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EXHIBIT (2)(B)
AGREEMENT AND PLAN OF MERGER
DATED AS OF
DECEMBER 15, 1998
AMONG
THE XXXXXXXX COMPANIES, INC.
EMAP ACQUISITION CORP.
AND
EMAP PLC
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TABLE OF CONTENTS
I - THE OFFER.....................................................................................................2
1.01 The Offer.......................................................................................2
1.02 Company Action..................................................................................3
1.03 Directors.......................................................................................5
II - THE MERGER...................................................................................................6
2.01 The Merger......................................................................................6
2.02 Conversion of Shares............................................................................7
2.03 Exchange of Shares..............................................................................7
2.04 Dissenting Shares...............................................................................9
2.05 Stock Options; Warrants........................................................................10
III - THE SURVIVING CORPORATION..................................................................................11
3.01 Certificate of Incorporation...................................................................11
3.02 Bylaws.........................................................................................11
3.03 Directors and Officers.........................................................................11
IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................................11
4.01 Organization and Qualification; Subsidiaries...................................................11
4.02 Certificate of Incorporation and By-Laws.......................................................12
4.03 Capitalization.................................................................................12
4.04 Authority Relative to this Agreement...........................................................14
4.05 No Conflict; Required Filings and Consents.....................................................14
4.06 Compliance.....................................................................................15
4.07 SEC Filings; Financial Statements..............................................................15
4.08 Disclosure Documents...........................................................................16
4.09 Absence of Certain Changes or Events...........................................................17
4.10 Taxes..........................................................................................18
4.11 Absence of Changes in Benefit Plans............................................................19
4.12 ERISA Compliance: Excess Parachute Payments....................................................20
4.13 Litigation.....................................................................................22
4.14 Environmental Matters..........................................................................22
4.15 Contracts......................................................................................23
4.16 Labor Matters..................................................................................23
4.17 Transactions with Affiliates...................................................................23
4.18 Brokers; Schedule of Fees and Expenses.........................................................24
4.19 Applicability of Section 203 of Delaware Law...................................................24
4.20 Voting Requirements............................................................................24
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4.21 Opinion of Financial Advisors..................................................................24
4.22 Major Advertisers..............................................................................25
4.23 Intellectual Property..........................................................................25
4.24 Year 2000 Compliance...........................................................................25
V - REPRESENTATIONS AND WARRANTIES OF BUYER......................................................................26
5.01 Organization and Qualification; Subsidiaries...................................................26
5.02 Certificate of Incorporation and By-Laws.......................................................26
5.03 Authority Relative to this Agreement...........................................................27
5.04 No Conflict; Required Filings and Consents.....................................................27
5.05 Documents Relating to Offer; Company Proxy Statement...........................................28
5.06 Financing......................................................................................28
5.07 Brokers........................................................................................28
5.08. Director Recommendations.......................................................................29
VI - COVENANTS OF THE COMPANY....................................................................................29
6.01 Conduct of the Company.........................................................................29
6.02 Stockholders' Meeting; Proxy Materials.........................................................32
6.03 Access to Information..........................................................................33
6.04 No Solicitations...............................................................................33
6.05 Notices of Certain Events......................................................................34
6.06 Debt Instruments...............................................................................35
6.07 Exchange of Shares of Class B Common...........................................................35
6.08 Consent to Revocation of Proxy.................................................................35
VII - COVENANTS OF BUYER.........................................................................................36
7.01 Confidentiality................................................................................36
7.02 Obligations of Merger Subsidiary...............................................................36
7.03 Voting of Shares...............................................................................36
7.04 Director and Officer Liability.................................................................36
7.05 Employee Benefits..............................................................................38
7.06 Repayment of Debt..............................................................................38
7.07 Notices of Certain Events......................................................................39
7.08 Shareholders' Meeting; Offering Circular.......................................................39
VIII - COVENANTS OF BUYER AND THE COMPANY........................................................................40
8.01 Reasonable Best Efforts........................................................................40
8.02 Certain Filings................................................................................41
8.03 Public Announcements...........................................................................41
8.04 Other Actions..................................................................................41
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IX - CONDITIONS TO THE MERGER....................................................................................42
9.01 Conditions to the Obligations of Each Party....................................................42
X - TERMINATION; EXPENSES........................................................................................42
10.01 Termination....................................................................................42
10.02 Effect of Termination..........................................................................45
10.03 Fees and Expenses..............................................................................45
XI - MISCELLANEOUS...............................................................................................45
11.01 Notices........................................................................................45
11.02 Survival of Representations, Warranties and Covenants..........................................46
11.03 Amendments; No Waivers.........................................................................46
11.04 Successors and Assigns.........................................................................47
11.05 Governing Law; Consent to Jurisdiction.........................................................47
11.06 Counterparts; Effectiveness....................................................................48
11.07 Headings; Interpretations; Disclosure Schedules................................................48
11.08 No Third Party Beneficiaries...................................................................48
11.09 Entire Agreement...............................................................................48
11.10 Severability...................................................................................48
11.11 Definitions....................................................................................49
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EXHIBIT A - Conditions to the Offer
EXHIBIT B - Notice and Certificate
EXHIBIT C - Certificate of Incorporation
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AGREEMENT AND PLAN OF MERGER
AGREEMENT, dated as of December 15, 1998 (this "Agreement"),
among The Xxxxxxxx Companies, Inc. a Delaware corporation (the "Company"), EMAP
plc, an English public limited company ("Buyer"), and EMAP Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Buyer ("Merger
Subsidiary").
PRELIMINARY STATEMENT
The Boards of Directors of Buyer, the Merger Subsidiary and
the Company have each approved the acquisition of the Company by Buyer upon the
terms and subject to the conditions set forth herein.
In furtherance of the acquisition of the Company by Buyer,
Buyer proposes to cause Merger Subsidiary to make a tender offer (as it may be
amended from time to time as permitted under this Agreement, the "Offer") to
purchase all the issued and outstanding shares of Class A Common Stock, par
value $0.01 per share, of the Company (the "Class A Common"), and all the issued
and outstanding shares of Class B Common Stock, par value $0.01 per share, of
the Company (the "Class B Common" and, together with Class A Common, the
"Shares"), at a price per Share of $34.00, net to the seller in cash, on the
terms and subject to the conditions set forth herein.
The Boards of Directors of Buyer, the Merger Subsidiary and
the Company have each approved the merger (the "Merger") of Merger Subsidiary
with and into the Company, or (at the election of Buyer) the Company with and
into Merger Subsidiary, in accordance with the terms of this Agreement and the
General Corporation Law of the State of Delaware (the "Delaware Law") and with
any other applicable law, whereby each issued Share not owned directly or
indirectly by Buyer or the Company shall be converted into the right to receive
the highest per share cash consideration paid pursuant to the Offer.
The Board of Directors of the Company has: (i) unanimously
determined that (x) the consideration to be paid for each Share in the Offer and
the Merger is fair to the stockholders of the Company and (y) the Offer and the
Merger are otherwise in the best interests of the Company and its stockholders;
(ii) unanimously approved this Agreement and the transactions contemplated
hereby; (iii) unanimously declared that this Agreement is advisable; (iv)
unanimously consented to the Offer; and (v) unanimously recommended that the
holders of Shares accept the Offer, tender their Shares pursuant to the Offer
and approve and adopt this Agreement.
Simultaneously with the execution and delivery of this
Agreement, Buyer and certain stockholders of the Company (the "Principal Company
Stockholders") are entering into an
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agreement (the "Company Stockholders Agreement" and, together with this
Agreement, the "Transaction Agreements") pursuant to which the Principal Company
Stockholders will agree to take specified actions in furtherance of the Offer
and the Merger.
AGREEMENTS
NOW, THEREFORE, in consideration of the forgoing and the
mutual premises, representations, warranties, covenants and agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article X hereof and that none of the conditions
set forth in Exhibit A hereto shall have occurred and be continuing, Buyer and
Merger Subsidiary shall, promptly after the public announcement of the execution
and delivery of this Agreement (which announcement shall be made no later than
one business day following such execution and delivery), commence the Offer
(within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated thereunder, the
"Exchange Act")). The obligation of Merger Subsidiary to accept for payment and
to pay for any Shares tendered in the Offer shall be subject only to the
condition that there shall be validly tendered prior to the expiration date of
the Offer and not withdrawn a number of Shares which, together with the Shares
then owned by Buyer or Merger Subsidiary, represents (x) a majority of the
outstanding shares of Class A Common and (y) a majority of the outstanding
Shares, in each case on a fully diluted basis, after giving effect to the
exercise or conversion of all options, rights and securities exercisable or
convertible into such securities (other than conversion of the Class B Common)
("Fully Diluted Shares"), on the date of purchase (the "Minimum Condition"), and
to the other conditions set forth in Exhibit A hereto.
(b) Buyer and Merger Subsidiary expressly reserve the right to
modify the terms of the Offer, except that, without the prior written consent of
the Company, neither Buyer nor Merger Subsidiary shall (i) decrease the price
per Share or change the form of consideration payable in the Offer, (ii)
decrease the number of Shares sought in the Offer, (iii) amend or waive
satisfaction of the Minimum Condition, (iv) impose additional conditions to the
Offer or amend in any manner adverse to the holders of Shares any condition to
the Offer, (v) amend any other term of the Offer in any manner adverse in any
respect to the holders of Shares, or (vi) except as provided in the next
sentence, extend the expiration date of the Offer. Notwithstanding the
foregoing, subject to the
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Company's rights to terminate this Agreement pursuant to Article X and so long
as neither Buyer nor Merger Subsidiary has breached any of its representations
and warranties or obligations pursuant to this Agreement, Merger Subsidiary may,
without the consent of the Company, (i) extend the Offer, if at the then
scheduled expiration date of the Offer any of the conditions to Merger
Subsidiary's obligation to purchase Shares is not satisfied, until such time as
such condition is satisfied or waived, (ii) extend the Offer for a period of not
more than five (5) business days beyond the then scheduled expiration date of
the Offer, if on the date of such extension less than (x) 90% of the outstanding
shares of Class A Common or (y) 90% of the outstanding shares of Class B Common
have been validly tendered and not properly withdrawn pursuant to the Offer, and
(iii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer. Assuming the prior satisfaction or waiver of the conditions to the Offer,
upon the terms of the Offer, the Merger Subsidiary will accept for payment and
purchase, as soon as practicable after the expiration of the Offer, all Shares
validly tendered and not withdrawn prior to the expiration of the Offer;
provided, however, that Merger Subsidiary shall only be entitled to purchase
Shares validly tendered and not withdrawn prior to the expiration of the Offer
if it purchases all such Shares pursuant to the Offer.
(c) One business day following execution and delivery hereof
by the parties hereto, Buyer and Merger Subsidiary shall file or cause to be
filed with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule
14D-1") with respect to the Offer, which shall contain the offer to purchase and
related letter of transmittal and other ancillary Offer documents and
instruments pursuant to which the Offer will be made (collectively with any
supplements or amendments thereto, the "Offer Documents") and shall contain (or
shall be amended in a timely manner to contain) all information which is
required to be included therein in accordance with the Exchange Act and the
rules and regulations thereunder and any other applicable law. Each of Buyer and
Merger Subsidiary, on the one hand, and the Company, on the other hand, agree
promptly to correct any information provided by such party (or either of them,
in the case of Buyer or Merger Subsidiary) for use in the Offer Documents if and
to the extent that it shall have become false or misleading in any material
respect and Merger Subsidiary further agrees to take all steps necessary to
cause the Offer Documents as so corrected to be filed promptly with the SEC and
to be disseminated to the stockholders of the Company, in each case as and to
the extent required by applicable Federal securities law. The Company and its
counsel shall be given the opportunity to review and comment on the Offer
Documents and any amendments thereto prior to the filing thereof with the SEC.
SECTION 1.02 Company Action.
(a) The Company hereby approves and consents to the Offer, the
Merger and the other transactions contemplated by the Transaction Agreements
(collectively, the "Transactions") and represents that (i) the Company's Board
of Directors (the "Board") has at a meeting duly called
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and held unanimously (A) approved this Agreement and the Company Stockholder
Agreement and the Transactions, including the Offer and the Merger, (B)
recommended that holders of Shares accept the Offer, tender their Shares
pursuant to the Offer and approve and adopt this Agreement, (C) determined that
each of this Agreement, the Offer and the Merger is fair to and in the best
interests of the stockholders of the Company, (D) determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the stockholders of the Company, (E) declared that this Agreement is advisable,
and (F) consented to the Offer, and (ii) each of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ("DLJ") and Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") has delivered to the Board its respective written opinion that the per
Share consideration to be received by the Company's stockholders pursuant to the
Offer and the Merger is fair to such stockholders from a financial point of
view.
(b) The Company will promptly furnish Buyer with a list of its
stockholders, mailing labels containing the names and addresses of all record
holders of Shares and lists of securities positions of Shares held in stock
depositories, as of the most recent practicable date, and will provide to Buyer
such additional information (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Buyer may reasonably request in connection with the Offer. Subject
to the requirements of applicable law, and except for such steps as are
necessary to disseminate any documents necessary to consummate the Merger or the
Offer, Buyer shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the
Merger and the Offer and, if this Agreement is terminated in accordance with
Section 10.01, shall, upon request, deliver to the Company all copies of such
information then in its possession and deliver copies of such information then
in the possession of any person who has obtained such information directly or
indirectly from Buyer.
(c) Contemporaneously with the commencement of the Offer as
provided for in Section 1.01, the Company will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "14D-9") which
shall reflect the recommendations and actions of the Board referred to above
(subject to the fiduciary duties of the Board under applicable law as advised by
independent legal counsel (who may be the Company's regularly engaged legal
counsel)) and shall mail the 14D-9 to the holders of the Shares. Each of the
Company, on the one hand, and Buyer and Merger Subsidiary, on the other hand,
agrees promptly to correct any information provided by such party (or either of
them, in the case of Buyer or Merger Subsidiary) for use in the 14D-9 if and to
the extent that it shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to cause the
14D-9 as so corrected to be filed with the SEC and to be disseminated to the
stockholders of the Company, in each case as and to the extent required by
applicable Federal securities law. Buyer, Merger Subsidiary and their counsel
shall be given an opportunity to review and comment on the 14D-9 and any
amendments thereto prior to filing thereof with the SEC.
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SECTION 1.03 Directors.
(a) Promptly upon the earlier of the purchase by Buyer or any
of its subsidiaries of Shares pursuant to the Offer or the Company Stockholders
Agreement, and from time to time thereafter, Buyer shall be entitled to
designate such number of directors, rounded up to the next whole number (but in
no event more than one less than the total number of directors on the Board) as
will give Buyer, representation on the Board equal to the product of (x) the
total number of directors on the Board (giving effect to any increase in the
number of directors pursuant to this Section 1.03) multiplied by (y) the
percentage that such number of Shares so purchased bears to the aggregate number
of Shares outstanding (such number being, the "Board Percentage"), and the
Company shall promptly use its reasonable best efforts to satisfy the Board
Percentage by, at the option of the Company (i) increasing the size of the Board
or (ii) securing the resignations of such number of directors as is necessary to
enable Buyer's designees to be elected to the Board and shall use its reasonable
best efforts to cause Buyer's designees promptly to be so elected. The Company
shall take, at the Company's expense, all lawful action necessary to effect any
such election, including, without limitation, mailing to its stockholders the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, unless such information has previously been provided to
the Company's stockholders in the 14D-9.
(b) The Company represents that, (i) to effect the
transactions contemplated by Section 1.03(a), the Board has approved, and has
not withdrawn or amended, resolutions (x) to increase the number of members of
the Board from 11 to 15 directors, to be effective at such time as Merger
Subsidiary purchases Shares pursuant to the Offer or purchases Shares pursuant
to the Company Stockholders Agreement, and (y) to elect each of Xxxxx Xxxx,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxx Xxxxx to fill the vacancies created by
such increase in the number of directors, effective upon such increase and (ii)
each of the directors of the Company (other than the Chairman of the Board) has
delivered to the Company a letter stating that such director has resigned from
the Board, and from each committee thereof, effective at such time as Merger
Subsidiary purchases Shares pursuant to the Offer or purchases Shares pursuant
to the Company Stockholders Agreement to the extent such resignations are
necessary to provide Buyer with its Board Percentage.
(c) Following the election or appointment of Buyer's designees
pursuant to this Section 1.03 and prior to the Effective Time of the Merger, any
amendment or termination of this Agreement, extension for the performance or
waiver of the obligations or other acts of Buyer or Merger Subsidiary or waiver
of the Company's rights thereunder, shall require the concurrence of a majority
of directors of the Company then in office who are directors on the date hereof.
ARTICLE II
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THE MERGER
SECTION 2.01 The Merger.
(a) At the Effective Time (as defined in Section 2.01(b)),
Merger Subsidiary shall be merged with and into the Company in accordance with
Delaware Law and the terms and conditions of this Agreement, whereupon the
separate existence of Merger Subsidiary shall cease, and the Company shall be
the surviving corporation (the "Surviving Corporation"). Notwithstanding the
foregoing, Buyer may elect at any time prior to the Merger, instead of merging
Merger Subsidiary into the Company as provided above, to merge the Company with
and into Merger Subsidiary; provided, however, that the Company shall not be
deemed to have breached any of its representations, warranties or covenants set
forth in this Agreement solely by reason of such election. In such event, the
parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing. At the election of Buyer, any direct or indirect
subsidiary of Buyer may be substituted for Merger Subsidiary as a constituent
corporation in the Merger. In such event, the parties shall execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
(b) Subject to the terms and conditions of this Agreement,
Buyer, Merger Subsidiary and the Company will cause a Certificate of Merger (or,
if applicable, a Certificate of Ownership and Merger) to be executed and filed
on the Closing Date (as defined in Section 2.01(d)) with the Secretary of State
of the State of Delaware and make all other filings required by the Delaware Law
in connection with the Merger. The Merger shall become effective at such time
(the "Effective Time") as such Certificate of Merger (or, if applicable,
Certificate of Ownership and Merger) is duly filed with the Secretary of State
of the State of Delaware or at such later time as is specified in such
Certificate of Merger (or, if applicable, Certificate of Ownership and Merger).
(c) From and after the Effective Time, the Surviving
Corporation shall succeed to all the assets, rights, privileges, powers and
franchises and be subject to all of the liabilities, restrictions, disabilities
and duties of the Company and Merger Subsidiary, all as provided under the
Delaware Law. The Merger shall have the effects set forth in Section 259 of the
Delaware Law.
(d) The closing of the Merger (the "Closing") shall take place
at 10:00 a.m., local time, on a date to be specified by the parties, which shall
be no later than the fifth business day after satisfaction or, to the extent
permitted by law, waiver of all of the conditions set forth in Article IX hereof
(the "Closing Date"), at the offices of Cravath, Swaine & Xxxxx, Worldwide
Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or
place is agreed to in writing by the parties hereto.
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SECTION 2.02 Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
Shares or any shares of capital stock of Merger Subsidiary:
(a) Each Share of capital stock of the Company held by the
Company as treasury stock or owned by Buyer or Merger Subsidiary immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be canceled and retired and shall
cease to exist, and no payment shall be made with respect thereto and each share
that is owned by any subsidiary of the Company or Buyer (other than Merger
Subsidiary) shall automatically be converted into one fully paid and
non-assessable share of common stock, par value $0.01 per share, of the
Surviving Corporation;
(b) Each share of capital stock of Merger Subsidiary issued
and outstanding immediately prior to the Effective Time shall be converted into
and become one fully paid and non-assessable share of capital stock of the
Surviving Corporation, par value $0.01 per share, with the same rights and
privileges as the shares so converted; and
(c) Each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in clause (a) above or as provided in
Section 2.04 with respect to Shares as to which appraisal rights have been
exercised, be converted into the right to receive $34.00, or any higher price
per Share paid in the Offer, in cash without any interest thereon (the "Merger
Consideration"). As of the Effective Time, all Shares 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 Shares shall cease to
have any rights with respect thereto, except the right to receive Merger
Consideration upon surrender of such certificate in accordance with Section
2.03, without interest.
SECTION 2.03 Exchange of Shares.
(a) Prior to the Effective Time, Buyer shall appoint a bank or
trust company to act as paying agent (the "Exchange Agent") for the purpose of
exchanging certificates representing Shares for the Merger Consideration. Buyer
will make available to the Exchange Agent, as needed, the Merger Consideration
to be paid in respect of the Shares (such cash being hereinafter referred to as
the "Exchange Fund"). For purposes of determining the Merger Consideration to be
made available, Buyer shall assume that no stockholder of the Company will
perfect his right to appraisal of his, her or its Shares. Promptly after the
Effective Time, Buyer will send, or will cause the Exchange Agent to send, to
each holder of Shares (other than as provided in Section 2.02(c)) at the
Effective Time (i) a letter of transmittal for use in such exchange (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 Buyer
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may reasonably specify) and (ii) instructions for use in effecting the surrender
of the certificates in exchange for the Merger Consideration.
(b) After the Effective Time, each holder of Shares that have
been converted into a right to receive the Merger Consideration, upon surrender
to the Exchange Agent of a certificate or certificates representing any such
Shares, together with a properly completed letter of transmittal covering such
Shares, and such other documents as may reasonably be required by the Exchange
Agent, will be entitled to receive the Merger Consideration payable in respect
of such Shares and the certificate so surrendered shall forthwith be cancelled.
Until so surrendered, each such certificate shall (other than as provided in
Section 2.04), after the Effective Time, represent for all purposes only the
right to receive such Merger Consideration, and shall automatically be cancelled
and shall cease to exist. No interest shall be paid or accrued on such Merger
Consideration.
(c) If any portion of the Merger Consideration payable in
respect of any Share is to be paid to a person other than the registered holder
of the Shares represented by the certificate or certificates surrendered, it
shall be a condition to such payment that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid to the
Exchange Agent any transfer or other taxes required as a result of such payment
to a person other than the registered holder of such shares or have established
to the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) The Merger Consideration paid in accordance with the terms
of this Article II upon conversion of any Shares shall be deemed to have been
paid in full satisfaction of all rights pertaining to such Shares, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distribution with a record date prior to the Effective Time that may
have been declared or made by the Company on such Shares in accordance with the
terms of this Agreement or prior to the date of this Agreement and which remain
unpaid at the Effective Time, and the stock transfer books of the Company shall
be closed and there shall be no further registration of transfers of Shares. If,
after the Effective Time, any certificates formerly representing Shares are
presented to the Surviving Corporation or the Exchange Agent for any reason,
they shall be cancelled and exchanged as provided in this Article II.
(e) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to paragraph (a) of this Section 2.03 that remains
unclaimed by the holders of Shares entitled thereto six months after the
Effective Time shall be returned to Buyer, upon demand, and any stockholder of
the Company who has not exchanged his Shares for the Merger Consideration in
accordance with this Section 2.03 prior to that time shall thereafter look only
to Buyer for payment of the Merger Consideration in respect of his Shares.
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(f) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to paragraph (a) of this Section 2.03 to pay for
Shares for which appraisal rights shall have been perfected shall be returned to
Buyer, upon demand.
(g) None of Buyer, Merger Subsidiary, the Company or the
Exchange Agent shall be liable to any holder of the Shares for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any certificate has not been
surrendered prior to five years after the Effective Time (or immediately prior
to such earlier date on which Merger Consideration in respect of such
certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.05), any such shares, cash,
dividends or distributions in respect of such certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
(h) The Exchange Agent shall invest any cash included in the
Exchange Fund, as directed by Buyer, on a daily basis. Any interest and other
income resulting from such investments shall be paid to Buyer.
(i) Buyer shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares pursuant to this Agreement such amounts as Buyer is required to deduct
and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "Code"), or any provision of state, local
or foreign tax law. To the extent that amounts are so withheld by Buyer, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Buyer.
SECTION 2.04 Dissenting Shares. Notwithstanding any other
provision of this Agreement to the contrary, Shares ("Appraisal Shares")
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who is
entitled to demand and has properly demanded appraisal for such Shares pursuant
to and who complies in all respects with, Section 262 of the Delaware Law shall
not be converted into a right to receive the Merger Consideration, but rather
the holders of Appraisal Shares shall be entitled to payment of the fair market
value of such Appraisal Shares in accordance with Section 262 of the Delaware
Law, unless such holder fails to perfect or withdraws or otherwise loses his
right to appraisal. If, after the Effective Time, such holder fails to perfect
or withdraws or loses his right to appraisal, such Shares shall be treated as if
they had been converted as of the Effective Time into a right to receive the
Merger Consideration payable in respect of such Shares pursuant to Section 2.02.
The Company shall give Buyer prompt notice of any demands received by the
Company for appraisal of Shares, and Buyer shall have the right to participate
in and direct all negotiations and proceedings with respect to such demands.
The Company shall not, except with
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the prior written consent of Buyer, make any payment with respect to, or settle
or offer to settle, any such demands, or agree to do any of the foregoing.
SECTION 2.05 Stock Options; Warrants.
(a) Immediately prior to the Effective Time, each then
outstanding option to purchase any shares of capital stock of the Company (in
each case, an "Option"), whether or not then vested or exercisable, shall be
cancelled by the Company and in consideration of such cancellation and except to
the extent that Buyer or Merger Subsidiary and the holder of any such Option
otherwise agree, the Company (or, at Buyer's option, Merger Subsidiary) shall
pay to such holders of Options an amount in respect thereof equal to the product
of (A) the excess, if any, of the Merger Consideration over the exercise price
per Share subject to each such Option multiplied by (B) the number of Shares for
which such Option shall not theretofore have been exercised (net of withholding
taxes and without interest).
(b) The Company shall cause all stock option or other equity
based plans maintained with respect to the Shares, including, without
limitation, the Company's 1997 Long-Term Equity Incentive Plan and the Stock
Purchase Plan (collectively, the "Stock Option Plans"), to terminate as of the
Effective Time and the provisions in any other benefit plan providing for the
issuance, transfer or grant of any capital stock of the Company or any interest
in respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall ensure that following the Effective Time
no holder of an Option or any participant in the Stock Option Plans shall have
any right thereunder to acquire any capital stock of the Company, Buyer, Merger
Subsidiary or the Surviving Corporation.
(c) Prior to the Effective Time, the Company shall (i) obtain
all necessary consents from, and provide (in a form acceptable to Buyer) any
required notices to, holders of Options and Warrants (as defined in Section
2.05(d)) and (ii) amend the terms of the Stock Option Plans and Warrants, in
each case as is necessary to give effect to the provisions of paragraphs (a),
(b) and (d) of this Section 2.05. Notwithstanding anything to the contrary
contained in this Agreement, payment shall, at Buyer's request, be withheld in
respect of any Option or Warrants, as the case may be, until all necessary
consents are obtained.
(d) Immediately prior to the Effective Time, each then
outstanding warrant to purchase any shares of capital stock of the Company (the
"Warrants"), whether or not then exercisable, shall be canceled by the Company
and in consideration of such cancellation and except to the extent that Buyer or
Merger Subsidiary and the holder of any such Warrant otherwise agree, the
Company (or, at Buyer's option, Merger Subsidiary) shall pay to such holders of
the Warrants an amount in respect thereof equal to the product of (A) the
excess, if any, of the Merger Consideration over the exercise price per Share
subject to each such Warrant multiplied by (B) the
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number of Shares for which such Warrant shall not theretofore have been
exercised (net of withholding taxes and without interest).
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01 Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation shall be amended at the Effective
Time to read substantially in the form of Exhibit C and, as so amended, such
Certificate of Incorporation shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
SECTION 3.02 Bylaws. The Bylaws of Merger Subsidiary in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or in
accordance with applicable law.
SECTION 3.03 Directors and Officers. Immediately after the
Effective Time, until the earlier of their resignation or removal or until their
respective successors are duly elected or appointed in accordance with the
Certificate of Incorporation and Bylaws of Merger Subsidiary and with applicable
law, as the case may be, the directors of Merger Subsidiary at the Effective
Time shall be elected to serve as the directors of the Surviving Corporation,
and the officers of the Company at the Effective Time shall be elected to serve
as the officers of the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer and Merger
Subsidiary as follows:
SECTION 4.01 Organization and Qualification; Subsidiaries.
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(a) Each of the Company and each Company Subsidiary (as
defined below) is a corporation, partnership or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the requisite 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 be so organized, existing or in good standing or to have
such power, authority and governmental approvals individually or in the
aggregate, has not had, and is not reasonably expected to have, a Company
Material Adverse Effect (as defined below). The Company and each Company
Subsidiary is duly qualified or licensed as a foreign corporation 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 and in good standing that individually or in the
aggregate, have not had, and are not reasonably expected to have, a Company
Material Adverse Effect. The term "Company Material Adverse Effect" means a
material adverse effect on the business, results of operations or financial
condition of the Company and the Company Subsidiaries (as defined below), taken
as a whole, or prevents or materially delays the ability of the Company to
perform its obligations under this Agreement or to consummate the Offer, the
Merger or the other Transactions; provided, however, that in determining whether
there has been a "Company Material Adverse Effect," the following shall be
disregarded: any material adverse effect that results substantially from (i) the
breach by Buyer or Merger Subsidiary of this Agreement or (ii) any decline in
the Company's stock price (which shall not, in and of itself, constitute a
"Material Adverse Effect").
(b) Section 4.01(b) of the schedule, dated as of the date of
this Agreement, from the Company to Buyer and Merger Subsidiary and entitled
"Company Disclosure Schedule" (the "Company Disclosure Schedule") lists each
Company Subsidiary and the Company's ownership interest therein. Each subsidiary
of the Company (a "Company Subsidiary") that constitutes a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of Regulation S-X
of the SEC is referred to herein as a "Material Subsidiary."
SECTION 4.02 Certificate of Incorporation and By-Laws. The
Company has heretofore made available to Buyer a complete and correct copy of
the Certificate of Incorporation and the By-Laws or equivalent organizational
documents, each as amended to the date of this Agreement, of the Company and of
each Material Subsidiary. Such Certificates of Incorporation, By-Laws and
equivalent organizational documents are in full force and effect. Neither the
Company nor any Material Subsidiary is in violation of any provision of its
Certificate of Incorporation, By-Laws or equivalent organizational documents,
except for such violations that would not, individually or in the aggregate,
have a Company Material Adverse Effect.
SECTION 4.03 Capitalization. The authorized capital stock of
the Company consists of 75,000,000 shares of Class A Common Stock, par value
$0.01 per share (the "Class A
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Common"), 25,000,000 shares of Class B Common Stock, par value $0.01 per share
(the "Class B Common"), and 5,000,000 shares of Preferred Stock, par value $0.01
per share (the "Preferred Stock" and together with the Shares, the "Company
Capital Stock"). As of the close of business on December 14, 1998, (a) there
were 26,871,538 shares of Class A Common outstanding, (b) there were 7,886,290
shares of Class B Common outstanding, and (c) there were no shares of Preferred
Stock outstanding. All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable and
have no preemptive rights. As of the close of business on December 14, 1998,
there were 35,000 shares of Class A Common reserved for issuance upon exercise
of the Warrants and 2,041,269 shares of Class A Common reserved for issuance
upon exercise of the Options. As of the close of business on December 14, 1998,
the Company had granted Options (which had not expired) to acquire an aggregate
of 970,394 shares of Class A Common, of which Options to acquire an aggregate of
206,697 shares of Class A Common Stock were fully vested and exercisable as of
such date. At the close of business on December 14, 1998, the Company had issued
Warrants (which had not expired) to acquire an aggregate of 35,000 shares of
Class A Common, of which Warrants to acquire an aggregate of 35,000 shares of
Class A Common were fully vested and exercisable as of such date. Except for (i)
the Company's Employee Stock Discount Purchase Plan (the "Stock Purchase Plan"),
(ii) the Options, (iii) the Warrants, and (iv) the outstanding shares of Class B
Common, there are no options, warrants, convertible or exchangeable securities,
"phantom" stock rights, stock appreciation rights, stock-based performance
units, or other rights, agreements, arrangements, commitments, contracts or
undertakings of any character to which the Company or any Company Subsidiary is
a party or by which any of them is bound (i) obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity interests in, or any
securities convertible or exercisable or exchangeable for any capital stock of
or other equity interest in, the Company or of any Company Subsidiary or any
Voting Company Debt (as defined below), (ii) obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right security, commitment, contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights accruing to holders
of Company Capital Stock. All shares of the Class A Common subject to issuance
as aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the Delaware Law, the Certificate of Incorporation, the By-Laws or any contract
to which the Company is a party or otherwise bound. There are not any bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which holders of Shares may vote ("Voting Company Debt").
There are no outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of the Company
Capital Stock or any capital stock of any Company Subsidiary, or to make any
investment (in the
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form of a loan, capital contribution or otherwise) in any Company Subsidiary.
Each outstanding share of capital stock of each Company Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and each such share is
owned by the Company or another Company Subsidiary free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever
(collectively, "Liens").
SECTION 4.04 Authority Relative to this Agreement. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize any Transaction Agreement
or to consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the then
outstanding shares of Class A Common and the filing of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Buyer and Merger Subsidiary, constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
proceedings in equity or at law).
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SECTION 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Company do not and the consummation of the Offer, the Merger and the other
Transactions and compliance with the terms hereof will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws or equivalent organizational
documents of the Company or any Company Subsidiary, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to any
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (iii) except as set
forth in Section 4.05 of the Company Disclosure Schedule, 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, result in the loss of a material benefit
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 Company Subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation (a "Contract") to which the Company
or any Company Subsidiary is a party or by which the Company or any Company
Subsidiary or any property or asset of the Company or any Company Subsidiary is
bound or affected, except, in the case of clauses (ii) and (iii) above, for any
such conflicts, violations, breaches, defaults, losses or other occurrences
which would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, license, authorization, registration, order or
permit of, or filing with or notification to, any Federal, state, local or
foreign government or any court of competent jurisdiction, or other
governmental, administrative or regulatory authority, commission or agency,
domestic or foreign (each a "Governmental Entity"), except for (A) applicable
requirements of the Exchange Act, (B) compliance with and filings under the
pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act"), (C) filing of appropriate merger documents as required by
Delaware Law, and (D) such other consents, approvals, authorizations, permits,
filings or notifications not obtained or made prior to consummation of the Offer
the failure of which to be obtained or made, individually or in the aggregate,
have not had and would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 4.06 Compliance. Except as set forth in Section 4.06
of the Company Disclosure Schedule, the Company and the Company Subsidiaries are
in compliance with and are not in conflict with, or in default or violation of,
(a) any law, rule, regulation, order, judgment or decree (including, without
limitation, laws, rules and regulations relating to franchises) applicable to
the Company or any Material Subsidiary or by which any property or asset of the
Company or any Material Subsidiary is bound or affected, including those
relating to occupational
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health and safety and the environment ("Applicable Law"), or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Material Subsidiary
is a party or by which the Company or any Material Subsidiary or any property or
asset of the Company or any Material Subsidiary is bound or affected, except for
such instances of noncompliance, conflicts, defaults or violations that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect. Except as set forth in
Section 4.06 of the Company Disclosure Schedule, neither the Company nor any
Company Subsidiary has received any written communication during the past two
years from a Governmental Entity that alleges that the Company or a Company
Subsidiary is not in compliance with any Applicable Law, except for such
instances of noncompliance that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
This Section 4.06 does not relate to matters with respect to Taxes, which are
the subject of Section 4.10.
SECTION 4.07 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, registration
statements, proxy statements, schedules and documents required to be filed by it
with the SEC since October 3, 1997 and has heretofore made available to Buyer,
in the form filed with the SEC (excluding any exhibits thereto), (i) its Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 (the "Form
10-K"), (ii) its Quarterly Reports on Form 10-Q for the periods ended March 31,
1998, June 30, 1998 and September 30, 0000 (xxx "Xxxxx Xxxxxxx Xxxx 00-X"),
(xxx) all proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since October 1, 1997 and (iv) all other forms,
reports, other registration statements and schedules (other than Quarterly
Reports on Form 10-Q not referred to in clause (ii) above and preliminary
materials) filed by the Company with the SEC since October 3, 1997 (the forms,
reports and other documents referred to in clauses (i), (ii), (iii) and (iv)
above being referred to herein, collectively, as the "Company SEC Reports"). The
Company SEC Reports and any forms, reports and other documents filed by the
Company with the SEC after the date of this Agreement (x) were prepared in
accordance with the requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the Exchange Act, as the case may be, and the rules and
regulations thereunder and (y) did not at the time they were filed 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 made therein, in
the light of circumstances under which they were made, not misleading. No
Company Subsidiary is required to file any form, report or other document with
the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Company 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 generally accepted accounting principles ("GAAP")
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applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and fairly present in all material respects the
financial position, results of operations and cash flows of the Company and the
consolidated Company Subsidiaries, as the case may be, as at the respective
dates thereof and for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal year-end adjustments which were not and
are not expected, individually or in the aggregate, to be material in amount).
Except as set forth in the Filed Company SEC Documents (as defined in Section
4.09), neither the Company nor any Company Subsidiary has any material
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a consolidated balance sheet
of the Company and its consolidated subsidiaries or in the notes thereto.
SECTION 4.08 Disclosure Documents.
(a) Each document filed or required to be filed by the Company
with the SEC in connection with the Transactions (the "Company Disclosure
Documents"), including, without limitation, the proxy or information statement
of the Company (the "Company Proxy Statement"), if any, to be filed with the SEC
in connection with the Merger, the 14D-9 and any amendments or supplements to
any thereof will comply as to form with the applicable requirements of the
Exchange Act and the rules and regulations thereunder.
(b) At the time the Company Proxy Statement or any amendment
or supplement thereto is mailed to stockholders of the Company, at the time such
stockholders vote on adoption of this Agreement and at the Effective Time, the
Company Proxy Statement as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact required therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. At
the time of the filing with the SEC or any other governmental authority of any
Company Disclosure Documents and any amendment or supplement thereto (other than
the Company Proxy Statement), at the time such document is filed with the SEC,
at any time it is amended or supplemented and at the time of any distribution
thereof to the Company's stockholders and throughout the remaining pendency of
the Offer each such Company Disclosure Document will not contain any untrue
statement of a material fact or omit to state a material fact required therein
or necessary in order to make the statements made therein not misleading. The
representations and warranties contained in this subsection (b) will not apply
to statements or omissions in the Company Disclosure Documents based upon
information furnished in writing to the Company by Buyer or Merger Subsidiary
specifically for use therein.
(c) The information with respect to the Company or any Company
Subsidiary furnished by the Company or its affiliates to Buyer in writing
specifically for use in the Offer and the Offer Documents shall not contain, as
of the date the Offer Documents are filed, any untrue
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statement of a material fact or omit to state a material fact required therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If any such
information provided by the Company or its affiliates shall, after the filing of
the Offer Documents or any other document filed by Buyer or Merger Subsidiary
with the SEC, become false or misleading in any material respect, the Company
shall promptly notify Buyer and update such information in writing.
SECTION 4.09 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Reports filed and publicly available prior to the
date of this Agreement (the "Filed Company SEC Documents") or in Section 4.09 of
the Company Disclosure Schedule, from the date of the most recent financial
statements included in the Filed Company SEC Documents to the date of this
Agreement, the Company has conducted its business only in the ordinary course,
and during such period there has not been:
(i) any event, change, effect or development that,
individually, in the aggregate or when taken together
with all such events, changes, effects and
developments that have occurred since January 1,
1998, has had or would reasonably be expected to have
a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash,
stock or property) with respect to any Company
Capital Stock or any repurchase for value by the
Company of any Company Capital Stock;
(iii) any split, combination or reclassification of any
Company Capital Stock or any issuance or the
authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for
shares of Company Capital Stock;
(iv) (A) any granting by the Company or any Company
Subsidiary to any director or executive officer of
the Company or any Company Subsidiary of any increase
in compensation, except in the ordinary course of
business consistent with prior practice or as was
required under employment agreements in effect as of
the date of the most recent financial statements
included in the Filed Company SEC Documents, (B) any
granting by the Company or any Company Subsidiary to
any such director or executive officer of any
increase in severance or termination pay, except as
was required under any employment, severance or
termination agreements in effect as of the date of
the most recent financial statements included in the
Filed Company SEC Documents, or (C) any entry by the
Company or any Company Subsidiary into any
employment, severance or termination agreement with
any such director or executive officer;
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(v) any change in accounting methods, principles or
practices by the Company or any Company Subsidiary
materially affecting the consolidated assets,
liabilities or results of operations of the Company
and the Company Subsidiaries, except insofar as may
have been required by a change in GAAP; or
(vi) any elections with respect to Taxes (as defined in
Section 4.10) by the Company or any Company
Subsidiary or settlement or compromise by the Company
or any Company Subsidiary of any material Tax
liability or refund.
SECTION 4.10 Taxes.
(a) Each of the Company and each Company Subsidiary has timely
filed, or has caused to be timely filed on its behalf, all Tax Returns required
to be filed by it, and all such Tax Returns are true, complete and accurate in
all material respects. All Taxes shown to be due on such Tax Returns, or
otherwise owed, have been timely paid.
(b) The most recent financial statements contained in the
Filed Company SEC Documents reflect an adequate reserve for all Taxes payable by
the Company and the Company Subsidiaries for all Taxable periods and portions
thereof through the date of such financial statements. No deficiency with
respect to any Taxes has been proposed, asserted or assessed in writing against
the Company or any Company Subsidiary, and no requests for waivers of the time
to assess any such Taxes are pending.
(c) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of the Company or any
Company Subsidiary. Neither the Company nor any Company Subsidiary is bound by
any agreement with respect to Taxes.
(d) Since the formation of the Company, no Federal income Tax
Return of the Company or any Company Subsidiary consolidated in such Return has
been examined by or settled with the United States Internal Revenue Service.
(e) For purposes of this Agreement:
"Taxes" includes all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, Federal or other Governmental
Entity, or in connection with any agreement with respect to Taxes, including all
interest, penalties and additions imposed with respect to such amounts.
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"Tax Return" means all Federal, state, local, provincial and
foreign Tax Returns, declarations, statements, reports, schedules, forms and
information Returns and any amended Tax Return relating to Taxes.
SECTION 4.11 Absence of Changes in Benefit Plans. Except as
disclosed in the Filed Company SEC Documents or in Section 4.11 of the Company
Disclosure Schedule, from the date of the most recent financial statements
included in the Filed Company SEC Documents to the date of this Agreement, there
has not been any adoption or amendment in any material respect by the Company or
any Company Subsidiary of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of the Company or any
Company Subsidiary (collectively, "Company Benefit Plans"). Except as disclosed
in the Filed Company SEC Documents or in Section 4.11 of the Company Disclosure
Schedule, as of the date of this Agreement, there are not any employment,
consulting, indemnification, severance or termination agreements or arrangements
between the Company or any Company Subsidiary and any current or former
executive officer or director of the Company or general severance or termination
benefits plans or policies.
SECTION 4.12 ERISA Compliance: Excess Parachute Payments.
(a) Section 4.12 of the Company Disclosure Schedule contains a
list and brief description of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (sometimes referred to herein as "Company Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA) and all
other Company Benefit Plans maintained, or contributed to, by the Company or any
Company Subsidiary for the benefit of any current or former employees, officers
or directors of the Company or any Company Subsidiary. The Company has made
available to Buyer true, complete and correct copies of (i) each Company Benefit
Plan (or, in the case of any unwritten Company Benefit Plan, a description
thereof), (ii) the two most recent annual reports on Form 5500 filed with the
Internal Revenue Service with respect to each Company Benefit Plan (if any such
report was required), (iii) the most recent summary plan description for each
Company Benefit Plan for which such summary plan description is required and
(iv) each trust agreement and group annuity contract relating to any Company
Benefit Plan.
(b) Except as disclosed in Section 4.12 of the Company
Disclosure Schedule, all Company Pension Plans have been the subject of
determination letters from the Internal Revenue Service to the effect that such
Company Pension Plans are qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, and no such determination
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letter has been revoked nor, to the knowledge of the Company, has revocation
been threatened, nor has any such Company Pension Plan been amended since the
date of its most recent determination letter or application therefor in any
respect that would adversely affect its qualification or materially increase its
costs. Each Company Benefit Plan has been administered in accordance with its
terms and applicable law, including the Code and ERISA.
(c) Except as disclosed in Section 4.12 of the Company
Disclosure Schedule, no Company Pension Plan, other than any Company Pension
Plan that is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA (a "Company Multiemployer Pension Plan"), had, as of the respective last
annual valuation date for each such Company Pension Plan, an "unfunded benefit
liability" (as such term is defined in Section 4001(a)(18) of ERISA), based on
actuarial assumptions that have been furnished to Buyer. None of the Company
Pension Plans has an "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code), whether or not waived. With
respect to any Pension Plan subject to Title IV of ERISA, the Company has not
incurred any material liability to such Company Pension Plan or to the Pension
Benefit Guaranty Corporation, other than for the payment of premiums, all of
which have been paid when due. None of the Company, any Company Subsidiary, any
officer of the Company or any of its Company Subsidiary or any of the Company
Benefit Plans which are subject to ERISA, including the Company Pension Plans,
any trusts created thereunder or any trustee or administrator thereof, has
engaged in a "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could subject the Company, any Company Subsidiary or any
officer of the Company or any Company Subsidiary to the tax or penalty on
prohibited transactions imposed by such Section 4975 or to any liability under
Section 502(i) or 502(1) of ERISA. None of such Company Benefit Plans and trusts
has been terminated, nor has there been any reportable event (as that term is
defined in Section 4043 of ERISA) with respect to any Company Benefit Plan
during the last five years. Neither the Company nor any Company Subsidiary has
incurred a "complete withdrawal" or a "partial withdrawal" (as such terms are
defined in Sections 4203 and 4205, respectively, of ERISA) since the effective
date of such Sections 4203 and 4205 with respect to any of the Company
Multiemployer Pension Plans. The Company has not received any notification to
the effect that any Company Multiemployer Pension Plan is in reorganization or
is insolvent.
(d) With respect to any Company Benefit Plan that is an
employee welfare benefit plan, except as disclosed in Section 4.12 of the
Company Disclosure Schedule, (i) no such Company Benefit Plan is unfunded or
funded through a "welfare benefits fund" (as such term is defined in Section
419(e) of the Code), (ii) each such Company Benefit Plan that is a "group health
plan" (as such term is defined in Section 5000(b)(1) of the Code), complies with
the applicable requirements of Section 4980B(f) of the Code and (iii) each such
Company Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without
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material liability to the Company and the Company Subsidiary on or at any time
after the Effective Time.
(e) Except as listed in Section 4.12 of the Company Disclosure
Schedule, no employee of the Company or any Company Subsidiary will be entitled
to any additional benefits or any acceleration of the time of payment or vesting
of any benefits under any Company Benefit Plan as a result of the Transactions.
Other than payments that may be made to the persons listed in the Company
Disclosure Schedule (the "Primary Company Executives"), any amount that could be
received (whether in cash or property or the vesting of property) as a result of
the Offer, the Merger or any other Transaction by any employee, officer or
director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or Company Benefit Plan currently in effect would not
be characterized as an "excess parachute payment" (as defined in Section
280G(b)(1) of the Code). Set forth in Section 4.12 of the Company Disclosure
Schedule is (i) the estimated maximum amount that could be paid to each Primary
Company Executive as a result of the Offer, the Merger and the other
Transactions under all employment, severance and termination agreements, other
compensation arrangements and Company Benefit Plans currently in effect and (ii)
the "base amount" (as defined in Section 280G(b)(3) of the Code) for each
Primary Company Executive calculated as of the date of this Agreement.
SECTION 4.13 Litigation. Except as disclosed in the Filed
Company SEC Documents or in Section 4.13 of the Company Disclosure Schedule,
there is no suit, action or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Company Subsidiary
(and the Company is not aware of any basis for any such suit, action or
proceeding) that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect, nor is there any
judgment, order, or decree ("Judgment") outstanding against the Company or any
Company Subsidiary that has had or would reasonably be expected to have a
Company Material Adverse Effect.
SECTION 4.14 Environmental Matters.
(a) Neither the Company nor any Company Subsidiary (i) has
placed, held, located, released, transported or disposed of any Hazardous
Substances (as defined below) on, under, from or at any of the Company's or any
Company Subsidiary's properties or any other properties, other than in a manner
that would not, in all such cases taken individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect, (ii) is
aware of the presence of any Hazardous Substances on, under or at any of the
Company's or any Company Subsidiary's properties or any other property but
arising from the Company's or any Company Subsidiary's properties, other than in
a manner that could not, in all such cases taken individually or in the
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aggregate, reasonably be expected to result in a Company Material Adverse
Effect, or (iii) during the preceding five years, has received any written
notice (A) of any violation of any statute, law, ordinance, regulation, rule,
judgment, decree or order of any Governmental Entity relating to any matter of
pollution, protection of the environment, environmental regulation or control or
regarding Hazardous Substances (collectively, "Environmental Laws") on or under
any of the Company's or any Company Subsidiaries' properties or any other
properties, (B) of the institution or pendency of any suit, action, claim,
proceeding or investigation by any Governmental Entity or any third party in
connection with any such violation, (C) requiring the response to or remediation
of Hazardous Substances at or arising from any of the Company's or any Company
Subsidiary's properties or any other properties, or (D) demanding payment for
response to or remediation of Hazardous Substances at or arising from any of the
Company's or any Company Subsidiary's properties or any other properties, except
in each case for the notices set forth in Section 4.14 of the Company Disclosure
Schedule and except for any such violations, suits, actions, claims,
proceedings, investigations, remediation requirements or payment as would not
reasonably be expected to have a Company Material Adverse Effect. For purposes
of this Agreement, the term "Hazardous Substance" shall mean any toxic or
hazardous wastes, materials or substances, including asbestos, chemicals,
flammable explosives, radioactive materials, petroleum and petroleum products
and any substances defined as, or included in the definition of, "hazardous
substances," "hazardous wastes," "hazardous materials" or "toxic substances"
under any Environmental Law.
(b) Except as set forth in Section 4.14 of the Company
Disclosure Schedule, no Environmental Law imposes any obligation upon the
Company or the Company Subsidiaries arising out of or as a condition to any
transaction contemplated by this Agreement, including, without limitation, any
requirement to modify or to transfer any permit or license, any requirement to
file any notice or other submission with any Governmental Entity, the placement
of any notice, acknowledgment or covenant in any land records, or the
modification of or provision of notice under any agreement, consent order or
consent decree, except for any such obligation the failure to comply with which
would not reasonably be expected to have a Company Material Adverse Effect. No
Lien has been placed upon any of the Company's or the Company Subsidiaries'
properties under any Environmental Law.
SECTION 4.15 Contracts. Except as disclosed in Section 4.15 of
the Company Disclosure Schedule, there are no contracts or agreements that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Company and the Company
Subsidiaries taken as a whole. Neither the Company nor any of the Company
Subsidiaries is in violation of or in default in any material respect under any
contract disclosed in Section 4.15 of the Company Disclosure Schedule (nor does
there exist any condition which upon the passage of time or the giving of notice
would cause such a violation or default).
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SECTION 4.16 Labor Matters. Except as set forth in Section
4.16 of the Company Disclosure Schedule, there are no collective bargaining or
other labor union agreements to which the Company or any of the Company
Subsidiaries is a party or by which any of them is bound. To the best knowledge
of the Company, since December 31, 1997, neither the Company nor any of the
Company Subsidiaries has encountered any labor union organizing activity with
respect to its emphasis, or had any actual or threatened employee strikes, work
stoppages, slowdowns or lockouts.
SECTION 4.17 Transactions with Affiliates. Except as set forth
in Section 4.17 of the Company Disclosure Schedule or the Filed Company SEC
Documents, there is no agreement, contract or other arrangement between the
Company or any Company Subsidiary, on the one hand, and any affiliates of the
Company or any Company Subsidiary (other than the Company or a Company
Subsidiary), on the other hand, and none of such agreements will continue in
effect subsequent to the Closing. Except as set forth in Section 4.17 of the
Company Disclosure Schedule, after the Effective Time none of the Company's
affiliates (other than Merger Subsidiary or Buyer) will have any interest in any
property (real or personal, tangible or intangible) or contract used in or
pertaining to the business of the Surviving Corporation. Except as set forth in
Section 4.17 of the Company Disclosure Schedule, no affiliate of the Company
provides material services to the Company or any of the Company Subsidiaries.
SECTION 4.18 Brokers; Schedule of Fees and Expenses. Except
for DLJ and Xxxxxx Xxxxxxx, whose fees will be paid by the Company, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of the Company or any Company Subsidiary
(or any director or officer thereof) who is entitled to any fee or commission
from the Company or any Company Subsidiary upon consummation of the transactions
contemplated by this Agreement. The estimated fees and expenses incurred and to
be incurred by the Company in connection with the Offer, the Merger and the
other Transactions (including the fees of DLJ and Xxxxxx Xxxxxxx and the fees of
the Company's legal counsel) are set forth in Section 4.18 of the Company
Disclosure Schedule. The Company has furnished to Buyer a true and complete copy
of all agreements between the Company and DLJ and Xxxxxx Xxxxxxx relating to the
Offer, the Merger and the other Transactions.
SECTION 4.19 Applicability of Section 203 of Delaware Law.
Section 203 of Delaware Law will not apply to the Offer, the acquisition of
Shares pursuant to the Offer or the Merger. The resolutions of the Board
referred to in Section 1.02(a) are sufficient to render inapplicable to Buyer
and Merger Subsidiary and the Transaction Agreements, the Offer, the Merger and
the other Transactions (i) the provisions of Section 203 of the Delaware Law and
(ii) the provisions of Article XI of the Certificate of Incorporation. To the
Company's knowledge, no other state takeover statute or similar statute or
regulation applies or purports to apply to the Company with respect to this
Agreement, the Offer, the Merger or any other Transaction. The Company has
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been advised by each of its directors and executive officers that each such
person intends to tender all Shares owned by such person pursuant to the Offer,
except to the extent of any restrictions created by Section 16(b) of the
Exchange Act.
SECTION 4.20 Voting Requirements. In the event that Section
253 of Delaware Law is inapplicable and unavailable to effectuate the Merger,
the only vote of holders of any class or series of Company Capital Stock
necessary to approve and adopt this Agreement and the Merger is the adoption of
this Agreement by the holders of a majority of the outstanding shares of Class A
Common (the "Company Stockholder Approval"). The affirmative vote of the holders
of Company Capital Stock, or any of class or series of Company Capital Stock, is
not necessary to consummate the Offer or any Transaction other than the Merger.
The holders of Class B Common are not entitled to vote on the approval and
adoption of this Agreement.
SECTION 4.21 Opinion of Financial Advisors. The Company has
received the opinions of DLJ and Xxxxxx Xxxxxxx to the effect that, as of the
date of this Agreement, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair to the Company's stockholders from
a financial point of view, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to Buyer.
The Company has been authorized by DLJ and Xxxxxx Xxxxxxx to permit the
inclusion of such opinion in its entirety in the 14D-9 and the Company Proxy
Statement, so long as such inclusion is in form and substance reasonably
satisfactory to DLJ and Xxxxxx Xxxxxxx and their respective counsel.
SECTION 4.22 Major Advertisers. During the year ended December
31, 1997 and from January 1, 1998 through November 30, 1998, (i) no single
advertiser accounted for 5% or more of the consolidated revenues of the Company
and the Company Subsidiaries for such periods and (ii) the ten largest
advertisers of the Company and the Company Subsidiaries accounted for no more
than 25% of the consolidated revenues of the Company and the Company
Subsidiaries for such periods. From the date of the most recent financial
statements included in the Filed Company SEC Documents to the date of this
Agreement, none of the ten largest advertisers of the Company as of the date
hereof has informed the Company that such advertiser intends to cease doing
business with the Company.
SECTION 4.23 Intellectual Property. Section 4.23 of the
Company Disclosure Schedule lists all current registered and material
unregistered trademarks and service marks, trade names and any applications
therefor owned by the Company or the Company Subsidiaries (the "Company
Intellectual Property Rights"), and specifies the jurisdictions, if any, in
which each such Company Intellectual Property Right has been issued or
registered or in which an application for such issuance and registration has
been filed, including the respective registration or application numbers and the
names of all registered owners. Section 4.23 of the Company Disclosure Schedule
lists (i) all material licenses, sublicenses and other agreements as to which
the Company is a party
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and pursuant to which any person is authorized to use any Company Intellectual
Property Right and (ii) all material licenses, sublicenses and other agreements
as to which the Company is a party and pursuant to which the Company is
authorized to use any third party trademarks or service marks of a third party
in conjunction with any product or service, and identities of all parties
thereto and the trademarks or service marks licensed. Except as set forth in
Section 4.23 of the Company Disclosure Schedule, the Company or one of the
Company Subsidiaries owns, or has the right to use in the manner currently being
used by the Company or one of the Company Subsidiaries, without payment to any
other person, the Company Intellectual Property Rights listed in Section 4.23 of
the Company Disclosure Schedule and the consummation of the Transactions will
not conflict with, alter or impair any such rights.
SECTION 4.24 Year 2000 Compliance. Schedule 4.24 of the
Company Disclosure Schedule sets forth the Company's good faith assessment as to
whether the computer software used by the Company can reasonably be expected to
process information including the transition from December 31, 1999 to January
1, 2000 and dates in the year 2000 (and later years) as distinct from 1900's
years (commonly referred to as the "Year 2000" problem) in all material respects
in accordance with its intended purposes as of such dates, the steps that the
Company will likely be required to take to ensure that such computer software
used by the Company shall process such information in all material respects in
accordance with its intended purposes, and the Company's good faith assessment
of the expenditures that the Company is likely to incur in connection therewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company that:
SECTION 5.01 Organization and Qualification; Subsidiaries.
Each of Buyer and Merger Subsidiary is a corporation, partnership or other legal
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization and has the requisite
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 be so organized, existing or in good
standing or to have such power, authority and governmental approvals,
individually or in the aggregate, has not had, and would not reasonably be
expected to have a Buyer Material Adverse Effect (as defined below). Each of
Buyer and Merger Subsidiary is duly qualified or licensed as a foreign
corporation 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 and in good standing that, individually
or in the aggregate, have not had, and would not
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reasonably expected to have a Buyer Material Adverse Effect. The term "Buyer
Material Adverse Effect" means a material adverse effect on the business,
results of operations or financial condition of Buyer and each of Buyer's
subsidiaries (collectively, the "Buyer Subsidiaries"), taken as a whole, or
prevents or materially delays the ability of Buyer or Merger Subsidiary to
perform its obligations under this Agreement or to consummate the Offer, the
Merger or the other Transactions; provided, however, any material adverse effect
that results substantially from the breach by the Company of this Agreement
shall be disregarded in determining whether there has been a "Buyer Material
Adverse Effect."
SECTION 5.02 Certificate of Incorporation and By-Laws. Buyer
has heretofore made available to the Company a complete and correct copy of the
Certificate of Incorporation and the By-Laws or equivalent organizational
documents, each as amended to the date of the Agreement, of Buyer and Merger
Subsidiary. Such Certificates of Incorporation, By-Laws and equivalent
organizational documents are in full force and effect. Neither Buyer nor Merger
Subsidiary is in violation of any provision of its Certificate of Incorporation,
By-Laws or equivalent organizational documents, except for such violation that
would not, individually or in the aggregate, have a Buyer Material Adverse
Effect.
SECTION 5.03 Authority Relative to this Agreement. Each of
Buyer and Merger Subsidiary has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and, subject to
obtaining the Buyer Shareholder Approval (as defined below), to consummate the
Transactions. The execution and delivery of this Agreement by Buyer and Merger
Subsidiary and the consummation by Buyer and Merger Subsidiary of the
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the Transactions (other than the
approval of the Transaction Agreements, the Offer and the Merger by Buyer's
shareholders to the extent required under the rules of the London Stock Exchange
(the "Buyer Shareholder Approval") and, with respect to the Merger, the filing
of the appropriate merger documents with the Secretary of the State of Delaware
as required by Delaware Law). The Buyer Shareholder Approval shall require only
the affirmative vote of the holders of a majority of all of the outstanding
ordinary shares of Buyer that are entitled to vote upon the proposals to approve
the Transaction Agreements and are present or represented by proxy at the Buyer
Shareholders Meeting (as defined in Section 7.08). This Agreement has been duly
and validly executed and delivered by Buyer and Merger Subsidiary and, assuming
the due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of Buyer and Merger Subsidiary, enforceable
against Buyer and Merger Subsidiary in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
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SECTION 5.04 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer and
Merger Subsidiary do not, and the consummation of the Offer, the Merger and the
other Transactions and compliance with the terms hereof will not, (i) conflict
with or violate the Certificate of Incorporation or By-Laws or equivalent
organizational documents of Buyer or Merger Subsidiary, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to Buyer
or any Buyer Subsidiary or by which any property or asset of Buyer or any Buyer
Subsidiary 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, result in the loss of a material benefit 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 Buyer
or any Buyer Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Buyer or any Buyer Subsidiary is a party or by which Buyer
or any Buyer Subsidiary or any property or asset of Buyer or any Buyer
Subsidiary is bound or affected, except in the case of clauses (ii) and (iii)
above, for any such conflicts, violations, breaches, defaults or other
occurrences which, individually or in the aggregate, have not had and would not
reasonably be expected to have a Buyer Material Adverse Effect.
(b) The execution and delivery of this Agreement by Buyer and
Merger Subsidiary do not, and neither the performance of this Agreement by Buyer
and Merger Subsidiary nor the consummation of the Transactions by the Company
will, require any consent, approval, authorization, order or permit of, or
filing with or notification to, any Governmental Entity, except for (A)
applicable requirements of the Exchange Act, (B) compliance with and filings
under the pre-merger notification requirements of the HSR Act, (C) filing of
appropriate merger documents with the Secretary of State of the State of
Delaware as required by Delaware Law, (D) Buyer Shareholder Approval and (E)
such other consents, approvals, authorizations or permits, filings or
notifications, not obtained or made prior to consummation of the Offer the
failure of which to be obtained or made would not prevent or delay consummation
of the Merger, or otherwise prevent Buyer or Merger Subsidiary from performing
its obligations under this Agreement in any material respect, and which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Buyer Material Adverse Effect.
SECTION 5.05 Documents Relating to Offer; Company Proxy
Statement. The Offer Documents and the Offer will comply in all material
respects with the applicable requirements of the Exchange Act, except that no
representation is made by Buyer or Merger Subsidiary with respect to information
supplied in writing by the Company specifically for use in the Offer Documents.
None of the information that may be supplied in writing by Buyer or its
affiliates specifically for use in the Company Proxy Statement, the 14D-9 or any
other document filed or to be filed with the SEC will contain any untrue
statement of a material fact or omit to state any material fact necessary in
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order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If any such information provided by Buyer or its
affiliates shall, after the filing of the 14D-9, the Company Proxy Statement or
any other document filed by the Company with the SEC, become false or misleading
in any material respect, Buyer shall promptly notify the Company and update such
information in writing.
SECTION 5.06 Financing. Merger Subsidiary has, or Buyer will
cause Merger Subsidiary to have, sufficient funds available to purchase all
Shares outstanding for the Merger Consideration on the termination date of the
Offer and otherwise comply with the terms set forth herein (the "Financing").
SECTION 5.07 Brokers. Except for J. Xxxxx Xxxxxxxx & Co.
Limited , whose fees will be paid by Buyer, there is no investment banker,
broker, finder or other intermediary who might be entitled on account of any
agreement binding upon Buyer, Merger Subsidiary or any of their respective
affiliates to any fee or commission upon consummation of the transactions
contemplated by this Agreement.
SECTION 5.08. Director Recommendations. The Directors of Buyer
have at a meeting duly called and held unanimously (a) approved the Agreement
and the Transactions, including the Offer and the Merger and (b) recommended
that the shareholders of Buyer approve this Agreement and all actions
contemplated hereby that require the approval of Buyer's shareholders.
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ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01 Conduct of the Company. The Company covenants and
agrees that, between the date of this Agreement and continuing until the earlier
to occur of the Effective Time or the election of the Buyer's designees
representing a majority of the members of the Board in accordance with Section
1.03, unless Buyer shall have consented in writing, the businesses of the
Company and the Company Subsidiaries shall be conducted in, and the Company and
the Company Subsidiaries shall not take any action except in the ordinary course
of business, consistent with past practice, and the Company shall, and shall
cause the Company Subsidiaries to, use their respective reasonable best efforts
to preserve substantially intact their respective business organizations, to
keep available the services of their respective current officers, employees and
consultants and to preserve their respective relationships with customers,
suppliers, licensors, licensees, distributors and other persons with which it or
any of the Company Subsidiaries has significant business relations as well as
with officials and employees of government agencies and other entities which
regulate the Company, the Company Subsidiaries and their business to the end
that its goodwill and ongoing business shall be unimpaired at the Effective
Time; provided, that notwithstanding the foregoing or the following provisions,
the Company may take all actions necessary and desirable to consummate the
Transactions and incur and pay the fees and expenses in connection therewith
disclosed in Section 4.18. By way of amplification and not limitation, except
(i) as expressly contemplated by this Agreement, or (ii) as set forth on Section
6.01 of the Company Disclosure Schedule, neither the Company nor any of the
Company Subsidiaries shall, between the date of this Agreement and the Effective
Time, directly or indirectly do, or propose or agree to do, any of the following
without the prior written consent of Buyer:
(a) amend or otherwise change the certificate of
incorporation, by-laws or other comparable charter or organizational document of
the Company or any Company Subsidiary;
(b) (i) issue, deliver, grant or sell, or authorize the
issuance or sale of, any shares of capital stock of any class of, or any Voting
Company Debt, or any other ownership interest in, the Company or any of the
Company Subsidiaries, or any options, warrants or other securities or rights
convertible into, exchangeable for, evidencing the right to subscribe for or
purchase, or otherwise providing for the right to acquire capital stock, or any
other ownership interest (including, without limitation, any phantom interest)
of the Company or any of the Company Subsidiaries (other than the issuance of
shares of capital stock in connection with (A) the exercise of the Options or
the Warrants, (B) the then current offering period in effect under the Stock
Purchase Plan as in effect on the date of this Agreement or (C) the conversion
of shares of Class B Common to Class A Common at the request of the holder
thereof), or (ii) authorize the sale of any assets of it or any of the Company
Subsidiaries, except for sales in the ordinary course of business or which,
individually,
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do not exceed $1.0 million or which, in the aggregate, do not exceed $3.0
million, or (iii) amend, waive or otherwise modify any of the terms of any
option, warrant or stock option plan of the Company or any Company Subsidiary,
including without limitation the Options, the Warrants and the Stock Purchase
Plan;
(c) declare, set aside or pay any dividend on or other actual,
constructive or deemed distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock (other than a divided or
distribution payable solely to the Company or a Company Subsidiary) or otherwise
make any payments to stockholders in their capacity as stockholders;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any capital stock of the Company
or any Company Subsidiary or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities other than
shares of Class B Common upon conversion to Class A Common at the request of the
holder thereof;
(e) (i) acquire or agree to acquire (for cash, shares of stock
or other consideration) (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or by any other manner) any
corporation, partnership, joint venture, association or other business
organization or any division thereof (or a substantial portion of the assets
thereof) or any other assets, except for (A) such acquisitions which,
individually or in the aggregate, do not exceed $1.0 million or, (B) any
acquisition described in Section 6.01 of the Company Disclosure Schedule; (ii)
incur any indebtedness for borrowed money or issue or sell any debt securities
or warrants or other rights to acquire any debt securities of the Company or any
Company Subsidiary, or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic effect of
any of the foregoing, or make any loans, advances or capital contributions to,
or investments in, any other person, other than to or in the Company or any
direct or indirect wholly owned subsidiary of the Company, except (A) to finance
any acquisition permitted under this Section 6.01(e) or (B) borrowings under
existing bank lines of credit incurred in the ordinary course of business
consistent with past practices, or (iii) enter into or amend any contract,
agreement, commitment or arrangement to effectuate any prohibited matter set
forth in this Section 6.01(e);
(f) hire any employee with aggregate annual compensation and
benefits in excess of $100,000, or adopt, enter into, establish or amend any
bonus, profit sharing, compensation, severance, termination, stock option,
pension, retirement, deferred compensation, employment or other employee benefit
agreements, trusts, plans, funds or other arrangements for the benefit or
welfare of any director, officer or employee that increase in any manner the
compensation, retirement, welfare or fringe benefits of any director, officer or
employee, or pay any benefit not
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required by any existing plan, agreement or arrangement (including without
limitation the granting of stock options or stock appreciation rights) or take
any action or grant any benefit not expressly required under the terms of any
existing agreements, trusts, plans, funds or other such arrangements or enter
into any contract, agreement, commitment or arrangement to do any of the
foregoing, except pursuant to collective bargaining agreements as presently in
effect;
(g) take any action, other than as required by a change in
GAAP, with respect to accounting methods, practices, policies or procedures;
(h) authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation or dissolution of the Company or
any of its Material Subsidiaries;
(i) make or change any Tax election or settle or compromise
any material Tax liability or refund;
(j) (i) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted, unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business consistent with past practice or in accordance with their terms of
liabilities reflected or reserved against in the most recent consolidated
financial statements of the Company included in the Filed Company SEC Documents
or incurred in the ordinary course of business consistent with past practice,
(ii) cancel any material indebtedness (individually or in the aggregate) or
waive any claims or rights of substantial value or (iii) waive the benefits of,
or agree to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any Company Subsidiary is a party;
(k) other than in the ordinary course of business consistent
with past practice, waive any rights of substantial value or make any payment,
direct or indirect, of any material liability of the Company or any of the
Company Subsidiaries before the same comes due in accordance with its terms;
(l) fail to maintain its existing insurance coverage of all
types in effect or, in the event any such coverage shall be terminated or lapse,
to the extent available at reasonable cost, procure substantially similar
substitute insurance policies which in all material respects are in at least
such amounts and against such risks as are currently covered by such policies;
(m) enter into any collective bargaining agreement;
(n) sell, lease, license or otherwise dispose of or subject to
any Lien (other than Permitted Liens) any properties or assets, except sales of
inventory and excess or obsolete assets in the ordinary course of business
consistent with past practice;
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(o) make or agree to make any new capital expenditure that is
in excess of $500,000 (except to consummate any acquisition not prohibited by
Section 6.01(e));
(p) initiate or threaten litigation against any third party;
(q) (i) make any changes in advertising or subscription rates,
policies or procedures that are not consistent with past practices or (ii) make
any material change in advertising or subscription rates, policies or procedures
(whether or not consistent with past practices);
(r) launch any new magazine or other product in excess of
$1,000,000 (losses to profits for whole project); or
(s) authorize any of, or commit or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
SECTION 6.02 Stockholders' Meeting; Proxy Materials. Unless
Buyer or Merger Subsidiary acquires at least (x) 90% of the outstanding shares
of the Class A Common, and (y) 90% of the outstanding shares of Class B Common,
in which case Buyer shall cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a vote of the Company's
stockholders as permitted under Delaware Law, if required by applicable law the
Company shall cause a special meeting of its stockholders (the "Company
Stockholders Meeting") to be duly called and held as soon as reasonably
practicable after the purchase of Shares pursuant to the Offer for the purpose
of acting upon proposals to adopt this Agreement and all actions contemplated
hereby that require the approval of the Company's stockholders. The Board shall
recommend approval and adoption of this Agreement by the Company's stockholders,
unless the Board after consultation with and based upon advice of legal counsel
(who may be the Company's regularly engaged legal counsel) determines in good
faith that such action is necessary for the Board to comply with its fiduciary
duties to stockholders under applicable law. In connection with the Company
Stockholders Meeting, the Company shall in accordance with applicable law and
after consultation with Buyer prepare and file with the SEC a preliminary
Company Proxy Statement relating to the matters to be considered at the Company
Stockholders Meeting, respond promptly to any comments made by the SEC with
respect to the preliminary Company Proxy Statement and cause a definitive
Company Proxy Statement to be mailed to its stockholders as promptly as
reasonably practicable after filing with the SEC.
SECTION 6.03 Access to Information. The Company will, and will
cause each of the Company Subsidiaries to, give Buyer, Buyer's officers,
employees, counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours during the period
prior to the Effective Time to all their respective employees, offices,
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properties, books and records of the Company and furnish to Buyer, its officers,
employees, counsel, financial advisors, auditors and authorized representatives
such financial and operating data and other information as such persons may
reasonably request, and will cause the Company's and the Company Subsidiaries'
employees, counsel and financial advisors to cooperate with Buyer, in each case
in order to facilitate an orderly transition of the ownership of the Company to
Buyer; provided, however, that the Company shall not be required to disclose
information that would otherwise jeopardize protections offered under the
attorney-client privilege or the work product doctrine or would violate an
existing confidentiality agreement under which the Company or a Company
Subsidiary is bound. Without limiting the generality of the foregoing, the
Company shall, within two business days of request therefor, provide to Buyer
the information described in Rule 14a-7(a)(2)(ii) under the Exchange Act and any
information to which a holder of Shares would be entitled under Section 220 of
the Delaware Law (assuming such holder met the requirements of such section).
SECTION 6.04 No Solicitations.
(a) From and after the date hereof until the termination of
this Agreement, the Company shall not, and shall cause each of the Company
Subsidiaries and its and their respective officers, directors, employees,
representatives, agents or affiliates (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of the
Company Subsidiaries) not to, directly or indirectly, invite, initiate, solicit
or knowingly encourage (including by way of furnishing non-public information or
assistance), any inquiries or the making of any proposal that constitutes any
Acquisition Proposal (as defined below), or enter into or maintain or continue
discussions or negotiations with any person or entity in furtherance of such
inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, or authorize or permit any of its respective officers,
directors or employees or any of the Company Subsidiaries or any investment
banker, financial advisor, attorney, accountant or other representative retained
by it or any of the Company Subsidiaries to take any such action; provided,
however, that nothing contained in this Section 6.04 shall prohibit the Board,
or any of the Company's financial advisors or attorneys, officers, directors
from (i) complying with Rule 14e-2 promulgated under the Exchange Act with
regard to an Acquisition Proposal or (ii) (A) providing information in response
to a request therefor by a person who has made an unsolicited bona fide written
Acquisition Proposal if prior to providing such information the Board informs
such person in writing of the existence and the material terms of the Company
Stockholders Agreement and receives from such person an executed confidentiality
agreement on terms substantially equivalent to those contained in the
Confidentiality Agreement (as defined in Section 7.01); (B) engaging in any
negotiations or discussions with any person who has made an unsolicited bona
fide written Acquisition Proposal; or (C) recommending such an Acquisition
Proposal to the stockholders of the Company, if and only to the extent that, (i)
in each such case referred to in clause (A), (B) or (C) above, the Board
determines in good faith after consultation with independent legal counsel (who
may be the Company's regularly engaged legal
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counsel) that such action is necessary in order for the Board to comply with its
fiduciary duties to stockholders under applicable law and (ii) in each case
referred to in clause (B) or (C) above, the Board determines in good faith
(after consultation with its independent legal counsel, who may be the Company's
regularly engaged legal counsel, and financial advisor) that such Acquisition
Proposal is reasonably capable of being consummated, taking into account all
legal, financial and regulatory aspects of the proposal, the terms of the
Company Stockholders Agreement and the person making the proposal and that such
Acquisition Proposal would, if consummated, be more favorable, from a financial
point of view (either short or long-term), to the stockholders of the Company
than the Transactions (any such more favorable Acquisition Proposal satisfying
all the criteria of this clause (ii) being referred to in this Agreement as a
"Superior Proposal"). For purposes of this Agreement, "Acquisition Proposal"
shall mean any of the following (other than the transactions between the
Company, Buyer and Merger Subsidiary contemplated hereunder) involving the
Company or any of the Company Subsidiaries: (i) any merger, consolidation, share
exchange or other similar transaction involving the Company; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all of the assets of the Company and the Company Subsidiaries,
taken as a whole, in a single transaction or series of transactions; or (iii)
any tender offer or exchange offer for 50% or more of the outstanding shares of
capital stock of the Company or the filing of a registration statement under the
Securities Act in connection therewith. The Company represents that neither it
nor, to its knowledge without independent inquiry having been made, any of its
stockholders is a party to or bound by any agreement with respect to an
Acquisition Proposal.
(b) The Company promptly shall advise Buyer orally and in
writing of any Acquisition Proposal or any inquiry with respect to any
Acquisition Proposal including any change to the material terms of any such
Acquisition Proposal or inquiry. The Company shall keep Buyer fully informed of
the status including any change to the material terms of any such Acquisition
Proposal or inquiry.
SECTION 6.05 Notices of Certain Events. The Company shall
promptly notify Buyer orally and in writing of and consult with Buyer with
respect to:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or involving or
otherwise affecting the Company or any
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Company Subsidiary on the date of this Agreement which will preclude the
consummation of the Transactions or result in, or is reasonably likely to result
in, a Company Material Adverse Effect;
(d) the occurrence, or non-occurrence, of any event which
would or is reasonably like to cause (i) any condition set forth in Exhibit A to
be unsatisfied at the time Buyer or Merger Subsidiary purchases Shares pursuant
to the Offer, or (ii) any condition set forth in Article IX hereof to be
unsatisfied at the Effective Time; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement; and
(e) any change (i) in the Company's annual budget, (ii) in the
Company's strategic objectives, (iii) or event which is material to the conduct
of any pending litigation (including any proposed settlement thereof) or (iv) or
event having, or which, would reasonably expected to have, a Company Material
Adverse Effect.
SECTION 6.06 Debt Instruments. Prior to the Effective Time,
the Company and each Company Subsidiary shall seek waivers from the parties
thereto with respect to the occurrence, as a result of the Merger, the Offer and
the other transactions contemplated by this Agreement, of a change in control or
any other event which constitutes a default (or an event which with notice or
lapse of time or both would become a default) under the Credit Agreement (as
defined in Section 7.06).
SECTION 6.07 Exchange of Shares of Class B Common. Upon
delivery by Merger Subsidiary to the Company of certificates representing shares
of Class B Common and a notice and certificate in substantially the form
attached as Exhibit B hereto, the Company shall immediately effect the exchange
of such shares for an equal number of shares of Class A Common and issue a
certificate representing such shares of Class A Common to Merger Subsidiary. The
Company hereby represents and warrants that upon such exchange, Merger
Subsidiary shall have the same rights with respect to shares of Class A Common
issued to it upon such exchange including, without limitation, voting rights, as
those of holders of shares of Class A Common on the date hereof.
SECTION 6.08 Consent to Revocation of Proxy. The Company
hereby expressly consents, to the extent that any such consent may be required,
to the revocation, as set forth in the Company Stockholders Agreement, of any
and all proxies granted by certain stockholders of the Company to Xxxxxx Xxxxx &
Partners, L.P. pursuant to the Securityholders Agreement, dated as of September
30, 1996, as amended by Amendment No. 1 to Securityholders Agreement, dated as
of September 30, 1997, among the Company and the stockholders named therein.
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ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01 Confidentiality. All information obtained by
Buyer in connection with the Transactions shall be kept confidential in
accordance with the Confidentiality Agreement, dated November 18, 1998, between
the Company and Buyer (the "Confidentiality Agreement"); provided, that any
provisions of the Confidentiality Agreement that would prohibit Buyer or Merger
Subsidiary from engaging in the Transactions shall be deemed to be modified to
the extent required to permit Buyer and Merger Subsidiary to engage in all such
Transactions.
SECTION 7.02 Obligations of Merger Subsidiary. Buyer will take
all action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement and shall be responsible for any and all breaches or
other violations of this Agreement by Merger Subsidiary.
SECTION 7.03 Voting of Shares. Buyer agrees to vote all Shares
owned by Buyer, Merger Subsidiary or any of their affiliates in favor of
approval and adoption of this Agreement at the Company Stockholders Meeting.
SECTION 7.04 Director and Officer Liability.
(a) The Certificate of Incorporation and By-Laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Certificate of Incorporation and By-Laws of the
Company on the date of this Agreement, 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 directors or
officers of the Company in respect of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required by law.
(b) From and after the Effective Time, the Surviving
Corporation shall indemnify, defend and hold harmless the present and former
officers and directors of the Company (collectively, the "Indemnified Parties")
against all losses, expenses, claims, damages, liabilities or amounts that are
paid in settlement of, with the approval of the Surviving Corporation (which
approval shall not unreasonably be withheld), or otherwise incurred in
connection with any claim, action, suit, proceeding or investigation (a
"Claim"), based in whole or in part by reason of the fact that such person is or
was a director or officer of the Company and arising out of actions, events or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions
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contemplated by this Agreement), in each case to the full extent permitted under
Delaware Law (and shall pay expenses in advance of the final disposition of any
such action or proceeding to each Indemnified Party to the fullest extent
permitted under Delaware Law, upon receipt from the Indemnified Party to whom
expenses are advanced of the undertaking to repay such advances contemplated by
Section 145(e) of Delaware Law); provided, that the Surviving Corporation shall
indemnify, defend and hold harmless the Indemnified Parties, and pay expenses in
advance, only to the same extent and on the same terms (including with respect
to advancement of expenses) provided for in the Company's Certificate of
Incorporation and By-Laws in effect on the date hereof (to the extent consistent
with applicable law), which rights pursuant to such provisions shall survive the
Merger and continue in full force and effect for a period of six years after the
Effective Time.
(c) Without limiting the foregoing, in the event any Claim is
brought against any Indemnified Party (whether arising before or after the
Effective Time) after the Effective Time (i) such Indemnified Party may retain
the Company's regularly engaged independent legal counsel or other independent
legal counsel satisfactory to such person, provided that such other counsel
shall be reasonably acceptable to the Surviving Corporation, (ii) the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel for such
Indemnified Party promptly as and which statements therefor are received and
(iii) the Surviving Corporation will use its reasonable best efforts to assist
in the vigorous defense of any such matter, provided that the Surviving
Corporation shall not be liable for any settlement of any Claim effected without
its written consent, which consent shall not be unreasonably withheld; provided,
that the Surviving Corporation shall indemnify, defend and hold harmless the
Indemnified Parties, and pay expenses in advance, only to the same extent and on
the same terms (including with respect to advancement of expenses) provided for
in the Company's Certificate of Incorporation and By-Laws in effect on the date
hereof (to the extent consistent with applicable law), which rights pursuant to
such provisions shall survive the Merger and continue in full force and effect
for a period of six years after the Effective Time. Any Indemnified Party
wishing to claim indemnification under this Section 7.04 upon learning of any
such Claim shall notify the Surviving Corporation (although the failure so to
notify the Surviving Corporation shall not relieve the Surviving Corporation
from any liability which the Surviving Corporation may have under this Section
7.04, except to the extent such failure materially prejudices the Surviving
Corporation's position with respect to such claim), and shall deliver to the
Surviving Corporation the undertaking contemplated by Section 145(e) of Delaware
Law. Indemnified Parties who are parties to the same action as a group may
retain no more than one law firm (in addition to local counsel) to represent
them with respect to each such matter unless there is, under applicable
standards of professional conduct (as determined by any counsel to the
Indemnified Parties), an actual conflict between the interests of any two or
more Indemnified Parties, in which event such additional counsel as may be
required may be retained by the Indemnified Parties.
(d) For a period of three years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the liability
insurance policies for directors and officers which are currently maintained by
the Company with respect to claims arising from facts
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or events which occurred before the Effective Time (provided that Buyer may
substitute therefor policies issued by insurance companies of comparable or
higher rating of at least the same coverage and amounts containing terms and
conditions which are no less advantageous in any material respect to the
Indemnified Parties). Notwithstanding the foregoing, Buyer shall not be required
to pay an annual premium for such insurance in excess of $250,000, but in such
case shall purchase as much coverage as possible for such amount. The Company
represents and warrants to Buyer that the last premium for such insurance paid
by the Company for the period from October 1, 1997 to October 1, 2000 was
$352,260.
(e) The Company and Buyer shall have no obligation under this
Section 7.04 to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and non-appealable, that indemnification of such Indemnified Party
in the manner contemplated hereby is prohibited by applicable law. In the event
that it shall be determined in a final judicial proceeding that a person who has
received advance payments of expenses or indemnification sums pursuant to this
Section 7.04 shall not be entitled to indemnification hereunder such person
shall repay to Buyer or the Company, as the case may be, all such expenses and
sums, plus interest thereto to the date of repayment immediately following such
determination.
(f) Each Indemnified Party shall have rights as a third party
beneficiary under this Section 7.04 as separate contractual rights for his or
her benefit and such right shall be enforceable by such Indemnified Party, its
heirs and personal representatives and shall be binding on the Surviving
Corporation and its successors and assigns.
SECTION 7.05 Employee Benefits. Except as otherwise may be
provided pursuant to a collective bargaining agreement, Buyer shall cause the
Surviving Corporation to maintain or provide the employees of the Surviving
Corporation and its subsidiaries for a period of one (1) year after the
Effective Time with employee benefits that are in the aggregate substantially
comparable to those provided by the Company and the Company Subsidiaries on the
date hereof. Buyer shall cause the Surviving Corporation to honor the terms of
all employment agreements of the Company and the Company Subsidiaries, the
existence of which do not violate this Agreement. Buyer shall cause the
Surviving Corporation to honor all collective bargaining agreements by which the
Company or any of the Company Subsidiaries is bound.
SECTION 7.06 Repayment of Debt. With respect to debt issued by
the Company and/or a Company Subsidiary under the Credit Agreement, dated as of
March 31, 1998, as amended, among the Company, Xxxxxxxx Publishing Company LLC
and certain financial institutions thereto (the "Credit Agreement"), following
the Effective Time Buyer shall repay all indebtedness thereunder (including any
premiums or penalties).
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SECTION 7.07 Notices of Certain Events. Buyer shall promptly
notify the Company) orally and in writing of and consult with the Company with
respect to:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting Buyer or any Buyer Subsidiary on the date of
this Agreement which will preclude the consummation of the transactions
contemplated by this Agreement or result in a Buyer Material Adverse Effect;
(d) the occurrence, or non-occurrence, of any event which
would cause (i) any condition set forth in Exhibit A to be unsatisfied at the
time Buyer or Merger Subsidiary purchases Shares pursuant to the Offer or (ii)
any condition set forth in Article IX hereof to be unsatisfied at the Effective
Time; and
(e) the occurrence of any event which would cause the
Directors of Buyer to modify or withdraw their approval or recommendations from
this Agreement and all actions contemplated hereby that require the approval of
Buyer's shareholders.
SECTION 7.08 Shareholders' Meeting; Offering Circular. Buyer
shall cause an extraordinary general meeting of its shareholders (the "Buyer
Shareholders Meeting") to be duly called and held as soon as reasonably
practicable and in no event later than January 4, 1999 for the purpose of acting
upon proposals to approve this Agreement and all actions contemplated hereby
that require the approval of Buyer's shareholders. Unless otherwise required
pursuant to their fiduciary duties to Buyer's shareholders (as determined in
good faith by the Directors of Buyer based upon the advice of independent legal
counsel), the Directors of Buyer shall not modify, withdraw or otherwise change
their prior recommendation that the Buyer's shareholders approve this Agreement
and all actions contemplated hereby that require the approval of Buyer's
shareholders. In connection with Buyer Shareholders Meeting, Buyer shall in
accordance with applicable law and stock exchange regulations, as soon as
practicable file with the London Stock Exchange a preliminary copy of its Super
Class 1 Offering Circular (the "Offering Circular") relating to the matters to
be considered at Buyer Shareholders Meeting, respond promptly to any comments
made by the London Stock Exchange with respect to the preliminary Offering
Circular and cause a definitive Offering Circular to be mailed to its
shareholders as promptly as practicable after filing with the London Stock
Exchange.
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ARTICLE VIII
COVENANTS OF BUYER AND THE COMPANY
SECTION 8.01 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement,
each party will use its commercially reasonable best efforts to take, or cause
to be taken, all action and to do, or cause to be done, and to assist and
cooperate with the other parties in doing all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective, the Offer, the Merger and the other Transactions including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the Transactions, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or reversed and
(iv) the execution and delivery of any additional instruments necessary to
consummate the Transactions and to fully carry out the purposes of this
Agreement. In connection with and without limiting the foregoing, the Company
and the Board shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
any Transaction or any Transaction Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to any Transaction
Agreement, take all action necessary to ensure that the Offer, the Merger and
the other Transactions may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Offer, the Merger and the other Transactions
and (iii) use reasonable efforts cooperate with Buyer and Merger Subsidiary
arrangements for obtaining the Financing. Nothing in this Agreement shall be
deemed to require any party to waive any substantial rights or agree to any
substantial limitation on its operations or to dispose of any significant asset
or collection of assets. In case at any time after the Effective Time any
further action is necessary or desirable to consummate more effectively the
actions contemplated by this Agreement, at the request of the other party hereto
and at the expense of the party so requesting, Buyer and Merger Subsidiary, on
the one hand, and the Company, on the other hand, shall execute and deliver to
such requesting party such documents and take such other action as such
requesting party may reasonably request.
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(b) In the event any action, suit, claim, investigation or
other proceeding relating to this Agreement, the Merger or the other
Transactions hereby shall be commenced prior to the Effective Time, each of the
parties hereto agrees, to cooperate with each other party hereto and to use its
commercially reasonable best efforts to respond to and to defend vigorously
against such proceeding; provided, however, that nothing in this Section 8.01(b)
shall be interpreted to prohibit the Company from taking any action permitted by
Section 6.04(a).
SECTION 8.02 Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the Company
Disclosure Documents, the Offer Documents and the Offering Circular, and (b) in
determining whether any other action by or in respect of, or filing with, any
governmental body, agency or official, or authority or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts in connection with the consummation of the Transactions and (c) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Company Disclosure Documents, the Offer Documents or the Offering Circular and
seeking timely to obtain any such actions, consents, approvals or waivers
(including, without limitation, as may be required under the HSR Act).
SECTION 8.03 Public Announcements. Buyer and the Company will
consult with each other before issuing or making, and provide each other the
opportunity to review and comment upon, any press release or public statement
with respect to this Agreement, the Offer, the Merger and the other
Transactions, and will not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law or any listing agreement with any national securities exchange or the London
Stock Exchange.
SECTION 8.04 Other Actions. The Company and Buyer shall not,
and shall ensure that none of their respective subsidiaries shall, take any
action that would, or that could reasonably be expected to, result in (i) any of
the representations and warranties of such party set forth in this Agreement
that is qualified as to materially becoming untrue, (ii) any of such
representations and warranties that is not so qualified becoming untrue in any
material respect or (iii) any condition to the Offer set forth in Exhibit A, or
any condition to the Merger set forth in Exhibit A, or any condition to the
Merger set forth in Article IX, not being satisfied.
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ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01 Conditions to the Obligations of Each Party. The
respective obligations of the Company, Buyer and Merger Subsidiary to consummate
the Merger are subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) if required by Delaware Law, this Agreement shall have
been approved and adopted by the stockholders of the Company in accordance with
Delaware Law (except that this condition shall be deemed satisfied if Buyer
and/or Merger Subsidiary shall have acquired (x) 90% or more of the outstanding
shares of Class A Common and (y) 90% or more of the outstanding shares of Class
B Common);
(b) any applicable waiting period (and any extension thereof)
under the HSR Act relating to the Merger shall have expired or been terminated;
(c) no Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued or enforced any statute,
regulation, decree, injunction or other order which has become final and
nonappealable and which prohibits the consummation of the Merger; provided,
however, that each of the parties shall have used its best efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any such injunction or other order that may be entered prior to it
having become final and nonappealable; and
(d) Merger Subsidiary shall have purchased pursuant to the
Offer all Shares validly tendered prior to the expiration thereof and not
withdrawn or shall have purchased pursuant to the Company Stockholders Agreement
all Shares tendered thereunder.
ARTICLE X
TERMINATION; EXPENSES
SECTION 10.01 Termination. This Agreement may be terminated
and the Transactions may be abandoned at any time prior to the Effective Time
(notwithstanding any approval and adoption of this Agreement by the stockholders
of the Company and by the shareholders of Buyer):
(a) by mutual written consent of the Company and Buyer;
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(b) by either Buyer or the Company, if any permanent
injunction or action by any Governmental Entity or by any federal or state court
of competent jurisdiction (other than a temporary restraining order) preventing
the consummation of the Merger shall have become final and nonappealable;
(c) by either Buyer or the Company, if the Merger shall not
have been consummated before June 30, 1999, unless the failure to consummate the
Merger is the result of a breach of this Agreement by the party seeking to
terminate this Agreement; provided, however, that this Agreement may be extended
by written notice of either Buyer or the Company to a date not later than
September 30, 1999, if the Merger shall not have been consummated as a direct
result of Buyer or the Company having failed by June 30, 1999, to receive all
required approvals or consents with respect to the Merger;
(d) by the Company, at any time three business days or more
following termination or expiration of the Offer without Merger Subsidiary
purchasing Shares thereunder, so long as no Shares have been purchased pursuant
to the Company Stockholders Agreement;
(e) by Buyer, if the Offer shall have expired without the
purchase of the Shares thereunder and the Minimum Condition shall not have been
satisfied, or Buyer or Merger Subsidiary shall, in accordance with Exhibit A
hereto, have terminated the Offer without purchasing Shares thereunder, in each
case so long as no Shares have been purchased pursuant to the Company
Stockholders Agreement and neither Buyer nor Merger Subsidiary has breached any
of its obligations under Section 1.01 of this Agreement or is in breach of any
of its other obligations under this Agreement and such breach has resulted in
the failure of any condition set forth in Exhibit A to be satisfied;
(f) by the Company, if the Merger shall fail to receive the
requisite vote for approval and adoption by the stockholders of the Company at
the Company Stockholders Meeting;
(g) by the Company, if the Board fails to make or withdraws or
modifies its recommendation referred to in Section 6.02 so long as the Board,
after consultation with and based upon the advice of legal counsel (who may be
the Company's regularly engaged legal counsel), determines in good faith that
such action is necessary for the Board to comply with its fiduciary duties to
stockholders under applicable law and, after consultation with its independent
legal counsel and financial advisor, determines in good faith that the
Acquisition Proposal is a Superior Proposal; provided, that the Company may not
terminate this Agreement pursuant to this Section 10.01(g) after such time as
Merger Subsidiary has purchased upon expiration of the Offer all Shares validly
tendered in the Offer and not withdrawn or Buyer or Merger Subsidiary has
purchased Shares pursuant to the Company Stockholders Agreement;
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(h) by either Buyer or the Company, if the Merger shall fail
to receive the requisite vote for approval by the shareholders of Buyer at the
Buyer Shareholders Meeting;
(i) by Buyer, in the event of any breach of the
representations and warranties of the Company set forth in this Agreement other
than any breach that individually or in the aggregate with each other such
breach has not had and would not reasonably be expected to have a Company
Material Adverse Effect; provided, that for purposes of this Section 10.01(i)
each such representation and warranty of the Company set forth in this Agreement
shall be read without giving effect to any qualification as to materiality or a
Company Material Adverse Effect, or if the Company breaches or fails to perform
in any material respect any of its covenants contained in this Agreement, which
breach or failure to perform (i) would give rise to the failure of a condition
set forth in Exhibit A and (ii) has not been cured within 30 days after the
giving of written notice to Buyer of such breach; provided, that Buyer may not
terminate this Agreement pursuant to this Section 10.01(i) if (x) Buyer or
Merger Subsidiary is then in material breach of any covenant contained in this
Agreement, (y) any Shares have been purchased in the Offer or (z) any Shares
have been purchased pursuant to the Company Stockholders Agreement;
(j) by the Company, in the event of any breach of the
representations and warranties of Buyer or Merger Subsidiary set forth in this
Agreement that are qualified as to materiality or any breach of any
representations and warranties of Buyer or Merger Subsidiary set forth in this
Agreement that are not so qualified in any material respect and, individually or
in the aggregate, such breach has had a Buyer Material Adverse Effect or if
Buyer or Merger Subsidiary breaches or fails to perform in any material respect
any of its covenants contained in this Agreement, which breach or failure to
perform has not been cured within 30 days after the giving of written notice to
Company of such breach; provided, that the Company may not terminate this
Agreement pursuant to this Section 10.01(j) if (x) the Company is then in
material breach of any covenant contained in this Agreement, (y) any Shares have
been purchased in the Offer or (z) any Shares have been purchased pursuant to
the Company Stockholders Agreement; or
(k) by the Company, if the Buyer Shareholders Meeting is not
held on or prior to January 4, 1999; provided, however, that the Company may not
terminate this Agreement pursuant to this Section 10.01(k) if the Buyer has
obtained the approval of its shareholders of the Transactions prior to delivery
by the Company of its notice of termination hereunder.
The right of any party hereto to terminate this Agreement
pursuant to this Section 10.01 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any party hereto,
any person controlling or controlled by any such party or any of their
respective officers or directors, whether prior to or after the execution of
this Agreement.
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SECTION 10.02 Effect of Termination. If this Agreement is
terminated pursuant to Section 10.01, this Agreement shall become void and of no
effect with no liability on the part of any party hereto, except that the
agreements contained in Sections 4.19, 5.07, 7.01, this Section 10.02, Article
XI and Section 10.03 shall survive the termination hereof, and except that no
such termination shall relieve any party from liability for breach of this
Agreement or failure by such party to perform its obligations hereunder.
SECTION 10.03 Fees and Expenses. All out-of-pocket costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred directly or indirectly by the
parties hereto in respect of the Merger and the other Transactions shall be
borne by the party to this Agreement which has incurred such costs and expenses
(with respect to such party, its "Expenses"); provided, however, that if the
Merger is consummated all Expenses of the Company shall be paid by the Surviving
Corporation.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing including facsimile,
telex or similar writing) and shall be given,
If to Buyer or Merger Subsidiary, to:
EMAP plc
0 Xxxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxxxxx XX0 0XX
Xxxxxxx
Attention: Chief Executive Officer
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with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxx
Xxxxxx X. Xxxxxxxxxx
if to the Company, to:
The Xxxxxxxx Companies, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxx
or such other address, as such party may hereafter specify for the purpose by
notice to the other parties hereto. Each such notice, request or other
communication shall be effective (i) if given by facsimile and received at or
prior to 5:00 p.m. local time on a business day, upon confirmation of receipt,
and if given by facsimile and received at any other time, upon the next business
day or (ii) if given by any other means, when delivered at the address specified
in this Section 11.01.
SECTION 11.02 Survival of Representations, Warranties and
Covenants. The representations and warranties contained herein shall not survive
the Effective Time. This Section 11.02 shall not limit any covenant or agreement
of the parties which by its terms contemplate performance after the Effective
Time.
SECTION 11.03 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company and Buyer or in
the case of a waiver, by the party against whom the
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waiver is to be effective; provided, however, that after receipt of the Company
Stockholder Approval and Buyer Shareholder Approval, there shall be made no
amendment that by law requires further approval by the stockholders of the
Company or the shareholders of Buyer without the further approval of such
stockholders or shareholders, as the case may be; provided, further, that after
the adoption of this Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of such stockholders,
alter or change in a manner adverse to the holders of any shares of capital
stock of the Company (i) the amount or kind of consideration to be received in
exchange for any shares of capital stock of the Company, (ii) any term of the
Certificate of Incorporation of the Surviving Corporation or (iii) any of the
terms or conditions of this Agreement.
(b) At any time prior to the Effective Time, the parties may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) subject to the first proviso of Section 11.03(a), waive
compliance with any of the agreements or conditions contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04 Successors and Assigns. Subject to the following
provisos, the provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successor and assigns,
provided that no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of the other
parties hereto; provided, further, that Merger Subsidiary may assign, in its
sole discretion, all its rights and, interests under this Agreement to Buyer or
to any direct or indirect wholly owned subsidiary of Buyer so long as Buyer or
such assignee also assumes all of Merger Subsidiary's obligations under this
Agreement and Buyer acknowledges to the Company in a way satisfactory to the
Company that Buyer will cause such assignee to satisfy all of such obligations,
but no such assignment shall relieve Merger Subsidiary of any of its obligations
under this Agreement.
SECTION 11.05 Governing Law; Consent to Jurisdiction. This
Agreement shall be construed in accordance with and governed in all respects,
including validity, interpretation and effect, by the law of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
The parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or
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injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or in any Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any state
or federal court located in the State of Delaware in the event any dispute
arises out of this Agreement or any of the Transactions, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction or venue by motion or
other request for leave from any such court, (c) agrees that it will not bring
any action relating to this Agreement or any of the Transactions in any court
other than a state or federal court sitting in the State of Delaware (except
that the Company may seek to enforce any judgment in any such action), and (d)
waives any right to trial by jury with respect to any action related to or
arising out of this Agreement or any Transactions.
SECTION 11.06 Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 11.07 Headings; Interpretations; Disclosure Schedules.
The table of contents and Section headings used in this Agreement are for
convenience only and shall be ignored in the construction and interpretation
hereof. When a reference is made in this Agreement to a Section, 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."
SECTION 11.08 No Third Party Beneficiaries. Except for the
provisions of Article II and Section 7.04 (which are intended to and shall
confer upon such persons all rights and remedies by reason of this Agreement as
if such person was a party hereto), no provision of this Agreement is intended
to, or shall, confer any third party beneficiary or other rights or remedies
upon any person other than the parties hereto.
SECTION 11.09 Entire Agreement. The Transaction Agreements
(together with the Company Disclosure Schedule, Buyer Disclosure Schedule and
the other documents delivered pursuant hereto) and the Confidentiality Agreement
constitute the entire agreements of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof; provided, however, that the
terms and provisions of Section 6 of the Confidentiality Agreement shall
terminate upon execution hereof.
SECTION 11.10 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
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conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such 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 to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 11.11 Definitions. For purposes of this Agreement:
An "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person.
A "person" means any individual, firm, corporation,
partnership, company, limited liability company, trust, joint venture,
association, Governmental Entity or other entity.
A "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
"Permitted Liens" means: (i) Liens created to secure existing
lines of credit; (ii) Liens imposed by law with respect to property or assets of
the Company and any of the Company Subsidiaries, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar Liens
incurred in the ordinary course of business for sums not constituting borrowed
money that are not overdue for a period of more than thirty (30) days or that
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP (if so
required); (iii) Liens (other than any Lien imposed by ERISA) with respect to
property or assets of the Company and the Company Subsidiaries incurred in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other forms of governmental insurance of benefits, or
to secure the performance of letters of credit, bids, tenders, statutory
obligations, surety and appeal bonds, leases, government contracts and other
similar obligations (other than obligations for borrowed money) entered into in
the ordinary course of business consist with past practice; (iv) Liens for
taxes, assessments or other governmental charges or statutory obligations that
are not delinquent or remain payable without any penalty or that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so required); (v)
Liens securing purchase money indebtedness incurred in the ordinary course of
business consistent with past practice and not
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otherwise incurred in violation of Section 6.01 of this Agreement, provided that
the aggregate principal amount at any time outstanding of all indebtedness
secured by such Liens does not exceed $10,000,000, and provided further that any
such Lien (A) shall attach to such property concurrently with or within twenty
(20) days after the acquisition thereof by the Company or such Company
Subsidiary, (B) shall not exceed the lesser of (y) the fair market value of such
property or (z) the cost thereof to the Company or such Subsidiary and (C) shall
not encumber any other property of the Company or any of the Company
Subsidiaries; and the replacement, extension or renewal of any such Lien,
provided that such replacement, extension or renewal Lien shall not extend to or
cover any property other than the property subject to such Lien immediately
prior to such replacement, extension or renewal, and provided further that the
Indebtedness secured by such replacement, extension or renewal Lien is permitted
under this Agreement; (vi) any attachment or judgment Lien that is being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so required); (vii)
Liens arising from the filing, for notice purposes only, of financing statements
in respect of operating leases entered into in the ordinary course of business
consistent with past practice and not otherwise entered into in violation of
6.01 of this Agreement; (viii) Liens arising by operation of law in favor of
depositary banks and collecting banks, incurred in the ordinary course of
business consistent with past practice and not otherwise in violation of Section
6.01 and this Agreement; (ix) Liens consisting of restrictions on the transfer
of securities pursuant to applicable federal and state securities laws; (x)
interests of lessors and licensors under leases and licenses to which the
Company or any of the Company Subsidiaries is a party as of the date hereof;
(xi) with respect to any real property occupied by the Company or any of its
Subsidiaries, all easements, rights of way, licenses and similar encumbrances on
title that do not materially impair the use of such property for its intended
purposes; and (xii) Liens with respect to any assets acquired in transactions
permitted under Section 6.01 of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
THE XXXXXXXX COMPANIES, INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------------
Its: Chairman and Chief Executive
Officer
------------------------------
EMAP PLC
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Its: President, Secretary and
Treasurer
------------------------------
EMAP ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Its: President, Secretary and
Treasurer
------------------------------
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EXHIBIT A
CONDITIONS TO THE OFFER
The capitalized terms used in this Exhibit A have the meanings
set forth in the attached Agreement, except that the term "Merger Agreement"
shall be deemed to refer to the attached Agreement.
Notwithstanding any other provision of the Offer or this
Agreement, Merger Subsidiary shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to Merger Subsidiary's obligation to
pay for or return tendered Shares promptly after the termination or withdrawal
of the Offer), to pay for any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer if (i) as of immediately prior to the expiration of
the Offer, (A) the Minimum Condition shall not have been satisfied or (B) the
applicable waiting period under the HSR Act shall not have expired or been
terminated or (ii) prior to the acceptance for payment of or payment for Shares
and at any time on or after the date of this Agreement, any of the following
conditions shall have occurred and be continuing:
(a) there shall be issued by any U.S. Federal or state court
of competent jurisdiction in connection with any legal proceeding, any
final or nonappealable order, ruling or injunction (that has not been
vacated, withdrawn or overturned), (i) restraining or prohibiting the
acquisition by Buyer or Merger Subsidiary of any Shares under the Offer
or the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by this
Agreement, or obtaining from the Company, or Merger Subsidiary any
damages in connection with the aforesaid transactions that are material
in relation to the Company and its subsidiaries taken as a whole, (ii)
prohibiting or materially limiting the ownership or operation by the
Company, Buyer or any of their respective subsidiaries of a material
portion of the business or assets of the Company and its subsidiaries,
or Buyer and its subsidiaries, in each case taken as a whole, or
compelling the Company or Buyer to dispose of or hold separate any
material portion of the business or assets of the Company and its
subsidiaries, or Buyer and its subsidiaries, in each case taken as a
whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose material
limitations on the ability of Buyer or Merger Subsidiary to acquire or
hold, or exercise full rights of ownership of, any Shares to be
accepted for payment pursuant to the Offer including, without
limitation, the right to vote such Shares on all matters properly
presented to the stockholders of the Company, or (iv) prohibiting Buyer
or any of its subsidiaries from effectively controlling in any material
respect any significant portion of the business or operations of the
Company and its subsidiaries taken as a whole;
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(b) The Company shall not have performed or complied in any
material respect with any obligation or to comply in any material
respect with any agreement or covenant required by this Agreement to be
performed or complied with by the Company on or prior to the date of
consummation of the Offer, which failure to perform or comply is not
substantially cured within 15 days after Buyer provides the Company
with notice of such failure;
(c) Any breach of the representations and warranties of the
Company set forth in this Agreement other than any breach that
individually or in the aggregate with each other such breach has not
had and would not reasonably be expected to have a Company Material
Adverse Effect; provided, that for purposes of this paragraph (c) each
such representation and warranty of the Company set forth in this
Agreement shall be read without giving effect to any qualification as
to materiality or a Company Material Adverse Effect;
(d) This Agreement shall have been terminated in accordance
with its terms;
(e) Buyer and the Company shall have agreed that Buyer shall
terminate the Offer;
(f) There shall be any statute, rule or regulation enacted or
promulgated by any Governmental Entity applicable to the Offer or the
Merger, or any other action shall be taken by any Governmental Entity,
that results, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above; or
(g) Buyer shall have held a vote at the Buyer Shareholders
Meeting (as defined in Section 7.08 of the Merger Agreement) of the
holders of the outstanding ordinary shares of Buyer that are entitled
to vote upon the proposals to approve the Merger Agreement and the
transactions contemplated thereby (including the Offer and the Merger)
and the Buyer Shareholder Approval shall not have been obtained;
which, in the sole judgment of Merger Subsidiary or Buyer in any such
case, and regardless of the circumstances giving rise to any such
condition (including any action or inaction by Buyer or any of its
affiliates), makes it inadvisable to proceed with such acceptance for
payment or payment for the Shares.
The foregoing conditions in paragraphs (a) through (g) are for the sole
benefit of Merger Subsidiary and Buyer and may be asserted by Merger Subsidiary
or Buyer regardless of the circumstances giving rise to such condition or may be
waived by Merger Subsidiary and Buyer in whole or in part at any time and from
time to time in their sole discretion. The failure by Buyer,
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Merger Subsidiary or any other affiliate of Buyer at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right, the waiver
of any such right with respect to particular facts and circumstances shall not
be deemed a waiver with respect to any other facts and circumstances and each
such right shall be deemed an ongoing right that may be asserted at any time and
from time to time.
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EXHIBIT B
NOTICE AND CERTIFICATE
___________________________ ["_____"], as the holder of [ ]
shares of Class B Common Stock, par value $.01 per share, of The Xxxxxxxx
Companies, Inc. (the "Company"), desires to exchange all of such shares for such
number of shares of Class A Common Stock, par value $.01 per share, of the
Company. The shares of Class A Common Stock to be issue to [________] pursuant
to this Notice and Certificate shall be issued in a single certificate in the
name of [________] as the holder thereof.
Dated as of [________]
By:_________________________________
Name:__________________________
Title:_________________________
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EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
ARTICLE I
The name of the corporation (hereinafter called the
"Corporation") is [NAME OF CORPORATION].
ARTICLE II
The address of the Corporation's registered office in the
State of Delaware is /-/, Delaware. The name of the registered agent at such
address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 1,000 shares of Common Stock having
the par value of $0.01 per share.
ARTICLE V
The number of directors of the Corporation shall be fixed from
time to time by the Board of Directors of the Corporation.
ARTICLE VI
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In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws of the
Corporation so require, the election of directors of the Corporation need not be
by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted by law, no
director of the Corporation shall be personally liable to any extent to the
Corporation or its stockholders for monetary damages for breach of his fiduciary
duty as a director.
ARTICLE IX
Each person who is or was or had agreed to become a director
or officer of the Corporation, and each such person who is or was serving or who
had agreed to serve at the request of the Corporation as a director, officer,
partner, member, employee or agent of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise (including the
heirs, executor, administrators or estate of such person), shall be indemnified
by the Corporation to the fullest extent permitted from time to time by
applicable law.
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