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