AGREEMENT AND PLAN OF MERGER
DATED AS OF
OCTOBER 26, 2000
AMONG
KEEBLER FOODS COMPANY,
XXXXXXX COMPANY
AND
FK ACQUISITION CORP.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS .......................................................2
Section 1.01. Definitions ........................................2
ARTICLE 2 THE MERGER ........................................................6
Section 2.01. The Merger .........................................6
Section 2.02. Conversion of Shares ...............................6
Section 2.03. Surrender and Payment ..............................7
Section 2.04. Dissenting Shares ..................................8
Section 2.05. Stock Options ......................................8
Section 2.06. Adjustments ........................................9
Section 2.07. Withholding Rights .................................9
Section 2.08. Lost Certificates ..................................9
ARTICLE 3 THE SURVIVING CORPORATION .........................................9
Section 3.01. Certificate of Incorporation .......................9
Section 3.02. Bylaws .............................................9
Section 3.03. Directors and Officers .............................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ELF ............................10
Section 4.01. Corporate Existence and Power .....................10
Section 4.02. Corporate Authorization ...........................10
Section 4.03. Governmental Authorization ........................10
Section 4.04. Non-Contravention .................................11
Section 4.05. Capitalization ....................................11
Section 4.06. Subsidiaries ......................................12
Section 4.07. SEC Filings .......................................12
Section 4.08. Financial Statements ..............................13
Section 4.09. Disclosure Documents ..............................13
Section 4.10. Absence of Certain Changes ........................13
Section 4.11. No Undisclosed Material Liabilities ...............15
Section 4.12. Compliance with Laws and Court Orders .............15
Section 4.13. Litigation ........................................15
Section 4.14. Finders' Fees .....................................16
Section 4.15. Opinion of Financial Advisors .....................16
Section 4.16. Taxes .............................................16
Section 4.17. Employee Benefit Plans ............................17
Section 4.18. Environmental Matters .............................20
Section 4.19. Intellectual Property .............................21
Section 4.20. Material Contracts; Joint Ventures ................21
Section 4.21. Insurance .........................................22
Section 4.22. Indebtedness ......................................22
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Section 4.23. Real Property .....................................22
Section 4.24. Transactions with Affiliates ......................22
Section 4.25. Customers .........................................22
Section 4.26. Antitakeover Statute ..............................23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT .........................23
Section 5.01. Corporate Existence and Power .....................23
Section 5.02. Corporate Authorization ...........................23
Section 5.03. Governmental Authorization ........................23
Section 5.04. Non-Contravention .................................24
Section 5.05. Disclosure Documents ..............................24
Section 5.06. Finders' Fees .....................................24
Section 5.07. Adequate Funds ....................................24
ARTICLE 6 COVENANTS OF ELF .................................................24
Section 6.01. Conduct of Elf ....................................24
Section 6.02. Stockholder Action by Written Consent;
Information Statement ...........................27
Section 6.03. Access to Information .............................27
Section 6.04. No Solicitation ...................................28
Section 6.05. Third Party Standstill Agreements .................30
Section 6.06. Special Dividend ..................................30
ARTICLE 7 COVENANTS OF PARENT ..............................................30
Section 7.01. Obligations of Merger Subsidiary ..................30
Section 7.02. Director and Officer Liability ....................31
Section 7.03. Employee Matters ..................................32
ARTICLE 8 COVENANTS OF PARENT AND ELF ......................................32
Section 8.01. Reasonable Efforts ................................32
Section 8.02. Certain Filings ...................................33
Section 8.03. Public Announcements ..............................33
Section 8.04. Further Assurances ................................34
Section 8.05. Notices of Certain Events .........................34
ARTICLE 9 CONDITIONS TO THE MERGER .........................................34
Section 9.01. Conditions to Obligations of Each Party ...........34
Section 9.02. Conditions to the Obligations of Parent
and Merger Subsidiary ...........................35
Section 9.03. Conditions to the Obligations of Elf ..............35
ARTICLE 10 TERMINATION ......................................................36
Section 10.01. Termination .......................................36
Section 10.02. Effect of Termination .............................37
ARTICLE 11 MISCELLANEOUS ....................................................37
Section 11.01. Notices ...........................................37
Section 11.02. Non-Survival of Representations and
Warranties ......................................39
Section 11.03. Amendments; No Waivers ............................39
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Section 11.04. Expenses ..........................................39
Section 11.05. Successors and Assigns ............................40
Section 11.06. Governing Law .....................................40
Section 11.07. Jurisdiction ......................................40
Section 11.08. WAIVER OF JURY TRIAL ..............................40
Section 11.09. Counterparts; Effectiveness; Benefit ..............40
Section 11.10. Entire Agreement ..................................41
Section 11.11. Captions ..........................................41
Section 11.12. Severability ......................................41
Section 11.13. Specific Performance ..............................41
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of October 26, 2000 (this
"Agreement"), among KEEBLER FOODS COMPANY, a Delaware corporation ("Elf"),
XXXXXXX COMPANY, a Delaware corporation ("Parent"), and FK ACQUISITION CORP., a
Georgia corporation and a wholly-owned subsidiary ("Merger Subsidiary") of
FLOWERS INDUSTRIES, INC., a Georgia corporation ("TULIP").
WHEREAS, the respective Boards of Directors of Parent, Merger
Subsidiary and Elf have approved this Agreement, and deem it advisable, fair to
and in the best interests of their respective stockholders to consummate the
merger of Merger Subsidiary or another corporation directly or indirectly
wholly-owned by Parent with and into Elf on the terms and conditions set forth
herein (the "Merger");
WHEREAS, the Board of Directors of Elf (the "Elf Board"), by
resolution adopted in accordance with Delaware Law, has appointed a special
committee of independent members of the Elf Board (the "Special Committee")
which has determined that the Merger and this Agreement is fair to and in the
best interests of Elf's stockholders (other than TULIP);
WHEREAS, as a condition and inducement to Parent entering this
Agreement, concurrently with the execution and delivery of this Agreement,
Parent and TULIP, a majority stockholder of Elf, are entering into a voting
agreement (the "TULIP Voting Agreement") pursuant to which, among other things,
TULIP has agreed to execute a written consent with respect to all of its shares
of Elf common stock, $0.01 par value, in favor of the approval of the
above-described Merger and adoption of this Merger Agreement;
WHEREAS, (i) Parent, Kansas Merger Subsidiary, Inc., a Delaware
corporation and wholly-owned subsidiary of Parent ("TULIP Merger Sub") and TULIP
have entered into an Agreement and Plan of Restructuring and Merger dated as of
the date hereof (the "TULIP Merger Agreement") pursuant to which TULIP Merger
Sub will merge with and into TULIP (the "TULIP Merger") on the terms and
conditions set forth therein and (ii) in the TULIP Merger each share of common
stock, $0.625 par value, of TULIP ("TULIP Common Stock") will be converted into
the right to receive an amount per share in cash determined as set forth in the
TULIP Merger Agreement;
WHEREAS, the Merger contemplated by this Agreement will occur only
if the condition set forth in Section 9.01(d) is satisfied; and
WHEREAS, Parent, TULIP and Elf intend that as a result of the TULIP
Merger and the Merger, Elf will be a direct wholly-owned subsidiary of TULIP,
and TULIP will be a direct wholly-owned subsidiary of Parent or, if the TULIP
Merger is not consummated, then as a result of the Merger, Elf will be a direct
wholly-owned subsidiary of Parent.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS.
(a) The following terms, as used herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Antitrust Division" means the Antitrust Division of the United
States Department of Justice.
"Benefit Arrangement" means any employment, severance or similar
contract, plan, policy, fund or arrangement (oral or written) providing for
compensation, bonus, profit-sharing, stock option, or other stock-related rights
or other forms of incentive or deferred compensation, perquisites, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, worker's compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not and was not an Employee Plan, (ii) is or has
been entered into, maintained, administered or contributed to, as the case may
be, by Elf or any of its ERISA Affiliates and (iii) covers any Elf Employee.
"Business Day" means a day other than Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
"Code" means the Internal Revenue Code of 1986, as amended.
"Controlled Group Liability" means any and all liabilities (i) under
Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and
4971 of the Code, (iv) as a result of a failure to comply with the continuation
coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code and (v) under corresponding or similar provisions of foreign laws or
regulations, other than such liabilities that arise solely out of, or relate
solely to, the Employee Arrangements listed in the Elf Disclosure Schedule.
"Delaware Law" means the General Corporation Law of the State of
Delaware.
"Elf Balance Sheet" means the consolidated balance sheet of Elf as
of January 1, 2000 and the footnotes thereto set forth in the Elf 10-K.
"Elf Employees" means all current and former employees of Elf and
its Subsidiaries.
"Elf Intellectual Property Rights" means all material Intellectual
Property Rights owned or licensed and used or held for use by Elf or any of its
Subsidiaries.
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"Elf 10-K" means Elf's annual report on Form 10-K for the fiscal
year ended January 1, 2000.
"Employee Arrangement" means any Benefit Arrangement or Employee
Plan.
"Employee Plan" means any "employee benefit plan", as defined in
Section 3(3) of ERISA that (i) is or was subject to any provision of ERISA, (ii)
is or was maintained, administered or contributed to by Elf or any of its ERISA
Affiliates and (iii) covers or covered any Elf Employee.
"Environmental Claims" means any written or, to Elf's knowledge,
threatened claim, demand, or notice to, or other suit, action, proceeding or
investigation of, Elf or any of its Subsidiaries by any person alleging any
potential liability (including potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages, or
penalties) arising out of, based on, or resulting from the presence, or Release
into the environment, of any Hazardous Substance at any location, whether or not
owned, leased, operated or used by Elf or any of its Subsidiaries.
"Environmental Laws" means in each case as in effect on the date
hereof and for purposes of Section 9.02(b) on the date of the consummation of
the Merger all Laws of, or agreements with, any Governmental Entity or other
third party relating to human health, safety or the environment, including
relating to emissions, discharges, Releases or threatened Releases of Hazardous
Substances, or otherwise relating to the manufacture, generation, processing,
distribution, use, sale, treatment, receipt, storage, disposal, transport or
handling of Hazardous Substances, including the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act, and the Occupational Safety and Health Act.
"Environmental Permits" means all permits, licenses, certificates or
approvals necessary for the operation of Elf or any of its Subsidiaries as
currently conducted to comply with all applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" of any entity means any other entity that,
together with such entity, would be treated as a single employer under Section
414(b), (c) or (m) of the Code.
"FTC" means the United States Federal Trade Commission.
"Governmental Entity" means any federal, state, local or foreign
government or any court, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic, foreign or
supranational.
"Hazardous Substance" means (i) chemicals, pollutants, contaminants,
hazardous wastes, toxic substances, and oil and petroleum products, (ii) any
substance that is or contains friable asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances
or wastes, radon gas or related materials, (iii) any substance that requires
removal or remediation under any Environmental Law, or is defined, listed or
identified
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as a "hazardous waste" or "hazardous substance" thereunder, or (iv)
any substance that is toxic, explosive, corrosive, flammable, radioactive,
carcinogenic, mutagenic, or otherwise hazardous.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"Intellectual Property Right" means any trademark, service xxxx,
trade name, mask work, invention, patent, trade secret, copyright, know-how or
proprietary information (including with respect to any website), processes,
formulae, products, technologies, discoveries, apparatus, Internet domain names,
trade dress and general intangibles of like nature (together with goodwill),
customer lists, confidential information, licenses, software, databases and
compilations including any and all collections of data and all documentation
thereof (including any registrations or applications for registration of any of
the foregoing) or any other similar type of intellectual property right.
"Law" means any applicable federal, state, local or foreign law,
statute, common law, ordinance, directive, rule, regulation, judgment, order,
injunction, decree, arbitration award, agency requirement, license or permit of
any Governmental Entity.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien, any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on the condition (financial or otherwise), business,
assets, or results of operations of such Person and its Subsidiaries, taken as a
whole.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 3(37) of ERISA.
"1933 Act" means the Securities Act of 1933.
"1934 Act" means the Securities Exchange Act of 1934.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, Governmental Entity or other entity or
organization.
"Releases" means any releasing, disposing, discharging, injecting,
spilling, leaking, pumping, dumping, emitting, escaping, emptying, migrating,
placing and the like, including into or upon, any land, soil, surface water,
ground water or air, or otherwise entering into the environment, that is not in
compliance with Environmental Laws.
"SEC" means the Securities and Exchange Commission.
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"Shares" means the shares of common stock, $0.01 par value, of Elf.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Title IV Plan" means an Employee Plan subject to Title IV of ERISA,
other than any Multiemployer Plan.
"Withdrawal Liability" means liability to or with respect to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title
IV of ERISA.
Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time, and to the rules and regulations
promulgated thereunder.
Any reference to "including" or "include" means "including, without
limitation" or "include, without limitation," respectively.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Acquisition Agreement............................... 6.04
Contracts........................................... 4.20
Certificates........................................ 2.03
Confidentiality Agreement........................... 6.03
Effective Time...................................... 2.01
Elf Disclosure Schedule............................. Article 4
Elf Information Statement........................... 4.09
Elf Properties...................................... 4.22
Elf SEC Documents................................... 4.07
Elf Securities...................................... 4.05
Elf Subsidiary Securities........................... 4.06
Exchange Agent...................................... 2.03
GAAP................................................ 4.08
Indemnified Person.................................. 7.03
IRS................................................. 4.16
Joint Venture....................................... 4.20
JV Agreement........................................ 4.20
Merger.............................................. Recitals
Merger Consideration................................ 2.02
Options............................................. 4.05
Preferred Shares.................................... 4.05
Surviving Corporation............................... 2.01
Takeover Proposal................................... 6.04
Tax Return.......................................... 4.16
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Tax or Taxes........................................ 4.16
Taxing Authority.................................... 4.16
Trigger Date........................................ 11.04
TULIP............................................... Recitals
TULIP Common Stock.................................. Recitals
TULIP Merger........................................ Recitals
TULIP Merger Agreement.............................. Recitals
TULIP Merger Sub.................................... Recitals
TULIP Voting Agreement.............................. Recitals
ARTICLE 2
THE MERGER
Section 2.01. THE MERGER.
(a) At the Effective Time, Merger Subsidiary, or, at the option of
Parent and subject to Section 11.05, a newly-formed wholly-owned Subsidiary of
Parent, shall be merged with and into Elf in accordance with Delaware Law,
whereupon the separate existence of Merger Subsidiary (or such other
wholly-owned Subsidiary of Parent, as the case may be) shall cease, and Elf
shall be the surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, Elf and Merger
Subsidiary will file a certificate of merger with the Delaware Secretary of
State and make all other filings or recordings required by Delaware Law in
connection with the Merger. The Merger shall become effective at such time (the
"Effective Time") as the certificate of merger is duly filed with the Delaware
Secretary of State or at such later time as is specified in the certificate of
merger, provided that, so long as the condition set forth in Section 9.01(d)
shall have been satisfied by consummation of the Tulip Merger, the Effective
Time shall not occur unless and until the effective time of the TULIP Merger
shall have previously occurred.
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of Elf and Merger
Subsidiary (or such other subsidiary referenced in Section 2.01(a), as the case
may be), all as provided under Section 259 of the Delaware Law.
Section 2.02. CONVERSION OF SHARES. At the Effective Time:
(a) except as otherwise provided in Section 2.02(b) or Section 2.04,
each Share outstanding immediately prior to the Effective Time shall be
converted into the right to receive $42 in cash, without interest (the "Merger
Consideration");
(b) each Share held by Elf as treasury stock or owned by Parent, TULIP
or any of their Subsidiaries immediately prior to the Effective Time shall
remain outstanding after the Merger, and no payment shall be made with respect
thereto and all such shares shall thereafter constitute shares of capital stock
of the Surviving Corporation; provided that if the
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TULIP Merger is not consummated and the condition set forth in Section 9.01(d)
is satisfied, each Share held by TULIP or any of its subsidiaries shall not
remain outstanding but instead shall be converted into the right to receive the
Merger Consideration;
(c) the shares of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become that
number of shares of common stock of the Surviving Corporation equal to the
number of Shares converted pursuant to Section 2.02(a); provided that if the
TULIP Merger is not consummated and the condition set forth in Section 9.01(d)
is satisfied, each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation; and
(d) the shares of capital stock of the Surviving Corporation
outstanding after the Effective Time pursuant to Sections 2.02(b) and 2.02(c)
shall constitute the only shares of capital stock of the Surviving Corporation
outstanding immediately after the Effective Time.
Section 2.03. SURRENDER AND PAYMENT.
(a) Prior to the Effective Time, Parent shall appoint an agent (the
"Exchange Agent") reasonably acceptable to Elf for the purpose of exchanging
certificates representing Shares (the "Certificates") for the Merger
Consideration. Promptly after the Effective Time, Parent will cause to be
deposited with the Exchange Agent the Merger Consideration to be paid in respect
of the Shares converted pursuant to Section 2.02(a) and pursuant to Section
2.02(b), if applicable. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of Shares at the Effective
Time a letter of transmittal and instructions (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the Certificates to the Exchange Agent) for use in such
exchange.
(b) Each holder of Shares that have been converted into the right to
receive the Merger Consideration pursuant to Section 2.02(a) and pursuant to
Section 2.02(b), if applicable, will be entitled to receive, upon surrender to
the Exchange Agent of a Certificate, together with a properly completed letter
of transmittal, the Merger Consideration payable for each Share represented by
such Certificate. Until so surrendered, each such Certificate shall represent
after the Effective Time for all purposes only the right to receive such Merger
Consideration. No interest shall be paid or will accrue on the Merger
Consideration payable pursuant to the provisions of this Article 2.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such Certificate or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
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(d) After the Effective Time, the stock transfer books of Elf will
be closed and there shall be no further registration or transfers of Shares. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration
provided for, and in accordance with the procedures set forth, in this Article
2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has not exchanged Shares for the Merger
Consideration in accordance with this Section 2.03 prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of such Shares without any interest thereon. Notwithstanding the
foregoing, Parent shall not be liable to any holder of Shares for any amount
paid to a public official pursuant to applicable abandoned property, escheat or
similar Laws. Any amounts remaining unclaimed by holders of Shares three years
after the Effective Time (or such earlier date immediately prior to such time
when the amounts would otherwise escheat to or become property of any
Governmental Entity) shall become, to the extent permitted by applicable Law,
the property of Parent free and clear of any claims or interest of any Person
previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for Shares for which appraisal
rights have been requested shall be returned to Parent, upon demand.
Section 2.04. DISSENTING SHARES. Notwithstanding Section 2.02,
Shares outstanding immediately prior to the Effective Time and held by a holder
who has not voted in favor of the Merger or consented thereto in writing and who
has demanded appraisal for such Shares in accordance with Delaware Law shall not
be converted into a right to receive the Merger Consideration, unless such
holder fails to perfect, withdraws or otherwise loses its right to appraisal.
If, after the Effective Time, such holder fails to perfect, withdraws or loses
its right to appraisal, such Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the Merger
Consideration. Elf shall give Parent prompt notice of any demands received by
Elf for appraisal of Shares. Except as required by applicable law or with the
prior written consent of Parent, Elf shall not make any payment with respect to,
or settle or offer to settle, any such demands.
Section 2.05. STOCK OPTIONS.
(a) At or immediately prior to the Effective Time, each Option,
whether or not vested or exercisable, shall be canceled, and Elf shall pay each
holder of any such Option at or promptly after the Effective Time for each such
Option an amount in cash determined by multiplying (i) the excess, if any, of
the Merger Consideration per Share over the applicable exercise price of such
Option by (ii) the number of Shares such holder could have purchased (assuming
full vesting of all Options) had such holder exercised such Option in full
immediately prior to the Effective Time.
(b) Prior to the Effective Time, Elf shall (i) obtain any consents
from holders of options to purchase Shares granted under Elf's stock option or
compensation plans or
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arrangements and (ii) make any amendments to the terms of such stock
option or compensation plans or arrangements that, in the case of either clauses
(i) or (ii), Elf deems reasonably necessary to give effect to the transactions
contemplated by Section 2.05(a). Notwithstanding any other provision of this
Agreement, payment may be withheld in respect of any employee or director stock
option until such necessary consents are obtained, and Elf shall withhold from
such payments all amounts required by applicable Law or regulation to be
withheld for taxes or otherwise.
Section 2.06. ADJUSTMENTS. If, during the period between the date of
this Agreement and the Effective Time, any change in the outstanding Shares
shall occur, including by reason of any reclassification, recapitalization,
stock split or combination, exchange or readjustment of Shares, or stock
dividend thereon with a record date during such period, the Merger Consideration
and any other amounts payable pursuant to Section 2.05 shall be appropriately
adjusted to provide to the holders of Shares the same economic effect as
contemplated by this Agreement prior to such event.
Section 2.07. WITHHOLDING RIGHTS. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article 2 such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign tax Law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which the Surviving Corporation or Parent, as
the case may be, made such deduction and withholding.
Section 2.08. 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 pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
ARTICLE 3
THE SURVIVING CORPORATION
Section 3.01. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Elf in effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until amended in accordance with
applicable Law.
Section 3.02. BYLAWS. The bylaws of Merger Subsidiary in effect at
the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable Law.
Section 3.03. DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable Law, (i) the
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directors of Merger Subsidiary at the Effective Time shall be the directors of
the Surviving Corporation and (ii) the officers of Merger Subsidiary at the
Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ELF
Except as set forth in the corresponding sections or subsections of
the disclosure schedule delivered by Elf to Parent on or prior to the date
hereof (the "Elf Disclosure Schedule"), Elf represents and warrants to Parent
that:
Section 4.01. CORPORATE EXISTENCE AND POWER. Elf is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Elf. Elf is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on Elf. Elf
has heretofore made available to Parent true and complete copies of the
certificate of incorporation and bylaws of Elf as currently in effect.
Section 4.02. CORPORATE AUTHORIZATION.
(a) The execution, delivery and performance by Elf of this Agreement
and the consummation by Elf of the transactions contemplated hereby are within
Elf's corporate powers and, except for the affirmative vote of the holders of a
majority of the outstanding Shares in connection with the consummation of the
Merger, have been duly authorized by all necessary corporate action on the part
of Elf. The affirmative vote of the holders of a majority of the outstanding
Shares is the only vote of the holders of any of Elf's capital stock necessary
in connection with the consummation of the Merger. This Agreement has been duly
executed and delivered by Elf and constitutes a valid and binding agreement of
Elf, enforceable against it in accordance with its terms.
(b) The Elf Board of Directors has (i) determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of Elf's stockholders, (ii) declared advisable and approved this
Agreement and the transactions contemplated hereby and (iii) resolved (subject
to Section 6.04(b)) to recommend approval and adoption of this Agreement and the
Merger by its stockholders.
Section 4.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery
and performance by Elf of this Agreement and the consummation by Elf of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity, other than (i) the filing of a certificate
of merger with respect to the Merger with the Delaware Secretary of State (ii)
compliance with any applicable requirements of the HSR Act, (iii) compliance
with any applicable requirements of the 1933 Act, the 1934 Act and any other
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applicable securities or takeover laws and (iv) any actions or filings the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Elf or materially impair, delay or
prevent the ability of Elf to consummate the transactions contemplated by this
Agreement.
Section 4.04. NON-CONTRAVENTION. Except as set forth in Section 4.04
of the Elf Disclosure Schedule, the execution, delivery and performance by Elf
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) contravene, conflict with, or result in any violation or
breach of any provision of the certificate of incorporation or bylaws of Elf or
of the similar organizational documents of any of its material Subsidiaries,
(ii) assuming compliance with the matters referred to in Section 4.03,
contravene, conflict with, or result in a violation or breach of any provision
of any applicable Law, (iii) require any consent or other action by any Person
under, constitute (with or without notice or lapse of time or both) a default
under, or cause or permit the termination, cancellation, acceleration or other
change of any right or obligation or the loss of any benefit to which Elf or any
of its Subsidiaries is entitled under, any provision of any agreement or other
instrument binding upon Elf or any of its Subsidiaries (or their respective
properties) or any license, franchise, permit, certificate, approval or other
similar authorization affecting, or relating in any way to, the assets or
business of Elf and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of Elf or any of its Subsidiaries, except,
in the case of clauses (ii), (iii) and (iv), for such matters as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Elf or materially impair, delay or prevent the consummation of
the Merger.
Section 4.05. CAPITALIZATION.
(a) The authorized capital stock of Elf consists of (i) 500,000,000
shares of common stock, $0.01 par value per share, and (ii) 100,000,000 shares
of preferred stock, par value $0.01 per share (the "Preferred Shares"). As of
October 18, 2000, there were outstanding 85,013,619 Shares (excluding 1,334,382
Shares held in Elf's treasury), (ii) employee and director stock options to
purchase an aggregate of 7,079,142 Shares ("Options") and (iii) no Preferred
Shares. As of October 18, 2000, TULIP owned, beneficially and of record,
46,197,466 Shares. All shares of capital stock of Elf outstanding have been duly
authorized and validly issued and are fully paid and nonassessable. Section 4.05
of the Elf Disclosure Schedule sets forth a complete and accurate list of all
outstanding employee and director stock options to purchase Shares and sets
forth each price at which an option is exercisable and the corresponding number
of options exercisable at such price. All Shares issuable upon exercise of
outstanding employee or director stock options have been duly authorized and,
when issued in accordance with the terms thereof, will be validly issued and
will be fully paid and nonassessable.
(b) Except as set forth in this Section 4.05 and for changes since
October 18, 2000 resulting from the exercise of employee or director stock
options outstanding on such date, there are no outstanding (i) shares of capital
stock or voting equity, debt or other securities of Elf, (ii) securities of Elf
or any other issuer convertible into or exchangeable for shares of capital stock
or equity, debt or other securities of Elf or (iii) options or other rights to
acquire from Elf or any of its Affiliates or other obligation of Elf or any of
its Affiliates to issue, any capital stock, equity, debt or other securities or
securities convertible into or exchangeable for capital stock or
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equity, debt or other securities of Elf (the items in clauses (i), (ii) and
(iii) being referred to collectively as the "Elf Securities"). There are no
outstanding obligations of Elf or any of its Affiliates (i) to repurchase,
redeem or otherwise acquire any of the Elf Securities, (ii) to register any Elf
Securities under the 1933 Act or any state securities law, (iii) to grant
preemptive or antidilutive rights with respect to any Elf Securities or (iv) to
grant any stock options (either upon the exercise of any option or otherwise).
Section 4.06. SUBSIDIARIES.
(a) Each Subsidiary of Elf is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Elf. Each such
Subsidiary is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where such qualification is necessary, except
for those jurisdictions where failure to be so qualified would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Elf. All material Subsidiaries of Elf and their respective jurisdictions of
incorporation are identified in the Elf 10-K. Section 4.06 of the Elf Disclosure
Schedule identifies Elf's direct and indirect percentage ownership of each
Subsidiary.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of Elf, is owned by Elf,
directly or indirectly (except for any director's qualifying shares in foreign
jurisdictions), free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other securities or ownership interests). There
are no outstanding (i) securities of Elf or any of its Subsidiaries or any other
issuer convertible into or exchangeable for shares of capital stock or other
securities or ownership interests in any Subsidiary of Elf or (ii) options or
other rights to acquire from Elf or any of its Subsidiaries, or other obligation
of Elf or any of its Subsidiaries to issue, any capital stock or other
securities or ownership interests in, or any securities convertible into or
exchangeable for, any capital stock or other securities or ownership interests
in, any Subsidiary of Elf (the items in clauses (i) and (ii) being referred to
collectively as the "Elf Subsidiary Securities"). There are no outstanding
obligations of Elf or any of its Subsidiaries (i) to repurchase, redeem or
otherwise acquire any of the Elf Subsidiary Securities, (ii) to register any Elf
Subsidiary Securities under the 1933 Act or any state securities law or (iii) to
grant preemptive or antidilutive rights with respect to any Elf Subsidiary
Securities.
Section 4.07. SEC FILINGS.
(a) Elf has made available to Parent (i) Elf's annual reports on
Form 10-K for its fiscal years ended January 1, 2000 and January 2, 1999, (ii)
its quarterly reports on Form 10-Q for its fiscal quarters ended April 22, 2000
and July 15, 2000, (iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of Elf held
since February 3, 1998 and (iv) all of its other reports, statements, schedules
and registration
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statements filed with the SEC since February 3, 1998 (the documents referred to
in this Section 4.07(a), collectively, the "Elf SEC Documents").
(b) As of its filing date, each Elf SEC Document complied as to form
in all material respects with the applicable requirements of the 1933 Act and
the 1934 Act, as the case may be.
(c) As of its filing date, each Elf SEC Document, including each
amendment or supplement thereto, filed pursuant to the 1934 Act did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(d) Each Elf SEC Document that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
the date such statement or amendment became effective, did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
Section 4.08. FINANCIAL STATEMENTS. The audited consolidated
financial statements and unaudited consolidated interim financial statements
(including the related notes) of Elf included in the Elf SEC Documents fairly
present in all material respects, in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial position of
Elf and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments that are not expected to be material in
amount, in the case of any unaudited interim financial statements).
Section 4.09. DISCLOSURE DOCUMENTS. The information statement of Elf
to be filed with the SEC in connection with the Merger (the "Elf Information
Statement") and any amendments or supplements thereto will, when filed, comply
as to form in all material respects with the applicable requirements of the 1934
Act. At the time the Elf Information Statement or any amendment or supplement
thereto is first mailed to the Elf stockholders, the Elf Information Statement,
as supplemented or amended, if applicable, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties contained in this
Section 4.09 will not apply to statements or omissions included in the Elf
Information Statement based upon information furnished to Elf by Parent
specifically for use therein.
Section 4.10. ABSENCE OF CERTAIN CHANGES. Except (i) as disclosed in
the Elf SEC Documents filed after January 1, 2000 and prior to the date hereof,
(ii) as expressly contemplated by this Agreement, or (iii) as disclosed in
Section 4.10 of the Elf Disclosure Schedule or (iv) as permitted by Section 6.01
hereof, since January 1, 2000, the business of Elf and its Subsidiaries has been
conducted in the ordinary course consistent with past practices and there has
not been:
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(a) any event, occurrence, development or state of circumstances or
facts that, either individually or in the aggregate, has had or would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Elf;
(b) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of Elf or any of its
Subsidiaries that has had or would reasonably be expected to have a Material
Adverse Effect on Elf;
(c) any declaration, setting aside or payment of any dividend or
other distribution with respect to any Shares (other than quarterly cash
dividends on the Shares on customary record and payment dates in an amount not
greater than $0.1125 per Share per quarter), or any repurchase, redemption or
other acquisition by Elf or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in, Elf or
any of its Subsidiaries;
(d) any amendment of any material term of any outstanding security
of Elf or any of its Subsidiaries or any amendment to Elf's Certificate of
Incorporation or By-Laws;
(e) any incurrence, assumption or guarantee by Elf or any of its
Subsidiaries of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practices
and pursuant to existing agreements;
(f) any creation or other incurrence by Elf or any of its
Subsidiaries of any Lien on any material asset other than in the ordinary course
of business consistent with past practices;
(g) any making of any loan, advance or capital contributions to or
investment in any Person not wholly owned, directly or indirectly, by Elf, other
than immaterial amounts in the ordinary course of business consistent with past
practices;
(h) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of Elf or any of its
Subsidiaries that has had or would reasonably be expected to have a Material
Adverse Effect on Elf;
(i) any change in any method of accounting, method of tax accounting
or accounting principles or material change in practice by Elf or any of its
Subsidiaries, except for any such change which is required by reason of a
concurrent change in GAAP or Regulation S-X under the 1934 Act;
(j) any (i) grant of any bonus, severance or termination pay or
award under a long term incentive plan to (or amendment to any existing
arrangement with) any director, officer or (to the extent material in the
aggregate) employee of Elf or any of its Subsidiaries, (ii) establishment,
adoption or amendment (except as required by applicable law) of any collective
bargaining, bonus, profit-sharing, thrift, pension, retirement or other benefit
plan or arrangement covering any director, officer or employee of Elf or any of
its Subsidiaries, (iii) increase in compensation, bonus or other benefits
payable to any director or executive officer of Elf (other than changes made
applicable to Elf employees generally), or (iv) other than in the ordinary
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course of business consistent with past practices, increase in compensation,
bonus or other benefits payable to any employee of Elf or any of its
Subsidiaries not described in clause (iii);
(k) any material labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of Elf or any of its Subsidiaries, or any
material lockouts, strikes, slowdowns, work stoppages or threats thereof by or
with respect to such employees;
(l) any pledge or encumbrance by Elf or any of its Subsidiaries of
any Shares, or any securities convertible into Shares, or any Option or other
rights, warrants or options to acquire any Shares, other than issuances of
Shares pursuant to stock-based awards or options that are outstanding at the
date hereof; or
(m) any agreement to do any of the foregoing.
Section 4.11. NO UNDISCLOSED MATERIAL LIABILITIES. There are no
liabilities or obligations of Elf or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, other than:
(a) liabilities or obligations disclosed in the Elf Balance Sheet or
in the notes thereto or in the Elf SEC Documents filed prior to the date hereof,
(b) liabilities or obligations that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on Elf,
(c) liabilities or obligations under this Agreement including
advisory fees in connection with the transactions contemplated hereby, or
(d) liabilities or obligations disclosed in the Elf Disclosure
Schedule.
Section 4.12. COMPLIANCE WITH LAWS AND COURT ORDERS. Neither Elf nor
any of its Subsidiaries nor any of their respective properties is in violation
of, or has since January 1, 2000 violated, any applicable Law, except for
violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Elf or materially
impair, delay or prevent the consummation of the transactions contemplated by
the Merger. Elf and its Subsidiaries are in compliance with the terms of all
required governmental licenses, authorizations, permits, consents and approvals,
except where the failure so to comply would not reasonably be expected to have,
individually or in the aggregate, Material Adverse Effect on Elf or materially
impair, delay or prevent the consummation of the transactions contemplated by
the Merger.
Section 4.13. LITIGATION. Other than as disclosed in Section 4.13(a)
of the Elf Disclosure Schedule, there is no action, suit, investigation or
proceeding pending, or, to the knowledge of Elf, threatened, against Elf or any
of its Subsidiaries, or any of their respective properties before any court or
arbitrator or before or by any Governmental Entity, that, if determined or
resolved adversely would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Elf or materially impair, delay or
prevent the consummation of the Merger. Neither Elf nor any of its Subsidiaries
is subject to any
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outstanding order, writ, injunction or decree that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on Elf
or materially impair, delay or prevent the consummation of the Merger.
Section 4.14. FINDERS' FEES. Except for Xxxxxxx Xxxxx & Co., a
copy of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of Elf or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement.
Section 4.15. OPINION OF FINANCIAL ADVISORS. The special committee
of the Board of Directors of Elf has received an opinion of Xxxxxxx Xxxxx & Co.
dated as of the date of this Agreement to the effect that, as of the date of
such opinion, the Merger Consideration is fair to Elf's stockholders from a
financial point of view (other than TULIP). Complete and correct signed copies
of such opinion will be delivered to Parent as soon as practicable after the
date of this Agreement.
Section 4.16. TAXES. Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Elf:
(a) Elf and each of its Subsidiaries has timely filed (or has had
timely filed on its behalf) or will timely file or cause to be timely filed all
Tax Returns required by applicable Law to be filed by it or on its behalf prior
to or as of the Effective Time, and all such Tax Returns are, or will be at the
time of filing, true and complete in all respects.
(b) Elf and each of its Subsidiaries has timely paid (or has had
timely paid on its behalf), or, where payment is not yet due, has established
(or has had established on its behalf and for its sole benefit and recourse) or
(with respect to new Taxes for periods, or portions thereof, beginning after the
date hereof) will establish or cause to be established in accordance with GAAP
on or before the Effective Time, an adequate accrual for the payment of, all
Taxes due with respect to any period ending prior to or as of the Effective
Time.
(c) The federal income Tax Returns filed with respect to Elf and its
Subsidiaries have been examined and settled with the Internal Revenue Service
(the "IRS") (or the applicable statutes of limitation for the assessment of
federal income Taxes for such periods have expired) for all years through 1990.
(d) There are no Liens or encumbrances for Taxes on any of the
assets of Elf or any of its Subsidiaries other than those for Taxes not yet due
and payable. Neither Elf nor any of its Subsidiaries is a party to any Tax
sharing or indemnification agreement (other than such agreements solely between
or among Elf and its Subsidiaries).
(e) Elf and its Subsidiaries have complied with all applicable Laws,
rules and regulations relating to the payment and withholding of Taxes.
(f) No federal, state, local or foreign audits or administrative
proceedings are pending with regard to any Taxes or Tax Return of Elf or its
Subsidiaries and none of them has received a written notice of any proposed
audit or proceeding regarding any pending audit or proceeding.
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(g) Neither Elf nor any of its Subsidiaries 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 intended to qualify
for tax-free treatment under Section 355 of the Code (A) in the two years prior
to the date of this Agreement (or will constitute such a corporation in the two
years prior to the date of the Effective Time of the Merger) or (B) in a
distribution which otherwise constitutes part of a "plan" or "series of related
transactions" within the meaning of Section 355(e) of the Code in conjunction
with the Merger.
(h) "Tax" or "Taxes" shall mean (i) any and all taxes, charges,
fees, levies or other assessments, including income, gross receipts, excise,
real or personal property, sales, withholding, social security, retirement,
unemployment, occupation, use, goods and services, service use, license, value
added, capital, net worth, payroll, profits, withholding, franchise, transfer
and recording taxes, fees and charges, and any other taxes, assessment or
similar charges imposed by the IRS or any taxing authority (whether domestic or
foreign including any state, county, local or foreign government or any
subdivision or taxing agency thereof (including a United States possession)) (a
"Taxing Authority"), whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest whether
paid or received, fines, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or other
assessments, (ii) any liability for the payment of any amount of the type
described in clause (i) as a result of being or having been before the Effective
Time a member of an affiliated, consolidated, combined or unitary group, or a
party to any agreement or arrangement, as a result of which liability of Elf or
any of its subsidiaries to a Taxing Authority is determined or taken into
account with reference to the liability of any other Person (including, e.g.,
liability under Treasury Regulation 1.1502-6 or similar liability under any
other Law), and (iii) any liability with respect to the payment of any amount of
the type described in (i) or (ii) as a result of any existing express or implied
obligation (including, but not limited to, an indemnification obligation). "Tax
Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority or
jurisdiction (foreign or domestic) with respect to Taxes, including information
returns, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information.
Section 4.17. EMPLOYEE BENEFIT PLANS. Other than Employee Plans
that are insignificant in scope or amount and except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Elf:
(a) Elf has made available to Parent copies of each material
Employee Plan and all amendments thereto and written interpretations thereof,
together with the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto), summary plan description and summary of material
modifications, if any, annual financial report and actuarial valuation report
prepared in connection with any such Employee Plan and all trust agreements,
insurance contracts and other funding vehicles relating thereto. The Elf
Disclosure Schedule identifies each such Employee Plan that is (i) a
Multiemployer Plan, (ii) a Title IV Plan or (iii) maintained in connection with
any trust described in Section 501(c)(9) of the Code.
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(b) Except as set forth on Section 4.17(b) of the Elf Disclosure
Schedule, each Employee Plan that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter as to its
qualified status from the IRS, and Elf is not aware of any facts or
circumstances that would jeopardize the qualified status of any such Employee
Plan, if not cured; on that basis, and to Elf's knowledge, each trust created
under any such Employee Plan is exempt from tax under Section 501(a) of the Code
and has been so exempt since its creation. Except as set forth on Section
4.17(b) of the Elf Disclosure Schedule, Elf has made available to Parent the
most recent determination letter of the Internal Revenue Service relating to
each such Employee Plan. Each material Employee Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including ERISA
and the Code.
(c) Elf has made available to Parent copies (or if there is no
written plan document, written descriptions) of each material Benefit
Arrangement (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof and summary plan descriptions, if
applicable. Each such Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations, and has been maintained in
good standing with applicable regulatory authorities.
(d) There has been no failure of a group health plan (as defined in
Section 5000(b)(1) of the Code) to meet the requirements of Code Section
4980B(f) with respect to a qualified beneficiary (as defined in Section
4980B(g)). Neither Elf nor any of its ERISA Affiliates has contributed to a
nonconforming group health plan (as defined in Section 5000(c)) and neither Elf
nor any ERISA Affiliate of Elf has incurred a tax under Section 5000(a) that is
or could become a liability of Elf.
(e) The Elf Disclosure Schedule contains a complete list of all
material Employee Arrangements. Except as specifically provided in the foregoing
documents made available to Parent, no amendments to any such Employee
Arrangement have been adopted or approved nor has Elf or any of its ERISA
Affiliates undertaken to make any such amendments or to adopt or approve any new
material Employee Arrangement.
(f) All material contributions required to be made to any Employee
Arrangement or any trust or other arrangement funding any Employee Arrangement
by applicable Law or regulation or by any plan document or other contractual
undertaking, and all material premiums due or payable with respect to insurance
policies funding any Employee Arrangement, for any period have been timely made
or paid in full.
(g) Except as set forth on Section 4.17(g) of the Elf Disclosure
Schedule, with respect to each Title IV Plan: (i) there does not exist any
accumulated funding deficiency within the meaning of Code Section 412 or Section
302 of ERISA, whether or not waived; (ii) no reportable event within the meaning
of Section 4043(c) of ERISA for which the 30-day notice requirement has not been
waived has occurred, and the consummation of the transactions contemplated by
this Agreement will not result in the occurrence of any such reportable event;
(iii) all premiums to the PBGC have been timely paid in full; (iv) no material
liability (other than for premiums to the PBGC) under Title IV of ERISA has been
or is expected to be incurred by
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Elf or any of its ERISA Affiliates; and (v) the PBGC has not instituted
proceedings to terminate any such Title IV Plan and, to Elf's knowledge, no
condition exists that presents a risk that such proceedings will be instituted
or which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any such Title IV
Plan.
(h) There does not now exist, nor, to Elf's knowledge, do any
circumstances exist that could result in, any Controlled Group Liability that
would be a liability of Elf or any of its ERISA Affiliates following the
Effective Time. None of Elf and its ERISA Affiliates has incurred any Withdrawal
Liability that has not been satisfied in full. With respect to each Employee
Plan that is a Multiemployer Plan, none of Elf and its ERISA Affiliates has
received any notification, nor has reasonable cause to believe, that any such
Employee Plan is in reorganization, has been terminated, is insolvent, or may
reasonably be expected to be in reorganization, to be insolvent, or to be
terminated. If Elf and its ERISA Affiliates were to experience a complete
withdrawal from all such Multiemployer Plans, the total withdrawal liability
would not exceed the amount set forth in Section 4.17(h) of the Elf Disclosure
Schedule. The transactions contemplated by this Agreement, including the
Transaction (as defined in the TULIP Merger Agreement), will not result in
partial or complete withdrawal from any such Multiemployer Plan.
(i) The Elf Disclosure Schedule sets forth: (i) an accurate and
complete list of each material Employee Arrangement under which the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby could (either alone or in conjunction with any other event
such as termination of employment) result in, cause the accelerated vesting,
funding or delivery of, or increase the amount or value of, any payment or
benefit to any employee, officer or director of Elf or any of its Subsidiaries,
or for which Elf or any of its Subsidiaries could be liable, or would limit the
right of Elf or any of its Subsidiaries to amend, merger, terminate or receive a
reversion of assets from any material Employee Arrangement or related trust;
(ii) the aggregate liabilities of Elf and its ERISA Affiliates, together with
any corresponding assets held in any grantor trust of Elf and its ERISA
Affiliates, pursuant to each Employee Arrangement (other than Employee Plans
that are qualified under Section 401(a) of the Code) providing any supplemental
or excess retirement benefits or other deferred compensation (whether elective
or nonelective), in each case determined as of the date set forth in the Elf
Disclosure Schedule, and (iii) the maximum amount of the "excess parachute
payments" within the meaning of Section 280G of the Code that could become
payable by Elf or any of its Subsidiaries in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby. No outstanding options to purchase Shares granted to any current or
former employee or director of Elf or any of its ERISA Affiliates (other than
TULIP) contain any provision that would entitle the holder to receive any cash
payment with respect thereto in connection with the consummation of the
transactions contemplated hereby in excess of the amounts provided for in
Section 2.05 hereof.
(j) There are no pending or threatened claims (other than claims for
benefits in the ordinary course), investigations, lawsuits or arbitrations which
have been asserted or instituted, and, to Elf's knowledge, no set of
circumstances exists which may give rise to a claim or lawsuits, against the
Employee Arrangements, any fiduciaries thereof with respect to their duties to
such Employee Arrangements or the assets of any of the trusts under any of such
Employee Arrangements which could result in any liability of Elf or any of its
ERISA Affiliates
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to the PBGC, the Department of Treasury, the Department of Labor, or any other
U.S. or foreign governmental authority, or to any of such Employee Arrangements,
any participant in any such Employee Arrangement, or any other Person. Without
limiting the generality of the foregoing, neither Elf nor any of its ERISA
Affiliates has any actual or contingent liability under any such Employee
Arrangement or under any applicable Law or regulation for pay or benefits
incurred as a result of corporate restructuring, downsizing, layoffs, plant
closings or similar events occurring before the Effective Time that has not been
fully satisfied or adequately reserved for in the audited consolidated financial
statements (including the related notes) and unaudited consolidated financial
statements (including the related notes) of Elf included in the Elf SEC
Documents.
Section 4.18. ENVIRONMENTAL MATTERS.
(a) Except as disclosed in the Elf SEC Documents or as set forth in
Section 4.18 of the Elf Disclosure Schedule, and except where noncompliance,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Elf, Elf and its Subsidiaries are in compliance with
all applicable Environmental Laws and Environmental Permits.
(b) Except as disclosed in the Elf SEC Documents or as disclosed in
Section 4.18 of the Elf Disclosure Schedule, there are no written (or, to the
knowledge of Elf, other) Environmental Claims pending or, to the knowledge of
Elf, threatened against Elf or any of its Subsidiaries that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect on
Elf.
(c) Elf has made available to Parent all known material facts
regarding all known or reasonably suspected material liabilities under any
Environmental Law with respect to any Releases of Hazardous Substances or
conditions, in, on, under or about any of the properties or assets owned,
leased, or operated by Elf or its Subsidiaries at any time or for which Elf or
its Subsidiaries is responsible under any Environmental Law.
(d) Except as disclosed in the Elf SEC Documents or as disclosed in
Section 4.18 of the Elf Disclosure Schedule, prior to and during the period of
ownership or operation by Elf or its Subsidiaries, in each case, to the
knowledge of Elf, no Hazardous Substance was generated, treated, stored,
disposed of, used, handled or manufactured at, or transported, shipped or
disposed of from, currently or previously owned or leased properties that could
result in Liability for Elf or its Subsidiaries that would have a Material
Adverse Effect on Elf and there were no conditions or Releases of Hazardous
Substance in, on, under or affecting any currently or previously owned or leased
properties that would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Elf.
(e) Except as disclosed in the Elf SEC Documents, or as set forth in
Section 4.18 of the Elf Disclosure Schedule, none of Elf or its Subsidiaries has
received from any Governmental Entity or other third party any written (or, to
the knowledge of Elf, other) notice that any of them or any of their
predecessors is or may be a potentially responsible party in respect of or may
otherwise bear liability for any actual or threatened Release of Hazardous
Substance at any site or facility that is, has been or could reasonably be
expected to be listed on
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the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar or analogous
federal, state, provincial, territorial, municipal, county, local or other
domestic or foreign list, schedule, inventory or database of Hazardous Substance
sites or facilities, except where such notice or the circumstances referred to
therein would not, individually or in aggregate, reasonably be expected to have
a Material Adverse Effect on Elf.
Section 4.19. INTELLECTUAL PROPERTY. Except as set forth on the Elf
Disclosure Schedule, Elf and its Subsidiaries own, or are validly licensed or
otherwise have the right to use, all Elf Intellectual Property Rights used in
the conduct of their businesses, except where the failure to own or possess
valid rights to such Elf Intellectual Property Rights would not have,
individually or in the aggregate, a Material Adverse Effect on Elf. No Elf
Intellectual Property Right is subject to any outstanding judgment, injunction,
order, decree or agreement restricting the use thereof by Elf or any of its
Subsidiaries or restricting the licensing thereof by Elf or any of its
Subsidiaries to any Person, except for any judgment, injunction, order, decree
or agreement which would not have, individually or in the aggregate, a Material
Adverse Effect on Elf. To the knowledge of Elf, neither Elf nor any of its
Subsidiaries is infringing on any other Person's Intellectual Property Rights
and to the knowledge of Elf no Person is infringing on any Elf Intellectual
Property Rights, except, in either case, as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Elf. Except
for such matters as would not reasonably be expected to have a Material Adverse
Effect on Elf, (i) neither Elf nor any of its Subsidiaries was a defendant in
any action, suit, investigation or proceeding relating to, or otherwise was
notified of, any alleged claim of infringement of any Intellectual Property
Right and (ii) Elf and its Subsidiaries had no outstanding claim or suit for any
continuing infringement by any other Person of any Elf Intellectual Property
Rights.
Section 4.20. MATERIAL CONTRACTS; JOINT VENTURES. (a) All of the
material contracts of Elf and its Subsidiaries that are required to be described
in the Elf SEC Documents or listed or filed as exhibits to the Elf Form 10-K for
its fiscal year ended January 1, 2000 or the Elf quarterly report on Form 10-Q
for its fiscal quarter ended July 15, 2000 (the "Contracts") are described in
such Elf SEC Documents or listed or filed as exhibits thereto, respectively, and
are valid and binding and are in full force and effect, and neither Elf nor any
of its Subsidiaries is in breach of or in default (nor does there exist any
condition which with the passage of time or the giving of notice, or both, would
cause such a violation of or default) under any Contract, except for such
failures to be valid and binding, breaches and defaults as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Elf. Elf and its Subsidiaries are not, and after the Effective Time neither
the Surviving Corporation nor Parent (or any of their respective Subsidiaries)
will (by reason of any agreement to which Elf or any of its Subsidiaries is a
party) be subject to any material noncompetition or similar restriction on their
respective businesses.
(b) Elf has made available to Parent complete and correct copies of
all agreements, which are set forth in Section 4.20(b)(i) of the Elf Disclosure
Schedule, relating to the formation and governance of all material joint
ventures or partnerships arrangements ("Joint Ventures") to which Elf or any of
its Subsidiaries is a party (the "JV Agreements"). Other than as set forth in
Section 4.20(b)(ii) of the Elf Disclosure Schedule, Elf and its Subsidiaries
have no obligations of any kind whatsoever, whether accrued, contingent,
absolute, determined,
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determinable or otherwise, to loan funds to, make capital contributions to, or
guarantee indebtedness or other obligations of, such Joint Ventures.
Section 4.21. INSURANCE. Elf and its Subsidiaries are covered by
valid and currently effective insurance policies issued in favor of Elf or its
Subsidiaries that are customary and appropriate under the circumstances. All
such policies are in full force and effect, all premiums due thereon have been
paid, and Elf and its Subsidiaries have complied with the provisions of such
policies.
Section 4.22. INDEBTEDNESS. As of October 7, 2000, Elf and its
Subsidiaries have outstanding indebtedness for borrowed money (including,
without limitation, off-balance sheet indebtedness, guarantees of third party
indebtedness and capitalized lease obligations) in an aggregate principal amount
not greater than $774 million.
Section 4.23. REAL PROPERTY. (a) Except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect on
Elf: (i) Elf or its Subsidiaries have good and marketable fee title to, or a
valid leasehold interest in, all of the real property and related equipment used
by Elf or its Subsidiaries or otherwise reflected in Elf's financial statements
identified in Section 4.08 above (collectively, the "Elf Properties"), in each
case free and clear of any Liens or rights of third parties and (ii) the Elf
Properties (taking into account, without limitation, all Liens related thereto,
all zoning and other restrictions applicable thereto and the condition thereof)
are suitable and adequate for the conduct of the businesses of Elf and its
Subsidiaries as currently conducted.
(b) Except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on Elf, Elf and its
Subsidiaries have good and marketable title to, or a valid leasehold interest
in, or right to use, the other assets used by them, or shown on the financial
statements included in the Elf SEC Documents or acquired after the date thereof,
free and clear of all Liens, except for assets disposed of in the ordinary
course of business consistent with past practices.
Section 4.24. TRANSACTIONS WITH AFFILIATES. Neither TULIP nor any of
its Subsidiaries (excluding Elf and its Subsidiaries) owns, leases or licenses
any of the buildings, machinery, equipment or other tangible or intangible
assets used in the businesses of Elf or its Subsidiaries as currently conducted.
Neither Elf nor any of its Subsidiaries (a) has any outstanding contract,
agreement or other arrangement with TULIP or any of its Affiliates (other than
Elf or any of its Subsidiaries) or provides or receives goods or services to or
from TULIP or any of its Affiliates (other than Elf or any of its Subsidiaries),
other than the sale of products or ingredients on an arms' length basis in the
ordinary course of business consistent with past practice or (b) has engaged in
any transaction outside of the ordinary course of business consistent with past
practice with TULIP or any of its Affiliates (other than Elf or any of its
Subsidiaries) since January 1, 1998.
Section 4.25. CUSTOMERS. Neither Elf nor any of its Subsidiaries has
received any notice or has any reason to believe that any significant customer
of Elf or any of its Subsidiaries (i) has ceased, or will cease, to use the
products, goods or services of Elf or any of its Subsidiaries, (ii) has
substantially reduced or will substantially reduce, the use of products,
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goods or services of Elf or any of its Subsidiaries or (iii) has sought, or is
seeking, to reduce the price it will pay for products, goods or services of Elf
or any of its Subsidiaries, except as, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on Elf and except
for any such effect resulting from or arising in connection with this Agreement
or the transactions contemplated hereby or the announcement thereof. As of the
date of this Agreement, to Elf's knowledge, no customer of Elf or any of its
Subsidiaries described in clause (i) of the first sentence of this paragraph has
otherwise threatened to take any action described in the preceding sentence as a
result of the consummation of the transactions contemplated by this Agreement
that would have a Material Adverse Effect on Elf.
Section 4.26. ANTITAKEOVER STATUTE. Elf has taken all action
necessary to exempt the Merger and this Agreement and all transactions
contemplated hereby from the provisions of Section 203 of Delaware Law.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to Elf that:
Section 5.01. CORPORATE EXISTENCE AND POWER. Each of Parent and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to materially impair, delay or
prevent the ability of Parent and Merger Subsidiary to consummate the
transactions contemplated by this Agreement. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement or in connection with
arranging any financing required to consummate the transactions contemplated by
the Merger.
Section 5.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Parent and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by Parent and Merger Subsidiary and constitutes a
valid and binding agreement of each of Parent and Merger Subsidiary, enforceable
against it in accordance with its terms.
Section 5.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery
and performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby require no action by or in respect of, or filing with, any Governmental
Entity, other than (i) the filing of a certificate of merger with respect to the
Merger with the Delaware Secretary of State, (ii) compliance with any applicable
requirements of the HSR Act, (iii) compliance with any applicable requirements
of the 1933 Act, the 1934 Act and any other applicable securities or takeover
laws and (iv) any actions or filings the absence of which would reasonably be
expected to materially impair, delay or
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prevent the ability of Parent and Merger Subsidiary to consummate the
transactions contemplated by this Agreement.
Section 5.04. NON-CONTRAVENTION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
bylaws of Parent or Merger Subsidiary, (ii) assuming compliance with the matters
referred to in Section 5.03, contravene, conflict with, or result in any
violation or breach of any provision of any Law or (iii) require any consent or
other action by any Person under, constitute (with or without notice or lapse of
time or both) a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which Parent or Merger Subsidiary is entitled under, any provision of
any agreement or other instrument binding upon Parent or Merger Subsidiary,
except, in the case of clauses (ii) and (iii), for such matters as would
reasonably be expected to materially impair, delay or prevent the consummation
of the Merger.
Section 5.05. DISCLOSURE DOCUMENTS. The written information with
respect to Parent and any of its Subsidiaries that Parent furnishes to Elf
specifically for use in the Elf Information Statement will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading at the time such Elf Information
Statement, or any amendment or supplement thereto, is first mailed to
stockholders of Elf.
Section 5.06. FINDERS' FEES. There is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of Parent which might be entitled to any fee or commission from Elf or
any of its Affiliates upon consummation of the transactions contemplated by this
Agreement.
Section 5.07. ADEQUATE FUNDS. Parent has commitment letters in
customary form from nationally-recognized lending institutions for and will have
at the Effective Time sufficient funds for the payment of the Merger
Consideration and to perform its obligations with respect to the Merger
transactions contemplated by this Agreement and the TULIP Merger Agreement.
ARTICLE 6
COVENANTS OF ELF
Elf agrees that:
Section 6.01. CONDUCT OF ELF. From the date hereof until the
Effective Time, Elf and its Subsidiaries shall conduct their business and
operate their properties in the ordinary course consistent with past practices
and shall use their reasonable best efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Without limiting the
generality of the foregoing, except with the prior written consent of Parent or
as provided by this Agreement or as set forth in
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Section 6.01 of the Elf Disclosure Schedule, from the date hereof until the
Effective Time neither Elf nor any of its Subsidiaries shall:
(a) except as permitted under Section 6.06, declare, set aside or
pay any dividend or other distribution with respect to any share of its capital
stock, other than quarterly cash dividends on customary record and payment dates
on the Shares not to exceed $0.1125 per quarter;
(b) repurchase, redeem or otherwise acquire or offer to acquire any
shares of capital stock or other securities of, or other ownership interests in,
Elf or any of its Subsidiaries;
(c) issue, deliver, pledge, encumber or sell any Shares, or any
securities convertible into Shares, or any Options or other rights, warrants or
options to acquire any Shares, other than issuances of Shares pursuant to
stock-based awards or options that are outstanding on the date hereof;
(d) amend its Certificate of Incorporation or By-Laws or other
comparable organizational documents or amend any terms of the outstanding
securities of Elf or its Subsidiaries;
(e) merge or consolidate with any other Person, make any investment
in any other Person, including any joint venture, or acquire the stock or assets
or rights of any other Person other than (i) pursuant to existing contracts or
commitments as set forth in Section 6.01 of the Elf Disclosure Schedule, (ii) in
each case in the ordinary course of business consistent with past practice,
purchases of raw materials, services and items used or consumed in the
manufacturing process, (iii) capital expenditures made consistent with Elf's
current capital expenditure program, in an amount not to exceed $100 million in
the aggregate for 2000 and $90 million in the aggregate for 2001;
(f) sell, lease, license, mortgage or otherwise dispose of any
Subsidiary or any assets, securities, rights or property other than (i) pursuant
to existing contracts or commitments as set forth in Section 6.01(f) of the Elf
Disclosure Schedule, (ii) sales of inventory and equipment in the ordinary
course of business consistent with past practices;
(g) incur any indebtedness (whether or not reflected on the Elf
Balance Sheet) for borrowed money, guarantee any such indebtedness, enter into
any new or amend existing facilities relating to indebtedness, issue or sell any
debt securities or warrants or other rights to acquire any debt securities or
guarantee any debt securities other than borrowings under Elf's revolving credit
agreement in the ordinary course of business and in amounts consistent with past
practices;
(h) except as required under any collective bargaining agreement in
effect as of the date hereof, by applicable Law or under Section 2.05 or as may
be mutually agreed upon between Parent and Elf, enter into or adopt any new, or
amend any existing, Employee Arrangement which would materially increase the
costs or obligations of Elf or any of its Subsidiaries;
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(i) except to the extent required under any collective bargaining
agreement in effect as of the date hereof, by applicable Law, or by written
employment agreements existing on the date of this Agreement and listed in the
Elf Disclosure Schedule, increase the compensation payable or to become payable
to its officers, directors or employees, or pay any benefit or amount to any
such person that is not otherwise required by an Employee Arrangement as in
effect on the date hereof, other than to employees in the ordinary course of
business who are not officers, directors or holders of Options;
(j) (i) renew any material collective bargaining agreement or enter
into any new material collective bargaining agreement or (ii) renew any
collective bargaining agreement or enter into any new collective bargaining
agreement which would materially increase the costs or obligations of Elf or any
of its Subsidiaries;
(k) contribute any amount to any Employee Arrangement or any trust
or other arrangement funding any Employee Arrangement, except to the extent
required by the existing terms of such Employee Arrangement, trust or other
funding arrangement, by any collective bargaining agreement now in effect, by
any written employment agreement existing on the date of this Agreement and
listed in the Elf Disclosure Schedule, or by applicable Law;
(l) (i) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization or (ii) enter into any agreement or exercise any discretion
providing for acceleration of any material payment or performance as a result of
a change of control of Elf or its Subsidiaries;
(m) renew or enter into any non-compete, exclusivity or similar
agreement that would restrict or limit the operations of Elf or its
Subsidiaries, or, after the Effective Time, of Parent (other than indirectly by
virtue of its ownership of Elf) or its Subsidiaries other than exclusivity or
similar agreements regarding the sale of specialty products that are renewed or
entered into in the ordinary course of business consistent with past practices;
(n) renew, enter into, amend or waive any material right under any
contract with or loan to any Affiliate of Elf (other than its wholly-owned
Subsidiaries);
(o) create or incur any Lien on any asset (other than Elf
Intellectual Property Rights) which could materially detract from the value of
the property to which it relates or interfere with the use thereof;
(p) make any loan, advance or capital contribution to or investment
in any Person not wholly owned, directly or indirectly, by Elf, other than
immaterial amounts in the ordinary course of business consistent with past
practices;
(q) enter into, modify or amend in any material respect, or
terminate any (i) contract filed as an exhibit to any Elf SEC Document or any
other contract to which Elf or any of its Subsidiaries is a party which is or
would be required to be filed as an exhibit to the Elf SEC Documents or (ii)
agreement involving payments or receipts over its terms greater than $10
million;
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(r) sell, license, lease or otherwise dispose of, or create or incur
any Lien on, any Elf Intellectual Property Rights or any brand or line of
business, other than pursuant to agreements in place on the date hereof and
disclosed in Section 6.01(r) of the Elf Disclosure Schedule other than in the
ordinary course of business consistent with past practices in connection with
the sale of products from Elf;
(s) settle or compromise any material litigation of Elf or any of
its Subsidiaries for an amount in excess of the reserves established therefor,
or waive, release or assign any material claims of Elf or any of its
Subsidiaries;
(t) adopt any material change, other than as required by the SEC or
by GAAP, in its accounting policies, procedures or practices;
(u) except as otherwise required by Law, make any material Tax
election, settle or compromise any material Tax claim, file any Tax Return
(other than in a manner consistent with past practice) or change any method of
Tax accounting; or
(v) agree or commit to do any of the foregoing.
Section 6.02. STOCKHOLDER ACTION BY WRITTEN CONSENT; INFORMATION
STATEMENT. In lieu of calling a meeting of Elf's stockholders, Elf will seek
approval and adoption of this Agreement and the Merger by written consent of
TULIP. Such approval will be sought so that such consent shall be obtained and
shall be effective on the 21st day after the date the Elf Information Statement
is first sent or given to the Elf stockholders. Subject to Section 6.04, the
Board of Directors of Elf shall recommend approval and adoption of this
Agreement and the Merger by Elf's stockholders. In connection with such action
by written consent, Elf will (i) promptly prepare and file with the SEC, use its
best efforts to have cleared by the SEC and thereafter mail to its stockholders
as promptly as practicable the Elf Information Statement, and (ii) otherwise
comply with all legal requirements applicable to approvals by its stockholders
of this Agreement and the transactions contemplated hereby. Elf shall provide
Parent, TULIP and their respective counsel with sufficient opportunity to
comment upon the form and substance of the Elf Information Statement (including
any amendments or supplements thereto) prior to filing such with the SEC and Elf
shall use its reasonable best efforts to incorporate Parent's and TULIP's
reasonable comments into the Elf Information Statement (including any amendments
or supplements thereto). Elf shall promptly provide to Parent and TULIP copies
of any comments received from the SEC in connection therewith and shall consult
with Parent and TULIP in responding to the SEC.
Section 6.03. ACCESS TO INFORMATION. (a) From the date hereof until
the Effective Time and subject to applicable Law and the Confidentiality
Agreement dated as of July 24, 2000 between TULIP and Parent (the
"Confidentiality Agreement"), Elf shall (i) give Parent, its counsel, financial
advisors, auditors and other authorized representatives reasonable access to the
offices, properties, books and records of Elf and its Subsidiaries, (ii) furnish
to Parent, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request, (iii) cause the employees, counsel, financial
advisors, auditors and other authorized representatives of Elf and its
Subsidiaries to cooperate with Parent in its investigation of Elf and
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its Subsidiaries and (iv) promptly advise Parent orally and in writing of any
fact or circumstance reasonably likely to have a Material Adverse Effect on Elf
or to cause a condition contained in Article 9 not to be satisfied. Any
investigation pursuant to this Section shall be conducted in such manner as not
to interfere unreasonably with the conduct of the business of Elf and its
Subsidiaries. No information or knowledge obtained by Parent in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by Elf hereunder.
(b) Without limiting the generality of the foregoing, as soon as
reasonably practicable after the date hereof, Elf shall provide to Parent a copy
of the most recent statement of withdrawal liability that it or any of its
Affiliates has obtained from each Employee Plan that is a Multiemployer Plan
and, to the extent that such a statement has not yet been obtained for any such
Employee Plan, or to the extent such a statement has been obtained but reflects
withdrawal liability as of a date earlier than July 1, 2000 with respect to any
such Employee Plan, Elf shall use, and shall cause its Affiliates to use, its
reasonable best efforts to obtain a current withdrawal liability statement from
such Employee Plan and provide it to Parent.
Section 6.04. NO SOLICITATION.
(a) Elf shall not, nor shall it permit any of its Subsidiaries to,
or authorize or permit any director, officer or employee of Elf or any of its
Subsidiaries or any investment banker, attorney, accountant or other advisor or
representative of Elf or any of its Subsidiaries to, directly or indirectly, (i)
solicit, initiate, negotiate or encourage, or take any other action knowingly to
facilitate, any Takeover Proposal (as defined below) or (ii) enter into,
continue or otherwise participate in any discussions or negotiations regarding,
or furnish to any person any information with respect to, or otherwise cooperate
in any way with, any Takeover Proposal, in each case other than a Takeover
Proposal made by Parent; provided, however, that at any time prior to obtaining
the written consent of TULIP as contemplated by Section 6.02 hereof, the Board
of Directors of Elf may, in response to a bona fide written Takeover Proposal
that such Board of Directors reasonably determines in good faith, after
consultation with its independent financial advisors, constitutes a Superior
Proposal (as defined below), and which Takeover Proposal was unsolicited and did
not otherwise result from a breach of this Section 6.04, (x) furnish information
with respect to Elf and its Subsidiaries to the person making such Takeover
Proposal (and its representatives) pursuant to a confidentiality agreement with
terms not more favorable to such person than the Confidentiality Agreement,
provided that all such information is provided on a prior or substantially
concurrent basis to Parent, and (y) participate in discussions or negotiations
with the person making such Takeover Proposal (and its representatives)
regarding such Takeover Proposal, provided that Elf shall have delivered to
Parent prior written notice advising Parent that it intends to participate in
such discussions or negotiations. Elf will immediately cease all existing
activities, discussions and negotiations with any parties conducted heretofore
with respect to any Takeover Proposal and request the return of all confidential
information regarding Elf provided to any such parties prior to the date hereof
pursuant to the terms of any confidentiality agreements or otherwise.
The term "Takeover Proposal" means any inquiry, proposal or offer
from any person relating to, or that is reasonably likely to lead to, any direct
or indirect acquisition, in one transaction or a series of transactions,
including any merger, consolidation, tender offer,
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exchange offer, binding share exchange, business combination, recapitalization,
liquidation, dissolution, joint venture, purchase or similar transaction, of (A)
assets or businesses that constitute or represent 20% or more of the total
revenue, operating income or assets of Elf and its Subsidiaries, taken as a
whole, or (B) 20% or more of the outstanding shares of Elf common stock or
capital stock of, or other equity or voting interests in, any of Elf's
Subsidiaries directly or indirectly holding the assets or businesses referred to
in clause (A) above.
(b) Neither the Board of Directors of Elf nor any committee thereof
shall (i) withdraw (or modify in a manner adverse to Parent or Merger
Subsidiary) or propose publicly to withdraw (or modify in a manner adverse to
Parent or Merger Subsidiary) the recommendation or declaration of advisability
by such Board of Directors or any such committee of this Agreement or the
Merger, provided, that in the event that prior to receiving the written consent
of TULIP as contemplated by Section 6.02, the Board of Directors of Elf receives
a Superior Proposal (as determined in accordance with Section 6.04(a)) that is
unsolicited and did not result from a breach of Section 6.04(a), the Board of
Directors of Elf may, if it believes in good faith such action is required under
Delaware law to avoid a breach of its fiduciary duties, after receipt of advice
from its outside legal counsel, withdraw or modify in a manner adverse to Parent
or Merger Subsidiary the recommendation or declaration of advisability of this
Agreement or the Merger (each such action being referred to herein as an
"Adverse Recommendation Change"), (ii) adopt or approve, or recommend or propose
publicly to adopt or approve or recommend, any Takeover Proposal, or withdraw
its approval of the Merger, or propose publicly to withdraw its approval of the
Merger, (iii) cause or permit Elf to enter into any letter of intent, memorandum
of understanding, agreement in principle, acquisition agreement, merger
agreement, option agreement, joint venture agreement, partnership agreement or
other agreement (each, an "Acquisition Agreement") constituting or related to,
or which is intended to or is reasonably likely to lead to, any Takeover
Proposal (other than a confidentiality agreement referred to in Section 6.04(a))
or (iv) agree or resolve to take any of the actions prohibited by clauses (i),
(ii) or (iii) of this sentence; provided, however, that Elf shall not exercise
its right to make an Adverse Recommendation Change until after the fifth
business day following Parent's receipt of written notice (a "Notice of Superior
Proposal") from Elf advising Parent that the Board of Directors of Elf has
received a Superior Proposal and specifying the terms and conditions of the
Superior Proposal and identifying the person making such Superior Proposal (it
being understood and agreed that any amendment to the price or any other
material term of a Superior Proposal shall require a new Notice of Superior
Proposal and a new five business day period). The foregoing shall in no way
limit or otherwise affect Parent's right to terminate this Agreement pursuant to
Section 10.01(c) at such time as the requirements of such subsection have been
met. Any such Adverse Recommendation Change shall not change the approval of the
Board of Directors of Elf for purposes of causing any state takeover statute or
other state law to be inapplicable to the transactions contemplated hereby,
including the Merger. Elf shall seek the written consent of TULIP contemplated
by Section 6.02 even if the Board of Directors of Elf shall have made an Adverse
Recommendation Change. Nothing in this Section 6.04 shall (x) permit Elf to
terminate this Agreement, (y) permit Elf to enter into any agreement with
respect to any Takeover Proposal or (z) affect any other obligation of Elf under
this Agreement.
The term "Superior Proposal" means any bona fide binding written
offer not solicited by or on behalf of Elf or any of its Subsidiaries made by a
third party that if
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consummated would result in such third party (or in the case of a direct merger
between such third party and Elf, the stockholders of such third party)
acquiring, directly or indirectly, more than 50% of the voting power of Elf
Common Stock or all or substantially all the assets of Elf and its Subsidiaries,
taken as a whole, for consideration consisting of cash and/or securities that
the Board of Directors of Elf determines in its reasonable good faith judgment
(after consultation with a financial advisor of nationally recognized
reputation) to be superior from a financial point of view to the stockholders of
Elf, and taking into account, among other things, any changes to the terms of
this Agreement proposed by Parent in response to such Superior Proposal or
otherwise.
(c) In addition to the obligations of Elf set forth in paragraphs
(a) and (b) of this Section 6.04, Elf promptly shall advise Parent in writing of
any request for information that Elf reasonably believes could lead to or
contemplates a Takeover Proposal or of any Takeover Proposal together with a
copy of such Takeover Proposal, or any inquiry Elf reasonably believes could
lead to any Takeover Proposal.
(d) Nothing contained in this Section 6.04 or elsewhere in this
Agreement shall prohibit Elf from (i) taking and disclosing to its stockholders
a position contemplated by Rule 14e-2(a) promulgated under the 1934 Act or (ii)
making a disclosure to Elf's stockholders if outside legal counsel advises that
failure so to disclose would be inconsistent with applicable Law; provided,
however, that in no event shall Elf or its Board of Directors or any committee
thereof take, agree or resolve to take any action prohibited by Section 6.04(b).
Section 6.05. THIRD PARTY STANDSTILL AGREEMENTS. During the period
from the date of this Agreement until the Effective Time or earlier termination
of this Agreement, Elf shall not terminate, amend, modify or waive any provision
of any confidentiality or standstill agreement relating to the making of a
Takeover Proposal to which it or any of its Subsidiaries is a party (other than
any involving Parent or its Subsidiaries). During such period, Elf agrees to use
all reasonable efforts to enforce, to the fullest extent permitted under
applicable Law, the provisions of any such agreements, including seeking
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
or any state thereof having jurisdiction.
Section 6.06. SPECIAL DIVIDEND. Immediately prior to the Effective
Time, Elf shall declare and pay a special cash dividend on the Shares in the
aggregate amount of $16 million, which amount shall be paid PRO RATA to all
holders of Shares. Such special dividend shall be in addition to any regular
dividends declared and paid as permitted by this Agreement.
ARTICLE 7
COVENANTS OF PARENT
Parent agrees that:
Section 7.01. OBLIGATIONS OF MERGER SUBSIDIARY. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
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Section 7.02. DIRECTOR AND OFFICER LIABILITY. Parent shall cause
the Surviving Corporation, and the Surviving Corporation hereby agrees, to do
the following:
(a) For six years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless each present and former officer
and director of Elf (each an "Indemnified Person") in respect of acts or
omissions occurring at or prior to the Effective Time to the fullest extent
permitted by Delaware Law (including with respect to the advancement of
expenses) or any other applicable Laws or provided under Elf's certificate of
incorporation and bylaws in effect on the date hereof, provided that such
indemnification shall be subject to any limitation imposed from time to time
under applicable Law.
(b) The Surviving Corporation shall be entitled to control the
defense of any action, suit, investigation or proceeding with counsel of its own
choosing reasonably acceptable to the Indemnified Person and the Indemnified
Person shall cooperate in the defense thereof. The Surviving Corporation shall
not be liable for the fees, costs or expenses of any other counsel for an
Indemnified Person, other than local counsel, unless a conflict of interest
shall be caused thereby in which case the Surviving Corporation shall pay the
fees, costs and expenses of one additional counsel of the Indemnified Person's
choosing but reasonably acceptable to the Surviving Corporation, provided that
the Surviving Corporation shall not be liable for (i) the fees of more than one
counsel for all Indemnified Persons (other than as required as a result of a
conflict of interest between such Indemnified Persons) or (ii) any settlement
effected without its written consent (which consent shall not be unreasonably
withheld).
(c) For six years after the Effective Time, the Surviving
Corporation shall use its reasonable efforts to provide officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time covering each such Indemnified Person currently covered by Elf's
officers' and directors' liability insurance policy on terms with respect to
coverage and amount no less favorable than those of such policy in effect on the
date hereof; provided if the aggregate annual premiums for such insurance at any
time during such period shall exceed 200% of the per annum rate of premium paid
by Elf and its Subsidiaries as of the date hereof for such insurance, then
Parent shall, or shall cause its Subsidiaries to, provide only such coverage as
shall then be available at an annual premium equal to 200% of such rate.
(d) If Parent, the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the Parent
or Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 7.02.
(e) The rights of each Indemnified Person under this Section 7.02
shall be in addition to any rights such Person may have under the certificate of
incorporation or bylaws of Elf or any of its Subsidiaries, under Delaware Law or
any other applicable Laws or under any agreement of any Indemnified Person with
Elf or any of its Subsidiaries. These rights shall survive consummation of the
Merger and are intended to benefit, and shall be enforceable by, each
Indemnified Person.
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Section 7.03. EMPLOYEE MATTERS.
(a) Parent shall honor, and shall cause the Surviving Corporation to
honor, the following in accordance with their terms as in effect on the date
hereof: (i) the change-of-control payments pursuant to the 2000 Keebler
Incentive Plan, as amended, to the extent triggered by the consummation of the
transactions contemplated hereby; (ii) the Revised Policy Regarding Termination
Benefits for Certain Executives in the Event of a Change of Control (the
"Revised Policy"), with respect to the Change of Control (as defined therein)
resulting from the transactions contemplated hereby; and (iii) the Change of
Control Severance Policy applicable to non-officers and non-union employees,
with respect to the Change of Control (as defined therein) resulting from the
transactions contemplated hereby.
(b) The Surviving Corporation shall give Elf Employees full credit
for purposes of eligibility, early-retirement and vesting under any such plans
or arrangements maintained by the Parent or Surviving Corporation for their
respective subsidiaries for such employees' service recognized for such purposes
under the Employee Arrangements.
(c) Parent shall, and shall 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
the Elf Employees under any welfare benefit plans in which such employees may be
eligible to participate after the Effective Time and (ii) provide each Elf
Employee with credit for any co-payments and deductibles paid prior to the
Effective Time in the calendar year in which the Effective Time occurs in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans in which the Elf Employees are eligible to participate after the
Effective Time.
ARTICLE 8
COVENANTS OF PARENT AND ELF
The parties hereto agree that:
Section 8.01. REASONABLE EFFORTS.
(a) Subject to the terms and conditions of this Agreement, Elf and
Parent will use their reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, and to assist and cooperate with the
other parties in doing all things necessary, proper or advisable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement. In furtherance and not in limitation of the foregoing, each of
Parent and Elf agrees (i) to make an appropriate filing of a Notification and
Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as reasonably practicable after the date hereof
and to supply as promptly as reasonably practicable any additional information
and documentary material that may be requested by the FTC or the Antitrust
Division or any other Governmental Entity pursuant to the HSR Act and (ii) to
use reasonable efforts to cause the expiration or termination of the applicable
waiting periods under the HSR Act (and to obtain the necessary approvals under
any foreign laws, rules or regulations) as soon as reasonably practicable;
provided, that, Parent shall not be required to agree, and Elf shall not agree
without Parent's consent, to waive any rights or to accept any limitation on its
operations
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or to dispose of any assets in connection with obtaining any such consent or
authorization, but at Parent's written request, Elf shall agree to any such
waiver, limitation or disposal, which agreement may, at Elf's option, be
conditioned upon and effective only as of the Effective Time. Each party shall:
(1) promptly notify the other party of any communication from the FTC, the
Antitrust Division or any State Attorney General or any other Governmental
Entity, and subject to applicable Law, permit the other party to review in
advance any proposed written communication to any of the foregoing and to accept
all reasonable additions, deletions or changes suggested in connection
therewith; (2) not agree to participate in any substantive meetings or
discussions with any Governmental Entity in respect of any filings,
investigations, or inquiry concerning the transactions contemplated by this
Agreement unless it consults with the other party in advance and, to the extent
permitted by such Governmental Entity, gives the other party the opportunity to
attend and participate thereat; and (3) furnish the other party's counsel,
subject to appropriate confidentiality procedures, with copies of all
correspondence, filings, and communications (and memoranda setting forth the
substance thereof) between them and their respective representatives and any
Governmental Entity or their respective staffs.
(b) In connection with obtaining financing in connection with the
transactions contemplated by this Agreement, at the reasonable request of
Parent, Elf (i) agrees to enter into such agreements, agrees to use reasonable
best efforts to deliver such officers certificates and opinions as are customary
in a financing and as are, in the good faith determination of the persons
executing such officers certificates or opinions, accurate, and agrees to
pledge, grant security interests in, and otherwise grant liens on, its assets
pursuant to such agreements as may be reasonably requested, provided that no
obligation of Elf under any such agreement, pledge, or grant shall be effective
until the Effective Time; provided, further, that all expenses, liabilities or
costs of Elf reasonably incurred in connection herewith shall be the
responsibility of Parent and any obligations entered into in connection herewith
shall be terminated with no liability to Elf or its Subsidiaries in the event
this Agreement is terminated in accordance with its terms and (ii) in each case,
with such assurances of confidentiality reasonably acceptable to Elf, will
provide to the lenders specified by Parent financial and other information in
Elf's possession with respect to Elf and the Merger and the Transaction (as
defined in the TULIP Merger Agreement), will make Elf's senior officers and
financial and accounting personnel available to assist such lenders, and
otherwise will cooperate in connection with the consummation of such financing.
Section 8.02. CERTAIN FILINGS. Elf and Parent shall cooperate with
one another and use their reasonable best efforts (i) in connection with the
preparation of the Elf Information Statement, (ii) in determining whether any
action by or in respect of, or filing with, any governmental body, agency,
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any contracts, in connection
with the consummation of the transactions contemplated by this Agreement, and
(iii) in taking such actions or making any such filings, furnishing information
required in connection therewith or with the Elf Information Statement and
seeking timely to obtain any such actions, consents, approvals or waivers.
Section 8.03. PUBLIC ANNOUNCEMENTS. The initial press release
concerning this Agreement and the transactions contemplated hereby shall be a
joint release. Thereafter Parent and Elf will consult with each other before
issuing any press release or making any public statement with respect to this
Agreement or the transactions contemplated hereby and, except as
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may be required by applicable Law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
Section 8.04. FURTHER ASSURANCES. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Elf or Merger Subsidiary, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of Elf or Merger Subsidiary, 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 Elf acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger.
Section 8.05. NOTICES OF CERTAIN EVENTS. Each of Elf and Parent
shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Entity
in connection with the transactions contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting Elf, Parent or any of their respective Subsidiaries that
relate to the consummation of the transactions contemplated by this Agreement.
ARTICLE 9
CONDITIONS TO THE MERGER
Section 9.01. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
obligations of Elf, Parent and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement shall have been approved and adopted by the
stockholders of Elf in accordance with Delaware Law;
(b) no federal, state or foreign statute, rule, regulation,
executive order, decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which has the effect of
making the Merger or the transactions contemplated hereby illegal or otherwise
prohibiting the consummation of the Merger or the transactions contemplated
hereby;
(c) any applicable waiting period under the HSR Act or any foreign
competition law or regulation relating to the Merger shall have expired or been
terminated; and
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(d) the TULIP Merger shall have been consummated; provided that this
condition shall be deemed to have been satisfied for all purposes of this
Agreement if (i) TULIP shareholder approval of the TULIP Merger shall not have
been obtained on or before June 15, 2001, (ii) the meeting of TULIP shareholders
(including any adjournment thereto) shall have concluded without the approval of
the TULIP Merger Agreement from the TULIP shareholders having been obtained, or
(iii) TULIP shall have failed to perform in any material respect any obligation
or to comply in any material respect with any agreement or covenant of TULIP to
be performed or complied with by it under the TULIP Merger Agreement, such that
the conditions set forth in Section 9.02(a) or 9.02(c) of the TULIP Merger
Agreement cannot be satisfied.
Section 9.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(a) Elf shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) the representations and warranties of Elf contained in Sections
4.05 and 4.26 shall be true in all respects (except for any de minimus
inaccuracy), both when made and as of the Effective Time as though made at and
as of the Effective Time, and all other representations and warranties of Elf
contained in this Agreement and in any certificate or other writing delivered by
Elf pursuant hereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect or any similar
standard or qualification, shall be true when made and at and as of the
Effective Time as if made at and as of such time (or, if given as of a specific
date, at and as of such date) with only such exceptions as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Elf or Parent;
(c) Parent shall have received a certificate signed by an executive
officer of Elf to the foregoing effect;
(d) all consents or approvals of any Governmental Entity required in
connection with the consummation of the transactions contemplated hereby shall
have been obtained, except for such consents or approvals which, if not
obtained, would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Elf or Parent;
(e) the employment agreements with the individuals listed in Exhibit
A, in the forms entered into in connection with this Agreement, shall have been
entered into by the parties thereto, and shall be in full force and effect
(except for any failure to be in full force and effect resulting from
unenforceability of the employment agreement or death of the individual); and
(f) as of immediately prior to the Effective Time, holders of no
more than 10% of the outstanding Shares shall have taken actions to assert
appraisal rights under Section 262 of the Delaware Law.
Section 9.03. CONDITIONS TO THE OBLIGATIONS OF ELF. The obligations
of Elf to consummate the Merger are subject to the satisfaction of the following
further conditions:
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(a) each of Parent and Merger Subsidiary shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Effective Time;
(b) the representations and warranties of Parent and Merger
Subsidiary contained in this Agreement and in any certificate or other writing
delivered by Parent or Merger Subsidiary pursuant hereto, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect or any similar standard or qualification, shall be true
in all material respects when made and at and as of the Effective Time as if
made at and as of such time (or, if given as of a specific date, at and as of
such date) with only such exceptions as would not reasonably be expected to
materially impair, delay or prevent the ability of Parent and Merger Subsidiary
to consummate the transactions contemplated by this Agreement; and
(c) Elf shall have received a certificate signed by an executive
officer of Parent and Merger Subsidiary to the foregoing effect.
ARTICLE 10
TERMINATION
Section 10.01. TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of Elf):
(a) by mutual written agreement of Elf and Parent;
(b) by either Elf or Parent, if:
(i) the Merger has not been consummated on or before June 30,
2001, provided that the right to terminate this Agreement pursuant
to this Section 10.01(b)(i) shall not be available to any party
whose breach of any provision of this Agreement or the TULIP Voting
Agreement results in the failure of the Merger to be consummated by
such time; or
(ii) there shall be any Law or regulation that makes consummation
of the Merger illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Entity enjoining Elf
or Parent from consummating the Merger is entered and such judgment,
injunction, decree or order shall have become final and
non-appealable; or
(iii) this Agreement shall not have been approved and adopted in
accordance with Delaware Law by Elf's stockholders by reason of the
failure to obtain the required vote of Elf's stockholders;
(c) by Parent, if Elf shall have (1) failed to perform in any
material respect any obligation or to comply in any material respect with any
agreement or covenant of Elf to be performed or complied with by it under this
Agreement such that the conditions set forth in
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Sections 9.02(a) or 9.02(c) cannot be satisfied or (2) breached any of its
representations or warranties such that the conditions set forth in Sections
9.02(b) or 9.02(c) cannot be satisfied, which failure under clause (1) or (2)
shall not be cured within 15 Business Days of notice from Parent; or
(d) by Elf, if Parent or Merger Subsidiary shall have (i) failed to
perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of Parent or Merger Subsidiary to be
performed or complied with by it under this Agreement such that the conditions
set forth in Section 9.03(a) or 9.03(c) cannot be satisfied or (ii) breached any
of such party's representations or warranties contained in this Agreement such
that the condition set forth in Section 9.03(b) cannot be satisfied, which
failure or breach described in such clause (i) or (ii) shall not be cured within
15 Business Days of notice from Elf.
The party desiring to terminate this Agreement pursuant to this
Section 10.01 (other than pursuant to Section 10.01(a)) shall give notice of
such termination to the other party.
Section 10.02. EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to Section 10.01, this Agreement shall become void and of no
effect with no liability on the part of any party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to the
other party hereto, provided that, if such termination shall result from the
willful (i) failure of either party to fulfill a condition to the performance of
the obligations of the other party or (ii) failure of either party to perform a
covenant hereof, such party shall be fully liable for any and all liabilities
and damages incurred or suffered by the other party as a result of such failure.
The provisions of Sections 11.04, 11.06, 11.07 and 11.08 shall survive any
termination hereof pursuant to Section 10.01.
ARTICLE 11
MISCELLANEOUS
Section 11.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to Parent or Merger Subsidiary, to:
Xxxxxxx Company
Xxx Xxxxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx,
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
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if to Elf, to:
Keebler Foods Company
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. X'Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
and
Winston & Xxxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
and
Flowers Industries, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: G. Xxxxxxx Xxxxxxxx,
Fax: (000) 000-0000
and
Xxxxx, Day, Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Fax: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a Business Day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt.
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Section 11.02. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Other
than as provided in Section 10.02, the representations and warranties contained
herein and in any certificate or other writing delivered pursuant hereto shall
not survive the Effective Time or the termination of this Agreement.
Section 11.03. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived prior
to the Effective Time if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or,
in the case of a waiver, by each party against whom the waiver is to be
effective, provided that, after the adoption of this Agreement by the
stockholders of Elf and without their further approval, no such amendment or
waiver shall reduce the amount or change the kind of consideration to be
received in exchange for the Shares and provided, further, that any amendment or
waiver of this Agreement which adversely affects the rights of the stockholders
of Elf (other than TULIP) shall also require the authorization or recommendation
of the Special Committee.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.
Section 11.04. EXPENSES.
(a) Except as otherwise provided in this Section, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
(b) If:
(i) either Elf or Parent shall terminate this Agreement pursuant
to Section 10.01(b)(iii) and prior to such termination a third party
or Elf shall have publicly announced a Takeover Proposal, or a
Takeover Proposal shall have been made known to Elf (other than a
Takeover Proposal by Parent); or
(ii) either Parent or Elf shall terminate this Agreement pursuant
to Section 10.01(b)(i) without the approval by Elf's stockholders of
this Agreement having been obtained prior to such termination and
prior to June 30, 2001 a third party or Elf shall have publicly
announced a Takeover Proposal, or a Takeover Proposal shall have
been made known to Elf (other than a Takeover Proposal by Parent)
and within twelve months after the termination of this Agreement,
Elf enters into a definitive agreement, agreement in principle or
letter of intent, in each case in writing, with any Person (other
than Parent) with respect to a Takeover Proposal or any Person shall
acquire beneficial ownership of at least 50% of the outstanding
Shares (the earliest date when such agreement, agreement in
principle or letter of intent is entered into or such acquisition of
beneficial ownership shall occur is referred to herein as the
"Trigger Date");
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then in the case of a termination by Elf or Parent pursuant to clause (i), Elf
shall pay to Parent (by wire transfer of immediately available funds not later
than the date of such termination of this Agreement by Elf or in the case of
such termination by Parent, one Business Day after such termination of this
Agreement, or, in the case where clause (ii) applies, on the Trigger Date) an
amount equal to $57.8 million. Elf shall be entitled to deduct and withhold from
any payments made to Parent under this Section 11.04(b) such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
applicable provisions of state or local tax Law. To the extent such amounts are
so deducted or withheld, such amounts shall be treated for purposes of this
Section 11.04(b) as having been paid to Parent.
Section 11.05. SUCCESSORS AND ASSIGNS. 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 no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto, except that Parent or
Merger Subsidiary may transfer or assign, in whole or from time to time in part,
to one or more of its Affiliates, and, with respect to Merger Subsidiary, to a
newly-formed wholly-owned Subsidiary of Parent, the right to enter into the
transactions contemplated by this Agreement and the corresponding obligations,
but no such transfer or assignment will relieve Parent or Merger Subsidiary of
its obligations hereunder.
Section 11.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the conflicts of law rules of such state.
Section 11.07. JURISDICTION. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of Delaware or any Delaware
state court, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
Law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 11.01 shall be deemed
effective service of process on such party.
Section 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 11.09. COUNTERPARTS; EFFECTIVENESS; BENEFIT. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Sections 2.02, 2.05 and 7.02, no provision of this
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Agreement is intended to confer any rights, benefits, remedies, obligations, or
liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.
Section 11.10. ENTIRE AGREEMENT. This Agreement, the TULIP Voting
Agreement and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
Section 11.11. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction
or interpretation hereof.
Section 11.12. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 11.13. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled, without posting a bond or similar indemnity, to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof in any federal court located in
the State of Delaware or any Delaware state court, in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
KEEBLER FOODS COMPANY
By: /s/ Xxx X. Xxxx
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Name:
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Title:
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XXXXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name:
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Title:
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FK ACQUISITION CORP.
By: /s/ G.A. Xxxxxxxx
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Name:
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Title:
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FLOWERS INDUSTRIES, INC.
solely for the purposes of Sections 6.02,
6.03, and 11.01
By: /s/ G.A. Xxxxxxxx
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Name:
---------------------------------------
Title:
--------------------------------------
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