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Agreement and Plan of Merger
Dated as of December 27, 2001
among
YAHOO! INC.
HJ ACQUISITION CORP.
and
XXXXXXX.XXX, LTD.
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TABLE OF CONTENTS
Page
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ARTICLE I THE OFFER AND THE MERGER...........................................2
Section 1.1 The Offer.....................................................2
Section 1.2 Company Actions...............................................5
Section 1.3 Directors.....................................................6
Section 1.4 The Merger....................................................7
Section 1.5 Closing.......................................................8
Section 1.6 Effective Time................................................8
Section 1.7 Certificate of Incorporation and Bylaws.......................8
Section 1.8 Directors and Officers of the Surviving Corporation...........8
Section 1.9 Effects of the Merger.........................................8
Section 1.10 Subsequent Actions...........................................9
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES.......................................9
Section 2.1 Effect on Capital Stock.......................................9
Section 2.2 Exchange of Certificates.....................................10
Section 2.3 Dissenting Shares............................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................14
Section 3.1 Representations and Warranties of the Company................14
Section 3.2 Representations and Warranties of Parent and Sub.............28
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS........................33
Section 4.1 Conduct of Business..........................................33
Section 4.2 No Solicitation..............................................36
ARTICLE V ADDITIONAL AGREEMENTS.............................................38
Section 5.1 Preparation of the Proxy Statement; Stockholders Meetings....38
Section 5.2 Letters of the Company's Accountants.........................39
Section 5.3 [RESERVED]...................................................40
Section 5.4 Access to Information; Confidentiality.......................40
Section 5.5 Reasonable Best Efforts......................................40
Section 5.6 Stock Options; Employee Benefits.............................42
Section 5.7 Indemnification, Exculpation and Insurance...................44
Section 5.8 Fees and Expenses............................................46
Section 5.9 Public Announcements.........................................47
Section 5.10 Affiliates..................................................47
Section 5.11 Nasdaq Listing..............................................48
Section 5.12 Tax Treatment...............................................48
Section 5.13 Notices of Certain Events...................................48
Section 5.14 Conveyance Taxes............................................49
Section 5.15 Stockholder Agreements......................................49
Section 5.16 Matters.....................................................49
Section 5.17 Antitrust Notice............................................49
ARTICLE VI CONDITIONS PRECEDENT.............................................50
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Section 6.1 Conditions to Each Party's Obligation to Effect the Merger...50
Section 6.2 Frustration of Closing Conditions............................50
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...............................50
Section 7.1 Termination..................................................50
Section 7.2 Effect of Termination........................................52
Section 7.3 Amendment....................................................53
Section 7.4 Extension; Waiver............................................53
ARTICLE VIII GENERAL PROVISIONS.............................................53
Section 8.1 Nonsurvival of Representations and Warranties................53
Section 8.2 Notices......................................................53
Section 8.3 Definitions..................................................54
Section 8.4 Interpretation...............................................56
Section 8.5 Counterparts.................................................56
Section 8.6 Entire Agreement; Third-Party Beneficiaries..................56
Section 8.7 Governing Law................................................56
Section 8.8 Assignment...................................................57
Section 8.9 Enforcement..................................................57
Section 8.10 Severability................................................57
Exhibit 5.10...... Form of Company Affiliate Agreement
Exhibit 5.15...... Form of Stockholder Agreement
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INDEX OF DEFINED TERMS
Defined
Term
Section
-------
Adjusted Option..................................................... 5.6(a)
Affiliate........................................................... 8.3(a)
Agreement........................................................... Preamble
Appointment Time.................................................... 1.3(c)
Benefit Plan........................................................ 3.1(l)(i)
Benefit Plans....................................................... 3.1(l)(i)
Business Day........................................................ 8.3(b)
Certificate of Merger............................................... 1.6
Certificates........................................................ 2.2(b)
Closing............................................................. 1.5
Closing Date........................................................ 1.5
Code................................................................ Preamble
Commonly Controlled Entity.......................................... 3.1(l)(i)
Company............................................................. Preamble
Company Common Stock................................................ Preamble
Company Disclosure Memorandum....................................... 3.1
Company Preferred Stock............................................. 3.1(c)
Company SEC Documents............................................... 3.1(e)
Company Stock Plans................................................. 5.6(a)
Company Stockholder Approval........................................ 3.1(r)
Company Stockholders Meeting........................................ 5.1(b)
Confidentiality Agreement........................................... 5.4
DGCL................................................................ 1.4
Dissenting Shares................................................... 2.3(a)
DOJ................................................................. 5.5(c)
Dow Xxxxx News Release.............................................. 3.1(e)
Effective Time...................................................... 1.6
Employees........................................................... 5.6(e)
Environmental Laws.................................................. 3.1(j)
ERISA............................................................... 3.1(l)(i)
ESPP................................................................ 5.6(f)
Exchange Act........................................................ 1.1(a)
Exchange Agent...................................................... 2.2(a)
Exchange Fund....................................................... 2.2(a)
Exchange Offer Consideration........................................ 1.1(a)
Exchange Ratio...................................................... 1.1(a)
Expenses............................................................ 5.8(b)
Filed Company SEC Document.......................................... 3.1(e)
Filed Parent SEC Document........................................... 3.2(d)
Form S-4............................................................ 3.1(f)
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Defined
Term
Section
-------
Forward Merger...................................................... Preamble
FTC................................................................. 5.5(c)
Fully Diluted Basis................................................. 1.1(b)
GAAP................................................................ 3.1(e)
Governmental Entity................................................. 3.1(d)
Hazardous Materials................................................. 3.1(j)
HSR Act............................................................. 3.1(d)
Indemnified Party................................................... 5.7(a)
Independent Directors............................................... 1.3(b)
Initial Expiration Date............................................. 1.1(b)
Intellectual Property Rights........................................ 3.1(q)
IRS................................................................. 3.1(l)(i)
Knowledge........................................................... 8.3(c)
Law................................................................. 1.1(b)
Legal Provisions.................................................... 3.1(j)
Liens............................................................... 3.1(d)
Material Adverse Effect............................................. 8.3(d)
Material Contracts.................................................. 3.1(i)
Merger.............................................................. 1.4
Merger Consideration................................................ 2.1(c)
Minimum Consideration............................................... 1.1(b)
Offer............................................................... Preamble
Offer Documents..................................................... 1.1(c)
Offer Registration Statement........................................ 1.1(c)
Offer to Purchase................................................... 1.1(b)
Option Exchange Ratio............................................... 5.6(a)
Parent.............................................................. Preamble
Parent Common Stock................................................. Preamble
Parent Disclosure Memorandum........................................ 3.2
Parent Preferred Stock.............................................. 3.2(b)
Parent Market Price................................................. 1.1(a)
Parent SEC Documents................................................ 3.2(d)
Parent Stock Plans.................................................. 3.2(b)
Pension Plans....................................................... 3.1(l)(i)
Per Share Cash Consideration........................................ 1.1(a)
Permits............................................................. 3.1(j)
Person.............................................................. 8.3(e)
Preliminary Prospectus.............................................. 1.1(c)
Proxy Statement..................................................... 3.1(d)
Recommendations..................................................... 1.2(c)
Regulation M-A...................................................... 1.1(c)
Regulatory Law...................................................... 5.5(b)
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Defined
Term
Section
-------
Release............................................................. 3.1(j)
Restraints.......................................................... 6.1(b)
Reverse Merger...................................................... Preamble
Schedule 14D-9...................................................... 1.2(a)
Schedule TO......................................................... 1.1(c)
SEC................................................................. 1.1(b)
Shares.............................................................. Preamble
Significant Subsidiary.............................................. 8.3(f)
Securities Act...................................................... 3.1(e)
Stockholder......................................................... Preamble
Stockholder Agreement............................................... 5.15
Stock Option........................................................ 5.6(a)
Sub................................................................. Preamble
Subsidiary.......................................................... 8.3(g)
Superior Proposal................................................... 8.3(h)
Surviving Corporation............................................... 1.4
Takeover Proposal................................................... 4.2(a)
Tax Opinion......................................................... 5.12
Tax Returns......................................................... 3.1(n)
Taxes............................................................... 3.1(n)
Termination Fee..................................................... 5.8(b)
TMP................................................................. Preamble
TMP Agreement....................................................... Preamble
Transaction......................................................... Preamble
Trading Day......................................................... 8.3(i)
Valuation Period.................................................... 1.1(a)
Welfare Plans....................................................... 3.1(l)(i)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of
December 27, 2001, by and among Yahoo! Inc., a Delaware corporation
("PARENT"), HJ Acquisition Corp., a Delaware corporation and a newly formed,
direct, wholly-owned subsidiary of Parent ("SUB"), and XxxXxxx.xxx, Ltd., a
Delaware corporation (the "COMPANY").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and declared advisable this Agreement, the Offer and the
Merger (as defined herein).
WHEREAS, it is intended that the acquisition be accomplished by Sub
commencing an offer (as it may be amended from time to time as permitted by this
Agreement, the "OFFER") in which each of the issued and outstanding shares of
common stock, par value $0.01, of the Company (the "SHARES" or "COMPANY COMMON
STOCK"), upon the terms and subject to the conditions set forth in this
Agreement, may be exchanged for the right to receive from Parent (A) a fraction
of a share of common stock, par value $0.001 per share, of Parent together with
the associated rights to purchase shares of Series A Junior Participating
Preferred Stock, par value $.001 per share, of Parent issued and issuable
pursuant to the Rights Agreement dated as of March 15, 2001 between Parent and
EquiServe Trust Company, N.A., as Rights Agent (together, "PARENT COMMON STOCK")
as determined in accordance with Article I hereof and (B) the Per Share Cash
Consideration (together with any cash to be paid in lieu of fractional shares of
Parent Common Stock to be paid pursuant to Article I hereof) in cash, to be
followed by a merger of the Company with and into Sub (the "FORWARD MERGER").
WHEREAS, subsequent to the acquisition by Sub of Shares in the
Offer, upon the terms and subject to the conditions set forth in this Agreement,
each issued and outstanding Share, other than Shares owned by Parent, Sub or the
Company, will be converted into the right to receive cash and Parent Common
Stock as set forth herein.
WHEREAS, the Company's Board of Directors has unanimously, by those
present at such meeting of the Board of Directors, determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of such Shares and has resolved to recommend that the holders of
each Share accept the Offer and adopt this Agreement and each of the
transactions contemplated by this Agreement upon the terms and subject to the
conditions set forth herein.
WHEREAS, the Company has validly terminated the Agreement and Plan
of Merger (the "TMP AGREEMENT"), dated as of June 29, 2001, among TMP Worldwide
Inc. ("TMP"), TMP Tower Corp. and the Company pursuant to Section 7.1(f)
thereof.
WHEREAS, the voting agreement by and between Xxxx X. Xxxxxxx and
TMP dated as of June 29, 2001 was validly terminated on December 27, 2001 in
accordance with Section 7.16 thereof.
WHEREAS, if the Tax Opinion (as defined herein) is not obtained, the
parties desire to provide for an alternate merger structure providing for the
merger of Sub (or other direct or indirect wholly-owned subsidiary of Parent, as
determined by Parent in its sole discretion) with and into the Company (the
"REVERSE MERGER"), and the surviving corporation shall thereby become a direct
or indirect wholly-owned subsidiary of Parent.
WHEREAS, for U.S. Federal income tax purposes, it is intended that
the Offer and the Forward Merger (the "TRANSACTION") shall be treated as an
integrated transaction and shall qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (the "CODE"), and that this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Sections 354 and 361 of the Code.
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, and as a condition and inducement to Parent's and Sub's willingness
to enter into this Agreement, certain stockholders of the Company (each, a
"STOCKHOLDER") are entering into a stockholders agreement in the form attached
hereto as Exhibit 5.15, pursuant to which each such Stockholder is agreeing,
among other things, to validly tender for exchange all Shares owned by such
Stockholder.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND THE MERGER
Section 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 hereof and none of the events set forth in Annex I
hereto shall have occurred or be existing, Sub (or another direct or indirect
wholly-owned Subsidiary of Parent in Parent's sole discretion (so long as such
change of entity shall not adversely affect the intended tax-free nature of the
transaction), in which case all references to "Sub" in this Agreement shall be
to such other Subsidiary) shall commence (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "EXCHANGE ACT")) not later than ten (10)
Business Days after the date hereof the Offer to exchange for each Share: (i) a
fraction of a share of Parent Common Stock equal to the Exchange Ratio and (ii)
cash in an amount equal to (A) Ten Dollars and Fifty Cents ($10.50) minus (B) an
amount equal to the product of (x) the Exchange Ratio multiplied by (y) the
Parent Market Price, without interest (the "PER SHARE CASH CONSIDERATION") as
promptly as practicable following the date hereof (together, the "EXCHANGE OFFER
CONSIDERATION"). For purposes of this
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Agreement, the "EXCHANGE RATIO" shall be equal to the result obtained by
dividing Five Dollars and Twenty-Five Cents ($5.25) by the Parent Market Price;
provided if the number of shares of Parent Common Stock otherwise issuable as
part of the Exchange Offer Consideration (assuming valid tender and no
withdrawal of Thirty-Nine Million Five Hundred Thousand (39,500,000) Shares)
would otherwise exceed Fifteen Million (15,000,000) (the "MAXIMUM NUMBER"), then
the Exchange Ratio shall be reduced to a number equal to the quotient of (i) the
Maximum Number divided by (ii) Thirty-Nine Million Five Hundred Thousand
(39,500,000), rounded to four decimal points. In the event that Parent declares
a stock split, stock dividend or other reclassification or exchange with respect
to Parent Common Stock with a record or ex-dividend date occurring during the
Valuation Period or for the period between the termination of the Valuation
Period and the Effective Time, there will be an appropriate adjustment made to
the closing sales prices during the Valuation Period and the Maximum Number for
purposes of calculating the Exchange Ratio. The "PARENT MARKET PRICE" means the
average of the daily volume-weighted average prices, rounded to four decimal
points, of Parent Common Stock, as reported by Bloomberg, L.P., during each
Trading Day in the Valuation Period. "VALUATION PERIOD" means the period of ten
(10) consecutive Trading Days ending on and including the second Trading Day
before and excluding the Initial Expiration Date or, if applicable, the latest
extension of such expiration date, other than an extension relating to a
"subsequent offering period" pursuant to Rule 14d-11 of the Exchange Act.
(b) The obligations of Sub to accept for payment and to pay for any
Shares validly tendered and not withdrawn prior to the expiration of the Offer
(as it may be extended in accordance with the requirements of this Section
1.1(b)) shall be subject only to (i) there being validly tendered and not
withdrawn prior to the expiration of the Offer that number of Shares which,
together with the Shares then owned by Parent or Sub (without giving effect to
Shares subject to the Stockholder Agreement (as defined herein) unless such
shares have been validly tendered and not withdrawn as of such time), represents
at least a majority of the Shares outstanding on a Fully Diluted Basis (the
"MINIMUM CONDITION"), and (ii) the other conditions set forth in Annex I hereto.
The Company agrees that no Shares held by the Company or any of its Subsidiaries
will be tendered to Parent pursuant to the Offer. As used in this Agreement,
"FULLY DILUTED BASIS" shall refer to the number of Shares issued and outstanding
at any time after taking into account all Shares issuable upon the conversion of
the Company's convertible securities or upon the exercise of any options,
warrants or rights to purchase shares of the capital stock of the Company to the
extent that the exercise price or conversion price, as the case may be, of such
convertible security, option, warrant or right is less than $10.00 per share.
Subject to the prior satisfaction or waiver by Parent or Sub of the Minimum
Condition and the other conditions set forth in Annex I hereto, Sub shall
promptly consummate the Offer in accordance with its terms and accept for
payment and pay for all Shares tendered and not withdrawn promptly following the
acceptance of Shares for payment pursuant to the Offer. The Offer shall be made
by means of an offer to purchase (the "OFFER TO PURCHASE") that contains the
terms set forth in this Agreement, the Minimum Condition and the other
conditions set forth in Annex I hereto. Parent expressly reserves the right to
waive any of such conditions, to increase the Exchange Offer Consideration
payable in the Offer and to make any other changes in the terms of the Offer;
provided, however, that Sub shall not, and Parent shall cause Sub not to,
decrease the Exchange Offer Consideration, change the form of consideration
payable in the Offer (including the ratio of cash to shares of Parent Common
Stock, except as provided in Section 1.1(a) hereof), decrease the number of
Shares sought in the Offer, waive the Minimum
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Condition, impose additional conditions to the Offer, extend the offer beyond
the date that is twenty (20) "business days" (as such term is defined in Rule
14d-1(g) under the Exchange Act) after commencement of the Offer (the "INITIAL
EXPIRATION DATE") except as set forth herein, or amend any other condition of
the Offer in any manner adverse to the holders of the Shares, in each case
without the prior written consent of the Company (such consent to be authorized
by the Company's Board of Directors or a duly authorized committee thereof).
Notwithstanding the foregoing, Sub may, without the consent of the Company, (i)
extend the Offer beyond the Initial Expiration Date if, at the Initial
Expiration Date or, if applicable, the latest extension of such expiration date,
any of the conditions to Sub's obligation to accept Shares for payment shall not
be satisfied or waived, or (ii) extend the Offer for any period required by any
rule, regulation or interpretation of the United States Securities and Exchange
Commission ("SEC"), or the staff thereof, or by any other federal, state, local,
foreign or other statute, law, ordinance, rule or regulation or any order, writ,
decision, injunction, judgment, award or decree (collectively, "LAW"),
applicable to the Offer. If at the Initial Expiration Date or the latest
extension of such date all of the conditions to the Offer have been satisfied or
waived, Sub may (and, if the number of Shares validly tendered and not withdrawn
pursuant to the Offer equals seventy percent (70%) or more, but less than ninety
percent (90%) of the Shares outstanding on a Fully Diluted Basis of Company
Common Stock, shall) extend the Offer pursuant to a "subsequent offering period"
not to exceed twenty (20) business days (as such term is defined in Rule
14d-1(g) under the Exchange Act) to the extent permitted under, and in
compliance with, Rule 14d-11 under the Exchange Act.
(c) Within ten (10) Business Days after the date of this Agreement,
Parent shall prepare and file with the SEC a registration statement on Form S-4
(together with any amendments, supplements and exhibits thereto, the "OFFER
REGISTRATION STATEMENT") to register the offer and sale of Parent Common Stock
pursuant to the Offer. The Offer Registration Statement will include a
preliminary prospectus containing the information required under Rule 14d-4(b)
promulgated under the Exchange Act (the "PRELIMINARY PROSPECTUS"). As soon as
practicable on the date the Offer is commenced, Parent and Sub shall file with
the SEC, pursuant to Regulation M-A under the Exchange Act ("REGULATION M-A"), a
Tender Offer Statement on Schedule TO which will contain or incorporate by
reference all or part of the Preliminary Prospectus, the Offer to Purchase and
the related letter of transmittal form and all other ancillary documents with
respect to the Offer (together with all amendments, supplements and exhibits
thereto, the "SCHEDULE TO") (the Schedule TO, the Offer Registration Statement
and such documents included therein pursuant to which the Offer will be made,
together with any amendments, supplements and exhibits thereto, the "OFFER
DOCUMENTS"). Parent and Sub agree to take all steps necessary to cause the Offer
Documents to be filed with the SEC and disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
Parent and Sub, on the one hand, and the Company, on the other hand, agree to
promptly correct any information provided by it for use in the Offer Documents
if and to the extent that it shall have become false or misleading in any
material respect or as otherwise required by Law. Parent and Sub further agree
to take all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review the Offer Documents
before they are filed with the SEC. In addition, Parent and Sub agree to provide
the Company and its counsel with any comments that Parent, Sub or their counsel
may receive from time to time from
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the SEC or its staff with respect to the Offer Documents promptly after receipt
of such comments, and any responses thereto.
(d) Withholding Rights. Each of Parent and Sub shall be entitled to
deduct and withhold, or cause the Exchange Agent to deduct and withhold, from
the Exchange Offer Consideration payable to a holder of Shares pursuant to the
Offer such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Sub or Parent, as
the case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by Sub or Parent, as the case may be.
Section 1.2 COMPANY ACTIONS.
(a) As soon as practicable on the date the Offer is commenced, the
Company shall, in a manner that complies with Rule 14d-9 under the Exchange Act,
file with the SEC a Tender Offer Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments, supplements and exhibits thereto,
the "SCHEDULE 14D-9") which shall, subject to the provisions of Section 4.2(b),
contain the Recommendations (as defined herein). The Company further agrees to
take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company, on the one hand,
and Parent and Sub, on the other hand, agree to promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect or as otherwise required
by Law. The Company agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, Sub and their counsel shall be given the opportunity to
review and comment on the Schedule 14D-9 and any amendment thereto before filing
with the SEC. In addition, the Company agrees to provide Parent, Sub and their
counsel in writing with any comments that the Company or its counsel may receive
from time to time from the SEC or its staff with respect to the Schedule 14D-9
promptly after receipt of such comments, and to consult with Parent, Sub and
their counsel prior to responding to any such comments.
(b) In connection with the Offer, the Company shall promptly furnish
or cause to be furnished to Parent or Sub mailing labels, security position
listings and all available listings and computer files containing the names and
addresses of the record and beneficial holders of the Shares as of a recent
date, and shall promptly furnish Parent or Sub with such additional information
and assistance (including, but not limited to, lists of holders of the Shares,
updated periodically, and their addresses, mailing labels and lists of security
positions) as Parent or Sub or its agent(s) may reasonably request for the
purpose of communicating the Offer to the record and beneficial holders of the
Shares.
(c) The Company hereby approves of and consents to the Offer and the
Merger and represents and warrants that the Company's Board of Directors, at a
meeting duly called and held, has (i) unanimously, by those present at such
meeting of the Board of Directors, determined that this Agreement and the
transactions contemplated hereby, including the Offer
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and the Merger, are advisable and are fair to and in the best interests of the
stockholders of the Company, (ii) unanimously, by those present at such meeting
of the Board of Directors, approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, in a
manner which constitutes a directors' action (as defined in Section 141(b) of
the DGCL), (iii) unanimously, by those present at such meeting of the Board of
Directors, determined to terminate the TMP Agreement in accordance with its
terms pursuant to Section 7.1(f) thereof, and (iv) unanimously, by those present
at such meeting of the Board of Directors, resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares to Parent
thereunder and approve and adopt this Agreement and the Merger (the
recommendations referred to in this clause (iv) are collectively referred to in
this Agreement as the "RECOMMENDATIONS"). The Company hereby consents to the
inclusion in the Offer Documents of the Recommendations and approval of the
Board of Directors described in the immediately preceding sentence, and the
Company shall not permit the Recommendations and approval of the Company's Board
of Directors or any component thereof to be modified in any manner adverse to
Parent or Sub or to be withdrawn by the Company's Board of Directors or any
committee thereof, except as provided, and only to the extent set forth, in
Section 5.1(b) hereof.
Section 1.3 DIRECTORS.
(a) Effective upon the acceptance of any Shares for payment by Parent
or Sub or any of its affiliates pursuant to the Offer (the "APPOINTMENT TIME"),
Parent shall be entitled to elect or designate such number of directors, rounded
up to the next whole number, on the Company Board of Directors as is equal to
the product of the total number of directors on the Company Board of Directors
(giving effect to the directors elected or designated by Parent pursuant to this
sentence) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Sub, Parent and any of their affiliates bears to the total
number of Shares then outstanding. The Company shall, upon Parent's request,
promptly increase the size of the Company Board of Directors, including by
amending the Bylaws of the Company if necessary so as to increase the size of
the Company Board of Directors, or promptly secure the written resignations of
such number of its incumbent directors, or both, as is necessary to enable
Parent's designees to be so elected or designated to the Company Board of
Directors, and shall use its reasonable best efforts to cause Parent's designees
to be so elected or designated at such time. At the Appointment Time, the
Company shall, upon Parent's request, also cause persons elected or designated
by Parent to constitute the same percentage (rounded up to the next whole
number) as is on the Company Board of Directors of (i) each committee of the
Company Board of Directors; (ii) each board of directors (or similar body) of
each of the Company's Subsidiaries; and (iii) each committee (or similar body)
of each such board, in each case only to the extent permitted by applicable Law
or the rules of any stock exchange or trading market on which the Company's
common stock is listed or traded after giving effect to the foregoing changes to
the composition of the Company's Board of Directors. The Company's obligations
under this Section 1.3(a) shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-l promulgated thereunder. The Company shall promptly upon execution
of this Agreement take all actions required pursuant to such Section 14(f) and
Rule 14f-l in order to fulfill its obligations under this Section 1.3(a),
including, but not limited to, mailing to record and beneficial holders of the
Shares as of a recent date (together with the Schedule 14D-9) the information
required by Section 14(f) and Rule 14f-l as is necessary to enable Parent's
designees to be elected or designated to the Company Board of Directors. Parent
or Sub shall supply the Company, in writing, and be solely responsible for
6
information with respect to either of them and their nominees, officers,
directors and affiliates to the extent required by Section 14(f) and Rule 14f-l.
The provisions of this Section 1.3(a) are in addition to and shall not limit any
rights that any of Sub, Parent or any of their respective affiliates may have as
a holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
(b) In the event that Parent's designees are elected or designated to
the Company Board of Directors, then, until the Effective Time, the Company
shall cause the Company Board of Directors to have at least two (2) directors
who are directors on the date hereof including at least two (2) members who are
independent directors for purposes of the continued listing requirements of the
Nasdaq National Market (the "INDEPENDENT DIRECTORS"), provided, however, that if
any Independent Director is unable to serve due to death or disability, the
remaining Independent Directors shall be entitled to elect or designate another
person (or persons) who serves as a director on the date hereof to fill such
vacancy, and such person (or persons) shall be deemed to be an Independent
Director for purposes of this Agreement. If no Independent Director then
remains, the other directors shall designate two (2) persons who are directors
on the date hereof (or, in the event there shall be less than two (2) directors
available to fill such vacancies as a result of such persons' deaths,
disabilities or refusals to serve, such smaller number of persons who are
directors on the date hereof) to fill such vacancies and such persons shall be
deemed Independent Directors for purposes of this Agreement. Notwithstanding
anything in this Agreement to the contrary, if Parent's designees constitute a
majority of the Company Board of Directors after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, then the
affirmative vote of a majority of the Independent Directors (or if only one
exists, then the vote of such Independent Director) shall be required to (i)
amend or terminate this Agreement by the Company; (ii) exercise or waive any of
the Company's rights, benefits or remedies hereunder, if such action would
adversely affect holders of Shares other than Parent or Sub; (iii) amend the
Certificate of Incorporation or Bylaws of the Company if such action would
adversely affect holders of Shares other than Parent or Sub; or (iv) take any
other action of the Company Board of Directors under or in connection with this
Agreement if such action would adversely affect holders of Shares other than
Parent or Sub; provided, however, that if there shall be no Independent
Directors as a result of such persons' deaths, disabilities or refusal to serve,
then such actions may be effected by majority vote of the entire Board of
Directors of the Company.
Section 1.4 THE MERGER.
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL"), the Forward Merger shall be effected and the Company shall be merged
with and into Sub at the Effective Time with the separate corporate existence of
the Company ceasing and Sub continuing as the surviving corporation; provided,
however, that if Parent does not obtain the Tax Opinion (as defined herein),
then the Reverse Merger shall be effected, with the separate corporate existence
of Sub (or another direct or indirect wholly-owned subsidiary of Parent, as
determined by Parent in its sole discretion) ceasing and the Company continuing
as the surviving corporation. The surviving corporation of the Forward Merger or
the Reverse Merger, as the case may be, shall be herein referred as the
"SURVIVING CORPORATION" and the Forward Merger and Reverse Merger shall
collectively be referred to as the "MERGER". The Surviving Corporation shall
become a direct or
7
indirect wholly owned subsidiary of Parent and shall succeed to and assume all
the rights and obligations of Sub and the Company in accordance with the DGCL.
Section 1.5 CLOSING.
The closing of the Merger (the "CLOSING") will take place at 10:00
a.m. on a date to be specified by the parties (the "CLOSING DATE"), which shall
be no later than the second Business Day after satisfaction or waiver (subject
to applicable Law) of the conditions set forth in Article VI (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions), at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxxxxxxx Xxx., Xxx. 0000, Xxxx Xxxx,
Xxxxxxxxxx, unless another date or place is agreed to by the parties hereto.
Section 1.6 EFFECTIVE TIME.
Subject to the provisions of this Agreement, as soon as practicable
on the Closing Date, the parties shall file a certificate of merger (the
"CERTIFICATE OF MERGER") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings or recordings required under the DGCL.
The Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware, or at such
other time as Parent and the Company shall agree and specify in the Certificate
of Merger (the time the Merger becomes effective being the "EFFECTIVE TIME").
Section 1.7 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) The Certificate of Incorporation of Sub, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided therein or by
applicable Law.
(b) The Bylaws of Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until thereafter amended
as provided therein or by applicable Law.
Section 1.8 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
(a) The directors of Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
(b) The officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
Section 1.9 EFFECTS OF THE MERGER.
At and after the Effective Time, the Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective T
8
ime all the property, rights, privileges, powers and franchises of the Company
and Sub shall be vested in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
Section 1.10 SUBSEQUENT ACTIONS.
If at any time after the Effective Time the Surviving Corporation
shall determine, in its sole discretion, or shall be advised, that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, then the officers and directors
of the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or Sub, all such deeds, bills of sale,
instruments of conveyance, assignments and assurances and to take and do, in the
name and on behalf of each such corporation or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title or interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 2.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any Shares or any
shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. In the event of a Forward Merger, each
issued and outstanding share of capital stock of Sub shall remain as one validly
issued, fully paid and nonassessable share of common stock, par value $0.001, of
the Surviving Corporation. Notwithstanding the foregoing, in the event of a
Reverse Merger, then each issued and outstanding share of capital stock of Sub
(or another direct or indirect wholly-owned Subsidiary of Parent, as determined
by Parent in its sole discretion) shall be converted into and become one validly
issued, fully paid and non-assessable share of common stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each Share
that is owned by the Company, Parent or Sub (except for Shares that are owned by
Sub, in the event of a Reverse Merger) shall automatically be canceled and
retired and shall cease to exist, and no Parent Common Stock or other
consideration shall be delivered in exchange therefor.
(c)Conversion of Company Common Stock.
(i)Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be canceled in accordance with Section
2.1(b) and other
9
than Shares owned by Sub in the event of a Reverse Merger) shall be converted
into the right to receive the Exchange Offer Consideration (the "MERGER
CONSIDERATION").
(ii) As of the Effective Time, all such Shares shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate which immediately prior to the Effective
Time represented any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration upon surrender of
such certificate in accordance with Section 2.2, without interest.
Notwithstanding the foregoing, if between the date of this Agreement and the
Effective Time the outstanding shares of Parent Common Stock or Company Common
Stock shall have been changed into a different number of shares or a different
class, by reason of the occurrence or record date of any stock dividend,
subdivision, reclassification, recapitalization, split, combination, exchange of
shares or similar transaction, the Merger Consideration shall be appropriately
adjusted to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination, exchange or similar transaction (without
duplication of any adjustments made pursuant to Section 1.1(a)).
(iii) Notwithstanding anything expressed or implied to the
contrary in this Agreement, appropriate modifications shall be made to the
provisions of this Agreement (including, without limitation, this Section 2.1)
in the event of a Reverse Merger.
Section 2.2 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. As of the Effective Time, Parent shall deposit
with Equiserve, L.P. or such other bank or trust company as may be designated by
Parent (the "EXCHANGE AGENT") and which shall be reasonably acceptable to the
Company, for the benefit of the holders of Shares, for exchange in accordance
with this Article II, through the Exchange Agent, certificates representing the
shares of Parent Common Stock and cash (such shares of Parent Common Stock and
cash, together with any dividends or distributions with respect thereto with a
record date after the Effective Time and any cash payments in lieu of any
fractional shares of Parent Common Stock, being hereinafter referred to as the
"EXCHANGE FUND") issuable and payable pursuant to Section 2.1 in exchange for
Shares. Parent agrees to make available to the Exchange Agent from time to time,
as needed, cash sufficient to pay cash in lieu of fractional shares pursuant to
Section 2.2(e) and any dividends and other distributions pursuant to Section
2.2(c).
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
record of a certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "CERTIFICATES") whose shares were
converted into the right to receive the Merger Consideration pursuant to Section
2.1(c), (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Parent may reasonably specify and shall be
reasonably acceptable to the Company) and (ii) instructions for use in
surrendering the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be
10
required by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate representing that number of
whole shares of Parent Common Stock which such holder has the right to receive
pursuant to the provisions of this Article II after taking into account all the
Shares then held by such holder under all such Certificates so surrendered, (y)
cash which such holder has the right to receive pursuant to the provisions of
this Article II after taking into account all the Shares then held by such
holder under all such Certificates so surrendered (together with cash in lieu of
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(e)), and (z) any dividends or other distributions to
which such holder is entitled pursuant to Section 2.2(c) (in each case after
giving effect to any required withholding taxes), and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of Company Common Stock which is not registered in the transfer records of the
Company, a certificate representing the proper number of shares of Parent Common
Stock may be issued to a Person other than the Person in whose name the
Certificate so surrendered is registered, if, upon presentation to the Exchange
Agent, such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the Person requesting such issuance shall pay any transfer
or other taxes required by reason of the issuance of shares of Parent Common
Stock to a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of Parent that such tax has been paid
or is not applicable. Notwithstanding anything to the contrary contained herein,
no certificate representing Parent Common Stock or cash (including in lieu of a
fractional share interest) shall be delivered to a Person who is an "affiliate"
(as contemplated by Section 5.10 hereof) of the Company unless such affiliate
has theretofore executed and delivered to Parent the agreement referred to in
Section 5.10. Until surrendered as contemplated by this Section 2.2(b), each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration, cash in
lieu of any fractional shares of Parent Common Stock as contemplated by Section
2.2(e) and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.2(c). No interest will be paid or will accrue on any cash
payable to holders of Certificates.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Parent Common Stock represented thereby, and no
cash payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.2(e) until the holder of record of such Certificate shall
surrender such Certificate in accordance with this Article II. Subject to the
effect of applicable escheat or similar laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificate
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of dividends or
other distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Parent Common Stock, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of Parent
Common Stock, less the amount of any withholding taxes which may be required
thereon.
11
(d) No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to Section 2.2(c) or Section 2.2(e)) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to the Shares previously
represented by such Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by the Company on such Shares in accordance with the terms of this
Agreement or prior to the date of this Agreement and which remain unpaid at the
Effective Time.
(e) No Fractional Shares.
(i) No certificates or scrip representing fractional shares of
Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution of Parent shall relate to such
fractional share interests and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a stockholder of Parent.
(ii) Notwithstanding any other provision of this Agreement, each
holder of Shares exchanged pursuant to the Offer or the Merger who would
otherwise have been entitled to receive a fraction of a share of Parent Common
Stock (after taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an amount, less the
amount of any withholding taxes, as contemplated by Section 2.2(f), which are
required to be withheld with respect thereto, equal to the product of (A) such
fractional part of a share and (B) Parent Market Price.
(f) Withholding Rights. Each of the Surviving Corporation and Parent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by the Surviving Corporation or Parent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by the Surviving Corporation or Parent,
as the case may be.
(g) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six (6)
months after the Effective Time shall be delivered to Parent, upon demand, and
any holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to Parent for, and Parent shall remain
liable for, payment of their claim for Merger Consideration, any cash in lieu of
fractional shares of Parent Common Stock and any dividends or distributions with
respect to Parent Common Stock. Any such portion of the Exchange Fund remaining
unclaimed by holders of Shares immediately prior to such time as such amounts
would otherwise escheat to or become property of any Governmental Entity shall,
to the extent permitted by applicable Law, become the property of the Surviving
Corporation free and clear of any claims or interest of any Person previously
entitled thereto.
12
(h) No Liability. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any Person in respect of any shares of Parent Common
Stock (or dividends or distributions with respect thereto) or cash in lieu of
fractional shares of Parent Common Stock or cash from the Exchange Fund, in each
case delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(i) Investment of Exchange Fund. The Exchange Agent shall invest cash
included in the Exchange Fund, as directed by Parent, on a daily basis, provided
that no such investment or loss thereon shall affect the amounts payable or the
timing of the amounts payable pursuant to the provisions of this Article II. Any
interest and other income resulting from such investments shall be paid to
Parent.
(j) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration and any cash in lieu of fractional shares,
and unpaid dividends and distributions on shares of Parent Common Stock
deliverable in respect thereof, in each case pursuant to this Agreement.
(k) Stock Transfer Books. The stock transfer books of the Company
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or the Surviving Corporation for any reason shall be converted
into the Merger Consideration with respect to the Shares formerly represented
thereby (including any cash in lieu of fractional shares of Parent Common Stock
to which the holders thereof are entitled pursuant to Section 2.2(e)) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.2(c).
Section 2.3 DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the contrary, 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
complied with Section 262 of the DGCL (the "DISSENTING SHARES") shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses his or her right to appraisal.
A holder of Dissenting Shares shall be entitled to receive payment of the
appraised value of such Shares held by him or her in accordance with Section 262
of the DGCL, unless, after the Effective Time, such holder fails to perfect or
withdraws or loses his or her right to appraisal, in which case such Shares
shall be converted into and represent only the right to receive the Merger
Consideration, without interest thereon, upon surrender of the Certificate or
Certificates representing such Shares, pursuant to Section 2.2.
(b) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of such demands and
any other instruments
13
served pursuant to the DGCL and received by the Company relating to rights of
appraisal; and (ii) the opportunity to participate in the conduct of all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. Except with the prior written consent of Parent, the Company shall not
voluntarily make any payment with respect to any demands for appraisal or settle
or offer to settle any such demands for appraisal.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
expressly set forth in the Filed Company SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by the Company to Parent
immediately prior to the execution of this Agreement and initialed on behalf of
Parent and the Company, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "COMPANY
DISCLOSURE MEMORANDUM"), the Company represents and warrants to Parent and Sub
as follows:
(a) Organization, Standing and Corporate Power. Each of the Company
and each of its Significant Subsidiaries is a corporation duly organized,
validly existing and, to the extent applicable, in good standing under the laws
of the jurisdiction in which it is organized and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Each of the Company and each of its Significant
Subsidiaries is duly qualified or licensed to do business and, to the extent
applicable, is in good standing in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect on the Company. The
Company has made available to Parent prior to the execution of this Agreement
complete and correct copies of its Certificate of Incorporation and Bylaws, and
the comparable organizational documents of each of its Significant Subsidiaries,
in each case as amended to the date hereof.
(b) Subsidiaries. All the outstanding shares of capital stock of, or
other equity interests in, each Subsidiary have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly by the Company
free and clear of all Liens, and free of any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests.
Other than such Subsidiaries of the Company, neither the Company nor any
Subsidiary owns a greater than twenty percent (20%) equity interest or similar
interest in, or any interest convertible into or exchangeable or exercisable for
a greater than twenty percent (20%) equity or similar interest in, any Person.
Neither the Company nor any of its Subsidiaries is subject to any obligation or
requirement to make any material loan, capital contribution investment or
similar expenditure to or in any Person in excess of $500,000 individually or
$1,000,000 to all Persons, except for loans, capital contributions, investments
or similar expenditures by the Company or any of its Subsidiaries to any of the
Company's Subsidiaries. Except as provided by applicable Law, there are no
restrictions of any kind which prevent the payment of dividends by any
Subsidiary.
14
(c) Capital Structure. The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock and 10,000,000 shares of
preferred stock, par value $.01 per share ("COMPANY PREFERRED STOCK"). At the
close of business on December 20, 2001, (i) 38,766,678 shares of Company Common
Stock were issued and outstanding, none of which shares are subject to
restrictions (other than with respect to Rule 144 of the Securities Act) or
forfeiture risks, (ii) no shares of Company Common Stock were held by the
Company in its treasury, (iii) 5,623,424 shares of Company Common Stock were
issuable pursuant to outstanding Company Stock Options, and (iv) no shares of
Company Preferred Stock were issued or outstanding. Since December 20, 2001,
except as permitted by Section 4.1(a)(ii) of this Agreement, (i) there have been
no issuances of capital stock of the Company (or securities convertible into or
exchangeable or exercisable for such capital stock) other than issuances of
Company Common Stock pursuant to the exercise of options outstanding on December
20, 2001 under Company Stock Plans, and (ii) no options, warrants, securities
convertible into, or commitments with respect to the issuance of shares of
Company Common Stock have been issued, granted or made. All outstanding shares
of capital stock of the Company are, and all shares which may be issued pursuant
to the Company Stock Plans will be, when issued in accordance with the terms
thereof, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except (i) as set forth above in this
Section 3.1(c), and (ii) for shares of Company Common Stock reserved for
issuance under any plan or arrangement providing for the grant of options to
purchase shares of Company Common Stock to current or former officers,
directors, employees or consultants of the Company or its Subsidiaries or
resulting from the issuance of shares of Company Common Stock pursuant to Stock
Options outstanding as of the close of business on December 20, 2001, (x) there
are not issued, issuable, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of the Company, (B) any securities of
the Company convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company, (C) any warrants, calls,
options or other rights to acquire from the Company or any Subsidiary of the
Company, and no obligation of the Company or any Subsidiary of the Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company or (D) stock appreciation rights or rights to receive shares of Company
Common Stock on a deferred basis granted under the Company Stock Plans or
otherwise; and (y) there are not any outstanding obligations of the Company or
any Subsidiary of the Company to repurchase, redeem or otherwise acquire any
such securities or to issue, deliver or sell, or cause to be issued, delivered
or sold, any such securities. Neither the Company nor any Subsidiary is a party
to any voting agreement with respect to the voting of any such securities.
Except as set forth in this Section 3.1(c), there are no issued, issuable,
reserved for issuance or outstanding (A) securities of the Company or any
Subsidiary of the Company convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests in any
Subsidiary of the Company, (B) warrants, calls, options or other rights to
acquire from the Company or any Subsidiary of the Company, and no obligation of
the Company or any Subsidiary of the Company to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any Subsidiary of the Company or (C) obligations of the
Company or
15
any Subsidiary of the Company to repurchase, redeem or otherwise acquire any
such outstanding securities of Subsidiaries of the Company or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities. Except
as set forth above in this Section 3.1(c), neither the Company nor any
Subsidiary is a party to or bound by any agreement regarding any securities of
the Company or any Subsidiary of the Company.
(d) Authority; Noncontravention. The Company has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, subject, in the case of the
Merger, to receipt of the Company Stockholder Approval (if required by
applicable Law to consummate the Merger) and the filing of the Certificate of
Merger. The Board of Directors of the Company has unanimously, by those present
at such meeting of the Board of Directors, approved this Agreement, determined
that this Agreement and the transactions contemplated hereby are fair to and in
the best interests of the Company and its stockholders and declared that the
Merger is advisable, provided that after the date hereof, the Board of Directors
of the Company may withdraw its recommendation as provided in Section 4.2
hereof. Assuming that the representation of Parent contained in Section 3.2(i)
is correct, the Board of Directors of the Company has taken all action necessary
to render inapplicable, as it relates to the execution, delivery and performance
of this Agreement and the Stockholder Agreement and the consummation of the
Offer and the Merger and the other transactions contemplated hereby and thereby,
Section 203 of the DGCL. To the Company's Knowledge, except for Section 203 of
the DGCL (the restrictions of which have been rendered inapplicable), no state
takeover statute is applicable to this Agreement, the Offer, the Merger, or the
other transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by each of the other parties thereto, constitutes legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally or by principles governing
availability of equitable remedies). The execution and delivery of this
Agreement does not, and the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a benefit under, or result in the creation of any pledge, claim, lien,
charge, encumbrance or security interest of any kind or nature whatsoever
(collectively, "LIENS") in or upon any of the properties or assets of the
Company or any Subsidiary of the Company under, (i) the Company's Certificate of
Incorporation or Bylaws or the comparable organizational documents of any of its
Subsidiaries, (ii) any loan or credit agreement, bond, note, mortgage,
indenture, lease or other contract, agreement, obligation, commitment,
arrangement, understanding, instrument, permit or license applicable to the
Company or any of its Subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to in the
following paragraph, any (A) statute, law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case applicable to the
16
Company or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, cancellations, accelerations, losses or Liens that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company or to prevent or materially delay the
consummation of the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any supranational, national, state,
municipal, local or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing, importing
or other governmental or quasi-governmental authority (each, a "GOVERNMENTAL
ENTITY") is required by or with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the Offer, the Merger or the
other transactions contemplated by this Agreement, except for (1) the filing of
a pre-merger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR ACT")
and any applicable filings and approvals under similar foreign antitrust laws
and regulations, (2) the filing with the SEC of (A) a proxy statement relating
to the meeting of the Company's stockholders to be held in connection with the
Merger (as amended or supplemented from time to time, the "PROXY STATEMENT") and
(B) such reports under Section 13(a), 13(d), 15(d) or 16(a) of Exchange Act, as
may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (3) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company is qualified to do
business, (4) such filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" law and (5) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect on the Company or
to prevent or materially delay the consummation of the transactions contemplated
by this Agreement.
(e) Company SEC Documents. The Company has timely filed all reports,
schedules, forms, statements and other documents (including exhibits and other
information incorporated therein) with the SEC required to be filed by the
Company since January 1, 1999 (the "COMPANY SEC DOCUMENTS"). No Company
Subsidiary is required to file any form, report, registration statement,
prospectus or other document with the SEC. As of their respective dates (and, if
amended or superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), the Company SEC Documents
complied in all material respects with the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"SECURITIES ACT") or the Exchange Act, as the case may be, applicable to such
Company SEC Documents, and none of the Company SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company SEC Documents filed since December 31, 2000, together with any public
announcements in a news release issued by the Dow Xxxxx news service, PR
Newswire or any equivalent service (collectively, a "DOW XXXXX NEWS RELEASE")
made by the Company after the date hereof taken as a whole, as of the Effective
Time will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the
17
circumstances existing as of the Effective Time, not misleading. The financial
statements (including the related notes) of the Company included in the Company
SEC Documents, as of their respective dates, complied in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP"), applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
(except as amended or superseded by a filing prior to the date of this
Agreement) fairly presented the financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments not material
in amount). Except (i) as set forth in the Filed Company SEC Documents filed
since December 31, 2000 or (ii) for the transactions contemplated by this
Agreement, neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on the Company. For purposes of this
Agreement, a "FILED COMPANY SEC DOCUMENT" shall mean a Company SEC Document
filed by the Company and publicly available prior to the date of this Agreement.
(f) Information in the Form S-4, Proxy Statement, Offer Documents and
Schedule 14D-9. None of the information to be supplied by the Company
specifically for inclusion or incorporation by reference in the registration
statement on Form S-4 to be filed with the SEC by Parent in connection with the
issuance of Parent Common Stock in the Merger (the "FORM S-4") will, at the time
the Form S-4 is filed with the SEC, at any time it is supplemented or amended or
at the time it becomes effective under the Securities Act, 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, in light of the
circumstances under which they are made, not misleading and the Proxy Statement
will not, on the date it is first mailed to the Company's stockholders and at
the time of the Company Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference in the
Proxy Statement. The Proxy Statement will comply in all material respects with
the requirements of the Exchange Act, as applicable to the Company, except that
no representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference in the
Proxy Statement. The information supplied by the Company expressly for inclusion
in the Offer Documents will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the SEC and on the date first published or sent or given to the
stockholders, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading, except that no representation or warranty is made by
the Company with respect to statements
18
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference in the
Schedule 14D-9.
(g) Absence of Certain Changes or Events. Except as set forth in the
Filed Company SEC Documents filed after December 31, 2000 and for transactions
expressly contemplated or permitted by this Agreement, since December 31, 2000
(i) the Company and its Subsidiaries have conducted their businesses in the
ordinary course consistent with past practice and (ii) there has not been a
Material Adverse Effect on the Company. Except as set forth in the Filed Company
SEC Documents and for actions in the ordinary course of business, since December
31, 2000, neither the Company nor any Company Subsidiary has taken any action,
or failed to take any action, which if such action or failure occurred during
the period from the date of this Agreement to the Effective Time would
constitute a breach or violation of Section 4.1(a) (i), (ii), (iv), (vi),
(viii), (ix), (xi), (xii), (xiii) or Section 5.12, and neither the Company nor
any Company Subsidiary has authorized, or committed or agreed, to take any of
such actions.
(h) Litigation. There is no suit, action or proceeding pending or, to
the Knowledge of the Company, overtly threatened against or affecting the
Company or any of its Subsidiaries or any of their respective properties that
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect on the Company, nor is there any judgment, decree, injunction,
rule, order, action, demand or requirement of any Governmental Entity or
arbitrator outstanding against, or, to the Knowledge of the Company, any
investigation by any Governmental Entity involving, the Company or any of its
Subsidiaries that individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect on the Company.
(i) Contracts. Except as set forth in Section 3.1(i)(A) of the Company
Disclosure Memorandum or listed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 2000, neither the Company nor any
Company Subsidiary is a party to, and none of their respective properties or
assets are bound by, any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) (the contracts listed in Section 3.1(i)
of the Company Disclosure Memorandum being referred to as the "MATERIAL
CONTRACTS"). Each such Material Contract is a valid, binding and enforceable
obligation of the Company or its Subsidiaries and, to the Company's Knowledge,
of the other party or parties thereto, in accordance with its terms, and in full
force and effect, except where the failure to be valid, binding, enforceable and
in full force and effect would not reasonably be expected to have a Material
Adverse Effect on the Company and to the extent as may be limited by applicable
bankruptcy, insolvency, moratorium or other laws affecting the enforcement of
creditors' rights generally or by general principles of equity. The Company has
not received any notice from any other party to any such Material Contract, and
otherwise has no Knowledge that such third party intends to terminate, or not
renew, any such Material Contract. As of the date hereof, the Company has made
available to Parent true and correct copies of all such contracts. Neither the
Company nor any of its Subsidiaries, and, to the Knowledge of the Company, no
other party thereto, is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice or
both would cause such a violation of or default under) any loan or credit
agreement, bond, note, mortgage, indenture, lease or other contract, agreement,
obligation, commitment, arrangement, understanding, instrument, permit or
license to which it is a party or by which it or any of its properties or assets
is bound, except for violations or defaults
19
that individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company. Except as set forth in Section 3.1(i)(B)
of the Company Disclosure Memorandum, neither the Company, its Subsidiaries nor,
to the Company's Knowledge, any of its employees is a party to or otherwise
bound by any agreement or covenant not to compete or by any agreement or
covenant restricting the development, marketing or distribution of the Company's
or its Subsidiaries' products or services or the conduct of their businesses or
by any agreement or covenant granting any exclusive rights whatsoever.
(j) Compliance with Laws. Each of the Company and its Subsidiaries is
in compliance with all statutes, laws, ordinances, rules, regulations,
judgments, orders and decrees of any Governmental Entity (other than
Environmental Laws) (collectively, "LEGAL PROVISIONS") applicable to its
business or operations, except for instances of noncompliance that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company. Since January 1, 1998, neither the Company nor any of its
Subsidiaries has received any written notice from any Governmental Entity
regarding any actual or possible violation of, or failure to comply with, any
Legal Provisions, except for such violations or failures to comply that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company. Each of the Company and its Subsidiaries
has in effect all approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights of or with all Governmental Entities,
including all authorizations under Environmental Laws ("PERMITS"), necessary for
it to own, lease or operate its properties and assets and to carry on its
business and operations as now conducted, except for the failure to have such
Permits that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect on the Company. There has occurred no default
under, or violation of, any such Permit, except for defaults under, or
violations of, Permits that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on the Company. Neither
the Offer nor the Merger, in and of itself, would not cause the revocation or
cancellation of any such Permit that individually or in the aggregate is
reasonably likely to have a Material Adverse Effect on the Company. Except for
those matters that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on the Company: (A) each of the
Company and its Subsidiaries is, and has been, in compliance with all applicable
Environmental Laws; (B) during the period of ownership or operation by the
Company or its Subsidiaries of any of its currently or previously owned, leased
or operated properties, no Hazardous Material has been treated or disposed of,
and there have been no Releases or threatened Releases of Hazardous Material at,
in, on, under or affecting such properties or any contiguous site; (C) prior to
the period of ownership or operation by the Company or its Subsidiaries of any
of its currently or previously owned, leased or operated properties, to the
Knowledge of the Company, no Hazardous Material was treated, stored or disposed
of, and there were no Releases of Hazardous Material at, in, on, under or
affecting any such property or any contiguous site; and (D) neither the Company
nor its Subsidiaries have received any written notice of, or entered into or
assumed by contract, judicial or administrative settlement, or operation of law
any indemnification obligation, order, settlement or decree relating to: (1) any
violation of any Environmental Laws or the institution or pendency of any suit,
action, claim, proceeding or investigation by any Governmental Entity or any
third party in connection with any alleged violation of Environmental Laws or
any Release of Hazardous Materials, (2) the response to or remediation of
Hazardous Material at or arising from any of the Company's or its Subsidiaries'
activities or properties or any other properties or (3) payment for any response
action relating to or
20
remediation of Hazardous Material at or arising from any of the Company's or its
Subsidiaries' properties, activities, or any other properties. The term
"Environmental Laws" means all applicable U.S., state, local and foreign laws,
statutes, treaties, rules, codes, ordinances, regulations, certificates, orders,
directives, interpretations, licenses, permits and other authorizations of any
Governmental Entity and judgments, decrees, injunctions, writs, orders or like
action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction, including any
thereof of the European Community or the European Union having the force of law
and being applicable to the Company or any of its Subsidiaries, dealing with the
protection of health, welfare or the environment, including, without limitation,
flood, pollution or disaster laws and health and environmental protection laws
and regulations, and all other rules and regulations promulgated thereunder and
any provincial, municipal, water board or other local statute, law, rule,
regulation or ordinance relating to public or employee health, safety or the
environment; including all laws relating to Releases to air, water, land or
groundwater, relating to the withdrawal or use of groundwater, and relating to
the use, handling, transportation, manufacturing, introduction into the stream
of commerce or disposal of Hazardous Materials. The term "HAZARDOUS MATERIALS"
means any chemical, material, liquid, gas, substance or waste, whether naturally
occurring or manmade, that is prohibited, limited or regulated by or pursuant to
an Environmental Law applicable to the Company, any Company Subsidiary or their
respective properties. The term "RELEASE" means the spilling, leaking,
discharging, injecting, emitting and/or disposing and placement of a Hazardous
Material in any location that poses a threat thereof.
(k) Absence of Changes in Benefit Plans. There has not been, since
December 31, 2000, any adoption or amendment in any material respect by the
Company or any of its Subsidiaries of any collective bargaining agreement or any
Benefit Plan, or any material change in any actuarial or other assumption used
to calculate funding obligations with respect to any Pension Plans, or any
change in the manner in which contributions to any Pension Plans are made or the
basis on which such contributions are determined.
21
(l) ERISA Compliance.
(i) Section 3.1(l) of the Company Disclosure Memorandum contains
a list of each pension, retirement, savings, profit sharing, medical, dental,
health, disability, life, death benefit, group insurance, deferred compensation,
fringe, change in control, retiree, stock option, stock purchase, restricted
stock, bonus or incentive, vacation, sick leave, severance pay, employment or
termination, and other material employee benefit or compensation plan,
arrangement, contract, agreement (including pursuant to any collective
bargaining agreement), policy, practice or commitment, whether formal or
informal, written or oral, in each case that are binding commitments of the
Company and its Subsidiaries (but, for purposes hereof, excluding any
nonmaterial plan or program maintained by the Company or its Subsidiaries for
the benefit of non U.S. employees), under which (1) current or former employees,
officers, directors or independent contractors of the Company or any of its
Subsidiaries (or their beneficiaries) participate or are entitled to participate
by reason of their relationship with the Company or any of its Subsidiaries, (2)
to which the Company or any of its Subsidiaries is a party or a sponsor or a
fiduciary thereof or by which the Company or any of its Subsidiaries (or any of
their rights, properties or assets) is currently bound or (3) with respect to
which the Company or any of its Subsidiaries has any obligation to make payments
or contributions, including, without limitation, all "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (sometimes referred to herein as "PENSION
PLANS"), "employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
(sometimes referred to herein as "WELFARE PLANS") (all of the foregoing referred
to collectively herein as "BENEFIT PLANS"), and all other Benefit Plans
maintained, or contributed to, by the Company, its Subsidiaries or any Person or
entity that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (a "COMMONLY CONTROLLED ENTITY") for
the benefit of any current or former officers, directors, employees or
independent contractors of the Company and its Subsidiaries (or their
beneficiaries) (including any such plans maintained for current or former
foreign employees). The Company has made available to Parent true, complete and
correct copies of (1) each Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (2) the most recent annual report on Form
5500 required to be filed with the Internal Revenue Service (the "IRS") with
respect to each Benefit Plan, (3) the most recent summary plan description for
each Benefit Plan for which such summary plan description is required and (4)
each trust agreement and group annuity contract relating to any Benefit Plan.
Each Benefit Plan has been administered in all material respects in accordance
with its terms. The Company, its Subsidiaries and all the Benefit Plans are all
in compliance in all material respects with the applicable provisions of ERISA,
the Code and all other applicable Legal Provisions. Notwithstanding anything
contained herein to the contrary, with respect to any Benefit Plan maintained,
sponsored or contributed to primarily for the benefit of persons residing and
providing services to the Company or its Subsidiaries outside of the United
States, the term "BENEFIT PLAN" as used herein shall only include such non
United States Benefit Plans that are material Benefit Plans of the Company or
its Subsidiaries.
(ii) All Pension Plans are the subject of a determination letter
from the IRS to the effect that such Pension Plans are qualified (or the Company
has time remaining to apply under applicable regulations or IRS pronouncements
to make any amendment necessary to obtain a favorable determination or opinion
letter) and exempt from United States Federal income taxes under Sections 401(a)
and 501(a), respectively, of the Code, and no such
22
determination letter has been revoked nor to the Company's Knowledge, has any
event occurred since the date of its most recent determination letter or
application therefor that would adversely affect its qualification.
(iii) Neither the Company nor any Commonly Controlled Entity has
(1) at any time in the six (6) years prior to the Closing Date maintained or
contributed to any Benefit Plan that is subject to Title IV of ERISA, Section
302 of ERISA or Section 412 of the Code or (2) has any unsatisfied liability
under Title IV of ERISA, Section 302 of ERISA, Section 412 of the Code or
Section 4980B of the Code. None of the Company, its Subsidiaries, or any
Commonly Controlled Entity contributes to a "multi-employer plan" as defined in
Section 3(37) of ERISA.
(iv) With respect to any Benefit Plan (other than employment
agreements or any other individual contract), there are no understandings,
agreements or undertakings, written or oral, that would prevent any such Benefit
Plan (including any such plan covering retirees or other former employees, other
than agreements with individuals) from being amended or terminated without
material liability to the Company on or at any time after the Effective Time.
(v) No pending or, to the Knowledge of the Company, overtly
threatened disputes, lawsuits, claims (other than routine claims for benefits),
investigations, audits or complaints to, or by, any Person or Governmental
Entity have been filed or are pending with respect to any Benefit Plans of the
Company or any of its Subsidiaries in connection with any Benefit Plan or the
fiduciaries or administrators thereof that could reasonably be expected to give
rise to a material liability. With respect to each Benefit Plan, there has not
occurred, and neither the Company, any Subsidiary of the Company, the plan
sponsor nor, to the Company's Knowledge, a plan fiduciary that the Company has
an obligation to indemnify or is contractually bound to enter into, any
nonexempt "prohibited transaction" within the meaning of Section 4975 of the
Code or Section 406 of ERISA, nor any transaction that would result in a
material civil penalty being imposed under Section 409 or 502(i) of ERISA.
(vi) There are no unfunded liabilities with respect to any
Benefit Plan other than those that would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company.
(vii) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, all contributions to and payments with
respect to or under the Benefit Plans that are required to be made with respect
to periods ending on or before the Effective Time have been made or accrued
before the Effective Time by the Company in accordance with the appropriate plan
documents, financial statements, actuarial report, collective bargaining
agreements or insurance contracts or arrangements.
(viii) No Welfare Plan providing medical or death benefits
(whether or not insured) with respect to current or former employees of the
Company or any Subsidiary continues such coverage or provides such benefits
beyond their date of retirement or other termination of service (except as
required by Code Section 4908B or applicable state healthcare continuation
law(s)).
23
(ix) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any plan, policy,
arrangement or agreement (including under any collective bargaining agreement)
or any trust or loan that will or would reasonably be expected to result in any
payment (whether of severance pay or otherwise), acceleration of, forgiveness of
indebtedness owing from, vesting of, distribution of, or increase in or
obligation to fund, any benefits with respect to any current or former employee,
director or consultant of the Company.
(m) Labor Relations. Neither the Company nor any of its Subsidiaries
is a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization. There
is no pending or, to the Knowledge of the Company, overtly threatened (i) union
organizational campaign effort, collective bargaining negotiations, bargaining
impasse, implementation of final offer, work to rule or intermittent strike or
(ii) labor dispute, grievance or arbitration matter, economic or unfair labor
practice strike, boycott, work stoppage or slowdown involving, in each case of
this clause (ii), a material number of employees of the Company and its
Subsidiaries, against the Company or any of its Subsidiaries, no lockout is in
effect and no permanent or temporary strike replacements are currently employed
at any Company facility. Neither the Company nor any of its Subsidiaries, nor
their respective representatives or employees, has committed any unfair labor
practices in connection with the operation of the respective businesses of the
Company or any of its Subsidiaries, and there is no pending or, to the Knowledge
of the Company, threatened charge, complaint, decision, order, notice posting
requirement, settlement agreement or injunctive action or order against the
Company or any of its Subsidiaries by the National Labor Relations Board or any
similar governmental or adjudicatory agency or court, except in each case as
would not reasonably be expected to have a Material Adverse Effect on the
Company. The Company and its Subsidiaries have in the past been and are in
compliance in all respects with all applicable collective bargaining agreements
and Legal Provisions respecting employment, employment practices, employee
classification, labor relations, safety and health, wages, hours and terms and
conditions of employment, except where the failure to be in compliance would not
reasonably be expected to have a Material Adverse Effect on the Company. The
Company has complied in all material respects with its payment obligations to
all employees of the Company and its Subsidiaries in respect of all wages,
salaries, commissions, bonuses, benefits and other compensation due and payable
to such employees under any Company or Company Subsidiary policy, practice,
agreement, plan, program or any statute or other law. Neither the Company nor
any of its Subsidiaries has experienced within the past twelve (12) months a
"plant closing" or "mass layoff" within the meaning of the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. xx.xx. 2101 et seq.
(n) Taxes. Each of the Company and its Subsidiaries has timely filed
all Tax Returns required to be filed by it, or requests for extensions to file
such Tax Returns have been timely filed and granted and have not expired, and
all such filed Tax Returns are complete and accurate in all respects, except for
such failures to (i) file, (ii) have extensions granted that remain in effect or
(iii) be complete and accurate in all respects, as applicable, as would not
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company and each of its Subsidiaries has paid
(or the Company has paid on its behalf) all Taxes required to be paid by it,
except for such failures to pay as would not,
24
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The most recent financial statements contained in
the Filed Company SEC Documents reflect an adequate reserve for all Taxes
payable by the Company and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements, except for such
failures to reflect such reserves as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. No deficiencies for any Taxes have been proposed, asserted or assessed
against the Company or any of its Subsidiaries that are not adequately reserved
for on the Company's financial statements in accordance with GAAP except for
such failures to so reserve as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. Except
as set forth in Section 3.1(n) of the Company Disclosure Memorandum, no Company
income or franchise Tax Return has ever been examined or audited by any
Governmental Entity. No requests for waivers of the time to assess any Taxes
against the Company or any of its Subsidiaries have been granted that remain in
effect. No claim has ever been made in writing by a Governmental Entity in a
jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There are
no Liens for Taxes upon any of the assets of the Company or its Subsidiaries
except Liens for current Taxes not yet due and payable or for Taxes that are
being disputed in good faith by appropriate proceedings and for which
appropriate reserves under GAAP exist on the books of the Company. Neither the
Company nor any of its Affiliates has taken or agreed to take any action or has
Knowledge of any fact or circumstance (other than as a result of a decline in
the market price of Parent Common Stock) that is reasonably likely to prevent
the Transaction from qualifying as a reorganization within the meaning of
Section 368(a) of the Code. As used in this Agreement, "TAXES" shall include all
U.S. Federal, state and local, domestic and foreign, income, franchise,
property, sales, use, excise and other taxes, of any nature whatsoever, tariffs
or similar governmental charges, including any obligations for withholding taxes
from payments due or made to any other person, together with all interest,
penalties or additions to tax imposed with respect to such amounts and "TAX
RETURNS" shall include any return, report or similar statement (including
attached schedules) required to be filed with respect to any Tax, including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(o) No Excess Parachute Payments; No Section 162(m) Payments. There
will be no payments or benefits to any "disqualified individual" (within the
meaning of Section 280G of the Code) that would constitute or result in an
"excess parachute payment" under Section 280G of the Code as a direct or
indirect consequence of the transactions contemplated by this Agreement,
including, without limitation, as a result of the acceleration of vesting or
exercisability of any options to purchase Company Common Stock held by
"disqualified individuals" as a direct or indirect consequence of the
transactions contemplated by this Agreement. No such Person is entitled to
receive any additional payment from the Company, the Surviving Corporation or
any other Person in the event that the excise tax of Section 4999(a) of the Code
is imposed on such Person. The Benefit Plans and other Company employee
compensation arrangements in effect as of the date of this Agreement have been
designed so that the disallowance of a deduction under Section 162(m) of the
Code for employee remuneration will not apply to any amounts paid or payable by
the Company or any of its Subsidiaries under any such plan or arrangement.
25
(p) Title to Properties.
(i) Each of the Company and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its properties and
assets except for such as are no longer used or useful in the conduct of its
businesses or as have been disposed of in the ordinary course of business and
except for failures to have, or defects in title or interests, easements,
restrictive covenants and similar encumbrances that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect on
the Company. All such material assets and properties, other than assets and
properties in which the Company or any of its Subsidiaries has a leasehold
interest, are free and clear of all Liens, except for Liens that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company.
(ii) Each of the Company and its Subsidiaries has complied in all
respects with the terms of all leases to which it is a party and under which it
is in occupancy, and all such leases are in full force and effect, except for
such noncompliance or failure to be in full force and effect that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company. Each of the Company and its Subsidiaries enjoys peaceful
and undisturbed possession under all such leases, except for failures to do so
that individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect on the Company.
(q) Intellectual Property.
(i) Each of the Company and its Subsidiaries owns, or is validly
licensed or otherwise has the right to use (in each case free and clear of all
Liens) all patents, patent applications, trademarks, trademark rights, trade
names, trade name rights, service marks, service xxxx rights, copyrights and
other proprietary intellectual property rights, computer programs and other
technology (collectively, "INTELLECTUAL PROPERTY RIGHTS") which if the Company
or its Subsidiaries did not own or validly license or otherwise have the right
to use would reasonably be expected to have a Material Adverse Effect on the
Company. Section 3.1(q) of the Company Disclosure Memorandum sets forth, as of
the date hereof, a list of all granted patents, pending patent applications,
trademarks and applications therefor owned by the Company or any of its
Subsidiaries.
(ii) In each of the following cases, except for those matters
that individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company, (A) the use of any Intellectual Property
Rights by the Company and its Subsidiaries does not infringe on or otherwise
violate the rights of any Person and is in accordance with any applicable
license pursuant to which the Company or any Subsidiary of the Company acquired
the right to use any Intellectual Property Rights; (B) no Person is challenging
or, to the Knowledge of the Company, infringing on or otherwise violating any
right of the Company or any of its Subsidiaries with respect to any Intellectual
Property Right owned by and/or licensed to the Company or its Subsidiaries; and
(C) neither the Company nor any of its Subsidiaries has received any written
notice or otherwise has Knowledge of any pending claim, order or proceeding with
respect to any Intellectual Property Right used by the Company and its
Subsidiaries and to its Knowledge no Intellectual Property Right owned and/or
licensed by the Company or its Subsidiaries is being used or enforced in a
manner that would reasonably be
26
expected to result in the abandonment, cancellation or unenforceability of such
Intellectual Property Right.
(iii) The Company has no Knowledge that the use of its material
Intellectual Property Rights in the business of the Company and its Subsidiaries
as presently conducted or as presently contemplated does or will infringe (A)
any granted patent or existing trademark or (B) any patent granted from a
pending patent application.
(iv) In each of the following cases, except for those matters
that individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company, the execution, delivery and performance
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (A) constitute a breach by the Company
or its Subsidiaries of any instrument or agreement governing any Intellectual
Property Rights owned by or licensed to the Company or any of its Subsidiaries
(the "COMPANY INTELLECTUAL PROPERTY RIGHTS"), (B) pursuant to the terms of any
license or agreement relating to any Company Intellectual Property Rights, cause
the modification of any terms of any such license or agreement, including but
not limited to the modification of the effective rate of any royalties or other
payments provided for in any such license or agreement, (C) cause the forfeiture
or termination of any Company Intellectual Property Rights under the terms
thereof, (D) give rise to a right of forfeiture or termination of any Company
Intellectual Property Rights under the terms thereof or (E) impair the right of
the Company, its Subsidiaries, the Surviving Corporation or Parent to make, have
made, offer for sale, use, sell, export or license any Company Intellectual
Property Rights or portion thereof pursuant to the terms thereof.
(v) The Company has no Knowledge of any facts which would cause
it to reasonably believe that either the Offer or the Merger (including the
assignment by operation of law of any contract to the Surviving Corporation)
will result in: (A) the granting by Parent or any of its Subsidiaries (other
than Sub in the case of a Forward Merger and other than the Company and its
Subsidiaries in the case of a Reverse Merger) of any rights or licenses to any
material Intellectual Property Rights of Parent or any Subsidiary of Parent to
any third party (including a covenant not to xxx with respect to any material
Intellectual Property Rights of Parent or any Subsidiary of Parent) which
granting, individually or in the aggregate, would reasonably be expected to be
material to Parent and its Subsidiaries taken as a whole or (B) the Parent or
any of its Subsidiaries (other than Sub in the case of a Forward Merger and
other than the Company and its Subsidiaries in the case of a Reverse Merger)
being bound by any material non-compete or other material restriction on the
operation of any business of the Parent or its Subsidiaries (such materiality to
be determined with respect to Parent and its Subsidiaries taken as a whole).
(r) Voting Requirements. The affirmative vote of a majority of the
outstanding shares of Company Common Stock to adopt this Agreement (the "COMPANY
STOCKHOLDER APPROVAL") is the only vote of the holders of any class or series of
the Company's capital stock necessary to adopt this Agreement and approve the
transactions contemplated hereby. No vote of any holders of any class or series
of the Company's capital stock is necessary to adopt this Agreement or approve
the transactions contemplated hereby in the event that Parent shall acquire at
least ninety percent (90%) of the outstanding Shares in the Offer, other than,
27
subject to the satisfaction of (to the extent permitted hereunder) waiver of all
conditions to the Merger, in accordance with Section 253 of the DGCL.
(s) Brokers. No broker, investment banker, financial advisor or other
Person, other than Lazard Freres & Co., LLC, the fees and expenses of which will
be paid by the Company, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
(t) Opinion of Financial Advisor. The Company has received the opinion
of Lazard Freres & Co., LLC, dated the date hereof, to the effect that, as of
such date, the consideration to be paid in the Offer and the Merger is fair from
a financial point of view to the holders of shares of Company Common Stock.
(u) Certain Business Practices. Neither the Company nor any of its
Subsidiaries nor (to the Knowledge of the Company) any director, officer, agent
or employee of the Company or any of its Subsidiaries has, in connection with
the conduct of the business of the Company and its Subsidiaries, (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (iii) made any other unlawful payment.
(v) TMP Agreement. The TMP Agreement was validly terminated pursuant
to Section 7.1(f) thereof.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Except as
expressly set forth in the Filed Parent SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by Parent to the Company
immediately prior to the execution of this Agreement and initialed on behalf of
the Company and Parent, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "PARENT
DISCLOSURE MEMORANDUM"), Parent and Sub represent and warrant to the Company as
follows:
(a) Organization, Standing and Corporate Power. Each of Parent and
each of its Subsidiaries is an entity duly organized, validly existing and, to
the extent applicable, in good standing under the laws of the jurisdiction in
which it is organized and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted. Each of Parent and each of its Significant Subsidiaries is duly
qualified or licensed to do business and, to the extent applicable, is in good
standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on Parent. Parent has made available
to the Company prior to the execution of this Agreement complete and correct
copies of its Certificate of Incorporation and Bylaws, and the comparable
organizational documents of each of its Significant Subsidiaries, in each case
as amended to the date hereof.
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(b) Capital Structure. The authorized capital stock of Parent consists
of 5,000,000,000 shares of Parent Common Stock and 10,000,000 shares of
Preferred Stock, par value $.001 per share ("PARENT PREFERRED STOCK"). At the
close of business on December 20, 2001, (i) 574,645,471 shares of Parent Common
Stock were issued and outstanding, (ii) 5,384,423 shares of Parent Common Stock
were held by Parent in its treasury, (iii) 137,136,206 shares of Parent Common
Stock were issuable pursuant to outstanding Parent Stock Options and (iv) no
shares of Parent Preferred Stock were issued or outstanding. All outstanding
shares of capital stock of Parent Common Stock are, and all shares of Parent
Common Stock which may be issued pursuant to this Agreement will be, when issued
in accordance with the terms hereof, duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. As of the date hereof
there are no bonds, debentures, notes or other indebtedness of Parent having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of Parent may vote. Except
(i) as set forth above in this Section 3.2(b), and (ii) for shares of Parent
Common Stock reserved for issuance under any plan or arrangement providing for
the grant of options to purchase shares of Parent Common Stock to current or
former officers, directors, employees or consultants of Parent or its
Subsidiaries (the "PARENT STOCK PLANS") or resulting from the issuance of shares
of Parent Common Stock pursuant to options or other benefits issued or granted
pursuant to Parent Stock Plans outstanding as of the close of business on
December 20, 2001, as of the date hereof (x) there are not issued, issuable,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of Parent, (B) any securities of Parent convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
Parent, (C) any warrants, calls, options or other rights to acquire from Parent
or any of Parent's Subsidiaries, and no obligation of Parent or any of Parent's
Subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of Parent, or (D) any stock appreciation rights or rights to receive
shares of Parent Common Stock on a deferred basis granted under the Parent Stock
Plans or otherwise; and (y) there are not any outstanding obligations of Parent
or any of Parent's Subsidiaries to repurchase, redeem or otherwise acquire any
such securities or to issue, deliver or sell, or cause to be issued, delivered
or sold, any such securities. Neither Parent nor any Significant Subsidiary is a
party to any voting agreement with respect to the voting of any such securities.
Except as set forth in this Section 3.2(b) there are no issued, issuable,
reserved for issuance or outstanding (A) securities of Parent or any of Parent's
Subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any of
Parent's Significant Subsidiary, (B) warrants, calls, options or other rights to
acquire from Parent or any Significant Subsidiary of Parent, and no obligation
of Parent or any Significant Subsidiary of Parent to issue, any capital stock,
voting securities or other ownership interests in, or any securities convertible
into or exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any Significant Subsidiary of Parent or (C) obligations
of Parent or any Significant Subsidiary of Parent to repurchase, redeem or
otherwise acquire any such outstanding securities of the Significant
Subsidiaries of Parent or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.
(c) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly authorized by
29
all necessary corporate action on the part of Parent and Sub and no other
corporate proceedings on the part of Parent or Sub are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby, subject,
in the case of the Merger, to the filing of the Certificate of Merger. This
Agreement has been duly executed and delivered by Parent and Sub, as applicable,
and, assuming the due authorization, execution and delivery by each of the other
parties thereto, constitute legal, valid and binding obligations of Parent and
Sub, as applicable, enforceable against Parent and Sub, as applicable, in
accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally or by principles governing
availability of equitable remedies). The execution and delivery of this
Agreement does not, and the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a benefit under, or result in the creation of any Lien in or upon any of
the properties or assets of Parent or any of its Subsidiaries under (i) the
Certificate of Incorporation or Bylaws of Parent or the comparable
organizational documents of any of its Subsidiaries, (ii) any loan or credit
agreement, bond, note, mortgage, indenture, lease or other contract, agreement,
obligation, commitment, arrangement, understanding, instrument, permit or
license applicable to Parent or any of its Subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following paragraph, any (A) statute, law, ordinance,
rule or regulation or (B) judgment, order or decree, in each case applicable to
Parent or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, cancellations, accelerations, losses or Liens that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on Parent or to prevent or materially delay the
consummation of the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filings with, any Governmental Entity is required
by or with respect to Parent or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by Parent and Sub or the consummation
by Parent and Sub of the Merger or the other transactions contemplated by this
Agreement, except for (1) the filing of a pre-merger notification and report
form under the HSR Act and any applicable filings and approvals under similar
foreign antitrust laws and regulations, (2) the filing with the SEC of (A) the
Form S-4 (B) the Offer Documents and (C) such reports under Section 13(a),
13(d), 15(d) or 16(a) of the Exchange Act as may be required in connection with
this Agreement or the Stockholder Agreement and the transactions contemplated by
this Agreement or the Stockholder Agreement, (3) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which Parent is
qualified to do business, (4) such filings with Governmental Entities to satisfy
the applicable requirements of state securities or "blue sky" laws, (5) such
filings with and approvals of Nasdaq to permit the shares of Parent Common Stock
that are to be issued pursuant to the Offer and the Merger to be traded on the
Nasdaq National Market and (6) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Parent or to prevent or materially
delay the consummation of the transactions contemplated by this Agreement.
30
(d) Parent SEC Documents. Except as listed in Section 3.2(d) of the
Parent Disclosure Memorandum, Parent has timely filed all reports, schedules,
forms, statements and other documents (including exhibits and other information
incorporated therein) with the SEC required to be filed by Parent since January
1, 1999 (the "PARENT SEC DOCUMENTS"). None of Parent's Subsidiaries is required
to file any form, report, registration statement, prospectus or other document
with the SEC. As of their respective dates (and, if amended or superseded by a
filing prior to the date of this Agreement or the Closing Date, then on the date
of such filing), the Parent SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Parent SEC
Documents filed since December 31, 2000, together with any public announcements
in a Dow Xxxxx News Release made by Parent after the date hereof taken as a
whole, as of the Effective Time will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances existing
as of the Effective Time, not misleading. The financial statements (including
the related notes) of Parent included in the Parent SEC Documents, as of their
respective dates, complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and (except as amended or superseded by a filing prior to the date of this
Agreement) fairly presented the financial position of Parent and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments not material
in amount). Except (i) as set forth in the Parent SEC Documents filed since
December 31, 2000 and (ii) for liabilities set forth in this Agreement, neither
Parent nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) which, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Parent. For purposes of this Agreement, a "FILED PARENT SEC DOCUMENT"
shall mean a Parent SEC Document filed by Parent and publicly available prior to
the date of this Agreement.
(e) Information Supplied. None of the information supplied or to be
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in the Form S-4 will, at the time the Form S-4 is filed with the SEC,
at any time it is supplemented or amended or at the time it becomes effective
under the Securities Act, 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, in light of the circumstances under which they are
made, not misleading. The Form S-4 will comply in all material respects with the
requirements of the Securities Act and the Exchange Act, respectively, in each
case as applicable to Parent and Sub, except that no representation or warranty
is made by Parent or Sub with respect to statements made or incorporated by
reference therein based on information supplied by the Company specifically for
inclusion or incorporation by reference in the Form S-4.
(f) Absence of Certain Changes or Events. Except as set forth in the
Filed Parent SEC Documents filed after December 31, 2000 and for transactions
expressly contemplated or permitted by this Agreement, since December 31, 2000
to the date hereof (i)
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Parent and its Subsidiaries have conducted their businesses in the ordinary
course consistent with past practice and (ii) there has not been a Material
Adverse Effect on the Parent. Except as set forth in the Filed Parent SEC
Documents and for actions in the ordinary course of business, since December 31,
2000, neither the Parent nor any Parent Subsidiary has taken any action, or
failed to take any action, which if such action or failure occurred during the
period from the date of this Agreement to the Effective Time would constitute a
breach or violation of Section 4.1(b) or Section 5.12, and neither the Parent
nor any Parent Subsidiary has authorized, or committed or agreed, to take any of
such actions.
(g) Brokers. No broker, investment banker, financial advisor or other
Person, other than Xxxxxxx Sachs & Co., the fees and expenses of which will be
paid by Parent, is entitled to any broker's, finder's, financial advisors or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent.
(h) No Stockholder Vote. No vote of the stockholders of Parent is
necessary to approve the issuance of Parent Common Stock in connection with the
Offer or the Merger.
(i) Ownership of Company Capital Stock. Neither Parent nor Sub is, nor
at any time during the last three (3) years has it been, an "interested
stockholder" of the Company as defined in Section 203 of the DGCL (other than as
contemplated by this Agreement). Neither Parent nor Sub owns (directly or
indirectly, beneficially or of record) or is a party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, any shares of capital stock of the Company (other
than as contemplated by this Agreement).
(j) Information in the Proxy Statement. None of the information
supplied by Parent or Sub in writing expressly for inclusion or incorporation by
reference in the Proxy Statement (or any amendment thereof or supplement
thereto) will, at the date mailed to stockholders and at the time of the meeting
of stockholders to be held in connection with the Merger (if required under
applicable Law), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
are made, not misleading.
(k) Information in the Offer Documents. The Offer Documents will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published or sent or given to the Company's stockholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading,
except that no representation is made by Parent or Sub with respect to
information furnished by the Company expressly for inclusion in the Offer
Documents.
(l) Financing. Either Parent or Sub has, or will have available to it
upon the consummation of the Offer, sufficient funds available (through existing
credit arrangements or otherwise) to deliver the cash component of the Exchange
Offer Consideration and the Merger
32
Consideration to all of the Shares outstanding which become entitled to receive
such consideration.
(m) Tax Matters. Neither Parent nor any of its Affiliates has taken or
agreed to take any action or has Knowledge of any fact or circumstance (other
than as the result of a decline in the market price of Parent Common Stock) that
is reasonably likely to prevent the Transaction from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 CONDUCT OF BUSINESS.
(a) Conduct of Business by the Company. During the period from the
date of this Agreement to the Effective Time, or the date, if any, on which this
Agreement is earlier terminated pursuant to Section 7.1, and except as may be
agreed in writing by Parent, as may be expressly permitted pursuant to this
Agreement or as set forth in Section 4.1 of the Company Disclosure Memorandum,
the Company shall, and shall cause its Subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice and
in compliance in all material respects with all applicable Legal Provisions and,
to the extent consistent therewith, use all commercially reasonable efforts to
preserve intact its current business organizations, keep available the services
of its current officers and key employees and preserve its relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with them with the intention that its goodwill and ongoing
business shall be preserved. Without limiting the generality of the foregoing,
during the period from the date of this Agreement to the Effective Time, or the
date, if any, on which this Agreement is earlier terminated pursuant to Section
7.1, and except as may be agreed in writing by Parent, as may be expressly
permitted pursuant to this Agreement or as set forth in Section 4.1 of the
Company Disclosure Memorandum, the Company shall not, and shall not permit any
of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock or property), in respect of, any of
its capital stock, other than dividends or distributions by a direct or indirect
wholly-owned Subsidiary of the Company to its parent, (B) split, combine or
reclassify any of its capital stock or amend the terms of any outstanding
securities (including Stock Options) or (C) purchase, redeem or otherwise
acquire any shares of its capital stock or any other securities;
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other securities
convertible into or exercisable or exchangeable for, or any rights, warrants or
options to acquire, any such shares or securities (other than the issuance of
shares of Company Common Stock upon the exercise of Stock Options outstanding on
the date hereof or permitted to be granted after the date hereof as set forth in
Section 4.1 of the Company's Disclosure Memorandum and in accordance with their
terms on the date hereof) or any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock-based performance units;
33
(iii) amend its Certificate of Incorporation or Bylaws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing assets of, or by any other manner, any Person or
division, business or equity interest of any Person except for purchases of
assets in the ordinary course of business which do not constitute the purchase
of a Person's business;
(v) except in the ordinary course of business, sell, lease,
license, mortgage or otherwise encumber or subject to any Lien or otherwise
dispose of any of its properties or assets (including securitizations);
(vi) (A) except for borrowings under the Company's existing
credit facilities, incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or any of
its Subsidiaries, guarantee any debt securities of another Person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of another Person or enter into any arrangement having the economic effect of
any of the foregoing or (B) make any loans, advances or capital contributions
to, or investments in, any other Person, other than in the ordinary course of
business or to or in any direct or indirect wholly-owned Subsidiary of the
Company (or any foreign Subsidiary of the Company with nominal non Company
ownership);
(vii) make or agree to make any new capital expenditure
(including leases) or enter into any agreement or agreements providing for
payments which are in excess of $100,000 individually or $500,000 in the
aggregate;
(viii) (A) pay, discharge, settle or satisfy any claims,
liabilities, obligations or litigation (absolute, accrued, asserted or
unasserted, contingent or otherwise) in excess of $100,000 individually and
$250,000 in the aggregate, other than the payment, discharge, settlement or
satisfaction in the ordinary course of business or in accordance with their
terms, of liabilities disclosed, reflected or reserved against in the most
recent consolidated financial statements (or the notes thereto) of the Company
included in the Filed Company SEC Documents or incurred since the date of such
financial statements in the ordinary course of business, or (B) cancel any
indebtedness in excess of $10,000 individually and $50,000 in the aggregate,
other than in the ordinary course of business;
(ix) modify, amend or terminate any Material Contract to which
the Company or any of its Subsidiaries is a party in a manner that would
reasonably be expected to have a Material Adverse Effect on the Company;
(x) enter into any contract, agreement, binding arrangement or
understanding that would be a Material Contract, other than pursuant to any such
contracts, agreements, arrangements or understandings currently in place (that
have been disclosed in writing to Parent prior to the date hereof) in accordance
with their terms as of the date hereof;
(xi) except as otherwise set forth in this Agreement or as
required to comply with applicable Legal Provisions or contractual commitments
existing as of the date
34
hereof, (A) adopt, enter into, terminate or amend in any material respect (I)
any collective bargaining agreement or Benefit Plan or (II) any other agreement,
plan or policy involving the Company or its Subsidiaries, and one or more of its
current or former directors, officers, or other executive employees, (B)
increase in any manner the compensation, bonus or fringe or other benefits of,
or pay any bonus to, any current or former officer, director or employee, other
than in the case of employees who are neither current nor former officers or
directors, increases made in connection with normal periodic reviews and related
compensation and benefit increases which are consistent with past practice, (C)
pay any benefit or amount not required under any Benefit Plan, (D) increase in
any manner the severance or termination pay of any current or former director,
officer or other executive employee, (E) enter into or amend any employment,
deferred compensation, consulting, severance, termination or indemnification
agreement, arrangement or understanding with any current or former officer,
director or other executive employee, (F) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit Plan
(including the grant of stock options, stock appreciation rights, performance
units, restricted stock, "phantom" stock or other stock related awards), or
remove any existing restrictions in any Benefit Plans or agreements or awards
made thereunder, (G) amend or modify any Stock Option, (H) take any action to
fund or in any other way secure the payment of compensation or benefits under
any employee plan, agreement, contract or arrangement or Benefit Plan, or (I)
take any action to accelerate the vesting of payment of any compensation or
benefit under any Benefit Plan;
(xii) except as required by GAAP, make any change in accounting
methods, principles or practices;
(xiii) transfer or license to any Person or otherwise extend,
amend or modify any rights to the Intellectual Property Rights of the Company
and its Subsidiaries, other than in the ordinary course of business or pursuant
to any contracts, agreements, arrangements or understandings currently in place
(that have been disclosed in writing to Parent prior to the date of this
Agreement);
(xiv) take any action (including any action otherwise permitted
by this Section 4.1(a)) that would reasonably be expected to prevent the
Transaction from qualifying as a "reorganization" under Section 368(a) of the
Code;
(xv) enter into any hedging, option, derivative or other similar
transaction of any foreign exchange position or contract for the exchange of
currency other than in the ordinary course of business and consistent with past
practice;
(xvi) take any action that would reasonably be expected to
prevent, impair or materially delay the ability of the Company, Parent or Sub to
consummate the transactions contemplated by this Agreement;
(xvii) (A) change any material tax election; (B) change any
annual tax accounting period or method of tax accounting in any material
respect; (C) file any amended Tax Return; (D) enter into any closing agreement
relating to any material Tax; (E) settle any material Tax claim or assessment or
(F) surrender any right to claim a material Tax refund or to any extension or
waiver of the limitations period applicable to any material Tax claim or
assessment;
35
or
(xviii) authorize, or commit or agree to take, any of the
foregoing actions.
(b) Conduct of Business by Parent. During the period from the date of
this Agreement to the Effective Time or the date, if any, on which this
Agreement is earlier terminated pursuant to Section 7.1, and except as may be
agreed in writing by the Company, or as may be contemplated by this Agreement or
Section 4.1(b) of the Parent Disclosure Memorandum, Parent shall not, and shall
not permit any of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock or property), in respect of, any of
its capital stock, other than dividends or distributions by a direct or indirect
wholly owned Subsidiary of Parent to its parent, or (B) split, combine or
reclassify any of its capital stock;
(ii) amend its Certificate of Incorporation or other comparable
charter or organizational documents;
(iii) take any action that would reasonably be expected to
prevent, impair, or materially delay the ability of the Company, Parent or Sub
to consummate the transactions contemplated by this Agreement;
(iv) cause Sub to engage in any activities or incur any
liabilities or obligations other than in connection with or as contemplated by
this Agreement;
(v) authorize, or commit or agree to take, any of the foregoing
actions; or
(vi) enter into any new line of business material to Parent's
operations taken as a whole, other than any lines of business in which Parent's
competitors are currently engaged.
Section 4.2 NO SOLICITATION.
(a) The Company agrees that neither it nor any of its Subsidiaries nor
any of the officers and directors of the Company or its Subsidiaries shall, and
that it shall use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker, attorney
or accountant retained by the Company or any of its Subsidiaries) not to,
directly or indirectly, (i) initiate, solicit, encourage or knowingly facilitate
any inquiries or the making of any proposal or offer with respect to, or a
transaction to effect, a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving it or any of its Significant Subsidiaries (or any group of
Subsidiaries which taken together could constitute a Significant Subsidiary), or
any purchase or sale of fifteen percent (15%) or more of the consolidated assets
(including stock of its Subsidiaries) of the Company and its Subsidiaries, taken
as a whole, or any purchase or sale of, or tender or exchange offer for, its
equity securities that, if consummated, would result in any Person (or the
stockholders of such Person) beneficially owning securities representing fifteen
percent (15%) or more of its total voting power (or of the surviving parent
entity in such
36
transaction) or the voting power of any of its Significant Subsidiaries (any
such proposal, offer or transaction (other than a proposal or offer made by
Parent or an Affiliate thereof) a "TAKEOVER PROPOSAL"), (ii) have any discussion
with or provide any confidential information or data to any Person relating to a
Takeover Proposal, or engage in any negotiations concerning a Takeover Proposal,
or knowingly facilitate any effort or attempt to make or implement a Takeover
Proposal, (iii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal or (iv) approve or recommend, or propose to
approve or recommend, or execute or enter into, any letter of intent, agreement
in principle, merger agreement, acquisition agreement, option agreement or other
similar agreement or propose publicly or agree to do any of the foregoing
related to any Takeover Proposal.
(b) Notwithstanding anything in this Agreement to the contrary, prior
to the Appointment Time, the Company (and its Board of Directors) shall be
permitted to (i) comply with applicable Law (including Rule 14d-9 and Rule 14e-2
promulgated under the Exchange Act) with regard to a Takeover Proposal or make
any other disclosure to the Company's stockholders if, in the good faith
judgment of the Company, after taking into account the advice of outside
counsel, failure to so disclose would be inconsistent with applicable Law (and
any such disclosure shall not be deemed a change, amendment or modification in
the Company's (or its Board of Directors') recommendation to the stockholders of
the Company), (ii) change its recommendation to its stockholders or (iii) engage
in discussions or negotiations with, or provide any information to any Person in
response to, an unsolicited bona fide written Takeover Proposal by such Person
that did not result from a breach of Section 4.1(a) if and only to the extent
that, in any such case referred to in clause (ii) or (iii), (A) the consummation
of the Offer shall not have occurred, (B) (I) in the case of clause (ii) above,
it has received an unsolicited bona fide written Takeover Proposal from a third
party that did not result from a breach of Section 4.1(a) and its Board of
Directors concludes in good faith that such Takeover Proposal constitutes a
Superior Proposal and such withdrawal is in connection with the termination of
this Agreement in accordance with the provisions of Section 7.1(f) and (II) in
the case of clause (iii) above, its Board of Directors concludes in good faith
that there is a reasonable likelihood that such Takeover Proposal could
constitute a Superior Proposal and (C) prior to providing any information or
data to any Person or entering into discussions or negotiations with any Person,
it notifies Parent promptly of such inquiries, proposals or offers received by,
any such information requested from, or any such discussions or negotiations
sought to be initiated or continued with, any of its representatives indicating,
in connection with such notice, the name of such Person and the material terms
and conditions of any inquiries, proposals or offers and enters into a customary
and reasonable confidentiality agreement no less favorable to the Company than
the Confidentiality Agreement. The Company agrees that it will promptly keep
Parent reasonably informed of the status and terms of any inquiries, proposals
or offers and the status and terms of any discussions or negotiations, including
the identity of the Person making such inquiry, proposal or offer and will
deliver to Parent the information delivered to such Person to the extent not
previously provided to Parent. The Company agrees that it will, and will cause
its officers, directors and representatives to, immediately cease and cause to
be terminated any activities, discussions or negotiations existing as of the
date of this Agreement with any Person (other than the parties hereto) conducted
heretofore with respect to any Takeover Proposal, and Parent agrees that no such
prior activity shall be considered solicitation of a Takeover Proposal
hereunder. The Company agrees that it will use its reasonable best efforts to
promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in
37
this Section 4.2. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in this Section 4.2 by any officer or
director of the Company or any of its Subsidiaries or any investment banker,
attorney or other advisor or representative of the Company or any of its
Subsidiaries, whether or not such Person is purporting to act on behalf of the
Company or any of its Subsidiaries or otherwise, shall be deemed to be a breach
of this Section 4.2 by the Company. Nothing in this Section 4.2 shall (i) permit
Parent or the Company to terminate this Agreement (except as specifically
provided in Article VII) or (ii) affect or limit any other obligation of Parent
or the Company under this Agreement except as explicitly provided herein.
Notwithstanding anything to the contrary in this Agreement, if requested by a
third party, the Company may waive any "standstill" or similar provisions in
favor of the Company in any agreement with such third party if the Board of
Directors reasonably believes that there is a reasonable likelihood that third
party will submit a bona fide Takeover Proposal that could constitute a Superior
Proposal, and any such waiver shall not be construed as a breach of this Section
4.2.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 PREPARATION OF THE PROXY STATEMENT; STOCKHOLDERS MEETINGS
(a) If approval by the Company's stockholders is required by
applicable Law in order to consummate the Merger, as promptly as practicable
after the acceptance for exchange of Shares pursuant to the offer, the Company
shall prepare and file with the SEC under the Exchange Act the Proxy Statement
and use all reasonable efforts to have the Proxy Statement cleared by the SEC as
promptly as practicable after the acceptance by Parent for exchange of Shares
pursuant to the Offer. Subject to Section 4.2, each of the Company and Parent
shall use its reasonable best efforts to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after the Proxy
Statement shall have cleared the SEC. Each of the Company, Parent and Sub will
promptly correct any information provided by it for use in the Proxy Statement
if and to the extent that it shall have become false or misleading in any
material respect prior to the Company Stockholders Meeting, and the Company will
cause the Proxy Statement as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given a
reasonable opportunity to review and comment upon the Proxy Statement before it
is filed with the SEC. In addition, the Company agrees to provide Parent, Sub
and their counsel with any comments that the Company or its counsel may receive
from time to time from the SEC or its staff with respect to the Proxy Statement
promptly after the receipt of such comments and to consult with Parent, Sub and
their counsel prior to responding to any such comments. The Company will advise
Parent of the time when the SEC has cleared the Proxy Statement, promptly after
it receives notice thereof.
(b) If approval of the stockholders is required by applicable Law in
order to consummate the Merger, the Company shall establish, prior to or as soon
as practicable following the date upon which the Proxy Statement has been
cleared by the SEC, a record date (which shall be prior to or as soon as
practicable following the date upon which the Proxy Statement has been cleared
by the SEC) for, duly call, give notice of, convene and hold a
38
meeting of its stockholders (the "COMPANY STOCKHOLDERS MEETING") for the purpose
of considering and taking action upon this Agreement and the Merger and (with
the consent of Parent) such other matters as may in the reasonable judgment of
the Company be appropriate for consideration at the Company Stockholders
Meeting. The Company shall, through its Board of Directors, recommend to its
stockholders adoption of this Agreement in accordance with Section 1.2(c)
hereof, and except as expressly permitted by this Agreement, shall not withdraw,
amend or modify in a manner adverse to Parent its recommendation. The Company
shall ensure that the Company Stockholders Meeting is called, noticed, convened,
held and conducted, and that all proxies solicited in connection with the
Company Stockholders Meeting are solicited, in compliance with all applicable
Legal Provisions. Once the Company Stockholders Meeting has been called and
noticed, the Company shall not postpone or adjourn the Company Stockholders
Meeting (other than for the absence of a quorum) without the consent of Parent.
The Board of Directors of the Company shall include the Recommendations in the
Proxy Statement as such Recommendations pertain to the Merger and this
Agreement. The Company shall use its reasonable best efforts to solicit from
stockholders of the Company proxies in favor of this Agreement and the Merger
and shall take all other actions necessary or advisable to secure the vote or
consent of stockholders required by the DGCL to effect the Merger. Without
limiting the generality of the foregoing, (i) the Company agrees that its
obligation to duly call, give notice of, convene and hold a meeting of the
holders of Company Common Stock, as required by this Section 5.1(b), shall not
be affected by the withdrawal, amendment or modification of the Recommendations
and (ii) the Company agrees that its obligations pursuant to this Section 5.1(b)
shall not be affected by the commencement, public proposal, public disclosure or
communication to the Company of any Takeover Proposal.
(c) Notwithstanding the foregoing clauses (a) and (b) above, if Parent
shall acquire at least ninety percent (90%) of the outstanding Shares in the
Offer (and if permitted Section 253 of the DGCL), subject to the satisfaction or
(to the extent permitted hereunder) waiver of all conditions to the Merger, the
parties hereto shall take all necessary actions to cause the Merger to become
effective, as soon as practicable after the acceptance for exchange and purchase
of such Shares pursuant to the Offer, without a meeting of stockholders, in
accordance with Section 253 of the DGCL.
Section 5.2 LETTERS OF THE COMPANY'S ACCOUNTANTS.
The Company shall use its reasonable best efforts to cause to be
delivered to Parent a letter from KPMG LLP, the Company's independent public
accountants, dated a date within two (2) Business Days before the date on which
the Form S-4 shall become effective addressed to Parent and the Company, in form
and substance reasonably satisfactory to Parent and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
Section 5.3 [RESERVED]
Section 5.4 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice,
each party shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives of
the other party reasonable access during normal business hours, during the
period prior to the Effective Time, to such of its properties,
39
books, contracts, commitments, records, officers and employees as the other
party may reasonably request and, during such period, such party shall (and
shall cause its Subsidiaries to) furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of Federal or state securities laws, as applicable (other than
documents which such party is not permitted to disclose under applicable Law),
and (b) consistent with its legal obligations, all other information concerning
it and its business, properties and personnel as such other party may reasonably
request; provided, however, that either party may restrict the foregoing access
to the extent that it reasonably concludes, after consultation with outside
counsel, that (i) any Legal Provision of any Governmental Entity applicable to
such party requires such party or its Subsidiaries to restrict access to any
properties or information, (ii) providing such access would result in the loss
of the attorney client privilege, (iii) such document discusses the pricing or
dollar value of the transactions contemplated by this Agreement or (iv) the
documents contain competitively sensitive information, the sharing of which
could constitute a violation of any applicable antitrust laws. The parties shall
hold any such information in confidence to the extent required by, and in
accordance with, the provisions of the letter agreements dated as of December
13, 2001 and December 19, 2001, respectively, between Parent and the Company (as
it may be amended from time to time, the "CONFIDENTIALITY AGREEMENT"). Each
party shall make all reasonable best efforts to minimize disruption to the
business of the other party and its Subsidiaries which may result from the
requests for data and information hereunder. All requests for access and
information shall be coordinated through senior executives of the parties to be
designated. Any investigation by Parent or the Company shall not affect the
representations and warranties of Parent or the Company, as the case may be.
Section 5.5 REASONABLE BEST EFFORTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable best 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 to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger and the other transactions
contemplated by this Agreement, including using reasonable best efforts to
accomplish the following:
(i) the taking of all reasonable acts necessary to cause the
conditions to Closing to be satisfied,
(ii) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by any
Governmental Entity,
(iii) the obtaining of all necessary consents, approvals or
waivers from third parties other than Governmental Entities (provided that if
obtaining any such consent, approval or waiver would require any action other
than the payment of a nominal amount, such action shall be subject to the
consent of Parent, not to be unreasonably withheld),
40
(iv) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby or thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and
(v) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement. In connection with and without limiting the
foregoing Parent, Sub and the Company and their respective Boards of Directors
shall, if any state takeover statute or similar statute becomes applicable to
this Agreement, the Offer, the Merger or any other transactions contemplated by
this Agreement, take all action necessary, with the reasonable cooperation of
the other parties hereto if reasonably requested, to ensure that the Offer, the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
this Agreement, the Offer, the Merger and the other transactions contemplated by
this Agreement. The Company shall give Parent the opportunity to participate, on
an advisory basis, in the defense of any stockholder litigation against the
Company and/or its directors relating to the transactions contemplated by this
Agreement.
(b) In furtherance and not in limitation of the foregoing, each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and any other Regulatory Law with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any other
Regulatory Law and to take all other actions necessary to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable. "REGULATORY LAW" means the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and
all other applicable federal, state and foreign, if any, statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to prohibit, restrict or regulate (i) foreign
investment or (ii) actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition.
(c) Each of Parent and the Company shall, in connection with the
efforts referenced in Section 5.5(b) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Regulatory Law, use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to, the Antitrust Division of the Department of Justice (the "DOJ"), the Federal
Trade Commission (the "FTC") or any other Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) subject to Section 5.4 and unless prohibited from doing so by
applicable Law, permit the other party to review any communication given by it
to, and consult with each other in advance of any meeting or conference with,
the DOJ, the FTC or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person, and to the
41
extent appropriate or permitted by the DOJ, the FTC or such other applicable
Governmental Entity or other Person, give the other party the opportunity to
attend and participate in such meetings and conferences.
(d) Nothing in this Agreement shall require any of Parent and its
Subsidiaries or the Company and its Subsidiaries to sell, hold separate or
otherwise dispose of or conduct any portion of their business in a specified
manner, or agree to sell, hold separate or otherwise dispose of or conduct any
portion of their business in a specified manner, or permit the sale, holding
separate or other disposition of, any assets of Parent, the Company or their
respective Subsidiaries or the conduct of their business in a specified manner,
whether as a condition to obtaining any approval from a Governmental Entity by
April 30, 2002 or any other Person or for any other reason, if such sale,
holding separate or other disposition or the conduct of their business in a
specified manner would reasonably be expected to have a Material Adverse Effect
on Parent and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
Section 5.6 STOCK OPTIONS; EMPLOYEE BENEFITS.
(a) As of the Effective Time, (i) each outstanding option to purchase
shares of Company Common Stock (a "STOCK OPTION") granted under any plan or
arrangement providing for the grant of options to purchase shares of Company
Common Stock to current or former officers, directors, employees or consultants
of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested
or unvested, shall be assumed by Parent and converted into an option (such
option, an "ADJUSTED OPTION") to acquire, on the same terms and conditions as
were applicable under the Stock Option, the number of shares of Parent Common
Stock (rounded up to the nearest whole share) determined by multiplying the
number of shares of Company Common Stock subject to such Stock Option by the
Option Exchange Ratio, at a price per share of Parent Common Stock equal to (A)
the aggregate exercise price for the shares of Company Common Stock otherwise
purchasable pursuant to such Stock Option (assuming all conditions to the
exercise of such Stock Option had then been met) divided by (B) the aggregate
number of shares of Parent Common Stock deemed purchasable pursuant to such
Stock Option; provided, that, such exercise price shall be rounded up to the
nearest whole cent. In addition, any and all repurchase rights under any Company
Stock Plan held by the Company on the shares of Company Common Stock shall, to
the extent permitted by Law, be assigned to Parent and shall be converted into
repurchase rights held by Parent as the corresponding shares of Parent Common
Stock. The Company represents that, prior to the Effective Time, it shall take
the necessary and appropriate actions to evidence that the option treatment
described in this Section 5.6(a) is the appropriate adjustment as authorized and
permitted under the terms of the plans and agreements pursuant to which the
Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE
RATIO" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50)
divided by (ii) the Parent Market Price.
(b) In the case of any Stock Options that are "incentive stock
options" as defined in Section 422 of the Code, the exercise price, the number
of shares of Parent Common Stock and the terms and conditions of such Stock
Options shall be determined in accordance with Section 5.6(a) hereof, subject to
such adjustments as are necessary to comply with the requirements of Section
424(a) of the Code.
42
(c) Parent shall, prior to the Effective Time, take all action
necessary so that, at the Effective Time, by virtue of the Merger and without
the need of any further corporate action, Parent shall assume the Company Stock
Plans with the result that all obligations of the Company under the Company
Stock Plans with respect to Stock Options outstanding at the Effective Time,
shall be obligations of Parent, and all Adjusted Options shall be exercisable,
on the same terms as were applicable under the Stock Options, for shares of
Parent Common Stock following the Effective Time, subject to this Section 5.6.
(d) At or prior to the Effective Time, Parent shall take all corporate
action necessary to reserve for issue a sufficient number of shares of Parent
Common Stock for delivery upon exercise of Adjusted Options. As soon as
practicable after the Effective Time, Parent shall file a Registration Statement
on Form X-0, Xxxx X-0 or Form S-8 as the case may be (or any successor or other
appropriate forms), with respect to the shares of Parent Common Stock subject to
such Adjusted Options, and shall maintain the effectiveness of such registration
statement and the current status of the prospectus or prospectuses contained
therein, for so long as such Adjusted Options remain outstanding. Following the
Effective Time, Parent shall use its reasonable best efforts to provide that
holders of Adjusted Options do not experience delays in exercising and settling
their Adjusted Options.
(e) Parent shall take, and shall cause the Surviving Corporation and
its Subsidiaries to take, the following actions: (i) waive any limitations
regarding preexisting conditions and eligibility waiting periods under any
health benefit plan maintained by any of them for the benefit of individuals who
are employees of the Company and its Subsidiaries immediately prior to the
Effective Time (the "EMPLOYEES") to the extent such preexisting condition or
waiting period did not apply to the Employee under a comparable plan of the
Company or its Subsidiary immediately prior to the Effective Time, (ii) provide
each Employee with credit for any co-payments and deductibles paid prior to the
Effective Time for the calendar year in which the Effective Time occurs, in
satisfying any applicable deductible or out-of-pocket requirements under such
health plans, and (iii) for eligibility, vesting and benefit accrual purposes
(but not for purposes of benefit accruals under any defined benefit pension plan
and not to the extent such crediting would result in a duplication of benefits)
under all compensation and benefit plans and policies applicable to the
Employees, treat all service by the Employees with the Company or any of its
Subsidiaries and their predecessor entities before the Effective Time as service
with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation
to honor all employment, retention and severance arrangements (including,
without limitation, those set forth on Section 5.6(e) of the Company Disclosure
Memorandum) and all obligations to current and former employees of the Company
and its Subsidiaries thereunder. Parent shall take all actions necessary to
cause the Surviving Corporation and its Subsidiaries to satisfy the obligations
listed in Section 5.6(e) of the Company Disclosure Memorandum.
(f) The Company shall terminate its Employee Stock Purchase Plan (the
"ESPP") in accordance with its terms to take effect as of or immediately prior
to the Effective Time. The offerings under the ESPP are currently suspended, and
the Company shall not commence a new offering under its ESPP after the date of
this Agreement.
(g) The provisions of this Section 5.6 shall not create in any
employee or former employee of the Company or any of its Subsidiaries any rights
to employment or
43
continued employment with Parent, the Surviving Corporation, the Company or any
of their respective Subsidiaries.
Section 5.7 INDEMNIFICATION, EXCULPATION AND INSURANCE.
(a) Parent shall cause all rights to indemnification and exculpation
from liabilities for acts or omissions occurring at or prior to the Effective
Time now existing in favor of the current or former directors or employees or
officers of the Company (each such Person being an "Indemnified Party") as
provided in the Company's Certificate of Incorporation, Bylaws or any
indemnification agreement between such directors or officers and the Company (in
each case, as in effect on the date hereof) to be assumed by the Surviving
Corporation in the Merger, without further action, as of the Effective Time and
such rights shall survive the Merger and shall continue in full force and effect
in accordance with their terms. Without limiting the foregoing, Parent shall
indemnify and hold harmless, and provide advancement of expenses to, all past
and present directors, officers and employees of the Company and its
Subsidiaries (in all of their capacities) to the fullest extent permitted by the
Company's Certificate of Incorporation, Bylaws or any indemnification agreement
between such directors, officers and employees for acts or omissions occurring
at or prior to the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the transactions contemplated
hereby).
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 5.7 shall promptly notify the Surviving
Corporation, upon learning of any such claim, action, suit, proceeding or
investigation, but the failure to so notify shall not relieve the Surviving
Corporation of any liability it may have to such Indemnified Party to the extent
such failure does not materially prejudice the Surviving Corporation. The
Surviving Corporation may, at its own expense: (i) participate in the defense of
any claim, suit, action or proceeding; or (ii) at any time during the course of
any such claim, suit, action or proceeding, assume the defense thereof, unless
the Indemnified Parties (or any of them) determine in good faith (after
consultation with legal counsel) that there is, under applicable standards of
professional conduct, a conflict or any significant issue between the positions
of Parent and any of such Indemnified Parties, provided that the Surviving
Corporation's counsel shall be reasonably satisfactory to the Indemnified
Parties. If the Surviving Corporation assumes such defense, the Indemnified
Parties shall have the right (but not the obligation) to participate in the
defense thereof and to employ counsel, at their own expense, separate from the
counsel employed by the Surviving Corporation. Whether or not the Surviving
Corporation chooses to assume the defense of any such claim, suit, action or
proceeding, the Surviving Corporation and Parent shall cooperate in the defense
thereof. If the Surviving Corporation fails to so assume the defense thereof,
the Indemnified Parties may retain counsel reasonably satisfactory to the
Surviving Corporation and the Surviving Corporation shall pay the reasonable
fees and expenses of such counsel promptly after statements therefor are
received; provided that the Indemnified Parties on whose behalf expenses are
advanced provide (x) a written affirmation of their good faith belief that the
standard of conduct necessary for indemnification under Section 145 of the DGCL
has been met, and (y) an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification under
Section 145 of the DGCL. Neither Parent nor the Surviving Corporation shall be
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld or delayed); provided that, in the event that
any claim or
44
claims for indemnification are asserted or made within such a period of six (6)
years after the Effective Time, all rights to indemnification in respect of any
such claim or claims (and the matters giving rise thereto) shall continue until
the disposition of any and all such claim or claims (and the matters giving rise
thereto). The Indemnified Parties as a group may retain only one law firm (in
addition to local counsel) to represent them with respect to a single action
unless any Indemnified Party determines in good faith (after consultation with
legal counsel) that there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnified Parties. In the event Parent or the Surviving Corporation or
any of their respective 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 to effectuate the purposes of this Section
5.7, proper provision shall be made so that the successors and assigns of Parent
and the Surviving Corporation assume the obligations set forth in this Section
5.7, and none of the actions described in clause (i) or (ii) shall be taken
until such provision is made. Nothing in this Section 5.7(b) is intended to
modify adversely any existing rights to indemnification of an Indemnified Party
from the Company.
(c) For six (6) years after the Effective Time, Parent shall cause the
Surviving Corporation to maintain in effect the Company's current officers',
directors' and employees' liability insurance in respect of acts or omissions
occurring at or prior to the Effective Time, covering each Person currently
covered by the Company's officers' and directors' liability insurance policy (a
copy of which has been heretofore delivered to Parent), on terms with respect to
such coverage and amount no less favorable than those of such policy in effect
on the date hereof; provided that Parent may substitute therefor policies of
Parent containing terms with respect to coverage and amount no less favorable to
such directors and officers; provided, however, that in satisfying its
obligation under this Section 5.7(c) Parent shall not be obligated to pay annual
premiums in excess of two hundred percent (200%) of the amount per annum paid by
the Company in its last full fiscal year; and provided further that if Parent is
not able to obtain such coverage for such two hundred percent (200%) amount,
Parent shall nevertheless be obligated to provide such coverage as may be
obtained annually for such two hundred percent (200%) amount and provided
further that notwithstanding the foregoing, the Surviving Corporation may
satisfy its obligations under this Section 5.7(c) by purchasing a "tail" policy
under the Company's existing directors' and officers' insurance policy that (i)
has an effective term of six (6) years from the Effective Time, (ii) covers
those Persons who are currently covered, or will be covered on or prior to the
Effective Time, by the Company's directors' and officers' insurance policy in
effect on the date hereof for actions and omissions occurring on or prior to the
Effective Time and (iii) contains terms and conditions (including without
limitation coverage amounts) that are at least as favorable in the aggregate as
the terms and conditions of the Company's directors' and officers' insurance
policy in effect on the date hereof.
(d) The Certificate of Incorporation and Bylaws of the Surviving
Corporation shall contain, and Parent shall cause the Surviving Corporation to
fulfill and honor, provisions with respect to indemnification and exculpation
that are substantially identical to those set forth in the Certificate of
Incorporation and Bylaws of the Company as of the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six (6)
45
years from the Effective Time in any manner that would adversely affect the
rights thereunder of any of the Indemnified Parties.
(e) The obligations of Parent or the Surviving Corporation under this
Section 5.7 are subject to the conditions that each Indemnified Party shall
comply with the reasonable requests of the Surviving Corporation or Parent in
defending or settling any action hereunder and that any Indemnified Party shall
approve any proposed settlement of any such action if (i) such settlement
involves no finding or admission of any liability by any Indemnified Party, and
(ii) the sole relief provided in connection with such settlement is monetary
damages that are paid in full by the Surviving Corporation or Parent.
(f) The provisions of this Section 5.7 are (i) intended to be for the
benefit of, and will be enforceable by, each Indemnified Party, his or her heirs
and his or her representatives and (ii) in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such Person
may have by contract or otherwise. Parent hereby guarantees the performance by
Surviving Corporation of its obligations under this Section 5.7.
Section 5.8 FEES AND EXPENSES.
(a) Except as provided in this Section 5.8, all fees and expenses
incurred in connection with this Agreement, the Offer, the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Offer or the Merger is consummated.
(b) In the event that (1) a bona fide Takeover Proposal shall have
been publicly disclosed or has been made directly to the Company's stockholders
or any Person has announced an intention (whether or not conditional) to make a
bona fide Takeover Proposal and thereafter this Agreement is terminated (x) by
Parent or the Company pursuant to Section 7.1(b)(i) (as a result of a failure to
achieve the Minimum Condition), (y) by Parent pursuant to Section 7.1(c)(i)
(provided that the breach or failure to perform giving rise to Parent's right to
terminate under Section 7.1(c)(i) shall be willful and material) or (z) by
Parent pursuant to Section 7.1(e)(vii) and, in any case, within twelve (12)
months of termination either the Company enters into definitive agreement with
respect to a Takeover Proposal or a Takeover Proposal is consummated (provided
that for this purpose the percentage in the definition of Takeover Proposal
shall be fifty percent (50%) in lieu of fifteen percent (15%)) or (2) this
Agreement is terminated (x) by the Company pursuant to Section 7.1(f) or (y) by
Parent pursuant to Section 7.1(e) (other than Section 7.1(e)(vii)), then the
Company shall pay Parent a fee equal to $15.0 million (the "TERMINATION FEE"),
payable by wire transfer of immediately available funds, such payment to be made
(A) in the case of the termination contemplated by clause (1), on the earlier of
the date the Company enters into a definitive agreement or a Takeover Proposal
is consummated, (B) in the case of a termination contemplated by clause (2)(x),
no later than immediately prior to such termination, and in the case of
termination contemplated by clause 2(y), no later than the date of such
termination. Simultaneously with the payment of the Termination Fee, the Company
shall reimburse Parent by wire transfer of immediately available funds for all
of its documented out-of-pocket expenses incurred in connection with this
Agreement and the transactions contemplated hereby (including documented fees
and expenses of accountants, attorneys and financial advisors) up to an
aggregate of $2.0 million (the
46
"EXPENSES"). The Company acknowledges that the agreements contained in this
Section 5.8(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement. If Parent shall successfully bring an action to enforce its rights
under this Section 5.8(b), the Company shall reimburse Parent for its reasonable
fees and expenses in connection therewith and shall pay Parent interest on the
Termination Fee and Expenses from the date the Termination Fee becomes payable
to the date of payment at the publicly announced prime rate of Citibank, N.A. in
effect on the date the Termination Fee became payable.
(c) Parent shall make payment to the Company (by wire transfer of
immediately available funds) in the amount of $30.0 million within two (2)
Business Days after and excluding the date this Agreement is terminated (i) by
the Company pursuant to Section 7.1(g) or (ii) by the Company or the Parent on
or after May 31, 2002 pursuant to Section 7.1(b)(ii) if the waiting period (and
any extension thereof) applicable to the Offer under the HSR Act shall not have
expired or been terminated or if any Restraint shall be in effect preventing the
consummation of the Offer at the time of such termination.
Section 5.9 PUBLIC ANNOUNCEMENTS.
Parent and the Company shall consult with each other before issuing,
and give each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
by this Agreement, including the Offer and the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or
national securities quotation system. In addition to the foregoing, neither
Parent nor the Company shall issue any press release or otherwise make any
public statement or disclosure concerning nonpublic information relating to the
other party's business, financial condition or results of operations without the
consent of the other party, which consent shall not be unreasonably withheld or
delayed.
Section 5.10 AFFILIATES.
As soon as practicable after the date hereof, and in no event more
than twenty (20) days prior to the Initial Expiration Date, the Company shall
deliver to Parent a letter identifying all Persons who are, at the time this
Agreement is submitted for adoption by the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use its reasonable best efforts to cause each such Person to
deliver to Parent at least ten (10) days prior to the Initial Expiration Date a
written agreement substantially in the form attached as Exhibit 5.10 hereto.
Section 5.11 NASDAQ LISTING.
Parent shall use its reasonable best efforts to cause the shares of
Parent Common Stock to be issued in the Offer and the Merger and such other
shares of Parent Common Stock to be reserved for issuance in connection with the
Offer and the Merger to be approved for listing on the Nasdaq National Market,
subject to official notice of issuance, prior to the Closing Date.
47
Section 5.12 TAX TREATMENT.
Parent and the Company intend that the Transaction will qualify as a
reorganization within the meaning of Section 368(a) of the Code. Parent and the
Company shall each use all reasonable efforts to cause the Transaction to so
qualify. From and after the date of this Agreement, each party hereto shall use
its reasonable best efforts to cause the Transaction to qualify, and shall not,
without the prior written consent of the other parties hereto, knowingly take
any actions or cause any actions to be taken which could reasonably be expected
to prevent the Transaction from qualifying as a reorganization under the
provisions of Section 368(a) of the Code. Following the Effective Time, neither
the Surviving Corporation nor Parent nor any of their respective affiliates
shall take any action or cause any action to be taken which could reasonably be
expected to cause the Transaction to fail to qualify as a reorganization under
Section 368(a) of the Code. Parent shall use its reasonable best efforts to
obtain an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, or another
nationally recognized United States Federal income tax counsel or "Big Five"
accounting firm (based on the facts and customary representations and
assumptions) that the Transaction will be treated as a "reorganization" within
the meaning of Section 368(a) of the Code (the "TAX OPINION"). Parent, the
Company and Sub agree to provide certifications reasonably requested by counsel
issuing such Tax Opinion. Notwithstanding anything express or implied to the
contrary in this Agreement, but subject to the provisions of this Section 5.12,
if the Tax Opinion is not obtained, then the Reverse Merger shall be effected
instead of the Forward Merger.
Section 5.13 NOTICES OF CERTAIN EVENTS.
Each party hereto shall promptly notify the other parties orally and
in writing of:
(a) the receipt by such party or any of such party's Subsidiaries of
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) subject to any applicable legal restrictions, the receipt by such
party or any of such party's Subsidiaries of any notice or other communication
from any Governmental Entity in connection with the transactions contemplated by
this Agreement;
(c) such party's obtaining Knowledge of any actions, suits, claims,
investigations or proceedings commenced or threatened against, relating to or
involving or otherwise affecting any of Parent, Sub or the Company, as the case
may be, or any of their respective Subsidiaries which relate to the consummation
of the transactions contemplated by this Agreement; and
(d) such party's obtaining Knowledge of the occurrence, or failure to
occur, of any event which occurrence or failure to occur will be likely to cause
the conditions set forth in Article VI not to be satisfied; provided, however,
that no such notification shall affect the representations, warranties or
obligations of the parties or the conditions to the obligations of the parties
hereunder, or limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
48
Section 5.14 CONVEYANCE TAXES.
The Company and Parent shall cooperate in the preparation, execution
and filing of all returns, questionnaires, applications or other documents
regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees, and any similar taxes which become payable in connection with the
transaction contemplated by this Agreement that are required or permitted to be
filed on or before the Effective Time.
Section 5.15 STOCKHOLDER AGREEMENTS.
Concurrently with the execution and delivery of this Agreement,
Xxxxxxx Xxxxxxx shall execute and deliver to Parent an agreement substantially
in the form of Exhibit 5.15 hereto (the "STOCKHOLDER AGREEMENT"), pursuant to
which, among other things, such Stockholder is agreeing to vote all of the
shares of Company Common Stock owned, beneficially or of record, by him to
approve the Merger and to tender all such shares into the Offer, subject to
exceptions provided for in such agreement.
Section 5.16 MATTERS.
Prior to the Effective Time, Parent and the Company shall take all
such steps as may be required to cause any dispositions of Company Common Stock
(including derivative securities with respect to the Company Common Stock)
resulting from the transactions contemplated by this Agreement by each
individual who is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act, such steps to be taken in accordance with
the No-Action Letter, dated January 12, 1999, issued by the SEC to Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP.
Section 5.17 ANTITRUST NOTICE.
Within five (5) Business Days of the date on which the DOJ, the FTC
or any other agency, branch or instrumentality of the United States federal
government has first filed a complaint, motion, petition or similar document
with a United States federal courts seeking to enjoin the consummation of the
Offer, the Merger or any of the other transactions contemplated hereby, Parent
shall deliver a notice to the Company pursuant to Section 8.2 including a copy
of such complaint, motion, petition or similar document.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
49
(a) Stockholder Approval. If required under the DGCL, the Company
shall have obtained the Company Stockholder Approval.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other judgment or order issued by any
court of competent jurisdiction or other statute, law, rule, legal restraint or
prohibition (collectively, "Restraints") shall be in effect preventing the
consummation of the Merger.
(c) Purchase of Shares in Offer. Parent shall have purchased, or
caused to be purchased, Shares pursuant to the Offer.
Section 6.2 FRUSTRATION OF CLOSING CONDITIONS.
None of the Company, Parent or Sub may rely on the failure of any
condition set forth in Section 6.1 to be satisfied if such failure was caused by
such party's failure to use its reasonable best efforts to consummate the Merger
and the other transactions contemplated by this Agreement, as required by and
subject to Section 5.5.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 TERMINATION.
This Agreement may be terminated at any time prior to the Effective
Time, whether before or after the Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Offer shall have expired or been terminated in
accordance with the terms of this Agreement without Parent or Sub having
accepted for exchange any Shares pursuant to the Offer;
(ii) if the Offer shall not have been consummated by March 31,
2002 for any reason; provided, however, that the right to terminate this
Agreement under this Section 7.1(b)(ii) shall not be available to (A) Parent
before May 31, 2002 if the waiting period (and any extension thereof) applicable
to the Offer under the HSR Act shall not have expired or been terminated or if
any Restraint shall be in effect preventing the consummation of the Offer at the
time of such termination or (B) any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Offer to be
consummated on or before such date; or
(iii) if any Restraint having any of the effects set forth in
Section 6.1(b) shall be in effect and shall have become final and nonappealable;
provided that the party seeking to terminate this Agreement pursuant to this
Section 7.1(b)(iii) shall have used reasonable best efforts to prevent the entry
of and to remove such Restraint;
50
(c) by Parent, if (i) prior to the purchase of Shares pursuant to the
Offer there has been a breach by the Company of any representation, warranty,
covenant or agreement set forth in this Agreement, which breach is reasonably
likely to result in any condition set forth in Annex I not being satisfied (and
such breach is not reasonably capable of being cured and such condition is not
reasonably capable of being satisfied within thirty (30) days after the receipt
of notice thereof); or (ii) due to an occurrence or circumstance that would
result in a failure to satisfy any condition set forth in Annex I hereto, Sub
shall have (x) failed to commence the Offer within thirty (30) days following
the date of this Agreement, (y) terminated the Offer without having accepted any
Shares for payment thereunder or (z) failed to accept Shares for payment
pursuant to the Offer by March 31, 2002, unless such action or inaction under
clauses (x), (y) or (z) shall have been caused by or resulted from the failure
of Parent or Sub to perform, in any material respect, any of their material
covenants or agreements contained in this Agreement, or the material breach by
Parent or Sub of any of their material representations or warranties contained
in this Agreement;
(d) by the Company if Sub shall have (i) failed to commence the Offer
within thirty (30) days following the date of this Agreement, (ii) terminated
the Offer without having accepted any Shares for payment thereunder or (iii)
failed to accept shares of Company Common Stock for payment pursuant to the
Offer by March 31, 2002, unless such action or inaction under clauses (i), (ii)
or (iii) shall have been caused by or resulted from the failure of the Company
to perform, in any material respect, any of its material covenants or agreements
contained in this Agreement, or the material breach by the Company of any of its
material representations or warranties contained in this Agreement;
(e) by Parent, if prior to the Appointment Time (i) the directors of
the Company shall have failed to include in the Schedule 14D-9 or the Proxy
Statement the Recommendations, (ii) the directors of the Company shall have
withdrawn the Recommendations, (iii) the directors of the Company shall have
modified or changed the Recommendations in a manner adverse to Parent or Sub (it
being agreed that any disclosure of information required by applicable Law
regarding the Company's operations shall not be deemed a modification or change
of the Recommendations in a manner adverse to Parent or Sub), provided that
Parent shall not be entitled to terminate this Agreement pursuant to this clause
(iii) unless it has notified the Company in writing that it intends to terminate
the Agreement pursuant to this clause (iii) and the Company has not, within two
(2) Business Days after receipt of Parent's notice, revised the Recommendations
in a manner not so adverse, (iv) a tender or exchange offer relating to
securities of the Company shall have been commenced and the Company shall not
have sent to its security holders, within fifteen (15) Business Days after the
commencement of such tender or exchange offer (or such longer period as the
Company advises Parent it requires to obtain the information necessary to
evaluate such offer), a statement disclosing that the Company's Board of
Directors recommends rejection of such tender or exchange offer, (v) the
directors of the Company shall have approved or recommended to the stockholders
of the Company a Takeover Proposal, (vi) the directors of the Company shall have
approved or recommended that the stockholders of the Company tender their shares
of Company Common Stock into any tender offer or exchange offer that is a
Takeover Proposal or is related thereto, (vii) the Company willfully breaches
any of its obligations under Section 4.2 of this Agreement that results in a
Person making a Takeover Proposal, (viii) the Company shall have materially
breached its obligations under this Agreement by reason of a failure to file the
51
Schedule 14D-9 in accordance with Section 1.2 or call the Company Stockholders
Meeting in accordance with Section 5.1(b), or (ix) the directors of the Company
shall have adopted a resolution to do any of the foregoing specified in clauses
(i), (ii), (iii), (iv), (v), (vi) or (viii); or
(f) by the Company, if, prior to the Appointment Time, the Board of
Directors of the Company has provided written notice to Parent that the Company
intends to enter into a binding written agreement for a Superior Proposal (with
such termination becoming effective upon the Company entering into such binding
written agreement); provided, however, that (i) the Company shall have complied
with Section 4.2 in all material respects; (ii) the Company shall have (A)
notified Parent in writing of its receipt of such Superior Proposal, (B) further
notified Parent in writing that the Company intends to enter into a binding
agreement with respect to such Superior Proposal subject to clause (iii) of this
Section 7.1(f) and (C) attached the most current written version of such
Superior Proposal (or a summary containing all material terms and conditions of
such Superior Proposal) to such notice referred to in clause (B), (iii) Parent
does not make, within 72 hours after receipt of the Company's written notice
pursuant to clause (ii)(B) above, an offer that the Board of Directors of the
Company shall have reasonably concluded in good faith (following consultation
with its financial advisor and outside counsel) is as favorable to the
stockholders of the Company as such Superior Proposal and (iv) the Company pays
the Termination Fee and Expenses in accordance with Section 5.8(b) concurrently
with entering into such binding written agreement.
(g) By the Company, if, prior to the Effective Time, the Company
notifies Parent of such termination pursuant to Section 8.2 within ten (10)
Business Days after receipt of a notice from Parent pursuant to Section 5.17
hereof.
Section 7.2 EFFECT OF TERMINATION.
In the event of termination of this Agreement by either the Company
or Parent as provided in Section 7.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of Parent,
Sub or the Company, other than the provisions of the second sentence of Section
5.4 (obligation to keep confidential nonpublic information received from the
other party) and Section 5.8 (fees and expenses), this Section 7.2 and Article
VIII, which provisions shall survive such termination, provided that,
notwithstanding anything to the contrary contained in this Agreement, neither
Parent nor the Company shall be relieved or released from any liabilities or
damages arising out of its willful and material breach of this Agreement.
Section 7.3 AMENDMENT.
This Agreement may be amended by the parties hereto at any time before
or after approval of the matters presented in connection with the Merger to the
stockholders of the Company; provided, however, that after any such approval,
there shall be made no amendment that by law requires further approval by the
stockholders of the Company without such approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
52
Section 7.4 EXTENSION; WAIVER.
At any time prior to the Effective Time, the parties may (i) extend
the time for the performance of any of the obligations or other acts of the
other parties, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) subject
to the proviso of Section 7.3, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein (including Sections 5.6(e) and 5.7) that by their terms apply or are to
be performed in whole or in part after the Effective Time and this Article VIII.
Section 8.2 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed given, and shall be effective
upon receipt, if delivered personally, telecopied (which is confirmed) or sent
by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
if to Parent or Sub, to: Yahoo! Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chief Executive Officer
and Yahoo! Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: General Counsel
53
with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx
(which shall not LLP
constitute notice): 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention: Xxxxxx X. Xxxx,
Esq.
if to the Company, to: XxxXxxx.xxx, Ltd.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chief Executive Officer
and XxxXxxx.xxx, Ltd.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: General Counsel
with a copy to Wachtell, Lipton, Xxxxx & Xxxx
(which shall not 00 Xxxx 00xx Xxxxxx
constitute notice): Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 212-403-2000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxx X. Xxxxxxx, Esq.
Section 8.3 DEFINITIONS.
For purposes of this Agreement:
(a) an "AFFILIATE" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person;
(B) "BUSINESS DAY" means any day other than Saturday, Sunday or any
other day on which banks are legally permitted to be closed in New York, New
York;
(c) "KNOWLEDGE" of any Person that is not an individual means, with
respect to any matter in question, the actual knowledge of any of such person's
executive officers having primary responsibility for such matter;
(d) "MATERIAL ADVERSE EFFECT" with respect to the Company or Parent,
means any change, effect, event, occurrence or state of facts (or any
development that has had or is
54
reasonably likely to have any change or effect) that is materially adverse to
the business, financial condition or results of operations of such entity and
its Subsidiaries, taken as a whole, provided, however, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been a Material Adverse Effect: (i) any change in the market price or
trading volume of such entity's capital stock after the date hereof, (ii) any
adverse change, event or effect arising from or relating to general business or
economic conditions in the United States (including prevailing interest rate and
stock market levels), (iii) any adverse change, event or effect arising from or
relating to the general state of the industries and market sectors in which such
entity operates and (iv) the loss of existing customers or employees, a
reduction in business by, or revenue from, existing customers, or any reduction
in job seekers, in each case resulting primarily from the announcement or
termination of the TMP Agreement or the announcement or consummation of the
Offer and the Merger;
(e) "PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(f) "SIGNIFICANT SUBSIDIARY" shall have the meaning ascribed to such
term in Rule 1-02 of Regulation S-X of the SEC, except as listed in Section
8.3(f) of the Parent Disclosure Memorandum;
(g) a "SUBSIDIARY" of any Person means, with respect to such Person,
any corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns,
directly or indirectly, fifty percent (50%) or more of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the Board of Directors or other governing body of such corporation or other
legal entity;
(h) "SUPERIOR PROPOSAL" means a bona fide written proposal made by a
Person other than a party hereto that is (a) for a Takeover Proposal (except
that references in the definition of "Takeover Proposal" to "15%" shall be
"50%") and (b) is on terms which the Board of Directors of the Company in good
faith concludes (following receipt of the advice of its financial advisors and
outside counsel), taking into account, among other things, the likelihood of
consummation and all legal, financial, regulatory and other aspects of the
proposal and the Person making the proposal and of the transactions contemplated
by this Agreement and the parties to this Agreement, (i) would, if consummated,
result in a transaction that is more favorable to the Company's stockholders (in
their capacities as stockholders), taking into account, among other things, the
likelihood of consummation and all legal, financial, regulatory and other
aspects of the proposal and this Agreement and the Person making the proposal
and Parent, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being completed by March 31, 2002; and
(i) "TRADING DAY" means any day on which the Nasdaq National Market or
such national securities exchange that is the primary exchange for Parent Common
Stock is open for trading.
Section 8.4 Interpretation.
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When a reference is made in this Agreement to an Article, a Section,
Exhibit or Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. References to this Agreement include
references to the Company Disclosure Memorandum and Parent Disclosure
Memorandum. Each Section of this Agreement is qualified by the matters set forth
in the related Section of the Company Disclosure Memorandum and of the Parent
Disclosure Memorandum and by such matters set forth any place else in this
Agreement or in the Company Disclosure Memorandum or the Parent Disclosure
Memorandum where the applicability of such qualification to the Section of this
Agreement is reasonably apparent.
Section 8.5 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when two or more counterparts have been signed by each of the parties and
delivered to the other parties.
Section 8.6 ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES.
This Agreement and the Confidentiality Agreement (a) constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement and the Confidentiality Agreement and (b) except for the provisions of
Sections 5.6(e) (including the corresponding section of the Company Disclosure
Memorandum) and 5.7 are not intended to confer upon any Person other than the
parties any rights or remedies.
Section 8.7 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
Section 8.8 ASSIGNMENT.
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Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties without the prior written consent of the other
parties, except that Sub may assign, in its sole discretion, any of or all its
rights, interests and obligations under this Agreement to Parent or to any
direct or indirect wholly-owned newly-formed United States Subsidiary of Parent,
provided that no such assignment shall adversely affect the intended tax-free
nature of the transaction and provided further that no such assignment shall
relieve Sub of any of its obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
Section 8.9 ENFORCEMENT.
The parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in the Chancery or other Courts of the State of Delaware, this being
in addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the Chancery or other Courts of the State of Delaware
in the event any dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any action relating to this
Agreement or the transactions contemplated by this Agreement in any court other
than the Chancery or other Courts of the State of Delaware, and each of the
parties irrevocably waives the right to trial by jury, and (d) each of the
parties irrevocably consents to service of process by first class certified
mail, return receipt requested, postage prepaid, to the address at which such
party is to receive notice.
Section 8.10 SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
57
WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
YAHOO! INC.
By: /s/ XXXXX XXXXX
---------------------
Name: Xxxxx Xxxxx
Title: Chairman and Chief Executive
Officer
HJ ACQUISITION CORP.
By: /s/ XXXXX XXXXX
---------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
XXXXXXX.XXX, LTD.
By: /s/ XXXXXXX XXXXXX
---------------------
Name: Xxxxxxx Xxxxxx
Title: President and
Chief Executive Officer
ANNEX I
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Sub's rights to extend and amend the Offer at any time in
its sole discretion (subject to the provisions of the Merger Agreement), Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any validly tendered Shares unless the Minimum Condition shall have
been satisfied. Furthermore, notwithstanding any other provisions of the Offer,
Sub shall not be required to accept for payment or pay for any validly tendered
Shares if, at the scheduled expiration date (i) the waiting period (and any
extension thereof) applicable to the Offer under the HSR Act shall not have
expired or been terminated, (ii) the Offer Registration Statement shall not have
become effective under the Securities Act or shall be the subject of any stop
order or proceeding seeking a stop order, (iii) the shares of Parent Common
Stock to be issued in the Offer and the Merger and such other shares of Parent
Common Stock to be reserved for issuance in connection with the Offer and the
Merger shall not have been approved for listing on the Nasdaq National Market,
subject to official notice of issuance or (iv) any of the following events shall
occur and be continuing:
(a) Restraints shall be in effect preventing the consummation of the
Offer or the Merger;
(b) there shall be pending any suit, action or proceeding by any
Governmental Entity (i) challenging the acquisition by Parent or Sub of any of
the Shares, seeking to restrain or prohibit the consummation of the Offer or the
Merger, or seeking to place limitations on the ownership of the Shares (or
shares of common stock of the Surviving Corporation) by Parent or Sub or seeking
to obtain from the Company, Parent or Sub any damages that are material in
relation to the Company, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company or its Subsidiaries, Parent or any of
Parent's Subsidiaries of any material portion of any business or of any assets
of the Company, Parent or any of Parent's Subsidiaries, or to compel the
Company, Parent or any of Parent's Subsidiaries to divest or hold separate any
material portion of any business or of any assets of the Company, Parent or any
of their respective Subsidiaries, as a result of the Offer or the Merger or
(iii) seeking to prohibit Parent or any of its Subsidiaries from effectively
controlling in any material respect the business or operations of the Company or
its Subsidiaries;
(c) there shall have not been obtained, other than the filing provided
for under Section 1.6 and filings pursuant to the HSR Act (which are addressed
in Sections 5.5(b) and (c)), all consents, approvals and actions of, filings
with and notices to any Governmental Entity required of Parent, the Company or
any of their Subsidiaries to consummate the Offer or the Merger, the issuance of
Parent Common Stock in the Offer or the Merger and the other transactions
contemplated hereby, the failure of which to be obtained or taken, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Parent and its Subsidiaries (including the Surviving Corporation and
its Subsidiaries), taken together after giving effect to the Offer and the
Merger, provided, that, no consents, approvals, actions, filings
58
or notices related to any antitrust requirements of any jurisdiction, except as
set forth in clause (i) of the preamble to this Annex I, shall be a condition
hereunder;
(d) any representation or warranty of the Company contained in the
Agreement shall not be true and correct in all respects without reference to any
qualification as to materiality such that the aggregate effect of any
inaccuracies in such representations and warranties will have a Material Adverse
Effect on the Company, in each case as of the date of such determination, except
to the extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date and except for the representations
and warranties contained in Section 3.1(q)(v) of the Merger Agreement which
shall be qualified as to materiality with respect to Parent and its
Subsidiaries, taken as a whole;
(e) Parent shall not have received a certificate signed on behalf of
the Company by the chief executive officer and the chief financial officer of
the Company to the effect that each representation and warranty of the Company
contained in the Agreement is true and correct in all respects without reference
to any qualification as to materiality such that the aggregate effect of any
inaccuracies in such representations and warranties will not have a Material
Adverse Effect on the Company, in each case as of the date of such
determination, except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date and
except for the representations and warranties contained in Section 3.1(q)(v) of
the Merger Agreement which shall be qualified as to materiality with respect to
Parent and its Subsidiaries, taken as a whole;
(f) there shall have not been obtained all consents, the absence of
which, in the aggregate, would be reasonably likely to have a Material Adverse
Effect on the Company, provided, that, no consents, approvals, actions, filings
or notices related to any antitrust requirements of any jurisdiction, except as
set forth in clause (i) of the preamble to this Annex I, shall be a condition
hereunder;
(g) the Company (i) shall have not performed or not complied with all
agreements and covenants required to be performed by it under the Agreement that
are qualified as to Material Adverse Effect or (ii) shall have not performed or
not complied with all agreements and covenants required to be performed by it
under the Agreement that are not qualified as to Material Adverse Effect except
where such nonperformance or noncompliance individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect on the
Company;
(h) Parent shall not have received a certificate signed on behalf of
the Company by the chief executive officer and the chief financial officer of
the Company to the effect that the Company (i) shall have performed or complied
with all agreements and covenants required to be performed by it under the
Agreement that are qualified as to Material Adverse Effect and (ii) shall have
performed or complied with all agreements and covenants required to be performed
by it under the Agreement that are not qualified as to Material Adverse Effect
except where such nonperformance or noncompliance individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect on
the Company;
(i) Parent shall not have received from each Person named in the
letter referred to in Section 5.10 an executed copy of an agreement
substantially in the form of Exhibit 5.10 hereto.
The foregoing conditions are for the benefit of Parent and Sub, may be
asserted by Parent or Sub and may be waived by Parent or Sub in whole or in part
at any time and from time to time, subject to the terms of the Merger Agreement.
The failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and, each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Merger Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this Annex
I is annexed.
Exhibit 5.10
FORM OF COMPANY AFFILIATE AGREEMENT
THIS AFFILIATE AGREEMENT, dated as of ______________ (the "AGREEMENT"),
is made by the undersigned stockholder ("STOCKHOLDER") of XxxXxxx.xxx, Ltd.,
a Delaware corporation (the "COMPANY"), in favor of and for the benefit of
Yahoo! Inc., a Delaware corporation ("PARENT"). Capitalized terms not
otherwise defined in this Agreement have the meanings ascribed to them in the
Merger Agreement (as defined below).
RECITALS
A. Parent and the Company have entered into an Agreement and Plan of
Merger, dated as of December [], 2001 (the "MERGER AGREEMENT"), pursuant to
which [HJ Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent][OR ANOTHER DIRECT OR INDIRECT WHOLLY-OWNED SUBSIDIARY OF
PARENT] ("MERGER SUB"), (subject to the conditions set forth therein) shall
commence an offer (the "OFFER") in which each of the issued and outstanding
shares of common stock, par value $0.01, of the Company ("COMPANY COMMON STOCK")
may be exchanged for the right to receive from Parent (A) a fraction of a share
of common stock, par value $0.001 per share of Parent as determined in
accordance with the Merger Agreement and (B) cash, without interest, in an
amount to be paid in accordance with the Merger Agreement followed by either the
merger of Merger Sub with and into the Company or the merger of the Company with
and into Merger Sub (the "MERGER");
B. Pursuant to the Merger Agreement (a) subject to the terms of the Offer,
upon consummation of the Offer, Merger Sub shall accept for payment and pay for
any shares of Company Common Stock validly tendered and not withdrawn in the
Offer, including shares of Company Common Stock validly tendered and not
withdrawn by Stockholder as of such time, and (b) at the Effective Time,
outstanding shares of Company Common Stock, including any Company Common Stock
owned by Stockholder as of the Effective Time, will be converted into the right
to receive shares of Parent Common Stock and cash, without interest, in
accordance with Article II of the Merger Agreement;
C. The execution and delivery of this Agreement by Stockholder is a
material inducement to Parent to enter into the Merger Agreement; and
D. Stockholder has been advised that Stockholder may be deemed to be an
"affiliate" of the Company, as such term is used for purposes of paragraphs (c)
and (d) of Rule 145 of the Securities and Exchange Commission (the "COMMISSION")
under the Securities Act, although nothing contained herein shall be construed
as an admission by Stockholder that Stockholder is in fact an affiliate of the
Company.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
(a) Stockholder is the holder and "BENEFICIAL OWNER" (as
defined in Rule 13d-3 under the Exchange Act) of the number of outstanding
shares of Company Common Stock set forth beneath Stockholder's signature on the
signature page hereof (the "COMPANY SHARES"), and Stockholder has good and valid
title to the Company Shares, free and clear of any liens, pledges, security
interests, adverse claims, equities, options, proxies, charges, encumbrances or
restrictions of any nature. Stockholder has the sole right to vote and to
dispose of the Company Shares.
(b) Stockholder is the holder of options to purchase the
number of shares of Company Common Stock set forth beneath Stockholder's
signature on the signature page hereof (the "COMPANY OPTIONS"), and Stockholder
has good and valid title to the Company Options, free and clear of any liens,
pledges, security interests, adverse claims, equities, options, proxies,
charges, encumbrances or restrictions of any nature.
(c) Stockholder does not own, of record or beneficially,
directly or indirectly, any securities of the Company other than the Company
Shares and the Company Options.
(d) Stockholder has carefully read this Agreement and, to the
extent Stockholder felt necessary, has discussed with counsel the limitations
imposed on Stockholder's ability to sell, transfer or otherwise dispose of the
Company Shares, the Company Options, the shares of Parent Common Stock that
Stockholder is to receive in the Offer and/or the Merger and the options to
purchase shares of Parent Common Stock that Stockholder is to receive in respect
of the Company Options in connection with the Offer and/or the Merger.
Stockholder fully understands the limitations that this Agreement and federal
and applicable state securities laws place upon Stockholder's ability to sell,
assign, transfer or otherwise dispose of securities of the Company and
securities of Parent.
(e) Stockholder acknowledges and understands that the
representations, warranties and covenants made by Stockholder set forth in this
Agreement will be relied upon by Parent, the Company and their respective
affiliates and counsel, and that substantial losses and damages may be incurred
by such persons if Stockholder's representations, warranties or covenants are
breached.
SECTION 2. COMPLIANCE WITH RULE 145 AND THE SECURITIES ACT.
(a) Stockholder has been advised that (i) the issuance of
shares of Parent Common Stock in connection with the Offer and the Merger is
expected to be effected pursuant to a Registration Statement filed by Parent on
Form S-4, and the resale of such shares will be subject to the restrictions set
forth in Rule 145 under the Securities Act unless such shares are otherwise
transferred pursuant to an effective registration statement under the Securities
Act or an appropriate exemption from registration, and (ii) Stockholder may be
deemed to be an affiliate of the Company. Stockholder accordingly agrees not to
sell, pledge, transfer or otherwise dispose of any shares of Parent Common Stock
issued to Stockholder in the Offer and/or the Merger unless (i) such sale,
pledge,
2
transfer or other disposition is made in conformity with the requirements of
Rule 145 under the Securities Act, (ii) such sale, pledge, transfer or other
disposition is made pursuant to an effective registration statement under the
Securities Act, or (iii) Stockholder delivers to Parent a written opinion of
counsel, in form and substance reasonably acceptable to Parent, to the effect
that such sale, pledge, transfer or other disposition is otherwise exempt from
registration under the Securities Act.
(b) Parent will give stop transfer instructions to its
transfer agent with respect to any Parent Common Stock received by Stockholder
pursuant to the Offer or the Merger, and there will be placed on the
certificates representing such Parent Common Stock, or any substitutions
therefor, legends stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES,
AND MAY ONLY BE TRANSFERRED IN CONFORMITY WITH RULE 145, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, OR IN ACCORDANCE WITH A WRITTEN OPINION
OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, IN FORM AND SUBSTANCE TO
THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933."
and
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
THE REQUIREMENTS OF THE CONDITIONS SPECIFIED IN THE AFFILIATE AGREEMENT
DATED AS OF ________________ BETWEEN THE HOLDER OF THIS CERTIFICATE AND
THE ISSUER, A COPY OF WHICH AGREEMENT MAY BE INSPECTED BY THE HOLDER OF
THIS CERTIFICATE AT THE PRINCIPAL OFFICES OF THE ISSUER OR FURNISHED BY
THE ISSUER TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND
WITHOUT CHARGE."
The legends set forth above shall be removed (by delivery of a substitute
certificate without such legends), and Parent shall so instruct its transfer
agent, if a registration statement respecting the sale of the shares has been
declared effective under the Securities Act or if Stockholder delivers to Parent
(i) satisfactory written evidence that the shares have been sold in compliance
with Rule 145 (in which case, the substitute certificate will be issued in the
name of the transferee), or (ii) an opinion of counsel, in form and substance
reasonably acceptable to Parent, to the effect that sale of the shares by the
holder thereof is no longer subject to Rule 145.
SECTION 3. SPECIFIC PERFORMANCE.
3
Stockholder agrees that in the event of any breach or threatened breach by
Stockholder of any covenant, obligation or other provision contained in this
Agreement, Parent shall be entitled (in addition to any other remedy that may be
available to Parent) to: (a) a decree or order of specific performance or
mandamus to enforce the observance and performance of such covenant, obligation
or other provision; and (b) an injunction restraining such breach or threatened
breach. Stockholder further agrees that neither Parent nor any other person or
entity shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 3, and Stockholder irrevocably waives any right Stockholder
may have to require the obtaining, furnishing or posting of any such bond or
similar instrument.
SECTION 4. MISCELLANEOUS.
(a) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
(b) This Agreement shall be enforceable by, and shall inure to
the benefit of and be binding upon, the parties and their respective successors
and assigns. As used in this Agreement, the term "successors and assigns" means,
where the context so permits, heirs, executors, administrators, trustees and
successor trustees, and personal and other representatives.
(c) If any provision of this Agreement or any part of any such
provision is held under any circumstances to be invalid or unenforceable in any
jurisdiction, then (i) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (ii) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in such jurisdiction shall not affect the
validity or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (iii) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Agreement. Each provision of this
Agreement is separable from every other provision of this Agreement, and each
part of each provision of this Agreement is separable from every other part of
such provision.
(d) This Agreement is made under, and shall be construed and
enforced in accordance with, the laws of the State of Delaware applicable to
agreements made and to be performed solely therein, without giving effect to
principles of conflicts of law. In any action between the parties hereto,
whether arising out of this Agreement or otherwise, (i) each of the parties
irrevocably and unconditionally consents and submits to the jurisdiction and
venue of the Chancery or other Courts of the State of Delaware; (ii) if any such
action is commenced in a state court, then, subject to applicable law, no party
shall object to the removal of such action to any federal court located in
Delaware; (iii) each of the parties irrevocably waives the right to trial by
jury; and (iv) each of the parties
4
irrevocably consents to service of process by first class certified mail, return
receipt requested, postage prepaid, to the address at which such party is to
receive notice.
(e) Stockholder shall execute and/or cause to be delivered to
Parent such instruments and other documents and shall take such other actions as
Parent may reasonably request to effectuate the intent and purposes of this
Agreement.
(f) This Agreement and any Stockholders Agreement between
Stockholder and Parent collectively set forth the entire understanding of Parent
and Stockholder relating to the subject matter hereof and thereof and supersede
all other prior agreements and understandings between Parent and Stockholder
relating to the subject matter hereof and thereof.
(g) The rights and remedies of Parent under this Agreement are
not exclusive of or limited by any other rights or remedies which it may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative). Without limiting the generality of the
foregoing, the rights and remedies of Parent under this Agreement, and the
obligations and liabilities of Stockholder under this Agreement, are in addition
to their respective rights, remedies, obligations and liabilities under common
law requirements and under all applicable statutes, rules and regulations.
Nothing in this Agreement shall limit any of Stockholder's obligations, or the
rights or remedies of Parent, under any Stockholders Agreement between Parent
and Stockholder; and nothing in any such Stockholders Agreement shall limit any
of Stockholder's obligations, or any of the rights or remedies of Parent, under
this Agreement.
(h) This Agreement and all obligations of Stockholder
hereunder are personal to Stockholder and may not be transferred or delegated by
Stockholder at any time. Parent may freely assign any or all of its rights under
this Agreement, in whole or in part, to any other person or entity without
obtaining the consent or approval of Stockholder.
(i) Each of the representations, warranties, covenants and
obligations contained in this Agreement shall survive the consummation of the
Offer and the Merger.
(j) Counsel to the parties to the Merger Agreement shall be
entitled to rely upon this Agreement as needed.
(k) This Agreement shall not be modified or amended, or any
right waived or any obligations excused, except by a written agreement signed by
both parties.
(l) Notwithstanding any other provision contained in this
Agreement, this Agreement and all obligations under this Agreement shall
terminate upon the termination of the Merger Agreement in accordance with its
terms.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first stated
above.
STOCKHOLDER
By:________________________
Name:
Title:
Number of Company Shares Owned:_______________
Number of Shares of Company Common Stock Issuable upon Exercise of Stock
Options:_________
Address of Stockholder:
---------------------------
---------------------------
Exhibit 5.15
FORM OF STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT is entered into as of December [], 2001, by
and among Yahoo! Inc., a Delaware corporation (together with its successors,
"PARENT"), HJ Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("MERGER SUB") and ___________________ ("STOCKHOLDER"), a
stockholder of XxxXxxx.xxx, Ltd., a Delaware corporation (the "COMPANY").
RECITALS
A. Parent, Merger Sub and the Company are entering into an Agreement
and Plan of Merger of even date herewith (the "MERGER AGREEMENT") which provides
(subject to the conditions set forth therein) for the commencing an offer by
Merger Sub in which each of the issued and outstanding shares of Company Common
Stock (as defined below) may be exchanged for the right to receive from Parent
(A) a fraction of a share of common stock, par value $0.001 per share of Parent
as determined in accordance with the Merger Agreement and (B) cash, without
interest, in an amount to be paid in accordance with the Merger Agreement
followed by either the merger of Merger Sub with and into the Company or the
merger of the Company with and into Merger Sub (the "MERGER"). Capitalized terms
not otherwise defined herein shall have the respective meanings ascribed to them
in the Merger Agreement.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of such number of shares of the outstanding capital stock of
the Company and shares subject to outstanding options as is indicated on the
signature page of this Agreement; and
C. In order to induce Parent and Merger Sub to enter into the Merger
Agreement, Stockholder is entering into this Stockholder Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto
agree as follows:
Section 1. CERTAIN DEFINITIONS.
For purposes of this Stockholder Agreement:
1. "COMPANY COMMON STOCK" shall mean the common stock, par value
$0.01 per share, of the Company.
2. "EXPIRATION DATE" shall mean the earliest of:
(i) the date upon which the Merger Agreement is validly
terminated pursuant to Article VII thereof; and
(ii) the date upon which the Merger becomes effective.
3. Stockholder shall be deemed to "OWN" or to have acquired
"OWNERSHIP" of a security if Stockholder is the record and/or beneficial owner
(as defined in Rule 13d-3 under the Exchange Act) of such security.
4. "PERSON" shall mean any individual, corporation, limited
liability company, partnership, trust or other entity, or governmental
authority.
5. "SUBJECT SECURITIES" shall mean: (i) all securities of the
Company (including all shares of Company Common Stock and all options and other
rights to acquire shares of Company Common Stock) Owned by Stockholder as of the
date of this Stockholder Agreement; and (ii) all additional securities of the
Company (including all additional shares of Company Common Stock and all
additional options and other rights to acquire shares of Company Common Stock)
of which Stockholder acquires Ownership during the period from the date of this
Stockholder Agreement through the Expiration Date.
6. A Person shall be deemed to have a effected a "TRANSFER" of a
security if such Person directly or indirectly: (i) sells, pledges, encumbers,
grants an option with respect to, transfers, distributes or disposes of such
security or any interest in such security; (ii) enters into an agreement or
commitment contemplating the possible sale of, pledge of, encumbrance of, grant
of an option with respect to, transfer of or disposition of such security or any
interest therein; (iii) grants any proxy, power-of-attorney or other
authorization or consent with respects to any such security or any interest
therein; (iv) deposits any such security or any interest therein into a voting
trust, or enters into a voting agreement or arrangement with respect to any such
security or any interest therein; or (v) takes any other action that would in
any way restrict, limit or interfere with the performance of such Stockholder's
obligations hereunder or the transactions contemplated hereby.
Section 2. TRANSFER OF SUBJECT SECURITIES.
1. Transferee of Subject Securities to be Bound by this Stockholder
Agreement. Stockholder agrees that, except as may be provided herein, during the
period from the date of this Stockholder Agreement through the Expiration Date,
Stockholder shall not cause or permit any Transfer of any of the Subject
Securities to be effected unless each Person to which any of such Subject
Securities, or any interest in any of such Subject Securities, is or may be
Transferred shall have: (a) executed a counterpart of this Stockholder Agreement
and a irrevocable proxy in the form attached hereto as Exhibit A (with such
modifications as Parent may reasonably request); and (b) agreed to hold such
Subject Securities (or interest in such Subject Securities) subject to all of
the terms and provisions of this Stockholder Agreement; provided, that nothing
in this Stockholder Agreement shall prohibit Stockholder from (i) Transferring
Subject Securities to Parent or Merger Sub pursuant to Section 3(1)(iii) hereof,
(ii) selling at any time and from time to time up to an aggregate of one million
(1,000,000) shares of Company Common Stock, free of any and all restrictions, to
any Person other than, directly or indirectly, to any Person known to
Stockholder to have made (or announced its intention to make) a Takeover
Proposal or (iii) transfers to a trust, family limited
2
partnership or similar entity, provided such shares remain beneficially owned by
Stockholder and subject to the restrictions of this agreement (each, a
"PERMITTED TRANSFER").
2. No Transfer of Voting Rights. Stockholder shall ensure that,
during the period from the date of this Stockholder Agreement through the
Expiration Date: (a) none of the Company Common Stock owned by Stockholder is
deposited into a voting trust; and (b) no proxy is granted, and no voting
agreement or similar agreement is entered into, with respect to any of the
Company Common Stock owned by Stockholder.
3. No Transfer to Parent or Related Parties. Stockholder has no
plan or intention to, and will not, Transfer any of the Subject Securities
(including through derivative transactions such as equity swaps, collars, or put
protection arrangements which would have the economic effect of a transfer of
the burdens, benefits, or other facets of ownership) to Parent or any person
related to Parent within the meaning of Treasury Regulation section
1.368-1(e)(3), directly or indirectly (including through partnerships or through
third parties in connection with a plan to so Transfer such Subject Securities),
except as pursuant to Section 3(1)(iii) hereof.
Section 3. TENDER AND VOTING OF SHARES.
1. Stockholder Agreement. Stockholder agrees that, during the period
from the date of this Stockholder Agreement through the Expiration Date:
(i) at any meeting of stockholders of the Company, however
called, and at every adjournment or postponement thereof, Stockholder shall (i)
appear at the meeting, or otherwise cause all shares of Company Common Stock
Owned by Stockholder, to be counted as present thereat for purposes of
establishing a quorum, (ii) vote or cause all shares of Company Common Stock
Owned by Stockholder to be voted in favor of the approval and adoption of the
Merger Agreement and the approval of the Merger and (iii) vote or cause all
shares of Company Common Stock Owned by Stockholder to be voted, against (A) any
Takeover Proposal (other than one by Parent or Merger Sub) and (B) any amendment
of the Company's Articles of Incorporation or Bylaws or other proposal, action
or transaction involving the Company or any of its Subsidiaries or any of its
stockholders, which amendment or other proposal, action or transaction that
could reasonably be expected to prevent or materially impede or delay the
consummation of the Offer, the Merger or the other transactions contemplated by
the Merger Agreement or this Agreement or to deprive Parent of any material
portion of the benefits anticipated by Parent to be received from the
consummation of the Offer, the Merger or the other transactions contemplated by
the Merger Agreement or this Agreement, or change in any manner the voting
rights of Company Common Stock presented to the stockholders of the Company
(regardless of any recommendation of the Board of Directors of the Company) or
in respect of which vote or consent of the stockholders is requested or sought,
unless such transaction has been approved in advance by Parent or Merger Sub;
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(ii) in the event written consents are solicited or otherwise sought from
stockholders of the Company with respect to the approval or adoption of the
Merger Agreement or with respect to the approval of the Merger, Stockholder
shall cause to be validly executed, with respect to all shares of Company Common
Stock Owned by Stockholder as of the record date fixed for the consent to the
proposed action, a written consent or written consents to such proposed action;
and
(iii) subject to the right of such Stockholder to make Permitted
Transfers, such Stockholder shall tender all shares of Company Common Stock
Owned by Stockholder as of the date of the commencement of the Offer into the
Offer as promptly as practicable, and in no event later than the twentieth
business day, following the commencement by Merger Sub of the Offer pursuant to
Section 1.1 of the Merger Agreement, and such Stockholder shall not withdraw any
shares so tendered unless the Offer is terminated or has expired without Merger
Sub or Parent purchasing all shares of common stock of the Company validly
tendered in the Offer and not withdrawn.
(iv) At or before the Effective Time, Stockholder agrees to take
all reasonable efforts to effect the transfer to Parent of his one appointor
share relating to XxxXxxx.xxx Pty. Limited.
2. Proxy. Contemporaneously with the execution of this Stockholder
Agreement: (i) Stockholder shall deliver to Parent a proxy in the form attached
to this Stockholder Agreement as Exhibit A, which shall be irrevocable prior to
the Expiration Date to the fullest extent permitted by law, with respect to the
Subject Securities referred to therein (the "PROXY"); and (ii) Stockholder shall
cause to be delivered to Parent an additional proxy (in the form attached hereto
as Exhibit A) executed on behalf of the record owner of any Subject Securities
that are Owned beneficially (within the meaning of Rule 13d-3 under the Exchange
Act), but not of record, by Stockholder; provided that any and all shares of
Company Common Stock that are Transferred in a Permitted Transfer shall without
any action on the part of the Company, Parent or Stockholder be released from
such Proxy.
3. No Exercise Requirement. Nothing in this Stockholder Agreement
shall obligate Stockholder to exercise or convert any options or other rights to
acquire shares of Company Common Stock that are Owned by the Stockholder.
Section 4. NO SOLICITATION. During the period from the date of this
Stockholder Agreement through the Expiration Date, Stockholder shall not, nor
shall Stockholder authorize or permit any of representative of Stockholder to,
directly or indirectly take any action prohibited by Section 4.2 of the Merger
Agreement. Nothing contained in this Section 4 shall prevent Stockholder, when
acting solely in his capacity as a director or officer of the Company, from
taking actions permitted under the Merger Agreement.
4
Section 5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder
hereby represents and warrants to Parent as follows:
1. Authorization, etc. Stockholder has the absolute and unrestricted
right, power, authority and legal capacity to execute and deliver this
Stockholder Agreement and the Proxy and to perform Stockholder's obligations
hereunder and thereunder. This Stockholder Agreement and the Proxy have been
validly executed and delivered by such Stockholder and constitute the legal,
valid and binding obligations of such Stockholder, enforceable against such
Stockholder in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
the availability of the remedy of specific performance or injunctive or other
forms of equitable relief may be subject to equitable defenses and would be
subject to the discretion of the court before which any proceeding therefor may
be brought.
2. No Conflicts or Consents.
(i) The execution and delivery of this Stockholder Agreement and
the Proxy by Stockholder do not, and the performance of this Stockholder
Agreement and the Proxy by Stockholder will not: (i) conflict with or violate
any law, rule, regulation, order, decree or judgment applicable to Stockholder
or by which Stockholder or any of Stockholder's properties is or may be bound or
affected; or (ii) result in or constitute (with or without notice or lapse of
time) any breach of or default under, or give to any other Person (with or
without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse of
time) in the creation of any encumbrance or restriction on any of the Subject
Securities pursuant to, any contract to which Stockholder is a party or by which
Stockholder or any of Stockholder's affiliates or properties is or may be bound
or affected, except in the case of clause (i) or (ii) above where any of such
events would not have a material adverse effect on Stockholder or otherwise
impair Stockholder's ability to satisfy Stockholder's obligations hereunder.
(ii) The execution and delivery of this Stockholder Agreement and
the Proxy by Stockholder do not, and the performance of this Stockholder
Agreement and the Proxy by Stockholder will not, require any consent or approval
of any Person.
3. Title to Securities. As of the date of this Stockholder
Agreement: (a) Stockholder holds of record (free and clear of any liens, claims,
options, rights of first refusal, co-sale rights, charges or other encumbrances,
collectively, "LIENS") the number of outstanding shares of Company Common Stock
set forth under the heading "Shares Held of Record" on the signature page
hereof; (b) Stockholder holds (free and clear of any Liens) the options and
other rights to acquire shares of Company Common Stock set forth under the
heading "Options and Other Rights" on the signature page hereof; (c) Stockholder
Owns the additional securities of the Company set forth under the heading
"Additional Securities Beneficially Owned" on the signature page
5
hereof; and (d) Stockholder does not directly or indirectly Own any shares of
capital stock or other securities of the Company, or any option, warrant or
other right to acquire (by purchase, conversion or otherwise) any shares of
capital stock or other securities of the Company, other than the shares and
options and other rights specified on the signature page hereof.
4. Accuracy of Representations. The representations and warranties
contained in this Stockholder Agreement are accurate in all material respects as
of the date of this Stockholder Agreement, will be accurate in all material
respects at all times through the Expiration Date and will be accurate in all
material respects as of the date of the consummation of the Merger as if made on
that date.
Section 6. FURTHER ASSURANCES. From time to time and without
additional consideration, Stockholder shall (at Stockholder's sole expense)
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall (at Stockholder's sole expense) take such further actions, as Parent
may reasonably request for the purpose of carrying out and furthering the intent
of this Stockholder Agreement.
Section 7. MISCELLANEOUS.
1. Independence of Obligations. The covenants and obligations of
Stockholder set forth in this Stockholder Agreement shall be construed as
independent of any other agreement or arrangement between Stockholder, on the
one hand, and the Company or Parent, on the other. The existence of any claim or
cause of action by Stockholder against the Company or Parent shall not
constitute a defense to the enforcement of any of such covenants or obligations
against Stockholder.
2. Specific Performance. Stockholder agrees that in the event of any
breach or threatened breach by Stockholder of any covenant, obligation or other
provision contained in this Stockholder Agreement, Parent shall be entitled (in
addition to any other remedy that may be available to Parent) to: (a) a decree
or order of specific performance or mandamus to enforce the observance and
performance of such covenant, obligation or other provision; and (b) an
injunction restraining such breach or threatened breach. Stockholder further
agrees that neither Parent nor any other person or entity shall be required to
obtain, furnish or post any bond or similar instrument in connection with or as
a condition to obtaining any remedy referred to in this Section 7(2), and
Stockholder irrevocably waives any right Stockholder may have to require the
obtaining, furnishing or posting of any such bond or similar instrument.
3. Other Agreements. Nothing in this Stockholder Agreement shall
limit any of the rights or remedies of Parent under the Merger Agreement, or any
of the rights or remedies of Parent or any of the obligations of Stockholder
under any agreement between Stockholder and Parent or any certificate or
instrument executed on behalf of Stockholder in favor of Parent; and nothing in
the Merger Agreement or in any other agreement, certificate or instrument shall
limit any of the rights or remedies of Parent or any of the obligations of
Stockholder under this Stockholder Agreement.
6
4. Notices. Any notice or other communication required or permitted
to be delivered to Stockholder or Parent under this Stockholder Agreement shall
be in writing and shall be deemed properly delivered, given and received when
delivered to the address or facsimile telephone number set forth beneath the
name of such party below (or to such other address or facsimile telephone number
as such party shall have specified in a written notice given to the other
party):
If to Parent or Merger Sub, to:
Yahoo! Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Stockholder: To the address set forth on the signature page hereof.
5. Severability. If any provision of this Stockholder Agreement or
any part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Stockholder Agreement.
Each provision of this Stockholder Agreement is separable from every other
provision of this Stockholder Agreement, and each part of each provision of this
Stockholder Agreement is separable from every other part of such provision.
6. Governing Law; Jurisdiction. This Stockholder Agreement is made
under, and shall be construed and enforced in accordance with, the laws of the
State of Delaware applicable to agreements made and to be performed solely
therein, without giving effect to principles of conflicts of law. In any action
between the parties hereto, whether arising out of this Stockholder Agreement or
otherwise: (a) each of the parties
7
irrevocably and unconditionally consents and submits to the jurisdiction and
venue of the Chancery or other Courts of the State of Delaware; (b) if any such
action is commenced in a state court, then, subject to applicable law, no party
shall object to the removal of such action to any federal court located in
Delaware; (c) each of the parties irrevocably waives the right to trial by jury;
and (d) each of the parties irrevocably consents to service of process by first
class certified mail, return receipt requested, postage prepaid, to the address
at which such party is to receive notice in accordance with Section 7(4).
7. Waiver. No failure on the part of Parent to exercise any power,
right, privilege or remedy under this Stockholder Agreement, and no delay on the
part of Parent in exercising any power, right, privilege or remedy under this
Stockholder Agreement, shall operate as a waiver of such power, right, privilege
or remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. Parent shall not be deemed to have waived any
claim arising out of this Stockholder Agreement, or any power, right, privilege
or remedy under this Stockholder Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of Parent; and any such waiver shall not
be applicable or have any effect except in the specific instance in which it is
given.
8. Attorneys' Fees. If any legal action or other legal proceeding
relating to this Stockholder Agreement or the enforcement of any provision of
this Stockholder Agreement is brought against Stockholder, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and disbursements
(in addition to any other relief to which the prevailing party may be entitled).
9. Captions. The captions contained in this Stockholder Agreement
are for convenience of reference only, shall not be deemed to be a part of this
Stockholder Agreement and shall not be referred to in connection with the
construction or interpretation of this Stockholder Agreement.
10. Officers and Directors. Stockholder, a director or officer of
the Company, makes no agreement or understanding herein in his or her capacity
as such director or officer, and nothing herein will limit or affect, or give
rise to any liability to Stockholder by virtue of, any actions taken by
Stockholder in his or her capacity as an officer or director of the Company in
exercising its rights under the Merger Agreement.
11. Entire Agreement. This Stockholder Agreement (including the
Proxy) and any affiliate agreement between Stockholder and Parent collectively
set forth the entire understanding of Parent and Stockholder relating to the
subject matter hereof and thereof and supersede all other prior agreements and
understandings between Parent and Stockholder relating to the subject matter
hereof and thereof.
12. Non-exclusivity. The rights and remedies of Parent under this
Stockholder Agreement are not exclusive of or limited by any other rights or
remedies which it may have, whether at law, in equity, by contract or otherwise,
all of which shall be cumulative (and not alternative). Without limiting the
generality of the foregoing, the
8
rights and remedies of Parent under this Stockholder Agreement, and the
obligations and liabilities of Stockholder under this Stockholder Agreement, are
in addition to their respective rights, remedies, obligations and liabilities
under common law requirements and under all applicable statutes, rules and
regulations. Nothing in this Stockholder Agreement shall limit any of
Stockholder's obligations, or the rights or remedies of Parent, under any
affiliate agreement between Parent and Stockholder; and nothing in any such
affiliate agreement shall limit any of Stockholder's obligations, or any of the
rights or remedies of Parent, under this Stockholder Agreement.
13. Amendments. This Stockholder Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of Parent and Stockholder.
14. Assignment; Binding Effect. Neither this Stockholder Agreement
nor any of the interests or obligations hereunder may be assigned or delegated
by Stockholder, and any attempted or purported assignment or delegation of any
of such interests or obligations shall be void. Subject to the preceding
sentence, this Stockholder Agreement shall be binding upon Stockholder and
Stockholder's heirs, estate, executors, personal representatives, successors and
assigns, and shall inure to the benefit of Parent and its successors and
assigns. Without limiting any of the restrictions set forth in Section 2 or
elsewhere in this Stockholder Agreement, this Stockholder Agreement shall be
binding upon any Person to whom any Subject Securities are Transferred prior to
the termination of this Stockholder Agreement; provided that no Person who
receives shares of Company Common Stock in a Permitted Transfer shall be bound
by this Stockholder Agreement. Nothing in this Stockholder Agreement is intended
to confer on any Person (other than Parent and its successors and assigns) any
rights or remedies of any nature.
15. Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Stockholder Agreement shall be paid by the
party incurring such costs and expenses.
16. Termination. This Stockholder Agreement shall automatically
terminate on the Expiration Date; provided, however, that the termination of
this Stockholder Agreement shall not relieve Stockholder from any liability for
any previous breach of this Stockholder Agreement.
17. Counterparts. This Stockholder Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.
18. Construction.
(i) For purposes of this Stockholder Agreement, whenever the
context requires: the singular number shall include the plural, and vice versa;
the masculine gender shall include the feminine and neuter genders;
9
the feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include masculine and feminine genders.
(ii) The parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Stockholder Agreement.
(iii) As used in this Stockholder Agreement, the words "include"
and "including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(iv) Except as otherwise indicated, all references in this
Stockholder Agreement to "Sections" and "Exhibits" are intended to refer to
Sections of this Stockholder Agreement and Exhibits to this Stockholder
Agreement.
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IN WITNESS WHEREOF, Parent and Stockholder have caused this
Stockholder Agreement to be executed as of the date first written above.
YAHOO! INC.
By:
---------------------------
Name:
Title:
HJ ACQUISITION CORP.
By:
---------------------------
Name:
Title:
STOCKHOLDER:
Address:
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/SHARES HELD OF RECORD / ADDITIONAL SECURITIES /
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/ / OPTIONS AND OTHER RIGHTS / BENEFICIALLY OWNED/
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/ / / /
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/ / / /
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EXHIBIT A
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of XxxXxxx.xxx, Ltd., a Delaware
corporation (the "COMPANY"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes _______, _______ and Yahoo! Inc., a Delaware
corporation ("PARENT"), and each of them, the attorneys and proxies of the
undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to (i) the outstanding shares of
capital stock of the Company owned of record by the undersigned as of the date
of this proxy, which shares are specified on the final page of this proxy, and
(ii) any and all other shares of capital stock of the Company which the
undersigned may acquire on or after the date hereof. (The shares of the capital
stock of the Company referred to in clauses "(i)" and "(ii)" of the immediately
preceding sentence are collectively referred to as the "SHARES.") Upon the
execution hereof, all prior proxies given by the undersigned with respect to any
of the Shares are hereby revoked, and the undersigned agrees that no subsequent
proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest, is granted
in connection with the execution and delivery of the Stockholder Agreement,
dated as of the date hereof, between Parent and the undersigned (the
"STOCKHOLDER AGREEMENT") and is granted in consideration of Parent entering into
the Agreement and Plan of Merger, dated as of the date hereof, among Parent, HJ
Acquisition Corp. and the Company (the "MERGER AGREEMENT").
Shares sold by the undersigned in Permitted Transfers (as defined in
the Stockholder Agreement) shall, for all purposes, be and be deemed released
from this proxy and no longer be included among the "Shares" hereunder.
The attorneys and proxies named above (and their successors) will be
empowered, and may exercise this proxy, to vote the Shares at any meeting of the
stockholders of the Company, however called, and at every adjournment or
postponement thereof, or in connection with any solicitation of written consents
from stockholders of the Company:
(i) in favor of (A) the approval and adoption of the Merger
Agreement and the approval of the merger contemplated thereby and (B) each of
the other actions contemplated by the Merger Agreement, and
(ii) against (A) any Takeover Proposal (other than one by
Parent or Purchaser) and (B) any amendment of the Company's Articles of
Incorporation or Bylaws or other proposal, action or transaction involving the
Company or any of its Subsidiaries or any of its stockholders, which amendment
or other proposal, action or transaction that could reasonably be expected to
prevent or materially impede or delay the consummation of the Offer, the Merger
or the other transactions contemplated by the Merger Agreement or this Agreement
or to deprive Parent of any material portion
2
of the benefits anticipated by Parent to be received from the consummation of
the Offer, the Merger or the other transactions contemplated by the Merger
Agreement or this Agreement, or change in any manner the voting rights of
Company Common Stock presented to the stockholders of the Company (regardless of
any recommendation of the Board of Directors of the Company) or in respect of
which vote or consent of the stockholders is requested or sought, unless such
transaction has been approved in advance by Parent or Purchaser.
The undersigned may vote the Shares on all other matters.
This proxy shall be binding upon the heirs, estate, executors,
personal representatives, successors and assigns of the undersigned (including
any transferee of any of the Shares).
If any provision of this proxy or any part of any such provision is
held under any circumstances to be invalid or unenforceable in any jurisdiction,
then (a) such provision or part thereof shall, with respect to such
circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and in such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this proxy. Each provision of this
proxy is separable from every other provision of this proxy, and each part of
each provision of this proxy is separable from every other part of such
provision.
This proxy shall terminate, and be of no further force and effect,
automatically upon the Expiration Date.
Dated: December [ ], 2001
------------------------------------
Number of shares of common stock of the Company owned of record as of the date
of this proxy:
------------------------------------
3
