Exhibit 4
AGREEMENT AND PLAN OF MERGER
DATED MARCH 10, 1999
BY AND AMONG
PINAULT-PRINTEMPS-REDOUTE S.A.
BUTTONS ACQUISITION CORPORATION
AND
BRYLANE INC.
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER................................................................... 2
Section 1.1. The Offer............................................... 2
Section 1.2. Company Actions......................................... 3
ARTICLE II
THE MERGER.................................................................. 5
Section 2.1. The Merger.............................................. 5
Section 2.2. Effective Time.......................................... 5
Section 2.3. Effects of the Merger................................... 5
Section 2.4. Certificate of Incorporation and By-Laws of the
Surviving Corporation .................................. 5
Section 2.5. Directors............................................... 6
Section 2.6. Officers................................................ 6
Section 2.7. Conversion of Shares of Common Stock.................... 6
Section 2.8. Conversion of Purchaser Common Stock.................... 6
Section 2.9. Options................................................. 7
Section 2.10. Stockholders' Meeting................................... 7
Section 2.11. Merger Without Meeting of Stockholders.................. 8
Section 2.12. Additional Actions...................................... 8
ARTICLE III
PAYMENT FOR SHARES.......................................................... 9
Section 3.1. Dissenting Shares....................................... 9
Section 3.2. Payment for Shares of Common Stock...................... 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................... 10
Section 4.1. Organization and Qualification; Subsidiaries............ 11
Section 4.2. Certificate of Incorporation and By-Laws................ 11
Section 4.3. Capitalization; Subsidiaries............................ 11
Section 4.4. Authority Relative to this Agreement.................... 12
Section 4.5. No Conflict; Required Filings and Consents.............. 13
Section 4.6. SEC Reports and Financial Statements.................... 14
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Page
Section 4.7. Employee Benefit Matters................................ 15
Section 4.8. Litigation.............................................. 16
Section 4.9. Information............................................. 16
Section 4.10. Taxes................................................... 17
Section 4.11. Intellectual Property................................... 18
Section 4.12. Year 2000 Compliance.................................... 19
Section 4.13. Certain Approvals....................................... 19
Section 4.14. Brokers................................................. 19
Section 4.15. Opinion of Financial Advisor............................ 19
Section 4.16. Vote Required........................................... 19
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER.................. 19
Section 5.1. Organization and Qualification.......................... 20
Section 5.2. Authority Relative to this Agreement.................... 20
Section 5.3. No Conflict; Required Filings and Consents.............. 20
Section 5.4. Information............................................. 21
Section 5.5. Financing............................................... 21
ARTICLE VI
COVENANTS................................................................... 21
Section 6.1. Conduct of Business of the Company...................... 21
Section 6.2. Access to Information................................... 23
Section 6.3. Reasonable Best Efforts................................. 23
Section 6.4. Public Announcements.................................... 24
Section 6.5. Indemnification......................................... 24
Section 6.6. Notification of Certain Matters......................... 25
Section 6.7. State Takeover Laws..................................... 25
Section 6.8. Acquisition Transactions................................ 25
Section 6.9. Management.............................................. 26
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER.................................... 26
Section 7.1. Conditions.............................................. 26
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER............................................. 27
Section 8.1. Termination............................................. 27
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Page
Section 8.2. Effect of Termination................................... 29
Section 8.3. Amendment............................................... 29
Section 8.4. Extension; Waiver....................................... 29
ARTICLE IX
MISCELLANEOUS............................................................... 29
Section 9.1. Non-Survival............................................ 29
Section 9.2. Entire Agreement; Assignment............................ 29
Section 9.3. Validity................................................ 30
Section 9.4. Notices................................................. 30
Section 9.5. Governing Law........................................... 31
Section 9.6. Descriptive Headings.................................... 31
Section 9.7. Counterparts............................................ 31
Section 9.8. Parties in Interest..................................... 31
Section 9.9. Fees and Expenses....................................... 31
Section 9.10. Certain Definitions..................................... 32
Section 9.11. Specific Performance.................................... 32
ANNEXES
Annex I -- Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 10,
1999, by and among Pinault-Printemps-Redoute S.A., a societe anonyme organized
and existing under the laws of the Republic of France ("Parent"), Buttons
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent (the "Purchaser"), and Brylane Inc., a Delaware corporation (the
"Company").
WHEREAS, Parent beneficially owns 8,617,017 shares (the "Parent Shares") of
the common stock, par value $0.01 par share, of the Company (the "Common
Stock");
WHEREAS, Parent has proposed that the Purchaser acquire all of the issued
and outstanding shares of Common Stock not beneficially owned by Parent or the
Purchaser (references to the Parent shall, where the context so requires, be
deemed to refer to the Purchaser as well);
WHEREAS, it is proposed that the Purchaser will make a cash tender offer
(the "Offer") in compliance with Section 14(d)(1) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations
promulgated thereunder to acquire all the issued and outstanding shares of
Common Stock for $24.50 per share (such amount, or any greater amount per share
paid pursuant to the Offer, being hereinafter referred to as the "Per Share
Amount"), net to the seller in cash, upon the terms and subject to the
conditions of this Agreement; and that the Offer will be followed by the merger
(the "Merger") of the Purchaser with and into the Company, with the Company
being the surviving corporation, in accordance with the General Corporation Law
of the State of Delaware ("DGCL"), pursuant to which each issued and outstanding
share of Common Stock not beneficially owned by Parent will be converted into
the right to receive the Per Share Amount, upon the terms and subject to the
conditions provided herein;
WHEREAS, a special committee (the "Special Committee") comprised of three
independent directors of the Board of Directors of the Company (the "Board") has
received the written opinion of Bear, Xxxxxxx & Co. Inc. (the "Financial
Advisor") that, based on, and subject to, the various assumptions and
qualifications set forth in such opinion, as of the date of such opinion, the
consideration to be received by the holders of Common Stock (other than Parent
and the Purchaser) pursuant to the Offer and the Merger was fair to such holders
from a financial point of view;
WHEREAS, the Special Committee has determined that it is in the best
interests of the stockholders of the Company (the "Stockholders") to approve
Parent's acquisition of the shares of Common Stock not beneficially owned by
Parent and to waive the provisions of the Governance Agreement, dated as of
April 3, 1998, by and between the Company and Parent (the "Governance
Agreement"), which would otherwise limit Parent in making the Offer or effecting
the Merger, and has voted to recommend to the Board that the Board recommend
that the
Stockholders (i) accept the Offer and tender their shares of Common Stock
pursuant to the Offer and (ii) approve the Merger following consummation of the
Offer; and
WHEREAS, the Board has determined that it is in the best interests of the
Stockholders to approve Parent's proposed acquisition and has voted (i) to
recommend that the Stockholders accept the Offer and tender their shares of
Common Stock pursuant to the Offer and (ii) to approve the Merger of the
Purchaser with and into the Company, with the Company being the surviving
corporation, following consummation of the Offer;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
Section 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1, the Purchaser shall, and Parent shall cause the
Purchaser to, commence within the meaning of Rule 14d-2 under the Exchange Act
the Offer in no later than five business days after the initial public
announcement of Parent's intention to commence the Offer. The Offer shall have a
scheduled expiration date 20 business days following commencement of the Offer
(the "Initial Expiration Date"). Notwithstanding any contrary provision of this
Agreement, the Purchaser (i) if so requested by the Company at the direction of
the Special Committee, will extend the Offer for up to 20 business days in the
event upon the Initial Expiration Date, the Purchaser shall not have accepted
for payment shares of Common Stock pursuant to the Offer as a result of one or
more of the conditions set forth in Annex I hereto not having been satisfied or
waived by the Purchaser, (ii) at its discretion may determine from time to time
to extend the Offer for no more than an aggregate of 20 business days following
the later of the Initial Expiration Date and the first expiration date
thereafter on which all of the conditions set forth in Annex I shall have been
satisfied or waived, if applicable; provided, however, that in the event that
the Purchaser extends the Offer pursuant to this clause (ii) all of the
conditions to the Offer shall be deemed to have been irrevocably satisfied for
all purposes of the Offer and shall not be asserted by Parent as a basis for not
consummating the Offer and (iii) may, from time to time at its discretion,
extend the Offer in increments of up to ten business days each, if one or more
of the conditions set forth in Annex I shall not have been satisfied or waived.
The Purchaser shall not accept for payment any shares of Common Stock tendered
pursuant to the Offer unless there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer such number of shares of Common
Stock which, together with the Parent Shares, satisfy the Minimum Condition (as
defined in Annex I). Under no circumstances shall Parent or Purchaser waive the
Minimum Condition. In addition to the Minimum Condition, the obligation of the
Purchaser to accept for payment and pay for shares of Common Stock tendered
pursuant to the Offer shall be subject only to the satisfaction of the
conditions set forth in Annex I hereto. Parent expressly
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reserves the right to increase the Per Share Amount under such circumstances, if
any, as Parent, in its sole discretion, may deem appropriate. Without the prior
consent of the Special Committee, the Purchaser will not (i) decrease the Per
Share Amount; (ii) change the number of shares of Common Stock to be purchased
in the Offer; (iii) change the form of the consideration payable in the Offer;
(iv) add to the conditions to the Offer set forth in Annex I hereto; or (v) make
any other change in the terms or conditions of the Offer which is adverse to the
holders of shares of Common Stock. The Per Share Amount shall, subject to any
applicable withholding of taxes, be net to the seller in cash, upon the terms
and subject to the conditions of the Offer. Following the satisfaction or waiver
of the conditions to the Offer, Parent shall cause the Purchaser to accept for
payment and pay for, in accordance with the terms of the Offer, all shares of
Common Stock validly tendered pursuant to the Offer and not withdrawn, pursuant
to applicable law.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Parent shall file with the Securities and Exchange Commission (the
"SEC") (i) a Tender Offer Statement on Schedule 14D-1, including the exhibits
thereto (together with all amendments and supplements thereto, the "Schedule
14D-1"), including the exhibits thereto with respect to the Offer and (ii) a
Rule 13e-3 Transaction Statement on Schedule 13E-3, including the exhibits
thereto (together with all amendments and supplements thereto, the "Schedule
13E-3") with respect to the Offer and the other transactions contemplated hereby
(the "Transactions"). The Schedule 14D-1 and the Schedule 13E-3 shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the letter of transmittal and any summary advertisement (the
Schedule 14D-1, the Schedule 13E-3, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Parent, the Purchaser and the
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents which shall have become materially incorrect or
misleading, and Parent and the Purchaser further agree to take all steps
necessary to cause the Schedule 14D-1 and the Schedule 13E-3 as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of shares of Common Stock, in each case as and to the
extent required by applicable law. The Company, the Special Committee and their
respective counsel shall be given the reasonable opportunity to review and
comment on the Offer Documents and any amendments thereto prior to the filing
thereof with the SEC. Parent and the Purchaser shall provide promptly the
Company, the Special Committee and their respective counsel with a copy of any
written comments or telephonic notification of any oral comments Parent or the
Purchaser may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt thereof. Parent and the Purchaser shall
provide the Company and the Special Committee, and their respective counsel,
with a reasonable opportunity to participate in all communications with the SEC
and its staff, including any meetings and telephone conferences, relating to the
Transactions or this Agreement.
Section 1.2. Company Actions.
(a) The Company hereby consents to the Offer and represents that (i) the
Special Committee and the Board at meetings duly held on March 9, 1999, have
each, by unanimous
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vote of all directors present and voting, (A) determined that each of the Offer
and the Merger, is fair to and in the best interests of the Stockholders (other
than Parent and the Purchaser), (B) approved this Agreement and the
Transactions, (C) determined that this Agreement is advisable and resolved to
recommend that the Stockholders (other than Parent and the Purchaser) accept the
Offer and tender their shares of Common Stock pursuant to the Offer and approve
and adopt this Agreement and the Merger; provided, that such recommendation may
be withdrawn, modified or amended to the extent the Board or the Special
Committee deems it necessary to do so in the exercise of its fiduciary duties,
as advised in writing by independent counsel, and (D) waived the provisions of
the Governance Agreement which would otherwise limit Parent in making the Offer
or effecting the Merger, and (ii) the Financial Advisor has delivered to the
Special Committee a written opinion that, based on, and subject to, the various
assumptions and qualifications set forth in such opinion, as of the date thereof
the consideration to be received by the Stockholders (other than Parent and the
Purchaser) pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company hereby consents to the inclusion in the
Offer Documents of the recommendations of the Special Committee and the Board
described in this Section 1.2(a).
(b) On the same day as the Parent first files the Schedule 14D-1
with the SEC, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9, including all exhibits thereto (together with all
amendments and supplements thereto, the "Schedule 14D-9"), containing the
recommendations of the Special Committee and the Board described in Section
1.2(a) and shall disseminate the Schedule 14D-9 to the extent required by Rule
14d-9 promulgated under the Exchange Act, and any other applicable law. The
Company, Parent and the Purchaser agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have become
materially incorrect or misleading, and the Company further 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 Common Stock, in each case as and to the
extent required by applicable law. Parent and its counsel shall be given the
opportunity to review and comment on the Schedule 14D-9 and any amendments
thereto prior to the filing thereof with the SEC. The Company shall provide
Parent and its counsel with a copy of any written comments or telephonic
notification of any oral comments the Company may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt thereof. The
Company and its counsel shall provide Parent and its counsel with a reasonable
opportunity to participate in all communications with the SEC and its staff,
including any meetings and telephone conferences, relating to the Transactions
or this Agreement.
(c) In connection with the Transactions, the Company (i) shall
promptly furnish Parent with mailing labels containing the names and addresses
of all record holders of shares of Common Stock and with security position
listings of shares of Common Stock held in stock depositories, each as of a
recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of shares of Common Stock and (ii) shall furnish Parent with
such additional information, including, without limitation, updated listings and
computer files of Stockholders, mailing labels and security position listings,
and such other assistance as Parent, the Purchaser or their agents may
reasonably request in connection with the Offer and the Merger.
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ARTICLE II
THE MERGER
Section 2.1. The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the DGCL, at the Effective Time (as
defined below) the Purchaser shall be merged with and into the Company.
Following the Merger, the separate corporate existence of the Purchaser shall
cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). At the option of Parent, and provided that such
amendment does not delay the Effective Time, the Merger may be structured so
that, and this Agreement shall thereupon be amended to provide that, the Company
shall be merged with and into the Purchaser or another direct or indirect wholly
owned subsidiary of Parent, with the Company, the Purchaser or such other
subsidiary of Parent continuing as the Surviving Corporation (as determined by
Parent); provided, however, that the Company shall be deemed not to have
breached any of its representations and warranties herein if and to the extent
such breach would have been attributable to such election. In such event, the
parties agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing and, where appropriate, to provide that the Purchaser (or
another subsidiary of Parent) shall be the Surviving Corporation.
Section 2.2. Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Sections 7.1(a) and 7.1(b)
of this Agreement, but subject to the satisfaction or waiver of the conditions
set forth in Section 7.1(c), 7.1(d) and 7.1(e) of this Agreement, the Company
shall execute, in the manner required by the DGCL and deliver to the Secretary
of State of the State of Delaware a duly executed and verified certificate of
merger, and the parties shall take such other and further actions as may be
required by law to make the Merger effective. The Merger shall be effective upon
the filing of the certificate of merger or such later time as specified in the
certificate of merger. The time the Merger becomes effective in accordance with
applicable law is referred to as the "Effective Time."
Section 2.3. Effects of the Merger. From and after the Effective
Time, the Merger shall have the effects set forth in Section 259 of the DGCL.
Section 2.4. Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Merger shall provide that at the Effective Time (i)
the Certificate of Incorporation of the Surviving Corporation as in effect
immediately prior to the Effective Time shall be amended as of the Effective
Time so as to contain the provisions and only the provisions, contained
immediately prior thereto in the Certificate of Incorporation of the Purchaser,
except for Article I thereof, which shall continue to read as follows: "The name
of the corporation is Brylane Inc. (the "Corporation")."
(b) The By-Laws of the Purchaser in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation until amended in accordance
with the provisions thereof and applicable law.
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Section 2.5. Directors. Subject to applicable law, the directors of
the Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal. Prior to the Effective Time, the directors of the
Company other than those who are directors of the Purchaser and other than Xxxxx
X. Xxxxxxx shall resign from the Board effective immediately after the Effective
Time. For purposes of the Amended and Restated Credit Agreement, dated as of
April 30, 1997, amended and restated as of September 21, 1998, as further
amended, among Brylane, L.P., the Lenders listed therein and Credit Lyonnais New
York Branch, as Administrative Agent, the directors of Purchaser have been
nominated to be directors of the Surviving Corporation by the Board.
Section 2.6. Officers. The officers of the Company immediately prior
to the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
Section 2.7. Conversion of Shares of Common Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof, each share of Common Stock issued and outstanding immediately prior to
the Effective Time (other than any shares of Common Stock held by Parent, the
Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the
treasury of the Company or by any wholly owned subsidiary of the Company, which
shares of Common Stock, by virtue of the Merger and without any action on the
part of the holder thereof, shall be cancelled and retired and shall cease to
exist with no payment being made with respect thereto and other than Dissenting
Shares (as defined below)), shall be converted into the right to receive in cash
an amount equal to the Per Share Amount (the "Merger Price"), payable to the
holder thereof, without interest thereon, upon surrender of the certificate
formerly representing such share of Common Stock.
Section 2.8. Conversion of Purchaser Common Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holder
thereof, each share of common stock of the Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
validly issued, fully paid and non-assessable share of common stock, par value
$0.01 per share, of the Surviving Corporation.
Section 2.9. Options. Prior to the Effective Time, the Board (or, if
appropriate, any Committee thereof) shall adopt appropriate resolutions and take
all other actions necessary to provide for the cancellation, effective at the
Effective Time, of all the outstanding stock options (the "Options") heretofore
granted under any stock option or similar plan of the Company (the "Stock
Plans"). Immediately prior to the Effective Time, (i) each Option, whether or
not then vested or exercisable, shall no longer be exercisable but shall entitle
each holder thereof who is an employee or director of the Company or any of its
subsidiaries at the Effective Time, in cancellation and settlement therefor, to
payments in cash (subject to any applicable withholding taxes, the "Cash
Payment"), at the Effective Time, equal to the product of (x) the total number
of shares of Common Stock subject or related to such Option, whether or not then
vested or exercisable and (y) the excess (if any) of the Merger Price over the
exercise price per share subject or related to such Option, each such Cash
Payment to be paid to each holder of an
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outstanding Option who is an employee or director of the Company or any of its
subsidiaries at the Effective Time as soon as practicable following the
Effective Time. The Stock Plans and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any subsidiary shall terminate as of the
Effective Time. The Company will take all reasonable steps to ensure that after
the Effective Time none of the Parent, the Company or any of their respective
subsidiaries is or will be bound by any Options, other options, warrants, rights
or agreements which would entitle any Person, other than Parent or its
affiliates, to own any capital stock of the Surviving Corporation or any of its
subsidiaries or to receive any payment in respect thereof or have any right
under the Stock Plans to acquire any capital stock of the Company, Parent or the
Surviving Corporation. The Company will use its reasonable best efforts to
obtain all consents, if any, that are necessary to ensure that after the
Effective Time, the only rights of the holders of Options to purchase shares of
Common Stock in respect of such Options will be to receive the Cash Payment in
cancellation and settlement thereof.
Section 2.10. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through the Board, shall, in accordance with applicable law
and the Company's Certificate of Incorporation and By-laws:
(i) duly call, give notice of, convene and hold a special
meeting of its Stockholders (the "Special Meeting") as soon as practicable
following the acceptance for payment of shares of Common Stock by the Purchaser
pursuant to the Offer for the purpose of considering and taking action upon this
Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to this Agreement, and use its reasonable best efforts (x) to obtain
and furnish the information required to be included by the SEC in the Proxy
Statement (as defined below) and, after consultation with Parent, to respond
promptly to any comments made by the SEC or its staff with respect to the
preliminary proxy statement and cause a definitive proxy statement (the "Proxy
Statement") to be mailed to its Stockholders and (y) subject to the fiduciary
duties of the Board under applicable law, to obtain the necessary approvals of
the Merger and this Agreement by its Stockholders; and
(iii) subject to the fiduciary obligations of the Board and the
Special Committee under applicable law as provided in Section 1.2(a), include
in the Proxy Statement the recommendation of the Board and the Special Committee
that Stockholders vote in favor of the approval of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of
the shares of Common Stock then owned by it, the Purchaser or any of its other
subsidiaries in favor of the approval of this Agreement.
Section 2.11. Merger Without Meeting of Stockholders. Notwithstanding
Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire,
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together with the Parent Shares, at least 90% of the outstanding shares of
Common Stock pursuant to the Offer, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the acceptance for payment of and payment for shares of
Common Stock by the Purchaser pursuant to the Offer without a meeting of
Stockholders, in accordance with Section 253 of the DGCL.
Section 2.12. Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary or
desirable to (a) 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 the Company, or (b) otherwise carry out the
provisions of this Agreement, the Company and its officers and directors shall
be deemed to have granted to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, assignments or assurances in law
and to take all acts necessary, proper or desirable to vest, perfect or confirm
title to and possession of such rights, properties or assets in the Surviving
Corporation and otherwise to carry out the provisions of this Agreement, and the
officers and directors of the Surviving Corporation are authorized in the name
of the Company or otherwise to take any and all such action.
ARTICLE III
PAYMENT FOR SHARES
Section 3.1. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Common Stock outstanding immediately prior
to the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
shares in accordance with the requirement of Section 262 of the DGCL
("Dissenting Shares"), shall not be converted into the right to receive the
Merger Price as provided in Section 2.7, unless and until such holder fails to
perfect or withdraws or otherwise loses his or her right to appraisal and
payment under the DGCL. If, after the Effective Time, any such holder fails to
perfect or withdraws or loses his or her right to appraisal, such Dissenting
Shares shall thereupon be treated as if they had been converted as of the
Effective Time into the right to receive the Merger Price to which such holder
is entitled, without interest or dividends thereon. The Company shall give
Parent prompt notice of any demands received by the Company for appraisal of
shares of Common Stock and, prior to the Effective Time, Parent shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
Section 3.2. Payment for Shares of Common Stock.
(a) From and after the Effective Time, ChaseMellon Shareholder
Services LLC, or such other bank or trust company as shall be mutually
acceptable to Parent and the Company, shall act as paying agent (the "Paying
Agent") in effecting the payment of the Merger Price in respect of certificates
(the "Certificates") that, prior to the Effective Time, represented shares of
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Common Stock entitled to payment of the Merger Price pursuant to Section 2.7. At
the Effective Time, Parent or the Purchaser shall deposit, or cause to be
deposited, in trust with the Paying Agent the aggregate Merger Price to which
holders of shares of Common Stock shall be entitled at the Effective Time
pursuant to Section 2.7.
(b) Promptly after the Effective Time, the Paying Agent shall mail
to each record holder of Certificates that immediately prior to the Effective
Time represented shares of Common Stock (other than Certificates representing
shares of Common Stock held by Parent or the Purchaser, any wholly owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly owned subsidiary of the Company and other than Certificates representing
Dissenting Shares) a form of letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Paying Agent and
instructions for use in surrendering such Certificates and receiving the Merger
Price in respect thereof. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Merger Price
multiplied by the number of shares of Common Stock formerly represented by such
Certificate, in consideration therefor, and such Certificate shall be cancelled.
Until so surrendered, each such Certificate (other than Certificates
representing shares of Common Stock held by Parent or the Purchaser, any wholly
owned subsidiary of Parent or the Purchaser, in the treasury of the Company or
by any wholly owned subsidiary of the Company and other than Certificates
representing Dissenting Shares) shall represent solely the right to receive the
aggregate Merger Price relating thereto. No interest or dividends shall be paid
or accrued on the Merger Price. If the Merger Price (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Certificate formerly representing shares of Common Stock surrendered therefor is
registered, it shall be a condition to such right to receive such Merger Price
that the Certificate so surrendered shall be properly endorsed or otherwise be
in proper form for transfer and that the person surrendering such shares of
Common Stock shall pay to the Paying Agent any transfer or other taxes required
by reason of the payment of the Merger Price to a person other than the
registered holder of the Certificate surrendered, or shall establish to the
satisfaction of the Paying Agent that such tax has been paid or is not
applicable.
(c) Promptly following the date which is 180 days after the Effective Time
(or such later date as the Surviving Corporation shall request), the Paying
Agent shall deliver to the Surviving Corporation all cash, Certificates and
other documents in its possession relating to the Transactions, and the Paying
Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a share of Common Stock may surrender such Certificate to
the Surviving Corporation and (subject to applicable abandoned property, escheat
and similar laws) receive in consideration therefor the aggregate Merger Price
relating thereto, without any interest or dividends thereon.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any shares of Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing shares of Common Stock are
presented to the Surviving Corporation or the Paying Agent, they shall be
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surrendered and cancelled in return for the payment of the aggregate Merger
Price relating thereto, as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser that:
Section 4.1. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries is a
corporation or partnership duly organized, validly existing and in good standing
(where applicable) under the laws of the jurisdiction of its incorporation or
formation. The Company and each of its subsidiaries has the requisite corporate
or partnership power and authority to own, operate or lease its properties and
to carry on its business as it is now being conducted, and is duly qualified or
licensed to do business, and is in good standing (where applicable), in each
jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
(where applicable) necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company. The term "Material Adverse Effect on the
Company", as used in this Agreement, means any change in or effect on the
business, assets, liabilities, financial condition, results of operation or
prospects of the Company or any of its subsidiaries that is materially adverse
to the Company and its subsidiaries taken as a whole.
Section 4.2. Certificate of Incorporation and By-Laws. The Company
has heretofore made available to Parent and the Purchaser a complete and correct
copy of the certificate of incorporation and the by-laws or comparable
organizational documents, each as amended to the date hereof, of the Company and
each of its subsidiaries.
Section 4.3. Capitalization; Subsidiaries. The authorized capital
stock of the Company consists of 40,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"). As
of the close of business on February 27, 1999, 17,248,296 shares of Common Stock
were issued and outstanding, all of which are entitled to vote on this
Agreement, and 3,740,800 shares of Common Stock were held in treasury. 500,000
shares of Series A Convertible Preferred Stock ("Series A Preferred Stock") are
authorized. No shares of Series A Preferred Stock are issued and outstanding.
The Company has no shares reserved for issuance, except that, as of March 8,
1999, there were (i) 788,182 shares of Common Stock reserved for issuance
pursuant to outstanding Options granted under the 1996 Stock Option Plan and
765,309 available for issuance pursuant to Options not yet granted under such
Plan; (ii) 47,550 shares of Common Stock reserved for issuance pursuant to
outstanding Options granted under the 1996 Performance Stock Option Plan and
160,000 available for issuance pursuant to Options not yet granted under such
Plan and (iii) no shares of
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Common Stock reserved for issuance pursuant to outstanding Options granted
under the 1998 Performance Stock Option Plan and 900,000 available for issuance
pursuant to Options not yet granted under such Plan. As of March 8, 1999, the
Company has options to purchase shares of Common Stock outstanding and issued as
listed in the aggregate (including exercise price) in Section 4.3 of the
disclosure schedule delivered to Parent by the Company on the date hereof (the
"Company Disclosure Schedule"). Promptly following the date hereof, the Company
shall deliver to Parent the information set forth in Section 4.3 of the Company
Disclosure Schedule pursuant to the immediately preceding sentence listed by
individual. Since June 12, 1998, the Company has not issued any shares of
capital stock except pursuant to the exercise of Options outstanding as of such
date. All the outstanding shares of Common Stock are, and all shares of Common
Stock which may be issued pursuant to the exercise of outstanding Options will
be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and nonassessable and are not subject to,
nor were they issued in violation of, any pre-emptive rights. There are no
bonds, debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its subsidiaries issued and outstanding. Except as set forth above and
except for the Transactions, there are no existing options, warrants, calls,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company or
any of its subsidiaries, obligating the Company or any of its subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Company or any
of its subsidiaries or securities convertible into or exchangeable for such
shares or equity interests and neither the Company nor any of its subsidiaries
is obligated to grant, extend or enter into any such option, warrant, call,
subscription or other right, agreement, arrangement or commitment. Except as
contemplated by this Agreement and except for the Company's obligations in
respect of the Options under the Stock Plans, there are no outstanding
contractual obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of Common Stock or the capital stock or
other equity interests of the Company or any of its subsidiaries. Each of the
outstanding shares of capital stock or other equity interests of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid, and to
the extent applicable, nonassessable, and, except as set forth in Section 4.3 of
the Company Disclosure Schedule, such shares or other equity interests of the
Company's subsidiaries as are owned by the Company or by a subsidiary of the
Company are owned in each case free and clear of any lien, claim, option,
charge, security interest, limitation, encumbrance and restriction of any kind
(any of the foregoing being a "Lien"). Except as set forth in Section 4.3 of the
Company Disclosure Schedule, the Company has not agreed to register any
securities under the Securities Act of 1933, as amended (the "Securities Act"),
or under any state securities law or granted registration rights to any person
or entity; copies of any registration rights agreements set forth in Section 4.3
of the Company Disclosure Schedule have previously been provided to Parent. Set
forth in Section 4.3 of the Company Disclosure Schedule is a complete and
correct list of each subsidiary (direct or indirect) of the Company and any
joint ventures, partnerships or similar arrangements in which the Company has an
interest (and the amount and percentage of any such interest). No entity in
which the Company owns, directly or indirectly, less than a 50% equity interest
is, individually or when taken together with all such other entities, material
to the business of the Company and its subsidiaries taken as a whole.
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Section 4.4. Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the Transactions. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the Transactions have been
duly and validly authorized and approved by the Board and the Special Committee
and no other corporate proceedings on the part of the Company are necessary to
authorize or approve this Agreement or to consummate the Transactions (other
than, with respect to the Merger, the approval of this Agreement by the
affirmative vote of the holders of a majority of the then outstanding shares of
Common Stock entitled to vote thereon, to the extent required by applicable
law). This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due and valid authorization, execution and delivery of
this Agreement by Parent and the Purchaser, constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
Section 4.5. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), are made and the
waiting periods thereunder have been terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable state securities, "blue sky"
or takeover law are met, (iii) the filing of the certificate of merger and other
appropriate merger documents, if any, as required by the DGCL, is made and (iv)
approval of this agreement by a majority of the holders of shares of Common
Stock, if required by the DGCL, is received, none of the execution and delivery
of this Agreement by the Company, the consummation by the Company of the
Transactions or compliance by the Company with any of the provisions hereof will
(a) conflict with or violate the Certificate of Incorporation or By-Laws of the
Company or the comparable organizational documents of any of its subsidiaries,
(b) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to the Company or any of its subsidiaries, or by
which any of them or any of their respective properties or assets may be bound
or affected, or (c) result in a violation or breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any material benefit, or the creation
of any Lien on any of the property or assets of the Company or any of its
subsidiaries (any of the foregoing referred to in clause (b) or this clause (c)
being a "Violation") pursuant to, any note, bond, mortgage, indenture, contract,
agreement, arrangement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties may be bound or affected, except in the case of the foregoing clauses
(b) or (c) for any such Violations which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, or could not, individually or in the aggregate, reasonably be expected
to prevent or materially delay consummation of the Transactions. Section 4.5 of
the Company Disclosure Schedule sets forth any such Violation of clause (c) of
the immediately preceding sentence.
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(b) None of the execution and delivery of this Agreement by the
Company, the consummation by the Company of the Transactions or compliance by
the Company with any of the provisions hereof will require any consent, waiver,
approval, authorization or permit of, or registration or filing with or
notification to (any of the foregoing being a "Consent"), any federal, state,
local or foreign administrative, governmental or regulatory authority, agency,
commission, tribunal or body (a "Governmental Entity"), except for (i)
compliance with any applicable requirements of the Exchange Act, (ii) the filing
of the certificate of merger pursuant to the DGCL, (iii) compliance with the HSR
Act and any requirements of any foreign or supranational antitrust, competition,
trade regulatory or similar laws, rules or regulations ("Antitrust Laws") and
(iv) Consents the failure of which to obtain or make could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company or reasonably be expected to prevent or materially delay
consummation of the Transactions.
Section 4.6. SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports,
schedules, registration statements and definitive proxy statements required to
be filed by the Company with the SEC since February 26, 1997 (as they have been
amended since the time of their filing, collectively, the "SEC Reports"). As of
their respective dates, the SEC Reports (including but not limited to any
financial statements or schedules included or incorporated by reference therein)
complied in all material respects with the requirements of the Exchange Act and
the Securities Act, and the rules and regulations of the SEC promulgated
thereunder applicable, as the case may be, to such SEC Reports, and none of the
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(b) The financial statements of the Company included in the SEC
Reports at the time filed (and, in the case of registration statements and proxy
statements, on the dates of effectiveness and the dates of mailing,
respectively, and, in the case of any SEC Report amended or superseded by a
filing prior to the date of this Agreement, then on the date of such amending or
superseding filing) complied as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, were prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
present (subject, in the case of unaudited statements, to normal, recurring
audit adjustments) the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. No subsidiary of
the Company is subject to the periodic reporting requirements of the Exchange
Act or required to file any form, report or other document with the SEC, the
NYSE, any other stock exchange or any other comparable Governmental Authority.
(c) Except as reflected, reserved against or otherwise disclosed in
the financial statements of the Company included in the SEC Reports or as
otherwise disclosed in the SEC Reports, in each case, filed prior to the date of
this Agreement or as set forth in Section 4.6(c) of
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the Company Disclosure Schedule, as of the date hereof, neither the Company nor
any of its subsidiaries have any liabilities or obligations (absolute, accrued,
fixed, contingent or otherwise) which would be required to be reflected on a
balance sheet or the notes thereto prepared in accordance with GAAP, other than
liabilities incurred in the ordinary course of business consistent with past
practice since January 30, 1999 which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(d) Since January 30, 1999, (i) no development or event has occurred
that has, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or on the ability of the
Company to consummate the Transactions, (ii) the Company and each of its
subsidiaries has conducted its respective operations in the ordinary and usual
course of business consistent with past practice and (iii) neither the Company
nor any of its subsidiaries has taken any action or omitted to take any action,
which act or omission, if after the date of this Agreement, would result in a
breach or violation of Section 6.1.
(e) The Company has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications which have not yet been filed
with the SEC to agreements, documents or other instruments which previously had
been filed by the Company with the SEC pursuant to the Securities Act and the
rules and regulations promulgated thereunder or the Exchange Act and the rules
and regulations promulgated thereunder.
Section 4.7. Employee Benefit Matters.
(a) Section 4.7 of the Company Disclosure Schedule lists all material
compensation and benefit plans, contracts and arrangements maintained by,
sponsored or participated in by the Company and its subsidiaries in which any
current or former employees or directors of the Company or its subsidiaries
participate (the "Employee Benefit Plans").
(b) Except as could not, individually or in the aggregate, reasonably be
expected, to have a Material Adverse Effect on the Company (i) all Employee
Benefit Plans are in compliance with and have been administered in compliance
with all applicable requirements of law, including, but not limited to, the
Internal Revenue Code of 1986, as amended (the "Code"), and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and have been
operated in accordance with their terms, and all contributions required to be
made to each such plan under the terms of such plan, ERISA or the Code for any
period through the date hereof have been timely paid or made in full and through
the Effective Time will be timely paid or made in full; (ii) no "prohibited
transaction" (as defined in Section 4975 of the Code) has occurred with respect
to any Employee Benefit Plan which would reasonably be expected to subject any
Employee Benefit Plan (or its related trust), the Company or any subsidiary, to
a tax or penalty imposed under Section 4975 of the Code; (iii) the Company has
not incurred any material liability under Title IV of ERISA which has not been
satisfied in full, no event has occurred and no condition exists that would
reasonably be expected to result in the Company incurring a material liability
under Title IV of ERISA, and no Employee Benefit Plan has incurred an
"accumulated funding deficiency" as defined in Section 412 of the Code or
Section 302 of ERISA; (iv) none of the Company, its subsidiaries or any entity,
trade or business that is
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considered one employer with the Company or any of its subsidiaries under
Section 4001(a)(14) of ERISA or Section 414(b) or (c) of the Code (an "ERISA
Affiliate") is required to contribute to, or during the five-year period ending
on the Effective Time will have been required to contribute to, any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA); (v) each
Employee Benefit Plan which is not maintained in the United States is funded
and/or book reserved for in accordance with applicable laws and reasonable
accounting assumptions; (vi) there is no pending or, to the knowledge of the
Company, threatened legal action, suit or claim relating to any current or
former employee of the Company or its subsidiaries or any Employee Benefit Plan.
(c) The Transactions will not constitute a "change of control"
under, require the consent from or the giving of notice to a third party
pursuant to, or accelerate vesting or repurchase rights under the terms,
conditions or provisions of any employment, compensation, termination or
severance agreement of the Company or any of its subsidiaries. Neither the
Company nor any of its subsidiaries is a party to any agreement, contract or
arrangement that could result, on account of the Transactions (including upon
any subsequent termination of employment) in the payment of any excess parachute
payments within the meaning of Section 280G of the Code or any payment that
would be nondeductible under Section 162(m) of the Code. No such agreement,
contract or arrangement provides for the reimbursement of excise taxes under
Section 1999 of the code or any income taxes under the Code. The total amounts
payable to the executive officers of the Company, as set forth in Section 4.7 of
the Company Disclosure Schedule, as a result of the Transactions contemplated by
this Agreement and/or any subsequent employment termination (excluding any
cash-out or acceleration of options and restricted stock but including any
"gross-up" payments with respect thereto), based on compensation data applicable
as of the date hereof, calculated assuming effective tax rates of 39.6%, will
not exceed the amount set forth on such schedule.
Section 4.8. Litigation. Except as specifically disclosed in the SEC
Reports filed prior to the date of this Agreement, there is no suit, claim,
action, proceeding or investigation pending or, to the knowledge of the Company,
threatened, against the Company or any of its subsidiaries before any
Governmental Entity which could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Transactions. Except as specifically
disclosed in the SEC Reports filed prior to the date of this Agreement, neither
the Company nor any of its subsidiaries is subject to any outstanding order,
writ, injunction or decree which could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Transactions.
Section 4.9. Information. None of the information supplied by the
Company in writing specifically for inclusion or incorporation by reference in
(i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document to
be filed with the SEC or any other Governmental Entity prior to the Effective
Time (the "Other Filings") will, at the respective times filed with the SEC or
other Governmental Entity and, in addition, in the case of the Proxy Statement,
at the date it or any amendment or supplement is mailed to the Stockholders, at
the time of the Special Meeting and at the Effective Time, contain any untrue
statement of a material
-15-
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 were made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder, except that no
representation is made by the Company with respect to statements made therein
based on information supplied by Parent or the Purchaser in writing specifically
for inclusion in the Proxy Statement.
Section 4.10. Taxes.
(a) Except as set forth in Disclosure Schedule 4.10(a) and except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company: (i) all Tax Returns required to be filed
(taking into account extensions) on or before the Effective Time for taxable
periods ending on or before the Effective Time by, or with respect to any
activities of, or property owned by, the Company, its subsidiaries, or each
affiliated, consolidated, combined or unitary group that included or includes
the Company or any of its subsidiaries (a "Tax Group"), have been or will be
filed in accordance with all applicable laws and are true, correct and complete
in all material respects as filed, all Taxes shown as due on such Tax Returns
have been or will be timely paid, and reserves reflected on the most recent
balance sheet of the Company are in accordance with GAAP and are sufficient to
cover all Taxes (whether or not shown as due on any Tax Return) accrued as of
such date and, adjusted for the passage of time, will be sufficient to cover all
Taxes as of the Effective Time; (ii) all Taxes required to be withheld by the
Company or its subsidiaries have been withheld, and such withheld Taxes have
either been duly and timely paid to the proper Governmental Entities or set
aside in accounts for such purpose if not yet due; (iii) no Tax Return filed by
the Company or any of its subsidiaries is currently under audit by any Taxing
Authority or is the subject of any judicial or administrative proceeding, and to
the knowledge of the Company no Taxing Authority is threatening to commence any
such audit; (iv) no Taxing Authority is now asserting against the Company or any
of its subsidiaries any deficiency or claim for Taxes or any adjustment of
Taxes; (v) other than any Tax sharing or indemnification agreement to which the
parties are exclusively the Company and/or some or all of its subsidiaries,
neither the Company nor any of its subsidiaries is subject to or bound by any
Tax sharing agreement (or other arrangement or practice for the sharing of
Taxes); (vi) neither the Company nor any of its subsidiaries has ever been a
member of a Tax Group, other than one for which the Company or one of its
subsidiaries was the common parent; (vii) there are no liens for Taxes (other
than Taxes not yet due) upon any of the assets of the Company or any of its
subsidiaries; (viii) the Company has no liability for the Taxes of any person
other than the Company and its subsidiaries; and (ix) neither the Company nor
any of its subsidiaries has been a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(b) Prior to the date hereof, the Company has provided Parent with
written schedules of (i) the taxable years of the Company for which the statute
of limitations with respect to federal, state and local income Taxes has not yet
expired, and (ii) with respect to federal, state and local income Taxes, those
years for which examinations by a Taxing Authority have been
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completed, those years for which examinations by a Taxing Authority have
commenced but not yet been completed, and those years for which examinations by
a Taxing Authority have not yet commenced.
(c) "Tax" or "Taxes" means any and all taxes, fees, assessments,
levies, duties, tariffs, imposts, and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any Taxing Authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, assets, sales, use, capital
stock, payroll, employment, social security, workers' compensation, unemployment
compensation, severance, occupation, or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, estimated, value
added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges. "Taxing Authority" means any
Governmental Entity having jurisdiction over the assessment, determination,
collection or other imposition of any Tax. "Tax Return" means any return,
declaration, report, claim for refund, information statement, schedule or other
document (including any related or supporting information and including any Form
1099 or other document or report required to be provided by the Company or any
of its subsidiaries to third parties) relating to Taxes, including any document
required to be retained or provided to any Governmental Entity relating to the
Company or any of its subsidiaries or any consolidated group of which any such
entity was a member at the applicable time, and any amended Tax Returns.
Section 4.11. Intellectual Property. The Company owns, or possesses
adequate rights to use, all Intellectual Property that is used in the conduct of
the business of the Company and its subsidiaries, except as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company has not received any notice of any
conflict with or violation or infringement of, any asserted rights of any other
person with respect to any Intellectual Property owned or licensed by the
Company or any of its subsidiaries, which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. To the knowledge of the Company, the conduct of the Company's and its
subsidiaries' respective businesses as currently conducted does not conflict
with any patents, patent rights, licenses, trademarks, trademark rights, trade
names, trade name rights or copyrights of others, or any other rights with
respect to Intellectual Property, in any way that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. There is no infringement of any proprietary right owned by or licensed
by or to the Company or any of its subsidiaries that could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. "Intellectual Property" means all domestic or foreign trademarks
(registered and unregistered) and trademark applications and registrations,
patents, patent applications, inventions (whether or not patentable), processes,
products, technologies, discoveries, copyrightable and copyrighted works,
apparatus, trade secrets, brand names, certification marks, service marks and
service xxxx applications and registrations, trade names, trade dress, copyright
registrations, design rights, mask works, technical information (whether
confidential or otherwise), and all documentation thereof.
-17-
Section 4.12. Year 2000 Compliance. The Company has taken steps that are
reasonable to provide that the occurrence of the year 2000 will not materially
and adversely affect the information and business systems of the Company or its
subsidiaries, and it is the Company's reasonable expectation that no material
expenditures in excess of currently budgeted items will be required in order to
cause such systems to operate properly following the change of the year 1999 to
2000.
Section 4.13. Certain Approvals. The Board has taken appropriate
action such that the provisions of Section 203 of the DGCL will not apply to the
execution of this Agreement or any of the Transactions. No other state takeover
law or state law that purports to limit or restrict business combinations or the
ability to vote shares applies to the execution of this Agreement or any of the
Transactions contemplated hereby.
Section 4.14. Brokers. Except for the engagement of the Financial
Advisor, none of the Company, any of its subsidiaries, or any of their
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the Transactions. The Company has previously delivered to Parent
a copy of the Company's engagement letter with the Financial Advisor.
Section 4.15. Opinion of Financial Advisor. The Company has received
the written opinion of the Financial Advisor, to the effect that, as of the date
of such opinion, the consideration to be received in the Offer and the Merger by
the Stockholders is fair to the Stockholders (other than Parent and the
Purchaser) from a financial point of view. The Company has previously delivered
to Parent a copy of such opinion.
Section 4.16. Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote with respect
to this Agreement is the only vote of the holders of any class or series of the
Company's capital stock that may be necessary to approve this Agreement and the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as follows:
Section 5.1. Organization and Qualification. Parent is a societe
anonyme duly organized, validly existing and in good standing under the laws of
the Republic of France. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Parent and the Purchaser has the requisite corporate power and authority to own,
operate or lease its properties and to carry on its business as it is now being
conducted, and is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
could not,
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individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent. The term "Material Adverse Effect on Parent", as used
in this Agreement, means any change in or effect on the business, assets,
liabilities, financial condition, results of operation or prospects of Parent or
any of its subsidiaries that would be materially adverse to Parent and its
subsidiaries taken as a whole.
Section 5.2. Authority Relative to this Agreement. Each of Parent
and the Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution and
delivery of this Agreement by Parent and the Purchaser and the consummation by
Parent and the Purchaser of the Transactions have been duly and validly
authorized and approved by the Supervisory Board of Parent and the Board of
Directors of the Purchaser and by Parent as sole stockholder of the Purchaser
and no other corporate proceedings on the part of Parent or the Purchaser are
necessary to authorize or approve this Agreement or to consummate the
Transactions. This Agreement has been duly executed and delivered by each of
Parent and the Purchaser and, assuming the due and valid authorization,
execution and delivery by the Company, constitutes a valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms.
Section 5.3. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the HSR Act are made and
the waiting periods thereunder have been terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable state securities, "blue sky"
or takeover law are met and (iii) the filing of the certificate of merger and
other appropriate merger documents, if any, as required by the DGCL is made,
none of the execution and delivery of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the Transactions or compliance by
Parent or the Purchaser with any of the provisions hereof will (i) conflict with
or violate the organizational documents of Parent or the Purchaser, (ii)
conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to Parent or the Purchaser, or by which any of
them or any of their respective properties or assets may be bound or affected,
or (iii) result in a Violation pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or the Purchaser is a party or by which any of their
respective properties or assets may be bound or affected, except in the case of
the foregoing clauses (ii) and (iii) for any such Violations which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent or could not, individually or in the aggregate,
reasonably be expected to prevent or materially delay consummation of the
Transactions.
(b) None of the execution and delivery of this Agreement by Parent
and the Purchaser, the consummation by Parent and the Purchaser of the
Transactions or compliance by Parent and the Purchaser with any of the
provisions hereof will require any Consent of any Governmental Entity, except
for (i) compliance with any applicable requirements of the Exchange Act and any
state securities "blue sky" or takeover law, (ii) the filing of the certificate
of merger pursuant to the GCL, (iii) compliance with the HSR Act and any
requirements of any
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foreign or supranational Antitrust Laws and (iv) Consents the failure of which
to obtain or make could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent or materially adversely
affect the ability of Parent or reasonably be expected to prevent or materially
delay consummation of the Transactions.
Section 5.4. Information. None of the information supplied or to be
supplied by Parent and the Purchaser in writing specifically for inclusion in
(i) the Schedule 14D-9, (ii) the Proxy Statement or (iii) the Other Filings
will, at the respective times filed with the SEC or such other Governmental
Entity and, in addition, in the case of the Proxy Statement, at the date it or
any amendment or supplement is mailed to the Stockholders, at the time of the
Special Meeting and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Section 5.5. Financing. At the Effective Time, Parent and the Purchaser
will have available all of the funds necessary to consummate the Transactions.
ARTICLE VI
COVENANTS
Section 6.1. Conduct of Business of the Company. Except as
permitted, required or specifically contemplated by, or otherwise described in,
this Agreement or otherwise with the prior written consent of Parent, during the
period from the date of this Agreement to the Effective Time, the Company will,
and will cause each of its subsidiaries to, conduct its operations only in the
ordinary and usual course of business consistent with past practice and will use
its reasonable best efforts, and will cause each of its subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of its subsidiaries, to keep available the services of its and
their present officers and key employees, and to preserve the good will of those
having business relationships with it, including, without limitation,
maintaining satisfactory relationships with licensors, suppliers, distributors,
customers and others having business relationships with the Company. Without
limiting the generality of the foregoing, and except as otherwise expressly
permitted, required or specifically contemplated by, or otherwise described in,
this Agreement, the Company will not, and will not permit any of its
subsidiaries to, prior to the Effective Time, without the prior written consent
of Parent:
(a) adopt or propose any amendment to its Certificate of Incorporation or
By-Laws or comparable organizational documents;
(b) (i) issue, reissue, pledge or sell, or authorize the issuance,
reissuance, pledge or sale of (A) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any rights,
warrants or options to acquire any convertible securities or capital stock,
other than the issuance of shares of Common Stock, in accordance with the terms
of the instruments governing such issuance on the date hereof, pursuant to the
exercise of Options outstanding on the date hereof or (B) any other securities
in respect of, in lieu of, or in
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substitution for, shares of its capital stock outstanding on the date hereof or
(ii) make any other changes in its capital structure;
(c) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in respect
of any class or series of its capital stock other than between any of the
Company and any of its wholly owned subsidiaries;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities or create any
subsidiaries;
(e) (i) incur, assume or pre-pay any long-term debt or incur or assume any
short-term debt, except that the Company and its subsidiaries may incur or
pre-pay debt in the ordinary course of business in amounts and for purposes
consistent with past practice, (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person except in the ordinary course of business
consistent with past practice, or (iii) make any loans, advances or capital
contributions to, or investments in, any other person except in the ordinary
course of business consistent with past practice and except for loans, advances
or capital contributions between any wholly owned subsidiary of the Company and
the Company or another wholly owned subsidiary of the Company;
(f) other than in the ordinary course of business, (i) modify, amend
or terminate any material contract, (ii) except as required by law, waive,
release, relinquish, settle, compromise or assign any material contract (or any
of the Company's rights thereunder), right or claim, or (iii) cancel or forgive
any indebtedness owed to the Company or any of its subsidiaries except in the
ordinary course of business consistent with past practice;
(g) file any Tax Return (except in the ordinary course of business), or
make or revoke any Tax election, or change any method of accounting, except to
the extent that such action would not have a Material Adverse Effect on the
Company;
(h) other than in the ordinary course of business, enter into any
contract or agreement that would be material to the Company and its subsidiaries
taken as a whole;
(i) except as may be required as a result of a change in applicable
law or in GAAP, make any change in its methods or principles of accounting; or
(j) agree in writing or otherwise to take any of the foregoing
actions prohibited under this Section 6.1 or any action which would cause any
representation or warranty in this Agreement to be or become untrue or incorrect
in any material respect.
Section 6.2. Access to Information. (a) From the date of this
Agreement until the Effective Time, the Company will, and will cause its
subsidiaries, and each of their respective officers, directors, employees,
counsel, advisors and representatives (collectively, the "Company
Representatives") to, give Parent and the Purchaser and their respective
officers, employees,
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counsel, advisors and representatives (collectively, the "Parent
Representatives") reasonable access, during normal business hours, to the
offices and other facilities and to the books and records of the Company and its
subsidiaries and will cause the Company Representatives and the Company's
subsidiaries to furnish Parent, the Purchaser and the Parent Representatives to
the extent available with such financial and operating data and such other
information with respect to the business and operations of the Company and its
subsidiaries as Parent and the Purchaser may from time to time reasonably
request. The Company shall furnish to Parent and the Purchaser prior to filing a
copy of each report, schedule, registration statement and other document to be
filed by it or its subsidiaries during such period pursuant to the requirements
of federal or state securities laws.
(b) No investigation pursuant to this Section 6.2 shall affect any
representation or warranty in this Agreement of the Company or any condition to
the obligations of the parties hereto.
Section 6.3. Reasonable Best Efforts.
(a) Subject to the terms and conditions provided herein, each of the
Company, Parent and the Purchaser shall, and the Company shall cause each of its
subsidiaries to, cooperate and use their respective reasonable best efforts to
take, or cause to be made, all filings necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to
cooperation in the preparation and filing of the Offer Documents, the Schedule
14D-9, the Proxy Statement, any required filings under the HSR Act, or other
foreign filings and any amendments to any thereof.
(b) In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or the Purchaser or any of
their respective subsidiaries should be discovered by the Company or Parent, as
the case may be, which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance.
(c) Each of the parties will use its reasonable best efforts to
obtain as promptly as practicable all Consents of any Governmental Entity or any
other person required in connection with, and waivers of any Violations that may
be caused by, the consummation of the transactions contemplated by the Offer and
this Agreement.
Section 6.4. Public Announcements. The Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree to consult promptly with each
other prior to issuing any press release or otherwise making any public
statement with respect to the Offer, the Merger and the other Transactions,
agree to provide to the other party for review a copy of any such press release
or statement, and shall not issue any such press release or make any such public
statement prior to such consultation and review, unless required by applicable
law or any listing agreement with a securities exchange.
Section 6.5. Indemnification.
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(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation to indemnify and hold harmless the officers and directors
of the Company (the "Indemnified Parties") in respect of acts or omissions
occurring prior to the Effective Time to the extent currently provided under the
Company's Certificate of Incorporation, By-Laws or indemnification agreements in
effect as of the date of this Agreement.
(b) Parent agrees that the Company, and from and after the Effective
Time, the Surviving Corporation shall cause to be maintained in effect for not
less than six years (except as provided in the last sentence of this Section
6.5(b)) from the Effective Time the current policies of the directors' and
officers' liability insurance maintained by the Company; provided, that the
Surviving Corporation may substitute therefor other policies not less
advantageous in the aggregate (other than to a de minimis extent) to the
beneficiaries of the current policies and provided that such substitution shall
not result in any gaps or lapses in coverage with respect to matters occurring
prior to the Effective Time; and provided, further, that the Surviving
Corporation shall not be required to pay an annual premium in excess of 150% of
the last annual premium paid by the Company prior to the date hereof (which the
Company represents to be $694,175 for the 36-month period ending July 10, 2001)
and if the Surviving Corporation is unable to obtain the insurance required by
this Section 6.5(b) it shall obtain the greatest comparable insurance coverage
as possible for an annual premium equal to such maximum amount. Notwithstanding
the foregoing, at any time on or after the second anniversary of the Effective
Time, Parent may, at its election, undertake to provide funds to the Surviving
Corporation to the extent necessary so that the Surviving Corporation may
self-insure with respect to the level of insurance coverage required under this
Section 6.5(b) in lieu of causing to remain in effect any directors' and
officers' liability insurance policy.
(c) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section, upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify Parent thereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) Parent or the Surviving Corporation shall have
the right, from and after the purchase of shares of Common Stock pursuant to the
Offer, to assume the defense thereof if the relief sought therein is solely
monetary and Parent shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof (provided, that
if a conflict exists between Parent and the Indemnified Parties, the Indemnified
Parties may engage one separate counsel the reasonable expenses of such counsel
to be borne by Parent), (ii) the Indemnified Parties will cooperate in the
defense of any such matter and (iii) Parent shall not be liable for any
settlement effected without its prior written consent; and provided, further,
that Parent shall not have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall ultimately determine, and
such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
Section 6.6. Notification of Certain Matters. Parent and the Company
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (i) to cause any representation
or warranty contained in this Agreement to be
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untrue or inaccurate in any material respect at any time from the date hereof to
the Effective Time or (ii) to cause any material covenant, condition or
agreement under this Agreement not to be complied with or satisfied in all
material respects and (b) any failure of the Company, Parent, or the Purchaser,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder in any material
respect; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of the Company, Parent and the Purchaser shall give
prompt notice to the other parties hereof of any notice or other communication
from any third party alleging that the consent of such third party is or may be
required in connection with the Transactions.
Section 6.7. State Takeover Laws. The Company shall, upon the
request of the Purchaser, take all reasonable steps to assist in any challenge
by the Purchaser to the validity or applicability to the Transactions, including
the Offer and the Merger, of any state takeover law or other similar law.
Section 6.8. Acquisition Transactions. From and after the execution
of this Agreement, the Company shall promptly advise Parent in reasonable detail
of the receipt, directly or indirectly, of any inquiries, discussions,
negotiations or proposals relating to a merger, liquidation, recapitalization,
consolidation or other business combination involving the Company or its
subsidiaries or acquisition of any capital stock or any material portion of the
assets of the Company or its subsidiaries, or any combination of the foregoing
(an "Acquisition Transaction"), including without limitation identifying the
offeror and the terms of any proposal relating to an Acquisition Transaction.
The Company shall promptly advise Parent of any material development relating to
such proposal, including the results of any discussions or negotiations with
respect thereto. The Company shall not provide any non-public information to any
third party (other than Parent, the Purchaser or any of their respective
affiliates or advisors) without having entered into a customary confidentiality
agreement with respect to such information.
Section 6.9. Management. Parent has no present intention to change
senior management of the Company or the terms of their employment following
consummation of the Transactions. Parent intends to work with senior management
of the Company to develop appropriate incentives for management of the Company
following consummation of the Transactions. Nothing contained herein shall be
deemed to constitute a contract to employ any person for any specific period of
time or to provide for any terms of employment beyond current contractual
arrangements.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1. Conditions. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
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(a) Stockholder Approval. The Stockholders shall have duly approved the
Transactions, if required by the DGCL.
(b) Purchase of Common Stock. The Purchaser shall have accepted for
payment and paid for shares of Common Stock pursuant to the Offer in accordance
with the terms thereof; provided that this condition shall be deemed to have
been satisfied with respect to Parent and the Purchaser if the Purchaser fails
to accept for payment or pay for shares of Common Stock pursuant to the Offer in
violation of the terms of the Offer.
(c) Injunctions; Illegality. The consummation of the Merger shall
not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger or the other transactions contemplated
hereby or has the effect of making the purchase of shares of Common Stock
illegal.
(d) Litigation. There shall not be pending any claim, action, suit,
hearing, or proceeding ("Action") challenging or seeking to restrain or prohibit
the consummation of the Transactions, or any other Action filed against the
Company or any of its subsidiaries after the date of this Agreement that, if
adversely determined, could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or on the consummation
of the Transactions.
(e) HSR Act. Any waiting period (and any extension thereof) under
the HSR Act applicable to the Merger shall have expired or terminated and any
other approvals or requirements under any other Antitrust Laws shall have been
obtained or complied with.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
Section 8.1. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the shareholders of the Company (with
any termination by Parent also being an effective termination by the Purchaser):
(a) by the mutual written consent of Parent and the Company, by
action of the Supervisory Board (with respect to Parent) and of the Special
Committee (with respect to the Company);
(b) by the Company if (i) the Purchaser fails to commence the Offer
as provided in Section 1.1 hereof, (ii) the Purchaser shall not have accepted
for payment and paid for shares of Common Stock pursuant to the Offer in
accordance with the terms thereof on or before June 30, 1999 (provided, that if
any Governmental Entity has made a request for additional information under the
HSR Act, such date shall be extended to a date which is 60 days after
substantial compliance with such request, but in no event later than September
30, 1999) or (iii) the
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Purchaser fails to purchase validly tendered shares of Common Stock in violation
of applicable law;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any shares of Common Stock being purchased
thereunder; provided, however, that neither Parent nor the Company may terminate
this Agreement pursuant to this Section 8.1(c) if such party shall have breached
this Agreement in any material respect or, in the case of Parent, if it or the
Purchaser is in material violation of the terms of the Offer;
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, shares of Common Stock pursuant to the Offer or the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable;
(e) by the Company if, prior to the purchase of shares of Common
Stock pursuant to the Offer in accordance with the terms of this Agreement, the
Special Committee approves or recommends another offer or an agreement to effect
a proposal made by a third party (other than an affiliate of Parent) to effect
an Acquisition Transaction, on terms which a majority of the members of the
Special Committee has determined in good faith (i) based upon the advice of a
nationally recognized investment banker, to be more favorable to the Company and
its Stockholders (other than Parent and the Purchaser) than the Transactions and
(ii) based upon the advice from its outside counsel, that failure to approve
such proposal and terminate this Agreement would constitute a breach of
fiduciary duties of the Board under applicable law;
(f) by Parent prior to the purchase of shares of Common Stock
pursuant to the Offer if the Special Committee (i) shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner adverse to
the Purchaser its approval or recommendation of the Offer, this Agreement or the
Merger, (ii) shall have approved or recommended another offer or an agreement to
effect a proposal made by a third party (other than an affiliate of Parent) to
effect an Acquisition Transaction or (iii) shall have resolved to effect any of
the foregoing;
(g) by the Company prior to the consummation of the Offer, if (i)
(A) any of the representations and warranties of Parent or the Purchaser
contained in this Agreement and qualified as to materiality were when made or
have since become untrue or incorrect or (B) any other representations or
warranties of Parent or the Purchaser contained in this Agreement were when made
or have become untrue or incorrect and such breach could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on Parent or
on the ability of Parent or the Purchaser to consummate the Offer and the
Merger, or (ii) Parent or the Purchaser shall have breached or failed to comply
in any material respect with any of their respective agreements or obligations
under this Agreement, which breach shall not have been cured prior to the
earlier of (X) 10 days following notice of such breach and (Y) two business days
prior to the date on which the Offer expires;
(h) by Parent prior to the purchase of shares of Common Stock
pursuant to the Offer, if (i) (A) any of the representations or warranties of
the Company (1) contained in this
-26-
Agreement and qualified as to materiality or (2) contained in Section 4.3 were
when made or have since become untrue or incorrect or (B) any other
representations or warranties of the Company contained in this Agreement (other
than the representations and warranties set forth in Section 4.3) were when made
or have become untrue or incorrect and such breach could reasonably be expected,
individually or in the aggregate, to have Material Adverse Effect on the Company
or which could reasonably be expected, individually or in the aggregate, to
prevent or materially delay the consummation of the Offer or (ii) the Company
shall have breached or failed to comply in any material respect with any of its
agreements or obligations under this Agreement, which breach shall not have been
cured prior the earlier of (X) 10 days following notice of such breach and (Y)
two business days prior to the date on which the Offer expires; or
(i) by Parent prior to the purchase of Shares pursuant to the Offer, if the
Minimum Condition shall not have been satisfied by the expiration date of the
Offer and on or prior to such date any person (other than Parent or the
Purchaser or any affiliate thereof) shall have made a proposal or public
announcement or communication to the Company with respect to an Acquisition
Transaction.
Section 8.2. Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the provisions of this Section
8.2 and Section 9.9, which shall survive any such termination. Nothing contained
in this Section 8.2 shall relieve any party from liability for any breach of
this Agreement.
Section 8.3. Amendment. This Agreement may be amended by the
Company, Parent and the Purchaser at any time before or after any approval of
this Agreement by the shareholders of the Company but, after any such approval,
no amendment shall be made which decreases the Merger Price or which adversely
affects the rights of the Stockholders hereunder without the approval of such
Stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
Section 8.4. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may (i) extend the time for the performance of any of
the obligations or other acts of any other party hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any other
party or in any document, certificate or writing delivered pursuant hereto by
any other party or (iii) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations. Any agreement on the
part of any 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.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Non-Survival. The representations, warranties and
covenants made in this Agreement shall not survive beyond the Effective Time.
Notwithstanding the foregoing, the
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agreements set forth in Section 2.3, Section 2.9, Section 2.12, Article III,
Section 6.5, Section 6.6 and Section 6.9 shall survive the Effective Time
indefinitely (except to the extent a shorter period of time is explicitly
specified therein).
Section 9.2. Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments referred to
herein) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party (except that Parent may assign its rights and the Purchaser may assign its
rights, interest and obligations to any affiliate or direct or indirect
subsidiary of Parent without the consent of the Company; provided, that no such
assignment shall relieve Parent of any liability for any breach by such
assignee). 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 9.3. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
Section 9.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties as follows:
If to Parent or the Purchaser:
Pinault-Printemps-Redoute S.A.
00, Xxxxx Xxxxx Xxxxxxx
00000 Xxxxx, Xxxxxx Cedex 08
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 00-00-00-00
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
If to the Company:
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Brylane Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
and
Xxxxxxx & XxXxxxxx
California Plaza
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
Attention: Xxxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
Section 9.5. 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 9.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.8. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except with
respect to Sections 2.9 and 6.5, nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 9.9. Fees and Expenses. Whether or not the Merger is
consummated, except as otherwise specifically provided herein, all costs and
expenses incurred in connection with the
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Offer, this Agreement and the Transactions shall be paid by the party
incurring such expenses; provided, that if this Agreement shall have been
terminated by the Company pursuant to Section 8.1(b) or Section 8.1(g), Parent
shall reimburse the out-of-pocket costs and expenses incurred by the Company in
connection with the Offer, this Agreement and the Transactions.
Section 9.10. Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any person, shall mean any
other person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "subsidiary" when used with respect to any party means
any corporation or other organization, incorporated or unincorporated, (i) of
which such party or another subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any subsidiary of such party do not have 50% or more of the voting
interests in such partnership) or (ii) 50% or more of the securities or other
interests of which having by their terms ordinary voting power to elect at least
50% of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or one or more of its subsidiaries (or if
there are no such voting securities or interests, 50% or more of the equity
interests of which is directly or indirectly owned or controlled by such party
or one or more of its subsidiaries).
Section 9.11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity, provided, that this
Section 9.11 shall have no force and effect from and after the termination of
this Agreement in accordance with Section 8.1.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
PINAULT-PRINTEMPS-REDOUTE S.A.
By: /s/ Xxxxx Xxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
BUTTONS ACQUISITION CORPORATION
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
BRYLANE INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or pay for any tendered shares of Common
Stock, unless (i) there are validly tendered and not properly withdrawn prior to
the expiration date for the Offer (the "Expiration Date") that number of shares
of Common Stock which, when aggregated with the shares of Common Stock currently
beneficially owned by Parent, represent at least 90% of the total number of
outstanding shares of Common Stock, on a fully diluted basis, on the date of
purchase; provided, that following the Initial Expiration Date, Purchaser may
accept for payment or pay for tendered shares of Common Stock which, when
aggregated with the shares of Common Stock currently beneficially owned by
Parent, represent at least 75% of the total number of outstanding shares of
Common Stock, on a fully diluted basis, on the date of purchase (the "Minimum
Condition") and (ii) any applicable waiting period under the HSR Act or under
any applicable foreign statutes or regulations shall have expired or been
terminated. Furthermore, notwithstanding any other provisions of the Offer, the
Purchaser may, subject to the terms of the Merger Agreement, amend or terminate
the Offer or postpone the acceptance for payment of or payment for tendered
shares of Common Stock if at any time on or after March 10, 1999 (unless
otherwise indicated below) and before the time of payment for any shares of
Common Stock, any of the following events (each, an "Event") shall occur:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or
injunction enacted, enforced, promulgated, amended, issued or
deemed applicable to the Offer, by any legislative body, court,
government or governmental, administrative or regulatory
authority or agency, other than the routine application of the
waiting period provisions of the HSR Act to the Offer or to the
Merger, that would reasonably be expected to: (i) make illegal or
otherwise prohibit or materially delay consummation of the Offer
or the Merger or seek to obtain material damages or make
materially more costly the making of the Offer, (ii) prohibit or
materially limit the ownership or operation by Parent or the
Purchaser of all or any material portion of the business or
assets of the Company or any of its subsidiaries taken as a whole
or compel Parent or the Purchaser to dispose of or hold
separately all or any material portion of the business or assets
of Parent or the Purchaser or the Company or any of its
subsidiaries taken as a whole, or seek to impose any material
limitation on the ability of Parent or the Purchaser to conduct
its business or own such assets, (iii) impose material
limitations on the ability of Parent or the Purchaser effectively
to acquire, hold or exercise full rights of ownership of the
shares of Common Stock, including, without limitation, the right
to vote any shares of Common Stock acquired or owned by the
Purchaser or Parent on all matters properly presented to the
Company's stockholders, or (iv) require divestiture by Parent or
the Purchaser of any shares of Common Stock;
(b) there shall be any pending Action challenging or seeking to
restrain or prohibit the consummation of the Transactions or any
other Action filed against the Company or any of its subsidiaries
after the date of this Agreement which, if adversely determined,
could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Company or on the
consummation of the Transactions;
(c) there shall have occurred any development or event that has, or
could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, assets,
liabilities, financial condition, results of operations or
prospects of the Company and its subsidiaries taken as a whole,
excluding any development or event arising out of or attributable
to the U.S. economy generally; or
(d) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated,
or the Merger Agreement shall have been terminated in accordance
with its terms; or
(e) (i) any of the representations and warranties of the Company (A)
set forth in the Merger Agreement that are qualified as to
materiality or (B) set forth in Section 4.3 of the Merger
Agreement shall not be true and correct, or (ii) any such
representations and warranties that are not so qualified (other
than the representations and warranties set forth in Section 4.3
of the Merger Agreement) shall not be true and correct in any
respect which could reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on the Company,
in each case as if such representations and warranties were made
at the time of such determination except as to any such
representation or warranty which speaks as of a specific date,
which must be untrue or incorrect in the foregoing respects as of
such specific date; or
(f) the Company shall have failed to perform in any material respect
or to comply in any material respect with any of its obligations,
covenants or agreements under the Merger Agreement; or
(g) (i) the Special Committee shall have withdrawn or modified in a
manner adverse to Parent or the Purchaser the adoption or
recommendation of the Offer, the Merger or the Merger Agreement,
or (ii) the Special Committee shall have resolved to do any of
the foregoing;
(h) there shall have occurred, and continued to exist, (i) any
general suspension of, or limitation on prices for, trading in
securities on the New York Stock Exchange or on the Paris Bourse
(excluding suspensions or limitations resulting solely from
physical damage or interference with such exchanges not related
to market conditions), (ii) any decline of at least
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20% in either the Dow Xxxxx Average of Industrial Stocks or the
Standard & Poor's 500 Index from the close of business on the
last trading day immediately preceding the date of the Merger
Agreement, (iii) any change in currency exchange rates measured
from the close of business on the date of the Merger Agreement,
resulting in an increase of 15% or more in the Per Share Amount
as translated from U.S. Dollars into French Francs, (iv) a
declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or France, (v) a
commencement of a war, armed hostilities or other significant
national or international crisis directly or indirectly involving
the United States or France, or (vi) in the case of any of the
foregoing clauses (i) through (v) existing at the time of the
commencement of the Offer, a material acceleration or worsening
thereof.
The foregoing conditions (including those set forth in clauses (i) and (ii)
of the initial paragraph) are for the benefit of Parent and the Purchaser and
may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or the Purchaser
in whole or in part at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by Parent or the Purchaser 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. Any determination by the Purchaser concerning the events described in this
Annex I will be final and binding on all parties.
The Offer may be terminated by Purchaser if the Merger Agreement is
terminated pursuant to its terms.
The capitalized terms used in this Annex I shall have the meanings set
forth in the 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
appended.
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