EXHIBIT (c)(1)
AGREEMENT AND PLAN
OF
MERGER
___________________________________
By and Among
METROMAIL CORPORATION,
GREAT UNIVERSAL ACQUISITION CORP.
and
THE GREAT UNIVERSAL STORES P. L. C.
___________________________________
March 12, 1998
TABLE OF CONTENTS
Page
ARTICLE I THE OFFER................................................... 1
SECTION 1.01 The Offer........................................... 1
SECTION 1.02 Company Action...................................... 3
SECTION 1.03 Directors........................................... 4
ARTICLE II THE MERGER................................................. 5
SECTION 2.01 The Merger.......................................... 5
SECTION 2.02 Effective Time; Closing............................. 5
SECTION 2.03 Effects of the Merger; Subsequent Actions........... 6
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation............................... 6
SECTION 2.05 Directors........................................... 6
SECTION 2.06 Officers............................................ 6
SECTION 2.07 Conversion of Shares................................ 6
SECTION 2.08 Conversion of Purchaser Common Stock................ 7
SECTION 2.09 Company Option Plans................................ 7
SECTION 2.10 Stockholders' Meeting............................... 7
SECTION 2.11 Merger Without Meeting of Stockholders.............. 8
ARTICLE III DISSENTING SHARES; PAYMENT FOR SHARES................... 8
SECTION 3.01 Dissenting Shares................................... 8
SECTION 3.02 Exchange of Certificates............................ 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 10
SECTION 4.01 Organization and Qualification; Subsidiaries........ 10
SECTION 4.02 Charter and By-laws................................. 11
SECTION 4.03 Capitalization...................................... 11
SECTION 4.04 Authority Relative to this Agreement and the
Company Stock Purchase Agreement.......................... 12
SECTION 4.05 No Conflict; Required Filings and Consents.......... 12
SECTION 4.06 SEC Reports and Financial Statements................ 13
SECTION 4.07 Information......................................... 14
SECTION 4.08 Changes............................................. 14
SECTION 4.09 Opinion of Financial Advisor........................ 15
SECTION 4.10 Rights Agreement.................................... 15
SECTION 4.11 Takeover Statutes................................... 15
SECTION 4.12 Litigation.......................................... 15
SECTION 4.13 Employee Plans and Arrangements..................... 15
SECTION 4.14 Assets.............................................. 17
SECTION 4.15 Intellectual Property............................... 17
SECTION 4.16 Taxes............................................... 18
SECTION 4.17 Environmental Laws and Regulations.................. 19
SECTION 4.18 Brokers............................................. 21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER........................................................ 21
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SECTION 5.01 Organization and Qualification........................... 21
SECTION 5.02 Authority Relative to this Agreement and the Stock
Purchase Agreements............................................. 21
SECTION 5.03 No Conflict; Required Filings and Consents............... 22
SECTION 5.04 Information.............................................. 22
SECTION 5.05 Financing................................................ 23
SECTION 5.06 Brokers.................................................. 23
ARTICLE VI COVENANTS........................................................ 23
SECTION 6.01 Conduct of Business of the Company....................... 23
SECTION 6.02 Access to Information.................................... 25
SECTION 6.03 Reasonable Best Efforts.................................. 25
SECTION 6.04 Consents................................................. 26
SECTION 6.05 Public Announcements..................................... 27
SECTION 6.06 Indemnification; Insurance............................... 27
SECTION 6.07 Notification of Certain Matters.......................... 28
SECTION 6.08 No Solicitation.......................................... 29
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................ 30
SECTION 7.01 Conditions to Each Party's Obligation to Consummate
the Merger...................................................... 30
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER................................ 31
SECTION 8.01 Termination.............................................. 31
SECTION 8.02 Effect of Termination.................................... 32
SECTION 8.03 Fees and Expenses........................................ 32
SECTION 8.04 Amendment................................................ 33
SECTION 8.05 Extension; Waiver........................................ 33
ARTICLE IX MISCELLANEOUS.................................................... 34
SECTION 9.01 Non-Survival of Representations and Warranties........... 34
SECTION 9.02 Entire Agreement; Assignment............................. 34
SECTION 9.03 Validity................................................. 34
SECTION 9.04 Notices.................................................. 34
SECTION 9.05 Governing Law............................................ 35
SECTION 9.06 Consent to Jurisdiction; Waiver of Immunities............ 35
SECTION 9.07 Descriptive Headings..................................... 36
SECTION 9.08 Counterparts............................................. 36
SECTION 9.09 Parties in Interest...................................... 36
SECTION 9.10 Certain Definitions...................................... 36
SECTION 9.11 Specific Performance..................................... 37
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LIST OF SCHEDULES
-----------------
Schedule 4.03 -- Capitalization
Schedule 4.05(a) -- Conflicts
Schedule 4.08 -- Changes
Schedule 4.12 -- Insurance
Schedule 4.13 -- Employee Plans and Arrangements
Schedule 4.17 -- Environmental Laws and Regulations
Schedule 6.01(e) -- Employee Benefit Arrangements
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LIST OF DEFINED TERMS
Page
----
accumulated funding deficiency.................................... 16
Acquisition Proposal.............................................. 29
affiliate.........................................................15, 36
Agreement......................................................... 1
Antitrust Laws.................................................... 26
Benefit Plans..................................................... 16
Board............................................................. 1
Certificates...................................................... 9
Closing........................................................... 5
Closing Date...................................................... 6
Code.............................................................. 15
Commonly Controlled Entity........................................ 15
Company........................................................... 1
Company Process Agent............................................. 35
Company Representatives........................................... 25
Company Stock Purchase Agreement.................................. 1
Confidentiality Agreement......................................... 34
Consent........................................................... 13
control........................................................... 36
Dissenting Shares................................................. 8
Donnelley Stock Purchase Agreement................................ 1
Effective Time.................................................... 5
Employee Benefit Arrangement...................................... 24
employee pension benefit plan..................................... 15
employee welfare benefit plan..................................... 15
ERISA............................................................. 15
Exchange Act...................................................... 13
Executive Stock Purchase Agreement................................ 1
fully diluted basis............................................... 2
GAAP.............................................................. 13
GCL............................................................... 5
Governmental Entity............................................... 13
HSR Act........................................................... 13
Indemnified Parties............................................... 27
Indemnified Party................................................. 27
Independent Directors............................................. 5
Intellectual Property............................................. 18
▇▇▇▇▇▇ Brothers................................................... 15
Lien.............................................................. 11
Material Adverse Effect on Purchaser.............................. 21
Material Adverse Effect on the Company............................ 10
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Merger............................................................. 5
Newco.............................................................. 1
Offer.............................................................. 1
Offer Documents.................................................... 2
Offer to Purchase.................................................. 2
Option............................................................. 1
Option Plans....................................................... 7
Other Filings...................................................... 14
Parent............................................................. 1
Parent Process Agent............................................... 35
Parent Representatives............................................. 25
Paying Agent....................................................... 9
PBGC............................................................... 17
Pension Plan....................................................... 15
Person............................................................. 36
Preferred Stock.................................................... 11
Process Agent...................................................... 35
prohibited transaction............................................. 16
Proxy Statement.................................................... 8
Purchaser.......................................................... 1
Purchaser Representatives.......................................... 25
reportable event................................................... 17
Rights............................................................. 11
Rights Agreement................................................... 11
Schedule 14D-1..................................................... 2
Schedule 14D-9..................................................... 3
SEC................................................................ 2
SEC Reports........................................................ 13
Shares............................................................. 1
Significant Subsidiaries........................................... 10
Stock Purchase Agreements.......................................... 1
Stockholders' Meeting.............................................. 7
subsidiaries....................................................... 36
Subsidiary......................................................... 36
Surviving Corporation.............................................. 5
Tax................................................................ 18
Taxes.............................................................. 18
Termination Fee.................................................... 33
Violation.......................................................... 12
Voting Debt........................................................ 11
Welfare Plan....................................................... 15
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 12,
1998, by and among The Great Universal Stores P.L.C., a company incorporated
under the laws of England ("Parent"), Great Universal Acquisition Corp., a
Delaware corporation and an indirect subsidiary of Parent ("Purchaser"), and
Metromail Corporation (the "Company"), a Delaware corporation.
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company deem it advisable and in the best interests of the stockholders of
such corporations to effect the merger of Purchaser and the Company pursuant to
this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have approved the acquisition of the Company by Parent and, in
furtherance of such acquisition, Parent proposes to make or to cause Purchaser
to make a cash tender offer (the "Offer") for all of the outstanding shares of
common stock of the Company, par value $0.01 per share (including the associated
Rights (as defined in Section 4.03 of this Agreement)) (collectively, the
"Shares"), at a price of $31.50 net to the seller per Share (the "Purchase
Price") on the terms set forth in the Offer Documents (as such term is defined
below), and the Board of Directors of the Company (the "Board") has unanimously
approved the Offer and resolved to recommend that it be accepted by the
stockholders of the Company; and
WHEREAS, the Company and Parent are entering into a Stock Purchase
Agreement, dated as of the date hereof (the "Company Stock Purchase Agreement"),
▇. ▇. ▇▇▇▇▇▇▇▇▇ & Sons Company ("Donnelley") and Parent are entering into a
Stock Purchase Agreement, dated as of the date hereof (the "Donnelley Stock
Purchase Agreement"), and certain executives of the Company and Parent are each
entering into a Stock Purchase Agreement, dated as of the date hereof (each, an
"Executive Stock Purchase Agreement", and collectively with the Company Stock
Purchase Agreement and the Donnelley Stock Purchase Agreement, the "Stock
Purchase Agreements"), pursuant to which the Company, Donnelley and such
executives will, among other things, agree to sell Shares to Parent under
certain circumstances.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) Provided that nothing shall have occurred
that would result in the failure of any of the conditions set forth in Annex I
hereto, Parent and Purchaser shall, as promptly as practicable following the
date hereof and in any event not later
than March 20, 1998, commence their Offer to purchase the Shares at a price
equal to the Purchase Price. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase" and, together with a letter of transmittal
relating thereto, the "Offer Documents") which shall be subject solely to the
condition that there be validly tendered and not withdrawn prior to the
expiration of the Offer that number of Shares which, when added to any Shares
acquired pursuant to the Stock Purchase Agreements simultaneously with the
acceptance of Shares pursuant to the Offer, represents at least a majority of
the Shares outstanding on a fully diluted basis (the "Minimum Condition") and to
the other conditions set forth in Annex I hereto (including the expiration of
applicable waiting periods under the HSR Act (as hereinafter defined)). For
purposes of this Agreement, "fully diluted basis" means issued and outstanding
Shares and Shares subject to issuance under outstanding Options (as defined
below). As soon as practicable, Parent and Purchaser shall file with the
Securities and Exchange Commission (the "SEC") a Schedule 14D-1 (which schedule,
together with all amendments and supplements thereto, is hereinafter referred to
as the "Schedule 14D-1") with respect to the Offer. The Company and its counsel
shall be given the opportunity to review the Schedule 14D-1 (as defined below)
before it is filed with the SEC. In addition, Parent and Purchaser agree to
provide the Company and its counsel with any comments, whether written or oral,
that Parent and/or its counsel may receive from time to time from the SEC or its
staff with respect to the Schedule 14D-1 promptly after the receipt of such
comments or other communications. Without the prior written consent of the
Company, neither Parent nor Purchaser shall decrease the price per Share or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased in the Offer, change the conditions set forth in
Annex I, impose additional conditions to the Offer or amend any other term of
the Offer in any manner materially adverse to the holders of the Shares. Subject
to the terms of the Offer and this Agreement and the satisfaction or waiver of
all the conditions of the Offer set forth in Annex I hereto as of any expiration
date of the Offer, Parent and/or Purchaser will accept for payment and pay for
all Shares validly tendered and not properly withdrawn pursuant to the Offer as
soon as practicable after such expiration date of the Offer. Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, (i) extend the
Offer on one or more occasions for up to ten business days for each such
extension beyond the then scheduled expiration date (the initial scheduled
expiration date being 20 business days following commencement of the Offer), if
at the then scheduled expiration date of the Offer any of the conditions to
Purchaser's obligation to accept for payment and pay for the Shares shall not be
satisfied or waived, until such time as such conditions are satisfied or waived,
(ii) increase the Purchase Price and extend the Offer for any period required by
any rule, regulation, interpretation or provision of the SEC or the staff
thereof applicable to the Offer and (iii) extend the Offer for an aggregate
period of not more than 10 business days beyond the latest expiration date that
would otherwise be permitted under clause (i) or (ii) of this sentence if there
shall not have been tendered and not withdrawn pursuant to the Offer at least
90% of the outstanding Shares.
(b) The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under
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which they were made, not misleading, except that no representation is made by
Parent or Purchaser with respect to information supplied by the Company in
writing for inclusion in the Offer Documents. Each of Parent and Purchaser, on
the one hand, and the Company, on the other hand, agrees to correct promptly any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect and Parent
and Purchaser further agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws.
SECTION 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that, at a meeting duly called and held, its Board of Directors has
(i) unanimously determined that this Agreement, the Stock Purchase Agreements
and the transactions contemplated hereby and thereby, including, without
limitation, the Offer and the Merger, are fair to and in the best interest of
the Company's stockholders, (ii) unanimously approved this Agreement, the
Company Stock Purchase Agreement and the transactions contemplated hereby and
thereby, including, without limitation, the Offer and the Merger and (iii)
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares thereunder to Purchaser and approve and adopt this
Agreement, the Company Stock Purchase Agreement and the Merger; provided, that
such recommendation may be withdrawn, modified or amended if, in the good faith
opinion of the Directors, only after receipt of advice from outside legal
counsel, the failure to withdraw, modify or amend such recommendation would
result in the Board violating its fiduciary duties to the Company's stockholders
under applicable law. The Company consents to the inclusion of such
recommendation and approval in the Offer Documents.
(b) Contemporaneously with the commencement of the Offer as provided
for in Section 1.01, the Company will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (which schedule,
together with all amendments and supplements thereto, is hereafter referred to
as the "Schedule 14D-9") which shall reflect the recommendations and actions of
the Company's Board of Directors referred to above. The Company further agrees
to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. Each of the Company, on
the one hand, and Parent and Purchaser, on the other hand, agrees to promptly
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material respect
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 to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent and its counsel with any
comments, whether written or oral, that the Company and/or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments or other communications.
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(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Parent and Purchaser mailing labels, security position
listings and any available listing, or computer file containing the names and
addresses of all recordholders of the Shares as of a recent date, and shall
furnish Parent and Purchaser with such additional information (including, but
not limited to, updated lists of holders of the Shares and their addresses,
mailing labels and lists of security positions) and assistance as Parent,
Purchaser or their respective agents may reasonably request in communicating the
Offer to the record and beneficial holders of the Shares. Except for such steps
as are necessary to disseminate the Offer Documents, Parent and Purchaser shall
hold in confidence the information contained in any of such labels and lists and
the additional information referred to in the preceding sentence, will use such
information in connection with the Offer, and, if this Agreement is terminated,
will upon request of the Company deliver or cause to be delivered to the Company
all copies of such information then in its possession or the possession of its
agents or representatives.
SECTION 1.3 Directors.
(a) Promptly upon the purchase of Shares by Parent or Purchaser or any
of its Subsidiaries pursuant to the Offer and/or pursuant to any of the Stock
Purchase Agreements which represents at least a majority of the outstanding
Shares, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
is equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Purchaser pursuant to this sentence)
multiplied by the percentage that the number of Shares so accepted for payment
bears to the total number of Shares then outstanding. In furtherance thereof,
the Company shall, upon request of the Purchaser, use its reasonable best
efforts promptly either to increase the size of its Board of Directors or secure
the resignations of such number of its incumbent directors, or both, as is
necessary to enable Purchaser's designees to be so elected to the Company's
Board of Directors, and shall take all actions available to the Company to cause
Purchaser's designees to be so elected. At such time, the Company shall, if
requested by Purchaser, also cause persons designated by Purchaser to constitute
at least the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 1.03(a), including mailing to
stockholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Purchaser's designees to be elected to the Company's Board
of Directors. Purchaser or Parent will supply the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.03 are in addition to and shall
not limit any rights which Purchaser, Parent or any of their affiliates may have
as a holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
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(c) In the event Purchaser's designees are elected to the Company's
Board of Directors, until the Effective Time (as defined below), the Company's
Board shall have at least two directors who are directors on the date hereof
("Independent Directors"), provided that, in such event, if the number of
Independent Directors shall be reduced below two for any reason whatsoever, any
remaining Independent Directors (or Independent Director, if there be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Director then remains, the other directors shall designate two
persons to fill such vacancies who shall not be stockholders, affiliates or
associates of Purchaser or Parent and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Notwithstanding anything
in this Agreement to the contrary, in the event that Purchaser's designees are
elected to the Company's Board, after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights, benefits or remedies hereunder or (iii) take any other action
by the Company's Board under or in connection with this Agreement.
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 General Corporation Law of the State of
Delaware (the "GCL"), at the Effective Time Purchaser shall be merged (the
"Merger") with and into the Company. Following the Merger, the separate
corporate existence of 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 Purchaser or another
direct or indirect wholly-owned subsidiary of Parent with Purchaser or such
other subsidiary of Parent continuing as the Surviving Corporation; 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.
SECTION 2.2 Effective Time; Closing. As soon as practicable after the
satisfaction or waiver (to the extent permitted hereunder) of the conditions set
forth in Article VII, the Company shall execute in the manner required by the
GCL and deliver to the Secretary of State of the State of Delaware a duly
executed and verified certificate of merger, or, if permitted, a certificate of
ownership and merger, and the parties shall take such other and further actions
as may be required by law to make the Merger effective. The time the Merger
becomes effective in accordance with applicable law is referred to as the
"Effective Time." Prior to such filing, a closing (the "Closing") shall be held
at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other place as the parties hereto shall
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agree, for the purpose of confirming the satisfaction or waiver of the
conditions set forth in Article VII. The date on which the Closing occurs is
referred to herein as the "Closing Date."
SECTION 2.3 Effects of the Merger; Subsequent Actions. The Merger shall
have the effects set forth in Section 259 of the GCL. Without limiting the
generality of the foregoing, and subject thereto and any other applicable laws,
at the Effective Time, all properties, rights, privileges, powers and franchises
of the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, restrictions, disabilities and duties of the Company and
Purchaser shall become debts, liabilities, restrictions, disabilities and duties
of the Surviving Corporation.
SECTION 2.4 Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) The By-Laws of Purchaser in effect at the Effective Time shall be
the By-Laws of the Surviving Corporation, until thereafter amended in accordance
with the provisions thereof and hereof and applicable law.
SECTION 2.5 Directors. Subject to applicable law, the directors of
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.
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. Subject to Section 3.01 below, at the
Effective Time, by virtue of the Merger and without any action on the part of
Parent, Purchaser, the Company or the holders of the following securities, each
Share issued and outstanding immediately prior to the Effective Time (other than
any Shares held by Parent, Purchaser, any wholly-owned subsidiary of Parent or
Purchaser, in the treasury of the Company or by any wholly-owned Subsidiary of
the Company, which Shares, 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) shall be converted into the right to receive the Purchase Price, without
interest thereon, upon surrender of the certificate formerly representing such
Share.
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SECTION 2.8 Conversion of Purchaser Common Stock. At the Effective
Time, each share of common stock, par value $.01 per share, of Purchaser issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.9 Company Option Plans.
(a) The Company shall (i) terminate its Amended and Restated 1996
Stock Incentive Plan and its 1996 Broad-Based Employee Stock Plan (collectively,
the "Option Plans"), immediately prior to the Effective Time without prejudice
to the rights of the holders of Options awarded pursuant thereto and (ii) grant
no additional Options, restricted stock, stock units, performance units,
performance shares, fixed awards or similar rights or awards under the Option
Plans or otherwise on or after the date hereof. As used hereafter in this
Section 2.09, "Options" shall include each stock option or other right to
acquire Shares (whether or not then exercisable, and regardless of the exercise
price thereof) granted by the Company, whether pursuant to the Option Plans or
otherwise, to an employee, agent, consultant, advisor or director of the
Company.
(b) The Company shall (i) use its reasonable best efforts to obtain
from each holder of any Option that it does not have the right to cancel the
consent of such holder to the cancellation of each such Option, and (ii) shall
cancel each Option that the Company has the right to cancel or as to which the
Company has obtained the consent of the holder thereof to such cancellation,
each such cancellation (whether or not a consent is required therefor) to take
effect immediately after the Effective Time. In consideration of each
cancellation of an Option, the Company shall pay to the holder of such Option,
promptly after such cancellation, in respect of such Option, an amount equal to
the excess, if any, of the Purchase Price over the per Share exercise price of
such Option, multiplied by the number of Shares subject to such Option.
(c) The Company shall suspend its 1997 Employee Stock Purchase Plan
(the "Purchase Plan") so as to provide that no purchase period shall begin after
March 31, 1998, and the Company shall terminate the Purchase Plan prior to the
Effective Time.
SECTION 2.10 Stockholders' Meeting.
(a) If required by the GCL in order to consummate the Merger, the
Company, acting through the Board, shall, in accordance with the GCL:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Stockholders' Meeting") as soon as practicable
following the acceptance for payment of and payment for the Shares by
Parent and/or Purchaser pursuant to the Offer for the purpose of
considering and taking action upon this Agreement;
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(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and 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 hereinafter defined)
and, after consultation with Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (including
any amendment or supplement thereto, the "Proxy Statement") to be mailed to
its stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with Parent and
its counsel and (y) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law, include in the Proxy Statement the recommendation of the
Board that stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
(b) At such meeting, each of Parent and Purchaser will vote (and will
cause each of their respective affiliates to vote), all of the Shares (if any)
then owned by them (or their respective affiliates) in favor of the approval of
the Merger and the adoption of this Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders. Notwithstanding
Section 2.10, in the event that Parent, Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the Shares pursuant to the Offer and the
Stock Tender Agreement, 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 by Parent
and/or Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in accordance
with Section 262 of the GCL, if such Section 262 provides for appraisal rights
for such Shares in the Merger ("Dissenting Shares"), shall not be converted into
the right to receive the Purchase Price as provided in Section 2.07, unless and
until such holder fails to perfect or withdraws or otherwise loses his right to
appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his 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 Purchase Price, if any, 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
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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 Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate a bank or
trust company reasonably acceptable to the Company to act as paying agent (the
"Paying Agent") in effecting the exchange for the Purchase Price of certificates
(the "Certificates") that, prior to the Effective Time, represented Shares.
Upon the surrender of each such Certificate formerly representing Shares,
together with a properly completed letter of transmittal, the Paying Agent shall
pay the holder of such Certificate the Purchase Price multiplied by the number
of Shares formerly represented by each such Certificate, in exchange therefor,
and each such Certificate shall forthwith be cancelled. Until so surrendered
and exchanged, each such Certificate (other than Certificates representing
Dissenting Shares or Shares held by Parent, Purchaser or the Company, or any
direct or indirect subsidiary thereof, or in the treasury of the Company) shall
represent solely the right to receive the Purchase Price. No interest shall be
paid or accrue on the Purchase Price. If the Purchase Price (or any portion
thereof) is to be delivered to any person other than the person in whose name
the Certificate formerly representing Shares surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such exchange shall pay to the Paying
Agent any transfer or other Taxes required by reason of the payment of the
Purchase 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.
(b) Prior to the Effective Time, Parent or Purchaser shall deposit, or
cause to be deposited, in trust with the Paying Agent the Purchase Price to
which holders of Shares shall be entitled at the Effective Time pursuant to
Section 2.07 hereof; provided, however, that no such deposit shall relieve
Parent or Purchaser of its obligation to pay the Purchase Price pursuant to
Section 2.07.
(c) The Purchase Price shall be invested by the Paying Agent as
directed by Parent, provided that such investments shall be limited to direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest quality
by ▇▇▇▇▇'▇ Investors Services, Inc. or Standard & Poor's Corporation, or
certificates of deposit issued by a commercial bank having at least
$1,000,000,000 in assets; provided further that no loss on investment made
pursuant to this Section 3.02(c) shall relieve Parent or Purchaser of its
obligation to pay the Purchase Price pursuant to Section 2.07.
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(d) 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 a form of letter of transmittal and instructions for use in
surrendering such Certificates and receiving the Purchase Price in exchange
therefor.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares. If, after the
Effective Time, Certificates formerly representing Shares are presented to the
Surviving Corporation or the Paying Agent, they shall be cancelled and exchanged
for the Purchase Price as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
(f) Promptly following the date which is six months after the
Effective Time, the Paying Agent shall deliver to Parent all cash and documents
in its possession relating to the transactions described in this Agreement, and
the Paying Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing a Share may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Purchase Price, without any
interest thereon.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and 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 significant subsidiaries
(within the meaning of Regulation S-X under the Exchange Act (the "Significant
Subsidiaries")) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
Company and its Subsidiaries 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,
would not have a Material Adverse Effect on the Company. The term "Material
Adverse Effect on the Company," as used in this Agreement, means any adverse
change, circumstance or effect that, individually or in the aggregate with all
other adverse changes, circumstances and effects, has had or will have a
material adverse effect on the business, financial condition, properties or
results of operations of the Company and its Subsidiaries taken as a whole.
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SECTION 4.02 Charter and By-laws. The Company has heretofore made
available to Parent a complete and correct copy of the charter and the By-laws
or comparable organizational documents, each as amended as of the date hereof,
of the Company and each of the Significant Subsidiaries.
SECTION 4.03 Capitalization. (a) The authorized capital stock of the
Company consists of 75,000,000 Shares and 20,000,000 shares of preferred stock,
par value $0.01 per share ("Preferred Stock"). As of the close of business on
March 6, 1998, 22,516,996 Shares were issued and outstanding, excluding 619,435
Shares in treasury. As of the close of business on March 6, 1998 there were no
shares of Preferred Stock issued and outstanding. The Company has no shares
reserved for issuance, except that, as of March 6, 1998, there were 2,087,119
Shares reserved for issuance pursuant to outstanding Options or other awards
under the Option Plans and there were 75,000 shares of Junior Participating
Preferred Stock, Series A, reserved for issuance upon exercise of the Preferred
Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of February 24, 1997 between the Company and American Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agreement"). The Company has no
options to purchase Shares outstanding other than as set forth on Schedule 4.03.
Since March 6, 1998, the Company has not issued any shares of capital stock
except pursuant to the exercise of Options outstanding as of such date. All of
the outstanding Shares are, and all Shares 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. 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 or for the Rights or as set forth on
Schedule 4.03 and except for the transactions contemplated by this Agreement,
there are no existing options, warrants, calls, subscriptions or other rights,
convertible securities, 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, convertible security, agreement, arrangement or
commitment. Except as set forth in Section 2.09 and as set forth on Schedule
4.03, there are no outstanding contractual obligations of the Company or any of
its Subsidiaries to (i) repurchase, redeem or otherwise acquire any Shares or
the capital stock of the Company or any of its Subsidiaries or (ii) provide
funds to or make any investment in (in the form of a loan, capital contribution
or otherwise) any entity other than a wholly-owned Subsidiary.
(b) Each of the outstanding shares of capital stock of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and such shares 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").
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Except for directors' qualifying shares or as described on Schedule 4.03, all
outstanding shares of capital stock of each of the Company's Subsidiaries is
owned by the Company or another Subsidiary of the Company.
(c) Except as set forth on Schedule 4.03, there are no voting trusts
or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting of the capital stock of the
Company or any of its Subsidiaries.
SECTION 4.04 Authority Relative to this Agreement and the Company Stock
Purchase Agreement. The Company has all necessary corporate power and authority
to execute and deliver this Agreement, the Company Stock Purchase Agreement and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Company Stock Purchase Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly and validly authorized and approved by the
Board and no other corporate proceedings on the part of the Company are
necessary to authorize or approve this Agreement, the Company Stock Purchase
Agreement or to consummate the transactions contemplated hereby or thereby
(other than, with respect to the Merger, and subject to Section 2.11, the
approval and adoption of the Merger and this Agreement by the affirmative vote
of the holders of a majority of the Shares then outstanding). This Agreement and
the Company Stock Purchase Agreement have been duly and validly executed and
delivered by the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement and the Company Stock Purchase
Agreement by Parent and Purchaser, each constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) Except as set forth on Schedule 4.05(a) hereto, none of the
execution, delivery or performance of this Agreement or the Company Stock
Purchase Agreement by the Company, the consummation by the Company of the
transactions contemplated hereby or thereby or the compliance by the Company
with any of the provisions hereof or thereof will (i) conflict with or violate
the Certificate of Incorporation or By-Laws of the Company or the comparable
organizational documents of any of its Subsidiaries, (ii) conflict with or
violate any statute, ordinance, rule, regulation, order, judgment or decree
applicable to the Company or its Subsidiaries, 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 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 (ii) or this clause (iii) being a "Violation")
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiariesor any of their
-12-
respective properties may be bound or affected, except in the case of the
foregoing clauses (ii) or (iii) for any such Violations which would not in the
aggregate have a Material Adverse Effect on the Company or materially adversely
affect the ability of the Company to consummate the transactions contemplated
hereby or thereby.
(b) None of the execution, delivery or performance of this Agreement
or the Company Stock Purchase Agreement by the Company, the consummation by the
Company of the transactions contemplated hereby or thereby or the compliance by
the Company with any of the provisions hereof or thereof 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 government
or subdivision thereof, domestic, foreign or supranational or any
administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational (a "Governmental Entity"),
except for (i) compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the filing of a
certificate of merger, or, if permitted, a certificate of ownership and merger,
pursuant to the GCL, (iii) notifications required by certain state Blue Sky,
takeover and environmental statutes, (iv) compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any
requirements of any foreign or supranational Antitrust Laws, and (v) Consents
the failure of which to obtain or make would not in the aggregate have a
Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated hereby or
thereby.
SECTION 4.06 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 January 1, 1997 (the "SEC Reports"). As of their
respective dates, the SEC Reports (including, without limitation, any financial
statements or schedules included therein) complied in all material respects with
the requirements of the Exchange Act or the Securities Act of 1933, as amended,
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 audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included in the SEC
Reports and the audited financial statements as of and for the year ended
December 31, 1997, which the Company has provided to Parent, present fairly in
all material respects the consolidated financial position and the consolidated
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of the dates or for the periods presented therein in conformity
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved except as otherwise noted
therein, including the related notes.
-13-
SECTION 4.07 Information. None of the information provided or that may be
provided by the Company for use in the Offer Documents, the Schedule 14D-1 or
any other document to be filed with the SEC or any other Governmental Entity in
connection with the transactions contemplated by this Agreement (the "Other
Filings"), and neither the Proxy Statement nor the Schedule 14D-9, shall, at the
time filed with the SEC or such other Governmental Entity, and, in the case of
the Proxy Statement, at the time mailed to the Company's stockholders, at the
time of the Stockholders' Meeting or 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 therein, in light of
the circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information provided or that may be provided by Parent or Purchaser specifically
for use in such documents. The Schedule 14D-9 and 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.
SECTION 4.8 Changes. Since December 31, 1997, except as set forth in the
SEC Reports filed prior to the date hereof or as otherwise disclosed in Schedule
4.08 hereto:
(a) there has been no event, effect or change (including the
incurrence of any liabilities or obligations of any nature whether or not
accrued, contingent or otherwise) having a Material Adverse Effect on the
Company;
(b) the Company has not adopted any amendment to its Certificate of
Incorporation or By-laws;
(c) other than grants under the Options Plans and issuances upon
exercise of options granted under Option Plans and pursuant to the Purchase
Plan, the Company has not issued, reissued, pledged or sold, or authorized the
issuance, reissuance, pledge or sale of (i) additional shares of capital stock
of any class, or securities convertible into, exchangeable for or evidencing the
right to substitute for, capital stock of any class, or any rights, warrants,
options, calls, commitments or any other agreements of any character, to
purchase or acquire any capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, capital stock,
or (ii) any other securities in respect of, in lieu of, or in substitution for,
Shares;
(d) neither the Company nor any of its Subsidiaries declared, set
aside or paid 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 the Company and any of its wholly-owned
Subsidiaries; and
(e) neither the Company nor any of its Subsidiaries has split,
combined, subdivided, reclassified or redeemed, purchased or otherwise acquired
or proposed to redeem or purchased or otherwise acquired any shares of its
capital stock or any of its other securities.
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SECTION 4.9 Opinion of Financial Advisor. The Company has received the
opinion of ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇ Brothers"), dated the date hereof, to
the effect that, as of such date, the Purchase Price is fair to the holders of
Shares, a copy of which opinion has been delivered to Parent. The Company has
been authorized by ▇▇▇▇▇▇ Brothers to permit inclusion of such opinion (and
reference thereto) in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement.
SECTION 4.10 Rights Agreement. The Company has taken all action which may
be necessary under the Rights Agreement, so that (x) the execution of this
Agreement and any amendments thereto by the parties hereto and the execution of
the Stock Purchase Agreements and the consummation of the transactions
contemplated hereby and thereby shall not cause (i) Purchaser and/or Parent or
their respective Affiliates or Associates to become an Acquiring Person (as such
terms are defined in the Rights Agreement) unless this Agreement or the Stock
Purchase Agreements have been terminated in accordance with their respective
terms or (ii) a Distribution Date, a Stock Acquisition Date or a Triggering
Event (as such terms are defined in the Rights Agreement) to occur, irrespective
of the number of Shares acquired pursuant to the Offer, the Merger or the other
transactions contemplated by the Merger Agreement or the Stock Purchase
Agreements.
SECTION 4.11 Takeover Statutes. The Company has elected, pursuant to its
Certificate of Incorporation, not to be subject to Section 203 of the GCL.
Accordingly, such section is not applicable to the transactions contemplated
hereby or by the Stock Purchase Agreements.
SECTION 4.12 Litigation. Except as set forth in the SEC Reports, as of the
date hereof, there are no suits, claims, actions, proceedings, including,
without limitation, arbitration proceedings or alternative dispute resolution
proceedings, or investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries before any
Governmental Entity that would be reasonably likely to have a Material Adverse
Effect on the Company. The insurance endorsement described in Schedule 4.12 is
valid and binding on the Company and, to the knowledge of the Company, valid and
binding on the insurance company named therein.
SECTION 4.13 Employee Plans and Arrangements. (a) Schedule 4.13 lists each
"employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (hereinafter a
"Pension Plan") and "employee welfare benefit plan" (as defined in Section 3(1)
of ERISA, hereinafter a "Welfare Plan"), in each case maintained or contributed
to, or required to be maintained or contributed to, by the Company, any of its
Subsidiaries or any other person that, together with the Company, is treated as
a single employer under Section 4.14(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code") (each a "Commonly Controlled Entity") for
the benefit of any present or former employees of the Company or any of its
Subsidiaries. The Company has never maintained, or incurred any liability
whatsoever, with respect to a multiemployer plan (as defined in Section
4001(a)(3) of ERISA). The Company has made available to Purchaser true, complete
and correct copies of (i) each Pension Plan and Welfare Plan (collectively, the
"Benefit
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Plans"), (ii) the most recent annual report on Form 5500 as filed with the
Internal Revenue Service with respect to each applicable Benefit Plan, (iii) the
most recent summary plan description (or similar document) with respect to each
applicable Benefit Plan (iv) the most recent actuarial report or valuation with
respect to each plan that is a "defined benefit pension plan" (as defined in
Section 3(35) of ERISA), and (v) each trust agreement relating to any Benefit
Plan.
(b) Except where a failure would not have a Material Adverse Effect
on the Company, each Benefit Plan has been administered in accordance with its
terms. Except where a failure would not have a Material Adverse Effect on the
Company, the Company, its Subsidiaries and all the Benefit Plans are in
compliance with the applicable provisions of ERISA, the Code, and all other
laws, ordinances or regulations of any Governmental Entities. Except where a
failure would not have a Material Adverse Effect on the Company, there are no
investigations by any Governmental Entities, termination proceedings or other
claims (except claims for benefits payable in the normal operations of the
Benefit Plans), suits or proceedings against or involving any Benefit Plan or
asserting any rights to or claims for benefits under any Benefit Plan.
(c) Except where a failure would not have a Material Adverse Effect
on the Company, (i) all contributions to the Benefit Plans required to be made
by the Company or any of its Subsidiaries in accordance with the terms of the
Benefit Plans, any applicable collective bargaining agreement and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have been timely
made, (ii) there has been no application for or waiver of the minimum funding
standards imposed by Section 412 of the Code with respect to any Benefit Plan
that is a Pension Plan and (iii) no Pension Plan had an "accumulated funding
deficiency" within the meaning of Section 412(a) of the Code as of the end of
the most recently completed plan year.
(d) Except as set forth in Schedule 4.13, (i) each Pension Plan that
is intended to be a tax-qualified plan has been the subject of a determination
letter from the Internal Revenue Service to the effect that such Company Pension
Plan and each related trust is qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code, (ii) no such
determination letter has been revoked, and revocation has not been threatened,
(iii) no event has occurred and no circumstances exist that would adversely
affect the tax-qualification of such Pension Plan except for any events or
circumstances that would not have a Material Adverse Effect on the Company and
(iv) such Pension Plan has not been amended since the effective date of its most
recent determination letter in any respect that might adversely affect its
qualification, increase its cost or require security under Section 307 of ERISA.
The Company has made available to Purchaser a copy of the most recent
determination letter received with respect to each Pension Plan for which such a
letter has been issued, as well as a copy of any pending application for a
determination letter.
(e) Except where a failure would not have a Material Adverse Effect
on the Company: (i) no non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA) has occurred that involves the
assets of any Benefit Plan; (ii) no Pension Plan has been terminated or has been
the subject of a "reportable event" (as defined in
-16-
Section 4043 of ERISA and the regulations thereunder) for which the 30-day
notice requirement has not been waived by the Pension Benefit Guaranty
Corporation ("PBGC"); and (iii) none of the Company, any of its Subsidiaries or
any trustee, administrator or other fiduciary of any Benefit Plan has engaged in
any transaction or acted in a manner that could, or has failed to act so as to,
subject the Company, any such Subsidiary or any trustee, administrator or other
fiduciary to any liability for breach of fiduciary duty under ERISA or any other
applicable law.
(f) No Commonly Controlled Entity has incurred any liability to a
Pension Plan (other than for contributions not yet due) or to the PBGC (other
than for the payment of premiums not yet due other than liabilities that would
have a Material Adverse Effect on the Company).
(g) Except where the failure would not have a Material Adverse Effect
on the Company, no Commonly Controlled Entity has (i) engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to a liability
at any time after the date hereof or (ii) acted in a manner that could, or
failed to act so as to, result in fines, penalties, taxes or related charges
under (x) Section 502(c), (i) or (1) of ERISA, (y) Section 4071 of ERISA or (z)
Chapter 43 of the Code.
(h) The Company and its Subsidiaries comply with the applicable
requirements of parts 6 and 7 of subtitle B of Title I of ERISA ((S)(S) 601 et
seq.) with respect to each Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code.
(i) Schedule 4.13 lists (i) all employment agreements between the
Company or any of its Subsidiaries and any of their respective directors or
officers and between the Company or any of its Subsidiaries and any of its or
their employees which is not terminable by the Company or its Subsidiaries on
less than 90 days' notice, (ii) all agreements and plans pursuant to which any
director, officer or employee of the Company or any of its subsidiaries is
entitled to benefits upon termination of their employment or a change in control
of the Company and (iii) all Option Plans.
SECTION 4.14 Assets. The Company or one of its Subsidiaries has (a) good
and marketable title to or a valid leasehold interest under a capitalized lease
in all assets recorded on the Company's balance sheet as of December 31, 1997
included in the financial statements referred to in Section 4.06(b), except for
assets disposed of in the ordinary course of business since such date, and (b) a
valid leasehold or other interest in all other assets used by it in its
business, except in each case for exceptions to the foregoing that would not
have a Material Adverse Effect on the Company.
SECTION 4.15 Intellectual Property. (a) Except for any exceptions to the
foregoing that would not have a Material Adverse Effect on the Company, the
Company and its Subsidiaries own or have the right to use all Intellectual
Property reasonably necessary for the Company and its Subsidiaries to conduct
their business as it is currently conducted and consistent with past practice.
-17-
(b) Except for any exceptions to the foregoing that would not have a
Material Adverse Effect on the Company: (i) all of the registered Intellectual
Property owned by the Company and its Subsidiaries is subsisting and unexpired,
free of all Liens, has not been abandoned and, to the knowledge of the Company,
does not infringe the Intellectual Property rights of any third party; (ii) none
of the Intellectual Property owned by the Company and its Subsidiaries is the
subject of any license, security interest or other agreement granting rights
therein to any third party (except for contracts relating to data, databases or
software licensed to third parties in the ordinary course of Company's or its
Subsidiaries' businesses); (iii) to the knowledge of the Company, no judgment,
decree, injunction, rule or order has been rendered by any Governmental Entity
which would limit, cancel or question the validity of, or the Company's or its
Subsidiaries' rights in and to, any Intellectual Property owned by the Company;
(iv) the Company has not received notice of any pending or threatened suit,
action or proceeding that seeks to limit, cancel or question the validity of, or
the Company's or its Subsidiaries' rights in and to, any Intellectual Property;
and (v) the Company and its Subsidiaries take reasonable steps to protect,
maintain and safeguard the Intellectual Property owned by the Company, including
any Intellectual Property for which improper or unauthorized disclosure would
impair its value or validity, and have caused their employees to execute
agreements in connection with the foregoing.
(c) For purposes of this Agreement "Intellectual Property" shall mean
all rights, privileges and priorities provided under U.S., state and foreign law
relating to intellectual property, including without limitation all (i)(A)
inventions, discoveries, processes, formulae, designs, methods, techniques,
procedures, concepts, developments, technology, new and useful improvements
thereof and know-how relating thereto, whether or not patented or eligible for
patent protections; (B) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items; (C) trademarks,
service marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; and (D) trade
secrets and other confidential information; and (ii) all registrations,
applications, recordings, and licenses or other similar agreements related to
the foregoing.
SECTION 4.16 Taxes. The Company and each of its Subsidiaries have (i)
filed all Tax Returns which they are required to file under applicable laws and
regulations, (ii) paid all Taxes which have become due and payable, and (iii)
accrued as a liability on the balance sheet included in the Company's 1997
financial statements described in Section 4.06 all Taxes which were accrued but
not yet due and payable as of the date thereof, except for failures to take any
of such actions which, individually or in the aggregate, would not have a
Material Adverse Effect on the Company. For purposes of this Agreement, "Tax" or
"Taxes" shall mean any federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax of any
kind, including any interest or penalties in respect of the foregoing, and "Tax
Returns" means returns, declarations, reports, information returns, or other
documents filed or required to be filed in connection with the
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determination, assessment or collection of Taxes of any person or the
administration of any laws, regulations or administrative requirements relating
to any Taxes.
SECTION 4.17 Environmental Laws and Regulations. Except as disclosed in
Schedule 4.17:
(i) The Company and its Subsidiaries hold and are in
compliance with all Environmental Permits (as defined below), and the
Company and its Subsidiaries are otherwise in compliance with all
Environmental Laws (as defined below) and there are no conditions that
might prevent or interfere with such compliance in the future, except where
the failure to hold or to be in such compliance would not reasonably be
expected to have a Material Adverse Effect on the Company;
(ii) As of the date hereof, neither the Company nor any of its
Subsidiaries has received any Environmental Claim (as defined below) and
there is no threatened Environmental Claim that would reasonably be
expected to have a Material Adverse Effect on the Company;
(iii) Neither the Company nor any of its Subsidiaries has
entered into any consent decree, order or agreement under any Environmental
Law;
(iv) There are no (A) underground storage tanks, (B)
polychlorinated biphenyls, (C) friable asbestos or asbestos-containing
materials, (D) sumps, (E) surface impoundments, (F) landfills, or (G)
sewers or septic systems present at any facility currently owned, leased,
operated or otherwise used by the Company or any of its Subsidiaries the
presence of which would reasonably be expected to have a Material Adverse
Effect on the Company;
(v) There are no past (including, without limitation, with
respect to assets or businesses formerly owned, leased or operated by the
Company or any of its Subsidiaries) or present actions, activities, events,
conditions or circumstances, including without limitation the release,
threatened release, emission, discharge, generation, treatment, storage or
disposal of Hazardous Materials the occurrence of which would reasonably be
expected to have a Material Adverse Effect on the Company;
(vi) No modification, revocation, reissuance, alteration,
transfer, or amendment of the Environmental Permits, or any review by, or
approval of, any third party of the Environmental Permits is required in
connection with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby or the continuation of
the business of the Company or its Subsidiaries following such consummation
that would reasonably be expected to have a Material Adverse Effect on the
Company;
(vii) Hazardous Materials have not been generated, transported,
treated, stored, disposed of, released or threatened to be released at, on,
from or under any of
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the properties or facilities currently owned, leased or otherwise used by
the Company or any of its Subsidiaries, in violation of, or so as could
result in liability under, any Environmental Laws that would reasonably be
expected to have a Material Adverse Effect on the Company;
(viii) None of the Company or its Subsidiaries has contractually
assumed any liabilities or obligations under any Environmental Laws that
would reasonably be expected to have a Material Adverse Effect on the
Company;
(ix) To the extent required by GAAP, the Company and its
Subsidiaries have accrued or otherwise provided for all damages,
liabilities, penalties or costs that they may incur in connection with any
claim pending or threatened against them, or any requirement that is or may
be applicable to them, under any Environmental Laws, and such accrual or
other provision is reflected in the Company's most recent consolidated
financial statements included in the SEC Reports filed prior to the date
hereof, except where the failure to make such accrual or provision would
not reasonably be expected to have a Material Adverse Effect on the
Company; and
(x) For purposes of this Agreement, the following terms shall
have the following meanings: (A) "Environmental Claim" means any written or
oral notice, claim, demand, action, suit, complaint, proceeding or other
communication by any person alleging liability or potential liability
(including without limitation liability or potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damage, personal injury, fines or penalties)
arising out of, relating to, based on or resulting from (1) the presence,
discharge, emission, release or threatened release of any Hazardous
Materials at any location, whether or not owned, leased or operated by the
Company or any of its Subsidiaries or (2) circumstances forming the basis
of any violation or alleged violation of any Environmental Law or
Environmental Permit or (3) otherwise relating to obligations or
liabilities under any Environmental Laws; (B) "Environmental Permits" means
all permits, licenses, registrations and other governmental authorizations
required under Environmental Laws for the Company and its Subsidiaries to
conduct their operations and businesses on the date hereof and consistent
with past practices; (C) "Environmental Laws" means all applicable federal,
state and local statutes, rules, regulations, ordinances, orders, decrees
and common law relating in any manner to contamination, pollution or
protection of the environment, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act, the
Solid Waste Disposal Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Occupational Safety and Health Act, the
Emergency Planning and Community-Right-to-Know Act, the Safe Drinking Water
Act, all as amended, and similar state laws; and (D) "Hazardous Materials"
means all hazardous or toxic substances, wastes, materials or chemicals,
petroleum (including crude oil or any fraction thereof) and petroleum
products, friable asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials, and substances regulated pursuant to,
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or that could reasonably be expected to provide the basis of liability
under, any Environmental Law.
SECTION 4.18 Brokers. Except for the engagement of ▇▇▇▇▇▇ Brothers, whose
fees will be paid by the Company and a copy of whose engagement letter has been
provided to Parent, 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 contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company that:
SECTION 5.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of England and
each material subsidiary of Parent is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Parent and its
material subsidiaries (including 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, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent," as used in this Agreement, means any
adverse change, circumstance or effect that, individually or in the aggregate
with all other adverse changes, circumstances and effects, has had or will have
a materially adverse effect on the business, financial condition, properties or
results of operations of Parent and its Subsidiaries taken as a whole.
SECTION 5.2 Authority Relative to this Agreement and the Stock Purchase
Agreements. Each of Parent and Purchaser has all necessary corporate power and
authority to execute and deliver this Agreement, the Stock Purchase Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Purchase Agreements by
Parent and Purchaser and the consummation by Parent and Purchaser of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by the Boards of Directors of Parent and Purchaser and
by Parent as stockholder of Purchaser, and no other corporate proceedings on the
part of Parent or Purchaser are necessary to authorize or approve this
Agreement, the Stock Purchase Agreements or to consummate the transactions
contemplated hereby or thereby. This Agreement has been duly
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executed and delivered by each of Parent and 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 Purchaser enforceable against each
of them in accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
SECTION 5.3 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement or the Stock
Purchase Agreements by Parent or Purchaser, the consummation by Parent or
Purchaser of the transactions contemplated hereby or thereby or compliance by
Parent or Purchaser with any of the provisions hereof or thereof will (i)
conflict with or violate the organizational documents of Parent or Purchaser,
(ii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to Parent or Purchaser, or any of their
subsidiaries, 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 Purchaser, or any
of their subsidiaries, 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 would not have a Material Adverse
Effect on Parent or materially adversely affect the ability of Parent or
Purchaser to consummate the transactions contemplated hereby.
(b) None of the execution and delivery of this Agreement or the Stock
Purchase Agreements by Parent and Purchaser, the consummation by Parent and
Purchaser of the transactions contemplated hereby or thereby or compliance by
Parent and Purchaser with any of the provisions hereof or thereof will require
any Consent of any Governmental Entity, except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a certificate of
merger, or, if permitted, a certificate of ownership and merger, pursuant to the
GCL, (iii) notifications required by certain state Blue Sky, takeover and
environmental statutes, (iv) compliance with the HSR Act and any requirements of
any foreign or supranational Antitrust Laws and (v) Consents the failure of
which to obtain or make would not have a Material Adverse Effect on Parent or
materially adversely affect the ability of Parent or Purchaser to consummate the
transactions contemplated hereby.
SECTION 5.4 Information. None of the information provided or that may be
provided by Parent or Purchaser for use in the Proxy Statement, the Schedule
14D-9 or the Other Filings, and neither the Offer Documents nor the Schedule
14D-1, shall, at the time filed with the SEC or any other Governmental Entity,
and, in the case of the Proxy Statement, at the time mailed to the Company's
stockholders, at the time of the Stockholders' Meeting or 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
therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, neither Parent nor Purchaser makes
any representation or warranty with respect to any information provided or that
may be provided by the Company specifically for use in such
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documents. The Schedule 14D-1 and the Offer Documents will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 5.5 Financing. Parent or Purchaser will have available to it at
the time required the funds necessary to consummate the Merger and the
transactions contemplated hereby.
SECTION 5.6 Brokers. Except for Bear, ▇▇▇▇▇▇▇ & Co. Inc., whose fees will
be paid by Parent, none of Parent, Purchaser, any of their 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 contemplated by this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.1 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement or 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 best reasonable 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. Without limiting
the generality of the foregoing, and except as otherwise expressly contemplated
by 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 any amendment to its Certificate of Incorporation or By-laws
or comparable organizational documents;
(b) except for issuances of capital stock of the Company's
Subsidiaries to the Company or a wholly-owned Subsidiary of the Company, issue,
reissue, pledge or sell, or authorize the issuance, reissuance, pledge or sale
of (i) additional shares of capital stock of any class, or securities
convertible into, exchangeable for or evidencing the right to substitute for,
capital stock of any class, or any rights, warrants, options, calls, commitments
or any other agreements of any character, to purchase or acquire any capital
stock or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for, capital stock, other than the issuance of
Shares, pursuant to the exercise of Options outstanding on the date hereof, or
(ii) any other securities in respect of, in lieu of, or in substitution for,
Shares outstanding on the date hereof;
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(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 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;
(e) except for (i) increases in salary and wages granted to officers
and employees of the Company or its Subsidiaries in conjunction with promotions
or other changes in job status or normal compensation reviews (within the
amounts projected in the Company's 1998 operating plan previously provided to
Parent) in the ordinary course of business consistent with past practice, or
(ii) increases in salary, wages and benefits to employees of the Company
pursuant to collective bargaining agreements in effect on the date hereof,
increase the compensation or fringe benefits pay able or to become payable to
its directors, officers or employees (whether from the Company or any of its
Subsidiaries), or pay or award any benefit not required by any existing plan or
arrangement (including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Option Plans or otherwise) or grant any additional severance or termination
pay to (other than as required by existing agreements or policies listed on
Schedule 6.01(e) hereto), or enter into any employment or severance agreement
with, any director, officer or other employee of the Company or any of its
Subsidiaries or, except pursuant to arrangements disclosed in Schedule 6.01(e)
or as required by Section 2.09, establish, adopt, enter into, amend, accelerate
any rights or benefits or waive any performance or vesting criteria under any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance or other employee benefit plan,
agreement, trust, fund, policy or arrangement for the benefit or welfare of any
directors, officers or current or former employees (any of the foregoing being
an "Employee Benefit Arrangement"), except in each case to the extent required
by applicable law or regulation; provided, however, that nothing herein will be
deemed to prohibit the payment of benefits as they become payable;
(f) acquire, sell, lease or dispose of any assets or securities which
are material to the Company and its Subsidiaries, or enter into any commitment
to do any of the foregoing or enter into any material commitment or transaction,
in each case outside the ordinary course of business consistent with past
practice other than transactions between a wholly owned Subsidiary of the
Company and the Company or another wholly owned Subsidiary of the Company;
(g) (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 under existing lines of credit, (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
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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, capital contributions or investments between any wholly owned
Subsidiary of the Company and the Company or another wholly owned Subsidiary of
the Company;
(h) settle or compromise any material suit or claim or material
threatened suit or claim;
(i) other than in the ordinary course of business consistent with past
practice, (i) modify, amend or terminate any contract, (ii) waive, release,
relinquish or assign any 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;
(j) make any tax election not required by law or settle or compromise
any tax liability, in either case that is material to the Company and its
Subsidiaries;
(k) make any material change, other than in the ordinary course of
business and consistent with past practice or as required by applicable law,
regulation or change in generally accepted accounting principles, applied by the
Company (including tax accounting principles);
(l) release any person or entity from, or waive any provision of, any
standstill agreement to which it is a party or any confidentiality agreement
between it and another person or entity; or
(m) agree in writing or otherwise to take any of the foregoing actions
prohibited under Section 6.01 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. 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 Purchaser and their respective officers, employees, 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, Purchaser and
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 Purchaser may from time to time
reasonably request. Parent will comply with the terms of the Confidentiality
Agreement (as hereinafter defined).
SECTION 6.3 Reasonable Best Efforts. Subject to the terms and conditions
herein provided and to applicable legal requirements, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done,
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and to assist and cooperate with the other parties hereto in doing, as promptly
as practicable, all things necessary, proper or advisable under applicable laws
and regulations to ensure that the conditions set forth in Annex I and Article
VIII are satisfied, to remove any injunctions or other impediments or delays,
legal or otherwise and to consummate and make effective the transactions
contemplated by this Agreement.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent and/or 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 the Offer Documents, the Proxy
Statement, the Other Filings, Schedule 14D-1 or Schedule 14D-9, the discovering
party will promptly inform the other parties of such event or circumstance. If
at any time after the Effective Time any reasonable further action is necessary
or desirable to carry out the purposes of this Agreement, including the
execution of additional instruments, the proper officers and directors of each
party to this Agreement shall take all such necessary reasonable action.
SECTION 6.4 Consents.
(a) Each of the parties will, and will cause its Subsidiaries to, use
its reasonable best efforts to obtain as promptly as practicable all Consents of
any Governmental Entity or any other public or private person required in
connection with, and waivers of any Violations that may be caused by, the
consummation of the transactions contemplated by this Agreement.
(b) Each of the Company and Parent shall use its reasonable best
efforts to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters. Each
of the Company and Parent shall further take all reasonable actions necessary to
file any other forms or notifications which may be required by any foreign
Governmental Entity and to obtain any approvals which may be required in
connection therewith.
(c) In furtherance and not in limitation of the foregoing, each of
Parent and the Company shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any domestic or foreign government or
Governmental Entity or any multinational authority ("Antitrust Laws"); provided,
however, that nothing in this Agreement shall require, or be construed to
require, Purchaser or any of its affiliates to proffer to, or agree to, sell or
hold separate and agree to sell, before or after the Effective Time, any
material assets, businesses, or interest in any assets or businesses of
Purchaser, the Company or any of their respective affiliates (or to consent to
any sale, or agreement to sell, by the Company of any of its material assets or
businesses) or to agree to any material changes or restrictions in the
operations of any such assets or businesses.
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(d) Any party hereto shall promptly inform the others of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or governmental or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request. Parent will advise the
Company promptly in respect of any understandings, undertakings or agreements
(oral or written) which Parent proposes to make or enter into with the Federal
Trade Commission, the Department of Justice or any other domestic or foreign
government or governmental or multinational authority in connection with the
transactions contemplated by this Agreement.
SECTION 6.5 Public Announcements. The mutual press release with respect to
the execution of this Agreement shall be a joint press release acceptable to
Parent and the Company. Thereafter, so long as this Agreement is in effect,
neither Parent and Purchaser, on the one hand, nor the Company, on the other,
shall issue any press release or otherwise make any public statement with
respect to the transactions contemplated by this Agreement without prior
consultation with the other party, except as may be required by law or as
contemplated by the first clause of Section 6.08(a)(ii) (it being understood and
agreed that the Company intends to file a Current Report on Form 8-K with
respect to the transaction contemplated hereby promptly after the date hereof).
SECTION 6.6 Indemnification; Insurance.
(a) From and after the date hereof, Parent and Purchaser shall
indemnify and hold harmless each person who is, or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, an officer, director
or employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties" and individually, the "Indemnified Party") against all
losses, liabilities, expenses, claims or damages in connection with any claim,
suit, action, proceeding or investigation based in whole or in part on the fact
that such Indemnified Party is or was a director, officer or employee of the
Company or any of its Subsidiaries and arising out of acts or omissions
occurring prior to and including the Effective Time (including but not limited
to the transactions contemplated by this Agreement) to the fullest extent
permitted by the GCL, for a period of not less than six years following the
Effective Time; provided, however, that in the event any claim or claims are
asserted or made within such six-year period, all rights to indemnification in
respect of any such claim or claims shall continue until final disposition of
any and all such claims.
(b) Parent shall cause the Certificate of Incorporation and By-Laws
of the Surviving Corporation and its Subsidiaries to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under
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applicable law and shall not permit the amendment of such provisions in any
manner adverse to the Indemnified Parties, as the case may be, without the prior
written consent of such persons, for a period of six years from and after the
date hereof.
(c) Without limitation of the foregoing, in the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter, including, without
limitation, the transactions contemplated by this Agreement, occurring prior to,
and including, the Effective Time, Parent will pay as incurred such Indemnified
Party's legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith, subject to the provision by such
Indemnified Party of an undertaking to reimburse such payments in the event of a
final determination by a court of competent jurisdiction that such Indemnified
Party is not entitled thereto. Parent shall pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.06 or any action
involving an Indemnified Party resulting from the transactions contemplated by
this Agreement.
(d) For six years after the Effective Time, the Surviving Corporation
shall cause to be maintained policies of directors and officers' liability
insurance comparable to those currently maintained by the Company for the
benefit of directors and officers of the Company (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions which are substantially equivalent) with respect
to matters occurring prior to the Effective Time. Notwithstanding the foregoing,
in no case shall the Surviving Corporation be required to pay an annual premium
for such insurance greater than 300% of the last annual premium paid prior to
the date hereof. The Company represents to Parent that the last annual premium
paid for such insurance prior to the date hereof was $256,000.
(e) Any determination to be made as to whether any Indemnified Party
has met any standard of conduct imposed by law shall be made by legal counsel
reasonably acceptable to such Indemnified Party, Parent and the Surviving
Corporation, retained at Parent's and the Surviving Corporation's expense.
(f) This Section 6.06 is intended to benefit the Indemnified Parties
and their respective heirs, executors and personal representatives and shall be
binding on the successors and assigns of Parent, Purchaser and the Surviving
Corporation.
SECTION 6.7 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 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 or Parent, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder in any
material respect; provided,
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however, that no such notification shall affect the representations or
warranties of any party or the conditions to the obligations of any party
hereunder.
SECTION 6.8 No Solicitation. (a) The Company and its Subsidiaries shall
not, and the Company and its Subsidiaries shall use their reasonable best
efforts to ensure that their respective officers, directors, employees,
representatives and agents (including, but not limited to, investment bankers,
attorneys and accountants) do not, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Purchaser, any of its affiliates or representatives) concerning any
proposal or offer to acquire all or a substantial part of the business or
properties of the Company or any of its Subsidiaries or any capital stock of the
Company or any of its Subsidiaries, whether by merger, tender offer, exchange
offer, sale of assets or similar transaction involving the Company or any
Subsidiary, division or operating or principal business unit of the Company (an
"Acquisition Proposal"), except that nothing contained in this Section 6.08 or
any other provision hereof shall prohibit the Company or the Company's Board
from (i) taking and disclosing to the Company's stockholders a position with
respect to a tender or exchange offer by a third party pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act, or (ii) making such disclosure to
the Company's stockholders as, in the good faith judgment of the Board, after
receiving advice from outside counsel, is required under applicable law;
provided that the Company may not, except as permitted by Section 6.08(b),
withdraw or modify its position with respect to the Offer or the Merger or
approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition Proposal.
Except as permitted by Section 6.08(b), the Company shall, and shall cause each
of its Subsidiaries to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations by the Company, any of its
Subsidiaries or any officer, director, employee or affiliate of, or investment
banker, attorney, accountant or other advisor or representative of, the Company
or any of its Subsidiaries with parties conducted heretofore with respect to any
of the foregoing.
(b) Notwithstanding the foregoing, prior to the later of (i) 11:59 P.M.
Chicago time March 30, 1998 and (ii) the expiration of the applicable waiting
periods under the HSR Act, the Company may furnish information concerning the
Company and its Subsidiaries to any corporation, partnership, person or other
entity or group pursuant to appropriate confidentiality agreements with terms
substantially similar to those contained in the Confidentiality Agreement, and
may negotiate and participate in discussions and negotiations with such entity
or group concerning an Acquisition Proposal if (i) such entity or group, which
has not been solicited by or on behalf of the Company after the date hereof, has
submitted a bona fide written proposal to the Company relating to any such
transaction which the Board concludes in good faith, after consulting with a
nationally recognized investment banking firm, (A) is more favorable to the
Company's stockholders (in their capacities as stockholders), from a financial
point of view, than the Offer and the Merger and (B) is reasonably capable of
being completed, and (ii) in the good faith opinion of the Board of Directors of
the Company, only after receipt of advice from outside legal counsel to the
Company, the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Board of Directors to violate its
fiduciary duties to the Company's stockholders under applicable law (an
Acquisition Proposal which satisfies
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clauses (i) and (ii) being referred to herein as a "Superior Proposal"). The
Company shall provide reasonable notice to Purchaser to the effect that it has
received an Acquisition Proposal, including its terms and conditions (but
excluding the identity of the party or parties making such Acquisition Proposal,
unless the terms and conditions of such Acquisition Proposal contains a purchase
price that includes stock of such party or parties). At any time after 48 hours
following notification to Purchaser of the Company's intent to do so (which
notification shall include the identity of the bidder and the material terms and
conditions of the proposal) and if the Company has otherwise complied with the
terms of this Section 6.08(b), the Board of Directors may withdraw or modify its
approval or recommendation of the Offer and may cause the Company to enter into
an agreement with respect to a Superior Proposal, provided it shall concurrently
with entering into such agreement pay or cause to be paid to Purchaser the
Termination Fee (as defined below) plus any amount payable at the time for
reimbursement of expenses pursuant to Section 8.03(b). If the Company shall have
notified Purchaser of its intent to enter into an agreement with respect to a
Superior Proposal in compliance with the preceding sentence and has otherwise
complied with such sentence, the Company may enter into an agreement with
respect to such Superior Proposal (with the bidder and on terms no less
favorable than those specified in such notification to Purchaser) after the
expiration of such 48 hour period.
SECTION 6.9 Agreement regarding Certain Real Estate. The Company represents
and warrants that it has the unconditional right to obtain legal title to the
properties occupied by it or its Subsidiaries in Mt. Pleasant, Iowa, Lincoln,
Nebraska, and Rutland, Vermont which were subject to industrial revenue bond
financings that have now been paid in full (the "IRB Properties") and agrees to
use its reasonable best efforts to cause the deeds to each of the IRB Properties
to be transferred to and in the name of the Company prior to the consummation of
the Offer.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions to Each Party's Obligation to Consummate the
Merger. The respective obligations of Parent, Purchaser and the Company to
consummate the Merger and the transactions contemplated hereby are subject to
the satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. If required by the GCL, the stockholders of
the Company shall have duly approved the transactions contemplated by this
Agreement.
(b) 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.
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(c) Purchase of Shares. Parent and/or Purchaser shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Parent or Purchaser if Parent and/or Purchaser fails to purchase Shares tendered
pursuant to the Offer in violation of the terms of this Agreement or the Offer.
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 stockholders of the Company (with any
termination by Parent also being an effective termination by Purchaser):
(a) by mutual consent of Parent and the Company;
(b) by Parent or the Company:
(i) if any court or Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable best
efforts to lift) restraining, enjoining or otherwise prohibiting the Merger
and such order, decree, ruling or other action shall have become final and
nonappealable; or
(ii) if (x) the Offer shall have expired without any Shares being
purchased therein or (y) Purchaser shall not have accepted for payment all
Shares tendered pursuant to the Offer by September 30, 1998; provided,
however, that the right to terminate this Agreement under this Section
8.01(b)(ii) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in,
the failure of Purchaser, to purchase the Shares pursuant to the Offer on
or prior to such date;
(c) by the Company:
(i) if Parent and/or Purchaser fails to commence the Offer as
provided in Section 1.01 hereof; provided, that the Company may not
terminate this Agreement pursuant to this Section 8.01(c)(i) if the Company
is at such time in breach of its obligations under this Agreement such as
to cause a Material Adverse Effect on the Company;
(ii) in connection with entering into a definitive agreement in
accordance with Section 6.08(b), provided it has complied with all
provisions of such
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section, including the notice provisions therein, and that it makes
simultaneous payment of the Termination Fee plus any amounts then due as a
reimbursement of expenses; or
(iii) if Parent or Purchaser shall have made a material
misrepresentation or have breached in any material respect any of their
respective representations, covenants or other agreements contained in this
Agreement, which breach cannot be or has not been cured, in all material
respects, within 30 days after the giving of written notice to Parent or
Purchaser, as applicable; provided, however, that the right to terminate
this Agreement under this Section 8.01(c)(iii) shall not be available
(other than as a result of any breach of covenants or other agreements
contained in this Agreement) after 11:59 P.M. Chicago time March 30, 1998
unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time.
(d) by Parent:
(i) if, due to an occurrence, not involving a breach by Parent or
Purchaser of their obligations hereunder, which makes it impossible to
satisfy any of the conditions set forth in Annex I hereto, Parent or
Purchaser shall have failed to commence the Offer on or prior to five
business days following the date of the initial public announcement of the
Offer;
(ii) if prior to the purchase of Shares pursuant to the Offer, the
Company shall have breached any representation, warranty, covenant or other
agreement contained in this Agreement which (A) would give rise to the
failure of a condition set forth in paragraph (f) or (g) of Annex I hereto
and (B) cannot be or has not been cured, in all material respects, within
30 days after the giving of written notice to the Company; provided,
however, that the right to terminate this Agreement under this Section
8.01(d)(ii) shall not be available (other than as a result of any breach of
covenants or other agreements contained in this Agreement) after 11:59 P.M.
Chicago time March 30, 1998 unless the expiration of applicable waiting
periods under the HSR Act shall not have occurred at or prior to such time;
(iii) if any event set forth in paragraph (e) of Annex I hereto shall
have occurred; or
(iv) if the condition set forth paragraph (j) of Annex I hereto fails
to be fulfilled by March 20, 1998.
SECTION 8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.01, 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
8.02, Section 8.03 and the last sentence of Section 6.02, which shall survive
any such termination. Nothing contained in this Section 8.02 shall relieve any
party from liability for any breach of this Agreement or the Confidentiality
Agreement.
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SECTION 8.3 Fees and Expenses.
(a) Except as contemplated by this Agreement, each party hereto shall
bear its own expenses and costs in connection with this Agreement and the
transactions contemplated hereby.
(b) If
(w) the Company shall terminate this Agreement pursuant to Section
8.01(c)(ii) hereof,
(x) Parent shall terminate this Agreement pursuant to Section
8.01(d)(iii) hereof,
(y) either the Company or Parent terminates this Agreement pursuant to
Section 8.01(b)(ii) and (a) prior thereto there shall have been
publicly announced another Acquisition Proposal (provided, however,
that solely for purposes of this clause (a), the term Acquisition
Proposal shall not include (1) the purchase of less than 5% of any
class or series of capital stock of the Company if such purchase does
not involve an offer to acquire additional shares of capital stock of
the Company that could cause any person, entity or "group" (as defined
in Section 13(d)(3) of the Exchange Act), other than Purchaser or its
affiliates or any group of which any of them is a member, to
beneficially own 5% or more of any such class or series or (2) any
purchase of 5% or more of any class or series of capital stock of the
Company which can properly be reported on a Schedule 13G) or an event
set forth in paragraph (h) of Annex I shall have occurred and (b) an
Acquisition Proposal pursuant to which any Person acquires all or a
substantial part of the business or properties of the Company or any
of its Subsidiaries, any of the capital stock (or securities
exercisable for or convertible into such capital stock) of any of the
Subsidiaries of the Company or any capital stock (or securities
exercisable for or convertible into such capital stock) of the Company
which represents 20% or more of the equity interest or voting power of
the Company shall be consummated on or prior to December 31, 1998, or
(z) Parent shall terminate this Agreement pursuant to Section
8.01(d)(iv) hereof and an Acquisition Proposal pursuant to which any
Person acquires all or a substantial part of the business or
properties of the Company or any of its Subsidiaries, any of the
capital stock (or securities exercisable for or convertible into such
capital stock) of any of the Subsidiaries of the Company or any
capital stock (or securities exercisable for or convertible into such
capital stock) of the Company which represents 20% or more of the
equity interest or voting power of the Company shall be consummated on
or prior to December 31, 1998,
then, the Company shall pay to Purchaser an amount equal to $15,000,000 (the
"Termination Fee"), plus an amount equal to Purchaser's actual documented
reasonable out-of-pocket fees and
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expenses (including, without limitation, reasonable legal, investment banking,
financing commitment fees and commercial banking fees and expenses) incurred by
Purchaser and Parent in connection with the due diligence investigation, the
Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby (the "Reimbursable Expenses"), which shall be payable by
wire transfer of same day funds to an account designated by Purchaser. The
Company shall also be obligated to pay to Purchaser the Reimbursable Expenses in
such manner if Parent shall terminate this Agreement pursuant to Section
8.01(d)(iv) hereof (regardless of whether an Acquisition Proposal is consummated
thereafter). The Termination Fee and Purchaser's good faith estimate of its
Reimbursable Expenses shall be paid concurrently with any such termination,
together with delivery of a written acknowledgment by the Company of its
obligation to reimburse Purchaser for its actual expenses in excess of such
estimated expenses payment, except that the Termination Fee and such expenses
shall be payable in connection with a termination described in clauses (y) or
(z) above upon the consummation of an Acquisition Proposal referenced in such
clauses.
SECTION 8.4 Amendment. This Agreement may be amended by Parent and the
Company at any time before or after any approval of this Agreement by the
stockholders of the Company but, after any such approval, no amendment shall be
made which decreases the Purchase Price or changes the form thereof 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 8.5 Extension; Waiver. At any time prior to the Effective Time,
any party 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 of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. The covenants and other agreements contained herein shall
survive in accordance with their respective terms.
SECTION 9.2 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments
referred to herein) and the letter agreement between ▇▇▇▇▇▇ Brothers, on behalf
of the Company, and
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Experian Corporation, on its own behalf and for Parent and its other affiliates,
dated February 6, 1998 (the "Confidentiality Agreement"), 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 Purchaser may assign its
rights, interest and obligations to any affiliate or direct or indirect
subsidiary of Parent without the consent of the Company). 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 Purchaser:
The Great Universal Stores P. L. C.
c/o Experian Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Senior Vice President
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to the Company:
Metromail Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with copies to:
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▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
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 Consent to Jurisdiction; Waiver of Immunities. The Company,
Parent and Purchaser irrevocably submit to the jurisdiction of any Delaware
state or federal court thereof in any action or proceeding arising out of or
relating to this Agreement, and the Company, Parent and Purchaser hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Delaware court or in such federal court. Parent and
Purchaser hereby irrevocably appoint The Corporation Trust Company (the "Parent
Process Agent"), with an office on the date hereof at Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware, as its agent to receive on behalf of
Parent or Purchaser service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to Parent or Purchaser
in care of Parent Process Agent at Parent Process Agent's above address, and
Parent and/or Purchaser hereby irrevocably authorize and direct Parent Process
Agent to accept such service on their behalf. The Company hereby irrevocably
appoints The Corporation Trust Company (the "Company Process Agent"), with an
office on the date hereof at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware, as its agent to receive on behalf of the Company service
of copies of the summons and complaint and any other process which may be served
in any such action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Company in care of the Company Process
Agent at the Company Process Agent's above address, and the Company hereby
irrevocably authorizes and directs the Company Process Agent to accept such
service on its behalf. As an alternative method of service, the Company, Parent
and Purchaser also irrevocably consent to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to the
respective party at its address specified in Section 9.04. The Company, Parent
and Purchaser agree that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
SECTION 9.7 Descriptive Headings. The descriptive headings and captions
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.
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SECTION 9.8 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 9.9 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 2.09 and 6.06, 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 9.10 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" 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", "Subsidiaries" or "subsidiaries" means,
with respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
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.
* * * * *
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IN WITNESS WHEREOF, each of the parties has caused this Agreement and Plan
of Merger to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
THE GREAT UNIVERSAL STORES P. L. C.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Title:
----------------------------
GREAT UNIVERSAL ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title:
----------------------------
METROMAIL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title:
----------------------------
Annex I
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against Purchaser, Parent, the Company or
any Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Purchaser's or Parent's ownership or operation (or that of any of
their respective Subsidiaries or affiliates) of all or a material portion of
their or the Company's businesses or assets (or that of any of its
Subsidiaries), or to compel Purchaser or Parent or their respective Subsidiaries
and affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and their respective Subsidiaries,
in each case taken as a whole, (ii) challenging the acquisition by Purchaser or
Parent of any Shares under the Offer, seeking to restrain or prohibit the making
or consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Agreement or the Stock Purchase
Agreements, or seeking to obtain from the Company, Purchaser or Parent any
damages that are material in relation to the Company and its Subsidiaries taken
as a whole, (iii) seeking to impose material limitations on the ability of
Purchaser, or render Purchaser unable, to accept for payment, pay for or
purchase some or all of the Shares pursuant to the Offer and the Merger or (iv)
seeking to impose material limitations on the ability of Purchaser or Parent
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders or there shall be pending any
suit, action or proceeding by any Governmental Entity against Purchaser, Parent,
the Company or any Subsidiary of the Company which is reasonably likely to have
a Material Adverse Effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange for a
period in excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not mandatory),
(iii) a commencement of a war or other international or national calamity
directly or indirectly involving the United States, (iv) any limitation (whether
or not mandatory) by any United States governmental authority on the extension
of credit generally by banks or other financial institutions, or (v) a change in
general financial, bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United States to
extend credit or syndicate loans or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof; provided, however, the right to terminate the Agreement
pursuant to this provision shall not be available after 11:59 P.M. Chicago time
March 30, 1998 unless the expiration of applicable waiting periods under the HSR
Act shall not have occurred at or prior to such time;
(d) there shall have occurred any events after the date of the
Agreement which have or will have a Material Adverse Effect on the Company;
provided, however, the right to terminate the Agreement pursuant to this
provision shall not be available after 11:59 P.M. Chicago time March 30, 1998
unless the expiration of applicable waiting periods under the HSR Act shall not
have occurred at or prior to such time;
(e) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Purchaser its approval or recommendation of the Offer, the Merger or the
Agreement, or approved or recommended any Acquisition Proposal or (ii) the
Company shall have entered into any agreement with respect to any Superior
Proposal in accordance with Section 6.08(b) of the Agreement; provided, however,
the right to terminate the Agreement pursuant to this provision shall not be
available after 11:59 P.M. Chicago time March 30, 1998 unless the expiration of
applicable waiting periods under the HSR Act shall not have occurred at or prior
to such time;
(f) the representations and warranties of the Company set forth in
the Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Agreement and as of the scheduled expiration of the Offer (or if
applicable waiting periods under the HSR Act shall have expired on or before
March 30, 1998, as of March 30, 1998), unless the inaccuracies without giving
effect to any materiality or material adverse effect qualifications or
materiality exceptions contained therein under such representations and
warranties, taking all the inaccuracies under all such representations and
warranties together in their entirety, do not result in Material Adverse Effect
on the Company; provided, however, the right to terminate the Agreement pursuant
to this provision shall not be available after 11:59 P.M. Chicago time March 30,
1998 unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time;
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(g) the Company shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it (i)
under Section 6.01 or 6.08 of the Agreement or (ii) under any other agreement or
covenant to be performed or complied with by it under the Agreement, unless the
failure to so perform or comply would not have a Material Adverse Effect on the
Company;
(h) it shall have been publicly disclosed or Purchaser or Parent
shall have otherwise learned that any person, entity or "group" (as defined in
Section 13(d)(3) of the Exchange Act), other than Purchaser or its affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange Act)
of more than 20% of the outstanding shares of any class or series of capital
stock of the Company (including the Shares), through the acquisition of stock,
the formation of a group or otherwise, or shall have been granted an option,
right or warrant, conditional or otherwise, to acquire beneficial ownership of
more than 20% of any class or series of capital stock of the Company (including
the Shares); provided, however, the right to terminate the Agreement pursuant to
this provision shall not be available after 11:59 P.M. Chicago time March 30,
1998 unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time;
(i) the Agreement shall have been terminated in accordance with its
terms; or
(j) the Company shall have failed to obtain the irrevocable letter of
credit that is a condition precedent to the obligations of the insurer under the
insurance endorsement described in Schedule 4.12 to the Agreement by March 20,
1998 in accordance with the terms of such endorsement.
The foregoing conditions are for the benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or 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 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.
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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