EXHIBIT (7)(ii)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of September
5, 1995, is among TIE/communications, Inc., a Delaware corporation (the
"Company"), TIE Acquisition Co., a Delaware corporation ("Parent") and TIE
Merger Co., a Delaware corporation and wholly-owned subsidiary of Parent
("Acquisition").
WHEREAS, the Board of Directors of the Company (the "Board") desires to
optimize stockholder value and has been evaluating alternatives, including the
continuation of the Company's current business strategies, the implementation of
strategic alliances with one or more synergistic parties or a sale or similar
disposition of the Company;
WHEREAS, various potential purchasers have submitted proposals to acquire
the Company and these proposals have been considered and evaluated by the Board,
with the advice and assistance of its legal and financial advisors;
WHEREAS, the Board has determined that it is in the best interests of the
Company's stockholders for the Company to enter into this Agreement with Parent
and Acquisition, providing for the acquisition of the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, subject to the terms and conditions of this Agreement, and in
furtherance hereof, Parent shall make a tender offer (the "Offer") to acquire
all of the outstanding shares of common stock, par value $.10 per share, of the
Company (the "Shares") for a cash amount of $8.60 per share net to the seller
(such amount, or any greater amount per Share paid pursuant to the Offer, being
hereinafter referred to as the "Per Share Amount");
WHEREAS, the Board has, in light of and subject to the terms and conditions
set forth herein, (i) determined that the Offer and the Merger (as hereinafter
defined), taken together, is fair to and in the best interests of the
stockholders of the Company and (ii) approved and adopted this Agreement and the
transactions contemplated hereby (including, but not limited to, the Offer) and
resolved to recommend acceptance of the Offer and, if required by applicable
law, approval and adoption of this Agreement and the Merger by the stockholders
of the Company;
WHEREAS, subject to the terms and conditions of this Agreement and also in
furtherance of such acquisition, the Managing Board of Parent and the Board of
Directors of Acquisition have each approved the merger (the "Merger") of
Acquisition with and into the Company following the Offer in accordance with the
General Corporation Law of the State of Delaware (the "Delaware Law"), pursuant
to which the holders of Shares (other than
Acquisition, Parent and any direct or indirect subsidiary of Parent or
Acquisition) shall receive the Per Share Amount; and
WHEREAS, Parent has received the written commitment of Xxxxxx Holdings,
Inc. ("Xxxxxx") and The Pritzker Family Philanthropic Fund to tender the
respective Shares owned by each of them pursuant to the Offer, and not to
withdraw such Shares from such tender, and
each of Xxxxxx Holdings, Inc. and The Pritzker Family Philanthropic Fund has
granted to Parent an irrevocable option to purchase and an irrevocable proxy
with respect to the respective Shares owned or hereafter acquired by each of
them, all pursuant to and subject to the conditions of that certain Stockholders
Option Agreement of even date herewith (the "Stockholders Option Agreement").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company, Parent and Acquisition hereby agree as follows.
ARTICLE I.
THE OFFER
SECTION 1.01 The Offer. (a) Provided that this Agreement shall not have
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been terminated in accordance with Section 8.01 hereof and none of the events
set forth in Annex A hereto shall have occurred or be existing, Parent shall
commence the Offer as promptly as reasonably practicable after the date hereof,
but in no event later than September 12, 1995. The obligation of Parent to
accept for payment and to pay for Shares tendered pursuant to the Offer shall be
subject to the condition that at least 2,986,004 Shares (or such greater number
of Shares as equals 75% of the Shares then outstanding) shall have been validly
tendered and not withdrawn prior to the expiration of the Offer (the "Minimum
Tender Condition") and shall also be subject to the satisfaction of the other
conditions set forth in Annex A hereto. Subject to the terms and conditions of
the Offer (including the Minimum Tender Condition), Parent shall pay for Shares
which have been validly tendered and not withdrawn pursuant to the Offer as
promptly as reasonably practicable after expiration of the Offer. Parent
expressly reserves the right to increase the price per Share payable in the
Offer or to make any other changes in the terms and conditions of the Offer;
provided that, unless approved by the Board in writing, no change will be made
that decreases the price per Share payable in the Offer, changes the form of
consideration payable in the Offer, adds additional conditions to the Offer,
decreases the number of Shares being tendered for in the Offer, or makes any
change in the terms and conditions of the Offer which is inconsistent with the
third sentence of this Section 1.01(a) or which is otherwise materially adverse
to holders of Shares. It is agreed that the conditions set forth in Annex A
hereto are for the benefit of Parent and may be asserted by Parent or, subject
to the preceding sentence, may be waived by Parent, in whole or in part at any
time and from time to time, in its sole discretion. The Per Share Amount,
subject to applicable withholding taxes, shall be paid net to the seller in
cash, upon the terms and subject to the conditions of the Offer.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Parent and Acquisition shall file with the Securities and Exchange
Commission (the "SEC") (i) a Tender Offer Statement on Schedule 14D-1 (together
with any amendments or supplements thereto, the "Schedule 14D-1") with respect
to the Offer and (ii) if required, a Rule 13E-3 Transaction Statement (the
"Schedule 13E-3") with respect to the execution and delivery of the Stockholders
Option Agreement and the Offer. The Schedule 14D-1 shall contain or shall
incorporate by reference an offer to purchase and a form of the related letter
of transmittal and any related summary advertisement (together with all
supplements or amendments thereto and the Schedule 14D-1, the "Offer
Documents"). The Offer Documents and Schedule 13E-3 will
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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 therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by Parent or Acquisition with respect to
information supplied by the Company for inclusion in the Offer Documents or
Schedule 13E-3. Parent, Acquisition and the Company each agrees promptly to
correct any information provided by it for use in the Offer Documents and
Schedule 13E-3 if and to the extent that it shall have become false or
misleading in any material respect and Parent and Acquisition each further
agrees to take all steps necessary to cause the Offer Documents and Schedule
13E-3 as so corrected to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and Acquisition agree to provide the Company and its
counsel in writing any comments Parent, Acquisition or their counsel may receive
from the SEC or its Staff with respect to the Offer Documents promptly after the
receipt of such comments.
(c) The Company shall prepare and file with the SEC, subject to the prior
approval of Acquisition (which approval shall not be unreasonably withheld), if
necessary, as soon as practicable after the expiration of the Offer, a proxy or
information statement (the "Proxy Statement") and such other documents relating
to the Merger as required by the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder, and the Company
shall prepare or shall assist Parent and Acquisition in preparing, as the case
may be, any other filings required under the Exchange Act, the Securities Act of
1933, as amended (the "Securities Act"), or any other federal or state
securities laws relating to the Offer, the Merger and the transactions
contemplated herein (the "Other Filings"). The Company shall obtain and furnish
the information required to be included in the Proxy Statement and shall,
subject to the prior approval of Acquisition (which approval shall not be
unreasonably withheld), respond promptly to any comments made by the SEC with
respect to the Proxy Statement and cause the Proxy Statement to be mailed to the
Company's stockholders at the earliest reasonably practicable date.
SECTION 1.02 Company Action. (a) The Company hereby approves of and
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consents to the Offer and represents and warrants that the Board, at a meeting
duly called and held, has in light of and subject to the terms and conditions
set forth herein, (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, taken together, are
fair to and in the best interests of the stockholders of the Company, (ii)
approved and adopted this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, which approval constitutes approval for
purposes of Section 203(a)(1) of the Delaware Law of the Offer, the execution,
delivery and performance of the Stockholders Option Agreement by and among
Acquisition and the stockholders who are parties thereto and the Merger, and
(iii) resolved to recommend that the stockholders of the Company accept the
Offer, tender their Shares thereunder to Acquisition and, if required by
applicable law, approve and adopt this Agreement and the Merger; provided,
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however, that such recommendation may be withdrawn, modified or amended to the
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extent that the members of the Board, by a majority vote, determine in good
faith (upon advice of counsel) that they are required to do so in the exercise
of their fiduciary duties. The Company hereby consents to the inclusion in the
Offer Documents of the recommendation of the Board described in the immediately
preceding sentence.
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(b) The Company hereby agrees to file with the SEC as promptly as
reasonably practicable on the date of the commencement of the Offer, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") containing the
recommendations described in Section 1.02(a) hereof and to disseminate the
Schedule 14D-9 to the extent required by Rule 14e-2 promulgated under the
Exchange Act and any other applicable federal securities laws. The Schedule
14D-9 will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC, 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
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Parent or Acquisition for inclusion in the Schedule 14D-
9. Parent and its counsel shall be given the opportunity to review the Schedule
14D-9 prior to the filing thereof with the SEC. The Company, Parent and
Acquisition each agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 and to the extent that it shall have become false or
misleading in any material respect the Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and disseminated to the holders of Shares, as and to the extent required by
applicable federal securities laws. The Company agrees to provide to
Acquisition and its counsel in writing any comments the Company or its counsel
may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after receipt of such comments. Notwithstanding anything contained in
this Section 1.02(b), but subject to Section 8.03 hereof, if the members of the
Board by majority vote determine in good faith (upon advice of counsel) that it
is required in the exercise of their fiduciary duties to withdraw, modify or
amend the recommendation of the Board, such withdrawal, modification or
amendment shall not constitute a breach of this Agreement.
(c) In connection with the Offer, the Company will promptly furnish Parent
with such information, including current lists of the stockholders of the
Company, mailing labels and lists of security positions and shall furnish Parent
with such additional information and assistance (including, without limitation,
updated lists of stockholders, mailing labels and lists of securities positions)
as Parent or its agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Parent and its affiliates and associates shall hold in confidence the
information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger, and, if this
Agreement shall be terminated, will deliver to the Company all copies of such
information then in their possession.
SECTION 1.03 Boards of Directors and Committees; Section 14(f). (a)
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Effective upon the purchase by Parent of Shares pursuant to the Offer and from
time to time thereafter, Parent shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Board as will give
Parent representation on the Board equal to the product of the number of
directors on the Board and the percentage that such number of Shares so
purchased bears to the total number of outstanding Shares, and the Company shall
take all actions necessary to cause Parent's designees to be elected or
appointed to the Company's Board; provided, however, that prior to the Effective
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Time (as hereinafter defined), the Board shall always have at least three (3)
members who are neither officers of the Company nor designees, stockholders,
affiliates or associates of Parent, Acquisition or, unless such designee is
consented
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to by Parent (which consent shall not be unreasonably withheld), any party to
the Stockholders Option Agreement (the "Independent Directors"). At such times
the Company will use its best efforts to cause persons designated by Parent to
constitute the same percentage as is on the Board of (i) each committee of the
Board (other than any committee of the Board established to take action under
this Agreement), (ii) each board of directors of each subsidiary of the Company,
and (iii) each committee of each such board.
(b) The Company's obligations to appoint designees to the Board shall be
subject to Section 14(f) of the Exchange Act ("Section 14(f)") and Rule 14f-1
promulgated thereunder ("Rule 14f-1"). The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 1.03 and shall include in the Schedule 14D-9
or the Schedule 14D-1 such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1.
Parent or Acquisition will supply to the Company in writing and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(c) Following the election or appointment of Acquisition's designees
pursuant to this Section 1.03 and prior to the Effective Time (as hereinafter
defined), (i) any amendment to this Agreement which (A) decreases the price per
Share payable hereunder, (B) changes the form of consideration payable
hereunder, or (C) makes any change in the terms and conditions of this Agreement
which is otherwise materially adverse to holders of Shares, (ii) any extension
by the Company of the time for the performance of any of the obligations or
other acts of Parent or Acquisition or the waiver of any of the Company's rights
hereunder, and (iii) any termination of the Agreement, will require the
concurrence of a majority of the Independent Directors.
ARTICLE II.
THE MERGER
SECTION 2.01 The Merger. At the Effective Time and upon the terms and
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subject to the satisfaction or waiver of the conditions of this Agreement and
the Delaware Law, Acquisition shall be merged with and into the Company.
Following the Merger, the separate corporate existence of Acquisition shall
cease. The Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Acquisition.
SECTION 2.02 Effective Time. As soon as practicable after the
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satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall file a certificate of merger or certificate of
ownership and merger with the Secretary of State of the State of Delaware, and
take all such other and further actions as may be required by law to make the
Merger effective. The Merger shall become effective at such time as the
certificate of merger or certificate of ownership and merger is duly filed with
the Secretary of State of the State of Delaware (the "Effective Time").
SECTION 2.03 Effects of the Merger. The Merger shall have the effects set
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forth in the Delaware Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and
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Acquisition shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Acquisition shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation and By-Laws. (a) Subject to
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Section 6.06(b) hereof, the Restated Certificate of Incorporation of the Company
in effect immediately prior to the Effective Time shall be amended at the
Effective Time to read as does the Certificate of Incorporation of Acquisition
immediately prior to the Effective Time, except that the name of the Surviving
Corporation as set forth in such Certificate of Incorporation shall be
"TIE/communications, Inc."
(b) Subject to Section 6.06(b) hereof, the By-Laws of Acquisition in effect
immediately prior to the Effective Time shall be the By-Laws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 2.05 Directors. The directors of the Company immediately prior to
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the Effective Time shall be the initial directors of the Surviving Corporation,
each to hold office from the Effective Time in accordance with the Certificate
of Incorporation and By-Laws of the Surviving Corporation and until his or her
successor is duly appointed and qualified.
SECTION 2.06 Officers. The officers of the Company immediately prior to
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the Effective Time shall be the officers of the Surviving Corporation and will
hold office from the Effective Time until their respective successors are duly
elected or appointed and qualified in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation.
SECTION 2.07 Conversion of Securities. At the Effective Time, by virtue
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of the Merger and without any action on the part of Parent, Acquisition, the
Company or the holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be cancelled pursuant to Section
2.07(b) hereof and Dissenting Shares (as hereinafter defined)), shall be
cancelled and extinguished and be converted into the right to receive the
Per Share Amount, in cash, without any interest thereon, upon surrender of
the certificate(s) that formerly evidenced such Shares in the manner
provided in Section 3.02 hereof.
(b) Each Share issued and outstanding immediately prior to the
Effective Time and owned by Parent or Acquisition or any direct or indirect
subsidiary of Parent or Acquisition, or which is held in the treasury of
the Company or any of its subsidiaries, shall be cancelled and retired and
no payment shall be made without respect thereto.
(c) Each share of common stock, par value $.01 per share, of
Acquisition issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $.10 per share, of the
Surviving Corporation.
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ARTICLE III.
DISSENTING SHARES; EXCHANGE OF SHARES
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
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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 shall have demanded properly in writing appraisal for
such Shares in accordance with Section 262 of the Delaware Law (collectively,
the "Dissenting Shares") shall not be converted into a right to receive the Per
Share Amount unless such holder fails to perfect or withdraws or otherwise loses
his right to appraisal under the Delaware Law. Such stockholders shall be
entitled to receive payment of the appraised value of such Shares in accordance
with Section 262 of the Delaware Law, except all Dissenting Shares held by
stockholders who have failed to perfect or who effectively shall have withdrawn
or lost their right to appraisal of such Dissenting Shares shall be deemed to
have been converted as of the Effective Time into a right to receive the Per
Share Amount without interest thereon, upon surrender, in the manner provided in
Section 3.02 hereof, of the certificate(s) that formerly evidenced such Shares.
The Company shall provide Parent (i) prompt notice of and copies of any demands
received by the Company for appraisal of Shares, withdrawals of such demands,
and any other instruments served pursuant to the Delaware Law and received by
the Company and, (ii) prior to the Effective Time, the right to direct 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 3.02 Exchange of Certificates. (a) Prior to the Effective
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Time, a bank or trust company shall be designated by Parent which shall be
reasonably acceptable to the Company (the "Exchange Agent") to act as exchange
agent in effecting the exchange of the Per Share Amount for certificates (the
"Certificates") that, immediately prior to the Effective Time, evidenced Shares
entitled to payment pursuant to Section 2.07(a) hereof. As soon as practicable
after the Effective Time, the Surviving Corporation shall instruct the Exchange
Agent to mail or otherwise deliver to each record holder, immediately prior to
the Effective Time, of an outstanding Certificate or Certificates which
immediately prior to the Effective Time evidenced Shares, a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment thereof (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery to the Exchange Agent and shall be in such form and have such
other provisions as Parent may reasonably specify). Upon the surrender of each
such Certificate, together with a duly executed letter of transmittal and such
other customary documents as may be required pursuant to the instructions, the
Exchange Agent shall pay the holder of such Certificate an amount in cash equal
to the Per Share Amount multiplied by the number of Shares formerly evidenced by
such Certificate, in exchange therefor, and 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,
Acquisition or the Company, or any direct or indirect subsidiary thereof) shall
represent solely the right to receive the Per Share Amount multiplied by the
number of Shares formerly evidenced by such Certificate. No interest shall be
paid or accrue on the Per Share Amount. If the Per Share Amount (or any portion
thereof) is to be delivered to any person other than the person in whose name
the Certificate evidencing Shares surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the Certificate so
surrendered shall be
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properly endorsed or otherwise be in proper form for transfer and that the
person requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of the payment of the Per Share Amount to a
person other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not applicable. From and after the Effective Time, the holders of
Certificates shall cease to have any rights with respect to Shares, except as
otherwise provided herein or by law.
(b) At or before the Effective Time, Parent shall (or shall cause
Acquisition to) deposit in trust with the Exchange Agent, in immediately
available funds, the aggregate Per Share Amount to which holders of Shares shall
be entitled at the Effective Time pursuant to Section 2.07(a) hereof (the
"Fund"). At the direction of Parent, the Exchange Agent may invest portions of
the Fund in any of (i) readily marketable obligations of the United States or
any agent or instrumentality thereof or obligations unconditionally guaranteed
by the government of the United States; (ii) certificates of deposit of or time
deposits with any commercial bank (including the Exchange Agent) that has
combined capital and surplus of at least $500,000,000; (iii) commercial paper
issued by any corporation which is rated at least "P-1" by Xxxxx'x Investors
Service, Inc. or "A-1" by Standard & Poor's Corporation; or (iv) money market
mutual funds investing in obligations of the type described in subclauses (i),
(ii) or (iii) hereof. Any earnings resulting from, or interest or income
produced by, such investments shall be paid to the Surviving Corporation as and
when requested by the Surviving Corporation.
(c) Promptly following the date which is one (1) year after the
Effective Time, the Exchange Agent shall deliver to the Surviving Corporation
all cash and other documents in its possession relating to the transactions
described in this Agreement, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly evidencing 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 Per Share Amount multiplied by the number of Shares formerly
evidenced by such Certificate, without any interest or dividends thereon.
(d) At and after the Effective Time, the stock transfer records of the
Company shall be closed, and there shall be no transfers on the stock transfer
books of the Company of any Shares. If, after the Effective Time, Certificates
formerly representing Shares are presented to the Surviving Corporation or the
Exchange Agent, they shall be cancelled and exchanged for the Per Share Amount
multiplied by the number of Shares formerly evidenced by such Certificate, as
provided in this Article III, subject to applicable law in the case of
Dissenting Shares.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Acquisition as
follows:
SECTION 4.01 Organization and Qualification. (a) The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as now being conducted, except
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where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not have a Material
Adverse Effect (as hereinafter defined). The Company has heretofore delivered
to Parent or Acquisition accurate and complete copies of the certificate of
incorporation and by-laws of the Company, as currently in effect. When used in
connection with the Company or any of its subsidiaries, the term "Material
Adverse Effect" means any change or effect that, individually or when taken
together with all other such changes or effects, is or would reasonably be
likely to be materially adverse to the business, assets, results of operations
or financial condition of the Company and its subsidiaries, taken as a whole.
For purposes of this Agreement, the term "subsidiary" of the Company shall mean
each corporation or other entity in which the Company owns or controls, directly
or through one or more subsidiaries, 50 percent or more of the stock or other
interests having general voting power in the election of directors or persons
performing similar functions.
(b) The Company is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it make such qualification or
licensing necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 4.02 Subsidiaries. (a) The subsidiaries of the Company are
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listed on Schedule 4.02 hereto together with, as to each subsidiary, a list
identifying (i) the jurisdiction of incorporation of such subsidiary, (ii) each
jurisdiction in which such subsidiary is qualified to conduct business, (iii)
each jurisdiction in which such subsidiary has an office or conducts business.
Except as set forth on Schedule 4.02 hereto, each subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has heretofore delivered
to Parent or Acquisition accurate and complete copies of the certificates of
incorporation and by-laws or equivalent organizational documents of each
subsidiary of the Company, each as currently in effect. Each subsidiary is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it make such qualification or licensing necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) Except as set forth in Schedule 4.02 hereto, the Company is,
directly or indirectly, the record and beneficial owner of all of the
outstanding shares of capital stock of each of its subsidiaries. Except as set
forth on Schedule 4.02 hereto, each outstanding share of capital stock of each
subsidiary of the Company is duly authorized, validly issued, fully paid and
nonassessable and to the extent owned by the Company or any subsidiary of the
Company is free and clear of any security interest, claim, lien, charge,
encumbrance, pledge, option, right of first refusal, limitation on voting rights
or agreement of any kind. There are no proxies with respect to any shares of
capital stock of any subsidiary of the Company to the extent owned by the
Company or any subsidiary of the Company, and no equity securities of any of its
subsidiaries are or may become required to be issued by reason of any options,
warrants, rights to subscribe
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to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable or exercisable for, shares of any
capital stock of any subsidiary, and there are no contracts, commitments,
undertakings or arrangements by which the Company or any subsidiary is or may be
bound to issue additional shares of its capital stock or securities convertible
into or exchangeable or exercisable for any such shares. Except as set forth on
Schedule 4.02 hereto or in the SEC Reports (as hereinafter defined), the Company
does not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any equity or
similar interest in, any corporation (other than a subsidiary), partnership,
joint venture or other business association or entity which is material (in
assets, earnings or otherwise) to the Company and its subsidiaries as a whole.
SECTION 4.03 Capitalization of the Company. The authorized capital
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stock of the Company consists solely of 10,000,000 Shares of which, as of July
31, 1995, 3,981,338 Shares were issued and outstanding. All outstanding Shares
have been duly authorized, validly issued, and are fully paid, nonassessable and
free of preemptive rights. Except as described above, there are outstanding (i)
no shares of capital stock or other voting securities of the Company, (ii) no
securities of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company, and (iii) no options, warrants or
other rights to acquire from the Company, and no obligation of the Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company.
SECTION 4.04 Authority Relative to this Agreement; Governmental
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Approvals. The Company has all necessary corporate power and authority to
---------
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of this Agreement and the Merger by the
stockholders of the Company as required by applicable law and the Company's
Restated Certificate of Incorporation). The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize the
execution, delivery and performance of this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement and the Merger by the stockholders of
the Company as required by applicable law and the Company's Restated Certificate
of Incorporation). This Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity whether raised at law or in equity. The Company has taken all
appropriate actions so that the restrictions on business combinations contained
in Section 203 of the Delaware Law will not apply with respect to or as a result
of the Offer, the Merger, or the execution, delivery and performance of this
Agreement or the Stockholders Option Agreement. Except as set forth on Schedule
4.04 hereto, the execution, delivery and performance by the Company of this
Agreement and the consummation of the Merger by the Company will not require any
consent, approval, authorization, or permit of, or filing with or notification
to, any United States federal or state or foreign governmental body, agency,
official or authority other than (i) the filing of a certificate of merger or a
certificate of ownership and merger in accordance with the Delaware
10
Law; (ii) compliance with any applicable requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (iii) compliance
with any applicable requirements of the Exchange Act; and (iv) compliance with
any applicable state securities, takeover or "blue sky" laws; and (v) compliance
with any applicable requirements of the Investment Canada Act of 1985 and the
Competition Act (Canada). Except for consents, approvals, licenses,
accreditations, permits, franchises, authorizations or orders currently held by
the Company or its subsidiaries, the conduct by the Surviving Corporation of the
business of the Company and its subsidiaries in the same manner as now conducted
by the Company and its subsidiaries requires no consent, approval, license,
accreditation, permit, franchise, authorization or order of or notice or filing
with any domestic or foreign governmental commission, board or other regulatory
body.
SECTION 4.05 Non-Contravention. Except as set forth on Schedule 4.05
-----------------
hereto, neither the execution and delivery of this Agreement by the Company nor
the consummation of the transactions contemplated hereby nor compliance by the
Company with any of the provisions hereof will (i) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the loss of a material benefit under, or give to others any right
of termination, amendment, acceleration or cancellation of, or result in a right
of termination or acceleration under, or result in the creation of any mortgage,
pledge, security interest, claim, encumbrance or lien of any kind (a "Lien")
upon any of the properties or assets of the Company or any of its subsidiaries
under any of the terms, conditions or provisions of (x) the certificates or
articles of incorporation or by-laws or similar organizational documents of the
Company or any of its subsidiaries, or (y) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties or assets may be subject, or (ii) subject to compliance with the
statutes and regulations referred to in Section 4.04 hereof, violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their respective
properties or assets, except, in the case of clause (i) above, for such
violations, conflicts, breaches, defaults, losses, terminations, accelerations
or creations of Liens which would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 4.06 SEC Reports. The Company has filed all forms, reports
-----------
and documents required to be filed with the SEC since July 1, 1991
(collectively, the "SEC Reports"), each of which, as heretofore amended, has
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
American Stock Exchange, Inc. As of their respective dates, and except as
disclosed in an amendment to an SEC Report or in a subsequently filed SEC
Report, none of the SEC Reports, including, without limitation, any financial
statements or schedules included therein, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company included in the SEC Reports were prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods indicated (except as may be noted
therein) and each fairly presents the consolidated financial position of the
Company and its subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for
11
the periods then ended (subject to normal year-end adjustments in the case of
any unaudited interim financial statements). Except as and to the extent set
forth in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (the "1994 10-K"), or in its Quarterly Reports on Form 10-Q
filed since that date, neither the Company nor any subsidiary has any liability
or obligation of any nature whatsoever (whether due or to become due, accrued,
fixed, contingent, liquidated, unliquidated or otherwise) that would be required
by GAAP to be reflected on a consolidated balance sheet (or in the applicable
notes thereto) of the Company and its subsidiaries other than liabilities or
obligations which arose in the ordinary course of business since such date and
which do not or would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 4.07 Absence of Certain Changes. Since December 31, 1994,
--------------------------
except as disclosed in the SEC Reports filed thereafter or as set forth on
Schedule 4.07 hereto, the Company and its subsidiaries have not (i) suffered any
Material Adverse Effect, (ii) changed their accounting methods, principles or
practice or (iii) declared, set aside or authorized any dividend or other
distribution in respect of any capital stock of the Company or any of its
subsidiaries or any redemption, purchase or other acquisition of any of their
respective securities, except for any dividend or distribution paid or payable
by a wholly-owned subsidiary of the Company to the Company or another wholly-
owned subsidiary of the Company. Since December 31, 1994, except as disclosed
in the SEC Reports filed thereafter or except as set forth on Schedule 4.07
hereto, the Company has conducted its business and operations in the ordinary
course of business consistent with past practice.
SECTION 4.08 Compliance with Applicable Laws. Except as disclosed in
-------------------------------
the SEC Reports, the businesses and operations of the Company and its
subsidiaries are not being conducted in violation of or conflict with any law,
ordinance, order, rule or regulation of any domestic or foreign public body or
authority, except for possible violations which do not, and, insofar as
reasonably can be foreseen, in the future will not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 4.09 Employee Benefits and Compensation. Schedule 4.09
----------------------------------
hereto sets forth all of the Company's individual employment agreements and any
other plans, programs or arrangements (whether written or oral), covering any
individual, category of individuals or all employees generally, including,
without limitation, any qualified or non-qualified retirement or supplemental
retirement plan, employee benefit plan, incentive, bonus or other compensation
plan or program or any stock option, stock bonus or stock purchase plan or
program (collectively, the "Benefits Arrangements"). The Company has heretofore
made available to Parent or Acquisition true, correct and complete copies of all
Benefit Arrangements. Except as identified on Schedule 4.09 hereto, no Benefit
Arrangement is a "multi employer plan" (within the meaning of Section 3(37) or
Section 4011(a)(3) of Title IV of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or a "multiple employer plan" (within the meaning of
Section 4064 of ERISA or Section 413(c) of the Internal Revenue Code of 1986, as
amended (the "Code")), and neither the Company nor any of its subsidiaries has a
current or potential liability or obligation, whether direct or indirect, with
respect to any multi employer plan or multiple employer plan. Except as set
forth in the SEC Reports or except as set forth in Schedule 4.09 hereto, (i)
each Benefit Arrangement intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service (the "IRS") that it is so qualified and nothing has occurred since the
date of such letter
12
that could reasonably be expected to affect the qualified status of such plan,
(ii) each Benefit Arrangement has been operated or administrated in all material
respects in accordance with its terms and the requirements of applicable law,
(iii) neither Company nor any of its subsidiaries has incurred any direct or
indirect liability under, arising out of or by operation of ERISA, in connection
with the termination of, or withdrawal from any Benefit Arrangement or other
retirement plan or arrangement, and, to the knowledge of the Company, no fact or
event exists which could reasonably be expected to give rise to any such
liability, (iv) no breach of fiduciary duty, prohibited transaction, or
"reportable event" (within the meaning of Section 4043(b) of ERISA) has occurred
with respect to which the Company, any subsidiary or any Benefit Arrangement may
be liable or otherwise materially damaged, (v) all contributions, premiums, and
other payment obligations with respect to any Benefit Arrangement (A) have been
accrued on the Company's consolidated financial statements in accordance with
GAAP and, to the extent due, have been made on a timely basis and (B) meet the
requirements of deductibility under the Code, and (vi) with respect to each
Benefit Arrangement which provides welfare benefits of the type described in
Section 3(1) of ERISA: (X) no such Benefit Arrangement provides medical or
death benefits with respect to current or former employees, directors or
consultants of the Company and the subsidiaries beyond their termination of
employment, other than coverage mandated by Sections 601-608 of ERISA and
4980B(f) of the Code, (Y) each such Benefit Arrangement has been administered in
material compliance with Sections 601-608 of ERISA and 4980B(f) of the Code, and
(Z) no such Benefit Arrangement has reserves, assets, surpluses or prepaid
premiums except as disclosed in the financial statements of the Company. Except
as set forth in the SEC Reports or except as set forth on Schedule 4.09 hereto,
since December 31, 1994, the Company has not increased or established any bonus,
insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plans, or any other increase
in the compensation payable to or to become payable to any officers or key
employees of the Company or any of its subsidiaries other than normal increases
in the ordinary course of business consistent with past practice that do not, in
the aggregate, result in a material increase in benefits or compensation
expenses to the Company or its subsidiaries or an increase in excess of 5% in
the case of any individual. Notwithstanding the foregoing and except for
compensation based upon the payment of commissions pursuant to commission
schedules previously made available to Parent or Acquisition by the Company,
Schedule 4.09 sets forth a list of all increases to compensation (whether with
respect to salary or benefits) since March 31, 1995 of all employees of the
Company or any of its subsidiaries whose total fixed base
compensation prior to such date exceeded $75,000. The Company has heretofore
delivered to Parent or Acquisition its reasonable estimate (individually and in
the aggregate) of all amounts (whether currently payable or payable in the
future) payable as a result of a change in control of the Company to which
current or former officers, directors or employees of the Company or its
subsidiaries are entitled or would become entitled after the Offer or the
Merger, under the terms of any Benefits Arrangements other than any amounts
payable from any trust, fund, annuity or other insurance contract, existing as
of the date hereof the proceeds of which are segregated to pay such amounts.
SECTION 4.10 Taxes. Each of the Company and the subsidiaries has
-----
duly filed, on a timely basis, with the appropriate federal, state, local and
foreign governmental authorities all tax returns and reports required to be
filed by it with respect to any material taxes of any kind and has paid all
taxes shown thereon as owing, and each such return or report is true, complete
13
and accurate in all material respects; provided, however, that as to foreign
taxes of any nature and as to taxes other than income taxes, such representation
is made to the best knowledge of the Company's management after due inquiry.
Except as expressly set forth in the notes accompanying the financial statements
of the Company contained in the 1994 10-K, none of the Company and its
subsidiaries has waived any statute of limitations with respect to any income
tax matter or agreed to any extension of time with respect to any income tax
assessment or deficiency. None of the Company and its subsidiaries is a party
to any tax allocation or sharing agreement. None of the Company or its
subsidiaries (i) has been a member of an affiliated group filing a consolidated
federal income tax return (other than a group the common parent of which was the
Company) or (ii) has any liability for the taxes of any person, (other than the
Company and its subsidiaries) under Treas. Reg. (S) 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise. The changes, accruals and reserves for taxes reflected
on the June 30, 1995 balance sheet of the Company contained in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended on such date are
believed to be adequate for the payment of all material liabilities of, or
payable by, the Company and its subsidiaries for taxes (whether disputed or
not), including interest, penalties and additions to tax, accruing through the
date of such balance sheet. Except as set forth on Schedule 4.10 hereto, there
are no claims, actions or assessments relating to taxes that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 4.11 Trademarks, Patents and Copyrights. The Company and its
----------------------------------
subsidiaries own or possess adequate licenses or other valid rights to use all
material patents, patent rights, trademarks, trademark rights, trade names,
trade name rights, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the business of the Company
and its subsidiaries as currently conducted or as contemplated to be conducted,
and except as set forth on Schedule 4.11 hereto, the Company is unaware of any
assertion or claim challenging the validity of any of the foregoing which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Except as set forth on Schedule 4.11 hereto, the conduct of the
business of the Company and its subsidiaries as currently conducted does not
conflict in any way with any patent, patent right, license, trademark, trademark
right, trade name, trade name right, service xxxx or copyright of any third
party that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. To the best knowledge of the Company's
management after due inquiry, there are no infringements of any proprietary
rights owned by or licensed by or to the Company or any of its subsidiaries
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 4.12 Litigation. Except as and to the extent set forth in
----------
the 1994 10-K or its Quarterly Reports on Form 10-Q filed since that date or
except as set forth on Schedule 4.12 hereto, there is no suit, action, claim or
proceeding pending or, to the knowledge of the Company or its subsidiaries,
threatened against the Company or any of its subsidiaries, which, if adversely
determined, individually or in the aggregate with other such suits, actions,
claims or proceedings, could (i) have a Material Adverse Effect, (ii) materially
and adversely affect the Company's ability to perform its obligations under this
Agreement or (iii) prevent the consummation of any of the transactions
contemplated by this Agreement.
14
SECTION 4.13 Inventory. (a) The values at which all inventories are
---------
carried on the books of the Company and its subsidiaries as of June 30, 1995
(copies of which books previously have been made available to Parent or
Acquisition), including, without limitation, the reserves with respect thereto,
have been calculated in accordance with GAAP consistent with past practices or
in a manner which results in values determined on a basis more conservative than
with the prior practices of the Company.
(b) Consistent with past practices, taking into account the reserves
for inventory, the inventories reflected on the books of the Company and its
subsidiaries are as of June 30, 1995: (i) in all material respects in good and
merchantable condition; (ii) generally usable for the purposes for which they
are intended, or salable in the ordinary course of business; and (iii) not
excessive in material respects in kind or amount in the context of the business
or of the Company and its subsidiaries taken as a whole. The inventories
reflected on the books of the Company and its subsidiaries as of June 30, 1995
include any and all inventory held on consignment by third parties, all of which
consignment arrangements are described on Schedule 4.13 hereto.
SECTION 4.14 Expenses. All fees and expenses for professional
--------
advisors incurred by the Company and its subsidiaries in connection with this
Agreement and the transactions contemplated hereby, whether incurred before or
after the date hereof and through and including the date on which the Offer is
consummated, are not reasonably expected to exceed $200,000.
SECTION 4.15 Proxy Statement; Schedule 14D-9; Schedule 14D-1; Other
------------------------------------------------------
Filings. None of the information supplied by Company in writing for inclusion
-------
in the Proxy Statement, the Schedule 14D-9, the Schedule 14D-1 or any Other
Filings will, at the respective times that the Proxy Statement, the Schedule
14D-9, the Schedule 14D-1 or any Other Filings or any amendments or supplements
thereto are filed with the SEC and, in the case of the Proxy Statement, the
Schedule 14D-1 or any Other Filings, at the time that it or any amendment or
supplement thereto is mailed to the Company's stockholders, at the time of the
Stockholders' Meeting (as hereinafter defined) 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.
SECTION 4.16 Certain Contracts. Except as set forth on Schedule 4.16
-----------------
hereto, as of the date hereof, the Company has not (i) breached any material
obligation or covenant of the Company under that certain Equipment Credit
Agreement, dated September 17, 1993, by and among the Company and Northern
Telecom Inc., including, without limitation the failure of the Company to meet
any volume purchase commitments thereunder, or (ii) taken any action which has
or could reasonably be expected to result in the inability of the Company to
receive any equipment credits payable thereunder based upon any such action.
SECTION 4.17 Vote Required. The affirmative vote of the holders of a
-------------
majority of the outstanding Shares is the only vote of the holders of any class
or series of Company capital stock necessary to approve the Merger.
SECTION 4.18 Brokerage. Except as previously disclosed to
---------
Acquisition in writing, no broker, finder, agent or investment banker is
entitled to any brokerage, finder's or other fee
15
or commission payable by the Company in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
the Company.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
Each of Parent and Acquisition represents and warrants to the Company
as follows:
SECTION 5.01 Organization. Each of Parent and Acquisition is a
------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority to own, lease
and operate its respective properties and to carry on its respective business as
now being conducted, except where the failure to be so organized, existing and
in good standing or to have such power and authority would not in the aggregate
have a Purchaser Material Adverse Effect (as hereinafter defined). Parent and
Acquisition have heretofore delivered to the Company accurate and complete
copies of their respective certificates of incorporation and by-laws, in each
case as currently in effect. When used in connection with Parent and
Acquisition, the term "Purchaser Material Adverse Effect" means any change or
effect that is materially adverse to the assets or financial condition of Parent
and Acquisition, taken as a whole, or in their respective ability to consummate
the transactions contemplated hereby.
SECTION 5.02 Capitalization. As of the date hereof, the authorized
--------------
capital stock of Parent consists of 100 shares of Common Stock, par value $.01,
per share, of which, as of the date hereof, 10 shares are issued and
outstanding. As of the date hereof, all outstanding shares of capital stock of
Parent are owned by SP Investments Inc. ("SPII") or its controlling stockholders
or entities controlled by such persons. As of the date hereof, the authorized
capital stock of Acquisition consists of 100 shares of common stock, par value
$.01, per share, of which, as of the date hereof, 100 shares are issued and
outstanding. As of the date hereof, all the outstanding shares of capital stock
of Acquisition are owned by Parent. All the issued and outstanding shares of
capital stock of Parent and Acquisition have been validly issued and are fully
paid, nonassessable and free of preemptive rights. Except as described above,
there are outstanding (i) no shares of capital stock or other voting securities
of Parent or Acquisition, (ii) no securities of Parent or Acquisition
convertible into or exchangeable for shares of capital stock or voting
securities of Parent or Acquisition, and (iii) except as set forth on Schedule
5.02 hereto, no options, warrants or other rights to acquire from Parent or
Acquisition, and no obligation of Parent or Acquisition to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of Parent or Acquisition.
SECTION 5.03 Authority Relative to this Agreement. Each of Parent
------------------------------------
and Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
board of directors of Acquisition and Parent and by Parent as the sole
stockholder of Acquisition, and no other corporate proceedings on the part of
Parent or Acquisition are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Acquisition and constitutes the
valid, legal and binding obligations of each of
16
Parent and Acquisition, enforceable against each of Parent and Acquisition in
accordance with its terms.
SECTION 5.04 Proxy Statement; Schedule 14D-9; Other Filings. None of
----------------------------------------------
the information supplied by Parent or Acquisition in writing for inclusion in
the Proxy Statement, the Schedule 14D-9, or any Other Filings will, at the
respective times that the Proxy Statement, the Schedule 14D-9 or any Other
Filings or any amendments or supplements thereto are filed with the SEC and, in
the case of the Proxy Statement or any Other Filings, at the time that it or any
amendment or supplement thereto is 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.
SECTION 5.05 Financing. Parent has obtained written commitments from
---------
(i) NationsBank of Georgia, N.A. to provide, subject to the terms and conditions
set forth therein, financing in an amount equal to $20,000,000, and (ii) SPII to
provide, subject to the terms and conditions set forth therein, capital
contributions and/or financing in an amount up to $18,000,000, which amounts,
taken together, are sufficient to enable Parent to consummate the Offer and the
Merger at the Per Share Amount as contemplated hereby (collectively, the
"Financing"). Parent has delivered copies to the Company of the written
commitments referred to above. Parent shall (i) cause the initial stockholders'
equity in Acquisition to equal or exceed $8,000,000, (ii) cause the initial
stockholders' equity in the Surviving Corporation to equal or exceed $8,000,000,
and (iii) from and after the date on which the Offer is consummated to the date
which is ninety-one (91) days following the date on which payment in full is
made on all accounts payable of the Company outstanding as of the date on which
the Offer is consummated as identified on a list to be prepared and delivered by
the Company to Parent promptly following the date on which the Offer is
consummated, cause the Surviving Corporation not to declare, set aside or pay
any dividend (other than dividends in the form of capital stock) or other
distributions in respect of the capital stock of the Surviving Corporation or
redeem, repurchase or otherwise acquire any of the securities of the Surviving
Corporation if any such action would result in the stockholders' equity falling
below $8,000,000.
SECTION 5.06 No Prior Activities. Except for obligations or
-------------------
liabilities incurred in connection with its incorporation or organization or the
negotiation and consummation of this Agreement and the transactions contemplated
hereby, including, without limitation, the Financing, Acquisition has neither
incurred any obligations or liabilities nor engaged in any business or
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person or entity. To the knowledge of Parent and
Acquisition, (i) no judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to Parent, Acquisition or the controlling
stockholders of Parent (collectively the "Acquiring Persons"), and (ii) no note,
bond, mortgage, indenture, contract, lease, license, permit, franchise or other
instrument to which any Acquiring Person is a party or by which any of its
material assets is bound, would as the result of the execution and delivery of
this Agreement or the Stockholders Option Agreement by Parent and Acquisition,
as applicable, and the consummation of the transactions contemplated hereby and
thereby, reasonably be expected to result in any of the effects described in
clause (iv)(a) of Annex A hereto.
17
SECTION 5.07 Brokers. No broker, finder, agent or investment banker
-------
is entitled to any brokerage, finder's or other fee or commission payable by the
Company in connection with the transactions contemplated by this Agreement based
upon arrangements made by and on behalf of Parent or Acquisition.
ARTICLE VI.
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as expressly
----------------------------------
contemplated by this Agreement or as set forth on Schedule 6.01 hereto, during
the period from the date hereof to the Effective Time, the Company and its
subsidiaries will each conduct its operations according to its ordinary course
of business consistent with past practice, and the Company and its subsidiaries
will each use its reasonable best efforts to (i) preserve intact its business
organization, (ii) keep available the services of its officers and employees,
other than those officers and employees identified on Schedule 6.01 hereto, and
(iii) maintain existing relationships with its lenders, suppliers and others
having business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise contemplated by this Agreement or as set
forth on Schedule 6.01 hereto, prior to the Effective Time, neither the Company
nor any of its subsidiaries will, without the prior written consent of
Acquisition:
(a) amend or propose to amend any of their respective certificates or
articles of incorporation or by-laws;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell, pledge, encumber, deliver or otherwise dispose of (whether through
the issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any other equity
securities or equity equivalents of the Company or any of its subsidiaries or
amend in any material respect any of the terms of any such securities
outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its capital stock or
the capital stock of any of its subsidiaries, declare, set aside or pay any
dividend (other than dividends (whether in cash, stock, or property or any
combination thereof), if any, paid by wholly-owned subsidiaries to the Company
or another wholly-owned subsidiary of the Company) or other distribution in
respect of its capital stock or redeem, repurchase or otherwise acquire any of
its securities or any securities of its subsidiaries or any options, warrants or
other rights to acquire any shares of its capital stock or adopt a plan of
complete or partial liquidation or resolutions providing for or authorizing such
liquidation or a dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
subsidiaries, other than the redemption, repurchase or other acquisition of the
equity securities of any subsidiary of the Company which is not wholly-owned by
the Company for aggregate consideration not in excess of the book value of such
securities;
(d)(i) except as set forth in clause (e), incur any additional
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse the obligations of any other person except for the
obligations of wholly-owned subsidiaries of the Company in the ordinary course
of business consistent with past practice; (ii) make any loans, advances or
capital
18
contributions to, or investments in, any other person (other than to wholly-
owned subsidiaries of the Company and advances to employees for travel or other
business related expenses in the ordinary course of business consistent with
past practices); (iii) pledge or otherwise encumber shares of capital stock of
the Company or any of its subsidiaries; (iv) mortgage or pledge any of its
material assets, tangible or intangible, or create or suffer to exist any
material Lien thereupon; or (v) enter into any contract, agreement, commitment
or arrangement to do any of the foregoing;
(e) incur any advances pursuant to that certain Revolving Credit
Agreement, dated as of June 18, 1991, among the Company, various subsidiaries of
the Company and Xxxxxx (as successor in interest to HCR Partners), as amended
(the "Credit Agreement"), other than advances which at any time outstanding do
not exceed $3,000,000.
(f) enter into, adopt or (except as may be required by law) amend or
terminate any bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, restricted stock, performance unit, stock
equivalent, stock purchase, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreement, trust, plan, fund or
other arrangement for the benefit or welfare of any director, officer or
employee, or (except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company or an
increase in excess of 5% in the case of any individual (other than compensation
based upon the payment of commissions pursuant to commission schedules
previously made available to Parent or Acquisition by the Company)) increase in
any manner the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any plan or arrangement in effect as
of the date hereof (including, without limitation, the granting of stock
appreciation rights or performance units) or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing;
(g) acquire, sell, lease or dispose of any assets outside the ordinary
course of business or any assets which in the aggregate are material to the
Company and its subsidiaries, taken as a whole, or commit or agree to do any of
the above;
(h) except as required by GAAP, change any of the accounting
principles or practices used by it;
(i) make any tax election or settle or compromise any income tax
liability material to the Company and its subsidiaries taken as a whole;
(j) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business
consistent with past practice or in accordance with their terms, of liabilities
reflected or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company and its subsidiaries or
incurred in the ordinary course of business consistent with past practice;
provided that, in no event shall the Company and its subsidiaries repay any
long-term indebtedness except to the extent required by the terms thereof;
19
(k)(i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof; (ii) enter into or commit to enter into any contract or agreement other
than in the ordinary course of business consistent with past practice or which
requires the payment of amounts in excess of $100,000 or which gives rise to
obligations which extend beyond ninety (90) days from the date hereof other than
agreements to provide services to customers of the Company or any of its
subsidiaries; (iii) authorize any capital expenditures, other than those as to
which the Company or its subsidiaries have committed as set forth on Schedule
6.01 hereto, individually in excess of $100,000, or in the aggregate in excess
of $1,000,000, except with the consent of Parent (which shall not be
unreasonably withheld); or (iv) enter into or amend any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(l)(i) make or enter into any new lease of real property other than
any new lease of real property which will replace an existing lease or (ii)
extend or amend any existing lease of real property other than in the ordinary
course of business consistent with past practice or on terms and conditions no
less favorable to the Company or the subsidiary than the existing lease;
(m) enter into or commit to enter into any amendment or modification
to any contract, agreement or arrangement with any vendor or supplier identified
on Schedule 6.01(m) hereto which individually or in the aggregate with all other
such amendments and modifications is or could reasonably be expected to be
material to such contract, agreement or arrangement;
(n) intentionally take or omit to take, or enter into an agreement to
take or agree to omit to take, any action that would result in any of the
conditions to the Offer set forth in Annex A attached hereto or the conditions
to the Merger set forth in Article VII hereof not being timely satisfied;
(o) release or relinquish any material contractual rights, other than
in the ordinary course of business consistent with past practice;
(p) settle any pending or threatened material action, suit, claim or
proceeding involving the Company or any subsidiary, other than in the ordinary
course of business consistent with past practice and other than any settlements
which require only the payment of money not in excess of $50,000 individually or
$250,000 in the aggregate;
(q) enter into or commit to enter into any contract, agreement or
arrangement or any amendment or modification to any existing contract, agreement
or arrangement with Xxxxxx Holdings, Inc. or any affiliate thereof; or
(r) commit or agree in writing or otherwise to take any of the actions
described in Sections 6.01(a) through 6.01(q) hereof or any action which would
make any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect in any material respect as of the date when made
or as of the Effective Time, or omit to take or commit or agree to omit to take
any action necessary to prevent any such representation or warranty from being
untrue or incorrect in any material respect in any respect at any time which
would result in any of the conditions set forth in this Agreement not being
satisfied.
20
SECTION 6.02 Access to Employees, Vendors and Information. (a)
--------------------------------------------
Between the date hereof and the Effective Time, the Company will (i) give each
of Parent, Acquisition and persons or entities providing the financing (the
"Financing Sources") and their respective authorized representatives reasonable
access to all employees, offices and other facilities and to all books and
records of the Company and its subsidiaries, will permit each of Parent and
Acquisition and the Financing Sources to make such inspections as Parent or
Acquisition or the Financing Sources may reasonably require and will cause the
Company's officers and those of its subsidiaries to furnish Parent or
Acquisition or the Financing Sources with such financial and operating data and
other information with respect to the business and properties of the Company and
any of its subsidiaries as Parent or Acquisition or the Financing Sources may
from time to time reasonably request and (ii) provide to Acquisition copies of
(A) all SEC Reports filed after the date hereof as soon as practicable after
such reports are filed with the SEC and (B) all correspondence between the
Company or any of its subsidiaries and their respective independent accountants.
The Company acknowledges that access to employees, vendors and information by
Parent, Acquisition and its representatives is essential to the orderly
transition of ownership contemplated hereby and the Company agrees to use its
reasonable best efforts to assist (and cause its employees, agents, and
representatives) to assist in such transition, including, without limitation,
that the Company will, if requested by Parent or Acquisition, facilitate the
introduction of representatives and/or personnel of Parent or Acquisition to any
person or entity with whom the Company has a contractual or other business
relationship. Without limiting the generality of the foregoing, the Company
agrees and consents that Parent and/or Acquisition may communicate with some or
all of the Company's employees regarding the transactions contemplated hereby
and matters related thereto, including, without limitation, plans for future
business operations of the Company and the Surviving Corporation, and that
representatives of Parent and/or Acquisition may visit, inspect and conduct
meetings with employees at any or all business locations of the Company. To the
extent that the reasonableness of any actions taken or to be permitted pursuant
to this Section are to be determined, the parties agree that no events occurring
prior to the date hereof shall establish any course of dealing or other standard
of reasonableness among the parties with respect to any such determination.
(b) Each of Parent and Acquisition agrees to be bound by the
confidentiality agreement with Xxxxxxx X. XxXxxxx dated on or about April 19,
1995 as amended prior to the date hereof, except that Parent and Acquisition may
make such disclosures in the Offer Documents, Schedule 13E-3, Proxy Statement
and any Other Filings as Parent may determine in its reasonable discretion with
advice of counsel is required by applicable law.
SECTION 6.03 Reasonable Best Efforts. Subject to the terms and
-----------------------
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, (i) the
preparation and filing with the SEC of the Schedule 14D-1, Schedule 13E-3,
Schedule 14D-9 and any Other Filings and any amendments thereto; (ii) such
actions as may be required to have the Proxy Statement cleared by the SEC as
promptly as practicable after filing; (iii) such actions as may be required to
lift or rescind any injunction, order or decree referred to in clause (iv)(a) of
Annex A hereto; (iv) such actions as may be required to facilitate or obtain the
Financing and, in the event that any portion of the Financing becomes
unavailable, regardless of the reason therefor, Parent and Acquisition will each
use its best efforts to obtain alternative financing from other sources, on
21
and subject to substantially the same terms and conditions as the portion of the
Financing that has become unavailable; and (v) the execution of any additional
instruments necessary to consummate the transactions contemplated hereby. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
SECTION 6.04 Consents. Each of Parent, Acquisition and the Company
--------
will use its reasonable best efforts to obtain waivers, permits, consents and
approvals and to effect all registrations, filings and notices with or to all
third parties and governmental authorities necessary to the consummation of the
transactions contemplated by this Agreement (including, without limitation, any
consents or approvals set forth on Schedule 4.05 hereto) and necessary to permit
the continued operations of the Surviving Corporation on a basis substantially
equivalent to the operations of the Company prior to the Effective Time.
SECTION 6.05 Public Announcements. Parent and Acquisition, on the
--------------------
one hand, and the Company, on the other hand, will consult with, and provide an
advance copy of the proposed text to, the other party before issuing any press
release or otherwise making any public statements or mailing any communications
to any stockholder with respect to the transactions contemplated by this
Agreement, including, without limitation, the Offer and the Merger, and shall
not issue any such press release, make any such public statement or mail any
such communication without the prior consent of the other party, except as may
be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange; provided that, in such event it
has used all reasonable efforts to consult with the other party and to obtain
such party's consent but has been unable to do so in a timely manner.
SECTION 6.06 Insurance and Indemnification. (a) In the event of any
-----------------------------
threatened or actual claim, action, suit, proceeding or investigation, whether
civil, criminal or administrative, including, without limitation, any such
claim, action, suit, proceeding or investigation in which any of the present or
former officers or directors (the "Managers") of the Company is, or is
threatened to be, made a party by reason of the fact that such person is or was
a director, officer, or employee of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, whether
before or after the Effective Time, the parties hereto agree to cooperate and
use their best efforts to defend against and respond thereto. From and after
the Effective Time, the Surviving Corporation shall indemnify and hold harmless,
as and to the full extent permitted by the Delaware Law, as it exists or may
hereafter be amended, each such Manager against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement), reasonably incurred or suffered
by such person in connection with any such claim, action, suit, proceeding or
investigation, and in the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) subject
to the last sentence of this paragraph (a), the Managers may retain counsel
satisfactory to them (provided such counsel is reasonably acceptable to the
Surviving Corporation), and the Surviving Corporation shall pay all reasonable
fees and expenses of no more than one such counsel (and no more than one local
counsel) for the Managers promptly as statements therefor are received, and (ii)
the Surviving Corporation shall use its best efforts to assist in the vigorous
defense of any such matter; provided that, the Surviving Corporation shall not
be liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld); and provided,
22
further, that the Surviving Corporation shall have no obligation hereunder to
any Manager when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and non-appealable,
that indemnification of such Manager in the manner contemplated hereby is
prohibited by applicable law. Any Manager wishing to claim indemnification
under this Section 6.06(a), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify the Surviving Corporation
thereof and shall deliver to the Surviving Corporation the undertaking
contemplated by Section 145(e) of the Delaware Law. The Managers as a group may
retain no more than one law firm (in addition to one local counsel) to represent
them with respect to each such matter unless there is under applicable standards
of professional conduct, a conflict on a significant issue between the positions
of any two or more Managers, in which event such additional counsel as may be
required may be retained.
(b) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation set forth in the Company's Restated Certificate of Incorporation or
By-Laws on the date of this Agreement, which provisions shall not be amended,
repealed or otherwise modified for a period of five years after the Effective
Time in any manner that would adversely affect the rights thereunder of any
present or former directors, officers, employees, fiduciaries or agents of the
Company (collectively, the "Indemnified Parties") unless such modification is
required by law and the Surviving Corporation shall cause to be maintained (i)
for not less than five years after the Effective Time, the provisions with
respect to indemnification in the certificates or articles of incorporation, by-
laws or similar organizational documents of any of the Company's subsidiaries as
in effect as of the date hereof, and (ii) for not less than the shorter of five
years or the termination date specified therein (if any), the indemnification
agreements entered into between the Company and any of the Indemnified Parties,
in each case, with respect to matters occurring on or prior to the Effective
Time. For a period of three years after the Effective Time, Surviving
Corporation shall cause to be maintained the current policies of the directors'
and the officers' liability insurance maintained by the Company (provided that
the Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous) with
respect to matters occurring prior to the Effective Time to the extent
available; provided that, in no event shall Surviving Corporation be required to
expend to maintain or procure insurance coverage pursuant to this Section
6.06(b) any amount per annum in excess of 150% of the aggregate premiums paid or
payable in 1995 on an annualized basis for such purpose (which the Company
represents and warrants to be $131,500); provided, however, that in the event
-------- -------
the payment of such amount for any year is insufficient to maintain such
insurance, the Surviving Corporation shall purchase as much insurance as may be
purchased for the amount indicated.
SECTION 6.07 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Parent or Acquisition, and Parent or Acquisition shall give
prompt notice to the Company, of (i) any change or event having, or which,
insofar as can reasonably be foreseen, would have a Material Adverse Effect,
(ii) the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or as of the Effective Time, and (iii) any material failure of the Company,
Parent or Acquisition, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
-------- -------
Section 6.07
23
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 6.08 Prepayment. At such times following consummation of the
----------
Offer as Acquisition may request, the Company will to the extent of available
working capital or the extent capital is contributed to the Company by Parent or
Acquisition, in the manner and to the extent permitted by the instruments
governing the same, prepay, redeem or retire such indebtedness of the Company
and its subsidiaries as Acquisition may request.
SECTION 6.09 Acquisition Proposals. (a) Neither the Company nor any
---------------------
of its subsidiaries will, directly or indirectly, through any officer, director,
employee, representative or agent of the Company or any of its subsidiaries,
initiate, solicit or encourage (including by way of furnishing non-public
information or assistance) or take any action to knowingly facilitate, any
inquiries or the making of any proposals regarding any merger, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving the
Company or any of its subsidiaries (any of the foregoing inquiries or proposals
being referred to herein as an "Acquisition Proposal"). The Company represents
and warrants that (i) as of the date hereof it has ceased any and all
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and (ii) prior to the Effective Time, the
Company will not release, terminate or modify the terms of any existing
confidentiality agreement without the prior written consent of Acquisition
except as required by applicable law or in good faith (upon advice of counsel)
that such action is required in order that the Board discharge its fiduciary
duties. Nothing contained in this Section 6.09 shall prevent the Board from
considering, negotiating, approving and recommending to the stockholders of the
Company a bona fide Acquisition Proposal not solicited in violation of this
Agreement, provided the Board determines in good faith (upon advice of counsel)
that it is required to do so in order to discharge its fiduciary duties.
(b) The Company shall immediately notify Acquisition after receipt of
any Acquisition Proposal, or any modification of or amendment to any Acquisition
Proposal, or any request for non-public information relating to the Company or
any of its subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any subsidiary by any
person or entity that informs the Board or such subsidiary that it is
considering making, or has made, an Acquisition Proposal. Such notice to
Acquisition shall be made orally (within one business day) and in writing (as
soon thereafter as practicable), and shall indicate whether the Company is
providing or intends to provide the person making the Acquisition Proposal with
access to information concerning the Company.
(c) If the Board receives a request for non-public information by a
person who makes a bona fide Acquisition Proposal, and the Board determines in
good faith (upon the advice of counsel) that it is required to cause the Company
to act as provided in this Section 6.09 in order to discharge properly its
fiduciary duties, then, provided the person making the Acquisition Proposal has
executed a confidentiality agreement substantially equivalent to the one then in
effect between the Company and Xxxxxxx X. XxXxxxx, the Company may provide such
person with access to information regarding the Company.
SECTION 6.10 HSR Act Filing. To the extent required by applicable
--------------
law, the respective ultimate parent entities of the Company and Parent and
Acquisition shall file
24
Notification and Report Forms under the HSR Act (the "HSR Filings") with the
Federal Trade Commission and the Antitrust Division of the Department of
Justice. Each of the Company and Parent agree to cooperate and consult with
each other with respect to the preparation of the HSR Filings and any other
submissions, including, but not limited to, timely responses to written or oral
comments or requests for additional information or documents required to be made
pursuant to the HSR Act in connection with the transactions contemplated hereby.
SECTION 6.11 Certain Benefits. Parent and Acquisition agree to
----------------
cause, for at least one (1) year from the Effective Time, subject to applicable
law, the Surviving Corporation and its subsidiaries to provide benefit plans to
employees employed as of the Effective Time which will, in the aggregate, be no
less favorable than those in effect as of the date on which the Offer is
consummated.
SECTION 6.12 Stockholders' Meeting. (a) If approval by the Company's
---------------------
stockholders is required by applicable law to consummate the Merger, the
Company, acting through the Board, shall in accordance with applicable law and
the Company's Restated Certificate of Incorporation and By-Laws as soon as
practicable following the consummation of the Offer:
(i) duly call, give notice of, convene and hold as soon as
reasonably practicable following consummation of the Offer, a special
meeting of its stockholders or take such other action as may be
permitted under the Delaware Law (the "Stockholders' Meeting") for the
purpose of considering and taking action upon this Agreement and the
Merger;
(ii) include in the Proxy Statement the recommendation of the
Board that stockholders of the Company vote in favor of the approval
and adoption of this Agreement and the transactions contemplated
hereby, unless the Board (or any committee of the Board established to
take action under this Agreement) determines in good faith (upon
advice of counsel) that such recommendation is inconsistent with its
performance of its fiduciary duties under applicable law as determined
by the members thereof by a majority vote; and
(iii) use its reasonable best efforts (A) to obtain and furnish
the information required to be included by it in the Proxy Statement
to be prepared by the Company and filed as soon as reasonably
practicable following consummation of the Offer with the SEC with
respect to the Stockholders' Meeting and, after consultation with
Parent and Acquisition, respond promptly to any comments made by the
SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to its stockholders
at the earliest practicable time following the consummation of the
Offer and (B) subject to the exercise of the fiduciary duty of the
Board after consultation with its legal counsel, to obtain the
necessary approvals by its stockholders of this Agreement and the
transactions contemplated hereby. The information provided and to be
provided by the Company, Parent and Acquisition for use in the Proxy
Statement shall, as of the date of mailing of the Proxy Statement and
as of the date of the Stockholders' Meeting, not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated
25
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Parent and Acquisition agree that they will cause all Shares then owned by
them and their subsidiaries to be voted in favor of approval and adoption of
this Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Parent shall acquire
at least ninety percent (90%) of the outstanding Shares, the parties hereto
agree, at the request of Parent, to take all necessary and appropriate action to
cause the Merger to become effective (or, as contemplated by Section 2.01
hereof, to cause a merger of Acquisition (or any other direct or indirect
subsidiary of Parent) into the Company to become effective), as soon as
reasonably practicable after the expiration of the Offer, without a meeting of
the stockholders of the Company, in accordance with Section 253 of the Delaware
Law.
SECTION 6.13 Proxy Statement; Other Filings. The Proxy Statement will
------------------------------
comply in all material respects with applicable federal securities laws, except
that no representation is made by (i) the Company with respect to information
supplied by Parent or Acquisition in writing for inclusion in the Proxy
Statement, and (ii) Parent or Acquisition with respect to information supplied
by the Company in writing for inclusion in the Proxy Statement. As soon as
practicable after the date hereof, the Company and Parent shall promptly and
properly prepare and file any Other Filings. None of the information supplied
by the Company, Parent or Acquisition in writing for inclusion in the Proxy
Statement and the Other Filings and any amendments thereto to be filed with the
SEC by Parent or Acquisition and the Company in connection with the transactions
contemplated by this Agreement will, at the respective times that the Proxy
Statement and Other Filings or any amendments or supplements thereto are filed
with the SEC, at the time that the Proxy Statement or any amendment or
supplement thereto is mailed to the Company's stockholders, at the time of the
Stockholders' Meeting or at the Effective Time, contain an 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.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect the Merger.
----------------------------------------------------------
The respective obligations of each party hereto to effect the Merger are subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) if required by the Delaware Law, this Agreement and the Merger
shall have been adopted and approved by the affirmative vote of the
stockholders of the Company by the requisite vote in accordance with the
Restated Certificate of Incorporation of the Company and the Delaware Law;
(b) no statute, rule, regulation, executive order, decree, judgment,
ruling or injunction (whether temporary, preliminary or permanent) shall
have been enacted, entered, promulgated or enforced by any United States
federal or state court or
26
governmental authority which prohibits, restrains, enjoins or restricts the
consummation of the Merger; provided that the parties shall use their
reasonable best efforts to cause any such order, decree, judgment, ruling
or injunction to be vacated or lifted;
(c) any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired; and
(d) Parent shall have purchased a number of Shares equal to or in
excess of seventy-five percent (75%) of the then issued and outstanding
Shares pursuant to the Offer, provided this condition shall be deemed
satisfied if Acquisition fails to accept for payment or to pay for any
Shares tendered pursuant to the Offer in violation of the terms hereof or
Annex A hereto.
SECTION 7.02 Conditions to Obligation of the Company to Effect the Merger.
-------------------------------------------------------------
The obligation of the Company to effect the Merger is further subject to (i)
each of Parent and Acquisition having performed in all material respects their
respective material obligations under this Agreement required to be performed by
it at or prior to the Effective Time pursuant to the terms hereof, (ii) each of
the representations and warranties of Parent and Acquisition contained in this
Agreement being true and correct as of the Effective Time as though made on and
as of the Effective Time, except for (a) changes permitted by this Agreement,
and (b) any failures which, individually or in the aggregate, would not have a
Purchaser Material Adverse Effect, and (iii) Company having received a
certificate from Parent signed by the chief executive officer of Parent, to the
effect of (ii)(a) and (ii)(b). The provisions of this Section 7.02 shall become
void and shall no longer have any effect in the event that Shares are purchased
pursuant to the Offer.
SECTION 7.03 Conditions to Obligation of Parent and Acquisition to Effect
------------------------------------------------------------
the Merger. The obligation of Parent and Acquisition to effect the Merger is
----------
further subject to (i) the Company having performed in all material respects
each of its obligations under this Agreement required to be performed by it at
or prior to the Effective Time pursuant to the terms hereof, (ii) each of the
representations and warranties of the Company contained in this Agreement being
true and correct as of the Effective Time as though made on and as of the
Effective Time, except for (a) changes permitted by this Agreement, and (b) any
failures which, individually or in the aggregate, would not have a Material
Adverse Effect, and (iii) Acquisition having received a certificate from the
Company signed by the chief executive officer of the Company, to the effect of
(ii)(a) and (ii)(b). The provisions of this Section 7.03 shall become void and
shall no longer have any effect in the event that Shares are purchased pursuant
to the Offer.
ARTICLE VIII.
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the Merger
-----------
may be abandoned at any time by written notice, notwithstanding approval thereof
by the stockholders of the Company, but prior to the Effective Time:
27
(a) by mutual written consent duly authorized by the Boards of
Directors of the Company and Parent;
(b) by Parent, Acquisition or the Company, if (i) the Effective Time
shall not have occurred on or before December 15, 1995 (provided that the
right to terminate this Agreement under this Section 8.01(b) 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 the Effective
Time to occur on or before such date), (ii) any court of competent
jurisdiction in the United States or other United States governmental
authority shall have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable, or (iii) any of the Trigger Events described in Section 8.03
hereof shall have occurred;
(c) by Parent or Acquisition, if due to an occurrence or circumstance
which would result in a failure to satisfy any of the conditions set forth
in Annex A hereto, Parent shall have (i) failed to commence the Offer on or
before September 12, 1995, (ii) terminated the Offer or the Offer shall
have expired without the purchase of Shares sufficient to satisfy the
condition set forth in Section 7.01(d) hereof, or (iii) failed to accept
for payment Shares sufficient to satisfy the condition set forth in Section
7.01(d) hereof pursuant to the Offer within 60 days following the
commencement of the Offer;
(d) by the Company, if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any of the conditions set forth in
Annex A hereto or otherwise, Parent shall have (A) failed to commence the
Offer on or before September 12, 1995, (B) terminated the Offer or the
Offer shall have expired without the purchase of Shares sufficient to
satisfy the condition set forth in Section 7.01(d) hereof or (C) failed to
accept for payment Shares sufficient to satisfy the condition set forth in
Section 7.01(d) hereof pursuant to the Offer with 60 days following the
commencement of the Offer, or (ii) all conditions set forth in Annex A
hereto have been satisfied or waived and Parent shall have failed to accept
for payment any Shares validly tendered and not withdrawn; or
(e) by Parent or Acquisition, upon a breach of any material
representation, warranty, covenant or agreement on the part of Company set
forth in this Agreement, or if any representation or warranty of Company
shall have become untrue, in either case, such that the condition set forth
in Section 7.03 hereof would be incapable of being satisfied on or before
December 15, 1995 (or as otherwise extended); provided that, in any case, a
willful breach shall be deemed to cause such conditions to be incapable of
being satisfied for purposes of this Section 8.01(e).
SECTION 8.02 Effect of Termination. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 8.01 hereof, this Agreement
shall forthwith become void and have no effect, without any liability on the
part of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of this Section 8.02 and Sections 6.02(b) and 8.03.
Nothing contained in this Section 8.02 shall relieve any party from liability
for any willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
28
SECTION 8.03 Fees and Expenses. (a) If (i) any corporation (including
-----------------
the Company or any of its subsidiaries or affiliates), partnership, person,
other entity or group (as defined in Section 13(d) of the Exchange Act) other
than Parent or any of its affiliates (collectively, "Persons") shall have
acquired or entered into any commitment or agreement to acquire, directly or
indirectly, at least 25% of the assets of the Company and its subsidiaries; or
(ii) the Company shall have entered into, or shall have publicly announced
its intention to enter into, an agreement or an agreement in principle with
respect to any Acquisition Proposal; or
(iii) any representation or warranty made by the Company in, or pursuant
to, this Agreement shall not have been true and correct in all material respects
when made and any such failure to be true and correct could reasonably be
expected to have a Material Adverse Effect or the Company shall have failed to
observe or perform in any material respect any of its obligations under this
Agreement and Acquisition has terminated the Agreement pursuant to Section 8.01
hereof; or
(iv) the Board shall have withdrawn or materially modified in a manner
adverse to Acquisition its approval or recommendation of the Offer, the Merger
or this Agreement in any such case whether or not such withdrawal or
modification is required by the fiduciary duties of the Board; or
(v) prior to the purchase of any Shares under the Offer, the Company shall
have received any Acquisition Proposal which the Board has determined and
publicly announced is more favorable to the Company's stockholders than the
transactions contemplated by this Agreement, whether or not such determination
is required by the fiduciary duties of the Board;
(each such event described in this subparagraph (a) being, a "Trigger Event"),
then the Company shall promptly, but in no event later than two days after the
termination of this Agreement pursuant to Section 8.01(b)(iii) hereof as the
result of the occurrence thereof, pay to Acquisition an amount equal to
$1,500,000, which amount is inclusive of all expenses of Acquisition and Parent.
(b) If (i) this Agreement is terminated for any reason other than as a
result of the Offer being terminated based upon the failure of the conditions
set forth in clauses (iii) or (iv)(b) of Annex A hereto, and (ii) neither Parent
nor Acquisition is in material breach of its material covenants and agreements
under this Agreement, then the Company shall, if no payment has been made
pursuant to Section 8.03(a) hereof, reimburse each of Parent, Acquisition and
their respective stockholders and affiliates (not later than two days after
submission of statements therefor) for all out-of-pocket expenses and fees
(including, without limitation, fees and expenses payable to all banks,
investment banking firms and other financial institutions and their respective
agents and counsel, for arranging or providing the Financing and structuring the
transaction and all fees of counsel, accountants, experts and consultants, to
Parent, Acquisition and their respective stockholders and affiliates) actually
incurred or accrued by it or on its behalf in connection with the Offer and the
Merger and the consummation of all transactions contemplated by this Agreement,
including the Financing, and actually incurred or accrued by banks, investment
banking firms and other financial institutions and assumed by Parent,
Acquisition or their respective stockholders or affiliates in connection with
the negotiation,
29
preparation, execution and performance of this Agreement, the Financing and any
definitive financing agreements relating thereto up to a maximum of $750,000
(all of the foregoing being referred to collectively as the "Expenses").
(c)(i) If Parent does not accept for payment Shares pursuant to the Offer
on or prior to the date which is sixty (60) days following commencement of the
Offer, because of the failure of Parent to satisfy clause (iii) of Annex A
hereto, then Parent, within two days of any termination pursuant to Section
8.01(d) hereof, shall pay to the Company an amount equal to $750,000;
(ii) If this Agreement is terminated based upon a breach of any material
representation, warranty, covenant or agreement on the part of Acquisition or
Parent set forth in this Agreement (other than any representation, warranty or
covenant relating to the Financing which shall be governed solely by subsection
(c)(i) of this Section), then Parent, within two days of any termination
pursuant to Section 8.01(d) hereof, shall pay to the Company an amount equal to
$1,500,000;
(iii) SPII shall enter into an agreement acceptable to SPII and the
Company whereby SPII shall guarantee, among other things, the timely payment of
any amounts described in subclauses (i) and (ii) of this Section 8.03(c).
(d) Except as provided in Section 8.03(a), (b) and (c) hereof, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses
(including, in the case of the Company, the costs of printing the Schedule 14D-
9, the Proxy Statement and any Other Filings to be printed, and in each case all
exhibits, amendments or supplements thereto).
SECTION 8.04 Amendment. Subject to Section 1.03(c) hereof, this Agreement
---------
may be amended by action taken by the Company, Parent and Acquisition at any
time before or after adoption of the Merger by the stockholders of the Company
(if required by applicable law); provided that, after any such approval, no
amendment shall be made which decreases the Per Share Amount or which materially
adversely affects the rights of the Company's stockholders hereunder without the
approval of such stockholders; and, provided, further, that after consummation
of the Offer any amendment referred to in the foregoing provision shall require
approval of a majority of the Shares not beneficially owned by Parent,
Acquisition or any of their Affiliates. This Agreement may not be amended
except by an instrument in writing signed on behalf of the parties.
SECTION 8.05 Extension; Waiver. Subject to Section 1.03(c) hereof, at any
-----------------
time prior to the Effective Time, each party hereto may (i) extend the time for
the performance of any of the obligations or other acts of the other party, (ii)
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of either party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of either
party hereto to assert any of its rights hereunder shall not constitute a waiver
of such rights.
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ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 Nonsurvival of Representations and Warranties. The
---------------------------------------------
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement.
SECTION 9.02 Entire Agreement; Assignment. This Agreement, the Offer
----------------------------
Documents and the documents referenced in Sections 6.02(b) and 8.03(c)(iii)
hereof, constitute the entire agreement between the parties hereto with respect
to the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and shall not be assigned by operation of law or
otherwise; provided that, Parent may assign its rights and obligations to any
subsidiary of Parent, but no such assignment shall relieve Acquisition of its
obligations hereunder if such assignee does not perform such obligations.
SECTION 9.03 Validity. If any provision of this Agreement, or the
--------
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
SECTION 9.04 Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
facsimile (with confirmation), or telex, or by registered or certified mail
(postage prepaid, return receipt requested), to the other party as follows:
If to Parent or Acquisition, to:
Xxxxxxx X. XxXxxxx
President
TIE Acquisition Co.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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with copies to:
Xxxxx, Xxxxxxxx & Xxxxxxx
Suite 3100, Promenade II
0000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Company, to:
Xxxxxx X. Xxxx
Vice President, Secretary and
General Counsel
TIE/communications, Inc.
Suite 1900
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxx Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx Gerber, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
SECTION 9.05 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the law of the State of Delaware, without regard to
the principles of conflicts of law.
SECTION 9.06 Descriptive Headings. The descriptive headings herein
--------------------
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.07 Exhibits, Schedules and Annexes. The Exhibits,
-------------------------------
Schedules and Annexes referred to in this Agreement shall be deemed an integral
part of this Agreement, as if fully set forth herein.
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SECTION 9.08 Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Sections 6.06, 6.11 and 9.02
hereof, nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.09 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.
[The remainder of this page intentionally left blank.]
33
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
TIE/COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx III
--------------------------
Xxxxxx X. Xxxxxxxx III
President
TIE MERGER CO.
By: /s/ Xxxxxxx X. XxXxxxx
---------------------------
Xxxxxxx X. XxXxxxx
President
TIE ACQUISITION CO.
By: /s/ Xxxxxxx X. XxXxxxx
---------------------------
Xxxxxxx X. XxXxxxx
President
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ANNEX A
Notwithstanding any other provision of the Offer but subject to the
obligations of Parent and Acquisition pursuant to Section 6.03 of the Merger
Agreement, Parent shall not be required to accept for payment and may delay the
acceptance for payment of any Shares tendered, and may terminate the Offer and
not accept for payment any Shares tendered, if (i) any applicable waiting period
under the HSR Act shall not have expired or been terminated, (ii) the Minimum
Tender Condition shall not have been satisfied, (iii) Parent shall not have
obtained sufficient financing to enable it to purchase the Shares to be
purchased by it and to pay the fees and expenses incurred or to be incurred in
connection with the financing, or (iv) prior to the acceptance for payment of
Shares, any of the following conditions exist:
(a) any statute, rule, regulation, judgment, injunction (whether
temporary, preliminary or permanent), order or decree shall be enacted,
promulgated, issued, entered, or deemed applicable to (i) Parent,
Acquisition or any other affiliate of Parent or (ii) the Offer, the
Stockholders Option Agreement, this Agreement, or any transactions
contemplated hereby or the Merger, or any other action shall have been
taken by any government or governmental authority, domestic or foreign, (A)
making illegal, delaying beyond the date which is sixty (60) days following
the commencement of the Offer or otherwise directly or indirectly
restraining or prohibiting the acquisition by Parent of Shares pursuant to
the Stockholders Option Agreement, the making of the Offer, the acceptance
for payment of or payment for some of or all the Shares, or the
consummation by Parent and Acquisition of the Merger, (B) restraining or
prohibiting Parent's ownership or operation of, or compelling Parent to
dispose of or hold separate all or any material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, (C) imposing
material limitations on the ability of Parent to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by Parent on all matters properly presented to
the Company's stockholders, (D) requiring divestiture by Parent of any
Shares, or (E) otherwise, in the reasonable judgment of Parent, having a
Material Adverse Effect or a Purchaser Material Adverse Effect; provided
that, Parent shall have used its reasonable best efforts to cause any such
action or proceeding to be determined in a manner satisfactory to Parent;
or
(b) any material adverse change or development shall have occurred, or
Parent shall have become aware of any fact that would reasonably be
expected to result in any change or development, in the business, assets,
liabilities, capitalization, earnings, operations, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, that in the reasonable judgment of Parent, has or would reasonably
be expected to have a Material Adverse Effect; or
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the American Stock Exchange,
(ii) the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not mandatory), (iii)
the commencement of a war, armed hostilities or other international or
national calamity having a significant adverse effect on the functioning of
financial markets in the United States, (iv) any limitation (whether or not
mandatory), by any United States governmental authority or agency on the
extension of credit by banks or other financial institutions or (v) in the
case of any of the situations
A-1
described in clauses (i) through (iv) inclusive, existing at the date of
the commencement of the Offer, a material acceleration or worsening
thereof; or
(d) the Company shall have breached or failed to perform any of its
covenants or agreements which breach is material to the obligations of the
Company under the Agreement or any of the representations and warranties of
the Company set forth in the Agreement shall not be true in any material
respect, in each case, when made or at any time prior to consummation of
the Offer; or
(e) the Agreement or the Stockholders Option Agreement shall have been
terminated; or
(f) the Board shall have publicly (including by amendment of the
Schedule 14D-9) withdrawn or modified in a manner adverse to Parent: (i)
its approval or recommendation of the Offer, the Merger or the Agreement,
or (ii) its actions causing the restrictions on business combinations
contained in Section 203 of the Delaware Law not to apply to the
transactions contemplated hereby, the Offer or the Stockholders Option
Agreement or shall have resolved to do so; or
(g) any party to the Stockholders Option Agreement other than Parent
shall have breached or failed to perform in any material respect any of its
agreements under the Stockholders Option Agreement or any of the
representations and warranties of any such party set forth in the
Stockholders Option Agreement shall not be true in any material respect, in
each case, when made or at any time prior to the consummation of the Offer
as if made at and as of such time, or the Stockholders Option Agreement
shall have been invalidated or terminated with respect to any Shares
subject thereto; or
(h) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or agreement in
principle with respect to any Acquisition Proposal; or
(i) Parent, Acquisition and the Company shall have agreed that Parent
shall terminate the Offer or postpone the payment for Shares thereunder;
which, in the reasonable judgment of Parent in any such case, and regardless of
the circumstances giving rise to any such condition makes it inadvisable to
proceed with such acceptance for payment or payments.
The foregoing conditions are for the benefit of Parent and Acquisition and
may be asserted by Parent and/or Acquisition regardless of the circumstances
giving rise to any such condition or, except as otherwise provided herein, may
be waived by Parent in whole or in part at any time and from time to time in its
sole discretion. The failure by Parent at any time to assert any of the
foregoing conditions shall not be deemed a waiver of any such condition and each
such condition shall be deemed an ongoing condition which may be asserted at any
time and from time to time.
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