FORM OF
STOCK PURCHASE AGREEMENT
Dated as of August 31, 2006
Between
Asahi Tec Corporation
And
The Purchasers listed on Schedule I hereto
TABLE OF CONTENTS
Page
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ARTICLE I
Purchase and Sale of Shares; Dollar/Yen Exchange
SECTION 1.01. Purchase and Sale of the Shares................................2
SECTION 1.02. Dollar/Yen Exchange............................................2
ARTICLE II
Closing
SECTION 2.01. Closing........................................................3
SECTION 2.02. Transactions to Be Effected at the Closing.....................3
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization, Standing and Power...............................4
SECTION 3.02. Company Subsidiaries; Equity Interests.........................4
SECTION 3.03. Capital Structure; the Shares..................................4
SECTION 3.04. Authority; Execution and Delivery; Enforceability..............6
SECTION 3.05. No Conflicts; Consents.........................................7
SECTION 3.06. SEL Documents; Undisclosed Liabilities.........................9
SECTION 3.07. Information Supplied..........................................10
SECTION 3.08. Absence of Certain Changes or Events..........................10
SECTION 3.09. Taxes.........................................................12
SECTION 3.10. Absence of Changes in Benefit Plans...........................13
SECTION 3.11. Benefit Plans.................................................14
SECTION 3.12. Litigation....................................................17
SECTION 3.13. Compliance with Applicable Laws...............................18
SECTION 3.14. Environmental Matters.........................................18
SECTION 3.15. Intellectual Property.........................................20
SECTION 3.16. Contracts; Debt Instruments...................................20
SECTION 3.17. Title to Real Properties......................................21
SECTION 3.18. Customers and Suppliers.......................................21
SECTION 3.19. Brokers; Schedule of Fees and Expenses........................22
SECTION 3.20. Financing.....................................................22
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ARTICLE IV
Representations and Warranties of the Purchaser
SECTION 4.01. Organization, Standing and Power..............................23
SECTION 4.02. Accredited Investor; Private Offering.........................23
SECTION 4.03. Authority; Execution and Delivery; Enforceability.............23
SECTION 4.04. No Conflicts; Consents........................................24
SECTION 4.05. Information Supplied..........................................25
SECTION 4.06. Brokers.......................................................25
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business...........................................25
SECTION 5.02. No Solicitation...............................................27
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Information Statement..........................28
SECTION 6.02. Access to Information; Confidentiality........................29
SECTION 6.03. Commercially Reasonable Efforts; Notification.................30
SECTION 6.04. Fees and Expenses.............................................31
SECTION 6.05. Public Announcements..........................................31
SECTION 6.06. Transfer Taxes................................................32
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To Effect The
Acquisition.................................................32
SECTION 7.02. Conditions to Obligations of the Purchaser....................33
SECTION 7.03. Condition to Obligation of the Company........................34
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination...................................................35
SECTION 8.02. Effect of Termination.........................................36
SECTION 8.03. Amendment.....................................................36
SECTION 8.04. Extension; Waiver.............................................36
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ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties.................37
SECTION 9.02. Notices.......................................................37
SECTION 9.03. Definitions...................................................38
SECTION 9.04. Interpretation................................................39
SECTION 9.05. Severability..................................................39
SECTION 9.06. Counterparts..................................................40
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries................40
SECTION 9.08. Governing Law.................................................40
SECTION 9.09. Assignment....................................................40
SECTION 9.10. Enforcement...................................................40
SECTION 9.11. Agreement and Waiver of Certain Rights........................41
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STOCK PURCHASE AGREEMENT dated as of August
31, 2006, between Asahi Tec Corporation, a Japanese
corporation (the "Company") and the persons named on
Schedule I hereto (collectively, the "Purchaser").
WHEREAS the Purchaser desires to subscribe for and purchase from the
Company, and the Company desires to issue and sell to the Purchaser, 13,594,150
newly issued shares of common stock of the Company (the "Shares");
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to the parties' willingness to enter into this
Agreement, the Company, Argon Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of the Company ("Acquisition Sub"), and Metaldyne
Corporation, a Delaware corporation ("Mercury"), have entered into an agreement
and plan of merger dated as of the date of this Agreement (the "Merger
Agreement"), whereby Acquisition Sub will be merged with and into Mercury, with
Mercury as the surviving corporation, and Mercury will become a wholly-owned
subsidiary of the Company (the "Merger");
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to the Purchaser's willingness to enter into this
Agreement, RHJ International S.A. ("RHJI") has executed and delivered to the
Purchasers' Representative (as defined in the Company Stock Purchase Agreement)
a voting agreement (the "Company Voting Agreement") dated as of the date of
this Agreement in the form attached hereto as Exhibit A;
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to the Purchaser's willingness to enter into this
Agreement, RHJI and the Purchasers (as defined in the Company Stock Purchase
Agreement) have entered into an agreement in the form attached hereto as
Exhibit B (the "Stockholders Agreement") dated as of the date of this
Agreement, to be effective as of the Closing, whereby the Purchasers and RHJI
agree to certain matters with respect to the Company;
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to the Purchaser's willingness to enter into this
Agreement, the Company and each of the holders of (i) the Series A Mercury
Preferred Stock and (ii) the Series A-1 Mercury Preferred Stock (together, the
"Mercury Preferred Stock") have entered into an agreement (each, an "Other
Stock Purchase Agreement") dated as of the date of this Agreement whereby
holders of the Mercury Preferred Stock shall acquire for cash newly issued
shares of convertible preferred stock of the Company (the "Company Class C
Preferred Stock") using the Merger Consideration (as defined in the Merger
Agreement) received by such holders as consideration for such preferred stock
(each, together with the transactions contemplated by the Company Stock
Purchase Agreement, an "Other Stock Acquisition");
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WHEREAS the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Acquisition (as defined in Section 1.01) and also to prescribe various
conditions to the Acquisition;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Shares; Dollar/Yen Exchange
------------------------------------------------
SECTION 1.01. Purchase and Sale of the Shares. (a) On the terms and
subject to the conditions of this Agreement, at the Closing (as defined in
Section 2.01), the Company shall issue, sell, transfer and deliver to the
Purchaser, and the Purchaser shall subscribe for and purchase from the Company,
13,594,150 Shares (allocated among the Purchaser as set forth on Schedule I)
for a purchase price per share equal to (Y)206 (the "Purchase Price"), payable
in Japanese yen as set forth below in Section 2.02. The issuance, purchase and
sale of the Shares is referred to in this Agreement as the "Acquisition". The
Acquisition and the other transactions contemplated by this Agreement and the
other Transaction Agreements are referred to in this Agreement collectively as
the "Transactions".
(b) If there is an adjustment to the aggregate amount of the Merger
Consideration (as defined in Merger Agreement) pursuant to Section 2.01(c)(ii)
of the Merger Agreement, then the total number of Shares shall be adjusted
appropriately to reflect the reduction in the Merger Consideration received by
the Purchaser. In no event shall (i) the Purchase Price be affected, (ii) the
Purchaser be allocated a number of whole Shares resulting in the Purchaser
owing an aggregate Purchase Price under Section 1.01(a) greater than the
aggregate PCS Common Merger Consideration (as defined in the Merger Agreement)
to which the Purchaser is entitled under the Merger Agreement and (iii) the
Purchaser be entitled to purchase fractional Shares.
SECTION 1.02. Dollar/Yen Exchange. On the terms and subject to the
conditions of this Agreement, the Purchaser agrees that, in lieu of being paid
the Merger Consideration (as defined in the Merger Agreement) to which it is
entitled under the Merger Agreement in U.S. dollars, it will accept such Merger
Consideration converted into Japanese yen at an exchange rate of (Y)117.205 per
U.S. dollar (the "Exchange Rate"). Prior to the Effective Time (as defined in
the Merger Agreement), the Company shall deposit with the PCS Paying Agent (as
defined in the Merger Agreement) the aggregate amount of the Merger
Consideration, in yen determined at the Exchange Rate, due to the Purchaser
under the Merger Agreement.
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ARTICLE II
Closing
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SECTION 2.01. Closing. The closing (the "Closing") of the Acquisition
shall take place at the offices of Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at the same time during Tokyo business hours
that the Merger closing occurs, on the second business day following the
satisfaction (or, to the extent permitted, waiver by all parties) of the
conditions set forth in Section 7.01, or, if on such day any condition set
forth in Section 7.02 or 7.03 has not been satisfied (or, to the extent
permitted, waived by the party or parties entitled to the benefits thereof), as
soon as practicable after all the conditions set forth in Article VII have been
satisfied (or, to the extent permitted, waived by the party or parties entitled
to the benefits thereof), or at such other place, time and date as shall be
agreed in writing between the Company and the Purchaser. The date on which the
Closing occurs is referred to in this Agreement as the "Closing Date".
SECTION 2.02. Transactions to Be Effected at the Closing. (a) As soon
as commercially practicable after the Closing, the Company shall deliver to the
Purchaser certificates representing the Purchaser's Shares, duly endorsed in
blank or accompanied by stock powers duly endorsed in blank in proper form for
transfer, with appropriate transfer tax stamps, if any, affixed; and
(b) At the Closing, the Purchaser shall deliver to the PCS Paying
Agent the Certificate or Certificates (as defined in the Merger Agreement)
representing the shares of common stock of Mercury held of record by the
Purchaser, in accordance with the Merger Agreement and the instructions
provided in the letter of transmittal provided to the Purchaser by the PCS
Paying Agent (or a duly executed undertaking as required by the letter of
transmittal if the Purchaser no longer holds physical certificates), and, upon
such delivery, shall instruct the PCS Paying Agent to deliver, from the Merger
Consideration represented by such Certificate or Certificates, to the Company
payment, to a bank account designated in writing by the Company (such
designation to be made at least two business days prior to the Closing Date),
of immediately available funds in an amount of Japanese yen equal to the
Purchase Price multiplied by the number of Shares allocated to the Purchaser as
set forth on Schedule I.
ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to the Purchaser that, except as
set forth in the letter, dated as of the date of this Agreement, from the
Company to the Purchaser (the "Company Disclosure Letter"):
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SECTION 3.01. Organization, Standing and Power. Each of the Company
and each of its subsidiaries, including such entities organized under the laws
of non-Japanese jurisdictions (the "Company Subsidiaries"), is duly organized,
validly existing and in good standing (where such concept is applicable) under
the laws of the jurisdiction in which it is organized and has full corporate
power and authority, except, in the case of the Company Subsidiaries that are
not Significant Company Subsidiaries (as defined below), where the failure to
be duly organized, validly existing and in good standing, individually or in
the aggregate, has not had and would not be reasonably likely to have a
material adverse effect on the Company (a "Company Material Adverse Effect").
The Company and each Company Subsidiary is duly qualified to do business in
each jurisdiction where the nature of its business or their ownership or
leasing of its properties make such qualification necessary or the failure to
so qualify has had or would be reasonably likely to have a Company Material
Adverse Effect. The Company has made available to the Purchaser true and
complete copies of the articles of incorporation of the Company, as amended to
the date of this Agreement (as so amended, the "Company Charter").
SECTION 3.02. Company Subsidiaries; Equity Interests. (a) Section
3.02(a) of the Company Disclosure Letter lists each Significant Company
Subsidiary (as defined below) and its jurisdiction of organization. All the
outstanding shares of capital stock of each Company Subsidiary have been
validly issued and are fully paid and nonassessable and are, as of the date of
this Agreement, owned by the Company, by one or more Company Subsidiaries or by
the Company and another Company Subsidiary, free and clear of all pledges,
liens, charges, mortgages, rights of first refusal, options, restrictions
(other than restrictions imposed under applicable Law), leases, licenses,
easements, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"). The Company has made available to the Purchaser true
and complete copies of the articles of incorporation and by-laws, or comparable
charter and organizational documents, of each Significant Subsidiary, in each
case amended through the date of this Agreement. For purposes of this
Agreement, a "Significant Company Subsidiary" means any subsidiary of the
Company that constitutes a significant subsidiary within the meaning of Rule
1-02 of Regulation S-X of the United States Securities and Exchange Commission
(the "U.S. SEC").
(b) Except for its interests in the Company Subsidiaries, the Company
does not as of the date of this Agreement own, directly or indirectly, any
capital stock, membership interest, partnership interest, joint venture
interest or other equity interest with a fair market value in excess of U.S. $1
million in any person.
SECTION 3.03. Capital Structure; the Shares. (a) The authorized number
of shares of each class of capital stock of the Company consists of 358,412,200
shares of Company common stock ("Company Common Stock"), 28,572,000 shares of
Company Preferred Class A Stock ("Company Class A Preferred Stock") and
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80,000,000 shares of Company Preferred Class B Stock ("Company Class B
Preferred Stock" and, together with the Company Class A Preferred Stock, the
"Company Preferred Stock" and, together with the Company Common Stock, the
"Company Capital Stock"). The total authorized number of shares of Capital
Stock of the Company is 397,510,516 shares. As of the date of this Agreement,
(i) 60,300,081 shares of Company Common Stock and 28,572,000 shares of Company
Class A Preferred Stock and 10,526,316 shares of Company Class B Preferred
Stock were issued and outstanding, (ii) 84,779 shares of Company Common Stock
were held by the Company in its treasury and (iii) 5,305,558 shares of Company
Common Stock were subject to outstanding options to purchase Company Common
Stock ("Company Stock Options"). Except as set forth above, as of the date of
this Agreement, no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance or outstanding. As of the date of
this Agreement, there were outstanding Company Stock Options to purchase
2,429,558 shares of Company Common Stock with exercise prices on a per share
basis lower than (Y)220 and the weighted average exercise price of such Company
Stock Options was equal to (Y)204.8 per share. All outstanding shares of
Company Common Stock are, and all such shares that may be issued prior to the
Closing will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or
any similar right under any provision of the Japanese Corporation Law ("JCL"),
the Company Charter or any Contract (as defined in Section 3.05) to which the
Company is a party or otherwise bound. There are not any bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of Company Common Stock may vote ("Voting Company
Debt"). Except as set forth above and except for the Equity Commitment (as
defined below), there are not any options, warrants, rights, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is a
party or by which any of them is bound (i) obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity interests in, or
any security convertible or exercisable for or exchangeable into any capital
stock of or other equity interest in, the Company or of any Company Subsidiary
or any Voting Company Debt, (ii) obligating the Company or any Company
Subsidiary to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking or
(iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to
holders of Company Common Stock. There are not any outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary.
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(b) With respect to the Purchaser, assuming the Purchaser has the
requisite power and authority to be the lawful owner of the Shares set forth on
Schedule I hereto opposite the name of the Purchaser, upon payment of the
Purchase Price by the Purchaser at the Closing, such Shares will be duly
authorized, validly issued, fully paid and non-assessable, and, subject to the
terms of the Stockholders Agreement, free and clear of any Liens, other than
those arising from acts of the Purchaser or its affiliates, and free and clear
of any restrictive or other legend. Other than this Agreement and the
Stockholders Agreement, such Shares will not be subject to any voting trust
agreement or other Contract, including any Contract restricting or otherwise
relating to the voting, dividend rights or disposition of such Shares. Upon
issuance of the Shares, (i) the Shares will have been duly registered under the
requirements of the SEL, (ii) an application for the listing thereof will have
been duly filed with the TSE and (iii) subject to the terms of the Stockholders
Agreement and to TSE reporting requirements, the Shares may be transferred by
the Purchaser without the requirement of further registration thereof under the
requirements of the SEL or the TSE, other than as a result of acts of the
Purchaser.
(c) As of the date of this Agreement, the TSE (as defined in Section
3.05(b)) has acknowledged the Transactions, has indicated (orally or in
writing) to the Company (or its representatives) that the consummation of the
Transactions will not result in a proceeding by the TSE to delist the Company
Common Stock from the TSE and the Company has not been notified (and none of
the directors of the Company has been notified) that the TSE has commenced or
intends to commence a proceeding to delist the Shares from the TSE as a result
of the Transactions.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a)
The Company has all requisite corporate power and authority to execute and
deliver this Agreement and the Transaction Agreements to which it is a party
and to consummate the Transactions to which it is a party. The execution and
delivery by the Company of this Agreement and each of the Transaction
Agreements to which it is a party and the consummation by the Company of the
Transactions to which it is a party have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the
issuance of the Company Class C Preferred Stock, to receipt of the Company
Stockholder Approval (as defined below). The Company has duly executed and
delivered this Agreement, and each Transaction Agreement to which it is a party
and this Agreement and each Transaction Agreement to which it is a party,
assuming the due authorization, execution and delivery thereof by the other
parties hereto and thereto, constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
(b) The board of directors of the Company (the "Company Board"), at a
meeting duly called and held duly and unanimously adopted resolutions (i)
approving this Agreement and the other Transaction Agreements, the Acquisition
and the other Transactions, (ii) determining that the terms of the Acquisition
and the other Transactions are fair to and in the best interests of the
stockholders of the Company, (iii) approving the amendment of the Company
7
Charter to authorize the Company Class C Preferred Stock (the "Company Charter
Amendment") and (iv) recommending that the Company's stockholders approve the
Company Charter Amendment.
(c) The only vote of holders of any class or series of Company Capital
Stock necessary to consummate the Acquisition and other Transactions is (A) the
approval of the Company Charter Amendment (i) by the two-thirds affirmative
vote of the total number of votes held by the stockholders present at the
Company Common Stock stockholders meeting, (ii) by the two-thirds affirmative
vote of the total number of votes held by the stockholders present at the
Company Class A Preferred Stock stockholders meeting, (iii) by the two-thirds
affirmative vote of the total number of votes held by the stockholders present
at the Company Class B Preferred Stock stockholders meeting, and (iv) by the
two-thirds affirmative vote of the total number of votes held by the
stockholders present at the general stockholders meeting of the Company, (B)
the approval of the delegation of authority to the Company Board to determine
the terms of the issuance of the Company Class C Preferred Stock upon favorable
terms by the two-thirds affirmative vote of the total number of votes held by
the stockholders present at the general stockholders meeting of the Company and
(C) the approval of the delegation of authority to the Company Board to
determine the terms of the issuance of Company Stock Options upon favorable
terms by the two-thirds affirmative vote of the total number of votes held by
the stockholders present at the general stockholders meeting of the Company,
which, in the case of each of (A), (B) and (C), may and will be effected at the
Company Stockholder Meetings (as defined in Section 6.01(b)) (the "Company
Stockholder Approval"). The affirmative vote of the holders of Company Capital
Stock, or any of them, is not necessary to approve any Transaction Agreement or
consummate any Transaction other than the Company Charter Amendment and the
matters referred to in this Section 3.04(c).
SECTION 3.05. No Conflicts; Consents. (a) The execution and delivery
by the Company of this Agreement and each Transaction Agreement to which it is
a party do not and the consummation of the Acquisition and the other
Transactions to which it is a party and compliance with and performance of the
terms hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any obligation
or to loss of a material benefit under, or to increased, additional,
accelerated or guaranteed rights or entitlements of any person under, or result
in the creation of any Lien upon any of the properties or assets of the Company
or any Company Subsidiary under, any provision of (i) the Company Charter or
the comparable charter or organizational documents of any Significant Company
Subsidiary, (ii) subject to effectiveness of the Company Facility Amendments
(as defined in Section 3.20) as contemplated by the Company Consent Letter (as
defined in Section 3.20), any material contract, lease, license, indenture,
note, bond, agreement, permit, concession, franchise or other instrument (a
8
"Contract") to which the Company or any Company Subsidiary is a party or by
which any of their respective properties or assets is bound or (iii) subject to
the filings and other matters referred to in Section 3.05(b), any material
judgment, order or decree ("Judgment") or statute, law (including common law),
ordinance, rule or regulation ("Law") applicable to the Company or any Company
Subsidiary or their respective properties or assets, other than, in the case of
clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect (excluding for purposes of this Section 3.05(a) and the
application of Section 7.02(a) hereto, clause (a)(iii) of the definition
"material adverse effect").
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, or permit from,
any national, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "Governmental Entity") is
required to be obtained or made by or with respect to the Company or any
Company Subsidiary in connection with the execution, delivery and performance
of this Agreement or any Transaction Agreement to which it is a party and the
consummation of the Transactions to which it is a party, other than (i)
compliance with and filings under (A) the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) Japanese
Anti-Monopoly Law (Law No. 54 of 1947, as amended) (the "Japanese Anti-Monopoly
Law"), (C) other Antitrust Laws (as defined in Section 6.03(c)), (D) the
Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of 1949, as
amended) (the "FEL"), (E) the rules and regulations of the Tokyo Stock Exchange
("TSE"), (F) the JCL and (G) the Japanese Commercial Registration Law (Law Xx.
000 xx 0000, xx xxxxxxx) (xxx "XXX"), (xx) the filing with the U.S. SEC of (A)
an information statement with respect to the Merger (such information
statement, including all information required to be included therein by Rule
13e-3 promulgated under the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), as such information statement is amended from time to
time, the "U.S. Information Statement") and (B) such reports under Section 13
of the Exchange Act as may be required in connection with this Agreement, the
other Transaction Agreements, the Merger and the other Transactions, (iii) the
filing with the Kanto Local Finance Bureau or any other local finance bureau
(collectively, the "Bureau") of such registration, reports and other
information (such registration, reports and other information, as amended from
time to time, the "Information Statement") as may be required under the
Japanese Securities and Exchange Law (Law No. 25 of 1948, as amended) (the
"SEL") in connection with this Agreement, the other Transaction Agreements, the
Acquisition and the other Transactions, (iv) the filing of a certificate of
merger in connection with the Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of the
other jurisdictions in which the Company is qualified to do business, (v)
compliance with and such filings as may be required under applicable
Environmental Laws (as defined in Section 3.14), (vi) such filings as may be
required in connection with the Taxes described in Section 6.06, (vii) filings
9
under any applicable state takeover Law and (viii) such other items (A)
required solely by reason of the participation of the Purchaser (as opposed to
any third party) in the Transactions or (B) that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect (excluding for purposes of this Section 3.05(b) and the
application of Section 7.02(a) hereto, clause (a)(iii) of the definition
"material adverse effect").
SECTION 3.06. SEL Documents; Undisclosed Liabilities. (a) The Company
has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company with the Bureau, since March 31, 2006,
pursuant to the regulations of the SEL (the "Company SEL Documents").
(b) As of its respective date, each Company SEL Document complied in
all material respects with the requirements of the SEL, as the case may be, and
the rules and regulations under the SEL applicable to such Company SEL
Document, and did not contain any untrue statement of a material fact or omit
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 consolidated financial statements of the Company
included in the Company SEL Documents comply as of their respective dates as to
form in all material respects with applicable accounting requirements and the
published rules and regulations under the SEL with respect thereto, have been
prepared in accordance with Japanese generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods shown (subject, in the case of unaudited statements, to normal
year-end audit adjustments and lack of footnote disclosure as permitted under
the SEL.
(c) Except as set forth in the most recent audited consolidated
balance sheet of the Company (including the notes thereto) included in the
Filed Company SEL Documents (as defined in Section 3.08), and except for
liabilities and obligations incurred in the ordinary course of business since
the date of such balance sheet, neither the Company nor any Company Subsidiary
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a consolidated
balance sheet of the Company and its consolidated subsidiaries or in the notes
thereto that, individually or in the aggregate, would be reasonably likely to
have a Company Material Adverse Effect.
(d) The effectiveness of any additional disclosure requirement or
applicable accounting rule, consensus or pronouncement that has been formally
proposed or adopted by the FSA (as defined in Section 6.01), any Japanese
financial accounting standards board or any similar body but that is not yet in
10
effect, is not reasonably likely to lead to any material change in the
Company's disclosures as set forth in the Filed Company SEL Documents.
(e) None of the Company Subsidiaries is, or has at any time since
March 31, 2006, been, subject to (separately from the Company) the reporting
requirements under the SEL.
SECTION 3.07. Information Supplied. None of the information supplied
or to be supplied by the Company for inclusion or incorporation by reference in
the Information Statement or any other document required to be filed by the
Company with the Bureau relating to the Transactions, including the Acquisition
(the "Company Disclosure Documents") will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company Disclosure
Documents will comply as to form in all material respects with the requirements
of the SEL and the rules and regulations thereunder, except that no
representation is made by the Company with respect to statements made or
incorporated by reference therein or omitted therefrom based on information
supplied by the Purchaser in writing for inclusion or incorporation by
reference therein.
SECTION 3.08. Absence of Certain Changes or Events. (a) From the date
of the most recent audited financial statements included in the Company SEL
Documents filed and publicly available prior to the date of this Agreement (the
"Filed Company SEL Documents") to the date of this Agreement, the Company has
conducted its business only in the ordinary course, and during such period
there has not been:
(i) any event, change, effect, development or state of facts
that, individually or in the aggregate, has had or would be reasonably
likely to have a Company Material Adverse Effect;
(ii) any declaration, setting aside, allotment or payment of
any dividend or other distribution (whether in cash, stock or
property) with respect to any Company Common Stock or any repurchase
for value by the Company of any Company Common Stock;
(iii) any split, combination or reclassification of any
Company Common Stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of Company Common Stock;
(iv) (A) any grant by the Company or any Company Subsidiary
to any current director or officer of the Company or to any other
employee or independent contractor of the Company or any Company
Subsidiary reasonably likely to earn annual base compensation and
bonuses in 2006 of $200,000 or more (any such current director or
11
officer of the Company or other employee or independent contractor, a
"Covered Participant") of any loan or any increase in any type of
compensation, benefits, perquisites or bonus or award opportunity,
except for grants of normal cash bonus opportunities, normal increases
of cash compensation and increases in fringe or other benefits that
are not material, in each case in the ordinary course of business
consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEL Documents, (B)
any grant by the Company or any Company Subsidiary to any Covered
Participant of any severance, change in control, termination or
similar compensation or benefits or increases therein, or of the right
to receive any severance, change in control, termination or similar
compensation or benefits or increases therein, except as was required
under employment, severance or termination agreements in effect as of
the date of the most recent audited financial statements included in
the Filed Company SEL Documents, (C) any action by the Company or any
Company Subsidiary to fund or in any other way secure the payment of a
material amount of compensation or benefits under any Company Benefit
Plan (as defined in Section 3.10(a)) or Company Benefit Agreement (as
defined in Section 3.10(b)) or (D) any entry by the Company or any
Company Subsidiary into, or any amendment of, any Company Benefit
Agreement with any Covered Participant;
(v) any damage, destruction or loss, whether or not covered
by insurance, that, individually or in the aggregate, would be
reasonably likely to have a Company Material Adverse Effect;
(vi) any change in accounting methods, principles or
practices by the Company or any Company Subsidiary materially
affecting the consolidated assets, liabilities or results of
operations of the Company, except insofar as may have been required by
a change in GAAP or applicable Law;
(vii) any material elections with respect to Taxes (as
defined in Section 3.09) by the Company or any Company Subsidiary or
settlement or compromise by the Company or any Company Subsidiary of
any material Tax liability or refund;
(viii) any material revaluation by the Company or any Company
Subsidiary of any of the material assets of the Company or any Company
Subsidiary, except insofar as may have been required by applicable
Law; or
(ix) any action by the Company or any Company Subsidiary
which, if taken after the date hereof, would constitute a breach of
any provisions of Section 5.01(a)(ii), (iv) or (vi) or any
authorization, consent or agreement by the Company or any Company
Subsidiary to take any of the actions prohibited by the foregoing
provisions of Section 5.01(a).
12
SECTION 3.09. Taxes. (a) The Company, and each Company Subsidiary, has
duly and timely filed, or has caused to be timely filed on its behalf, all
material Tax Returns required to be filed by it. All such Tax Returns were
true, correct and complete in all material respects. All material Taxes owed
(whether or not shown on any Tax Return) have been timely paid in full. To the
Company's knowledge, no claim has been made in writing during the three year
period ending on the Closing Date by an authority in a jurisdiction where the
Company, or any Company Subsidiary, does not file Tax Returns that the Company,
or any Company Subsidiary, is or may be subject to taxation by that
jurisdiction. There are no liens with respect to Taxes upon any asset of the
Company, or any Company Subsidiary, other than liens for Taxes not yet due and
payable.
(b) The Company, and each Company Subsidiary, has deducted, withheld
and timely paid to the appropriate governmental authority all material Taxes
required to be deducted, withheld or paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party, and the Company, and each Company Subsidiary, has complied with
all material reporting and record keeping requirements.
(c) No dispute, audit, investigation, proceeding or claim concerning
any material Tax liability of the Company, or any Company Subsidiary, has been
raised by a governmental authority in writing, and to the Company's knowledge,
no such dispute, audit, investigation, proceeding, or claim is pending or being
conducted. The Company has provided or made available to the Purchaser true,
correct and complete copies of all material Tax Returns, examination reports,
and statements of deficiencies filed, assessed against, or agreed to by the
Company or any Company Subsidiary since January 1, 2001.
(d) The Company, and each Company Subsidiary, has not waived any
statute of limitations in respect of material Taxes or agreed to any extension
of time with respect to a material Tax assessment or deficiency. The Company,
and each Company Subsidiary, has not executed any power of attorney with
respect to any Tax, other than powers of attorney that are no longer in force.
Section 3.09(d) of the Company Disclosure Letter lists all closing agreements,
private letter rulings, technical advice memoranda, binding oral agreements,
rulings or advice or similar agreements or rulings relating to Taxes that have
been entered into or issued by any governmental authority with or in respect of
the Company and each Company Subsidiary since January 1, 2001.
(e) The Company, and each Company Subsidiary, is not a party to any
contractual obligation relating to Tax sharing or Tax allocation, other than
customary commercial agreements with vendors, lenders, customers and other
third parties (such as tax gross-ups in loan agreements or property tax
escalation clauses in real estate leases) entered into in the ordinary course
of business. The Company, and each Company Subsidiary, does not have any
material liability for the Taxes of any person under any provision of national,
local or foreign law, as a transferee or successor or by contract.
13
(f) The Company, and each Company Subsidiary, will not be required to
include any amount in taxable income or exclude any item of deduction or loss
from taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of (a) any "closing agreement" as described in any
provision of national, state, local or foreign Income Tax law executed on or
prior to the Closing Date, (b) any deferred intercompany gain or excess loss
account described in any provision or administrative rule of national, local or
foreign law, (c) any installment sale or open transaction disposition made on
or prior to the Closing Date, or (d) any prepaid amount received on or prior to
the Closing Date.
(g) For purposes of this Agreement:
"Tax" or "Taxes" means (i) any and all national, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind or any charge of any kind in the nature of (or similar
to) taxes whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not and (ii) any liability for the payment of any amounts
of the type described in clause (i) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any
period, as a result of any tax sharing or tax allocation agreement, arrangement
or understanding, or as a result of being liable for another person's taxes as
a transferee or successor or by contract.
"Tax Return" or "Return" means all national, local and foreign Tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
SECTION 3.10. Absence of Changes in Benefit Plans. (a) From the date
of the most recent audited financial statements included in the Filed Company
SEL Documents to the date of this Agreement, neither the Company nor any
Company Subsidiary has terminated, adopted, amended, modified or agreed to
terminate, adopt, amend or modify (or announced an intention to terminate,
adopt, amend or modify), in any material respect, any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, equity compensation, stock ownership, stock purchase,
stock appreciation, restricted stock, stock option, phantom stock, performance,
retirement, thrift, savings, stock bonus, cafeteria, paid time off, perquisite,
fringe benefit, vacation, unemployment insurance, severance, change in control,
termination, retention, disability, death benefit, hospitalization, medical or
other welfare benefit or other employee benefit plan, program, policy or
arrangement, whether oral or written, funded or unfunded, sponsored,
maintained, contributed to or required to be sponsored, maintained or
contributed to by the Company or any Company Subsidiary or any other person or
14
entity that, together with the Company or any Company Subsidiary, is treated as
a single employer under any applicable Law (each, a "Commonly Controlled
Entity"), in each case providing benefits to any current or former director,
officer, employee or independent contractor of the Company or any Company
Subsidiary (each, a "Participant") and whether or not subject to Japanese law
(all such plans, programs and arrangements, including any such plan, program or
arrangement entered into or adopted on or after the date of this Agreement,
"Company Benefit Plans") or has made any material change in any actuarial or
other assumption used to calculate funding obligations with respect to any
Company Benefit Plan that is a Company Pension Plan (as defined in Section
3.11(a)), or any material change in the manner in which contributions to any
such Company Pension Plan are made or the basis on which such contributions are
determined.
(b) As of the date of this Agreement, there is not any material (i)
employment, deferred compensation, severance, change in control, termination,
employee benefit, loan, indemnification, retention, equity compensation, bonus,
award, consulting or similar agreement between the Company or any Company
Subsidiary, on the one hand, and any Participant, on the other hand, (ii)
agreement between the Company or any Company Subsidiary, on the one hand, and
any Participant, on the other hand, the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of transactions
involving the Company or any Company Subsidiary of the nature contemplated by
this Agreement or (iii) trust or insurance Contract or other agreement to fund
or otherwise secure payment of any compensation or benefit to be provided to
any Participant (all such agreements under clauses (i), (ii) and (iii),
collectively, "Company Benefit Agreements").
(c) To the Company's knowledge, the exercise price of each Company
Stock Option is not less than the fair market value of a share of Company
Common Stock as determined on the date of grant of such Company Stock Option.
SECTION 3.11. Benefit Plans. (a) Section 3.11(a) of the Company
Disclosure Letter contains a complete and correct list of all Company Benefit
Plans that are "employee pension benefit plans" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
whether or not subject to ERISA (a "Company Pension Plan"), or "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA), whether or not
subject to ERISA, and all other material Company Benefit Plans. The Company has
delivered or made available to the Purchaser complete and correct copies of (i)
each such Company Benefit Plan and each material Company Benefit Agreement (or,
in the case of any such Company Benefit Plan or material Company Benefit
Agreement that is unwritten, a written description thereof), (ii) the two most
recent annual reports required to be filed, or such similar reports,
statements, information returns or material correspondence required to be filed
with or delivered to any Governmental Entity, with respect to each material
Company Benefit Plan , (iii) the most recent summary plan description for each
15
material Company Benefit Plan for which a summary plan description is required
under applicable Law, and any summary of material modifications prepared for
each material Company Benefit Plan, (iv) each trust agreement and group annuity
or insurance contract and other documents relating to the funding or payment of
benefits under any material Company Benefit Plan, (v) the most recent
determination or qualification letter issued by any Governmental Entity for
each Company Benefit Plan intended to qualify for favorable Tax treatment for
which such a letter has been obtained, as well as a true, correct and complete
copy of each pending application therefor, if applicable, and (vi) the two most
recent actuarial valuations for each material Company Benefit Plan for which
actuarial valuations have been obtained. Section 3.11(a) of the Company
Disclosure Letter sets forth the forecasted obligation amount as of December
31, 2005, as determined by GAAP, for each Company Benefit Plan. Proper
provision or reserve for the Company Benefit Plans and for all private pension
payments reasonably likely to be required to be made by the Company has been
made for accounting purposes under GAAP.
(b) (i) Each Company Benefit Plan has been administered in compliance
with its terms, and (ii) each Company Benefit Plan (and the Company and the
Company Subsidiaries with respect to such plans) is in compliance with
applicable Law and the terms of any applicable collective bargaining
agreements, except for such instances of noncompliance with either plan terms
or Laws that, individually or in the aggregate, have not had and would not
reasonably be likely to have a Company Material Adverse Effect.
(c) Each Company Benefit Plan required to have been approved by any
non-U.S. Governmental Entity (or permitted to have been approved to obtain any
beneficial Tax or other status) has been so approved; no such approval has been
revoked (nor, to the knowledge of the Company, has revocation been threatened)
and no event has occurred since the date of the most recent approval that could
reasonably be expected to affect any such approval, except for such failures to
approve, revocations of approval and events that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect.
(d) None of the Company, any Company Subsidiary, any employee of the
Company or any Company Subsidiary, any of the Company Benefit Plans, including
the Company Pension Plans and, to the knowledge of the Company, any trusts
created under any of the Company Benefit Plans or any trustee, administrator or
other fiduciary of any Company Benefit Plan or trust created thereunder and any
agent of the foregoing, has engaged in a "prohibited transaction" under
applicable Law or any other breach of fiduciary responsibility that could
subject the Company, any Company Subsidiary, any such employee or any of the
Company Benefit Plans, or, to the knowledge of the Company, any such trust,
trustee, administrator or other fiduciary, to Tax or penalty on prohibited
transactions imposed under applicable Law or any other liability for breach of
fiduciary duty under any applicable Law, except for such prohibited
16
transactions and other breaches of fiduciary responsibility that, individually
or in the aggregate, have not had and would not be reasonably likely to have a
Company Material Adverse Effect.
(e) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, whether or not subject to ERISA, no such Company Benefit
Plan provides benefits after termination of employment, except where the cost
thereof is borne entirely by the former employee (or his or her eligible
dependents or beneficiaries).
(f) No Participant will be entitled to (i)(A) any severance,
separation, change of control, termination, bonus or other additional
compensation or benefits, or (B) any acceleration of the time of payment or
vesting of any compensation or benefits, including the accelerated vesting of
Company Stock Options held by such Participant, or the forgiveness of
indebtedness owed by such Participant, in each case as a result of any of the
Transactions (alone or in combination with any other event) or in connection
with the termination of such Participant's employment on or after the Effective
Time or (ii) any compensation or benefits related to or contingent upon, or the
value of which will be calculated on the basis of, any of the Transactions
(alone or in combination with any other event). The execution and delivery of
this Agreement and the consummation of the Transactions (alone or in
combination with any other event) and compliance by the Company with the
provisions hereof do not and will not require the funding (whether through a
grantor trust or otherwise) of any Company Benefit Plan, Company Benefit
Agreement or any other employment arrangement and will not limit the Company's
ability to amend, modify or terminate any Company Benefit Plan or Company
Benefit Agreement.
(g) Since January 1, 2003, and through the date of this Agreement,
neither the Company nor any Company Subsidiary has received notice of, and, to
the knowledge of the Company, there are no (i) pending termination proceedings
or other suits, claims (except claims for benefits payable in the normal
operation of the Company Benefit Plans), actions or proceedings against, or
involving or asserting any rights or claims to benefits under, any Company
Benefit Plan or Company Benefit Agreement or (ii) pending investigations (other
than routine inquiries) by any Governmental Entity with respect to any Company
Benefit Plan or Company Benefit Agreement, except for such proceedings, suits,
claims, actions and investigations that, individually or in the aggregate, have
not had and would not be reasonably likely to have a Company Material Adverse
Effect.
(h) Neither the Company nor any Company Subsidiary has any liability
or obligations, including under or on account of a Company Benefit Plan or
Company Benefit Agreement, arising out of the hiring of persons to provide
services to the Company or any Company Subsidiary and treating such persons as
consultants or independent contractors and not as employees of the Company or
any Company Subsidiary, except for any such liability and obligations that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect.
17
(i) None of the employees of the Company or any Company Subsidiary is
a member of, represented by or otherwise subject to any (i) labor union, works
council or similar organization or (ii) collective bargaining agreement,
industry-wide collective bargaining agreement or any similar collective
agreement, in each case with respect to such employee's employment by the
Company or any Company Subsidiary, and the Company and the Company Subsidiaries
do not have any obligation (including to inform or consult with any such
employees or their representatives in respect of the Transactions) with respect
to any such organization or agreement. Each of the Company and the Company
Subsidiaries is in compliance with all applicable Laws and orders with respect
to labor relations, employment and employment practices, occupational safety
and health standards, terms and conditions of employment, payment of wages,
classification of employees, immigration, visa, work status, pay equity and
workers compensation, and is not engaged in any unfair labor practice, except
for such failures to comply and unfair labor practices that, individually or in
the aggregate, have not had and would not be reasonably likely to have a
Company Material Adverse Effect. There is no unfair labor practice charge or
complaint against the Company or any Company Subsidiary pending or, to the
knowledge of the Company, threatened before the competent Labor Standards
Supervision Office ("Roudou Kijun Kantoku Sho"), the competent Committee on
Labor Affairs ("Roudou I-inkai") or any comparable Governmental Entity that has
had or would be reasonably likely to have a Company Material Adverse Effect.
Since December 31, 2003, there has been no, and there currently is no, labor
strike, material dispute, request for representation, union organization
attempt, slowdown or stoppage actually pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Company Subsidiary
that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect. No grievance or arbitration
proceeding arising out of a collective bargaining agreement is pending or, to
the knowledge of the Company, threatened against the Company or any Company
Subsidiary that has had or would be reasonably likely to have a Company
Material Adverse Effect.
SECTION 3.12. Litigation. (a) As of the date of this Agreement, there
is no claim, demand, suit, action or proceeding pending or, to the knowledge of
the Company, threatened in writing against or affecting the Company or any
Company Subsidiary that involves an amount in controversy in excess of $1.0
million, seeks material injunctive relief or would be reasonably likely to have
a Company Material Adverse Effect, if resolved in accordance with the
plaintiff's demands.
(b) There is no suit, action or proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Company Subsidiary nor is there any judgment outstanding against the Company or
18
any Company Subsidiary that, individually or in the aggregate, has had or would
be reasonably likely to have a Company Material Adverse Effect.
SECTION 3.13. Compliance with Applicable Laws. The Company and the
Company Subsidiaries and their relevant personnel and operations are in
compliance with all applicable Laws, including those relating to occupational
health and safety except for any such failure to be in compliance as,
individually or in the aggregate, has not had and would not be reasonably
likely to have a Company Material Adverse Effect. Neither the Company nor any
Company Subsidiary has received any written communication during the past two
years from a Governmental Entity that alleges that the Company or a Company
Subsidiary is not in compliance with any applicable Law except for such failure
to be in compliance as, individually or in the aggregate, has not had and would
not be reasonably likely to have a Company Material Adverse Effect. The Company
and the Company Subsidiaries have in effect all permits, licenses, variances,
exemptions, authorizations, operating certificates, franchises, orders and
approvals of all Governmental Entities (collectively, "Permits"), necessary for
them to own, lease or operate their properties and assets and to carry on their
businesses as now conducted, except for such Permits the absence of which,
individually or in the aggregate, has not had and would not be reasonably
likely to have a Company Material Adverse Effect and there has occurred no
violation of, default (with or without the lapse of time or the giving of
notice, or both) under, or event giving to others any right of termination,
amendment or cancelation of, with or without notice or lapse of time or both,
any such Permit, except for such violations, defaults or events that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect. This Section 3.13 does not
relate to matters with respect to Taxes, which are the subject of Section 3.09
or to Environmental Permits or Environmental Laws, which are the subject of
Section 3.14.
SECTION 3.14. Environmental Matters. Except for such matters that,
individually or in the aggregate, have not had and would not be reasonably
likely to have a Company Material Adverse Effect:
(a) The Company and each of the Company Subsidiaries are in compliance
with all Environmental Laws (as defined below).
(b) Since July 31, 2003, neither the Company nor any of the Company
Subsidiaries has received any written communication that alleges that the
Company or any of its subsidiaries is in violation of or has liability under
any Environmental Law or written request for information pursuant to any
Environmental Law.
(c) (i) The Company and each of the Company Subsidiaries have obtained
and are in compliance with all Permits pursuant to Environmental Law
(collectively "Environmental Permits") necessary for their operations as
presently conducted and (ii) all such Environmental Permits are valid and in
good standing.
19
(d) There are no Environmental Claims pending or, to the knowledge of
the Company, threatened in writing, against the Company or any of the Company
Subsidiaries.
(e) Neither the Company nor any of the Company Subsidiaries has
entered into or agreed to, or is otherwise subject to, any Judgment relating to
any Environmental Law or to the investigation or remediation of Hazardous
Materials (as defined below).
(f) There has been no treatment, storage or Release (as defined below)
of any Hazardous Material that would be reasonably likely to form the basis of
any Environmental Claim against the Company or any of the Company Subsidiaries
or against any person whose liabilities the Company or any of the Company
Subsidiaries has retained or assumed either contractually or by operation of
law.
(g) None of the Company, the Company Subsidiaries or any Person whose
liabilities the Company or any of the Company Subsidiaries has, or may have,
retained or assumed, either contractually or by operation of law, has
manufactured, sold or distributed any products containing asbestos in any form.
(h) (i) neither the Company nor any of the Company Subsidiaries has
retained or assumed, either contractually or by operation of law, any
liabilities or obligations that would be reasonably likely to form the basis of
any Environmental Claim (as defined below) against the Company or any of the
Company Subsidiaries, and (ii) to the knowledge of the Company, no
Environmental Claims are pending against any Person whose liabilities the
Company or any of the Company Subsidiaries has, or may have, retained or
assumed, either contractually or by operation of law.
(i) Definitions. As used in this Agreement:
(1) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, directives, claims,
liens, Judgments, investigations, proceedings or written notices of
noncompliance, violation or potential responsibility alleging
liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings,
investigations, cleanup, governmental response, removal or
remediation, natural resources damages, property damages, personal
injuries, medical monitoring, penalties, contribution, indemnification
and injunctive relief) arising out of, based on or resulting from (x)
the presence or Release of, or exposure to, any Hazardous Materials at
any location; or (y) the failure to comply with any Environmental Law;
(2) "Environmental Laws" means all applicable national, local
and foreign laws, rules, regulations, Judgments, legally binding
agreements, standards prescribed by Governmental Entities or
Environmental Permits issued, promulgated or entered into by or with
20
any Governmental Entity, relating to pollution or protection or
restoration of natural resources or the environment (including ambient
air, indoor air, surface water, groundwater, land surface or
subsurface strata), endangered or threatened species or human health
(to the extent relating to exposure to Hazardous Materials);
(3) "Hazardous Materials" means any contaminant, pollutant,
waste or other substance which is defined as hazardous or toxic under
Environmental Laws, or the release or presence of which is regulated
under any Environmental Law; and
(4) "Release" means any actual or threatened release, spill,
emission, leaking, dumping, injection, pouring, deposit, disposal,
discharge, dispersal, leaching or migration into or through the
environment (including ambient air, indoor air, surface water,
groundwater, land surface or subsurface strata) or within any
building, structure, facility or fixture.
SECTION 3.15. Intellectual Property. The Company or one of the Company
Subsidiaries owns, or is validly licensed or otherwise has the right to use,
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service xxxx rights, copyrights, domain names and
other proprietary intellectual property rights and computer programs
(collectively, "Intellectual Property Rights") used in the conduct of the
business of the Company and the Company Subsidiaries, except where the failure
to own, be validly licensed or have the right to use such Intellectual Property
Rights, individually or in the aggregate, has not had and would not be
reasonably likely to have a Company Material Adverse Effect. No claims are
pending or, to the knowledge of the Company, threatened in writing that the
Company or any Company Subsidiary is infringing or otherwise adversely
affecting the rights of any person with regard to any Intellectual Property
Right, except for any such claims that, individually or in the aggregate, have
not had and would not be reasonably likely to have a Company Material Adverse
Effect. To the knowledge of the Company, no person is infringing the rights of
the Company or any Company Subsidiary with respect to any Intellectual Property
Right, except for such infringements that, individually or in the aggregate,
have not had and would not be reasonably likely to have a Company Material
Adverse Effect.
SECTION 3.16. Contracts. (a) None of the Company, any of the Company
Subsidiaries or, to the knowledge of the Company, any other party to any
Company Material Contract is in violation of or in default under (nor does
there exist any condition which upon the passage of time or the giving of
notice would cause such a violation of or default under) any Company Material
Contract, to which it is a party or by which it or any of its properties or
assets is bound, except for violations or defaults that, individually or in the
21
aggregate, have not resulted and would not be reasonably likely to result in a
Company Material Adverse Effect. A "Company Material Contract" means any
contract to which the Company or any Company Subsidiary is a party that
provides for payment or series of payments or performance by a party thereto
having an aggregate value exceeding 100 million Japanese yen or equivalent
amount of foreign currency therewith per year.
(b) All Company Material Contracts are valid, binding and in full
force and effect and are enforceable by the Company or the applicable Company
Subsidiary in accordance with their terms, except for such failures to be
valid, binding, in full force and effect or enforceable that, individually or
in the aggregate, have not had and would not be reasonably likely to have a
Company Material Adverse Effect. None of the Company and the Company
Subsidiaries has received any written notice of the intention of any party to
terminate any Company Material Contract. Complete and correct copies of all
Company Material Contracts, together with all material modifications and
amendments thereto, have been made available to the Purchaser (either as an
exhibit to a Filed SEL Document or otherwise).
SECTION 3.17. Title to Real Properties. (a) Each of the Company and
each Company Subsidiary has good and marketable title to, or valid leasehold
interests in, all its real properties free and clear of all Liens, except for
such defects in title, easements, restrictive covenants and similar
encumbrances or impediments that, individually or in the aggregate, have not
had and would not be reasonably likely to have a Company Material Adverse
Effect.
(b) Except where the failure to comply, the failure to be in full
force and effect or the default has not had and would not be reasonably likely
to have a Company Material Adverse Effect, each of the Company and each Company
Subsidiary has complied in all respects with the terms of all leases to which
it is a party and under which it is in occupancy, all such leases are in full
force and effect and no extant notice of default has been given by either party
to such leases, and no event has occurred, which with the giving of notice or
the passage of time or both would constitute a default under any of such
leases.
SECTION 3.18. Customers and Suppliers. (a) Since January 1, 2005,
there has been no adverse change in the relationship of the Company with any
customer of the Company or any Company Subsidiary with annual sales of $15
million or more or any of the 15 largest suppliers to the Company or any
Company Subsidiary by annual sales volume (excluding utilities), except for
such change that, individually or in the aggregate, has not had and would not
be reasonably likely to have a Company Material Adverse Effect.
(b) To the Knowledge of the Company, there is no material dispute with
any customer with annual sales of $15 million or more in connection with any
product sold by the Company or any Company Subsidiary to any such customer that
has given rise or would be reasonably likely to give rise to a material
22
liability or cost, except for such dispute that, individually or in the
aggregate, has not had and would not be reasonably likely to have a Company
Material Adverse Effect.
SECTION 3.19. Brokers; Schedule of Fees and Expenses. No broker,
investment banker, financial advisor or other person, other than Deutsche Bank
Securities Inc. and RHJI, the fees and expenses of which will be paid by the
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the Acquisition and the other
Transactions based upon arrangements made by or on behalf of the Company.
SECTION 3.20. Financing. (a) The Company has received and accepted (1)
a commitment letter dated August 31, 2006 (the "Commitment Letter"), from the
lenders party thereto (collectively, the "Lenders") relating to the commitment
of the Lenders to provide the debt financing required by Mercury and its
subsidiaries to effect the Refinancing (as defined below) and to pay related
fees and expenses of the Transactions, (2) a commitment letter dated August 28,
2006 (the "Company Commitment Letter"), from Aozora Bank, Ltd.,
("Aozora")relating to the commitment of Aozora to provide the bridge financing
(the "Bridge Financing") required by the Company, the Purchasers and the
holders of Mercury common stock and holders of Mercury preferred stock to
consummate the Merger, the Acquisition and the Other Stock Acquisitions, (3)
the commitment letter dated August 29, 2006, from Aozora, on behalf of the
lenders (the "Company Lenders") under the Company's existing credit facility
(the "Company Consent Letter") to enter into a consent agreement confirming the
approval by the Company Lenders of certain amendments to the Company's existing
credit facility required thereunder by the Company in connection with the
Transactions and Refinancing (as defined below) (the "Company Facility
Amendments") and (4) a commitment letter dated August 31, 2006 (the "Equity
Commitment" and, together with the Commitment Letter, the Company Commitment
Letter and the Company Consent Letter, the "Commitments"), between RHJI, and
the Company relating to the agreement of RHJI to provide the equity financing
to the Company as specified therein (the "RHJI equity financing"). The Company
has provided or made available to the Purchasers' Representative a true,
correct and complete copy of each of the Commitments. The financing
contemplated by the Commitment Letter, the Company Consent Letter and the
Company Commitment Letter is referred to herein as the "Financing."
(b) Subject to its terms and conditions, the Financing and RHJI equity
financing, when funded in accordance with the applicable terms and conditions
of the Commitment Letter, Company Commitment Letter, Company Consent Letter and
Equity Commitment, will provide Acquisition Sub with funds at the Effective
Time sufficient to (i) consummate the Merger, (ii) finance the Consent
Solicitations (as defined in the Merger Agreement), (iii) refinance the
23
existing indebtedness of Mercury and its subsidiaries described in the
Commitment Letter (the "Refinancing"), (iv) provide the Bridge Financing and
(v) pay related fees and expenses of the Transactions.
ARTICLE IV
Representations and Warranties of the Purchaser
-----------------------------------------------
The Purchaser represents and warrants to the Company that:
SECTION 4.01. Organization, Standing and Power. (a) The Purchaser is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full power and authority to
conduct its businesses as presently conducted.
SECTION 4.02. Accredited Investor; Private Offering. (a) The Purchaser
is (i) an "accredited investor" as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), (ii) a "qualified purchaser" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act") and
(iii) not an "investment company" as defined in Section 3 of the Investment
Company Act, and meets at least one category and has indicated all categories
applicable to it in each of Sections A, B and C of the Accredited Investor
Questionnaire attached hereto as Exhibit C.
(b) Private Offering. The Company Stock purchased by the Purchaser
pursuant to this Agreement is being acquired for investment only and not with a
view to any public distribution thereof, and the Purchaser shall not offer to
sell or otherwise dispose of such Company Stock so acquired by it in violation
of any of the registration requirements of the Securities Act.
SECTION 4.03. Authority; Execution and Delivery; Enforceability. The
Purchaser has all requisite power and authority to execute and deliver this
Agreement and each Transaction Agreement to which it is a party and to
consummate the Transactions to which it is a party. The execution and delivery
by the Purchaser of this Agreement and each Transaction Agreement to which it
is a party and the consummation by it of the Transactions to which it is a
party have been duly authorized by all necessary corporate action on the part
of the Purchaser. The Purchaser has duly executed and delivered this Agreement
and each Transaction Agreement to which it is a party, and this Agreement and
each Transaction Agreement to which it is a party, assuming the due
authorization, execution and delivery thereof by the other parties thereto
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
24
SECTION 4.04. No Conflicts; Consents. (a) The execution and delivery
by the Purchaser of this Agreement and each Transaction Agreement to which it
is a party, do not, and the consummation of the Acquisition and the other
Transactions to which it is a party and compliance with and performance of the
terms hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any obligation
or to loss of a material benefit under, or to increased, additional,
accelerated or guaranteed rights or entitlements of any person under, or result
in the creation of any Lien upon any of the properties or assets of the
Purchaser or any of its subsidiaries under, any provision of (i) the charter or
organizational documents of the Purchaser or any of the Purchaser's
subsidiaries, (ii) any material Contract to which the Purchaser or any of its
subsidiaries is a party or by which any of their respective properties or
assets is bound or (iii) subject to the filings and other matters referred to
in Section 4.04(b), any material Judgment or material Law applicable to the
Purchaser or any of its subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, have not had and would not be reasonably
likely to have, a material adverse effect on the Purchaser (with respect to the
Purchaser, a "Purchaser Material Adverse Effect") (excluding for purposes of
this Section 4.04(a) and the application of Section 7.03(a) hereto, clause
(a)(iii) of the definition "material adverse effect").
(b) No Consent of, or registration, declaration or filing with any
Governmental Entity is required to be obtained or made by or with respect to
the Purchaser or any of its subsidiaries in connection with the execution,
delivery and performance of this Agreement or any Transaction Agreement to
which it is a party or the consummation of the Transactions to which the
Purchaser is a party, other than (i) compliance with and filings under (A) the
HSR Act, (B) the Japanese Anti-Monopoly Law, (C) other Antitrust Laws, (D) the
FEL, (E) the rules and regulations of the TSE, (F) the JCL and (G) the CRL,
(ii) the filing with the U.S. SEC of (A) the U.S. Information Statement and (B)
such reports under the Exchange Act as may be required in connection with the
Merger Agreement and the other Transaction Agreements, the Acquisition and the
other Transactions, (iii) the filing with the Bureau of the Information
Statement as may be required under the SEL in connection with this Agreement,
the other Transaction Agreements, the Acquisition and the other Transactions,
(iv) the filing of a certificate of merger in connection with the Merger with
the Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of the other jurisdictions in which the Company is
qualified to do business, (v) compliance with and such filings as may be
required under applicable Environmental Laws, (vi) such filings as may be
required in connection with the Taxes described in Section 6.06, (vii) filings
under any applicable state takeover Law and (viii) such other items (A)
required solely by reason of the participation of the Company (as opposed to
any third party) in the Transactions or (B) that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Company
Material Adverse Effect (excluding for purposes of this Section 4.04(b) and the
25
application of Section 7.03(a) hereto, clause (a)(iii) of the definition
"material adverse effect").
SECTION 4.05. Information Supplied. None of the information supplied
or to be supplied by the Purchaser for inclusion or incorporation by reference
in the Information Statement will 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 4.06. Brokers. No broker, investment banker, financial advisor
or other person, other than Lazard Freres & Co. LLC, the fees and expenses of
which will be paid by Mercury, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Acquisition
and the other Transactions based upon arrangements made by or on behalf of the
Purchaser.
ARTICLE V
Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 5.01. Conduct of Business. (a) Conduct of Business by the
Company. Except for matters set forth in the Company Disclosure Letter or
otherwise expressly permitted by this Agreement, from the date of this
Agreement to the Closing the Company shall, and shall cause each Company
Subsidiary to, conduct its business in the usual, regular and ordinary course
in substantially the same manner as previously conducted and, to the extent
consistent therewith, use all commercially reasonable efforts to preserve
intact its current business organization, keep available the services of its
current officers and employees and keep its relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. In addition, and without limiting the generality of the
foregoing, except for matters set forth in the Company Disclosure Letter or
otherwise expressly permitted by this Agreement, from the date of this
Agreement to the Closing, the Company shall not, and shall not permit any
Company Subsidiary to, do any of the following without the prior written
consent of the Purchaser:
(i) (A) declare, set aside, allot or pay any dividends on, or
make any other distributions in respect of, any of its capital stock,
other than dividends and distributions by a direct or indirect wholly
owned subsidiary of the Company to its parent, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (C) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any Company
26
Subsidiary or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of its
capital stock, (B) any Voting Company Debt or other voting securities,
(C) any securities convertible into or exchangeable for, or any
options, warrants or rights to acquire, any such shares, Voting
Company Debt, voting securities or convertible or exchangeable
securities or (D) any "phantom" stock, "phantom" stock rights, stock
appreciation rights, restricted stock units or stock-based performance
units, other than the issuance of the Company Common Stock and Company
Preferred Stock issued in connection with the Transactions (including
to RHJI pursuant to the Equity Commitment) and the issuance of Company
Common Stock upon the exercise of Company Stock Options outstanding on
the date of this Agreement and in accordance with their present terms;
(iii) amend its articles of incorporation, by-laws or other
comparable charter or organizational documents, other than the Company
Charter Amendment;
(iv) acquire or agree to acquire or transfer or agree to
transfer by merging or consolidating with, or by corporate separation,
stock-for-stock exchange, stock transfer, business assignment or
receiving assignment of business or by purchasing a substantial equity
interest in or substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof that
would be material to the Company and the Company Subsidiaries, taken
as a whole;
(v) make any change in accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar as
may have been required by a change in GAAP;
(vi) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of the Company or any Company Subsidiary, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, the Bridge
Financing and such other long term indebtedness, guarantees, debt
securities or other agreements or arrangements that would not be
reasonably likely to have a Company Material Adverse Effect;
(vii) make or change any material Tax election; or
27
(viii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Advice of Changes. The Company shall promptly advise the Purchaser
orally and in writing of any change or event that has or could be reasonably
likely to have a Company Material Adverse Effect.
(c) Periodic Reports. In connection with the continuing operation of
the business of the Company and the Company Subsidiaries between the date of
this Agreement and the Closing and to the extent permitted by Antitrust Laws
(as defined in Section 6.02(c)), the Company shall use commercially reasonable
efforts to report in good faith on a regular basis to the representatives of
the Purchaser to report material operational developments and the general
status of ongoing operations pursuant to procedures reasonably requested in
writing by the Purchaser; provided that the consultation required by this
Section 5.01(d) shall be conducted in a manner so as not to disrupt in any
material respect the business of the Company and the Company Subsidiaries;
provided further that the Company and the Company Subsidiaries shall not report
to the Purchaser or its representatives any non-public information related to
output, pricing or any other competitively-sensitive matter. The Purchaser
acknowledges that it shall not have any approval rights under this Section
5.01(c). The Company acknowledges that any such reports shall not constitute a
waiver by the Purchaser of any rights it may have under this Agreement and that
the Purchaser shall not have any liability or responsibility for any actions of
the Company, any Company Subsidiary or any of their respective directors or
officers with respect to matters that are the subject of such reports. All
information exchanged pursuant to this Section 5.01(c) shall be subject to the
Confidentiality Agreement (as defined in Section 6.02). For the avoidance of
doubt, the Company shall not be required to provide any information pursuant to
this Section 5.01(c) to the extent such information is not required to be
provided pursuant to Section 6.02.
SECTION 5.02. No Solicitation. (a) Prior to the Closing Date, the
Company shall not, nor shall it authorize or permit any Company Subsidiary to,
nor shall it authorize or permit any officer, director or employee of, or any
investment banker, attorney or other advisor or representative (each, a
"Representative" and collectively, "Representatives") of, the Company or any
Company Subsidiary to, (i) directly or indirectly solicit, initiate or
encourage the submission of, any Company Takeover Proposal (as defined in
Section 5.02(e)), (ii) enter into any agreement with respect to any Company
Takeover Proposal or (iii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Company Takeover Proposal. Without limiting the foregoing, it is agreed
that any violation of the restrictions set forth in the preceding sentence by
any Representative or affiliate of the Company or any Company Subsidiary shall
28
be deemed to be a breach of this Section 5.02(a) by the Company. The Company
shall, and shall cause its Representatives to, cease immediately all
discussions and negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, a Company Takeover Proposal.
(b) Prior to the Closing Date, the Company promptly shall advise the
Purchaser orally and in writing of any Company Takeover Proposal or any inquiry
with respect to or that could reasonably be expected to lead to any Company
Takeover Proposal and the identity of the person making any such Company
Takeover Proposal or inquiry including any change to the material details of
any such Company Takeover Proposal or inquiry. The Company shall (i) keep the
Purchaser fully informed of the status including any change to the material
details of any such Company Takeover Proposal or inquiry and (ii) provide to
the Purchaser as soon as practicable after receipt or delivery thereof with
copies of all material correspondence and other written material sent or
provided to the Company from any third party in connection with any Company
Takeover Proposal or sent or provided by the Company to any third party in
connection with any Company Takeover Proposal.
(c) Nothing contained in this Section 5.02 shall prohibit the Company
from making any required disclosure to the Company's stockholders if, in the
good faith judgment of the Company Board, after consultation with outside
counsel, failure so to disclose would be inconsistent with its obligations
under applicable Law.
(d) For purposes of this Agreement:
"Company Takeover Proposal" means (i) any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving the Company, (ii) any proposal for the issuance by
the Company of over 20% of its equity securities as consideration for the
assets or securities of another person or (iii) any proposal or offer to
acquire in any manner, directly or indirectly, over 20% of the equity
securities or consolidated total assets of the Company, in each case other
than the Transactions and the Equity Commitment and Financing.
ARTICLE VI
Additional Agreements
---------------------
SECTION 6.01. Preparation of Information Statement. (a) The Company
shall, as soon as practicable following the date of this Agreement, prepare and
file with the Bureau the Information Statement to be provided to the Company's
stockholders in preliminary form, and each of the Company and the Purchaser
shall use its commercially reasonable efforts to respond as promptly as
29
practicable to any comments of the Bureau, or its upper body, the Finance
Services Agency (the "FSA") with respect thereto. The Company shall notify the
Purchaser promptly of the receipt of any comments from the Bureau, the FSA or
their staff and of any request by the Bureau or the FSA or their staff for
amendments or supplements to the Information Statement or on any other Company
Disclosure Document or for additional information and shall supply the
Purchaser with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the Bureau, the FSA or their staff, on
the other hand, with respect to the Information Statement or any other Company
Disclosure Document. If at any time prior to receipt of the Company Stockholder
Approval there shall occur any event that should be set forth in an amendment
or supplement to the Information Statement, the Company shall promptly prepare
and mail to its stockholders such an amendment or supplement. The Company shall
not mail any Information Statement, or any amendment or supplement thereto, to
which the Purchaser reasonably objects. The Company shall use its commercially
reasonable efforts to cause the Information Statement to be mailed to the
Company's stockholders as promptly as practicable after filing with the Bureau.
Notwithstanding the foregoing, prior to filing or mailing the Information
Statement or any other Company Disclosure Document (or any amendment or
supplement thereto) or responding to any comments of the Bureau and the FSA
with respect thereto, the Company (i) shall provide the Purchaser an
opportunity to review and comment on such document or response and (ii) shall
include in such document or response all reasonable comments proposed by the
Purchaser.
(b) Special Stockholder Meetings. The Company shall, as soon as
practicable following the date of this Agreement, duly call, give notice of,
convene and hold (i) a meeting of the Company Common Stock stockholders, (ii) a
meeting of the Company Class A Preferred Stock stockholders, (iii) a meeting of
the Company Class B Preferred Stock stockholders and (iv) a general
stockholders meeting of the Company (the "Company Stockholders Meetings") for
the purpose of (A) seeking the Company Stockholder Approval and (B) electing as
directors to the Company Board the persons designated as such in accordance
with Section 2(e) of the Stockholders Agreement. The Company shall, through the
Company Board, recommend to its stockholders that they give the Company
Stockholder Approval, except to the extent that the Company Board shall have
withdrawn or modified its approval or recommendation of the Company Charter
Amendment after the Company Board shall have determined in good faith, after
consultation with outside counsel, that the failure to do so would be
inconsistent with its obligations under applicable Law.
SECTION 6.02. Access to Information; Confidentiality. The Company
shall, and shall cause each of its subsidiaries to, afford to the Purchaser and
to the Purchaser's officers, employees, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours during the period prior to the Closing (as long as such access is not
unreasonably disruptive to the business of the Company or its subsidiaries) to
30
all their respective properties, books, contracts, commitments, personnel and
records and, during such period, the Company shall, and shall cause each of its
subsidiaries to, furnish promptly to the Purchaser (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Japanese securities laws and (b) all
other information concerning its business, properties and personnel as the
Purchaser may reasonably request; provided, however, that either party may
withhold (i) any document or information that is subject to the terms of a
confidentiality agreement with a third party, (ii) such portions of documents
or information relating to output, pricing or other matters that are highly
sensitive if the exchange of such documents (or portions thereof) or
information, as determined by such party's counsel, would reasonably be
expected to raise antitrust concerns for such party (or any of its affiliates)
or (iii) such portions of documents or information that would reasonably be
expected to jeopardize any attorney-client privilege or contravene any Law or
fiduciary duty (provided that each party shall in good faith seek and implement
a reasonable alternative to provide Purchaser's counsel with access to such
document or information. All information exchanged pursuant to this Section
6.02 shall be subject to the terms of the confidentiality agreement dated
September 29, 2005, between RHJI and Mercury (the "Confidentiality Agreement")
as if the Purchaser was a party thereto with the same obligations thereunder as
Mercury.
SECTION 6.03. Commercially Reasonable Efforts; Notification. (a) Upon
the terms and subject to the conditions set forth in this Agreement, each of
the parties shall use its commercially reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Acquisition and the other Transactions, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if
any) and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
any other Transaction Agreement or the consummation of the Transactions,
including seeking to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed and (iv) the
execution and delivery of any additional instruments necessary to consummate
the Transactions and to fully carry out the purposes of the Transaction
Agreements. Nothing in this Agreement shall be deemed to require any party to
waive any substantial rights or agree to any substantial limitation on its
operations or to dispose of any significant asset or collection of assets.
Notwithstanding the foregoing, the Company and its Representatives shall not be
prohibited under this Section 6.03(a) from taking any action permitted by
31
Section 5.02(b). Subject to applicable Law relating to the exchange of
information, the Company and the Purchaser and their respective counsel shall
have the right to review in advance, and to the extent practicable each shall
consult the other on, any filing made with, or written materials submitted to,
any Governmental Entity in connection with the Acquisition and the other
Transactions. The Company and the Purchaser shall provide the other party and
its counsel with the opportunity to participate in any meeting with any
Governmental Entity in respect of any filing, investigation or other inquiry in
connection with the Acquisition or the other Transactions.
(b) Prior to Closing, the Company shall give prompt notice to the
Purchaser, and the Purchaser shall give prompt notice to the Company, of (i)
any representation or warranty made by it contained in this Agreement or any
Transaction Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty that is not so
qualified becoming untrue or inaccurate in any material respect or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall be deemed to be a
waiver or cure of any such breach or failure to comply or affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement or the
Transaction Agreements.
(c) Nothing in Section 6.03(a) shall require the Purchaser to dispose
of any of its assets or to limit its freedom of action with respect to any of
its businesses, or to consent to any disposition of the Company's assets or
limits on the Company's freedom of action with respect to any of its
businesses, or to commit or agree to any of the foregoing, and nothing in
Section 6.03(a) shall authorize the Company to commit or agree to any of the
foregoing, to obtain any consents, approvals, permits or authorizations to
remove any impediments to the Acquisition relating to the HSR Act, any Japanese
competition Law or other antitrust, competition or premerger notification,
trade regulation law, regulation or order ("Antitrust Laws") or to avoid the
entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order in any suit or proceeding relating to
Antitrust Laws.
(d) Nothing in this Section 6.03 shall require the Purchaser to (i)
consent to any action or omission by the Company that would be inconsistent
with Section 5.01 absent such consent or (ii) agree to amend or waive any
provision of this Agreement.
SECTION 6.04. Fees and Expenses. All fees and expenses incurred in
connection with the Acquisition and the other Transactions shall be paid by the
party incurring such fees or expenses, whether or not the Acquisition is
consummated.
SECTION 6.05. Public Announcements. The Purchaser, on the one hand,
and the Company, on the other hand, shall consult with each other before
32
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Acquisition and
the other Transactions and neither the Purchaser nor the Company shall issue
any such press release or make any such public statement prior to such
consultation, except as may be required by applicable Law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
SECTION 6.06. Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("Transfer Taxes")
incurred in connection with the Acquisition shall be paid by the Company, and
the Purchaser shall reasonably cooperate with the Company in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes.
ARTICLE VII
Conditions Precedent
--------------------
SECTION 7.01. Conditions to Each Party's Obligation To Effect The
Acquisition. The respective obligation of each party to effect the Acquisition
is subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. The Company shall have obtained the
Company Stockholder Approval.
(b) Antitrust. Any waiting period (and any extension thereof)
applicable to the Acquisition under the Japanese Anti-Monopoly Law shall have
been terminated or shall have expired. Any consents, approvals and filings
under any foreign Antitrust Law of any country, the absence of which would
prohibit the consummation of the Acquisition or would be reasonably likely to
have a Company Material Adverse Effect, shall have been obtained or made;
provided, however, that prior to asserting this condition, subject to Section
6.03, the applicable party shall have used its commercially reasonable efforts
to obtain or make such consents, approvals and filings.
(c) No Injunctions or Restraints. No temporary judgment issued by any
court of competent jurisdiction or other law preventing the consummation of the
Acquisition shall be in effect; provided, however, that prior to asserting this
condition, subject to Section 6.03, the applicable party shall have used its
commercially reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any such judgment that may be
entered.
33
(d) Merger Agreement. The Company, Acquisition Sub and Mercury shall
have consummated the transactions contemplated by the Merger Agreement without
the amendment, modification or waiver in any material respect of any material
term or condition thereof.
(e) Other Stock Purchase Agreements. The transactions contemplated by
each of the Other Stock Purchase Agreements shall have been consummated without
the amendment, modification or waiver in any material respect of any material
term or condition thereof.
(f) Stockholders Agreement. The Stockholders Agreement shall have
become effective and remain in full force and effect.
(g) Japanese Regulatory. Any waiting periods (and any extensions
thereof) applicable to the Acquisition under the FEL, SEL and JCL shall have
been terminated or shall have expired.
(h) Financing. The Company and Acquisition Sub shall have obtained the
proceeds contemplated by the Financing or the Alternative Financing (as defined
in the Merger Agreement) and the proceeds of the Equity Commitment; provided,
however, that prior to asserting this condition, the applicable party shall
have complied in all material respects with its respective obligations under
Section 6.11 of the Merger Agreement.
(i) Approval for Listing. The Shares shall have been approved for
listing on the TSE and the next business day following the Closing shall be
listed thereon; provided, however, that prior to asserting this condition,
subject to Section 6.03, the applicable party shall have used its commercially
reasonable efforts to obtain such approval and listing.
(j) Company Stock Purchase Agreement. The transactions contemplated by
the Company Stock Purchase Agreement shall have been consummated without the
amendment, modification or waiver in any material respect of any material term
or condition thereof.
(k) Appointment of Directors. The persons designated as directors in
accordance with Section 2(e) of the Stockholders Agreement shall have been
elected to the Company Board.
SECTION 7.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to effect the Acquisition are further subject to
the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company in this Agreement (other than those set forth in Sections 3.01,
3.03 and 3.04) shall be true and correct, as of the date of this Agreement and
34
as of the Closing Date as though made on the Closing Date, except to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties shall be true and correct, on
and as of such earlier date), other than for such failures to be true and
correct that, individually or in the aggregate, have not had and would not be
reasonably likely to have a Company Material Adverse Effect (it being agreed
that for purposes of determining whether such representations and warranties
shall be true and correct and applying the foregoing Company Material Adverse
Effect qualifier, all such representations and warranties that already are
qualified by reference to a Company Material Adverse Effect or other
materiality qualifier shall be deemed to be not so qualified). The
representations and warranties of the Company set forth in Sections 3.01, 3.03
and 3.04 that are qualified by a Company Material Adverse Effect or other
materiality qualifier shall be true and correct, and those not so qualified
shall be true and correct in all material respects, as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall be true
and correct, or true and correct in all material respects, as applicable, on
and as of such earlier date). The Purchaser shall have received a certificate
signed on behalf of the Company by the chief executive officer and the chief
financial officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and the Purchaser
shall have received a certificate signed on behalf of the Company by the chief
executive officer and the chief financial officer of the Company to such
effect.
(c) Absence of Company Material Adverse Effect. Since the date of this
Agreement, there shall not have been any event, change, effect, development or
state of facts that, individually or in the aggregate, has had or would be
reasonably likely to have a Company Material Adverse Effect.
SECTION 7.03. Condition to Obligation of the Company. The obligation
of the Company to effect the Acquisition is further subject to the following
conditions:
(a) Representations and Warranties. The representations and warranties
of the Purchaser in this Agreement shall be true and correct in all material
respects, as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects, on and as of such earlier date) and the Company shall have received a
certificate signed on behalf of the Purchaser to such effect.
(b) Performance of Obligations of Purchaser. The Purchaser shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and the Company shall
35
have received a certificate signed on behalf of the Purchaser to such effect.
(c) Company Lender Consent. The Company Facility Amendments shall have
become effective on the terms and conditions contemplated in the Company
Consent Letter.
ARTICLE VIII
Termination, Amendment and Waiver
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual written consent of the Company and the Purchaser;
(b) by either the Company or the Purchaser:
(i) if the Acquisition is not consummated on or before March
1, 2007 (the "Outside Date"), unless the failure to consummate the
Acquisition is the result of a willful and material breach of this
Agreement by the party seeking to terminate this Agreement; provided,
however, that the passage of such period shall be tolled for any part
thereof during which any party shall be subject to a nonfinal order,
decree, ruling or action restraining, enjoining or otherwise
prohibiting the consummation of the Acquisition;
(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or
otherwise prohibiting the Acquisition and such order, decree, ruling
or other action shall have become final and nonappealable;
(iii) if, upon the votes thereon at the duly held first round
of meetings to obtain the Company Stockholder Approval, the Company
Stockholder Approval is not validly obtained and, upon the votes
thereon at the duly held second round of meetings to obtain the
Company Stockholder Approval, the Company Stockholder Approval is not
validly obtained; or
(iv) if the Merger Agreement is terminated in accordance with
its terms;
36
(c) by the Purchaser, if the Company breaches or fails to perform in
any material respect any of its representations, warranties or covenants
contained in any Transaction Agreement, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 7.02(a) or
7.02(b), and (B) cannot be or has not been cured by the Outside Date (provided
that the Purchaser is not then in willful and material breach of any
representation, warranty or covenant contained in this Agreement); or
(d) by the Company, if the Purchaser breaches or fails to perform in
any material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (i) would give
rise to the failure of a condition set forth in Section 7.03(a) or 7.03(b), and
(ii) cannot be or has not been cured by the Outside Date (provided that the
Company is not then in willful and material breach of any representation,
warranty or covenant contained in this Agreement).
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or the Purchaser as provided in Section
8.01, this Agreement shall forthwith become void and have no effect, without
any liability or obligation on the part of the Company or the Purchaser, other
than Section 3.19, Section 4.06, the last sentence of Section 6.02, Section
6.04, this Section 8.02 and Article IX, which provisions shall survive such
termination, and except to the extent that such termination results from the
willful and material breach by a party of any representation, warranty or
covenant set forth in this Agreement, in which case the aggrieved party shall
be entitled to all remedies available at law or in equity.
SECTION 8.03. Amendment. This Agreement may not be amended except by
an instrument in writing signed by the Company and the Purchaser.
SECTION 8.04. Extension; Waiver. At any time prior to the Closing, the
Company and the Purchaser may (a) extend the time for the performance of any of
the obligations or other acts of the other parties, (b) waive any inaccuracies
in the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) waive compliance with any
of the agreements or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the Company or by the Purchaser on
behalf of the Company or the Purchaser, as applicable. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
37
ARTICLE IX
General Provisions
------------------
SECTION 9.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Closing, except for
Section 3.03(b) which shall survive the Closing. This Section 9.01 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Closing.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to the Purchaser, to
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000x
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Ellenoff Xxxxxxxx & Schole LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx Bring, Esq.
(b) if to the Company, to
Asahi Tec Corporation
000-0 Xxxxxxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 000-0000, Xxxxx
Fax: 00-000-00-0000
Attention: Xxxxxx Xxxxxx
38
with a copy to:
Xxxxxxxx Mori & Tomotsune
Izumi Xxxxxx Xxxxx
0-0-0, Xxxxxxxx, Xxxxxx-xx,
Xxxxx 000-0000, Xxxxx
Fax: (00) 0000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
with a copy to:
RHJ International SA
Xxxxxx Xxxxxx 000
0000 Xxxxxxxx
Xxxxxxx
Attention: Xxx Xxxxx
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.; and
The Company promptly shall provide the Purchaser with a copy of each
notice delivered under the Merger Agreement.
SECTION 9.03. Definitions. For purposes of this Agreement:
An "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"business day" means any day other than a Saturday or Sunday, on which
banks located in Tokyo or New York are not required or authorized by law to
remain closed.
"Company Stock Purchase Agreement" means the stock purchase agreement
dated as of the date of this Agreement between Argon, the Purchasers listed on
Schedule I thereto and the Purchasers' Representative.
A "material adverse effect" on a party means (a) a material adverse
effect on the business, assets, financial condition or results of operations of
the party and its subsidiaries, taken as a whole except, in each case, to the
extent arising or resulting from, or caused or attributable to, any of the
following, individually or taken together: (i) general U.S., Japanese or global
economic, political or market conditions to the extent not materially
39
disproportionately affecting the party and its subsidiaries, taken as whole,
relative to other automotive industry participants in the party's geographic
area, (ii) changes in applicable generally accepted accounting principles or
Law, (iii) the public announcement of the Transactions, the consummation of the
Transactions or the execution of the Transaction Agreements or (iv) acts of
terrorism or war to the extent not materially disproportionately affecting the
party and its subsidiaries, taken as whole, relative to other automotive
industry participants in the party's geographic area, (b) a material adverse
effect on the ability of the party to perform its obligations under this
Agreement or the other Transaction Agreements to which it is a party or (c) a
material adverse effect on the ability of the party to consummate the
Transactions to which it is a party.
A "person" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
A "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person. For the avoidance of doubt, in no event shall Mercury or any subsidiary
of Mercury be deemed to be a subsidiary of the Company for any purpose of this
Agreement (including after giving effect to the Merger).
"Transaction Agreements" means this Agreement, the Company Voting
Agreement, the Merger Agreement, the Company Stock Purchase Agreement, the
Stockholders Agreement and the Other Stock Purchase Agreements and documents
delivered in connection with the foregoing.
SECTION 9.04. Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation".
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
40
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 9.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the Transaction Agreements, taken together with the Company
Disclosure Letter, (a) constitute the entire agreement, and supersede after the
date of this Agreement all prior agreements and understandings, both written
and oral, among the parties with respect to the Transactions (other than the
Confidentiality Agreement) and (b) are not intended to confer upon any person
other than the parties any rights or remedies.
SECTION 9.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof, except to the extent the laws of Japan are mandatorily
applicable to the Acquisition.
SECTION 9.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties. Any purported
assignment without such consent shall be void. Subject to the preceding
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 9.10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement or any
Transaction Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement or any Transaction Agreement and to enforce specifically the terms
and provisions of this Agreement and each other Transaction Agreement in any
New York state court, any Federal court located in the State of New York or the
State of Delaware or in any Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal
jurisdiction of any New York state court, any Federal court located in the
State of New York or the State of Delaware or in any Delaware state court, in
the event any dispute arises out of this Agreement, any Transaction Agreement
or any Transaction, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement or any
other Transaction Agreement or any Transaction in any court other than any New
York state court, any Federal court sitting in the State of New York or the
41
State of Delaware or any Delaware state court and (d) waives any right to trial
by jury with respect to any action related to or arising out of this Agreement
or any other Transaction Agreement or any other Transaction.
SECTION 9.11. Agreement and Waiver of Certain Rights. (a) The
Purchaser, by the execution and delivery of this Agreement, hereby waives in
relation to the Merger, its rights under Section 262 of the Delaware General
Corporation Law ("Section 262") in connection with its Appraisal Shares (as
defined in the Merger Agreement) including any rights to demand appraisal of
such Appraisal Shares, and hereby consents and agrees, in relation to the
Merger, not to exercise any rights under Section 262, including any appraisal
rights, with respect to such Appraisal Shares.
(b) The Purchaser hereby consents, with respect to the limitations and
approval and consent rights set forth in the Shareholders Agreement (the
"Mercury Shareholders Agreement") by and among Mascotech, Inc., Masco
Corporation, Xxxxxxx Xxxxxxxxx, Xxxxxxx and Xxxx Xxxxxxxxx Foundation, the
Heartland Entities listed on the signature pages thereto and the HIP
Co-Investors listed on the signature pages thereto, dated as of November 28,
2000, to Mercury's participation in the Transactions and the TM Distribution
(subject to the payment date of the TM Distribution being on or after the
Closing Date and being made conditional on the Closing). The Purchaser further
consents and acknowledges that at the Effective Time the Mercury Shareholders
Agreement shall terminate and be of no force and effect.
(c) Subject to the consummation of the Merger, the Purchaser, by the
execution and delivery of this Agreement, (i) hereby acknowledges, consents to
and agrees that the TM Distribution (as defined in the Merger Agreement) shall
be declared and made without registration under the Securities Act or the
Exchange Act of the securities distributed thereby, that the TM Distribution
shall be made on the terms set forth in the Merger Agreement (subject to the
payment date of the TM Distribution being on or after the Closing Date and
being made conditional on the Closing) and that it waives (subject to the
foregoing) any remedy of rescission or any other remedies against Mercury or
the Company in connection therewith and (ii) hereby consents and agrees to the
declaration and consummation of the TM Distribution (subject to the payment
date of the TM Distribution being on or after the Closing Date and being made
conditional on the Closing).
42
IN WITNESS WHEREOF, the Company and the Purchaser have duly executed
this Agreement, all as of the date first written above.
ASAHI TEC CORPORATION,
by:
-------------------------
Name:
Title:
METALDYNE INVESTMENT FUND I, LLC,
by:
-----------------------------------
Name:
Title:
HIP SIDE-BY-SIDE PARTNERS, L.P.,
by: HEARTLAND INDUSTRIAL
ASSOCIATES, LLC
Its: General Partner
by:
-----------------------------------
Name:
Title:
METALDYNE INVESTMENT FUND II, LLC,
by:
--------------------------------------
Name:
Title:
