AGREEMENT AND PLAN OF MERGER AND REORGANIZATION among BUNGE LIMITED, BLEECKER ACQUISITION CORP. and CORN PRODUCTS INTERNATIONAL, INC. Dated as of June 21, 2008
Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
XXXXX LIMITED,
BLEECKER ACQUISITION CORP.
and
CORN PRODUCTS INTERNATIONAL, INC.
Dated as of June 21, 2008
TABLE OF CONTENTS
Page | ||||
ARTICLE I |
||||
DEFINITIONS |
||||
SECTION 1.01. Definitions
|
1 | |||
ARTICLE II |
||||
THE MERGER |
||||
SECTION 2.01. The Merger
|
7 | |||
SECTION 2.02. Effective Time; Closing
|
7 | |||
SECTION 2.03. Effect of the Merger
|
8 | |||
SECTION 2.04. Conversion of Securities
|
8 | |||
SECTION 2.05. Company Stock Options
|
8 | |||
SECTION 2.06. Stock Awards
|
9 | |||
SECTION 2.07. Certificate of Incorporation; Bylaws
|
10 | |||
SECTION 2.08. Directors and Officers
|
10 | |||
ARTICLE III |
||||
DELIVERY OF PARENT COMMON SHARES |
||||
SECTION 3.01. Exchange of Certificates
|
10 | |||
SECTION 3.02. Stock Transfer Books
|
13 | |||
SECTION 3.03. No Appraisal Rights
|
13 | |||
ARTICLE IV |
||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
||||
SECTION 4.01. Organization and Qualification; Subsidiaries
|
14 | |||
SECTION 4.02. Certificate of Incorporation and Bylaws
|
15 | |||
SECTION 4.03. Capitalization
|
15 | |||
SECTION 4.04. Authority Relative to This Agreement
|
16 | |||
SECTION 4.05. No Conflict; Required Filings and Consents
|
16 | |||
SECTION 4.06. Permits; Compliance
|
17 | |||
SECTION 4.07. SEC Filings; Financial Statements
|
17 | |||
SECTION 4.08. Absence of Certain Changes or Events
|
19 | |||
SECTION 4.09. Absence of Litigation
|
20 | |||
SECTION 4.10. Employee Benefit Plans
|
20 | |||
SECTION 4.11. Labor and Employment Matters
|
23 | |||
SECTION 4.12. Real Property; Title to Assets
|
24 | |||
SECTION 4.13. Intellectual Property
|
25 |
i
SECTION 4.14. Taxes
|
26 | |||
SECTION 4.15. Environmental Matters
|
27 | |||
SECTION 4.16. No Stockholder Rights Plan
|
27 | |||
SECTION 4.17. Material Contracts
|
27 | |||
SECTION 4.18. Insurance
|
28 | |||
SECTION 4.19. Board Approval; Vote Required
|
29 | |||
SECTION 4.20. Opinions of Financial Advisors
|
29 | |||
SECTION 4.21. Brokers
|
29 | |||
ARTICLE V |
||||
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
||||
SECTION 5.01. Corporate Organization
|
30 | |||
SECTION 5.02. Organizational Documents
|
30 | |||
SECTION 5.03. Capitalization
|
30 | |||
SECTION 5.04. Authority Relative to This Agreement
|
31 | |||
SECTION 5.05. No Conflict; Required Filings and Consents
|
31 | |||
SECTION 5.06. Compliance
|
32 | |||
SECTION 5.07. SEC Filings; Financial Statements
|
32 | |||
SECTION 5.08. Absence of Certain Changes or Events
|
34 | |||
SECTION 5.09. Taxes
|
34 | |||
SECTION 5.10. Environmental Matters
|
35 | |||
SECTION 5.11. Board Approval; Vote Required
|
36 | |||
SECTION 5.12. Operations of Merger Sub
|
36 | |||
SECTION 5.13. Availability of Funds
|
36 | |||
SECTION 5.14. Opinions of Financial Advisors
|
36 | |||
SECTION 5.15. Brokers
|
37 | |||
ARTICLE VI |
||||
CONDUCT OF BUSINESS PENDING THE MERGER |
||||
SECTION 6.01. Conduct of Business by the Company Pending the Merger
|
37 | |||
SECTION 6.02. Conduct of Business by Parent Pending the Merger
|
40 | |||
ARTICLE VII |
||||
ADDITIONAL AGREEMENTS |
||||
SECTION 7.01. Registration Statement; Joint Proxy Statement
|
41 | |||
SECTION 7.02. Company Stockholder Meeting
|
43 | |||
SECTION 7.03. Parent Shareholder Meeting
|
44 | |||
SECTION 7.04. Access to Information; Confidentiality
|
44 | |||
SECTION 7.05. No Solicitation of Transactions
|
45 | |||
SECTION 7.06. Employee Benefits Matters
|
48 | |||
SECTION 7.07. Directors’ and Officers’ Indemnification and Insurance
|
50 |
ii
SECTION 7.08. Parent Board Representative
|
51 | |||
SECTION 7.09. Notification of Certain Matters
|
51 | |||
SECTION 7.10. Further Action; Reasonable Best Efforts
|
51 | |||
SECTION 7.11. Tax Free Merger
|
52 | |||
SECTION 7.12. Transfer Taxes
|
52 | |||
SECTION 7.13. Merger Sub
|
53 | |||
SECTION 7.14. Letters of Accountants
|
53 | |||
SECTION 7.15. NYSE Listing
|
53 | |||
SECTION 7.16. Subsequent Financial Statements
|
53 | |||
SECTION 7.17. Public Announcements
|
53 | |||
SECTION 7.18. Assistance with Parent Financing
|
54 | |||
ARTICLE VIII |
||||
CONDITIONS TO THE MERGER |
||||
SECTION 8.01. Conditions to the Obligations of Each Party
|
55 | |||
SECTION 8.02. Conditions to the Obligations of Parent and Merger Sub
|
56 | |||
SECTION 8.03. Conditions to the Obligations of the Company
|
57 | |||
ARTICLE IX |
||||
TERMINATION, AMENDMENT AND WAIVER |
||||
SECTION 9.01. Termination
|
58 | |||
SECTION 9.02. Effect of Termination
|
59 | |||
SECTION 9.03. Payment of Certain Fees and Expenses
|
59 | |||
SECTION 9.04. Amendment
|
61 | |||
SECTION 9.05. Waiver
|
61 | |||
ARTICLE X |
||||
GENERAL PROVISIONS |
||||
SECTION 10.01. Non-Survival of Representations, Warranties and Agreements
|
61 | |||
SECTION 10.02. Notices
|
61 | |||
SECTION 10.03. Severability
|
62 | |||
SECTION 10.04. Entire Agreement; Assignment
|
62 | |||
SECTION 10.05. Parties in Interest
|
63 | |||
SECTION 10.06. Interpretation
|
63 | |||
SECTION 10.07. Specific Performance
|
63 | |||
SECTION 10.08. Governing Law; Jurisdiction
|
64 | |||
SECTION 10.09. Headings
|
64 | |||
SECTION 10.10. Counterparts
|
64 | |||
SECTION 10.11. Waiver of Jury Trial
|
64 |
iii
EXHIBITS
Exhibit A
|
Form of Parent Tax Representation Letter | |
Exhibit B
|
Form of Company Tax Representation Letter |
iv
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of June 21, 2008 (this
“Agreement”), among XXXXX LIMITED, an exempted limited liability company organized and
existing under the laws of Bermuda (“Parent”), BLEECKER ACQUISITION CORP., a Delaware
corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), and CORN
PRODUCTS INTERNATIONAL, INC., a Delaware corporation (the “Company”).
WHEREAS, upon the terms and subject to the conditions of this Agreement and in accordance with
the General Corporation Law of the State of Delaware (the “DGCL”), Merger Sub will merge
with and into the Company (the “Merger”);
WHEREAS, the Board of Directors of the Company (the “Company Board”) has (i)
determined that the Merger is in the best interests of, the Company and its stockholders, (ii)
approved, and declared it advisable to enter into, this Agreement, and (iii) resolved to recommend
that this Agreement be adopted by the stockholders of the Company;
WHEREAS, the Board of Directors of Merger Sub has approved, and declared it advisable to enter
into, this Agreement;
WHEREAS, (i) the Board of Directors of Parent (the “Parent Board”) has approved this
Agreement, (ii) immediately following the execution of this Agreement, Parent shall adopt, as the
sole stockholder of Merger Sub, this Agreement, and (iii) the Parent Board has approved, and
resolved to recommend to the shareholders of Parent the approval of, the issuance (the “Parent
Share Issuance”) of common shares, par value $0.01 per share, of Parent (“Parent Common
Shares”) to the stockholders of the Company pursuant to the Merger; and
WHEREAS, for United States federal income tax purposes, the Merger is intended to qualify as a
reorganization under the provisions of Section 368(a) of the United States Internal Revenue Code of
1986, as amended (the “Code”), and this Agreement shall constitute a plan of
reorganization.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, Parent, Merger Sub and the Company
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) For purposes of this Agreement:
“affiliate” of a specified person means a person who, at the time of
determination, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person.
“business day” means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or, in the case of determining a date when
1
any payment is due, any day on which banks are not required or authorized to close in
The City of New York.
“Company Disclosure Schedule” means the Company’s disclosure schedule delivered
by the Company to Parent and Merger Sub concurrently with the delivery of this Agreement.
“Company Material Adverse Effect” means any event, circumstance, change or
effect that, individually or in the aggregate with all other events, circumstances, changes
and effects (a) is or is reasonably likely to be materially adverse to the business,
financial condition, assets, liabilities or results of operations of the Company and the
Subsidiaries, taken as a whole; provided, however, that to the extent any
event, circumstance, change or effect is caused by or results from any of the following, it
shall not be taken into account in determining whether there has been a “Company Material
Adverse Effect”: (i) changes in general economic conditions or changes in financial markets
in general to the extent such changes would not reasonably be expected to have a materially
disproportionate impact (relative to other participants in the industries in which the
Company and the Subsidiaries operate) on the Company and the Subsidiaries, taken as a whole,
(ii) general changes in the industries in which the Company and the Subsidiaries operate to
the extent such changes would not reasonably be expected to have a materially
disproportionate impact (relative to other participants in the industries in which the
Company and the Subsidiaries operate) on the Company and the Subsidiaries, taken as a whole,
(iii) changes resulting from the entry into or the public announcement of this Agreement or
the transactions contemplated hereby or the performance of obligations under this Agreement,
(iv) failure of the Company to meet any internal or public projections, forecasts or
estimates of revenues or earnings for any period ending on or after the date hereof (it
being understood that the facts or occurrences giving rise to or contributing to the
occurrence of any such failure may be deemed to constitute, or be taken into account in
determining whether there has been, a Company Material Adverse Effect), (v) any change in
any applicable law, rule or regulation or GAAP or interpretation thereof after the date
hereof, and (vi) the commencement, occurrence or continuation of any war, armed hostilities
or acts of terrorism involving or affecting the United States of America or any part
thereof; or (b) would prevent or materially delay consummation of any of the transactions
contemplated by this Agreement or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement.
“Company Material Subsidiary” means a subsidiary of the Company that is
material to the business, financial condition or results of operations of the Company and
the Subsidiaries taken as a whole.
“Company Stockholder Approval” means the adoption of this Agreement at the
Company Stockholder Meeting by holders of a majority of the outstanding Shares in accordance
with the DGCL and the Company’s certificate of incorporation and bylaws.
“control” (including the terms “controlled by”, “controlling”
and “under common control with”) means the possession, directly or indirectly, of
the power to direct or cause
2
the direction of the management and policies of a person, whether through the ownership
of voting securities, by contract or otherwise.
“Environmental Law” means any United States federal, state or local or
non-United States law relating to (i) releases or threatened releases of Hazardous
Substances or materials containing Hazardous Substances; (ii) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances; or (iii) pollution or protection of the environment,
health, safety or natural resources.
“Hazardous Substances” means (i) those substances defined in or regulated under
the following United States federal statutes and their state counterparts, as each is in
effect on the date hereof, and all regulations promulgated thereunder: the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe
Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and
Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum products, including
crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any mixtures
thereof; (iv) polychlorinated biphenyls, asbestos and radon; and (v) any substance,
material or waste regulated by any Governmental Authority pursuant to any Environmental Law.
“Intellectual Property” means intellectual property or similar proprietary
rights of any kind, including any and all: (i) United States, non-United States and
international patents, patent applications and statutory invention registrations,
(ii) trademarks, service marks, trade dress, logos, trade names, corporate names and other
source identifiers, and registrations and applications for registration thereof, and the
goodwill associated with any of the foregoing, (iii) copyrightable works, copyrights, and
registrations and applications for registration thereof, (iv) confidential and proprietary
information, including trade secrets and know-how, and (v) Internet domain names.
“NYSE” means the New York Stock Exchange.
“Parent Disclosure Schedule” means Parent’s disclosure schedule delivered by
Parent to the Company concurrently with the delivery of this Agreement.
“Parent Material Adverse Effect” means any event, circumstance, change or
effect that, individually or in the aggregate with all other events, circumstances, changes
and effects (a) is or is reasonably likely to be materially adverse to the business,
financial condition, assets, liabilities or results of operations of Parent and its
subsidiaries, taken as a whole; provided, however, that to the extent any
event, circumstance, change or effect is caused by or results from any of the following, it
shall not be taken into account in determining whether there has been a “Parent Material
Adverse Effect”: (i) changes in general economic conditions or changes in financial markets
in general to the extent such changes would not reasonably be expected to have a materially
disproportionate impact (relative to other participants in the industries in which Parent
and its subsidiaries operate) on Parent and its subsidiaries, taken as a whole, (ii) general
changes in the
3
industries in which Parent and its subsidiaries operate to the extent such changes
would not reasonably be expected to have a materially disproportionate impact (relative to
other participants in the industries in which Parent and its subsidiaries operate) on Parent
and its subsidiaries, taken as a whole, (iii) failure of Parent to meet any internal or
public projections, forecasts or estimates of revenues or earnings for any period ending on
or after the date hereof (it being understood that the facts or occurrences giving rise to
or contributing to the occurrence of any such failure may be deemed to constitute, or be
taken into account in determining whether there has been, a Parent Material Adverse Effect),
(iv) any change in any applicable law, rule or regulation or GAAP or interpretation thereof
after the date hereof, and (v) the commencement, occurrence or continuation of any war,
armed hostilities or acts of terrorism involving or affecting the United States of America
or any part thereof; or (b) would prevent or materially delay consummation of any of the
transactions contemplated by this Agreement or otherwise prevent or materially delay Parent
and Merger Sub from performing their obligations under this Agreement.
“Parent Share Value” means an amount equal to the volume weighted average of
the per share daily closing prices of a Parent Common Share on the NYSE, as reported by The
Wall Street Journal, for the fifteen consecutive trading days ending on and including the
second trading day prior to the date on which the Company Stockholder Meeting is held.
“Parent Shareholder Approval” means the approval of the Parent Share Issuance
at the Parent Shareholder Meeting by a majority of votes cast in accordance with Parent’s
memorandum of association and bye-laws; provided, that the total vote cast on the
proposal to approve the Parent Share Issuance represents over 50% in interest of all Parent
Common Shares.
“Parent Significant Subsidiary” means a subsidiary of Parent that would
constitute a “significant subsidiary” of Parent within the meaning of Rule 1.02(w) of
Regulation S-X as promulgated by the SEC.
“person” means an individual, corporation, partnership, limited partnership,
limited liability company, syndicate, person (including a “person” as defined in
Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government.
“Qualifying Confidentiality Agreement” means an executed agreement with
provisions requiring any person receiving nonpublic information with respect to the Company
to keep such information confidential, which provisions to keep such information
confidential are no less restrictive in the aggregate to such person than the
Confidentiality Agreement is to Parent, its affiliates, and their respective personnel and
representatives (it being understood that such agreement with such person need not have
comparable standstill provisions); provided, that no such confidentiality agreement
shall conflict with any rights of Parent or Merger Sub or obligations of the Company and the
Subsidiaries under this Agreement.
4
“subsidiary” or “subsidiaries” of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled by such person,
directly or indirectly, through one or more intermediaries.
“Tax Returns” means any return, declaration, report, election, claim for refund
or information return or other statement or form filed or required to be filed with any
Governmental Authority relating to Taxes, including any schedule or attachment thereto or
any amendment thereof.
“Taxes” means any and all (a) taxes, fees, levies, duties, tariffs, imposts and
other charges of any kind (together with any and all interest, penalties, additions to tax
and additional amounts imposed with respect thereto) imposed by any Governmental Authority,
including: taxes or other charges on or with respect to income, franchise, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll, employment,
social security, workers’ compensation, unemployment compensation or net worth; taxes or
other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added
or gains taxes; license, registration and documentation fees; and customers’ duties, tariffs
and similar charges, and (b) liability for the payment of any Tax of another person (i) as a
result of being a member of a consolidated, combined, unitary or affiliated group that
includes any other person, or (ii) by reason of transferee or successor liability imposed by
law.
(b) The following terms have the meaning set forth in the Sections set forth below:
Defined Term | Location of Definition | |
Acquisition Proposal
|
§ 7.05(f) | |
Action
|
§ 4.09 | |
Adjustment
|
§ 3.01(f) | |
Agreement
|
Preamble | |
AIP
|
§ 7.06(h) | |
Blue Sky Application
|
§ 7.18(b) | |
Blue Sky Laws
|
§ 4.05(b) | |
Certificate of Merger
|
§ 2.02 | |
Certificates
|
§ 3.01(b) | |
Change in Company Recommendation
|
§ 7.01(b) | |
Change in Parent Recommendation
|
§ 7.01(c) | |
Closing
|
§ 2.02 | |
Code
|
Recitals | |
Company
|
Preamble | |
Company Balance Sheet
|
§ 4.07(c) | |
Company Board
|
Recitals | |
Company Common Stock
|
§ 2.04(a) | |
Company Environmental Permits
|
§ 4.15 | |
Company Filed SEC Report
|
§ 4.07(a) | |
Company Licensed Intellectual Property
|
§ 4.13 |
5
Defined Term | Location of Definition | |
Company Material Contracts
|
§ 4.17(a) | |
Company Owned Intellectual Property
|
§ 4.13 | |
Company Performance Share Award
|
§ 2.06(b) | |
Company Plans
|
§ 4.10(a) | |
Company Permitted Liens
|
§ 4.12(a) | |
Company Permits
|
§ 4.06 | |
Company Preferred Stock
|
§ 4.03(a) | |
Company Property
|
§ 4.12(a) | |
Company Recommendation
|
§ 7.01(b) | |
Company Representatives
|
§ 7.05(a) | |
Company Restricted Stock Award
|
§ 2.06(a) | |
Company SEC Reports
|
§ 4.07(a) | |
Company Stock Awards
|
§ 4.03(a) | |
Company Stock Option Plan
|
§ 2.05(a) | |
Company Stock Options
|
§ 2.05(a) | |
Company Stockholder Meeting
|
§ 7.01(a) | |
Confidentiality Agreement
|
§ 7.04(b) | |
D&O Insurance
|
§ 7.07(b) | |
DGCL
|
Recitals | |
Effective Time
|
§ 2.02 | |
ERISA
|
§ 4.10(a) | |
Exchange Act
|
§ 4.07(a) | |
Exchange Agent
|
§ 3.01(a) | |
Exchange Fund
|
§ 3.01(a) | |
Exchange Ratio
|
§ 2.04(a) | |
Executive Benefit Trust
|
§ 7.06(f) | |
Expenses
|
§ 9.03(a) | |
Financing
|
§ 7.18(a) | |
GAAP
|
§ 4.07(b) | |
Governmental Authority
|
§ 4.05(b) | |
HSR Act
|
§ 4.05(b) | |
Indemnified Person
|
§ 7.07(d) | |
IRS
|
§ 4.10(b) | |
Joint Proxy Statement
|
§ 7.01(a) | |
knowledge of the Company
|
§ 10.06 | |
knowledge of Parent
|
§ 10.06 | |
Law
|
§ 4.05(a) | |
Liens
|
§ 4.12(a) | |
Merger
|
Recitals | |
Merger Sub
|
Preamble | |
Merger Sub Common Stock
|
§ 2.04(c) | |
Multiemployer Plan
|
§ 4.10(d) | |
Multiple Employer Plan
|
§ 4.10(d) | |
Non-U.S. Benefit Plan
|
§ 4.10(k) |
6
Defined Term | Location of Definition | |
Notice of Superior Proposal
|
§ 7.05(d)(i) | |
Notice Period
|
§ 7.05(d)(i) | |
Order
|
§ 8.01(d) | |
Parent
|
Preamble | |
Parent Board
|
Recitals | |
Parent Common Shares
|
Recitals | |
Parent Environmental Permits
|
§ 5.10 | |
Parent Filed SEC Report
|
§ 5.07(a) | |
Parent Preference Shares
|
§ 5.03(a) | |
Parent Recommendation
|
§ 7.01(c) | |
Parent SEC Reports
|
§ 5.07(a) | |
Parent Share Issuance
|
Recitals | |
Parent Shareholder Meeting
|
§ 7.01(a) | |
Per Share Merger Consideration
|
§ 2.04(a) | |
Registration Statement
|
§ 7.01(a) | |
Retiree Plan
|
§ 7.06(i) | |
SEC
|
§ 4.07(a) | |
Securities Act
|
§ 4.07(a) | |
Shares
|
§ 2.04(a) | |
Subsidiary
|
§ 4.01(a) | |
Substitute Option
|
§ 2.05(a) | |
Superior Proposal
|
§ 7.05(g) | |
Surviving Corporation
|
§ 2.01 | |
Termination Date
|
§ 9.01(b)(i) | |
Termination Fee
|
§ 9.03(b) | |
Transfer Taxes
|
§ 7.12 |
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. At the Effective Time, upon the terms and subject to
the conditions of this Agreement and in accordance with the DGCL, Merger Sub shall be merged with
and into the Company. As a result of the Merger, the separate corporate existence of Merger Sub
shall cease and the Company shall continue as the surviving corporation of the Merger (the
“Surviving Corporation”).
SECTION 2.02. Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article VIII, the
parties hereto shall cause the Merger to be consummated by filing a certificate of merger or
certificate of ownership and merger (the “Certificate of Merger”) with the Secretary of
State of the State of Delaware in such form as is required by, and executed in accordance with, the
relevant provisions of the DGCL (the date and time of such filing of the Certificate of Merger (or
such later time as may be agreed by each of the parties hereto and specified in the Certificate of
Merger) being the “Effective Time”). Immediately prior to such filing of the Certificate
of
7
Merger, a closing of the Merger (the “Closing”) shall be held at the offices of
Shearman & Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other place as the
parties shall agree, for the purpose of confirming the satisfaction or waiver, as the case may be,
of the conditions set forth in Article VIII.
SECTION 2.03. Effect of the Merger. The effect of the Merger at and following the
Effective Time shall be as provided in the applicable provisions of the DGCL and this Agreement.
SECTION 2.04. Conversion of Securities. (a) Conversion of Company Common
Stock. At the Effective Time, by virtue of the Merger and without any action on the part of
Parent, Merger Sub or the Company, each share of common stock, par value $0.01 per share, of the
Company (“Company Common Stock”) (all shares of Company Common Stock being collectively,
the “Shares”) issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled or converted, as the case may be, in accordance with Section 2.04(b))
shall be converted into the right to receive a fraction of a validly issued, fully paid and
non-assessable Parent Common Share (the “Per Share Merger Consideration”) equal to the
quotient (the “Exchange Ratio”) determined by dividing $56.00 by the Parent Share Value and
rounding to the nearest ten-thousandth of a share; provided, that (x) if the Parent Share
Value is equal to or greater than $133.10, the Exchange Ratio shall equal 0.4207, and (y) if the
Parent Share Value is equal to or less than $108.90, the Exchange Ratio shall equal 0.5142.
(b) Cancellation and Conversion of Certain Shares. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Merger Sub or the Company, (i) all
Shares owned by the Company as treasury stock and any Shares owned by Parent or any direct or
indirect wholly owned subsidiary of Parent (including Merger Sub) immediately prior to the
Effective Time shall, by virtue of the Merger, and without any action on the part of the holder
thereof, automatically be canceled without any conversion thereof and retired and shall cease to
exist and no consideration shall be delivered in exchange therefor, and each holder of a
certificate or certificates representing any such Shares shall cease to have any rights with
respect thereto, and (ii) each Share held by any Subsidiary immediately prior to the Effective Time
shall be converted into such number of shares of stock of the Surviving Corporation such that each
such Subsidiary owns the same percentage of shares of common stock of the Surviving Corporation
immediately following the Effective Time as such Subsidiary owned in the Company immediately prior
to the Effective Time.
(c) Capital Stock of Merger Sub. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub or the Company, each share of common stock,
par value $0.01 per share, of Merger Sub (“Merger Sub Common Stock”) issued and outstanding
immediately prior to the Effective Time shall become one duly authorized, validly issued, fully
paid and non-assessable share of common stock of the Surviving Corporation.
SECTION 2.05. Company Stock Options. (a) All options (the “Company Stock
Options”) outstanding, whether or not exercisable and whether or not vested, at the Effective
Time under the Company Stock Incentive Plan, as amended, supplemented or modified (the “Company
Stock Option Plan”), shall accelerate and remain outstanding following the Effective
8
Time. From and after the Effective Time, all references to the Company in the Company Stock
Option Plan and the applicable stock option agreements issued thereunder shall be deemed to refer
to Parent, which shall assume the Company Stock Option Plan as of the Effective Time by virtue of
this Agreement and without any further action. Each Company Stock Option assumed by Parent (each,
a “Substitute Option”) shall be fully vested and exercisable upon the same terms and
conditions as under the Company Stock Option Plan and the applicable option agreement issued
thereunder, except that (A) each such Substitute Option shall be exercisable for, and represent the
right to acquire, that whole number of Parent Common Shares (rounded down to the nearest whole
share) equal to the number of Shares subject to such Company Stock Option multiplied by the
Exchange Ratio; and (B) the option price per Parent Common Share shall be an amount equal to the
option price per Share subject to such Company Stock Option in effect immediately prior to the
Effective Time divided by the Exchange Ratio (the option price per share, as so determined, being
rounded upward to the nearest full cent). Such Substitute Option shall otherwise be subject to the
same terms and conditions as such Company Stock Option.
(b) As soon as practicable after the Effective Time, Parent shall deliver, or cause to be
delivered, to each holder of a Substitute Option an appropriate notice setting forth such holder’s
rights pursuant thereto and such Substitute Option shall be fully vested and exercisable as
described in Section 2.05(a) and shall otherwise continue in effect on the same terms and
conditions as such Company Stock Option. Parent shall comply with the terms of all such Substitute
Options and ensure, to the extent required by, and subject to the provisions of, the Company Stock
Option Plan, that Substitute Options that qualified as incentive stock options under Section 422 of
the Code prior to the Effective Time continue to qualify as incentive stock options after the
Effective Time. Parent shall take all corporate action necessary, if any, to reserve for issuance
a sufficient number of Parent Common Shares for delivery upon exercise of Substitute Options
pursuant to the terms set forth in this Section 2.05. As soon as practicable after the
Effective Time, the Parent Common Shares subject to Substitute Options will be covered by an
effective registration statement on Form S-8 (or any successor form) or another appropriate form,
and Parent shall use its reasonable best efforts to maintain the effectiveness of such registration
statement or registration statements for so long as Substitute Options remain outstanding. In
addition, Parent shall use its reasonable best efforts to cause the Parent Common Shares subject to
Substitute Options to be listed on the NYSE and such other exchanges as Parent shall determine.
(c) On or after the date of this Agreement and prior to the Effective Time, each of Parent and
the Company shall take all necessary action such that, with respect to each member of the Company
Board and each employee of the Company that is subject to Section 16 of the Exchange Act, the
acquisition by such person of Parent Common Shares or Substitute Options in the Merger and the
disposition by any such person of Parent Common Shares or Company Stock Options pursuant to the
transactions contemplated by this Agreement shall be exempt from the short swing profit liability
rules of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.
SECTION 2.06. Stock Awards. (a) Restricted Stock. At the Effective Time,
any Shares or stock unit awards outstanding immediately prior to the Effective Time that are
unvested or are subject to a repurchase option, risk of forfeiture or other condition under the
Company Stock Option Plan or any applicable restricted stock purchase agreement or other
9
agreement with the Company (other than Company Performance Share Awards) (each, a “Company
Restricted Stock Award”) shall be exchanged for Parent Common Shares pursuant to Section
2.04 that shall be fully vested and no longer subject to restriction or other condition to
which the applicable Company Restricted Stock Award was subject immediately prior to the Effective
Time.
(b) Performance Shares. At the Effective Time, any Shares or stock unit awards
outstanding immediately prior to the Effective Time that are unvested and are subject to the
satisfaction of certain performance measures under the Company Stock Option Plan or any applicable
restricted stock purchase agreement or other agreement with the Company (each, a “Company
Performance Share Award”) shall be deemed to be vested at its respective target performance
measures pursuant to the terms of the Company Stock Option Plan and shall be exchanged for Parent
Common Shares pursuant to Section 2.04 that shall be fully vested and no longer subject to
restriction or other condition to which the applicable Company Performance Share Award was subject
immediately prior to the Effective Time.
SECTION 2.07. Certificate of Incorporation; Bylaws. (a) At the Effective Time and
subject to Section 7.07(a), the certificate of incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving
Corporation (except that the name of the Surviving Corporation shall be Corn Products
International, Inc.) until thereafter amended as provided by Law and such certificate of
incorporation.
(b) Unless otherwise determined by Parent prior to the Effective Time, and subject to
Section 7.07(a), at the Effective Time, the bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving Corporation (except that any
references therein to Merger Sub’s name shall be replaced with references to Corn Products
International, Inc.) until thereafter amended as provided by Law, the certificate of incorporation
of the Surviving Corporation and such bylaws.
SECTION 2.08. Directors and Officers. At the Effective Time, the directors of Merger
Sub immediately prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each such director to hold office in accordance with the DGCL, the certificate of
incorporation and bylaws of the Surviving Corporation, and the officers of the Company immediately
prior to the Effective Time shall, subject to the applicable provisions of the certificate of
incorporation and bylaws of the Surviving Corporation, be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or appointed and
qualified or until the earlier of their death, resignation or removal.
ARTICLE III
DELIVERY OF PARENT COMMON SHARES
SECTION 3.01. Exchange of Certificates. (a) Exchange Agent. From and after
the Effective Time, Parent shall deposit, or shall cause to be deposited, with BNY Mellon
Shareowner Services or another bank or trust company selected by Parent and reasonably acceptable
to the Company (the “Exchange Agent”), for the benefit of the holders of Shares,
10
(i) for exchange in accordance with this Article III through the Exchange Agent,
certificates representing the Parent Common Shares issuable to holders of Shares in the Merger
pursuant to Section 2.04 as of the Effective Time, (ii) immediately available funds, from
time to time as required to make payments in lieu of any fractional shares pursuant to
Section 3.01(e) and (iii) any cash or other consideration from time to time as required for
any dividends or other distributions pursuant to Section 3.01(c) (such cash and
certificates for Parent Common Shares, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the “Exchange Fund”). The Exchange Agent shall,
pursuant to irrevocable instructions, deliver the Parent Common Shares contemplated to be issued
pursuant to Section 2.04, dividends or other distributions contemplated to be delivered
pursuant to Section 3.01(c) and the cash in lieu of fractional shares contemplated to be
paid pursuant to Section 3.01(e) out of the Exchange Fund. Except as contemplated by
Section 3.01(g) hereof, the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. (i) As promptly as practicable after the Effective Time,
Parent shall cause the Exchange Agent to mail to each person who was, at the Effective Time, a
holder of record of Shares whose Shares were converted into the right to receive the Per Share
Merger Consideration pursuant to Section 2.04(a): (A) a letter of transmittal (which shall
be in customary form and shall specify that delivery shall be effected, and risk of loss and title
to the certificates evidencing such Shares (the “Certificates”) shall pass, only upon
proper delivery of the Certificates (or an affidavit of loss in lieu thereof) to the Exchange
Agent); and (B) instructions for use in effecting the surrender of the Certificates (or an
affidavit of loss in lieu thereof) pursuant to such letter of transmittal.
(ii) Upon surrender to the Exchange Agent of a Certificate (or an affidavit of loss in lieu
thereof) for cancellation, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such other documents as may reasonably be
required pursuant to such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor (A) a certificate representing that number of whole Parent Common Shares which
such holder has the right to receive in respect of the Shares formerly represented by such
Certificate (after taking into account all Shares then held by such holder), (B) cash in lieu of
any fractional Parent Common Shares to which such holder is entitled pursuant to
Section 3.01(e), and (C) any dividends or other distributions to which such holder is
entitled pursuant to Section 3.01(c), and the Certificate (or an affidavit of loss in lieu
thereof) so surrendered shall forthwith be canceled. In the event of a transfer of ownership of
Shares that is not registered in the transfer records of the Company, a certificate representing
the proper number of Parent Common Shares, cash in lieu of any fractional Parent Common Shares to
which such holder is entitled pursuant to Section 3.01(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 3.01(c) may be delivered
to a transferee if the Certificate (or an affidavit of loss in lieu thereof) representing such
Shares is presented to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer Taxes have been paid.
Until surrendered as contemplated by this Section 3.01, each Certificate shall be deemed at
all times after the Effective Time to represent only the right to receive upon such surrender the
certificate representing Parent Common Shares, cash in lieu of any fractional Parent Common Shares
to which such holder is entitled pursuant to Section 3.01(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 3.01(c).
11
(c) Distributions with Respect to Unexchanged Parent Common Shares. No dividends or
other distributions declared or made after the Effective Time with respect to the Parent Common
Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the Parent Common Shares represented thereby, and no cash payment in
lieu of any fractional shares shall be paid to any such holder pursuant to Section 3.01(e),
until the holder of such Certificate shall surrender such Certificate (or an affidavit of loss in
lieu thereof). Subject to the effect of escheat, Tax or other applicable Laws, following surrender
of any such Certificate, there shall be paid to the holder of the certificates representing whole
Parent Common Shares issued in exchange therefor, without interest, (i) the amount of any cash
payable with respect to any fractional Parent Common Shares to which such holder is entitled
pursuant to Section 3.01(e) and the amount of dividends or other distributions with a
record date after the Effective Time and theretofore paid with respect to such whole Parent Common
Shares, and (ii) at the appropriate payment date, the amount of dividends or other distributions,
with a record date after the Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to such whole Parent Common Shares.
(d) No Further Rights in Company Common Stock. All Parent Common Shares issued upon
surrender of a Certificate in accordance with the terms of this Article III and any cash
paid pursuant to Section 3.01(c) or Section 3.01(e) shall be deemed to have been
issued in full satisfaction of all rights pertaining to the Shares formerly represented by such
Certificate.
(e) No Fractional Shares. No certificates or scrip representing fractional Parent
Common Shares shall be issued upon the surrender for exchange of Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to any other rights of a shareholder
of Parent. Each holder of a fractional share interest shall be paid an amount in cash (without
interest, rounded to the nearest whole cent and subject to the amount of any withholding Taxes as
contemplated in Section 3.01(h)) equal to the product obtained by multiplying (i) such
fractional share interest to which such holder (after taking into account all fractional share
interests then held by such holder) would otherwise be entitled by (ii) the Parent Share Value. As
promptly as practicable after the determination of the amount of cash, if any, to be paid to
holders of fractional share interests, the Exchange Agent shall so notify Parent, and Parent shall
deposit such amount with the Exchange Agent and shall cause the Exchange Agent to forward payments
to such holders of fractional share interests subject to and in accordance with the terms of
Section 3.01(b) and Section 3.01(c).
(f) Adjustments of Merger Consideration. If, between the date of this Agreement and
the Effective Time, there is a reorganization, recapitalization, reclassification, stock split,
reverse stock split, stock dividend (including any dividend or distribution of securities
convertible into Parent Common Shares or Company Common Stock), extraordinary cash dividends,
subdivision, combination or exchange of shares with respect to, or rights issued in respect of, the
Parent Common Shares (each, an “Adjustment”), the Per Share Merger Consideration shall be
adjusted accordingly, without duplication, to provide the holders of Shares with the same economic
effect as contemplated by this Agreement prior to such Adjustment.
12
(g) Termination of Exchange Fund. Any portion of the Exchange Fund that remains
undistributed to the holders of the Shares for nine months after the Effective Time shall be
delivered to Parent, upon demand, and any holders of Shares who have not theretofore complied with
this Article III shall thereafter look only to Parent (subject to abandoned property,
escheat or other similar laws) for the Per Share Merger Consideration, any cash in lieu of
fractional Parent Common Shares to which they are entitled pursuant to Section 3.01(e) and
any dividends or other distributions with respect to the Parent Common Shares to which they are
entitled pursuant to Section 3.01(c). Neither Parent nor the Surviving Corporation shall
be liable to any holder of Shares for any Per Share Merger Consideration (or dividends or
distributions with respect to Parent Common Shares), or other cash delivered to a public official
pursuant to any abandoned property, escheat or similar Law.
(h) Withholding Rights. Each of the Company, Merger Sub, the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration or other amounts payable
pursuant to this Agreement to any holder of Shares, Company Stock Options, Company Restricted Stock
Awards, Company Performance Share Awards or other interests in the Company such amounts as it is
required to deduct and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Law relating to Taxes. To the extent that amounts are so
withheld by the Company, Merger Sub, the Surviving Corporation or Parent, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares, Company Stock Options, Company Restricted Stock Awards, Company Performance
Share Awards or other interests in the Company in respect of which such deduction and withholding
was made by the Company, Merger Sub, the Surviving Corporation or Parent, as the case may be.
(i) Lost, Stolen or Destroyed Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond, in such reasonable amount as the Surviving Corporation may
direct, as indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the whole number of Parent Common Shares, any cash in lieu of fractional Parent Common
Shares to which the holders thereof are entitled pursuant to Section 3.01(e) and any
dividends or other distributions to which the holders thereof are entitled pursuant to
Section 3.01(c).
SECTION 3.02. Stock Transfer Books. At the Effective Time, the stock transfer books
of the Company shall be closed and there shall be no further registration of transfers of Shares
thereafter on the records of the Company. From and after the Effective Time, the holders of
Certificates representing Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares, except as otherwise provided in this Agreement or by
Law. On or after the Effective Time, any Certificates presented to the Exchange Agent or Parent
for any reason shall be canceled and converted in accordance with the terms of this
Article III.
SECTION 3.03. No Appraisal Rights. In accordance with Section 262 of the DGCL, no
appraisal rights shall be available to holders of Shares in connection with the Merger.
13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Merger Sub to enter into this Agreement, except (i) as set
forth in the Company Disclosure Schedule (with specific reference to the particular section or
subsection of this Agreement to which the information set forth in the Company Disclosure Schedule
relates; provided, that any information set forth in one section or subsection of the
Company Disclosure Schedule shall be deemed to apply to each other section or subsection thereof to
which its relevance is reasonably apparent); and (ii) as disclosed in the Company SEC Reports filed
with or furnished to the SEC by the Company since December 31, 2006 and prior to the date hereof
(other than disclosures in the “Risk Factors” sections thereof or any disclosures included in such
filings that are cautionary, predictive or forward-looking in nature; provided, that in no
event shall any disclosure contained in any such Company SEC Report be deemed to be an exception to
any representation or warranty contained in Section 4.03(a) or Section 4.05(b), and
it being understood that any matter set forth in the Company SEC Reports shall be deemed to qualify
any representation or warranty in this Article IV only to the extent that the description
of such matter in the Company SEC Reports would be reasonably inferred to be a qualification with
respect to such representation and warranty), the Company hereby represents and warrants to Parent
and Merger Sub as follows:
SECTION 4.01. Organization and Qualification; Subsidiaries. (a) Each of the Company
and each subsidiary of the Company (each, a “Subsidiary”) is a legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions where such concept is
applicable) under the laws of the jurisdiction of its organization and has the requisite corporate
or similar power and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted, except where the failure
of any Subsidiary to be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not have a Company Material Adverse Effect. The Company and each
Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good
standing (with respect to jurisdictions where such concept is applicable), in each jurisdiction
where the character of the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary or desirable, except for such failures to be so
qualified or licensed and in good standing that would not have a Company Material Adverse Effect.
(b) Section 4.01(b) of the Company Disclosure Schedule sets forth all of the
Subsidiaries of the Company in existence as of the date hereof (other than Subsidiaries with
immaterial amounts of assets, operations or liabilities), together with the jurisdiction of
incorporation or organization of each such Subsidiary and the percentage of the outstanding capital
stock or other equity interests of each such Subsidiary owned by the Company and its other
Subsidiaries. There are no outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire, or register under any securities Law, any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary.
14
(c) Each Company Material Subsidiary is so identified in Section 4.01(c) of the
Company Disclosure Schedule.
SECTION 4.02. Certificate of Incorporation and Bylaws. The Company has heretofore
furnished to Parent a complete and correct copy of the certificate of incorporation and the bylaws
or equivalent organizational documents, each as amended to date, of the Company and each of the
Company Material Subsidiaries listed in Section 4.02 of the Company Disclosure Schedule.
Such certificates of incorporation, bylaws or equivalent organizational documents are in full force
and effect. Neither the Company nor any Subsidiary is in violation of any of the provisions of its
certificate of incorporation, bylaws or equivalent organizational documents.
SECTION 4.03. Capitalization. (a) The authorized capital stock of the Company consists of
(i) 200,000,000 Shares, and (ii) 25,000,000 shares of preferred stock, par value $0.01 per share
(“Company Preferred Stock”). As of June 19, 2008, (i) 74,325,043 Shares were issued and
outstanding (not including Shares held in the treasury of the Company), all of which are duly
authorized, validly issued, fully paid and non-assessable, (ii) 994,731 Shares were held in the
treasury of the Company, (iii) no Shares are held by the Subsidiaries, (iv) 4,386,270 Shares were
reserved for future issuance pursuant to outstanding Company Stock Options, Company Restricted
Stock Awards, Company Performance Share Awards and other purchase rights (the “Company Stock
Awards”) granted pursuant to the Company Stock Option Plan, and (v) no shares of Company
Preferred Stock were issued and outstanding. Except as set forth in this Section 4.03,
there are no options, warrants, convertible debt or other convertible instruments or other rights,
agreements, arrangements or commitments of any character relating to the issued or unissued capital
stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or
other equity interests in, the Company.
(b) The following information has been made available to Parent prior to the date hereof with
respect to each Company Stock Award outstanding as of the date of this Agreement: (i) the name and
address of the Company Stock Award recipient; (ii) the particular plan pursuant to which such
Company Stock Award was granted; (iii) the number of Shares subject to such Company Stock Award;
(iv) the exercise or purchase price of such Company Stock Award; (v) the date on which such Company
Stock Award was granted; and (vi) the date on which such Company Stock Award expires.
(c) Each outstanding share of capital stock of, or other equity interest in, each Subsidiary
is duly authorized, validly issued, fully paid and non-assessable, and each such share is owned by
the Company or another Subsidiary free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company’s or any Subsidiary’s
voting rights, charges and other encumbrances of any nature whatsoever, except for limitations on
transfer imposed by federal or state securities Laws. There are no options, warrants, convertible
debt or other convertible instruments or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of any Subsidiary or obligating the
Company or any Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, any Subsidiary.
(d) The Company has made available to Parent an accurate and complete copy of the Company
Stock Option Plan pursuant to which Company has granted the Company Stock
15
Awards that are currently outstanding and the form of all stock award agreements evidencing
such Company Stock Awards. All Shares subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and non-assessable. All outstanding Shares, all outstanding
Company Stock Awards, and all outstanding shares of capital stock of each Subsidiary have been
issued and granted in compliance in material respects with (i) all applicable Laws, and (ii) all
requirements set forth in applicable contracts.
SECTION 4.04. Authority Relative to This Agreement. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and, subject to receipt of the Company Stockholder Approval, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the transactions contemplated
hereby (other than, with respect to the Merger, obtaining the Company Stockholder Approval and the
filing and recordation of appropriate merger documents as required by the DGCL). This Agreement
has been duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Parent and Merger Sub, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms,
except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of creditors’ rights
generally and by general equitable principles. The Company Board has approved this Agreement and
the transactions contemplated hereby and such approvals are sufficient so that the restrictions on
business combinations set forth in Section 203(a) of the DGCL shall not apply to the Merger or any
of the transactions contemplated hereby. To the knowledge of the Company, no other state takeover
statute is applicable to the Company with respect to the Merger or the other transactions
contemplated by this Agreement.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by the Company does not, and the performance of this Agreement by the
Company will not, (i) conflict with or violate the certificate of incorporation or bylaws or any
equivalent organizational documents, each as amended to date, of the Company or any Subsidiary,
(ii) assuming that all consents, approvals, authorizations and other actions described in
Section 4.05(b) have been obtained, that all filings and obligations described in
Section 4.05(b) have been made and that the Company Stockholder Approval has been obtained,
conflict with or violate any United States or non-United States statute, law, ordinance,
regulation, rule, code, writ, executive order, injunction, judgment, decree or other order
(“Law”) applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) result in any breach of, loss of any
benefit under, or constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any right of termination, amendment, acceleration
or cancellation of, or result in the creation of a lien or other encumbrance on any property or
asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation, except,
with respect
16
to clauses (ii) and (iii) above, for any such conflicts, violations, breaches, defaults or
other occurrences that would not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any United States federal, state, county or local or non-United
States government, governmental, regulatory, Taxing or administrative authority, agency,
instrumentality or commission or any court, tribunal, or judicial or arbitral body (a
“Governmental Authority”), except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, state securities or “blue sky” laws (“Blue Sky Laws”) and
state takeover laws, the pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the “HSR Act”) and as otherwise described in
Section 4.05(b) of the Company Disclosure Schedule, and filing and recordation of
appropriate merger documents as required by the DGCL, and except as may be required in connection
with Taxes described in Section 7.12 and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications, would not have a
Company Material Adverse Effect.
SECTION 4.06. Permits; Compliance. Each of the Company and the Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary
for each of the Company or the Subsidiaries to own, lease and operate its properties or to carry on
its business as it is now being conducted (the “Company Permits”), except where the failure
to have, or the suspension or cancellation of, any of the Company Permits would not have a Company
Material Adverse Effect. As of the date of this Agreement, no suspension or cancellation of any
material Company Permit is pending or, to the knowledge of the Company, threatened. Neither the
Company nor any Subsidiary is in conflict with, or in default, breach or violation of, (a) any Law
applicable to the Company or any Subsidiary or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (b) any Company Material Contract, except in either case for
any such conflicts, defaults, breaches or violations that would not have a Company Material Adverse
Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) The Company has filed all
forms, reports, statements, schedules and other documents required to be filed by it with the
Securities and Exchange Commission (the “SEC”) since December 31, 2005 (such forms,
reports, statements, schedules and other documents referred being, collectively, the “Company
SEC Reports”). The Company SEC Reports (i) at the time they were filed or, if amended, as of
the date of such amendment, complied in all material respects with all applicable requirements of
the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), as the case may be, and the rules and
regulations promulgated thereunder, each as in effect on the date so filed, except to the extent
updated, amended, restated or corrected by a subsequent Company SEC Report filed with or furnished
to the SEC by the Company, and in either case, publicly available prior to the date hereof (each, a
“Company Filed SEC Report”) and (ii) did not, at the time they were filed, or, if amended,
as of the date of such amendment, 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 made
therein, in the light of the circumstances under which they were made, not misleading, except to
17
the extent updated, amended, restated or corrected by a subsequent Company Filed SEC Report.
The Company is eligible to use Form S-3 in connection with the registration of securities under the
Securities Act. No Subsidiary is required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case, any notes thereto)
contained in the Company SEC Reports (or if amended prior to the date of this Agreement, as
amended) was prepared in accordance with the then existing United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the
consolidated financial position, results of operations and cash flows of the Company and the
consolidated Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments).
(c) Except as and to the extent set forth on the consolidated balance sheet of the Company and
the consolidated Subsidiaries as at March 31, 2008, including the notes thereto (the “Company
Balance Sheet”), neither the Company nor any Subsidiary has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), except for liabilities and
obligations, (i) incurred in the ordinary course of business consistent with past practice since
Xxxxx 00, 0000, (xx) relating to payment or performance obligations under contracts in accordance
with the terms and conditions thereof which are not required by GAAP to be reflected on a regularly
prepared balance sheet, (iii) incurred in connection with the performance by the Company of its
obligations under this Agreement, or (iv) that would not have a Company Material Adverse Effect.
(d) The Company has heretofore furnished to Parent complete and correct copies of all
amendments and modifications that have not been filed by the Company with the SEC to all Company
Material Contracts.
(e) The Company has timely filed all certifications and statements required by (x) Rule 13a-14
or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the
Xxxxxxxx-Xxxxx Act of 2002) with respect to any Company SEC Report.
(f) The Company maintains disclosure controls and procedures required by Rule 13a-15 or
Rule 15d-15 under the Exchange Act; such controls and procedures are designed to ensure that all
material information concerning the Company and the Subsidiaries that is required to be disclosed
in the Company’s SEC filings and other public disclosures is made known on a timely basis to the
individuals responsible for the preparation of the Company’s SEC filings and other public
disclosure documents.
(g) The Company maintains a standard system of accounting established and administered in
accordance with GAAP. The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP or any other
18
criteria applicable to such statements and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(h) Since December 31, 2004, (i) neither the Company nor any Subsidiary nor, to the knowledge
of the Company, any director, officer, employee, auditor, accountant or representative of the
Company or any Subsidiary, has received or otherwise had or obtained knowledge of any material
complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the Company or any Subsidiary or their
respective internal accounting controls, including any material complaint, allegation, assertion or
claim that the Company or any Subsidiary has engaged in questionable accounting or auditing
practices, (ii) no attorney representing the Company or any Subsidiary, whether or not employed by
the Company or any Subsidiary, has reported evidence of a material violation of securities laws,
breach of fiduciary duty or similar violation by the Company or any of its officers, directors,
employees or agents to the Company Board or any committee thereof or to any director or officer of
the Company, and (iii) there have been no internal investigations regarding accounting or revenue
recognition discussed with, reviewed by or initiated at the direction of the chief executive
officer, chief financial officer, general counsel, the Company Board or any committee thereof that
could have a material effect on accounting or revenue recognition.
(i) Except in response to any inquiries or interrogatories described in Section
4.07(j), to the knowledge of the Company, no employee of the Company or any Subsidiary is
providing information to any law enforcement agency regarding the commission or possible commission
of any crime or the violation or possible violation of any applicable Law by the Company or any
Subsidiary the outcome of which is, as of the date hereof, reasonably likely to be materially
adverse to the Company and the Subsidiaries, taken as a whole.
(j) The Company is not in receipt of any non-routine inquiries or interrogatories, whether in
writing or, to the knowledge of the Company, otherwise or, to the knowledge of the Company, is not
the subject of any investigation, audit, review or hearing by or in front of (A) the SEC or the
NYSE, with respect to any of the Company SEC Reports or any of the information contained therein,
or (B) any other Governmental Authority, with respect to the conduct by the Company or any
Subsidiary of its business or any aspect thereof the outcome of which is, as of the date hereof,
reasonably likely to be materially adverse to the Company and the Subsidiaries, taken as a whole.
SECTION 4.08. Absence of Certain Changes or Events. Since December 31, 2007,
(a) except as expressly contemplated by this Agreement, the Company and the Subsidiaries have
conducted their businesses in the ordinary course and in a manner consistent with past practice in
all material respects, (b) there has not been any Company Material Adverse Effect and (c) none of
the Company or any Subsidiary has taken any action that, if taken after the date of this Agreement,
would constitute a breach of any of the covenants set forth in clauses (iv), (v), (vii), (viii),
(ix), (x), (xii), (xiii) or (xiv) of Section 6.01(b).
19
SECTION 4.09. Absence of Litigation. Other than with respect to employee benefit
plans, labor and employment, intellectual property, tax and environmental matters, which are the
subjects of Section 4.10, Section 4.11, Section 4.13, Section 4.14,
and Section 4.15, respectively, (a) there is no investigation of which the Company has
received notice and no litigation, suit, claim, action or proceeding (an “Action”) pending
or, to the knowledge of the Company, threatened against the Company or any Subsidiary, or any
property or asset of the Company or any Subsidiary, before any Governmental Authority that has had
or would have a Company Material Adverse Effect; and (b) neither the Company nor any Subsidiary nor
any property or asset of the Company or any Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with, or, to the knowledge
of the Company, continuing investigation by, any Governmental Authority, or any order, writ,
judgment, injunction, decree, determination or award of any Governmental Authority that would have
a Company Material Adverse Effect.
SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of the Company
Disclosure Schedule lists as of the date hereof each of the following that are subject to United
States law, (i) all employee benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)) and all material bonus, stock option,
stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other material benefit plans, programs or
arrangements, and all material employment, termination, severance or other material contracts or
agreements to which the Company or any Subsidiary is a party, with respect to which the Company or
any Subsidiary has any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee, officer, director or
independent contractor of the Company or any Subsidiary, (ii) each employee benefit plan for which
the Company or any Subsidiary could incur liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated, (iii) any plan in respect of which the Company or any
Subsidiary could incur liability under Section 4212(c) of ERISA, and (iv) any material contracts,
arrangements or understandings between the Company or any Subsidiary and any current or former
employee, officer, director or independent contractor of the Company or any Subsidiary including
any material contracts, arrangements or understandings with any such current or former employee,
officer, director or independent contractor relating to a sale of the Company or any Subsidiary
(each of the items set forth in clauses (i) through (iv) being referred to collectively as, the
“Company Plans”).
(b) The Company has furnished to Parent a correct and complete copy of each Company Plan that
is subject to United States law and has made available to Parent a correct and complete copy of
the following documents, to the extent applicable, prepared in connection with each such Company
Plan: (i) a copy of each trust or other funding arrangement, (ii) the most recent summary plan
description and summary of material modifications, (iii) the most recently filed Internal Revenue
Service (“IRS”) Form 5500, (iv) the most recently received IRS determination letter for
each such Company Plan, and (v) the most recently prepared actuarial report and financial statement
in connection with each such Company Plan.
(c) Neither the Company nor any Subsidiary has any express or implied commitment (i) to create
or incur any material liability with respect to or cause to exist any other employee benefit plan,
program or arrangement, (ii) to enter into any material contract or
20
agreement to provide compensation or benefits to any individual, or (iii) to modify or change
in any material respect or terminate any Company Plan, other than with respect to a modification,
change or termination required by ERISA, the Code or other applicable Law or reasonably advisable
in order to maintain the Company Plan’s tax-qualified status or to comply with such applicable Law.
(d) None of the Company Plans is a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) (a “Multiemployer Plan”) or a single employer pension plan (within the
meaning of Section 4001(a)(15) of ERISA) for which the Company or any Subsidiary could incur
liability under Section 4063 or 4064 of ERISA (a “Multiple Employer Plan”). No Company
Plan is a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA. Except as
required by Law, none of the Company Plans provides for or promises retiree medical, disability or
life insurance benefits to any current or former employee, officer or director or independent
contractor of the Company or any Subsidiary.
(e) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby shall (either alone or in combination with another event) (i)
result in any payment becoming due, or increase the amount of any compensation due, to any current
or former employee, officer, director or independent contractor of the Company and the
Subsidiaries; (ii) increase any benefits otherwise payable under any Company Plan; (iii) result in
the acceleration of the time of payment or vesting of any such compensation or benefits; (iv)
result in the payment of any amounts that are reasonably expected to, individually or in
combination with any other such payment, constitute an “excess parachute payment”, as defined in
Section 280G(b)(1) of the Code; or (v) result in the triggering or imposition of any restrictions
or limitations on the rights of the Company to amend or terminate any Company Plan.
(f) Each Company Plan is operated in all material respects in accordance with its terms and
the requirements of all applicable Laws including ERISA and the Code. The Company and the
Subsidiaries have performed, in all material respects, all obligations required to be performed by
them under, are not in any respect in default under or in violation of, and have no knowledge of
any default or violation by any party to, any Company Plan. No Action is pending or, to the
knowledge of the Company, threatened with respect to any Company Plan (other than claims for
benefits in the ordinary course) and, to the knowledge of the Company, no fact or event exists that
could give rise to any such Action.
(g) Each Company Plan that is intended to be qualified under Section 401(a) of the Code or
Section 401(k) of the Code has timely received a favorable determination letter from the IRS
covering all of the provisions applicable to the Company Plan for which determination letters are
currently available that the Company Plan is so qualified and each trust established in connection
with any Company Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the IRS that it is so exempt,
and no fact or event has occurred since the date of such determination letter or letters from the
IRS that could reasonably be expected to adversely affect the qualified status of any such Company
Plan or the exempt status of any such trust.
21
(h) There has not been any non-exempt prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Company Plan that could
reasonably be expected to result in a material excise tax or liability. To the knowledge of the
Company, no fiduciary has any material liability for breach of fiduciary duty or any other failure
to act or comply with the requirements of ERISA, the Code or any other applicable Law. Neither the
Company nor any Subsidiary has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course), including any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA, or (ii) the withdrawal
from any Multiemployer Plan or Multiple Employer Plan, and no fact or event exists which could give
rise to any such liability.
(i) All contributions, premiums or payments required to be made with respect to any Company
Plan have been made on or before their due dates. All such contributions have been fully deducted
for income tax purposes and no such deduction has been challenged or disallowed by any Governmental
Authority and no fact or event exists which could give rise to any such challenge or disallowance.
(j) All officers and management employees of the Company and the Subsidiaries employed in the
United States are under written obligation to the Company and the Subsidiaries to maintain in
confidence all confidential or proprietary information acquired by them in the course of their
employment and to assign to the Company and the Subsidiaries all inventions made by them within the
scope of their employment during such employment and for a reasonable period thereafter.
(k) In addition to the foregoing, with respect to each Company Plan that is not subject to
United States law (a “Non-U.S. Benefit Plan”):
(i) | all employer and employee contributions to each Non-U.S. Benefit Plan required by law or by the terms of such Non-U.S. Benefit Plan have been made, or, if applicable, accrued in accordance with normal accounting practices, except for any failure which would not, individually or in the aggregate, reasonably be expected to result in a material liability; | ||
(ii) | the fair market value of the assets of each funded Non-U.S. Benefit Plan, the liability of each insurer for any Non-U.S. Benefit Plan funded through insurance or the book reserve established for any Non-U.S. Benefit Plan, together with any accrued contributions, is sufficient to procure or provide for the benefits determined on any ongoing basis (actual or contingent) accrued to the date of this Agreement with respect to all current and former participants under such Non-U.S. Benefit Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such Non-U.S. Benefit Plan, and no transaction contemplated hereby shall cause such assets or insurance obligations to be less than such benefit obligations, except, in either case, for any shortfall which would not, individually or in the aggregate, reasonably be expected to result in a material liability; and |
22
(iii) | each Non-U.S. Benefit Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities, except for any failure which would not, individually or in the aggregate, reasonably be expected to result in a material liability. Each Non-U.S. Benefit Plan is now and always has been operated in material compliance with all applicable non-United States laws. |
(l) The Company has no liabilities with respect to any misclassification of any individual as
an independent contractor, temporary employee or leased employee and no independent contractor,
temporary employee or leased employee has been improperly excluded from any Company Plan, except
for any failure which would not, individually or in the aggregate, reasonably be expected to result
in a material liability.
(m) Each Company Plan that is subject to the requirements of Section 409A of the Code is in
good faith compliance with the currently applicable requirements of Section 409A of the Code and
the regulations, rulings and notices thereunder.
SECTION 4.11. Labor and Employment Matters. (a) Except as set forth in Section
4.11(a) of the Company Disclosure Schedule, (i) neither the Company nor any Subsidiary is a
party to any collective bargaining agreement, works council or other labor union contract
applicable to persons employed in the United States by the Company or any Subsidiary, nor, to the
knowledge of the Company, are there any activities or proceedings of any labor union to organize
any such employees; (ii) neither the Company nor any Subsidiary has breached or otherwise failed to
comply with any provision of any such agreement or contract, and there are no grievances
outstanding against the Company or any Subsidiary under any such agreement or contract, except as
would not reasonably be expected to result in a material liability; (iii) there are no unfair labor
practice complaints pending against the Company or any Subsidiary before the National Labor
Relations Board or any current union representation questions involving employees of the Company or
any Subsidiary, except as would not reasonably be expected to result in a material liability; and
(iv) there is no strike, slowdown, work stoppage or lockout, or, to the knowledge of the Company,
threat thereof, by or with respect to any employees of the Company or any Subsidiary, except as
would not reasonably be expected to result in a material liability. The consent of the labor
unions which are a party to the collective bargaining agreements listed in Section 4.11 of
the Company Disclosure Schedule is not required to consummate the transactions contemplated hereby.
(b) The Company and the Subsidiaries are in material compliance with all applicable Laws
relating to the employment of labor, including those related to wages, hours, collective bargaining
and the payment and withholding of taxes and other sums as required by the appropriate Governmental
Authority and have withheld and paid to the appropriate Governmental Authority or are holding for
payment not yet due to such Governmental Authority all amounts required to be withheld from
employees of the Company or any Subsidiary and are not liable for any arrears of wages, taxes,
penalties or other sums for failure to comply with any of the foregoing. Except as would not
reasonably be expected to result in a material liability, (i) the Company and the Subsidiaries have
paid in full to all employees or adequately accrued for in accordance with GAAP consistently
applied all wages, salaries, commissions, bonuses, benefits and other compensation due to or on
behalf of such employees and there is no claim with respect
23
to payment of wages, salary or overtime pay that has been asserted and not resolved or that is
now pending or threatened before any Governmental Authority with respect to any persons currently
or formerly employed by the Company or any Subsidiary, (ii) neither the Company nor any Subsidiary
is a party to, or otherwise bound by, any consent decree with, or citation by, any Governmental
Authority relating to employees or employment practices, (iii) there is no charge or proceeding
with respect to a violation of any occupational safety or health standards that has been asserted
and not resolved or that is now pending or, to the knowledge of the Company, threatened with
respect to the Company, and (iv) there is no charge of discrimination in employment or employment
practices, for any reason, including age, gender, race, religion or other legally protected
category, which has been asserted and not resolved or that is now pending or, to the knowledge of
the Company, threatened before the United States Equal Employment Opportunity Commission, or any
other Governmental Authority in any jurisdiction in which the Company or any Subsidiary has
employed or employs any person.
(c) Section 4.11(c) of the Company Disclosure Schedule lists the name, place of
employment, the current annual salary rates, bonuses, deferred or contingent compensation, pension,
accrued vacation, “golden parachute” and other like benefits paid or payable (in cash or otherwise)
in 2007 and a description of position and job function of each current U.S. salaried employee,
officer or director of the Company and each Subsidiary, and a list of the names of each current
non-U.S. employee, officer or director of the Company and each Subsidiary, in each case whose
annual cash compensation exceeded (or in 2008 is expected to exceed) $250,000.
SECTION 4.12. Real Property; Title to Assets. (a) Item 2 of the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2007 lists all material real property
owned by the Company and the Subsidiaries as of the date hereof (each, a “Company
Property”). Except as would not have a Company Material Adverse Effect, each Company
Property (i) is owned free and clear of all mortgages, pledges, liens, security interests,
conditional and installment sale agreements, encumbrances, charges or other claims of third parties
of any kind, including any easement, right of way or other encumbrance to title, or any option,
right of first refusal, or right of first offer (collectively, “Liens”), other than
(A) Liens for current taxes and assessments not yet due and payable or not past due, (B) inchoate
mechanics’ and materialmen’s Liens for construction in progress, (C) workmen’s, repairmen’s,
warehousemen’s and carriers’ Liens arising in the ordinary course of business of the Company or
such Subsidiary consistent with past practice, (D) all matters of record, and (E) all Liens and
other imperfections of title and encumbrances that do not impair in any material respect the
continued use or utility of the real property encumbered thereby (collectively, “Company
Permitted Liens”); and (ii) is not subject to any governmental decree or order to be sold, and
neither the Company nor any Subsidiary has received any written notice to the effect that all or
any portion of the real property is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, or that any such actions are being
proposed or contemplated.
(b) Section 4.12(b) of the Company Disclosure Schedule lists each material parcel of
real property leased or subleased by the Company or any Subsidiary as of the date hereof, with the
name of the lessor and the date of the lease, sublease, assignment of the lease, any guaranty given
or leasing commissions payable by the Company or any Subsidiary in connection therewith and each
amendment to any of the foregoing. All such current leases and
24
subleases are in full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing default or event of
default (or event which, with notice or lapse of time, or both, would constitute an event of
default) by the Company or any Subsidiary or, to the knowledge of the Company, by the other party
to such lease or sublease, except as would not have a Company Material Adverse Effect.
(c) There are no written contractual or applicable legal restrictions that preclude or
restrict the ability to use any real property owned or leased by the Company or any Subsidiary for
the purposes for which it is currently being used and, to the knowledge of the Company, there are
no latent defects or adverse physical conditions affecting the real property, and improvements
thereon, owned or leased by the Company or any Subsidiary, in each case other than those that would
not have a Company Material Adverse Effect.
(d) Except as would not have a Company Material Adverse Effect, each of the Company and the
Subsidiaries has good, valid and marketable (subject to Company Permitted Liens) title to, or, in
the case of leased properties and assets, valid leasehold or subleasehold interests in, all of its
respective properties and assets, tangible and intangible, real, personal and mixed, used or held
for use in its business, free and clear of any Liens, except for Company Permitted Liens.
SECTION 4.13. Intellectual Property. Except as disclosed in Section 4.13 of
the Company Disclosure Schedule and except as would not have a Company Material Adverse Effect, (a)
to the knowledge of the Company, the conduct of the business of the Company and the Subsidiaries as
currently conducted does not infringe upon or misappropriate the Intellectual Property rights of
any third party, and no claim has been asserted to the Company in writing that the conduct of the
business of the Company and the Subsidiaries as currently conducted infringes upon or may infringe
upon or misappropriates the Intellectual Property rights of any third party; (b) with respect to
each item of Intellectual Property owned by the Company or any Subsidiary and used in the business
of the Company and the Subsidiaries as currently conducted (“Company Owned Intellectual
Property”), the Company or any Subsidiary is the owner of the entire right, title and interest
in and to such Company Owned Intellectual Property and is entitled to use such Company Owned
Intellectual Property in the continued operation of its respective business; (c) with respect to
each item of Intellectual Property licensed to the Company or any Subsidiary that is used in the
business of the Company and the Subsidiaries as currently conducted (“Company Licensed
Intellectual Property”), the Company or any Subsidiary has the right to use such Company
Licensed Intellectual Property in the continued operation of its respective business in accordance
with the terms of the license agreement governing such Company Licensed Intellectual Property;
(d) the Company Owned Intellectual Property has not been adjudged invalid or unenforceable in whole
or in part and, to the knowledge of the Company, the registered Company Owned Intellectual Property
is valid and enforceable; (e) to the knowledge of the Company, no person is engaging in any
activity that infringes upon the Company Owned Intellectual Property; (f) each license of the
Company Licensed Intellectual Property is binding on the Company and any of the Subsidiaries party
thereto and, to the knowledge of the Company, each of the other parties thereto, and is in full
force and effect; (g) to the knowledge of the Company, no party to any license of the Company
Licensed Intellectual Property is in breach thereof or default thereunder; and (h) neither the
execution of this Agreement nor the consummation of any transaction contemplated hereby will
adversely affect any of the
25
Company’s rights with respect to the Company Owned Intellectual Property or the Company
Licensed Intellectual Property.
SECTION 4.14. Taxes. (a) Each of the Company and the Subsidiaries has timely filed or
caused to be filed all Tax Returns required to be filed by it and has timely paid and discharged
all Taxes required to be paid or discharged by it, except where failures to file such Tax Returns
or failures to pay such Taxes would not have a Company Material Adverse Effect.
(b) All such Tax Returns are true, accurate and complete, except where failures to be true,
accurate and complete would not have a Company Material Adverse Effect.
(c) Neither the IRS nor any other United States or non-United States Governmental Authority
has asserted in writing or, to the knowledge of the Company, threatened in writing to assert
against the Company or any Subsidiary any material deficiency or claim for any Taxes, in each case
which is currently pending.
(d) Neither the Company nor any Subsidiary has granted in writing any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of, any Tax (other
than any waiver or extension pursuant to extensions of time to file Tax Returns obtained in the
ordinary course of business consistent with past practice).
(e) There are no Liens for Taxes upon any property or assets of the Company or any Subsidiary
except Company Permitted Liens.
(f) Neither the Company nor any Subsidiary has been required to include in income any
adjustment pursuant to Section 481 of the Code by reason of a voluntary change in accounting method
initiated by the Company or any Subsidiary, and the IRS has not, in writing, initiated or proposed
any such adjustment or change in accounting method, that would have a material effect on the Tax
liability of the Company and its subsidiaries after the Closing.
(g) Neither the Company nor any Subsidiary has any liability for Taxes of any person other
than the Company and the Subsidiaries as a result of being or having been a member of a group of
entities filing Tax Returns on a consolidated, combined, unitary or affiliated basis. Neither the
Company nor any Subsidiary is a party to any indemnification, allocation or sharing agreement with
respect to Taxes that could reasonably be expected to give rise to a material payment or
indemnification obligation (other than agreements among the Company and the Subsidiaries and other
than customary Tax indemnifications contained in credit or other commercial agreements the primary
purpose of which does not relate to Taxes).
(h) Neither the Company nor any Subsidiary has been a party to any “listed transaction” within
the meaning of United States Treasury Regulations Section 1.6011-4.
(i) Neither the Company nor any Subsidiary has been a “distributing corporation” or a
“controlled corporation” in a distribution intended to qualify under Section 355(e) of the Code
within the past five years.
26
(j) Neither the Company nor any of its affiliates has taken or agreed to take any action, and
the Company has no knowledge of any agreement, plan or other circumstance, that would (x) prevent
the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or
(y) cause the shareholders of the Company, other than any such shareholder that would be a
“five-percent transferee shareholder” (within the meaning of U.S. Treasury Regulations Section
1.367(a)-3(c)(5)), to recognize gain pursuant to Section 367(a) of the Code.
SECTION 4.15. Environmental Matters. Except as would not have a Company Material
Adverse Effect, (a) none of the Company or any Subsidiary has received any written notice, claim or
demand to the effect that it has violated or is in violation of any Environmental Law; (b) none of
the properties currently or, to the knowledge of the Company, formerly owned, leased or operated by
the Company or any Subsidiary (including soils and surface and ground waters) are contaminated with
any Hazardous Substance arising out of the operations of the Company or any Subsidiary which would
reasonably be expected to result in the imposition of any liability on the Company or any
Subsidiary; (c) none of the Company or any Subsidiary is subject to a written notice, request for
information or order from or agreement with any Governmental Authority finding that the Company or
any Subsidiary is actually, potentially or allegedly liable for any off-site contamination by
Hazardous Substances; (d) there are no judicial or administrative proceedings pending or, to the
knowledge of the Company, threatened asserting that the Company or any Subsidiary is actually,
potentially or allegedly liable under any Environmental Law (including pending or threatened
liens); (e) each of the Company and each Subsidiary has all permits, licenses and other
authorizations required under any Environmental Law for their operations as currently conducted
(“Company Environmental Permits”); (f) each of the Company and each Subsidiary is in
compliance with its Company Environmental Permits; and (g) neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will require any investigation,
remediation or other action with respect to Hazardous Substances, or any notice to or consent of
Governmental Authorities or third parties, pursuant to any applicable Environmental Law or Company
Environmental Permit. The representations and warranties of the Company and the Subsidiaries made
in this Section 4.15 are the only representations and warranties made in this Agreement
regarding any matters arising under or relating to Environmental Laws, Environmental Permits and
Hazardous Substances.
SECTION 4.16. No Stockholder Rights Plan. The Company is not a party to any
stockholder rights plan or “poison pill” agreement.
SECTION 4.17. Material Contracts. (a) Section 4.17(a) of the Company
Disclosure Schedule contains a complete list as of the date hereof of the following types of
contracts and agreements, whether written or oral, that are intended by the Company or any
Subsidiary, as applicable, to be legally binding, and to which the Company or any Subsidiary is a
party (such contracts and agreements, being the “Company Material Contracts”):
(i) | each “material contract” (as such term is defined in Item 610(b)(10) of Regulation S-K of the SEC) with respect to the Company and the Subsidiaries (other than compensatory contracts with, or which include as participants, any current or former director or officer of the Company or any Subsidiary); |
27
(ii) | each contract and agreement that is reasonably expected to require the payment by the Company or any other person of more than (x) $2,000,000 per annum, or (y) $10,000,000 over the remaining term of such contract or agreement (other than, in the case of this clause (y), any contract or agreement that provides that the Company has the right to terminate such contract or agreement on no more than 60 days’ notice and without material penalty); | ||
(iii) | all material joint venture contracts, partnership arrangements or other material agreements outside the ordinary course of business involving a sharing of profits, losses, costs or liabilities by the Company or any Subsidiary with any third party; | ||
(iv) | all management contracts (excluding contracts for employment) and contracts with other consultants, including any contracts involving the payment of royalties or other amounts calculated based upon the revenues or income of the Company or any Subsidiary or income or revenues related to any product of the Company or any Subsidiary, which are reasonably expected to involve payments by the Company or any Subsidiary of more than $2,000,000 per annum; | ||
(v) | all contracts and agreements evidencing indebtedness for borrowed money in excess of $10,000,000 in principal amount; and | ||
(vi) | all contracts and agreements that limit, or purport to limit, in any material respect the ability of the Company or any Subsidiary to compete in any line of business or with any person or entity or in any geographic area or during any period of time. |
(b) Except as would not have a Company Material Adverse Effect, (i) each Company Material
Contract is a legal, valid and binding agreement and there is no default by the Company or any
Subsidiary under any Company Material Contracts; (ii) no Company Material Contract has been
canceled by the other party; (iii) to the knowledge of the Company, no other party is in breach or
violation of, or default under, any Company Material Contract; and (iv) the Company and the
Subsidiaries have not received any claim of default under any such agreement.
(c) The Company has furnished or made available to Parent correct and complete copies of all
Company Material Contracts, including any material amendments, waivers or other changes thereto,
and has given to Parent a written description of all oral contracts included in the Company
Material Contracts.
SECTION 4.18. Insurance. Correct and complete summaries of (a) all material fire and
casualty, general liability, business interruption and workers’ compensation insurance policies and
(b) all D&O Insurance policies, in each case, maintained by the Company or any Subsidiary have been
made available to Parent. Except as would not have a Company Material Adverse Effect, (i) such
policies are in full force and effect as of the date of this Agreement; (ii) the Company or the
relevant Subsidiary has paid all premiums under such policies and none of the Company or any
Subsidiary is in default with respect to its obligations thereunder; and (iii) such policies cover
such risks, are of such types and are in coverage amounts (including retentions and deductibles) as
are usual and customary in the context of the businesses and operations in which the Company and
the Subsidiaries are engaged.
28
SECTION 4.19. Board Approval; Vote Required. (a) The Company Board, by resolutions
duly adopted by unanimous vote at a meeting duly called and held and not subsequently rescinded or
modified in any way, has duly (i) determined that the Merger is in the best interests of the
Company and its stockholders, (ii) approved this Agreement and declared its advisability, and
(iii) resolved to recommend that the stockholders of the Company adopt this Agreement and directed
that this Agreement be submitted for consideration by the Company’s stockholders at the Company
Stockholder Meeting.
(b) The only vote of the holders of any class or series of capital stock of the Company
necessary to adopt this Agreement is the Company Stockholder Approval.
SECTION 4.20. Opinions of Financial Advisors. The Company has received the written
opinions of Lazard Freres & Co. LLC and X.X. Xxxxxx Securities, Inc., dated the date of this
Agreement, to the effect that, as of the date of this Agreement, the Per Share Merger Consideration
is fair, from a financial point of view, to the Company’s stockholders, a copy of which opinions
will be delivered to Parent promptly after the date of this Agreement for informational purposes
only.
SECTION 4.21. Brokers. No broker, finder or investment banker (other than Lazard
Freres & Co. LLC and X.X. Xxxxxx Securities, Inc.) is entitled to any brokerage, finder’s or other
fee or commission in connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company. The Company has heretofore furnished to Parent a correct and
complete copy of all agreements (including any amendments, waivers or other changes thereto)
between the Company and each of Lazard Freres & Co. LLC and X.X. Xxxxxx Securities Inc. pursuant to
which either such firm would be entitled to any payment relating to the transactions contemplated
hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
As an inducement to the Company to enter into this Agreement, except (i) as set forth in the
Parent Disclosure Schedule (with specific reference to the particular section or subsection of this
Agreement to which the information set forth in the Parent Disclosure Schedule relates;
provided, that any information set forth in one section or subsection of the Parent
Disclosure Schedule shall be deemed to apply to each other section or subsection thereof to which
its relevance is reasonably apparent); and (ii) as disclosed in the Parent SEC Reports filed with
or furnished to the SEC by Parent since December 31, 2006 and prior to the date hereof (other than
disclosures in the “Risk Factors” sections thereof or any disclosures included in such filings that
are cautionary, predictive or forward-looking in nature; provided, that in no event shall any
disclosure contained in any such Parent SEC Report be deemed to be an exception to any
representation or warranty contained in Section 5.05(b), and it being understood that any
matter set forth in the Parent SEC Reports shall be deemed to qualify any representation or
warranty in this Article V only to the extent that the description of such matter in the
Parent SEC Reports would be reasonably inferred to be a qualification with respect to such
representation and warranty), Parent and Merger Sub hereby represent and warrant to the Company as
follows:
29
SECTION 5.01. Corporate Organization. (a) Each of Parent, Merger Sub and each Parent
Significant Subsidiary is a legal entity duly organized, validly existing and in good standing
(with respect to jurisdictions where such concept is applicable) under the laws of the jurisdiction
of its incorporation and has the requisite corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on its business as it
is now being conducted, except where the failure to be so organized, existing or in good standing
or to have such power, authority and governmental approvals would not have a Parent Material
Adverse Effect. Each of Parent, Merger Sub and each Parent Significant Subsidiary is duly
qualified or licensed as a foreign corporation to do business, and is in good standing (with
respect to jurisdictions where such concept is applicable), in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary or desirable, except for such failures to be so qualified
or licensed and in good standing that would not have a Parent Material Adverse Effect.
(b) Section 5.01(b) of the Parent Disclosure Schedule sets forth all Parent
Significant Subsidiaries, together with the jurisdiction of incorporation or organization of each
Parent Significant Subsidiary and the percentage of the outstanding capital stock or other equity
interests of each Parent Significant Subsidiary owned by Parent and each of its other subsidiaries
set forth in Section 5.01(b) of the Parent Disclosure Schedule.
SECTION 5.02. Organizational Documents. Parent has heretofore furnished to the
Company a complete and correct copy of the memorandum of association and the bye-laws of Parent and
the certificate of incorporation and bylaws of Merger Sub, each as amended to date. Such
memorandum of association, certificate of incorporation, bye-laws and bylaws are in full force and
effect. None of Parent, Merger Sub or any Parent Significant Subsidiary is in violation of any of
the provisions of its memorandum of association, certificate of incorporation, bye-laws, bylaws or
equivalent organizational documents, as applicable.
SECTION 5.03. Capitalization. (a) The authorized share capital of Parent consists of
(i) 400,000,000 Parent Common Shares and (ii) 21,000,000 preference shares, par value $0.01 per
share. As of June 18, 2008 (i) 121,594,093 Parent Common Shares were issued and outstanding, all
of which were duly authorized, validly issued, fully paid and non-assessable, (ii) 6,900,000 4.875%
cumulative convertible perpetual preference shares, par value $0.01 per share, were issued and
outstanding, all of which were duly authorized, validly issued, fully paid and non-assessable and
(iii) 862,500 5.125% cumulative mandatory convertible preference shares, par value $0.01 per share
(collectively with the preference shares described in clause (ii), the “Parent Preference
Shares”), were issued and outstanding, all of which were duly authorized, validly issued, fully
paid and non-assessable. As of December 31, 2007, 4,685,082 Parent Common Shares were reserved for
future issuance pursuant to outstanding stock options and restricted stock unit awards and from
January 1, 2008 through June 18, 2008, Parent granted stock options and restricted stock unit
awards pursuant to the equity incentive plans of Parent representing the right to acquire 941,050
Parent Common Shares in the aggregate. Except as set forth in this Section 5.03, and
except for stock options and restricted stock units granted pursuant to the equity incentive plans
of Parent, there are no options, warrants, convertible debt or other convertible instruments or
other rights, agreements, arrangements or commitments of any character relating to the issued or
unissued share capital or capital stock of Parent or Merger Sub, as applicable, or obligating
Parent or Merger Sub to issue or sell any share capital or shares of
30
capital stock, as applicable, of, or other equity interests in, Parent or Merger Sub. All
Parent Common Shares subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly authorized, validly
issued, fully paid and non-assessable. All outstanding share capital or capital stock of Parent
and Merger Sub, as applicable, has been issued and granted in compliance with all applicable
securities laws and other applicable Laws.
(b) The authorized capital stock of Merger Sub consists of 1,000 shares of Merger Sub Common
Stock. 100 shares of Merger Sub Common Stock are issued and outstanding, all of which are owned by
Parent.
(c) The Parent Common Shares to be issued pursuant to the Merger in accordance with
Section 2.04 (i) will be duly authorized, validly issued, fully paid and non-assessable and
not subject to preemptive rights created by statute, Parent’s memorandum of association or bye-laws
or any agreement to which Parent is a party or is bound, and (ii) will, when issued, be registered
under the Securities Act and the Exchange Act and registered or exempt from registration under
applicable Blue Sky Laws.
SECTION 5.04. Authority Relative to This Agreement. Each of Parent and Merger Sub has
all necessary corporate power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and, subject to receipt of the Parent Shareholder Approval, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement by Parent and
Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the Merger, the filing
and recordation of appropriate merger documents as required by the DGCL and, with respect to the
Parent Share Issuance, the Parent Shareholder Approval). This Agreement has been duly and validly
executed and delivered by Parent and Merger Sub and, assuming due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of each of Parent and
Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, except
to the extent that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.
SECTION 5.05. No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by Parent and Merger Sub do not, and the performance of this Agreement
by Parent and Merger Sub will not, (i) conflict with or violate the memorandum of association,
certificate of incorporation, bye-laws or bylaws, each as amended to date, of either Parent or
Merger Sub, as applicable, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.05(b) have been obtained, that all filings and obligations
described in Section 5.05(b) have been made and that the Parent Shareholder Approval has
been obtained, conflict with or violate any Law applicable to Parent or Merger Sub or by which any
property or asset of either of them is bound or affected, or (iii) result in any breach of, loss of
benefit under, or constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any rights of termination, amendment,
31
acceleration or cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of Parent, Merger Sub or any Parent Significant Subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent, Merger Sub or any Parent Significant Subsidiary is a
party or by which Parent, Merger Sub or any Parent Significant Subsidiary or any property of any of
them is bound or affected, except, with respect to clauses (ii) and (iii) above, for any such
conflicts, violations, breaches, defaults or other occurrences that would not have a Parent
Material Adverse Effect.
(b) The execution and delivery of this Agreement by each of Parent and Merger Sub do not, and
the performance of this Agreement by each of Parent and Merger Sub will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any Governmental
Authority, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act,
Blue Sky Laws and state takeover laws, the HSR Act and as otherwise described in Section
5.05(b) of the Parent Disclosure Schedule and filing and recordation of appropriate merger
documents as required by the DGCL, except as may be required in connection with Taxes described in
Section 7.12, and except for the filing with the Registrar of Companies in Bermuda of a
copy of the Joint Proxy Statement, signed by or on behalf of all the directors of Parent, to be
published in connection with the Parent Share Issuance, as soon as reasonably practicable after its
publication, and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not have a Parent Material Adverse Effect.
SECTION 5.06. Compliance. Neither Parent nor any Parent Significant Subsidiary is in
conflict with, or in default, breach or violation of, (a) any Law applicable to Parent or any
Parent Significant Subsidiary or by which any property or asset of Parent or any Parent Significant
Subsidiary is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement,
lease, license, franchise or other instrument or obligation to which Parent or any Parent
Significant Subsidiary is a party or by which Parent or any Parent Significant Subsidiary or any
property or asset of Parent or any Parent Significant Subsidiary is bound, except in either case
for any such conflicts, defaults, breaches or violations that would not have a Parent Material
Adverse Effect.
SECTION 5.07. SEC Filings; Financial Statements. (a) Parent has filed all forms,
reports, statements, schedules and other documents required to be filed by it with the SEC since
December 31, 2005 (collectively, the “Parent SEC Reports”). The Parent SEC Reports (i) at
the time they were filed or, if amended, as of the date of such amendment, complied in all material
respects with all applicable requirements of the Securities Act, or the Exchange Act, as the case
may be, and the rules and regulations promulgated thereunder, each as in effect on the date so
filed, except to the extent updated, amended, restated or corrected by a subsequent Parent SEC
Report filed with or furnished to the SEC by Parent, and in either case, publicly available prior
to the date hereof (each, a “Parent Filed SEC Report”) and (ii) did not, at the time they
were filed, or, if amended, as of the date of such amendment, 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 made therein, in the light of the circumstances under which they were made,
not misleading, except to the extent updated, amended, restated or corrected by a subsequent
32
Parent Filed SEC Report. No Parent Significant Subsidiary is required to file any form,
report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case, any notes thereto)
contained in the Parent SEC Reports (or if amended prior to the date of this Agreement, as amended)
was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the
consolidated financial position, results of operations and cash flows of Parent and its
consolidated subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments).
(c) Except as and to the extent set forth on the consolidated balance sheet of Parent and its
consolidated subsidiaries as at March 31, 2008, including the notes thereto, neither Parent nor any
of its subsidiaries has any liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise), except for liabilities and obligations, (i) incurred in the ordinary
course of business consistent with past practice since Xxxxx 00, 0000, (xx) relating to payment or
performance obligations under contracts in accordance with the terms and conditions thereof which
are not required by GAAP to be reflected on a regularly prepared balance sheet, (iii) incurred in
connection with this Agreement or the transactions contemplated hereby, or (iv) that would not have
a Parent Material Adverse Effect.
(d) Parent has timely filed all certifications and statements required by (x) Rule 13a-14 or
Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes Oxley
Act of 2002) with respect to any Parent SEC Report.
(e) Parent maintains disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15
under the Exchange Act; such controls and procedures are designed to ensure that all material
information concerning Parent and its subsidiaries that is required to be disclosed in Parent’s SEC
filings and other public disclosures is made known on a timely basis to the individuals responsible
for the preparation of Parent’s SEC filings and other public disclosure documents. As used in this
Section 5.07, the term “file” shall be broadly construed to include any manner in which a
document or information is furnished, supplied or otherwise made available to the SEC.
(f) Parent maintains a standard system of accounting established and administered in
accordance with GAAP. Parent maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP or any other criteria applicable to
such statements and to maintain accountability for assets, (iii) access to assets is permitted only
in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
33
(g) Since December 31, 2004, (i) neither Parent nor any of its subsidiaries nor, to the
knowledge of Parent, any director, officer, employee, auditor, accountant or representative of
Parent or any of its subsidiaries, has received or otherwise had or obtained knowledge of any
material complaint, allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of Parent or any of its
subsidiaries or their respective internal accounting controls, including any material complaint,
allegation, assertion or claim that Parent or any of its subsidiaries has engaged in questionable
accounting or auditing practices, (ii) no attorney representing Parent or any of its subsidiaries,
whether or not employed by Parent or any of its subsidiaries, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by Parent or any of its
subsidiaries, directors, employees or agents to the Parent Board or any committee thereof or to any
director or officer of Parent, and (iii) there have been no internal investigations regarding
accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the
chief executive officer, chief financial officer, general counsel, the Parent Board or any
committee thereof that could have a material effect on accounting or revenue recognition.
(h) Except in response to any inquiries or interrogatories described in Section
5.07(i), to the knowledge of Parent, no employee of Parent or any of its subsidiaries is
providing information to any law enforcement agency regarding the commission or possible commission
of any crime or the violation or possible violation of any applicable Law by Parent or any of its
subsidiaries the outcome of which is, as of the date hereof, reasonably likely to be materially
adverse to Parent and its subsidiaries, taken as a whole.
(i) Parent is not in receipt of any non-routine inquiries or interrogatories, whether in
writing or, to the knowledge of Parent, otherwise or, to the knowledge of Parent, is not the
subject of any investigation, audit, review or hearing by or in front of (A) the SEC or the NYSE,
with respect to any of the Parent SEC Reports or any of the information contained therein, or (B)
any other Governmental Authority, with respect to the conduct by Parent or any of its subsidiaries
of its business or any aspect thereof the outcome of which is, as of the date hereof, reasonably
likely to be materially adverse to Parent and its subsidiaries, taken as a whole.
SECTION 5.08. Absence of Certain Changes or Events. Since December 31, 2007,
(a) except as expressly contemplated by this Agreement, Parent and its subsidiaries have conducted
their business only in the ordinary course and in a manner consistent with past practice in all
material respects, (b) there has not been any Parent Material Adverse Effect and (c) none of Parent
or any Parent Significant Subsidiary has taken any action that, if taken after the date of this
Agreement, would constitute a breach of any of the covenants set forth in clauses (e), (f) and (g)
of Section 6.02.
SECTION 5.09. Taxes. (a) Each of Parent and its subsidiaries has timely filed or
caused to be filed all Tax Returns required to be filed by it and has timely paid and discharged
all Taxes required to be paid or discharged by it, except where failures to file such Tax Returns
or failures to pay such Taxes would not have a Parent Material Adverse Effect.
(b) All such Tax Returns are true, accurate and complete, except where failures to be true,
accurate and complete would not have a Parent Material Adverse Effect.
34
(c) Neither the IRS nor any other United States or non-United States Governmental Authority
has asserted in writing or, to the knowledge of Parent, threatened in writing to assert against
Parent or any of its subsidiaries any material deficiency or claim for any Taxes, in each case
which is currently pending.
(d) Neither Parent nor any of its subsidiaries has granted in writing any waiver of any
statute of limitations with respect to, or any extension of a period for the assessment of, any Tax
(other than any waiver or extension pursuant to extensions of time to file Tax Returns obtained in
the ordinary course of business consistent with past practice).
(e) There are no Liens for Taxes upon any property or assets of Parent or any of its
subsidiaries except Parent Permitted Liens.
(f) Neither Parent nor any of its subsidiaries has been required to include in income any
adjustment pursuant to Section 481 of the Code by reason of a voluntary change in accounting method
initiated by Parent or any of its subsidiaries, and the IRS has not, in writing, initiated or
proposed any such adjustment or change in accounting method, that would have a material effect on
the Tax liability of Parent and any of its subsidiaries after the Closing.
(g) Neither Parent nor any of its subsidiaries has any material liability for Taxes of any
person other than Parent and any of its subsidiaries as a result of being or having been a member
of a group of entities filing Tax Returns on a consolidated, combined, unitary or affiliated basis.
Neither the Parent nor any of its subsidiaries is a party to any indemnification, allocation or
sharing agreement with respect to Taxes that could reasonably be expected to give rise to a
material payment or indemnification obligation (other than agreements among Parent and its
subsidiaries and other than customary Tax indemnifications contained in credit or other commercial
agreements the primary purpose of which does not relate to Taxes).
(h) Neither Parent nor any of its subsidiaries has been a party to any “listed transaction”
within the meaning of United States Treasury Regulations Section 1.6011-4.
(i) Neither Parent nor any of its subsidiaries has been a “distributing corporation” or a
“controlled corporation” in a distribution intended to qualify under Section 355(e) of the Code
within the past five years.
(j) Neither Parent nor any of its affiliates has taken or agreed to take any action, and
Parent has no knowledge of any agreement, plan or other circumstance, that would (x) prevent the
Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or (y)
cause the stockholders of the Company, other than any such stockholder that would be a
“five-percent transferee shareholder” (within the meaning of U.S. Treasury Regulations Section
1.367(a)-3(c)(5)), to recognize gain pursuant to Section 367(a) of the Code.
SECTION 5.10. Environmental Matters. Except as would not have a Parent Material
Adverse Effect, (a) neither Parent nor any of its subsidiaries has received any written notice,
claim or demand to the effect that it has violated or is in violation of any Environmental Law;
(b) none of the properties currently or, to the knowledge of Parent, formerly owned, leased or
operated by Parent or any of its subsidiaries (including soils and surface and ground waters) are
contaminated with any Hazardous Substance arising out of the operations of Parent or any of
35
its subsidiaries which would reasonably be expected to result in the imposition of any
liability on Parent or any of its subsidiaries; (c) neither Parent nor any of its subsidiaries is
subject to a written notice, request for information or order from or agreement with any
Governmental Authority finding that Parent or any of its subsidiaries is actually, potentially or
allegedly liable for any off-site contamination by Hazardous Substances; (d) there are no judicial
or administrative proceedings pending or, to the knowledge of Parent, threatened asserting that
Parent or any of its subsidiaries is actually, potentially or allegedly liable under any
Environmental Law (including pending or threatened liens); (e) Parent and each of its subsidiaries
has all permits, licenses and other authorizations required under any Environmental Law for their
operations as currently conducted (“Parent Environmental Permits”); (f) Parent and each of
its subsidiaries is in compliance with its Parent Environmental Permits; and (g) neither the
execution of this Agreement nor the consummation of the transactions contemplated hereby will
require any investigation, remediation or other action with respect to Hazardous Substances, or any
notice to or consent of Governmental Authorities or third parties, pursuant to any applicable
Environmental Law or Parent Environmental Permit. The representations and warranties of Parent made
in this Section 5.10 are the only representations and warranties made in this Agreement
regarding any matters arising under or relating to Environmental Laws, Environmental Permits and
Hazardous Substances.
SECTION 5.11. Board Approval; Vote Required. (a) The Parent Board, by
resolutions duly adopted by unanimous vote of those present at a meeting duly called and held and
not subsequently rescinded or modified in any way, has duly (i) approved this Agreement and
declared its advisability, and (ii) resolved to recommend that the shareholders of Parent approve
the Parent Share Issuance and directed that the Parent Share Issuance be submitted for
consideration by Parent’s shareholders at the Parent Shareholder Meeting; and
(b) The only vote of the holders of any class or series of share capital of Parent necessary
to approve the Parent Share Issuance is the Parent Shareholder Approval.
SECTION 5.12. Operations of Merger Sub. Merger Sub is a direct, wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and has conducted its
operations only as contemplated by this Agreement.
SECTION 5.13. Availability of Funds. Parent has, or will have at the Effective Time,
sufficient cash available to enable it to pay all fees and expenses in connection with the
consummation of the transactions contemplated hereby.
SECTION 5.14. Opinions of Financial Advisors. The Parent Board has received the
separate opinions, each dated as of or about the date of this Agreement, of (i) Credit Suisse
Securities (USA) LLC to the effect that, as of the date of such opinion, the Exchange Ratio is fair
to Parent from a financial point of view and (ii) Xxxxxx Xxxxxxx & Co. Incorporated to the effect
that, as of the date of such opinion, the Exchange Ratio pursuant to this Agreement is fair from a
financial point of view to Parent. Copies of the written opinions of Credit Suisse Securities
(USA) LLC and Xxxxxx Xxxxxxx & Co. Incorporated will be delivered to the Company promptly after the
date of this Agreement for informational purposes only.
36
SECTION 5.15. Brokers. No broker, finder or investment banker (other than Credit
Suisse Securities (USA) LLC and Xxxxxx Xxxxxxx & Co. Incorporated) is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions contemplated hereby based
upon arrangements made by or on behalf of Parent or Merger Sub.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the Merger. (a) The Company
agrees that, between the date of this Agreement and the Effective Time, except as expressly
contemplated by any other provision of this Agreement or as set forth in Section 6.01 of
the Company Disclosure Schedule, unless Parent shall otherwise consent in writing:
(i) | the businesses of the Company and the Subsidiaries shall be conducted in all material respects in the ordinary course of business as currently conducted; and | ||
(ii) | the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. |
(b) By way of amplification and not limitation, except as expressly contemplated by any other
provision of this Agreement or as set forth in Section 6.01 of the Company Disclosure
Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the
Effective Time, directly or indirectly, do any of the following without the prior written consent
of Parent (which consent, except as to (i), (ii), (iii), (iv) or (vii), shall not be unreasonably
withheld):
(i) | amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents; | ||
(ii) | issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (A) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest), of the Company or any Subsidiary (except for the issuance of Shares issuable pursuant to Company Stock Options outstanding on the date hereof and the grant of Company Stock Options, Company Restricted Stock Awards and Company Performance Share Awards in the ordinary course of business and in the manner and in amounts consistent with past practice, or shares of stock of any Subsidiary issued to the Company or a wholly-owned Subsidiary), or (B) any amount of assets of the Company or any Subsidiary having an aggregate value in excess of $10,000,000, |
37
except in the ordinary course of business and in a manner consistent with past practice; | |||
(iii) | declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for regular quarterly dividends on Shares declared and paid in cash at times and in amounts consistent with past practice and except for any dividend or other distribution made by any Subsidiary to the Company or a wholly-owned Subsidiary; | ||
(iv) | reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities; | ||
(v) | (A) acquire (including by merger, consolidation, acquisition of stock or other equity interests of any corporation, partnership, other business organization or any division thereof or any other business combination) any amount of assets having an aggregate value in excess of $10,000,000; (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets except (x) for any such transactions between the Company and the Subsidiaries or between the Subsidiaries, (y) under any agreements existing as of the date hereof, provided that at no time shall the aggregate amount of indebtedness outstanding under such agreements exceed the aggregate amount of indebtedness outstanding under such agreements as of the date hereof by more than $25,000,000, or (z) in connection with any transactions permitted under clause (D); (C) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (D) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $2,500,000 or capital expenditures which are, in the aggregate, in excess of $10,000,000 for the Company and the Subsidiaries taken as a whole that is not set forth in the capital expenditure budget provided to Parent prior to the date hereof, except for capital expenditures reasonably required to respond to emergency-type occurrences involving life, health, personal safety or the protection of property; or (E) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 6.01(b)(v); | ||
(vi) | increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for (A) increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or any Subsidiary who are not directors or officers of the Company, or (B) for stay bonuses which may be granted at the discretion of the Company not to exceed $750,000 in the aggregate, provided that (i) no stay bonuses will be granted to executive officers of the Company, (ii) the term of each stay bonus ends no earlier than December 31, 2008, (iii) the amount of each stay bonus shall not exceed two months of an individual’s base salary, and (iv) each stay bonus must be approved by the Company Vice President of Human |
38
Resources, who shall provide a reconciled report on a monthly basis to the Parent setting forth in reasonable detail the terms of the stay bonuses granted, or grant any severance or termination pay to (except in the ordinary course of business consistent with past practice or to the extent required by any Company Plan in effect on the date of this Agreement), or enter into any employment or severance agreement with, any director, officer or other employee of the Company (except with respect to employees who are not directors or officers of the Company in the ordinary course of business consistent with past practice), or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, other than amendments required or reasonably advisable to comply with ERISA, the Code or other applicable Law; | |||
(vii) | exercise its discretion with respect to or otherwise voluntarily accelerate the vesting of any Company Stock Option, Company Restricted Stock Award or Company Performance Share Award; | ||
(viii) | make any material change, other than reasonable and usual changes in the ordinary course of business and consistent with past practice, or as may be required by GAAP or as a result of a change of law, with respect to accounting policies or procedures; | ||
(ix) | make or change any material Tax election or method of Tax accounting, amend any material Tax Return filed prior to the date hereof, settle or compromise any material Tax liability, consent to any material claim or assessment relating to Taxes, or waive any statute of limitations in respect of a material amount of Taxes or agree to any extension of time with respect to an assessment or deficiency for a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice); | ||
(x) | pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities (A) reflected or reserved against in the Company Balance Sheet, (B) incurred under agreements or other obligations existing as of the date hereof or (C) subsequently incurred in the ordinary course of business and consistent with past practice; | ||
(xi) | amend, modify or consent to the termination of any Company Material Contract, or amend, waive, modify or consent to the termination of the Company’s or any Subsidiary’s material rights thereunder, other than in the ordinary course of business and consistent with past practice; | ||
(xii) | commence or settle any material Action, including any Action relating to this Agreement or the transactions contemplated hereby; |
39
(xiii) | permit any material item of Company Owned Intellectual Property to lapse or to be abandoned, dedicated, or disclaimed, fail to perform or make any applicable material filings, recordings or other similar actions or filings, or fail to pay fees and taxes required or advisable to maintain and protect its interest in material Company Owned Intellectual Property; | ||
(xiv) | fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; or | ||
(xv) | announce an intention, enter into any agreement or otherwise make a commitment, to do any of the foregoing. |
SECTION 6.02. Conduct of Business by Parent Pending the Merger. Parent agrees that,
between the date of this Agreement and the Effective Time, except as expressly contemplated by any
other provision of this Agreement or as set forth in Section 6.02 of the Parent Disclosure
Schedule, unless the Company shall otherwise consent in writing, Parent shall not:
(a) amend or otherwise change its memorandum of association or bye-laws in a manner adverse to
the stockholders of the Company as opposed to any other holders of Parent Common Shares;
(b) issue, sell, or grant, or authorize the issuance, sale or grant of, any share capital of
Parent except (i) for fair market value, (ii) as dividend payments on Parent Preference Shares or
(iii) upon the vesting of restricted stock units or the exercise of options, warrants, convertible
securities or other rights of any kind to acquire any share capital of Parent which were issued
with an exercise or conversion price of not less than the market price at the time of issuance;
provided, that the foregoing shall not prohibit issuances of Parent Common Shares,
restricted stock units, options or rights as part of normal employee compensation in the ordinary
course of business; provided further, that this Section 6.02(b) shall not
prohibit the issuance of share capital, restricted stock units, options, warrants, convertible
securities or other rights in connection with the acquisition of another entity or business;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash,
shares, property or otherwise, with respect to any of its share capital, except for (i) regular
quarterly dividends on Parent Common Shares declared and paid in cash at times and in amounts
consistent with past practice or (ii) dividends on Parent Preference Shares declared and paid in
accordance with the terms of the certificates of designation of such shares;
(d) reclassify, combine, split or subdivide its share capital without appropriate adjustment
being made to the Per Share Merger Consideration payable to the holders of Shares in the Merger;
(e) acquire (including by merger, consolidation, acquisition of stock or other equity
interests of any corporation, partnership, other business organization or any division thereof or
any other business combination) assets if such acquisition would be reasonably likely to materially
delay or prevent the Merger or is for consideration (including the assumption of
40
debt) with a value in excess of the amount set forth in Section 6.02 of the Parent
Disclosure Schedule;
(f) make any material change, other than reasonable and usual changes in the ordinary course
of business and consistent with past practice, or as may be required by GAAP or as a result of a
change of law, with respect to accounting policies or procedures;
(g) fail to make in a timely manner any filings with the SEC required under the Securities Act
or the Exchange Act or the rules and regulations promulgated thereunder; or
(h) announce an intention, enter into any agreement or otherwise make a commitment, to do any
of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Registration Statement; Joint Proxy Statement. (a) As promptly as
practicable after the execution of this Agreement, (i) Parent and the Company shall prepare and
file with the SEC the proxy statement (such proxy statement, as amended or supplemented from time
to time, being the “Joint Proxy Statement”) to be sent to the stockholders of the Company
relating to the meeting of the Company’s stockholders (including any adjournments or postponements
thereof, the “Company Stockholder Meeting”) to be held to consider adoption of this
Agreement and to be sent to the shareholders of Parent relating to the meeting of Parent’s
shareholders (including any adjournments or postponements thereof, the “Parent Shareholder
Meeting”) to be held to vote on the Parent Share Issuance, and (ii) Parent shall prepare and
file with the SEC a registration statement on Form S-4 (together with all amendments thereto, the
“Registration Statement”) in which the Joint Proxy Statement shall be included as a
prospectus, in connection with the registration under the Securities Act of the Parent Common
Shares to be issued to the stockholders of the Company pursuant to the Merger. Parent and the
Company each shall use their reasonable best efforts to cause the Registration Statement to become
effective as promptly as practicable and, prior to the effective date of the Registration
Statement, Parent shall take all or any action required under any applicable federal or state
securities Laws or requirement of the NYSE in connection with the Parent Share Issuance. The
Company and Parent shall furnish all information reasonably requested by the other party for
inclusion in each of the Registration Statement and Joint Proxy Statement. As promptly as
practicable after the Registration Statement shall have become effective, the Company shall mail
the Joint Proxy Statement to its stockholders and Parent shall mail the Joint Proxy Statement to
its shareholders.
(b) Except as provided in Section 7.05(d) or Section 7.05(e), the Company
covenants that neither the Company Board nor any committee thereof shall withdraw, qualify, modify
or amend, or propose to withdraw, qualify, modify or amend, in any manner adverse to Parent or
Merger Sub, the approval or recommendation by the Company Board or any committee thereof of this
Agreement or the Merger (the “Company Recommendation”), or take any action, or make any
public statement, filing or release inconsistent with the Company Recommendation (any such actions
being a “Change in Company Recommendation”), and the Joint Proxy
41
Statement shall include the recommendation of the Company Board to the stockholders of the
Company in favor of adoption of this Agreement.
(c) Parent covenants that neither the Parent Board nor any committee thereof shall withdraw,
qualify, modify or amend, or propose to withdraw, qualify, modify or amend, in any manner adverse
to the Company, the approval or recommendation by the Parent Board or any committee thereof of the
Parent Share Issuance (the “Parent Recommendation”), or take any action, or make any public
statement, filing or release inconsistent with the Parent Recommendation (any such actions being a
“Change in Parent Recommendation”), and the Joint Proxy Statement shall include the
recommendation of the Parent Board to the shareholders of Parent in favor of approval of the Parent
Share Issuance; provided, that Parent shall not have any obligation under the foregoing
provision of this Section 7.01(c) if the Parent Board determines, in its good faith
judgment prior to the time of the Parent Shareholder Meeting and after consultation with outside
legal counsel, that the failure to make a Change in Parent Recommendation would be inconsistent
with the directors’ exercise of their fiduciary obligations to Parent and its shareholders under
applicable Law, in which event the Parent Board may make a Change in Parent Recommendation, but
only after (i) providing written notice to the Company advising the Company of its intention to
make a Change in Parent Recommendation at least five (5) calendar days prior to effecting such
Change in Parent Recommendation and (ii) negotiating, and causing its financial advisors and
outside counsel to negotiate, with the Company in good faith during such five-day period (to the
extent the Company desires to negotiate) to make such adjustments in the terms and conditions of
this Agreement so that the failure to make a Change in Parent Recommendation would no longer be
inconsistent with the directors’ exercise of their fiduciary obligations to Parent and its
shareholders under applicable Law.
(d) No amendment or supplement to the Joint Proxy Statement or the Registration Statement will
be made by Parent or the Company without the approval of the other party (such approval not to be
unreasonably withheld or delayed) and without providing a reasonable opportunity to review and
comment thereof. Parent and the Company each will advise the other, promptly after they receive
notice thereof, of the time when the Registration Statement has become effective or any supplement
or amendment has been filed, of the issuance of any stop order, of the suspension of the
qualification of the Parent Common Shares issuable in connection with the Merger for offering or
sale in any jurisdiction, or of any request by the SEC for amendment of the Joint Proxy Statement
or the Registration Statement or comments thereon and responses thereto or requests by the SEC for
additional information, and Parent and the Company shall cooperate to prepare appropriate responses
to the SEC to such comments and make such modifications for the Registration Statement as shall be
reasonably appropriate and to the extent required by applicable Law.
(e) Parent represents that the information supplied by Parent for inclusion in the
Registration Statement and the Joint Proxy Statement shall not, at (i) the time the Registration
Statement is declared effective, (ii) the time the Joint Proxy Statement (or any amendment thereof
or supplement thereto) is first mailed to the stockholders of the Company and shareholders of
Parent, (iii) the time of the Company Stockholder Meeting, (iv) the time of the Parent Shareholder
Meeting, and (v) the Effective Time, contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
42
misleading. If, at any time prior to the Effective Time, any event or circumstance relating
to Parent or Merger Sub, or their respective officers or directors, should be discovered by Parent
which is required by applicable Law to be set forth in an amendment or a supplement to the
Registration Statement or Joint Proxy Statement, Parent shall promptly inform the Company. All
documents that Parent is responsible for filing with the SEC in connection with the Merger or the
other transactions contemplated by this Agreement will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and regulations thereunder.
(f) The Company represents that the information supplied by the Company for inclusion in the
Registration Statement and the Joint Proxy Statement shall not, at (i) the time the Registration
Statement is declared effective, (ii) the time the Joint Proxy Statement (or any amendment thereof
or supplement thereto) is first mailed to the stockholders of the Company and shareholders of
Parent, (iii) the time of the Company Stockholder Meeting, (iv) the time of the Parent Shareholder
Meeting, and (v) the Effective Time, contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to the Company or any Subsidiary,
or their respective officers or directors, should be discovered by the Company which is required by
applicable Law to be set forth in an amendment or a supplement to the Registration Statement or
Joint Proxy Statement, the Company shall promptly inform Parent. All documents that the Company is
responsible for filing with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all material respects with
the applicable requirements of the Securities Act and the rules and regulations thereunder and the
Exchange Act and the rules and regulations thereunder.
SECTION 7.02. Company Stockholder Meeting. (a) The Company shall call and hold
the Company Stockholder Meeting as promptly as practicable for the purpose of voting upon the
adoption of this Agreement and the Company shall use its reasonable best efforts to hold the
Company Stockholder Meeting as soon as practicable after the date on which the Registration
Statement becomes effective and, subject to Section 7.05(d)(y), the Company agrees that
this Agreement shall be submitted for adoption at the Company Stockholder Meeting. Notwithstanding
anything to the contrary in this Agreement, the Company may, but shall not be required to, adjourn
or postpone the Company Stockholder Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Joint Proxy Statement is provided to its stockholders in advance of
a vote on the adoption of this Agreement, or, if, as of the time for which the Company Stockholder
Meeting is originally scheduled, there are insufficient Shares represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of such meeting.
(b) Subject to Section 7.05(d) and Section 7.05(e), the Company shall use its
reasonable best efforts to solicit from its stockholders proxies in favor of the adoption of this
Agreement and shall take all other action necessary or advisable to secure the Company Stockholder
Approval. Subject to Section 7.05(d)(y), the obligation of the Company to call, give
notice of, convene and hold the Company Stockholder Meeting shall not be limited or otherwise
43
affected by the commencement, disclosure, announcement or submission to it of any Acquisition
Proposal, or by any Change in Company Recommendation.
SECTION 7.03. Parent Shareholder Meeting. (a) Parent shall call and hold the Parent
Shareholder Meeting as promptly as practicable for the purpose of voting upon the Parent Share
Issuance and Parent shall use its reasonable best efforts to hold the Parent Shareholder Meeting as
soon as practicable after the date on which the Registration Statement becomes effective and Parent
agrees that the Parent Share Issuance shall be submitted for approval at the Parent Shareholder
Meeting. Notwithstanding anything to the contrary in this Agreement, Parent may, but shall not be
required to, adjourn or postpone the Parent Shareholder Meeting to the extent necessary to ensure
that any necessary supplement or amendment to the Joint Proxy Statement is provided to its
shareholders in advance of a vote on the approval of the Parent Share Issuance, or, if, as of the
time for which the Parent Shareholder Meeting is originally scheduled, there are insufficient
Parent Common Shares represented (either in person or by proxy) to constitute a quorum necessary to
conduct the business of such meeting.
(b) Subject to Section 7.01(c), Parent shall use its reasonable best efforts to
solicit from its shareholders proxies in favor of the approval of the Parent Share Issuance and
shall take all other action necessary or advisable to secure the Parent Shareholder Approval. The
obligation of Parent to call, give notice of, convene and hold the Parent Shareholder Meeting shall
not be limited or otherwise affected by any Change in Parent Recommendation.
SECTION 7.04. Access to Information; Confidentiality. (a) Except as otherwise
prohibited by applicable Law or the terms of any contract or agreement (provided that each party
shall use all reasonable efforts to promptly obtain any consent required under any such contract or
agreement in order that it may comply with the terms of this Section 7.04), from the date
of this Agreement until the Effective Time, each of Parent and the Company shall, and shall cause
its respective subsidiaries to, (i) provide to the other party and the other party’s officers,
directors, employees, accountants, consultants, legal counsel, agents and other representatives
access at reasonable times during normal business hours upon prior notice to the officers,
employees, agents, properties, offices and other facilities of such party and its subsidiaries and
to the books and records thereof, and (ii) furnish promptly to the other party such information
concerning the business, properties, contracts, assets, liabilities, personnel and other aspects of
such party and its subsidiaries as the other party or its representatives may reasonably request;
provided, however, that neither Parent nor the Company shall be required to provide
access to or disclose information where such access or disclosure would violate or prejudice the
rights of its customers, jeopardize the attorney-client privilege of the person in possession or
control of such information or contravene any Law, order, judgment, decree or agreement to which
such party or any of its subsidiaries is a party or is subject.
(b) All information obtained by the parties pursuant to this Section 7.04 shall be
kept confidential in accordance with the confidentiality agreement, dated March 31, 2008 (the
“Confidentiality Agreement”), between Parent and the Company.
(c) No investigation pursuant to this Section 7.04 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the obligations of the parties
hereto.
44
(d) Neither party shall conduct any invasive testing of soil, groundwater or building
components at any property of the other party without the prior written consent of such other
party.
SECTION 7.05. No Solicitation of Transactions. (a) The Company agrees that neither
it nor any Subsidiary will, and the Company shall use its reasonable best efforts to cause their
respective directors, officers, employees, agents, investment bankers, attorneys, accountants,
other advisors or representatives (such persons, together with Subsidiaries, collectively, the
“Company Representatives”) not to (i) solicit, initiate or knowingly encourage (including
by way of furnishing non-public information), or take any other action to knowingly facilitate the
making of any Acquisition Proposal, (ii) enter into, continue or otherwise engage or participate in
any discussions or negotiations regarding, or furnish to any person, any information with respect
to, or otherwise knowingly cooperate, encourage or facilitate any effort or attempt to make or
implement any proposal or inquiry that constitutes, or could reasonably be expected to result in,
an Acquisition Proposal, (iii) approve, endorse or recommend, or propose publicly to approve,
endorse or recommend, any Acquisition Proposal, or (iv) submit to a vote of its stockholders,
approve, endorse or recommend, or publicly announce an intention to approve, endorse or recommend,
or enter into, any letter of intent, agreement in principle, merger agreement, acquisition
agreement, option agreement amalgamation agreement, scheme of arrangement or other similar
agreement relating to any Acquisition Proposal (other than a Qualifying Confidentiality Agreement
in accordance with Section 7.05(b)). The Company immediately shall cease and cause to be
terminated all existing discussions or negotiations with any parties conducted heretofore with
respect to an Acquisition Proposal. The Company shall not release any third party from, or waive
any provision of, any confidentiality or standstill agreement to which it is a party.
(b) Notwithstanding anything to the contrary in this Section 7.05, if the Company or
any of the Company Representatives receives an unsolicited written Acquisition Proposal from any
person or group of persons at any time prior to the Company Stockholder Meeting, the Company and
Company Representatives may (i) contact such person or group of persons to clarify the terms and
conditions thereof, and (ii) if the Company Board (or any committee thereof) has (A) determined, in
its good faith judgment (after consultation with the Company’s financial advisors and outside legal
counsel), that such Acquisition Proposal constitutes or could reasonably be expected to lead to a
Superior Proposal, and (B) obtained from such person a Qualifying Confidentiality Agreement,
furnish information to, and enter into discussions and negotiations with, such person or group of
persons; provided, that the Company shall have provided written notice to Parent of its
intent to furnish information or enter into discussions or negotiations with such person or group
of persons at least one business day prior to taking any such action.
(c) Promptly (but in no event more than 24 hours) following receipt thereof, the Company shall
advise Parent in writing of the receipt of any Acquisition Proposal, or any inquiry, discussions or
negotiations with respect to any Acquisition Proposal and the terms and conditions of such
Acquisition Proposal and the Company shall promptly provide to Parent a copy of any Acquisition
Proposal made in writing provided to the Company and copies of any written materials received by
the Company in connection therewith. The Company agrees that it shall keep Parent reasonably
informed of the status of any discussions or negotiations with
45
respect to any Acquisition Proposal. The Company agrees that it shall simultaneously provide
to Parent any non-public information concerning the Company that may be provided (pursuant to
Section 7.05(b)) to any other person or group of persons in connection with any Acquisition
Proposal which was not previously provided to Parent.
(d) Notwithstanding anything to the contrary contained in Section 7.05, at any time
prior to the Company Stockholder Meeting, if the Company has received a Superior Proposal (after
giving effect to the terms of any revised offer by Parent pursuant to this Section
7.05(d)), the Company Board may (x) in connection with such Superior Proposal, make a Change in
Company Recommendation or (y) terminate this Agreement for the purpose of causing the Company to
enter into an acquisition agreement with respect to such Superior Proposal (provided that the
Company shall have paid the Termination Fee prior to or concurrently with such termination of this
Agreement in accordance with Section 9.03(b)), which the Company shall enter into
concurrently with or immediately following such termination, if the Company Board has determined in
good faith, after consultation with the Company’s financial advisors and outside counsel, that the
failure to take such action would be inconsistent with the directors’ exercise of their fiduciary
obligations to the Company and its stockholders under applicable Law and the Company’s certificate
of incorporation; provided, however, that if the Change in Company Recommendation
pursuant to clause (x) or the termination of this Agreement pursuant to clause (y) is to be
effected as a result of a Superior Proposal, then the Company Board may not take the actions set
forth in clause (x) or (y), as the case may be, unless:
(i) the Company shall have provided prior written notice to Parent at least five (5)
calendar days in advance (the “Notice Period”) of its intention to take such
actions, which notice shall advise Parent that the Company Board has received a Superior
Proposal, specify the material terms and conditions of such Superior Proposal and indicate
that the Company Board intends to effect a Change in Company Recommendation or terminate
this Agreement and the manner in which it intends (or may intend) to take such action (a
“Notice of Superior Proposal”), and
(ii) during the Notice Period, the Company shall, and shall cause its financial
advisors and outside counsel to, negotiate with Parent in good faith (to the extent Parent
desires to negotiate) to make such adjustments in the terms and conditions of this
Agreement so that such Acquisition Proposal ceases to constitute (in the judgment of the
Company Board) a Superior Proposal.
If during the Notice Period any revisions are made to the Superior Proposal, the Company shall
deliver a new written notice to Parent specifying the details of any such revisions and shall
comply with the requirements of this Section 7.05(d) with respect to such new written
notice, except that the new Notice Period shall be two (2) calendar days. Any disclosure that the
Company Board may be compelled to make with respect to the receipt of a proposal or offer for an
Acquisition Proposal or otherwise in order to comply with its fiduciary obligations to the Company
and its stockholders under applicable Law and the Company’s certificate of incorporation or
Rule 14d-9 or 14e-2(a) promulgated under the Exchange Act will not constitute a violation of this
Agreement; provided, that such disclosure does not violate any provision of this
Section 7.5(d) (it being understood that a mere “stop, look and listen” disclosure shall
not
46
violate this Section 7.5(d) or constitute a Change in Company Recommendation). Any Change
in Company Recommendation shall not change the approval of the Company Board for purposes of
causing any state takeover statute or other state law to be inapplicable to the transactions
contemplated hereby.
(e) Notwithstanding Section 7.05(d), at any time prior to the Company Stockholder
Approval, the Company Board may, other than in response to a Superior Proposal, make a Change in
Company Recommendation if the Company Board determines, in its good faith judgment prior to the
time of the Company Stockholder Meeting and after consultation with outside legal counsel, that
failure to make a Change in Company Recommendation would be inconsistent with the directors’
exercise of their fiduciary obligations to the Company and its stockholders under applicable Law
and the Company’s certificate of incorporation; provided, that the Company Board may not
take the actions set forth in this Section 7.05(e) unless prior thereto the Company shall
take the actions set forth in clauses (i) and (ii) of Section 7.05(d) as if a Superior
Proposal had been received by the Company.
(f) An “Acquisition Proposal” means any proposal or offer from any person or group of
persons (other than Parent, Merger Sub or their respective affiliates): (i) for any merger,
consolidation, amalgamation, share exchange, business combination, scheme of arrangement,
recapitalization, liquidation, dissolution or other similar transaction involving the Company or
any Subsidiary pursuant to which such person or group of persons would own 25% or more of the
voting power of any class of equity securities of the Company or of any resulting parent of the
Company; (ii) for any sale, lease, exchange, transfer or other disposition of assets or businesses
that constitute or represent 25% or more of the consolidated revenue, consolidated operating income
or consolidated total assets of the Company and the Subsidiaries, taken as a whole; or (iii) for
any sale, exchange, transfer or other disposition pursuant to which such person or group of persons
would own 25% or more of the voting power of any class of equity securities of the Company, in a
single transaction or a series of related transactions, in each case other than the Merger.
(g) A “Superior Proposal” means an unsolicited written bona fide offer made by a third
party to consummate any of the following transactions: (i) a merger, consolidation, amalgamation,
share exchange, business combination, asset purchase, scheme of arrangement, or other similar
transaction involving the Company pursuant to which the stockholders of the Company immediately
preceding such transaction would hold less than 50% of the voting power of any class of equity
securities of the Company or of any resulting entity of such transaction or the Company would sell
more than 50% of the consolidated assets of the Company and the Subsidiaries; or (ii) the
acquisition by any person or group (including by means of a tender offer or an exchange offer or a
two-step transaction involving a tender offer followed with reasonable promptness by a cash-out
merger involving the Company), directly or indirectly, of ownership of 100% of the then outstanding
shares of stock of the Company, in each case on terms that the Company Board determines, in its
good faith judgment (after consultation with the Company’s financial advisors), to be more
favorable to the Company stockholders than the Merger (after taking into account, among other
factors the Company Board may deem relevant, the likelihood of obtaining any financing required to
consummate the transaction contemplated by such offer).
47
SECTION 7.06. Employee Benefits Matters. (a) From and after the Effective Time,
Parent shall cause the Surviving Corporation and the Subsidiaries to honor in accordance with their
terms, all contracts, agreements, arrangements, policies, plans and commitments of the Company and
the Subsidiaries as in effect immediately prior to the Effective Time that are applicable to any
current or former employees or directors of the Company or any Subsidiary; provided, that
nothing contained herein shall prohibit Parent or the Surviving Corporation or any of Parent’s
subsidiaries from amending, modifying or terminating any such contracts, agreements, arrangements,
policies, plans and commitments in accordance with their terms. Employees of the Company or any
Subsidiary shall receive credit for purposes of eligibility to participate, vesting and benefit
entitlement (but not, except to the extent required by applicable Law, for benefit accruals under a
defined benefit pension plan) under any employee benefit plan, program or arrangement established
or maintained by the Surviving Corporation or any of the Subsidiaries for service accrued or deemed
accrued prior to the Effective Time with the Company or any Subsidiary; provided,
however, that such crediting of service shall not operate to duplicate any benefit or the
funding of any such benefit. In addition, Parent shall waive, or cause to be waived, any
limitations on benefits relating to any pre-existing conditions or actively-at work requirements,
except to the same extent such limitations are applicable under any Company Plan and recognize, for
purposes of annual deductible and out-of-pocket limits under its medical and dental plans,
deductible and out-of-pocket expenses paid by employees of the Company and the Subsidiaries in the
calendar year in which the Effective Time occurs.
(b) For a period commencing at the Effective Time and ending no earlier than the first
anniversary of the Effective Time, Parent shall, or shall cause its affiliates to, provide
employees of the Company and the Subsidiaries who are employed by the Company and the Subsidiaries
as of the Effective Time and who continue to be employees of Parent or its subsidiaries, including
the Company or any Subsidiary, with employee benefit plans, programs, contracts and arrangements
that are no less favorable in the aggregate than those currently provided to them in connection
with their employment by the Company or a Subsidiary (excluding equity-related awards and executive
life insurance benefits). Employees of the Company and the Subsidiaries who are employed by the
Company and the Subsidiaries as of the Effective Time and who continue to be employees of Parent or
its subsidiaries, including the Company or any Subsidiary, shall be eligible to receive
equity-related awards under the equity plans of Parent to the same extent as similarly-situated
employees of Parent or its subsidiaries.
(c) Parent shall credit employees of the Company and the Subsidiaries with any co-payments,
deductibles and out of pocket expenses paid by such employees under Company Plans during the plan
year in which the Effective Time occurs.
(d) Nothing contained herein shall be deemed to be a guarantee of employment for any employee
of the Company or their respective subsidiaries, or to restrict the right of Parent or any of its
subsidiaries to terminate or cause to be terminated any employee at any time for any or no reason
with or without notice. Notwithstanding the foregoing provisions of this Section 7.06,
nothing contained herein, whether express or implied, (i) shall be treated as an amendment or other
modification of any employee benefit plan, program or arrangement or the establishment of any
employee benefit plan, program or arrangement or (ii) shall limit the right of Parent or any of its
subsidiaries to amend, terminate or otherwise modify (or cause to be amended, terminated or
otherwise modified) any employee benefit plan, program or arrangement
48
following the Closing in accordance with its terms. Parent and the Company acknowledge and
agree that all provisions contained in this Section 7.06 are included for the sole benefit
of Parent and the Company, and that nothing herein, whether express or implied, shall create any
third party beneficiary or other rights (i) in any other person, including any employees, former
employees, any participant in any employee benefit plan, program or arrangement (or any dependent
or beneficiary thereof), of the Company or any of its affiliates or (ii) to continued employment
with Parent or any of its affiliates or continued participation in any employee benefit plan,
program or arrangement.
(e) Within fifteen (15) days of the date hereof, the Company shall provide, on Section
4.10(k) of the Company Disclosure Schedule, a current list of each material Non-U.S. Benefit
Plan that is not required by the Law of any non-U.S. jurisdiction, and the Company shall make
available to Parent all material documents related to each such material Non-U.S. Benefit Plan.
(f) No earlier than forty-five (45) days following the date hereof, the Company shall deliver,
or shall cause to be delivered, cash to the Company Executive Benefit Trust, dated as of May 23,
2000 (as amended from time to time) (the “Executive Benefit Trust”) in an amount not to
exceed $45,000,000 and a number of shares of Company Common Stock not to exceed 800,000 in order to
fund all of the Company’s obligations under such trust, pursuant to the terms of the Executive
Benefit Trust.
(g) Parent and the Company mutually agree to provide each other with reasonable access to
their respective affiliates, officers, employees, agents and representatives to cooperate and to
provide information as any of them may reasonably request, in connection with the Parent
negotiating and entering into retention arrangements within forty-five (45) days of the date hereof
with certain key employees of the Company (as may be determined by Parent in its sole discretion).
(h) Promptly following the date hereof, Parent will negotiate in good faith with the Company
with a view to agreeing on a mechanism with respect to employees of the Company who (i) hold
Company Performance Share Awards with respect to the 2006-2008 performance period and (ii) remain
employees of Parent or any of its subsidiaries (including the Company) following the Closing and
through the applicable payment date, so that such employees are not adversely affected from a
financial viewpoint as a result of the occurrence of the Closing, taking into consideration the
actual performance of the Company and its Subsidiaries during 2008. Parent shall assume, maintain
and honor the Company’s Annual Incentive Plan (“AIP”) existing as of the Closing and shall
pay to eligible AIP participants the bonuses they have accrued under the AIP at the end of the
bonus determination period that includes the date on which the Closing occurs based on the
Company’s performance for the period beginning on January 1, 2008 and ending on the date on which
the Closing occurs and based on the Surviving Corporation’s performance for the period beginning on
the date on which the Closing occurs and ending on December 31, 2008 (as determined by Parent in
its discretion); provided, that each such AIP participant is employed by the Surviving
Corporation on December 31, 2008 and no other annual bonuses will be payable to such AIP
participants in the United States for 2008, unless such AIP participant terminates employment with
the Surviving Corporation by reason of death, disability or retirement.
49
(i) Parent shall continue to maintain the Company Master Retiree Welfare Plan (the
“Retiree Plan”), including all accounts under such plan as of the Closing, in accordance
with the terms of the Retiree Plan. Parent shall have the discretion to freeze the Retiree Plan
with respect to new participants and future benefit accruals effective as of December 31, 2009.
Parent shall continue to allow participants in the Retiree Plan to participate in the medical and
dental programs generally available to active salaried employees of the Surviving Corporation at
group premium rates, subject to its terms, with the cost of such premiums to be paid from the
Retiree Plan accounts in accordance with the terms of the plan or by such participant.
SECTION 7.07. Directors’ and Officers’ Indemnification and Insurance. (a) The
certificate of incorporation of the Surviving Corporation and each of the Subsidiaries shall
(i) contain provisions no less favorable with respect to indemnification, exculpation and
advancement of expenses than are set forth in the certificate of incorporation and bylaws of the
Company or the applicable Subsidiary, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that would affect
adversely the rights thereunder of individuals who, at or at any time prior to the Effective Time,
were directors, officers, employees, fiduciaries or agents of the Company or the Subsidiaries,
unless such modification shall be required by law; provided, however, that if any
claim or claims are asserted against any individual entitled to the protections of such provisions
within such six-year period, such provisions shall not be modified until the final disposition of
any such claims, and (ii) with respect to the Surviving Corporation, contain provisions no less
favorable with respect to indemnification for matters occurring from and after the Effective Time
than are set forth in Parent’s memorandum of association or bye-laws, as of the date hereof.
(b) Prior to the Effective Time, the Company shall, and if the Company is unable to, Parent
shall cause the Surviving Corporation as of the Effective Time to, obtain and fully pay the premium
for the extension of (i) the Side A coverage part (directors’ and officers’ liability) of the
Company’s existing directors’ and officers’ insurance policies, and (ii) the Company’s existing
fiduciary liability insurance policies, in each case for a claims reporting or discovery period of
at least six years from and after the Effective Time from an insurance carrier with the same or
better credit rating as the Company’s current insurance carrier with respect to directors’ and
officers’ liability insurance and fiduciary liability insurance (collectively, “D&O
Insurance”) with terms, conditions, retentions and limits of liability that are not, in the
aggregate, less favorable as the Company’s existing policies with respect to any matter claimed
against a director or officer of the Company or any of the Subsidiaries by reason of his or her
serving in such capacity that existed or occurred at or prior to the Effective Time (including in
connection with this Agreement or the transactions or actions contemplated hereby). If the Company
and the Surviving Corporation for any reason fail to obtain such “tail” insurance policies as of
the Effective Time, Parent shall cause the Surviving Corporation to maintain in effect for six
years from the Effective Time, the D&O Insurance maintained by the Company as of the date hereof
(except the Surviving Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions that are not, in the aggregate, materially less favorable) with
respect to matters occurring prior to the Effective Time; provided, that in no event shall
the Surviving Corporation be required to expend in the aggregate pursuant to this
Section 7.07(b) an annual amount in excess of 200% of the annual premiums currently paid by
the Company (which current amount is set forth in Section 7.07(b) of the Company Disclosure
Schedule) for such insurance; provided further, that, if the amount of the annual
premiums necessary to maintain or
50
procure such insurance coverage exceeds such maximum amount, the Surviving Corporation shall
maintain or procure, for such six-year period, the most advantageous policies of directors’ and
officers’ insurance obtainable for an annual premium equal to that maximum amount from an insurance
carrier with the same or better credit rating than the Company’s current insurance carrier with
respect to directors’ and officers’ liability insurance and fiduciary liability insurance.
(c) In the event the Company, the Surviving Corporation, any Subsidiary or any of their
respective successors or assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such consolidation or merger, or
(ii) transfers all or substantially all of its properties and assets to any person, then, and in
each such case, proper provision shall be made so that the successors and assigns of the Company,
the Surviving Corporation or such Subsidiary, as the case may be, or at Parent’s option, Parent,
shall assume the obligations set forth in this Section 7.07.
(d) The provisions of this Section 7.07 are intended to be for the benefit of, and
shall be enforceable by, each present and former director, officer or employee (an “Indemnified
Person”) of the Company or any of the Subsidiaries, his or her heirs, executors or similar
representatives, shall be binding on all successors and assigns of Parent, the Company, the
Surviving Corporation and the Subsidiaries and shall not be amended in a manner that is adverse to
the Indemnified Persons (including their successors, assigns and heirs) without the consent of the
Indemnified Person (including the successors, assigns and heirs) affected thereby.
SECTION 7.08. Parent Board Representative. Prior to the Closing, effective as of
the Effective Time, Parent shall take such actions as are required to appoint the Chairman,
President and Chief Executive Officer of the Company to the class of directors of the Parent Board
with its term expiring at the 2011 annual general meeting of Parent shareholders.
SECTION 7.09. Notification of Certain Matters. Subject to applicable Law and the
requirements of any Governmental Authority, each of the Company and Parent shall keep the other
apprised of the status of matters relating to the completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other communications
received by Parent or the Company, as the case may be, from any third person and/or any
Governmental Authority with respect to the Merger and the other transactions contemplated by this
Agreement. Neither the Company nor Parent shall permit any of its officers or any other
representatives to participate in any meeting with any Governmental Authority in respect of any
filings, investigation or other inquiry relating to this Agreement or the transactions contemplated
hereby unless it consults with the other party in advance and, to the extent permitted by such
Governmental Authority, gives the other party the opportunity to attend and participate thereat.
SECTION 7.10. Further Action; Reasonable Best Efforts. Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto shall promptly after the date of this
Agreement (a) make its respective filings, and thereafter make any other required submissions,
under the HSR Act or other applicable foreign, federal or state antitrust, competition or fair
trade Laws with respect to the transactions contemplated hereby, (b) file with the Registrar of
Companies in Bermuda a copy of the Joint Proxy Statement, signed by or on behalf of all the
directors of Parent, to be published in connection with the Parent Share Issuance, as soon as
reasonably practicable after its publication, and (c) use its reasonable best efforts to
51
take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective
the transactions contemplated hereby, including using its reasonable best efforts to obtain all
permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities
and parties to contracts with the Company and the Subsidiaries as are necessary for the
consummation of the transactions contemplated hereby and to fulfill the conditions to the Merger.
In case, at any time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such action.
SECTION 7.11. Tax Free Merger. (a) This Agreement constitutes a “plan of reorganization”
within the meaning of Section 1.368-2(g) of the income tax regulations promulgated under the Code.
From and after the date of this Agreement and until the Effective Time, each party hereto shall use
its reasonable best efforts to cause the Merger to qualify, and will not take any action, cause any
action to be taken, fail to take any action or cause any action to fail to be taken which action or
failure to act it knows could (i) prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code or (ii) cause the shareholders of the Company, other than any
such shareholder that would be a “five-percent transferee shareholder” (within the meaning of U.S.
Treasury Regulations Section 1.367(a)-3(c)(5)), to recognize gain pursuant to Section 367(a) of the
Code. Following the Effective Time, none of the Surviving Corporation, Parent or any of their
affiliates shall take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken, which action or failure to act it knows could (i) cause the Merger
to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code or (ii)
cause the shareholders of the Company, other than any such shareholder that would be a
“five-percent transferee shareholder” (within the meaning of U.S. Treasury Regulations Section
1.367(a)-3(c)(5)), to recognize gain pursuant to Section 367(a) of the Code.
(b) As of the date hereof, the Company does not know of any reason (i) why it would not be
able to deliver the representation letters contemplated by Section 8.03(d), or (ii) why
counsel to Parent and the Company would not be able to deliver the tax opinions contemplated by
Section 8.02(e) and Section 8.03(d).
As of the date hereof, Parent does not know of any reason (i) why it would not be able to
deliver the representation letters contemplated by Section 8.02(e), or (ii) why counsel to
Parent and the Company would not be able to deliver the tax opinions contemplated by
Section 8.02(e) and Section 8.03(d).
SECTION 7.12. Transfer Taxes. The Company and Parent shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications or other documents
regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer
and stamp Taxes, any transfer, recording, registration and other fees and any similar Taxes which
become payable by the Company, Parent or Merger Sub in connection with the transactions
contemplated by this Agreement (together with any related interest, penalties or additions to Tax,
“Transfer Taxes”). All Transfer Taxes shall be paid by the Company and expressly shall not
be a liability of any holder of Company Common Stock.
52
SECTION 7.13. Merger Sub. Parent shall take all action necessary to cause Merger Sub
to perform its obligations under this Agreement and to consummate the Merger on the terms and
subject to the conditions set forth in this Agreement.
SECTION 7.14. Letters of Accountants. (a) Parent and the Company will each use all
reasonable efforts to cause to be delivered to each other consents from their respective
independent auditors, in form reasonably satisfactory to the recipient and customary in scope and
substance for consents delivered by independent public accountants in connection with registration
statements on Form S-4 under the Securities Act.
(b) Parent shall use its reasonable best efforts to cause to be delivered to the Company and
the Company Board two “comfort” letters of Deloitte & Touche LLP, Parent’s independent public
accountants, one dated and delivered the date on which the Registration Statement shall become
effective and one dated as of the Effective Time, and addressed to the Company and the Company
Board, in form and substance reasonably satisfactory to the Company and reasonably customary in
scope and substance for letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.
(c) The Company shall use its reasonable best efforts to cause to be delivered to Parent and
the Parent Board two “comfort” letters of KPMG LLP, the Company’s independent public accountants,
one dated and delivered the date on which the Registration Statement shall become effective and one
as of the Effective Time, and addressed to Parent and the Parent Board, in form and substance
reasonably satisfactory to Parent and reasonably customary in scope and substance for letters
delivered by independent public accountants in connection with transactions such as those
contemplated by this Agreement.
SECTION 7.15. NYSE Listing. Parent shall promptly prepare and submit to the NYSE a
listing application covering the Parent Common Shares to be issued in the Merger and pursuant to
Substitute Options, and shall use its reasonable best efforts to obtain, prior to the Effective
Time, approval for the listing of such Parent Common Shares, subject to official notice of issuance
to NYSE, and the Company shall cooperate with Parent with respect to such listing.
SECTION 7.16. Subsequent Financial Statements. (a) The Company shall, if
practicable, consult with Parent prior to making publicly available its financial results for any
period after the date of this Agreement and prior to filing any report or document with the SEC
after the date of this Agreement, it being understood that Parent shall have no liability by reason
of such consultation.
(b) Parent shall, if practicable, consult with the Company prior to making publicly available
its financial results for any period after the date of this Agreement and prior to filing any
report or document with the SEC after the date of this Agreement, it being understood that the
Company shall have no liability by reason of such consultation.
SECTION 7.17. Public Announcements. The initial press release relating to this
Agreement and the transactions contemplated hereby shall be a joint press release, the text of
which has been agreed to by each of Parent and the Company. Thereafter, unless otherwise
53
required by applicable Law or the requirements of the NYSE, each of Parent and the Company
shall use its reasonable best efforts to consult with each other before issuing any press release
or otherwise making any public statements with respect to this Agreement, the Merger or any of the
other transactions contemplated hereby; provided, that this Section 7.17 shall terminate in
the event the Company Board withdraws the Company Recommendation or the Parent Board withdraws the
Parent Recommendation.
SECTION 7.18. Assistance with Parent Financing. (a) The Company shall provide to
Parent such cooperation as may be reasonably requested by Parent to facilitate any financing
transaction by Parent (the “Financing”) after the date hereof, including (i) using its
reasonable best efforts to cause appropriate officers, employees and other representatives of the
Company to participate in (x) meetings, drafting sessions and due diligence sessions relating to
the Company with Parent and its representatives and with Parent’s financing sources, (y) sessions
with rating agencies with respect to the Financing, but only with respect to the portions of such
sessions that relate to the Company and (z) roadshows and other marketing efforts in connection
with the Financing, but only with respect to the portions of such roadshows or other marketing
efforts that relate to the Company, (ii) assisting Parent and its financing sources in the
preparation of any offering documents to be used in connection with the Financing, including any
documents to be filed by Parent with the SEC, bank information memoranda or other disclosure
documents reasonably requested by Parent in connection with the Financing, including materials for
rating agency presentations, in each case, to the extent such materials relate to the Company,
(iii) furnishing Parent and its financing sources with financial and other relevant information
regarding the Company as may reasonably be requested by Parent to obtain the Financing, and (iv)
using reasonable best efforts to cause KPMG LLP, the Company’s independent public accountants, to
take such actions regarding the Company as Parent may reasonably request in connection with the
Financing, including to (w) obtain the consent of KPMG LLP for the inclusion of its reports on the
Company’s audited financial statements included in the Company SEC Reports in any offering
documents, offering memoranda, offering circulars, prospectuses or registration statement to be
used in connection with the Financing, (x) deliver a “comfort letter” to Parent’s financing sources
in a form meeting the requirements of Statement of Auditing Standards No. 72 – Letters for
Underwriters and Certain Other Requesting Parties, as such statement has been amended or modified,
or such other form as may reasonably be requested by Parent or its financing sources and is
customary for offerings of securities contemplated by the Financing, (y) participate in customary
“auditor due diligence” sessions relating to the Company with Parent’s financing sources and
counsel to such financing sources and Parent and its representatives and (z) enter into customary
agreements or engagements with respect to the Company with accountants.
(b) Parent shall indemnify and hold harmless the Company and each of the officers, employees
and other representatives of the Company against all losses, liabilities, damages, claims, costs
and expenses (including the costs of reasonable investigation and reasonable accountants’ and
attorneys’ fees) arising out of, resulting from or relating to any third party claims against one
or more of such persons based on (i) any untrue statement or alleged untrue statement of material
fact contained in any offering documents, bankers’ book or other materials or information prepared
or distributed, whether orally or in writing, in connection with the Financing or any “Blue Sky”
application or other document prepared or executed by or on behalf of Parent for the purpose of
qualifying any securities issued or contemplated to be issued
54
in connection with the Financing under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a “Blue Sky
Application”), (ii) with respect to materials identified in clause (i), any omission or alleged
omission to state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which they were made, (iii) any
of such persons being alleged or found to be a seller, participant or underwriter in the offering
of any securities in connection with the Financing or an issuer or guarantor of such securities as
a result of the assistance provided or actions taken by the Company or any of its officers,
employees or representatives pursuant to Section 7.18(a), or (iv) any of such persons
otherwise being alleged or found to have aided and abetted Parent or its representatives in any
wrongdoing relating to the offer or sale of any securities in connection with the Financing as a
result of the assistance provided or actions taken by the Company or any of its officers, employees
or representatives pursuant to Section 7.18(a). Notwithstanding anything to the contrary
contained in this Section 7.18(b), Parent shall not be required to so indemnify the Company
or any officer, employee or other representative of the Company to the extent any losses,
liabilities, damages, claims, costs or expenses (including the costs of reasonable investigation
and reasonable accountants’ and attorneys’ fees) arise out of, result from or relate to any
information contained in any Company SEC Report or any information relating to the Company
expressly provided to Parent by the Company or any of its officers, employees or representatives
for use in connection with the Financing.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party. The obligations of the
Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver
(where permissible) of the following conditions:
(a) Registration Statement. The Registration Statement shall have been declared
effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceeding for that purpose shall
have been initiated by the SEC and not concluded or withdrawn.
(b) Company Stockholder Approval. The Company Stockholder Approval shall have been
obtained.
(c) Parent Shareholder Approval. The Parent Shareholder Approval shall have been
obtained.
(d) No Order. No Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law, rule, regulation, judgment, decree, executive order or award (an
“Order”) which is then in effect and has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(e) Regulatory Approvals. The clearances and waiting periods described on Schedule
8.01(e) shall have been obtained or expired, as applicable; provided, that if the
55
clearances and waiting periods described in clauses (i), (ii), (iii) and (iv) of Schedule
8.01(e) have been obtained or expired, as applicable, Parent and Merger Sub have complied with
their obligations under Section 7.10 in all material respects, and the other conditions to
the obligations of the parties contained in this Article VIII have been satisfied or waived
(where permissible), the condition to the Company’s obligations contained in this Section
8.01(e) shall be deemed to have been satisfied so long as the consummation of the Merger would
not have a Parent Material Adverse Effect or be reasonably likely to result in any personal
liability (other than de minimis monetary penalties) to any director, officer or employee of the
Company or any of the Subsidiaries.
(f) NYSE Listing. The Parent Common Shares to be issued in the Merger shall have been
authorized for listing on the NYSE, subject to official notice of issuance.
SECTION 8.02. Conditions to the Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver (where
permissible) of the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties of the
Company contained in Section 4.03(a) shall be true and correct except for de minimis
errors, (ii) the representations and warranties of the Company contained in Section 4.04
shall be true and correct, and (iii) all other representations and warranties of the Company
contained in this Agreement shall be true and correct (without giving effect to any limitation as
to materiality or Company Material Adverse Effect set forth therein) except as would not have a
Company Material Adverse Effect, in the case of each of (i), (ii) and (iii) as of the Effective
Time, as though made on and as of the Effective Time (except to the extent expressly made as of an
earlier date, in which case as of such earlier date).
(b) Agreements and Covenants. The Company shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time.
(c) Officer Certificate. The Company shall have delivered to Parent a certificate,
dated the date of the Closing, signed by a duly authorized officer of the Company, certifying as to
the satisfaction of the conditions specified in Section 8.02(a) and Section
8.02(b).
(d) Company Material Adverse Effect. No Company Material Adverse Effect shall have
occurred since the date of this Agreement.
(e) Tax Opinion. Parent shall have received the opinion of Shearman & Sterling LLP,
counsel to Parent, based upon representations of Parent, Merger Sub and the Company, and customary
assumptions, to the effect that, for United States federal income tax purposes, (i) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code, (ii) that each of
Parent, Merger Sub and the Company will be a party to the reorganization within the meaning of
Section 368(b) of the Code, and (iii) a conversion of Shares into the Per Share Merger
Consideration provided for hereunder will be an exchange governed by Section 354 of the Code to
which Section 367(a) does not apply, which opinion shall not have been withdrawn or modified in any
material respect. The issuance of such opinion
56
shall be conditioned on receipt by Shearman & Sterling LLP of representation letters from each
of Parent and Company substantially to the effect set forth in Exhibit A and Exhibit
B, respectively. Each such representation letter shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material respect as of the Effective
Time.
SECTION 8.03. Conditions to the Obligations of the Company. The obligations of the
Company to consummate the Merger are subject to the satisfaction or waiver (where permissible) of
the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties of Parent
contained in Section 5.03(a) shall be true and correct except for de minimis errors, (ii)
the representations and warranties of Parent contained in Section 5.04 shall be true and
correct, and (iii) all other representations and warranties of Parent contained in this Agreement
shall be true and correct (without giving effect to any limitation as to materiality or Parent
Material Adverse Effect set forth therein) except as would not have a Parent Material Adverse
Effect, in the case of each of (i), (ii) and (iii), as of the Effective Time, as though made on and
as of the Effective Time (except to the extent expressly made as of an earlier date, in which case
as of such earlier date).
(b) Agreements and Covenants. Parent and Merger Sub shall have performed or complied
in all material respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time.
(c) Officer Certificate. Parent shall have delivered to the Company a certificate,
dated the date of the Closing, signed by a duly authorized officer of Parent, certifying as to the
satisfaction of the conditions specified in Section 8.03(a) and Section 8.03(b).
(d) Tax Opinion. The Company shall have received the opinion of Sidley Austin LLP,
counsel to the Company, based upon representations of Parent, Merger Sub and the Company, and
customary assumptions, to the effect that, for United States federal income tax purposes, (i) the
Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code, (ii) each
of Parent, Merger Sub and the Company will be a party to the reorganization within the meaning of
Section 368(b) of the Code, and (iii) a conversion of Shares into the Per Share Merger
Consideration provided for hereunder will be an exchange governed by Section 354 of the Code to
which Section 367(a) of the Code does not apply, which opinion shall not have been withdrawn or
modified in any material respect. The issuance of such opinion shall be conditioned on receipt by
Sidley Austin LLP of representation letters from each of Parent and Company substantially to the
effect set forth in Exhibit A and Exhibit B, respectively. Each such
representation letter shall be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect as of the Effective Time.
(e) Parent Material Adverse Effect. No Parent Material Adverse Effect shall have
occurred since the date of this Agreement.
57
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the Company Stockholder Approval or the Parent Shareholder
Approval, as follows:
(a) | by mutual written consent of Parent and the Company; or | ||
(b) | by either Parent or the Company if: |
(i) | the Effective Time shall not have occurred on or before March 23, 2009 (the “Termination Date”); provided, that the right to terminate this Agreement under this Section 9.01(b)(i) shall not be available to any party whose intentional failure to fulfill any obligation of this Agreement or other intentional breach of this Agreement has resulted in the failure of any condition to the Merger not to be satisfied prior to such date; or | ||
(ii) | any court of competent jurisdiction or any Governmental Authority shall have issued an Order or taken any other action permanently restricting, enjoining, restraining or otherwise prohibiting consummation of the Merger and such Order or other action shall have become final and non-appealable provided, however, that the right to terminate this Agreement pursuant to this Section 9.01(b)(ii) shall not be available to any party who has not used its reasonable best efforts to cause such order to be lifted or otherwise taken such action as is required to comply with Section 7.10; or | ||
(iii) | (A) the Company Stockholder Approval shall not be obtained at the Company Stockholder Meeting, or (B) the Parent Shareholder Approval shall not be obtained at the Parent Shareholder Meeting; or |
(c) | by Parent: |
(i) | upon a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement such that the conditions set forth in Section 8.02(a) and Section 8.02(b) would not be satisfied, such breach cannot be cured or has not been cured within 30 days of the receipt by the Company of notice thereof, and such breach has not been waived by Parent pursuant to the provisions hereof; or | ||
(ii) | prior to the Company Stockholder Meeting, if the Company Board makes a Change in Company Recommendation; or | ||
(iii) | if the Company shall have failed to include in the Joint Proxy Statement the recommendation of the Company Board to the stockholders of the Company in favor of the adoption of this Agreement; or |
58
(d) | by the Company: |
(i) | upon a breach of any representation, warranty, covenant or agreement on the part of Parent and Merger Sub set forth in this Agreement such that the conditions set forth in Section 8.03(a) and Section 8.03(b) would not be satisfied, such breach cannot be cured or has not been cured within 30 days of the receipt by Parent of notice thereof, and such breach has not been waived by the Company pursuant to the provisions hereof; or | ||
(ii) | pursuant to Section 7.05(d); or | ||
(iii) | prior to the Parent Shareholder Meeting, if the Parent Board makes a Change in Parent Recommendation; or | ||
(iv) | if Parent shall have failed to include in the Joint Proxy Statement the recommendation of the Parent Board to the shareholders of Parent of the Parent Share Issuance. |
SECTION 9.02. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void, and there
shall be no liability under this Agreement on the part of the Company, Parent or Merger Sub or
their respective officers or directors, except (a) as set forth in Section 7.04(b),
Section 7.04(c), Section 7.18(b), this Section 9.02, Section 9.03
and Article X, which provisions shall survive termination, and (b) nothing contained in
this Section 9.02 or in Section 9.03 shall relieve any party from liability for any
intentional and material breach of any of its representations, warranties, covenants or agreements
set forth in this Agreement prior to such termination that would reasonably be expected to cause
any of the conditions set forth in Article VIII not to be satisfied.
SECTION 9.03. Payment of Certain Fees and Expenses. (a) Except as set forth in this
Section 9.03, all Expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such expenses, whether or not
the Merger or any other transaction is consummated. “Expenses”, as used in this Agreement,
shall include all reasonable out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the preparation, printing,
filing and mailing of the Registration Statement and the Joint Proxy Statement, the solicitation of
stockholder or shareholder approvals, the filing of any required notices under the HSR Act or other
similar regulations and all other matters related to the closing of the Merger and the other
transactions contemplated by this Agreement.
(b) | The Company agrees that: |
(i) | if Parent shall terminate this Agreement pursuant to Section 9.01(c)(ii) or Section 9.01(c)(iii) and within twelve months after the date of such termination the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by an Acquisition Proposal; provided, that for purposes |
59
of this Section 9.03(b)(i), all references to 25% in the definition of “Acquisition Proposal” shall be replaced with references to 50%; or |
(ii) | if the Company shall terminate this Agreement pursuant to Section 9.01(d)(ii); or | ||
(iii) | if (A) Parent or the Company shall terminate this Agreement pursuant to Section 9.01(b)(i) or Parent shall terminate this Agreement pursuant to Section 9.01(c)(i), (B) prior to the time of such termination an Acquisition Proposal shall have been made or communicated to the senior management of the Company or the Company Board or an Acquisition Proposal shall have been publicly made known or publicly announced with respect to the Company, and (C) within twelve months after the date of such termination the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by an Acquisition Proposal (in each case, whether or not such Acquisition Proposal is the same as the original Acquisition Proposal made, communicated, publicly made known or publicly announced); provided, that for purposes of this Section 9.03(b)(iii), all references to 25% in the definition of “Acquisition Proposal” shall be replaced with references to 50%; or | ||
(iv) | if (A) Parent or the Company shall terminate this Agreement pursuant to Section 9.01(b)(iii)(A), (B) prior to the time of such failure to so adopt this Agreement an Acquisition Proposal shall have been publicly made known or publicly announced with respect to the Company, and (C) within twelve months after the date of such termination the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by an Acquisition Proposal (in each case, whether or not such Acquisition Proposal is the same as the original Acquisition Proposal publicly made known or publicly announced); provided, that for purposes of this Section 9.03(b)(iv), all references to 25% in the definition of “Acquisition Proposal” shall be replaced with references to 50%; |
then the Company shall pay to Parent (A) prior to or concurrently with the termination of this
Agreement if payable pursuant to Section 9.03(b)(ii), or (B) promptly (but in any event no
later than one (1) business day after the first of such events shall have occurred) with respect to
the termination of this Agreement if payable pursuant to Section 9.03(b)(i), Section
9.03(b)(iii) or Section 9.03(b)(iv), a fee of $110,000,000 (the “Termination
Fee”), which amount shall be payable in immediately available funds.
(c) The Company agrees that if Parent shall terminate this Agreement pursuant to
Section 9.01(c)(i), Section 9.01(c)(ii) or Section 9.01(c)(iii) then the
Company shall, whether or not any payment is made pursuant to Section 9.03(b), reimburse
Parent for all of its Expenses, up to a maximum of $10,000,000 (not later than three business days
after submission of statements therefore). Parent agrees that if the Company shall terminate this
Agreement pursuant to Section 9.01(d)(i), Section 9.01(d)(iii) or Section
9.01(d)(iv) then Parent shall reimburse the Company for all of its Expenses, up to a maximum of
$10,000,000 (not later than three business days after submission of statements therefore). Any
reimbursement of expenses by the Company pursuant to this Section 9.03(c) shall be credited
against any amount that may become payable pursuant to Section 9.03(b).
60
(d) The Company and Parent acknowledge that the agreements contained in this Section
9.03 are an integral part of the transactions contemplated by this Agreement. In the event
that the Company shall fail to pay the Termination Fee, or the Company or Parent shall fail to pay
any Expenses, when due, the term “Expenses” shall be deemed to include the costs and expenses
actually incurred or accrued by Parent or the Company, as the case may be, (including fees and
expenses of counsel) in connection with the collection under and enforcement of this Section
9.03.
SECTION 9.04. Amendment. Except as may otherwise be provided herein, any provision of
this Agreement may be amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time; provided, that,
after either of the Company Stockholder Approval and the Parent Shareholder Approval have been
obtained, no such amendment shall be made that under applicable Law requires further approval by
the stockholders of the Company or the shareholders of Parent, as applicable, without such approval
having been obtained. This Agreement may not be amended except by an instrument in writing signed
by each of the Company and Parent.
SECTION 9.05. Waiver. At any time prior to the Effective Time, any party hereto may
(a) extend the time for the performance of any obligation or other act of any other party hereto,
(b) waive any inaccuracy in the representations and warranties of any other party contained herein
or in any document delivered pursuant hereto, and (c) subject to the proviso in the first sentence
of Section 9.04 and to the extent permitted by applicable Law, waive compliance with any
agreement of any other party or any condition to its own obligations contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement and in any certificate delivered
pursuant hereto shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 9.01, as the case may be, except that the agreements set forth in
Article II and Article III and Section 7.04(b), Section 7.06,
Section 7.07, Section 7.08 and Section 7.11 and this Article X
shall survive the Effective Time.
SECTION 10.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be deemed to have been
duly given upon receipt) by delivery in person, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in accordance with
this Section 10.02):
61
if to Parent or Merger Sub:
Xxxxx Limited
00 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
00 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Xxxxx X’Xxxxx, Esq.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Xxxxx X’Xxxxx, Esq.
if to the Company:
Corn Products International, Inc.
0 Xxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx Xxx Xxxxx, Esq.
0 Xxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx Xxx Xxxxx, Esq.
with a copy to:
Sidley Austin LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx X. X’Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx X. X’Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
SECTION 10.03. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect 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 a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 10.04. Entire Agreement; Assignment. This Agreement and the Confidentiality
Agreement constitute the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and undertakings, both written and oral,
62
among the parties, or any of them, with respect to the subject matter hereof. EACH PARTY
HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT,
NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND
EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY
DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. This
Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise),
except that Parent and Merger Sub may assign all or any of their rights and obligations hereunder
to any affiliate of Parent; provided, that no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such obligations;
provided further, that such assignment shall not impede or delay the consummation
of the transactions contemplated by this Agreement or otherwise materially impede the rights of the
shareholders of the Company under this Agreement.
SECTION 10.05. Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 7.07 (which are
intended to be for the benefit of the persons covered thereby and may be enforced by such persons).
SECTION 10.06. Interpretation. References herein to the “knowledge of the
Company” or the “knowledge of Parent” shall mean the actual knowledge of those persons
identified in Section 10.06 of the Company Disclosure Schedule and Section 10.06 of
the Parent Disclosure Schedule, respectively. Whenever the words “include”, “includes” or
“including” are used in this Agreement they shall be deemed to be followed by the words “without
limitation”. References to “hereof” shall mean this Agreement and references to the “date hereof”
shall mean the date of this Agreement. The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms. When reference is made in this
Agreement to an Article, Section or Exhibit, such reference is to an Article or Section of, or an
Exhibit to, this Agreement unless otherwise indicated. The use of “or” is not intended to be
exclusive unless expressly indicated otherwise. The table of contents to and headings contained in
this Agreement are for reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.07. Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition
to any other remedy at law or equity.
63
SECTION 10.08. Governing Law; Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to contracts executed in
and to be performed in that State (other than those provisions set forth herein that are required
to be governed by the DGCL). All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any Delaware state or federal court sitting
in the City of Wilmington. The parties hereto hereby (a) submit to the exclusive jurisdiction of
any Delaware state or federal court sitting in the City of Wilmington for the purpose of any Action
arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any
claim that it is not subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this Agreement or the
transactions contemplated hereby may not be enforced in or by any of the above-named courts.
SECTION 10.09. Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.10. Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
SECTION 10.11. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER, (B)
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) MAKES THIS WAIVER VOLUNTARILY
AND (D) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.
[SIGNATURE PAGE FOLLOWS]
64
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
XXXXX LIMITED |
||||
By | /s/ Xxxxxxx Xxxxxxx | |||
Name: | Xxxxxxx Xxxxxxx | |||
Title: | Chairman and Chief Executive Officer | |||
By | /s/ Xxxxxxxxx X. Xxxxx | |||
Name: | Xxxxxxxxx X. Xxxxx | |||
Title: | Chief Financial Officer | |||
BLEECKER ACQUISITION CORP. |
||||
By | /s/ Xxxxxxxxx X. Xxxxx | |||
Name: | Xxxxxxxxx X. Xxxxx | |||
Title: | President | |||
CORN PRODUCTS INTERNATIONAL, INC. |
||||
By | /s/ Xxxxxx X. Xxxxx III | |||
Name: | Xxxxxx X. Xxxxx III | |||
Title: | Chief Executive Officer | |||
65