EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BT INDUSTRIES AB,
LIFT ACQUISITION COMPANY, INC.
AND
THE XXXXXXX CORPORATION
Dated as of June 16, 1997
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
ARTICLE I THE OFFER.......................................................................... 1
1.01 The Offer............................................................................. 1
1.02 Company Actions....................................................................... 3
1.03 Composition of the Board of Directors................................................. 4
ARTICLE II THE MERGER AND RELATED MATTERS..................................................... 5
2.01 The Merger............................................................................ 5
2.02 Conversion of Stock................................................................... 6
2.03 Dissenting Stock...................................................................... 6
2.04 Surrender of Certificates............................................................. 7
2.05 Payment............................................................................... 8
2.06 No Further Rights of Transfers........................................................ 8
2.07 Stock Option and Other Plans.......................................................... 9
2.08 Certificate of Incorporation of the Surviving Corporation............................. 10
2.09 By-Laws of the Surviving Corporation.................................................. 10
2.10 Directors and Officers of the Surviving Corporation................................... 10
2.11 Closing............................................................................... 10
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................... 10
3.01 Representations and Warranties of the Company......................................... 10
(a) Due Organization, Good Standing and Corporate Power........................... 11
(b) Authorization and Validity of Agreement....................................... 11
(c) Capitalization................................................................ 12
(d) Consents and Approvals; No Violations......................................... 13
(e) Company Reports and Financial Statements...................................... 14
(f) Absence of Certain Changes.................................................... 14
(g) Title to Properties; Encumbrances............................................. 15
(h) Compliance with Laws.......................................................... 15
(i) Litigation.................................................................... 15
(j) Employee Benefit Plans........................................................ 16
(k) Employment Relations and Agreements........................................... 18
(l) Taxes......................................................................... 18
(i)
(m) Liabilities................................................................... 20
(n) Intellectual Properties....................................................... 20
(o) Proxy Statement, Schedule l4D-9 and Schedule l4D-1............................ 22
(p) Broker's or Finder's Fee...................................................... 22
(q) Environmental Laws and Regulations............................................ 23
(r) State Takeover Statutes; Charter Provisions................................... 24
(s) Voting Requirements........................................................... 24
(t) Rights Agreement.............................................................. 24
(u) Opinion of Financial Advisor.................................................. 25
3.02 Representations and Warranties of Parent and Sub...................................... 25
(a) Due Organization; Good Standing and Corporate Power........................... 25
(b) Authorization and Validity of Agreement....................................... 25
(c) Consents and Approvals; No Violations......................................... 26
(d) Offer Documents, Schedule l4D-9 and Proxy Statement........................... 26
(e) Broker's or Finder's Fee...................................................... 27
(f) Financing..................................................................... 27
ARTICLE IV TRANSACTIONS PRIOR TO CLOSING DATE................................................. 27
4.01 Access to Information Concerning Properties and Records............................... 27
4.02 Confidentiality....................................................................... 28
4.03 Conduct of the Business of the Company Pending the Closing Date....................... 28
4.04 Proxy Statement....................................................................... 30
4.05 Shareholder Approval.................................................................. 30
4.06 Reasonable Best Efforts............................................................... 31
4.07 No Solicitation of Other Offers....................................................... 31
4.09 HSR Act............................................................................... 33
4.10 Exon-Xxxxxx........................................................................... 35
4.11 Employee Benefits..................................................................... 35
4.13 Rights Agreement...................................................................... 37
4.14. Public Announcements................................................................. 37
4.15 Transfer Tax.......................................................................... 37
ARTICLE V CONDITIONS PRECEDENT TO MERGER..................................................... 38
5.01 Conditions Precedent to Obligations of Parent, Sub and the Company.................... 38
(a) Approval of Company's Shareholders............................................ 38
(b) HSR Act....................................................................... 38
(c) Exon-Xxxxxx................................................................... 38
(d) Injunction.................................................................... 38
(e) Statutes...................................................................... 39
(f) Minimum Condition............................................................. 39
(ii)
ARTICLE VI TERMINATION AND ABANDONMENT........................................................ 39
6.01 Termination........................................................................... 39
6.02 Effect of Termination................................................................. 41
ARTICLE VII MISCELLANEOUS...................................................................... 41
7.01 Fees and Expenses..................................................................... 41
7.02 Representations and Warranties........................................................ 42
7.03 Extension; Waiver..................................................................... 42
7.04 Notices............................................................................... 42
7.05 Entire Agreement...................................................................... 43
7.06 Binding Effect; Benefit; Assignment................................................... 44
7.07 Amendment and Modification............................................................ 44
7.08 Further Actions....................................................................... 44
7.09 Headings.............................................................................. 44
7.10 Counterparts.......................................................................... 44
7.11 Applicable Law........................................................................ 44
7.12 Severability.......................................................................... 44
7.13 Certain Definitions................................................................... 45
7.14 Parent Guarantee...................................................................... 45
7.15 Submission to Jurisdiction............................................................ 45
ANNEX A..............................................................................................A-1
(iii)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 16, 1997 (this "Agreement"),
by and among BT INDUSTRIES, INC., a corporation incorporated under the laws of
Sweden ("Parent"), LIFT ACQUISITION COMPANY, INC., a New York corporation and a
direct or indirect wholly-owned subsidiary of Parent ("Sub"), and THE XXXXXXX
CORPORATION, a New York corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent;
WHEREAS, in contemplation thereof it is proposed that Sub will make a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
common stock, $1.50 par value, of the Company ("Common Stock"), subject to the
terms and conditions of this Agreement, at a price of $33.00 per share net to
the seller in cash (the "Offer Price");
WHEREAS, to complete such acquisition, the respective Boards of Directors
of Parent, Sub and the Company, have approved the merger of the Company into Sub
(the "Merger"), pursuant to and subject to the terms and conditions of this
Agreement; and
WHEREAS, the Directors of the Company have unanimously determined that each
of the Offer and the Merger are fair to, and in the best interests of, the
holders of Common Stock, approved the Offer and the Merger and recommended the
acceptance of the Offer and approval and adoption of this Agreement by the
shareholders of the Company; and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.01 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Article VI hereof and so long as none of the
events set forth in Annex A hereto (the "Tender Offer Conditions") shall have
occurred and are continuing, as promptly as practicable, but in no event later
than the fifth business day after the date of this Agreement, Parent and Sub
shall, and Parent shall cause Sub to, commence the Offer at the Offer Price. The
obligations of Sub to accept for payment and to pay for any shares of Common
Stock tendered shall be subject only to the Tender Offer Conditions, any of
which may be waived by Parent or Sub in their sole discretion; provided,
however, that Sub shall not waive the Minimum Condition (as defined in Annex A)
without the prior written consent of the Company. The Tender Offer Conditions
are for the sole benefit of Parent and Sub and may be asserted by Parent and Sub
regardless of the circumstances giving rise to any such Tender Offer Conditions
or, except as expressly set forth herein, may be waived by Parent and Sub in
whole or in part. Parent and Sub expressly reserve the right to modify the terms
of the Offer, including without limitation to extend the Offer beyond any
scheduled expiration date; provided; however, without the prior written consent
of the Company, Sub shall not (i) reduce the number of shares of Common Stock to
be purchased in the Offer, (ii) reduce the Offer Price, (iii) modify or add to
the Tender Offer Conditions, (iv) change the form of consideration payable in
the Offer or (v) make any other change in the terms of the Offer which is
materially adverse to the holders of the Common Stock. Upon the terms and
subject to the conditions of the Offer, Sub shall purchase all shares of Common
Stock which are validly tendered on or prior to the expiration of the Offer and
not withdrawn.
(b) As soon as reasonably practicable on the date the Offer is commenced,
Parent and Sub shall file, and Parent shall cause Sub to file, with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain
(included as an exhibit) or shall incorporate by reference an offer to purchase
(the "Offer to Purchase") and a form of the related letter of transmittal (the
"Letter of Transmittal"), as well as all other information and exhibits required
by law (which Schedule 14D-1, Offer to Purchase, Letter of Transmittal and such
other information and exhibits, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents"). The
Schedule 14D-1 will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the Commission
and the date first published, sent or given to the Company's shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
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they are made, not misleading, except that no representation is made by Parent
or Sub with respect to any information supplied by the Company in writing for
inclusion in the Schedule 14D-1. Each of Parent and Sub agrees promptly to
correct any information provided by it for use in the Offer Documents that shall
be, or have become, false or misleading in any material respect, and Parent and
Sub further agree to take all steps necessary to cause the Schedule 14D-1 as so
corrected to be filed with the Commission and the other Offer Documents as so
corrected to be disseminated to holders of Common Stock, in each case as and to
the extent required by applicable federal securities laws. Each of Parent and
Sub agrees to provide the Company and its counsel with copies of any written
comments Parent and Sub or their counsel may receive from the Commission or its
staff with respect to the Offer Documents promptly after the receipt of such
comments and shall provide the Company and its counsel an opportunity to
participate, including by participating with Parent and its counsel in any
discussions with the Commission or its staff, in the response of Parent or
Sub to such comments.
1.02 Company Actions. The Company hereby consents to the Offer and the
Merger and represents that (a) its Board of Directors (at a meeting duly called
and held) has (i) determined by the unanimous vote of the Directors that each of
the Offer and the Merger is fair to, and in the best interests of, the holders
of Common Stock, (ii) approved the Offer and the Merger and adopted this
Agreement in accordance with the provisions of the New York Business Corporation
Law, (iii) recommended acceptance of the Offer and approval and adoption of this
Agreement by the shareholders of the Company, (iv) taken all other applicable
action necessary to render (x) Section 912 of the New York Business Corporation
Law and other state takeover statutes, (y) Article SEVENTH of the Company's
Restated and Amended Certificate of Incorporation and (z) the Rights Agreement
dated as of March 1, 1997 (the "Rights Agreement") inapplicable to the Offer and
the Merger; and (b) Xxxxxx Brothers has delivered to the Board of Directors of
the Company its opinion that the consideration to be received by the holders of
Common Stock, other than Parent and Sub, pursuant to the Offer and the Merger is
fair to such holders of Common Stock from a financial point of view, subject to
the assumptions and qualifications contained in such opinion. The Company shall
file with the Commission, as soon as practicable on the date of the commencement
of the Offer, a Solicitation/Recommendation Statement on Schedule 14D-9,
(together with all amendments and supplements thereto, the "Schedule l4D-9"),
containing the recommendations referred to in clause (a) of the preceding
sentence and shall disseminate the Schedule 14D-9 as required by Rule 14d-9
under the Exchange Act. Parent and Sub and their counsel shall be given the
opportunity to review and comment upon the Schedule l4D-9 prior to its filing
with the Commission. The Schedule 14D-9 will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the Commission and on the date first published, sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
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made by the Company with respect to information supplied by Parent or Sub in
writing for inclusion in the Schedule 14D-9. The Company agrees to provide
Parent and its counsel with any comments the Company or its counsel may receive
from the Commission or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by participating with the Company and its
counsel in any discussions with the Commission or its staff, in the response of
the Company to such comments. In connection with the Offer, the Company will
promptly furnish Sub with mailing labels, security position listings and any
available listing or computer list containing the names and addresses of the
record holders of the Common Stock as of the most recent practicable date and
shall furnish Sub with such additional information (including, but not limited
to, updated lists of holders of Common Stock and their addresses, mailing labels
and lists of security positions) and such other assistance as Sub or its agents
may reasonably request in communicating the Offer to the Company's shareholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and its affiliates and associates shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger, and,
if this Agreement is terminated, shall deliver to the Company all copies of such
information in their possession. The Company has been advised that each of its
directors and executive officers intends to tender pursuant to the Offer all
shares of Common Stock owned of record and beneficially by him or her except to
the extent such tender would violate applicable securities laws.
1.03 Composition of the Board of Directors. (a) Promptly upon the
acceptance for payment of, and payment by Sub in accordance with the Offer for,
shares of Common Stock equal to at least two-thirds of the outstanding shares of
Common Stock, pursuant to the Offer, Sub shall be entitled to designate up to
such number of directors on the Board of Directors of the Company, rounded up to
the next whole number, as will give Sub, subject to compliance with Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation
on such Board of Directors equal to at least that number of directors which
equals the product of the total number of directors on the Board of Directors
(giving effect to the directors elected pursuant to this sentence) multiplied by
a fraction, the numerator of which shall be the number of shares of Common Stock
beneficially owned by Sub and Parent and the denominator of which shall be the
number of shares of Common Stock then outstanding, and the Company and its Board
of Directors shall, at such time, take any and all such action needed to cause
Sub's designees to be appointed to the Company's Board of Directors (including
using its reasonable best efforts to cause directors to resign). Subject to
applicable law, the Company shall take all action requested by Parent which is
reasonably necessary to effect any such election, including mailing to its
shareholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the Schedule 14D-9 so
long as Sub shall have provided to the Company on a timely basis all information
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required to be included in the Information Statement with respect to Sub's
designees. Parent or Sub will be solely responsible for any information with
respect to either of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1. In furtherance thereof, the Company
will increase the size of the Company's Board of Directors (subject to the
limitations set forth in the Company's Restated and Amended Certificate of
Incorporation and By-Laws), or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Sub's designees to
be elected to the Company's Board of Directors. At the Effective Time (as
defined in Section 2.01(a) hereof), the Company, if so requested, will use its
reasonable efforts to cause persons designated by Sub to constitute the same
percentage of each committee of such board, each board of directors of each
Subsidiary and each committee of each such board (in each case to the extent of
the Company's ability to elect such persons).
(b) Following the election or appointment of Sub's designees pursuant to
this Section 1.03 and prior to the Effective Time (as hereinafter defined), any
amendment or termination of this Agreement or the Restated and Amended
Certificate of Incorporation or By-Laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent and Sub or waiver
of any of the Company's rights hereunder, and any other consent or action by the
Board of Directors hereunder, will require the concurrence of a majority (which
shall be at least two) of the directors of the Company then in office who are
directors on the date hereof and who voted to approve this Agreement or are
designated by a majority of the directors of the Company who are directors on
the date hereof and who voted to approve this Agreement.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. (a) Subject to the terms and conditions of this Agreement,
at the time of the Closing (as defined in Section 2.11 hereof), a certificate of
merger (the "Certificate of Merger") shall be duly prepared, executed and
acknowledged by Sub and the Company in accordance with the New York Business
Corporation Law and shall be filed on the Closing Date (as defined in Section
2.11 hereof). The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of New York in
accordance with the provisions and requirements of the New York Business
Corporation Law. The date and time when the Merger shall become effective is
hereinafter referred to as the "Effective Time."
(b) At the Effective Time, Sub shall be merged with and into the Company
and the separate corporate existence of Sub shall cease, and the Company shall
continue as the surviving corporation under the laws of the State of New York
under the name of "The Xxxxxxx Corporation" (the "Surviving Corporation").
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(c) From and after the Effective Time, the Merger shall have the effects
set forth in the applicable provisions of the New York Business Corporation Law.
2.02 Conversion of Stock. At the Effective Time:
(a) Each share of Common Stock then issued and outstanding (other than
(i) any shares of Common Stock which are held by any Subsidiary or in
the treasury of the Company, or which are held, directly or
indirectly, by Parent or any direct or indirect subsidiary of Parent
(including Sub), all of which shall be cancelled and none of which
shall receive any payment with respect thereto and (ii) shares of
Common Stock held by Dissenting Shareholders (as defined in Section
2.03 hereof)) shall, by virtue of the Merger and without any action
on the part of Parent, Sub, the Company or the holder thereof, be
cancelled and converted into and represent the right to receive an
amount in cash, without interest, equal to the price paid for each
share of Common Stock pursuant to the Offer (the "Merger
Consideration"); and
(b) Each share of common stock, par value $0.01 per share, of Sub then
issued and outstanding shall, by virtue of the Merger and without any
action on the part of Parent, Sub, the Company or the holder thereof,
become one fully paid and nonassessable share of common stock, par
value $0.01 per share, of the Surviving Corporation.
2.03 Dissenting Stock. Notwithstanding anything in this Agreement to the
contrary but only to the extent required by New York Business Corporation Law,
shares of Common Stock that are issued and outstanding immediately prior to the
Effective Time and are held by holders of Common Stock who comply with all the
provisions of New York law concerning the right of holders of Common Stock to
dissent from the Merger and require appraisal of their shares of Common Stock
("Dissenting Shareholders") shall not be converted into the right to receive the
Merger Consideration but shall become the right to receive such consideration as
may be determined to be due such Dissenting Shareholder pursuant to the law of
the State of New York; provided, however, that (i) if any Dissenting Shareholder
shall subsequently deliver a written withdrawal of his or her demand for
appraisal (with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within 60 days after the Effective Time), or (ii) if
any Dissenting Shareholder fails to establish and perfect his or her entitlement
to appraisal rights as provided by applicable law, then such Dissenting
Shareholder or Shareholders, as the case may be, shall forfeit the right to
appraisal of such shares and such shares shall thereupon be cancelled and be
deemed to have been converted into the right to receive, as of the Effective
Time, the Merger Consideration, without interest. The Company shall give Parent
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and Sub (A) prompt notice of any written demands for appraisal, withdrawals of
demands for appraisal and any other related instruments received by the Company,
and (B) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal. The Company will not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any demands for
appraisal or settle or offer to settle any such demand.
2.04 Surrender of Certificates. (a) Prior to the Effective Time, Parent
shall designate a bank or trust company located in the United States to act as
paying agent (the "Paying Agent") for purposes of making the cash payments
contemplated hereby. As soon as practicable after the Effective Time, Parent
shall cause the Paying Agent to mail and/or make available to each holder of a
certificate theretofore evidencing shares of Common Stock (other than those
which are held by any Subsidiary or in the treasury of the Company or which are
held directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Sub)) a notice and letter of transmittal advising such holder
of the effectiveness of the Merger and the procedure for surrendering to the
Paying Agent such certificate or certificates which immediately prior to the
Effective Time represented outstanding Common Stock (the "Certificates") in
exchange for the Merger Consideration deliverable in respect thereof pursuant to
this Article II. Upon the surrender for cancellation to the Paying Agent of such
Certificates, together with a letter of transmittal, duly executed and completed
in accordance with the instructions thereon, and any other items specified by
the letter of transmittal, the Paying Agent shall promptly pay to the Person (as
defined in Section 7.14 hereof) entitled thereto the Merger Consideration
deliverable in respect thereof. Until so surrendered, each Certificate shall be
deemed, for all corporate purposes, to evidence only the right to receive upon
such surrender the Merger Consideration deliverable in respect thereof to which
such Person is entitled pursuant to this Article II. No interest shall be paid
or accrued in respect of such cash payments.
(b) If the Merger Consideration (or any portion thereof) is to be delivered
to a Person other than the Person in whose name the Certificates surrendered in
exchange therefor are registered, it shall be a condition to the payment of the
Merger Consideration that the Certificates so surrendered shall be properly
endorsed or accompanied by appropriate stock powers and otherwise in proper form
for transfer, that such transfer otherwise be proper and that the Person
requesting such transfer pay to the Paying Agent any transfer or other taxes
payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event 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, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article II,
provided that, the Person to whom the Merger Consideration is paid shall, as a
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condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.
2.05 Payment. Concurrently with or immediately prior to the Effective Time,
Parent or Sub shall deposit in trust with the Paying Agent cash in United States
dollars in an aggregate amount equal to the product of (i) the number of shares
of Common Stock outstanding immediately prior to the Effective Time (other than
shares of Common Stock which are held by any Subsidiary or in the treasury of
the Company or which are held directly or indirectly by Parent or any direct or
indirect subsidiary of Parent (including Sub) or a Person known at the time of
such deposit to be a Dissenting Shareholder) and (ii) the Merger Consideration
(such amount being hereinafter referred to as the "Payment Fund"). The Payment
Fund shall be invested by the Paying Agent as directed by Parent in direct
obligations of the United States, obligations for which the full faith and
credit of the United States is pledged to provide for the payment of principal
and interest, commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Ratings Group or certificates of deposit,
bank repurchase agreements or bankers' acceptances of a commercial bank having
at least $100,000,000 in assets (collectively "Permitted Investments") or in
money market funds which are invested in Permitted Investments, and any net
earnings with respect thereto shall be paid to Parent as and when requested by
Parent. The Paying Agent shall, pursuant to irrevocable instructions, make the
payments referred to in Section 2.02(a) hereof out of the Payment Fund. The
Payment Fund shall not be used for any other purpose except as otherwise agreed
to by Parent. Promptly following the date which is six months after the
Effective Time, the Paying Agent shall return to the Surviving Corporation all
cash, certificates and other instruments in its possession that constitute any
portion of the Payment Fund (other than net earnings on the Payment Fund which
shall be paid to Parent), and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Merger Consideration, without
interest, but shall have no greater rights against the Surviving Corporation or
Parent than may be accorded to general creditors of the Surviving Corporation or
Parent under applicable law. Notwithstanding the foregoing, neither the Paying
Agent nor any party hereto shall be liable to a holder of shares of Common Stock
for any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
2.06 No Further Rights of Transfers. At and after the Effective Time, each
holder of a Certificate shall cease to have any rights as a shareholder of the
Company, except for, in the case of a holder of a Certificate (other than shares
to be cancelled pursuant to Section 2.02(a) hereof and other than shares held by
Dissenting Shareholders), the right to surrender his or her Certificate in
exchange for payment of the Merger Consideration or, in the case of a Dissenting
Shareholder, to perfect his or her right to receive payment for his or her
shares pursuant to New York law if such holder has validly perfected and not
withdrawn his or her right to receive payment for his or her shares, and no
transfer of shares of Common Stock shall be made on the stock transfer books of
the Surviving Corporation. Certificates presented to the Surviving Corporation
after the Effective Time shall be cancelled and exchanged for cash as provided
in this Article II. At the close of business on the day of the Effective Time
the stock ledger of the Company with respect to Common Stock shall be closed.
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2.07 Stock Option and Other Plans. (a) Prior to the Effective Time, each of
the Board of Directors of the Company (or, if appropriate, any Committee
thereof) and the Company shall use its reasonable best efforts to obtain the
consent of all of the holders of options to purchase Common Stock (the
"Options") heretofore granted under any stock option plan of the Company (the
"Stock Plans") to provide for the cancellation, effective at the Effective Time,
of all the outstanding Options, as follows: Immediately prior to the Effective
Time, each Option, whether or not then vested or exercisable, shall no longer be
exercisable for the purchase of shares of Common Stock but shall entitle each
holder thereof, in cancellation and settlement therefor, to payments in cash
(subject to any applicable withholding taxes, the "Cash Payment"), at the
Effective Time, equal to the product of (x) the total number of shares of Common
Stock subject to such Option as to which such Option could have been exercisable
and (y) the excess of the Merger Consideration over the exercise price per share
of Common Stock subject to such Option, each such Cash Payment to be paid to
each holder of an outstanding Option at the Effective Time. The Company will use
its reasonable best efforts to ensure that any then-outstanding stock
appreciation rights or limited stock appreciation rights shall be cancelled as
of immediately prior to the Effective Time without any payment therefor. As
provided herein, the Stock Plans and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any Subsidiary (collectively with the Stock
Plans, referred to as the "Stock Incentive Plans") shall terminate as of the
Effective Time. The Company will use its reasonable best efforts to take all
steps necessary to ensure that neither the Company nor any of its Subsidiaries
is or will be bound by any Options, other options, warrants, rights or
agreements which would entitle any Person, other than Parent or its affiliates
(including Sub), to own any capital stock of the Surviving Corporation or except
for certain call options in respect of the capital stock of certain of its
dealership subsidiaries, as more fully set forth in Section 3.01(c)(ii) of the
Company Disclosure Letter, any of its subsidiaries or to receive any payment in
respect thereof. The Company will use its reasonable best efforts to obtain all
necessary consents to ensure that after the Effective Time, the only rights of
the holders of Options to purchase shares of Common Stock in respect of such
Options will be to receive the Cash Payment in cancellation and settlement
thereof.
(b) All Stock Plans shall terminate as of the Effective Time and the
provisions in any other Employee Benefit Plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall be deleted as of the Effective Time,
and the Company shall use its reasonable best efforts to ensure that following
the Effective Time no holder of an option to purchase Common Stock or any
participant in any Stock Plan shall have any right thereunder to acquire any
capital stock of the Company, Parent or the Surviving Corporation.
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2.08 Certificate of Incorporation of the Surviving Corporation. The
Restated and Amended Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation and shall be amended as set forth on
Annex B attached hereto.
2.09 By-Laws of the Surviving Corporation. The By-Laws of the Company, as
in effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation.
2.10 Directors and Officers of the Surviving Corporation. At the Effective
Time, the directors of Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, each of such directors to hold office,
subject to the applicable provisions of the Certificate of Incorporation and
By-Laws of the Surviving Corporation, until the next annual shareholders'
meeting of the Surviving Corporation and until their respective successors shall
be duly elected or appointed and qualified. At the Effective Time, the officers
of the Company immediately prior to the Effective Time shall, subject to the
applicable provisions of the Certificate of Incorporation and By-Laws of the
Surviving Corporation, be the officers of the Surviving Corporation until their
respective successors shall be duly elected or appointed and qualified.
2.11 Closing. Unless this Agreement shall have been terminated pursuant to
Article VI hereof, and the transactions contemplated thereby shall have been
abandoned, the closing of the Merger (the "Closing") shall take place at the
offices of White & Case, 1155 Avenue of the Americas, New York, New York, as
soon as practicable after the last of the conditions set forth in Article V
hereof is fulfilled or waived (subject to applicable law) but in no event later
than the fifth business day thereafter, or at such other time and place and on
such other date as Parent and the Company shall mutually agree (the "Closing
Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent and Sub as follows:
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(a) Due Organization, Good Standing and Corporate Power. Each of the
Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation and each such corporation has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good
standing or to have such power and authority would not have a
material adverse effect on the business, properties, assets,
operations, results of operations or financial condition (the
"Condition") of the Company and its Subsidiaries taken as a whole.
Each of the Company and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be so qualified or
licensed and in good standing would not have a material adverse
effect on the Condition of the Company and its Subsidiaries taken as
a whole. The Company has made available to Parent and Sub complete
and correct copies of the Restated and Amended Certificate of
Incorporation and By-Laws of the Company and the comparable governing
documents of each of its Subsidiaries, in each case as amended to the
date of this Agreement. Other than as set forth in Section 3.01(a) of
the Company's disclosure letter (the "Company Disclosure Letter")
delivered concurrently with the delivery of this Agreement, the
respective certificates of incorporation and by-laws or other
organizational documents of the Subsidiaries of the Company do not
contain any provision limiting or otherwise restricting the ability
of the Company to control such Subsidiaries.
(b) Authorization and Validity of Agreement. The Company has full
power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by the Company, and the consummation by it of the
transactions contemplated hereby, have been duly authorized and
unanimously approved by its Board of Directors and no other corporate
action on the part of the Company is necessary to authorize the
execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby (other
than the approval of this Agreement by the holders of at least two
thirds of the outstanding shares of Common Stock entitled to vote and
the filing of appropriate merger documents as required by New York
law). This Agreement has been duly executed and delivered by the
Company and is a 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.
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(c) Capitalization. (i) The authorized capital stock of the Company
consists of 15,000,000 shares of Common Stock and no shares of
preferred stock. As of June 10, 1997, (1) 10,738,604 shares of Common
Stock are issued and outstanding, (2) 148,586 shares of Common Stock
are reserved for issuance pursuant to outstanding Options granted
under the Stock Plans and (3) 20,758 shares of Common Stock are held
in the Company's treasury. All issued and outstanding shares of
Common Stock have been validly issued and are fully paid and
nonassessable, and are not subject to, nor were they issued in
violation of, any preemptive rights. Except as set forth in this
Section 3.01(c) or in Section 3.01(c) of the Company Disclosure
Letter, (i) there are no shares of capital stock of the Company
authorized, issued or outstanding and (ii) there are not as of the
date hereof, and at the Effective Time there will not be, any
outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to Common Stock or any other shares of capital
stock of the Company, pursuant to which the Company is or may become
obligated to issue shares of Common Stock, any other shares of its
capital stock or any securities convertible into, exchangeable for,
or evidencing the right to subscribe for, any shares of the capital
stock of the Company. The Company has no authorized or outstanding
bonds, debentures, notes or other indebtedness the holders of which
have the right to vote (or convertible or exchangeable into or
exercisable for securities having the right to vote) with the
shareholders of the Company or any of its Subsidiaries on any matter
("Voting Debt").
(ii) Section 3.01(c)(ii) of the Company Disclosure Letter lists
all of the Company's Subsidiaries. All of the outstanding shares of
capital stock of each of the Company's Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, are
not subject to, nor were they issued in violation of, any preemptive
rights, and are owned, of record and beneficially, by the Company,
free and clear of all liens, encumbrances, options or claims
whatsoever, except as set forth in Section 3.01(c)(ii) of the Company
Disclosure Letter. Except as set forth in Section 3.01(c)(ii) of the
Company Disclosure Letter, no shares of capital stock of any of the
Company's Subsidiaries are reserved for issuance and there are no
outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to the capital stock of any Subsidiary, pursuant
to which such Subsidiary is or may become obligated to issue any
shares of capital stock of such Subsidiary or any securities
convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of such Subsidiary. There are no
restrictions of any kind which prevent the payment of dividends by
any of the Company's Subsidiaries. Except for the Subsidiaries listed
on Section 3.01(c)(ii) of the Company Disclosure Letter, the Company
does not own, directly or indirectly, any capital stock or other
equity interest in any Person or have any direct or indirect equity
or ownership interest in any Person and neither the Company nor any
of its Subsidiaries is subject to any obligation or requirement to
provide funds for or to make any investment (in the form of a loan,
capital contribution or otherwise) to or in any Person. The Company's
Subsidiaries have no Voting Debt.
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(d) Consents and Approvals; No Violations. Assuming (i) the filings
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), are made and the waiting period
thereunder has been terminated or has expired, (ii) voluntary
notification under Section 721 of the Defense Production Act of 1950,
as amended ("Exon-Xxxxxx"), is made, (iii) the requirements of the
Exchange Act relating to the Proxy Statement and the Offer are met,
(iv) the filing of the Certificate of Merger and other appropriate
merger documents, if any, as required by New York Business
Corporation Law, are made and (v) approval of the Merger and this
Agreement by holders of at least two thirds of the outstanding shares
of Common Stock entitled to vote, if required by the New York
Business Corporation Law or the Restated and Amended Certificate of
Incorporation or By-Laws of the Company, is received, the execution
and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby will not: (1)
violate any provision of the Restated and Amended Certificate of
Incorporation or By-Laws of the Company or the comparable governing
documents of any of its Subsidiaries; (2) violate any statute,
ordinance, rule, regulation, order or decree of any court or of any
governmental or regulatory body, agency or authority applicable to
the Company or any of its Subsidiaries or by which any of their
respective properties or assets may be bound; (3) require any filing
with, or permit, consent or approval of, or the giving of any notice
to, any governmental or regulatory body, agency or authority; or (4)
except as set forth in Section 3.01(d) of the Company Disclosure
Letter, result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, payment or
acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets
of the Company or any of its Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, agreement, lease, franchise agreement or
other instrument or obligation to which the Company or any of its
Subsidiaries is a party, or by which it or any of their respective
properties or assets are bound or subject except for in the case of
clauses (3) and (4) above for such filing, permit, consent, approval
or violation, which would not have a material adverse effect on the
Condition of the Company and its Subsidiaries, taken as a whole, or
would prevent or materially delay consummation of the transactions
contemplated by this Agreement.
-13-
(e) Company Reports and Financial Statements. (i) Since January 1,
1994, the Company has filed all forms, reports and documents with the
Commission required to be filed by it pursuant to the federal
securities laws and the Commission rules and regulations thereunder,
and all forms, reports and documents filed with the Commission by the
Company have complied in all material respects with all applicable
requirements of the federal securities laws and the Commission rules
and regulations promulgated thereunder. The Company has, prior to the
date of this Agreement, made available to Parent true and complete
copies of all forms, reports, registration statements and other
filings filed by the Company with the Commission since January 1,
1994, (such forms, reports, registration statements and other
filings, together with any exhibits, any amendments thereto and
information incorporated by reference therein, are sometimes
collectively referred to as the "Commission Filings"). As of their
respective dates, the Commission Filings did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. Each of the consolidated balance sheets as of the end
of the fiscal years ended December 31, 1996, December 31, 1995, and
December 31, 1994, and the consolidated statements of income,
consolidated statements of shareholders' equity and consolidated
statements of cash flows for the fiscal years ended December 31,
1996, December 31, 1995, and December 31, 1994, included in the
Commission Filings, were prepared in accordance with generally
accepted accounting principles (as in effect from time to time)
applied on a consistent basis (except as may be indicated therein or
in the notes or schedules thereto) and present fairly, in all
material respects, the consolidated financial position of the Company
and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and changes in cash flows
for the periods then ended.
(f) Absence of Certain Changes. Except as previously disclosed in
the Commission Filings, since December 31, 1996, (i) there has not
been any material adverse change in the Condition of the Company and
its Subsidiaries taken as a whole; (ii) the businesses of the Company
and each of its Subsidiaries have been conducted only in the ordinary
course; (iii) neither the Company nor any of its Subsidiaries has
incurred any material liabilities (direct, contingent or otherwise)
or engaged in any material transaction or entered into any material
agreement outside the ordinary course of business; (iv) the Company
and its Subsidiaries have not increased the compensation of any
officer or granted any general salary or benefits increase to their
employees other than in the ordinary course of business; (v) neither
the Company nor any of its Subsidiaries has taken any action referred
to in Section 4.03 hereof except as permitted thereby; (vi) there has
been no declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company;
and (vii) there has been no change by the Company in accounting
principles, practices or methods.
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(g) Title to Properties; Encumbrances. The Company and each of its
Subsidiaries has good, valid and marketable title to (i) all of its
material tangible properties and assets (real and personal),
including, without limitation, all the properties and assets
reflected in the consolidated balance sheet as of December 31, 1996
except as indicated in the notes thereto and except for properties
and assets reflected in the consolidated balance sheet as of December
31, 1996 which have been sold or otherwise disposed of in the
ordinary course of business after such date and except where the
failure to have such good, valid and marketable title would not have
a material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole, and (ii) all the tangible properties
and assets purchased by the Company and any of its Subsidiaries since
December 31, 1996 except for such properties and assets which have
been sold or otherwise disposed of in the ordinary course of business
and except where the failure to have such good, valid and marketable
title would not have a material adverse effect on the Condition of
the Company and its Subsidiaries taken as a whole; in each case
subject to no encumbrance, lien, charge or other restriction of any
kind or character, except for (1) liens reflected in the consolidated
balance sheet as of December 31, 1996, (2) liens consisting of zoning
or planning restrictions, easements, permits and other restrictions
or limitations on the use of real property or irregularities in title
thereto which do not materially detract from the value of, or impair
the use of, such property by the Company or any of its Subsidiaries
in the operation of its respective business, (3) liens for current
taxes, assessments or governmental charges or levies on property not
yet due and delinquent and (4) such encumbrances, liens, charges or
other restrictions which would not have a material adverse effect on
the Condition of the Company and its Subsidiaries taken as a whole.
(h) Compliance with Laws. Except as disclosed in the Commission
Filings, the Company and its Subsidiaries are in compliance with all
applicable laws, regulations, orders, judgments and decrees except
where the failure to so comply would not have a material adverse
effect on the Condition of the Company and its Subsidiaries taken as
a whole or would prevent or materially delay consummation of the
transactions contemplated by this Agreement.
(i) Litigation. Except as disclosed in the Commission Filings or as
set forth in Section 3.01(i) of the Company Disclosure Letter, there
is no action, suit, proceeding at law or in equity, or any
arbitration or any administrative or other proceeding by or before
(or to the knowledge of the Company any investigation by) any
governmental or other instrumentality or agency, pending, or, to the
knowledge of the Company, threatened, against or affecting the
Company or any of its Subsidiaries, or any of their properties or
rights which would have a material adverse effect on the Condition of
the Company and its Subsidiaries taken as a whole or would prevent or
materially delay consummation of the transactions contemplated by
this Agreement. There are no such suits, actions, claims, proceedings
or investigations pending or, to the knowledge of the Company,
threatened, seeking to prevent or challenging the transactions
contemplated by this Agreement. Except as disclosed in the Commission
Filings, neither the Company nor any of its Subsidiaries is subject
to any judgment, order or decree entered in any lawsuit or proceeding
which would have a material adverse effect on the Condition of the
Company and its Subsidiaries taken as a whole or would prevent or
materially delay consummation of the transactions contemplated by
this Agreement.
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(j) Employee Benefit Plans. Set forth in Section 3.01(j) of the
Company Disclosure Letter is an accurate and complete list of each
domestic and foreign employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations thereunder ("ERISA"), and
each stock option, stock appreciation right, restricted stock,
incentive, bonus, employment, severance or salary or benefits
continuation plan, program, arrangement or agreement maintained by
the Company or any of its Subsidiaries (including, for this purpose
and for the purpose of all of the representations in this Section
3.01(j), all employers (whether or not incorporated) that would be
treated together with the Company and/or any of its Subsidiaries as a
single employer within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended, and the rules and regulations
thereunder (the "Code")) or to which the Company or any such
Subsidiary contributes (or has any obligation to contribute), has any
liability or is a party (collectively, the "Employee Benefit Plans");
and, except to the extent that a breach of any of the following
representations would not have a material adverse effect on the
Condition of the Company and its Subsidiaries, taken as a whole, (i)
each Employee Benefit Plan is in substantial compliance with
applicable law (including, without limitation, ERISA and the Code)
and has been administered and operated in all respects in accordance
with its terms; (ii) each Employee Benefit Plan which is intended to
be "qualified" within the meaning of Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue
Service, and each foreign Employee Benefit Plan which is intended to
have a similar status under applicable non-U.S. law has received a
determination of such status from the relevant governmental
authority, and, to the knowledge of the Company, no event has
occurred and no condition exists which could reasonably be expected
to result in the revocation of any such determination; (iii) no
complete or partial termination of any Employee Benefit Plan covered
by Title IV of ERISA has occurred and no proceedings have been
instituted to terminate or appoint a trustee to administer any such
Employee Benefit Plan; (iv) neither the Company nor any of its
Subsidiaries has incurred any unsatisfied liability to the Pension
Benefit Guaranty Corporation (the "PBGC") with respect to any
"single-employer plan" (within the meaning of Section 4001(a)(15) of
ERISA), including, without limitation, any liability under Section
4069 of ERISA or any penalty imposed under Section 4071 of ERISA,
except for payments of premiums to the PBGC; (v) no Employee Benefit
-16-
Plan subject to Section 412 or 418B of the Code or Section 302 of
ERISA has incurred any accumulated funding deficiency within the
meaning of such sections of the Code or ERISA; (vi) the actuarial
present value of the accumulated plan benefits (whether or not vested
and determined in accordance with the actuarial assumptions which are
set forth in the most recent actuarial valuation report of the
applicable plan) under any Employee Benefit Plan covered by Title IV
of ERISA or the benefits of which are actuarially determined, as of
the close of its most recent plan year did not exceed the fair value
of the assets allocable thereto; (vii) full payment has been timely
made of all amounts which the Company or any of its Subsidiaries is
required under applicable law or under any Employee Benefit Plan to
have paid as of the last day of the most recent fiscal year of such
Employee Benefit Plan ended prior to the date hereof, and the Company
and its Subsidiaries have made adequate provisions, in accordance
with generally accepted accounting principles, in their financial
statements for all obligations and liabilities under all Employee
Benefit Plans that have accrued but have not been paid because they
are not yet due under the terms of any such Employee Benefit Plan or
applicable law; (viii) no Employee Benefit Plan currently contributed
to by the Company or any of its Subsidiaries is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA, or a "multiple
employer plan" within the meaning of the Code or ERISA and neither
the Company nor any of its Subsidiaries has incurred any unsatisfied
withdrawal liability under Title IV of ERISA with respect to any such
plan; (ix) neither the Company nor any Subsidiary has incurred any
material liability (including, without limitation, additional
contributions, fines, taxes, penalties or loss of tax deduction) as a
result of a failure to administer or operate any Employee Benefit
Plan that is a "group health plan" (as such term is defined in
Section 607(1) of ERISA or Section 5000(b)(1) of the Code) in
compliance with the applicable requirements of Part 6 of Subtitle B
of Title I of ERISA or Section 4980B of the Code; (x) except as set
forth in Section 3.01(j)(x) of the Company Disclosure Letter or the
financial statements of the Company and its Subsidiaries included in
the Commission Filings, neither the Company nor any of its
Subsidiaries has any unfunded liabilities pursuant to any "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA)
that is not intended to be "qualified" under Section 401(a) of the
Code; (xi) none of the Company, any of its Subsidiaries or affiliates
or, to Company's knowledge, any other "disqualified person" or "party
in interest" (as defined in Section 4975(e)(2) of the Code and
Section 3(14) of ERISA, respectively) has engaged in any transaction,
act or omission to act in connection with any Employee Benefit Plan
that could reasonably be expected to result in the imposition of a
penalty pursuant to Section 502 of ERISA, damages pursuant to Section
409 of ERISA or a tax pursuant to Section 4975 of the Code; (xii) set
forth in Section 3.01(j)(xii) of the Company Disclosure Letter are
all Employee Benefit Plans and agreements, which (either alone or
-17-
upon the occurrence of any additional or subsequent event) will or
may result in any payment, "parachute payment" (as such term is
defined in Section 280G of the Code), severance, bonus, retirement or
job security or similar-type benefit, or increase any benefits or
accelerate the payment or vesting of any benefits to any employee or
former employee or director of the Company or any Subsidiary as a
result of the execution of this Agreement and the consummation of the
transactions contemplated hereby; and (xiii) no liability, claim,
action, audit, examination or litigation has been made, commenced or,
to the Company's knowledge, threatened with respect to any Employee
Benefit Plan (other than for benefits payable in the ordinary
course).
(k) Employment Relations and Agreements. (i) Each of the Company and
its Subsidiaries is in substantial compliance with all federal, state
or other applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and has not and is not engaged in any unfair labor practice; (ii) no
material unfair labor practice charge or complaint against the
Company or any of its Subsidiaries is pending before the National
Labor Relations Board; (iii) there is no labor strike, slowdown,
stoppage or material dispute actually pending or, to the knowledge of
the Company, threatened against or involving the Company or any of
its Subsidiaries; (iv) no representation question exists respecting
the employees of the Company or any of its Subsidiaries; and (v) no
collective bargaining agreement is currently being negotiated by the
Company or any of its Subsidiaries and neither the Company nor any of
its Subsidiaries is or has been a party to a collective bargaining
agreement; and (vii) neither the Company nor any of its Subsidiaries
has experienced any material labor difficulty during the last three
years. Except as disclosed in Section 3.01(k) of the Company
Disclosure Letter or in the Commission Filings, there exist no
employment, consulting, severance, indemnification agreements or
deferred compensation agreements between the Company and any
director, officer or employee of the Company or any agreement that
would give any Person the right to receive any payment from the
Company as a result of the Offer or the Merger.
(l) Taxes. Except as provided in Section 3.01(l) of the Company
Disclosure Letter:
(i) Tax Returns. The Company and each of its subsidiaries, has
timely filed or caused to be timely filed with the appropriate taxing
authorities all Federal and other material returns, statements, forms
and reports for Taxes (as hereinafter defined) ("Returns") that are
required to be filed by, or with respect to, the Company and such
subsidiaries. The Returns reflect accurately all material liability
for Taxes of the Company and such subsidiaries for the periods
covered thereby. "Taxes" means all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including,
without limitation, all Federal, state, local, foreign and other
income, franchise, profits, capital gains, capital stock, transfer,
sales, use, occupation, property, excise, severance, windfall
profits, stamp, license, payroll, withholding and other taxes,
assessments, charges, duties, fees, levies or other governmental
charges of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a Return), all
estimated taxes, deficiency assessments, additions to tax, penalties
and interest and shall include any liability for such amounts as a
result either of being a member of a combined, consolidated, unitary
or affiliated group or of a contractual obligation to indemnify any
person or other entity.
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(ii) Payment of Taxes. All material Taxes and Tax liabilities of the
Company and its subsidiaries have been timely paid or adequately
disclosed and fully provided for as a liability on the financial
statements of the Company and its subsidiaries in accordance with
generally accepted accounting principles.
(iii) Other Tax Matters. (A) Section 3.01(l)(iii)(A) of the Company
Disclosure Letter sets forth (1) each taxable year or other taxable
period of the Company or any of its subsidiaries for which an audit
or other examination of Taxes by the appropriate tax authorities of
any nation, state or locality is currently in progress (or scheduled
to be conducted) together with the names of the respective tax
authorities conducting (or scheduled to conduct) such audits or
examinations and a description of the material subject matter of such
audits or examinations, (2) the most recent taxable year or other
taxable period for which an audit or other examination relating to
Federal income taxes of the Company and its subsidiaries has been
finally completed and the disposition of such audit or examination,
(3) the taxable years or other taxable periods of the Company or any
of its subsidiaries which will not be subject to the normally
applicable statute of limitations by reason of the existence of
circumstances that would cause any material statute of limitations
for applicable Taxes to be extended, (4) the amount of any proposed
adjustments (and the principal reason therefor) relating to any
Returns for Tax liability of the Company or any of its subsidiaries
which have been proposed or assessed by any taxing authority and (5)
a list of all notices received by the Company or any of its
subsidiaries from any taxing authority relating to any issue which
could affect the Tax liability of the Company or any of its
subsidiaries, which issue has not been finally determined and which,
if determined adversely to the Company or any such subsidiaries,
could result in a material Tax liability.
(B) Neither the Company nor any of its subsidiaries has been
included in any "consolidated," "unitary" or "combined" Return (other
than Returns which include only the Company and any subsidiaries of
the Company) provided for under the law of the United States, any
foreign jurisdiction or any state or locality with respect to Taxes
for any taxable period for which the statute of limitations has not
expired.
-19-
(C) All material Taxes which the Company or any of its subsidiaries
is (or was) required by law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the proper
authorities to the extent due and payable.
(D) There are no tax sharing, allocation, indemnification or similar
agreements or arrangements in effect as between the Company, any
subsidiary, or any predecessor or affiliate thereof and any other
party under which Parent, Purchaser or the Company (or any of its
subsidiaries) could be liable for any Taxes or other claims of any
party other than the Company or any subsidiary of the Company.
(E) No indebtedness of the Company or any of its subsidiaries
consists of "corporate acquisition indebtedness" within the meaning
of Section 279 of the Code.
(F) Neither the Company 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 the Company or any of its subsidiaries, and the Internal
Revenue Service has not initiated or proposed any such adjustment or
change in accounting method.
(m) Liabilities. Neither the Company nor any of its Subsidiaries has
any claims, liabilities or indebtedness, contingent or otherwise,
outstanding except (i) as set forth in the consolidated balance sheet
of the Company as of December 31, 1996, or referred to in the
footnotes thereto, (ii) for liabilities incurred subsequent to
December 31, 1996 in the ordinary course of business not involving
borrowings by the Company or any of its Subsidiaries, (iii) as
otherwise disclosed in the Commission Filings or (iv) such claims,
liabilities or indebtedness which would not have a material adverse
effect on the Condition of the Company and its Subsidiaries taken as
a whole. Neither the Company nor any of its Subsidiaries is in
default in respect of the material terms and conditions of any
indebtedness or other agreement.
(n) Intellectual Properties. In the operation of its business the
Company and its Subsidiaries have used, and currently use, domestic
and foreign patents, patent applications, patent licenses, software
licenses, know-how licenses, trade names, trademarks, copyrights,
unpatented inventions, service marks, trademark registrations and
applications, service xxxx registrations and applications, copyright
registrations and applications, trade secrets and other confidential
proprietary information (collectively, as so used, the "Intellectual
Property"). Section 3.01(n) of the Company Disclosure Letter contains
an accurate and complete list of all Intellectual Property which is
of material importance to the operation of the business of the
Company and its Subsidiaries. The Company (or the Subsidiary
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indicated) owns the entire right, title and interest in and to the
Intellectual Property listed on such Section 3.01(n) of the Company
Disclosure Letter (including, without limitation, the exclusive right
to use and license the same), except where the failure to own such
right, title or interest would not have a material adverse effect on
the Condition of the Company and its Subsidiaries taken as a whole,
and each item constituting part of the Intellectual Property which is
owned by the Company or a Subsidiary and listed on Section 3.01(n) of
the Company Disclosure Letter has been, to the extent indicated in
Section 3.01(n) of the Company Disclosure Letter, duly registered
with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office or such other government entities,
domestic or foreign, as are indicated in Section 3.01(n) of the
Company Disclosure Letter and such registrations, filings and
issuances remain in full force and effect, except where the failure
to be so registered, filed or issued or for such registrations,
filings or issuances would not have a material adverse effect on the
Condition of the Company and its Subsidiaries taken as a whole. There
are no pending, or to the knowledge of the Company, threatened
proceedings or litigation or other adverse claims affecting or with
respect to the Intellectual Property of the Company. Section 3.01(n)
of the Company Disclosure Letter lists all notices or claims
currently pending or received by the Company or any of its
Subsidiaries during the past two years which claim infringement,
contributory infringement, inducement to infringe, misappropriation
or breach by the Company or any of its Subsidiaries of any domestic
or foreign patents, patent applications, patent licenses and know-how
licenses, trade names, trademark registrations and applications,
service marks, copyrights, copyright registrations or applications,
unpatented inventions, trade secrets or other confidential
proprietary information. There is, to the knowledge of the Company,
no reasonable basis upon which a claim may be asserted against the
Company or any of its Subsidiaries, for infringement, contributory
infringement, inducement to infringe, misappropriation or breach of
any domestic or foreign patents, patent applications, patent
licenses, know-how licenses, trade names, trademark registrations and
applications, common law trademarks, service marks, copyrights,
copyright registrations or applications, trade secrets or other
confidential proprietary information, other than as would not have a
material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole. To the knowledge of the Company, no
Person is infringing the Intellectual Property.
(o) Proxy Statement, Schedule l4D-9 and Schedule l4D-1. The
definitive proxy statement and related materials, if required, to be
furnished to the holders of Common Stock in connection with the
Merger pursuant to Section 4.04 hereof (the "Proxy Statement") will
comply in all material respects with the Exchange Act and the rules
and regulations thereunder and any other applicable laws. If at any
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time prior to the Shareholders' Meeting (as defined herein) any event
occurs which should be described in an amendment or supplement to the
Proxy Statement, the Company will file and disseminate, as required,
an amendment or supplement which complies in all material respects
with the Exchange Act and the rules and regulations thereunder and
any other applicable laws. Prior to its filing with the Commission,
the amendment or supplement shall be delivered to Parent and Sub and
their counsel. None of the information supplied by the Company for
inclusion or incorporation by reference in (i) the documents pursuant
to which the Offer will be made, including the Offer Documents or
(ii) the Proxy Statement, will, in the case of the Offer Documents,
at the respective times the Offer Documents are filed with the
Commission, or in the case of the Proxy Statement at the date such
information is supplied and at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in light of the
circumstance under which they are made, not misleading. None of the
information supplied by the Company in the Schedule 14D-9, at the
respective times the Schedule 14D-9 is filed with the Commission,
will contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of
the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made
with respect to any information with respect to Parent, Sub or their
officers, directors or affiliates provided to the Company by Parent
or Sub in writing for inclusion in the Schedule 14D-9. The Schedule
l4D-9 will comply in all material respects with the Exchange Act and
the rules and regulations thereunder and any other applicable laws.
If at any time prior to the expiration or termination of the Offer
any event occurs which should be described in an amendment or
supplement to the Schedule l4D-9 or any amendment or supplement
thereto, the Company will file and disseminate, as required, an
amendment or supplement which complies in all material respects with
the Exchange Act and the rules and regulations thereunder and any
other applicable laws. Prior to its filing with the Commission, the
amendment or supplement shall be delivered to Parent and Sub and
their counsel.
(p) Broker's or Finder's Fee. Except for Xxxxxx Brothers (whose fees
and expenses will be paid by the Company in accordance with the
Company's agreement with such firm, a true and correct copy of which
has been previously delivered to Parent by the Company) and the fees
referred to in Section 7.01(b) hereof, no agent, broker, Person or
firm acting on behalf of the Company is, or will be, entitled to any
fee, commission or broker's or finder's fees from any of the parties
hereto, or from any Person controlling, controlled by, or under
common control with any of the parties hereto, in connection with
this Agreement or any of the transactions contemplated hereby.
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(q) Environmental Laws and Regulations. Except as set forth on
Section 3.01(q) of the Company Disclosure Letter and except as would
not reasonably be expected to have a material adverse effect on the
Condition of the Company and its Subsidiaries, to the knowledge of
the Company, (a) Hazardous Materials have not at any time been
Released or disposed of on any Company Property or, any property
adjoining or adjacent to any Company Property, (b) the Company and
each of its Subsidiaries are in compliance in all material respects
with all Environmental Laws and the requirements of any permits
issued under such Environmental Laws with respect to any Company
Property, (c) there are no past, pending or threatened material
Environmental Claims against the Company or any of its Subsidiaries
or any Company Property and (d) there are no facts or circumstances,
conditions or occurrences regarding any Company Property or any
property adjoining or adjacent to any Company Property, that could
reasonably be anticipated (A) to form the basis of a material
Environmental Claim against the Company or any of its Subsidiaries or
any Company Property or (B) to cause such Company Property to be
subject to any material restrictions on its ownership, occupancy, use
or transferability under any Environmental Law.
For purposes of this Agreement, the following terms shall have the
following meanings: (A) "Company Property" means any real property
and improvements owned or leased by the Company or any of its
Subsidiaries; (B) "Hazardous Materials" means (i) any petroleum or
petroleum products, radioactive materials, asbestos in any form that
is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; (ii)
any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," or words of similar
import, under any applicable Environmental Law; and (iii) any other
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority; (C)
"Environmental Law" means any federal, state or local statute, law,
rule, regulation, ordinance, code or rule of common law in effect and
in each case as amended as of the date hereof and Closing Date, and
any judicial or administrative interpretation thereof applicable to
the Company or its operations or property as of the date hereof and
Closing Date, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health, safety or
Hazardous Materials, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. ss. 9601 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss. 6901 et seq.; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C. ss. 3808 et seq.; and (D) "Environmental Claims" means
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any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings under any Environmental Law
or any permit issued under any such Environmental Law (for purposes
of this subclause (D), "Claims"), including without limitation (i)
any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment; and (E)
"Release" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying or seeping into or
upon any land or water or air, or otherwise entering into the
environment.
(r) State Takeover Statutes; Charter Provisions. The Board of
Directors of the Company has approved the Offer, the Merger and this
Agreement and such approval is sufficient to render inapplicable to
the Offer, the Merger and this Agreement and the other transactions
contemplated by this Agreement, the provisions of Section 912 of the
New York Business Corporation Law and the provisions of Article
SEVENTH of the Company's Restated and Amended Certificate of
Incorporation.
(s) Voting Requirements. The affirmative vote of the holders of at
least two thirds of the outstanding shares of Company Common Stock
entitled to be cast approving this Agreement is the only vote of the
holders of any class or series of the Company's capital stock
necessary to approve this Agreement and the transactions contemplated
by this Agreement.
(t) Rights Agreement. (i) The Company and the Board of Directors of
the Company have taken and will maintain in effect all necessary
action to (i) render the Rights Agreement inapplicable with respect
to the Offer, the Merger and the other transactions contemplated by
this Agreement and (ii) ensure that (y) neither Parent nor Sub nor
any of their Affiliates (as defined in the Rights Agreement) or
Associates (as defined in the Rights Agreement) is considered to be
an Acquiring Person (as defined in the Rights Agreement) and (z) the
provisions of the Rights Agreement, including the occurrence of a
Distribution Date (as defined in the Rights Agreement), are not and
shall not be triggered by reason of the announcement or consummation
of the Offer, the Merger or the consummation of any of the other
transactions contemplated by this Agreement. The Board of Directors
of the Company, at a meeting duly called and held, has resolved that
the Rights shall be redeemed immediately prior to the acceptance for
payment and purchase of any of the outstanding shares of Common Stock
pursuant to the Offer in accordance with the terms of this Agreement
provided that this Agreement shall not have been terminated in
accordance with its terms. The Company has delivered to Parent a
complete and correct copy of the Rights Agreement as amended and
supplemented to the date of this Agreement.
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(u) Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxx Brothers to the effect that, as of the date of this
Agreement, the consideration to be received in the Offer and the
Merger by the Company's shareholders, other than Parent and Sub, is
fair to such shareholders from a financial point of view, subject to
the qualifications and assumptions contained therein, and a complete
and correct signed copy of such opinion has been, or promptly upon
receipt thereof will be, delivered to Parent.
3.02 Representations and Warranties of Parent and Sub. Each of Parent and
Sub represents and warrants to the Company as follows:
(a) Due Organization; Good Standing and Corporate Power. Parent is a
corporation duly organized and validly existing and in good standing
under the laws of Sweden. Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of
New York.
(b) Authorization and Validity of Agreement. Each of Parent and Sub
has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Sub, and the consummation
by each of them of the transactions contemplated hereby, have been
duly authorized by the Board of Directors of Parent and the Board of
Directors of Sub. No other corporate action on the part of either of
Parent or Sub is necessary to authorize the execution, delivery and
performance of this Agreement by each of Parent and Sub and the
consummation of the transactions contemplated hereby. This Agreement
has been duly executed and delivered by each of Parent and Sub and is
a valid and binding obligation of each of Parent and Sub, enforceable
against each of Parent and Sub in accordance with its terms, except
that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and general equitable
principles.
(c) Consents and Approvals; No Violations. Assuming (i) the filings
required under the HSR Act are made and the waiting period thereunder
has been terminated or has expired, (ii) voluntary notification under
Exon-Xxxxxx is made, (iii) the requirements of the Exchange Act
relating to the Proxy Statement and the Offer are met and (iv) the
filing of the Certificate of Merger and other appropriate merger
documents, if any, as required by the laws of the State of New York
is made, the execution and delivery of this Agreement by Parent and
Sub and the consummation by Parent and Sub of the transactions
contemplated hereby will not: (1) violate any provision of the
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Articles of Association of Parent or the Certificate of Incorporation
or By-Laws of the Sub; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or
regulatory body, agency or authority applicable to Parent or Sub or
by which either of their respective properties or assets may be
bound; (3) require any filing with, or permit, consent or approval
of, or the giving of any notice to any governmental or regulatory
body, agency or authority; or (4) result in a violation or breach of,
conflict with, constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of the Parent, Sub or any of their subsidiaries
under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit, agreement, lease or
other instrument or obligation to which Parent or Sub or any of their
subsidiaries is a party, or by which they or their respective
properties or assets may be bound except for in the case of clauses
(3) and (4) above for such filing, permit, consent, approval or
violation, which would not reasonably be expected to have a material
adverse effect on the Condition of the Parent and Sub, taken as a
whole, or could be reasonably likely to prevent or materially delay
consummation of the transactions contemplated by this Agreement.
(d) Offer Documents, Schedule l4D-9 and Proxy Statement. The Offer
Documents will comply in all material respects with the Exchange Act
and the rules and regulations thereunder and any other applicable
laws. If at any time prior to the expiration or termination of the
Offer any event occurs which should be described in an amendment or
supplement to the Schedule l4D-1 or any amendment or supplement
thereto, Sub will file and disseminate, as required, an amendment or
supplement which complies in all material respects with the Exchange
Act and the rules and regulations thereunder and any other applicable
laws. Prior to its filing with the Commission, the amendment or
supplement shall be delivered to the Company and its counsel. The
written information supplied or to be supplied by Parent and Sub for
inclusion in the Proxy Statement and the Schedule l4D-9 of the
Company will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made
with respect to any information with respect to the Company or its
officers, directors and affiliates provided to Parent or Sub by the
Company in writing for inclusion in the Offer Documents or amendments
or supplements thereto.
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(e) Broker's or Finder's Fee. Except for Salomon Brothers, Inc
(whose fees and expenses as financial advisor to Parent and Sub will
be paid by Parent or Sub), no agent, broker, Person or firm acting on
behalf of Parent or Sub is, or will be, entitled to any fee,
commission or broker's or finder's fees from any of the parties
hereto, or from any Person controlling, controlled by, or under
common control with any of the parties hereto, in connection with
this Agreement or any of the transactions contemplated hereby.
(f) Financing. Parent has entered into two credit facilities with a
Swedish bank (copies of which have been delivered to the Company)
pursuant to which credit agreements such bank, subject to certain
conditions set forth in such credit agreements, will provide all
funds necessary, together with funds available to the Parent and Sub,
to consummate the transactions contemplated hereby.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.01 Access to Information Concerning Properties and Records. During the
period commencing on the date hereof and ending on the earlier of (x) the
Closing Date and (y) the date on which this Agreement is terminated pursuant to
Section 6.01 hereof, the Company shall, and shall cause each of its Subsidiaries
to, upon reasonable notice, afford Parent and Sub, and their respective counsel,
accountants, consultants and other authorized representatives, reasonable access
during normal business hours to the employees, properties, books and records of
the Company and its Subsidiaries in order that they may have the opportunity to
make such investigations as they shall desire of the affairs of the Company and
its Subsidiaries; such investigation shall not, however, affect the
representations and warranties made by the Company in this Agreement. The
Company shall furnish promptly to Parent and Sub (a) a copy of each report,
schedule, registration statement and other document filed by it or its
Subsidiaries during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its or its
Subsidiaries' business, properties and personnel as Parent and Sub may
reasonably request. The Company agrees to cause its officers and employees to
furnish such additional financial and operating data and other information and
respond to such inquiries as Parent and Sub shall from time to time request.
4.02 Confidentiality. Information obtained by Parent, Sub and their
respective counsel, accountants, consultants and other authorized
representatives pursuant to Section 4.01 hereof shall be subject to the
provisions of the Confidentiality Agreement between the Company and Parent dated
April 4, 1997 (the "Confidentiality Agreement").
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4.03 Conduct of the Business of the Company Pending the Closing Date. The
Company agrees that, except as permitted, required or specifically contemplated
by, or otherwise described in, this Agreement or otherwise consented to or
approved in writing by Parent (which consent or approval shall not be
unreasonably withheld), during the period commencing on the date hereof until
such time as nominees of Parent shall comprise two thirds of the members of the
Board of Directors of the Company or this Agreement shall have been terminated
pursuant to Section 6.01 hereof:
(a) The Company and each of its Subsidiaries will conduct their
respective operations only according to their ordinary and usual
course of business consistent with past practice and will use their
reasonable best efforts to preserve intact their respective business
organization, keep available the services of their officers and
employees and maintain satisfactory relationships with licensors,
suppliers, distributors, clients, joint venture partners, and others
having significant business relationships with them;
(b) Neither the Company nor any of its Subsidiaries shall (i) make
any change in or amendment to its Restated and Amended Certificate of
Incorporation or By-Laws (or comparable governing documents); (ii)
issue or sell any shares of its capital stock (other than in
connection with the exercise of Options outstanding on the date
hereof) or any of its other securities, or issue any securities
convertible into, or options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect
to the issuance or sale of, any shares of its capital stock or any of
its other securities, or make any other changes in its capital
structure; (iii) sell or pledge or agree to sell or pledge any stock
owned by it in any of its Subsidiaries except pursuant to certain
call options in respect of the capital stock of certain of its
dealership subsidiaries, as set forth in Section 3.01(c)(ii) of the
Company Disclosure Letter; (iv) declare, pay, set aside or make any
dividend (other than regular quarterly cash dividends of $.0625 per
share of Common Stock) or other distribution or payment with respect
to, or split, combine, redeem or reclassify, or purchase or otherwise
acquire any shares of its capital stock or its other securities, ;
(v) (A) enter into any contract or commitment with respect to capital
expenditures with a value in excess of, or requiring expenditures by
the Company and its Subsidiaries in excess of, $1.0 million,
individually, or enter into contracts or commitments with respect to
capital expenditures with a value in excess of, or requiring
expenditures by the Company and its Subsidiaries in excess of, $3.0
million, in the aggregate; (B) acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership or other
business or division thereof; or (C) enter into, amend, modify,
supplement or cancel any other material contract, (vi) except in the
ordinary course of business, consistent with past practice, acquire a
material amount of assets or securities or release or relinquish any
material contract rights; (vii) except in the ordinary course of
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business, consistent with past practice, and except to the extent
required under existing employee and director benefit plans,
agreements or arrangements as in effect on the date of this
Agreement, increase the compensation or fringe benefits of any of its
directors, officers or employees, except for increases in salary or
wages of employees of the Company or its subsidiaries who are not
officers of the Company in the ordinary course of business in
accordance with past practice, or grant any severance or termination
pay not currently required to be paid under existing severance plans
or enter into any employment, consulting or severance agreement or
arrangement with any present or former director, officer or other
employee of the Company or any of its Subsidiaries (other than
employment contracts with the individuals listed on Section
4.03(b)(vii) of the Company Disclosure Letter), or establish, adopt,
enter into or amend or terminate 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 directors, officers or employees;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any material assets or
incur or modify any indebtedness or other material liability, other
than in the ordinary course of business, or issue any debt securities
or assume, guarantee or endorse or otherwise as an accommodation
become responsible for the obligations of any person or, other than
in the ordinary course of business consistent with past practice,
make any loan or other extension of credit; (ix) agree to the
settlement of any material claim or litigation; (x) make any material
tax election or settle or compromise any material tax liability; (xi)
permit any insurance policy naming it as beneficiary or a loss
payable payee to be cancelled without notice to Parent; (xii) except
as required by applicable law or generally accepted accounting
principals, make any material change in its method of accounting;
(xiii) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries not
constituting an inactive Subsidiary (other than the Merger); or (xiv)
agree, in writing or otherwise, to take any of the foregoing actions;
and
(c) The Company shall not, and shall not permit any of its
Subsidiaries to, (i) take any action, engage in any transaction or
enter into any agreement which would cause any of the representations
or warranties set forth in Section 3.01 hereof to be untrue as of the
Closing Date, or (ii) purchase or acquire, or offer to purchase or
acquire, any shares of capital stock of the Company.
4.04 Proxy Statement. If shareholder approval of the Merger is required by
law or by the Company's Restated and Amended Certificate of Incorporation or
By-Laws, as promptly as practicable, following Parent's request the Company will
prepare and file a preliminary Proxy Statement with the Commission and will use
its reasonable best efforts to respond to the comments of the Commission, if
any, in connection therewith and to furnish all information regarding the
Company required in the definitive Proxy Statement (including, without
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limitation, financial statements and supporting schedules and certificates and
reports of independent public accountants). Parent, Sub and the Company will
cooperate with each other in the preparation of the Proxy Statement. Without
limiting the generality of the foregoing, each of Parent and Sub will furnish to
the Company the information relating to it required by the Exchange Act to be
set forth in the Proxy Statement. Promptly after the expiration or termination
of the Offer, if required by the New York Business Corporation Law in order to
consummate the Merger, the Company will cause the definitive Proxy Statement to
be mailed to the shareholders of the Company and, if necessary, after the
definitive Proxy Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material and, if required in
connection therewith, resolicit proxies. The Company will not use any proxy
material in connection with the meeting of its shareholders without Parent's
prior approval.
4.05 Shareholder Approval. (a) Promptly following the purchase of shares of
Common Stock pursuant to the Offer, if required by New York Business Corporation
Law in order to consummate the Merger, the Company, acting through its Board of
Directors, shall, in accordance with applicable law, duly call, convene and hold
a meeting of the holders of Common Stock (the "Shareholders' Meeting") for the
purpose of voting upon this Agreement and the Merger and the Company agrees that
this Agreement and the Merger shall be submitted at such meeting. The Company
shall use its reasonable best efforts to solicit from its shareholders proxies,
and shall take all other action necessary and advisable, to secure the vote of
shareholders required by applicable law and the Company's Restated and Amended
Certificate of Incorporation or By-Laws to obtain the approval for this
Agreement. Subject to Section 4.07 hereof, the Company agrees that it will
include in the Proxy Statement the recommendation of its Board of Directors that
holders of Common Stock approve and adopt this Agreement and approve the Merger.
Parent will cause all shares of Common Stock owned by Parent and its
Subsidiaries (including Sub) to be voted in favor of this Agreement and the
Merger.
(b) Notwithstanding the foregoing, in the event that Sub shall acquire at
least 90% of the outstanding Company Common Stock, the Company agrees, at the
request of Parent and Sub, subject to Article V, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with Section 905 of the New York Business
Corporation Law.
4.06 Reasonable Best Efforts. Subject to the terms and conditions provided
herein, each of the Company, Parent and Sub shall, and the Company shall cause
each of its Subsidiaries to, cooperate and use their respective reasonable best
efforts to take, or cause to be taken, all appropriate action, and to make, or
cause to be made, all filings necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, their respective
reasonable best efforts to obtain, prior to the Closing Date, all licenses,
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permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and its
Subsidiaries as are necessary for consummation of the transactions contemplated
by this Agreement and to fulfill the conditions to the Offer and the Merger;
provided, however, that no loan agreement or contract for borrowed money shall
be repaid except as currently required by its terms, in whole or in part, and no
contract shall be amended to increase the amount payable thereunder or otherwise
to be more burdensome to the Company or any of its Subsidiaries in order to
obtain any such consent, approval or authorization without first obtaining the
written approval of Parent and Sub.
4.07 No Solicitation of Other Offers. (a) The Company and its affiliates
and each of their respective officers, directors, employees, representatives and
agents shall immediately cease any discussions or negotiations with any other
parties that may be ongoing with respect to any Acquisition Proposal (as defined
below). Neither the Company nor any of its affiliates, shall, directly or
indirectly, take (and the Company shall not authorize or permit its or its
affiliates, officers, directors, employees, representatives, consultants,
investment bankers, attorneys, accountants or other agents or affiliates, to so
take) any action to (i) encourage, solicit or initiate the making of any
Acquisition Proposal, (ii) enter into any agreement with respect to any
Acquisition Proposal or (iii) participate in any way in discussions or
negotiations with, or, furnish or disclose any information to, any Person (other
than Parent or Sub) in connection with, or take any other action to facilitate
any inquiries or the making of any proposal (including without limitation by
taking any action that would make the Rights Agreement, Section 912 of the New
York Business Corporation Law or the provisions of Article SEVENTH of the
Company's Restated and Amended Certificate of Incorporation inapplicable to an
Acquisition Proposal) that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal, provided, however, that the Company, in response
to an unsolicited Acquisition Proposal and in compliance with its obligations
under Section 4.07(b) hereof, may participate in discussions or negotiations
with or furnish information to any third party which proposes a transaction
which the Board of Directors of the Company reasonably determines will result in
a Superior Proposal if the Board of Directors believes (and has been advised by
independent outside counsel) that failing to take such action would constitute a
breach of its fiduciary duties. In addition, neither the Board of Directors of
the Company nor any Committee thereof shall (x) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or Sub the approval and
recommendation of the Offer and this Agreement or (y) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal, provided that the
Company may recommend to its shareholders an Acquisition Proposal and in
connection therewith withdraw or modify its approval or recommendation of the
Offer or the Merger if (i) the Board of Directors of the Company has determined
that the Acquisition Proposal is a Superior Proposal, (ii) all the conditions to
the Company's right to terminate this Agreement in accordance with Section
6.01(f) hereof have been satisfied (including the expiration of the three
Business Day period described therein and the payment of all amounts required
pursuant to Section 7.01 hereof) and (iii) simultaneously with such withdrawal,
modification or recommendation, this Agreement is terminated in accordance with
Section 6.01(f) hereof. Any actions permitted under, and taken in compliance
with, this Section 4.07 shall not be deemed a breach of any other covenant or
agreement of such party contained in this Agreement.
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"Acquisition Proposal" shall mean any inquiry, proposal or offer from any
Person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its Subsidiaries or of
over 10% of any class of equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Company or any of its Subsidiaries, any merger, consolidation,
business combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries, other than the transactions contemplated by this Agreement, or
any other transaction the consummation of which could reasonably be expected to
impede, interfere with, prevent or materially delay the Offer or the Merger or
which would reasonably be expected to dilute materially the benefits to Parent
of the transactions contemplated hereby. "Superior Proposal" shall mean a bona
fide proposal made by a third party to acquire all of the outstanding shares of
the Company pursuant to a tender offer, a merger or a sale of all of the assets
of the Company (x) on terms which a majority of the members of the Board of
Directors of the Company determines in its good faith reasonable judgment (based
on the advice of independent outside financial and legal advisors) to be more
favorable to the Company and its shareholders than the transactions contemplated
hereby and (y) for which financing is then available (it being understood that
financing evidenced by highly confident letters and similar letters shall not be
considered "available" for purposes of this Section).
(b) In addition to the obligations of the Company set forth in paragraph
(a), on the date of receipt thereof, the Company shall advise Parent of any
request for information or of any Acquisition Proposal, or any inquiry or
proposal with respect to any Acquisition Proposal, the material terms and
conditions of such request or Acquisition Proposal, and the identity of the
person making any such Acquisition Proposal. The Company will keep Parent fully
informed of the status and details (including amendments or proposed amendments)
of any such request or Acquisition Proposal and keep Parent fully informed as to
the details of any information requested of or provided by, the Company and as
to the details of all discussions or negotiations with respect to any such
request, takeover proposal or inquiry.
(c) Immediately following the purchase of Shares pursuant to the Offer, the
Company will request each person which has heretofore executed a confidentiality
agreement in connection with its consideration of acquiring the Company or any
portion thereof (the "Confidentiality Agreements") to return all confidential
information heretofore furnished to such person by or on behalf of the Company.
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4.08 Notification of Certain Matters. The Company shall give prompt notice
to Parent, and Parent and Sub shall give prompt notice to the Company, of the
occurrence, of failure to occur, of any event, which occurrence or failure to
occur would be likely to cause any representation or warranty contained in this
Agreement to be untrue in any material respect at any time from the date of this
Agreement to the Effective Time. Each of the Company and Parent shall give
prompt notice to the other party of any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
4.09 HSR Act. (a) Each party hereto shall (i) take promptly all actions
necessary to make the filings required of it or any of its affiliates under the
applicable Antitrust Laws (as defined in Section 4.09(e) hereof) in connection
with this Agreement and the transactions contemplated hereby, (ii) comply at the
earliest practicable date with any request for additional information or
documentary material received by it or any of its affiliates from the Federal
Trade Commission (the "FTC") or the Antitrust Division of the Department of
Justice (the "Antitrust Division") and (iii) cooperate with one another in
connection with any filing under applicable Antitrust Laws and in connection
with resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement initiated by any Antitrust Authority (as defined
in Section 4.09(e) hereof).
(b) Each party hereto shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any Antitrust Law. Without limiting the
generality of the foregoing, "reasonable best efforts" shall include, without
limitation:
(i) in the case of each of Parent and the Company:
(A) filing with the appropriate Antitrust Authorities no later
than the fifth Business Day following the date hereof a
Notification and Report Form with respect to the transactions
contemplated by this Agreement; and
(B) if Parent or the Company receives a second request for
information and documents from an Antitrust Authority,
substantially complying with such second request within 60 days
following the date of its receipt thereof;
(ii) in the case of Parent only, taking any and all actions
reasonably necessary, proper or advisable to cause the HSR Condition
and Section 5.01(b) hereof to be satisfied and to permit the Closing
to occur as soon as possible, but in any event on or prior to the
Outside Date (as defined below) (it being understood that, without
limiting Parent's obligations hereunder, the timing of the Closing
shall be as set forth in Section 2.11); provided, however, that
Parent's obligations hereunder shall not include agreeing to dispose
of or hold separately all or any material portion of the business or
assets of Parent and its subsidiaries, taken as a whole or the
Company and its Subsidiaries, taken as a whole, or to take any other
action which would materially and adversely effect the business,
assets or operations of Parent and its subsidiaries taken as a whole
or the Company and its Subsidiaries taken as a whole; and
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(iii) in the case of the Company only, subject to Parent's
compliance with clauses (i) and (ii) above, not frustrating or
impeding Parent's strategy or negotiating positions with any
Antitrust Authority.
(c) Notwithstanding the foregoing, Parent's obligations pursuant to Section
4.09(b)(ii) above shall not include defending any administrative, judicial or
legislative action brought by any Antitrust Authority or other Person or
otherwise litigating against any Antitrust Authority or other person. Should
Parent nonetheless elect to litigate against any Antitrust Authority or other
person, the Company shall cooperate with Parent in any such proceeding.
(d) Each party hereto shall promptly inform the other parties of any
material communication made to, or received by such party from, any Antitrust
Authority or any other governmental or regulatory authority regarding any of the
transactions contemplated hereby. In addition, and without limiting the
generality of the foregoing, Parent and the Company each shall cause its counsel
to (i) afford to the other party's counsel the opportunity to receive and to
review for a reasonable period in advance of filing or submission to any
Antitrust Authority all forms, letters and memoranda (excluding documents
submitted as attachments or enclosed with such forms, letters or memoranda)
proposed to be filed or submitted to any Antitrust Authority regarding the
transactions contemplated hereby, and give reasonable consideration to any
comments or proposals such counsel may make with respect to any such forms,
letters or memoranda, (ii) give reasonable advance notice to the other party's
counsel of each meeting or pre-arranged telephone call with any Antitrust
Authority regarding the transactions contemplated hereby, so that such counsel
may request to attend or otherwise participate therein, and to give reasonable
consideration to such request, and (iii) promptly inform the other party's
counsel of the substance of each other material communication (written or oral,
in person or by telephone) with any Antitrust Authority regarding the
transactions contemplated hereby.
(e) For purposes hereof, (i) "Antitrust Authorities" means the FTC, the
Antitrust Division and the attorneys general of the several states of the United
States and (ii) "Antitrust Law" means the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the Antitrust Improvements Act, the Federal Trade Commission
Act, as amended, and all other federal and state statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines, and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
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4.10 Exon-Xxxxxx. The Company and Parent shall, as soon as possible and in
any event within ten days of the date of this Agreement, file a voluntary
notification pursuant to, and in compliance with, Exon-Xxxxxx and shall use
their best efforts to respond to any inquiries from governmental officials with
respect thereto.
4.11 Employee Benefits. (a) Until the first anniversary of the Effective
Time, Parent shall ensure that all employees and officers of the Company receive
compensation and benefits in the aggregate substantially comparable to the
compensation and benefits received by such individuals immediately prior to the
date hereof.
(b) Until the first anniversary of the Effective Time, Parent shall keep in
effect all severance policies that are applicable to employees and officers of
the Company immediately prior to the date hereof.
(c) Following the Effective Time, (i) Parent shall ensure that no employee
welfare benefit plan adopted by the Company shall have any preexisting condition
limitations and (ii) Parent shall honor all premiums and deductibles paid by the
employees, officers and directors of the Company under all Employee Benefit
Plans up to (and including) the Effective Time.
(d) Following the Effective Time, for purposes of eligibility and vesting,
Parent shall honor all service credit accrued by the employees, officers and
directors of the Company under all Employee Benefit Plans up to (and including)
the Effective Time.
(e) Following the Effective Time, Parent shall honor all employment
contracts with employees and officers and all contracts for services rendered
with directors of the Company.
4.12 Directors' and Officers' Insurance; Indemnification. (a) The
certificate of incorporation and the by-laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's certificate of incorporation and by-laws on
the date of this Agreement, 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 adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
the Company, unless such modification is required by law.
(b) For six years from the Effective Time, the Surviving Corporation shall
either (x) maintain in effect the Company's current directors' and officers'
liability insurance covering those persons who are currently covered on the date
of this Agreement by the Company's directors' and officers' liability insurance
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policy (a copy of which has been heretofore delivered to Parent) (the
"Indemnified Parties"); provided, however, that in no event shall Parent be
required to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by the Company for such insurance which the Company
represents to be $80,050 for the twelve month period ending on July 1, 1997; and
provided further that if the annual premiums of such insurance coverage exceed
such amount, the Surviving Corporation shall be obligated to obtain a policy
with the greatest coverage available for a cost not exceeding such amount;
provided further that the Surviving Corporation may substitute for such Company
policies, policies with at least the same coverage containing terms and
conditions which are no less advantageous and provided that said substitution
does not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Effective Time or (y) cause the Parent's, directors' and
officers' liability insurance then in effect to cover those persons who are
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy with respect to those matters covered by the
Company's directors' and officers' liability policy.
(c) In furtherance of and not in limitation of the preceding paragraph,
Parent and Sub agree that the officers and directors of the Company that are
defendants in any litigation commenced by shareholders of the Company with
respect to (x) the performance of their duties as officers and/or directors of
the Company under federal or state law (including litigation under federal and
state securities laws) and (y) Sub's offer or proposal to acquire the Company,
including, without limitation, any and all such litigation commenced on or after
the date of this Agreement (the "Subject Litigation") shall be entitled to be
represented, at the reasonable expense of the Company, in the Subject Litigation
by one counsel (including, if appropriate, one local counsel in each
jurisdiction in which a case is pending) each of which such counsel shall be
selected by a plurality of such director and officer defendants; provided that
neither Parent nor the Company shall be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld) and that a condition to the indemnification payments provided in
Section 4.12(a) hereof shall be that such officer/director defendant not have
settled any Subject Litigation without the consent of Parent; and provided
further that neither Parent nor the Company shall have any obligation hereunder
to any officer/director defendant when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final and
non-appealable, that indemnification of such officer/director defendant in the
manner contemplated hereby is prohibited by applicable law.
(d) At the Effective Time, the Company shall remain liable for all of its
obligations under the existing indemnification agreements with each of the
directors and officers of the Company.
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4.13 Rights Agreement. The Company shall not redeem the Rights or amend
(other than to delay the Distribution Date (as defined therein) or to render the
Rights inapplicable to the Offer and the Merger) or terminate the Rights
Agreement prior to the Effective Time without the consent of the Parent, unless
required to do so by a court of competent jurisdiction.
4.14. Public Announcements. Parent and the Company shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to the transactions contemplated by this Agreement and shall not
issue any such press release or make any such public statement prior to such
consultation and review by the other party of such release or statement or
without the prior consent of the other party, which shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of the
other party, issue such press release or make such public statement as may be
required by law or any listing agreement with a national securities exchange or
automated quotation system which Parent or the Company is a party if it has used
all reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
4.15 Transfer Tax. Parent shall pay any New York State Real Estate Transfer
Tax and New York City Real Property Transfer Tax (the "Transfer Taxes") and any
similar taxes in any other jurisdiction (and any penalties and interest with
respect to such taxes), which become payable in connection with the Offer and
the Merger, on behalf of the shareholders of the Company. Parent and the Company
shall cooperate in the preparation, execution and filing of any required returns
with respect to such taxes (including returns on behalf of the shareholders of
the Company) and in the determination of the portion of the consideration
allocable to the real property of the Company and the Subsidiaries in New York
State and City (or in any other jurisdiction, if applicable). The terms of the
Offer to Purchase and of the Proxy Statement shall provide that the shareholders
of the Company shall be deemed to have agreed to be bound by the allocation
established pursuant to this Section 4.14 in the preparation of any return with
respect to the Transfer Taxes and any similar taxes, if applicable.
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ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of Parent, Sub and the Company.
The respective obligations of Parent and Sub, on the one hand, and the Company,
on the other hand, to effect the Merger are subject to the satisfaction or
waiver (subject to applicable law) at or prior to the Effective Time of each of
the following conditions:
(a) Approval of Company's Shareholders. To the extent required by
applicable law, this Agreement and the Merger shall have been
approved and adopted by holders of two thirds of the outstanding
share of the Common Stock of the Company entitled to vote in
accordance with applicable law (if required by applicable law) and
the Company's Certificate of Incorporation and By-Laws;
(b) HSR Act. Any waiting period (and any extension thereof) under
the HSR Act applicable to the Merger shall have expired or been
terminated;
(c) Exon-Xxxxxx. The review periods, if applicable, under
Exon-Xxxxxx shall have expired or have been terminated.
(d) Injunction. No preliminary or permanent injunction or other
order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation
of the Offer or the Merger and the transactions contemplated by this
Agreement and which is in effect at the Effective Time, provided,
however, that, in the case of a decree, injunction or other order,
each of the parties shall have used reasonable best efforts to
prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order that
may be entered;
(e) Statutes. No statute, rule, regulation, executive order, decree
or order of any kind shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which prohibits the
consummation of the Offer or the Merger or has the effect of making
the purchase of the Common Stock illegal; and
(f) Minimum Condition. Sub shall have purchased shares of Common
Stock pursuant to the Offer in a number sufficient to satisfy the
Minimum Condition.
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ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the Company's shareholders:
(a) by mutual consent of the Company, on the one hand, and of
Parent and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any court of competent jurisdiction or any governmental or
regulatory agency shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for,
shares of Common Stock pursuant to the Offer or the Merger and such
order, decree or ruling or other action shall have become final and
nonappealable;
(c) by Parent, on the one hand, or the Company, on the other hand,
if the Effective Time shall not have occurred within 180 days after
commencement of the Offer (the "Outside Date") unless the Effective
Time shall not have occurred because of a material breach of any
representation, warranty, obligation, covenant, agreement or
condition set forth in this Agreement on the part of the party
seeking to terminate this Agreement;
(d) by Parent if the Offer is terminated or expires in accordance
with its terms without Sub having purchased any Common Stock
thereunder due to an occurrence which would result in a failure to
satisfy any of the conditions set forth on Exhibit A hereto, unless
any such failure shall have been caused by or resulted from the
failure of Parent or Sub to perform in any material respect any
covenant or agreement of either of them contained in this Agreement
or the material breach by Parent or Sub of any representation or
warranty of either of them contained in this Agreement;
(e) by the Parent, in the event of a breach by the Company of any
representation, warranty, covenant or agreement contained in this
Agreement which (A) would give rise to the failure of a condition set
forth in paragraph (e) or (g) of Annex A, (B) cannot or has not been
cured prior to the earlier of (i) 15 days after the giving of written
notice of such breach to the Company and (ii) two business days prior
to the date on which the Offer expires and (C) has not been waived by
Parent pursuant to the provisions hereof;
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(f) by either Parent, on the one hand, or the Company, on the other
hand, if the Board of Directors of the Company determines that an
Acquisition Proposal constitutes a Superior Proposal and the Board
believes (and has been advised by independent outside counsel) that a
failure to terminate this Agreement and enter into an agreement to
effect the Superior Proposal would constitute a breach of its
fiduciary duties; provided, however the Company may not terminate
this Agreement pursuant to this Section 6.01(f) unless and until
three Business Days have elapsed following delivery to the other
party of a written notice of such determination by the Board of
Directors and during such three Business Day period the Company has
fully cooperated with the Parent, including, without limitation,
informing the Parent of the terms and conditions of such Superior
Proposal, and the identity of the Person making such Proposal, with
the intent of enabling both parties to agree to a modification of the
terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected; and provided further that at the
end of such three Business Day period the Board of Directors of the
Company determines that the Acquisition Proposal constitutes a
Superior Proposal and the Board continues to believe (and has again
been advised by independent outside counsel) that a failure to
terminate this Agreement and enter into an agreement to effect the
Superior Proposal would constitute a breach of its fiduciary duties;
provided further that this Agreement shall not terminate pursuant to
this Section 6.01(f) unless (i) prior to such termination Parent has
received all fees and expenses set forth in Section 7.01 hereof by
wire transfer in same day funds and (ii) simultaneously with such
termination the Company enters into a definitive acquisition, merger
or similar agreement to effect the Superior Proposal which
acquisition agreement permits the Company to terminate the
acquisition agreement in the event the Board of Directors of the
Company determines to effect a transaction with Parent;
(g) by the Company, in the event of a breach by the Parent or Sub of
any representation, warranty, covenant or agreement contained in this
Agreement which cannot or has not been cured within 15 days after the
giving of written notice of such breach to the Parent and Sub,
except, in any case where such breaches are not reasonably likely to
affect adversely Parent's or Sub's ability to complete the Offer or
Merger; or
(h) by the Company if Parent or Sub shall have (i) failed to
commence the Offer within ten days following the date of this
Agreement, (ii) terminated the Offer or (iii) failed to pay for
shares of Common Stock pursuant to the Offer on or prior to the
Outside Date, unless in the case of (i), (ii) or (iii) such failure
shall have been caused by the failure of the Company to satisfy the
conditions set forth in paragraph (e) or (g) of Annex A.
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6.02 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 6.01 hereof by Parent or Sub, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent, Sub or
the Company, except that Sections 4.02, 3.01(p) and 7.01 hereof and this Section
6.02 shall survive any termination of this Agreement. Nothing in this Section
6.02 shall relieve any party to this Agreement of liability for breach of this
Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. (a) Except as provided in paragraph (b) below, all
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(b) If this Agreement is terminated other than solely because of a material
breach of the representations or warranties of Parent or Sub or a failure of
Parent or Sub to fulfill a material covenant or condition contained herein, then
the Company shall (except as required to be earlier paid in accordance with
Section 6.01(f) hereof) within two days after termination has occurred, pay to
Parent in same day funds all of Parent's reasonably documented out-of-pocket
expenses.
(c) If this Agreement is terminated by Parent in accordance with Section
6.01(d) or (e) hereof because of the occurrence of any of the events set forth
in clause (iv)(e), (f) or (g) of Annex A or if this Agreement is terminated by
the Company in accordance with Section 6.01(f) hereof, then the Company shall
(except as required to be earlier paid in accordance with Section 6.01(f)
hereof) pay to Parent in same day funds, in addition to the amounts required to
be paid pursuant to Section 7.01(b), $12,000,000.
7.02 Representations and Warranties. The respective representations and
warranties of the Company, on the one hand, and Parent and Sub, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Closing and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section
7.02 shall have no effect upon any other obligation of the parties hereto,
whether to be performed before or after the Effective Time.
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7.03 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent or Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
7.04 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
(a) if to the Company, to it at:
The Xxxxxxx Corporation
X.X. Xxx 000
Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: President
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, III, Esq.
(b) if to either Parent or Sub, to it at:
Lift Acquisition Company, Inc.
x/x XX Xxxxxxxxxx XX
0-000 00 Xxxxxx
Xxxxxx
Attention: President and Chief
Executive Officer
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with a copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.05 Entire Agreement. This Agreement and the annex, schedules and other
documents referred to herein or delivered pursuant hereto, collectively contain
the entire understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior agreements and understandings,
oral and written, with respect thereto, other than the Confidentiality
Agreement.
7.06 Binding Effect; Benefit; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, with respect to the
provisions of Section 4.12 hereof, shall inure to the benefit of the persons or
entities benefitting from the provisions thereof who are intended to be
third-party beneficiaries thereof and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties. Except as provided in the
immediately preceding sentence, nothing in this Agreement, expressed or implied,
is intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
7.07 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified and supplemented in writing by the parties hereto in
any and all respects before the Effective Time (notwithstanding any shareholder
approval), by action taken by the respective Boards of Directors of Parent, Sub
and the Company or by the respective officers authorized by such Boards of
Directors, provided, however, that after any such shareholder approval, no
amendment shall be made which by law requires further approval by such
shareholders without such further approval.
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7.08 Further Actions. Each of the parties hereto agrees that, subject to
its legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.09 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
7.10 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, and all of which together shall
be deemed to be one and the same instrument.
7.11 Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflict of laws rules thereof.
7.12 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.13 Certain Definitions. (a) "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a group and a government or other department or
agency thereof.
(b) "Subsidiary" with respect to the Company, shall mean and include (x)
any partnership of which the Company or any Subsidiary is a general partner or
(y) any other entity in which the Company or any of its Subsidiaries owns or has
the power to vote 50% or more of the equity interests in such entity having
general voting power to participate in the election of the governing body of
such entity.
7.14 Parent Guarantee. Parent agrees to take all action necessary to cause
Sub to perform all of its agreement, covenants and obligations under this
Agreement. Parent shall be liable for any breach of any representation,
warranty, agreement, covenant or obligation of Sub under this Agreement.
7.15 Submission to Jurisdiction. Each party hereto hereby irrevocably and
unconditionally:
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(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, or for recognition and enforcement of any judgment
in respect thereof, to the general jurisdiction of the courts of the State of
New York sitting in the City of New York, the courts of the United States of
America for the Southern District of New York and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding will be
in accordance with the laws of the State of New York and agrees to appoint an
agent for service of process in the State of New York within 20 business days of
the date hereof;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of Parent, Sub and the Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
all as of the date first above written.
BT INDUSTRIES AB
By /s/ Xxxx-Xxxx Ridderstrale
---------------------------------------
Name: Xxxx-Xxxx Ridderstrale
Title: President and Chief Executive Officer
By /s/ Per Zaunders
---------------------------------------
Name: Per Zaunders
Title: Vice President and Chief Financial Officer
LIFT ACQUISITION COMPANY, INC.
By /s/ Xxxx-Xxxx Riddrestrale
---------------------------------------
Name: Xxxx-Xxxx Ridderstrale
Title: President
THE XXXXXXX CORPORATION
By /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board of Directors
and Chief Executive Officer
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ANNEX A
to
Agreement and
Plan of Merger
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex A is
appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer or the Merger Agreement,
Purchaser shall not be required to accept for payment or subject to any
applicable rules and regulations of the Commission, including Rule 14e-1c under
the Exchange Act, pay for any shares of Common Stock tendered pursuant to the
Offer and may terminate or amend the Offer and may postpone the acceptance of,
and payment for, shares of Common Stock, if (i) there shall not have been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of shares of Common Stock which, together with shares of Common Stock owned by
Parent or Purchaser (or any affiliate of Parent or Purchaser), represent
two-thirds of the total voting power of all shares of capital stock of the
Company outstanding on a fully diluted basis (the "Minimum Condition"), (ii) any
applicable waiting period (and any extension thereof) under the HSR Act shall
not have expired or been terminated (the "HSR Condition"), (iii) any applicable
waiting period under Exon-Xxxxxx shall not have expired or been terminated (the
"Exon-Xxxxxx condition") or (iv) if, at any time on or after the date of the
Merger Agreement and at or before the time of payment for any such shares of
Common Stock (whether or not any shares of Common Stock have theretofore been
accepted for payment or paid for pursuant to the Offer) any of the following
shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other Person, domestic or foreign, before any court
of competent jurisdiction or governmental authority or agency, domestic or
foreign, (i) challenging or seeking to, or which could reasonably be
expected to make illegal, impede, delay or otherwise directly or indirectly
restrain, prohibit or make materially more costly the Offer or the Merger
or seeking to obtain material damages, (ii) seeking to prohibit or
materially limit the ownership or operation by Parent or Purchaser of all
or any material portion of the business or assets of the Company and its
Subsidiaries taken as a whole or to compel Parent or Purchaser to dispose
of or hold separately all or any material portion of the business or assets
of Parent or the Company and its Subsidiaries taken as a whole, or seeking
to impose any limitation on the ability of Parent or Purchaser to conduct
its business or own such assets, (iii) seeking to impose limitations on the
ability of Parent or Purchaser effectively to exercise full rights of
ownership of the shares of Common Stock, including, without limitation, the
right to vote any shares of Common Stock acquired or owned by Sub or Parent
on all matters properly presented to the Company's shareholders, (iv)
seeking to require divestiture by Parent or Purchaser of any shares of
Common Stock; (v) seeking any material diminution in the benefits expected
to be derived by Parent or Purchaser as a result of the transactions
contemplated by the Offer or the Merger, (vi) otherwise directly or
indirectly relating to the Offer or the Merger and which, would have a
material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole or Parent and its subsidiaries taken as a
whole or the value of the shares of Common Stock, or (vii) otherwise
materially adversely affecting the Condition of the Company and its
Subsidiaries taken as a whole;
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(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, Purchaser, the Company or any Subsidiary or (ii) the Offer or the
Merger, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of the
HSR Act or Exon-Xxxxxx to the Offer or to the Merger, which could
reasonably be expected to directly or indirectly, result in any of the
consequences referred to in clauses (i) through (vii) of paragraph (a)
above;
(c) any change shall have occurred, or Parent shall have become aware
of any fact, that has had or would have a material adverse effect on the
Condition of the Company and its Subsidiaries taken as a whole;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a
market index), (ii) any decline in either the Dow Xxxxx Industrial Average
or the Standard & Poor's Index of 500 Industrial Companies or in the New
York Stock Exchange Composite Index in excess of 20% measured from the
close of business on the trading day next preceding the date of the Merger
Agreement, (iii) any material adverse change in the general political,
market, economic or financial conditions in the United States or abroad
that would have a material adverse effect upon the Condition of the Company
and its Subsidiaries taken as a whole, (iv) any material change in United
States or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (v) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any other jurisdiction in which any bank or other financial
institution in any manner involved with the financing of the Offer or the
Merger is incorporated, (vi) any material limitation (whether or not
mandatory) by any Federal, state or foreign governmental authority or
agency on, the extension of credit by banks or other lending institutions,
(vii) a commencement or escalation of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States or (viii) in the case of any of the foregoing existing at the
time of the commencement of the Offer, an acceleration or worsening
thereof;
(e) any of the representations or warranties made by the Company in
the Merger Agreement that are qualified as to materiality shall be untrue
or incorrect in any respect or any such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect,
in each case as of the date of this Agreement and the scheduled expiration
date of the Offer, except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of
such date;
-48-
(f) the Company's Board of Directors shall have withdrawn, modified or
amended in any respect adverse to Parent or Purchaser its recommendation of
the Offer or the Merger, or shall have resolved to do so;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under this Agreement; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms,
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Parent and the
Purchaser and may be asserted by the Parent of the Purchaser, or may be waived
by the Parent or the Purchaser, in whole or in part at any time and from time to
time in its sole discretion (subject to the terms of the Merger Agreement). The
failure by the Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Parent or the Purchaser concerning
the events described in this Annex A will be final and binding upon all parties.
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