Exhibit (d)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
TUPPERWARE CORPORATION
B-C MERGER CORPORATION
AND
BEAUTICONTROL, INC.
Dated as of September 13, 2000
TABLE OF CONTENTS
Page
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ARTICLE I
THE OFFER
Section 1.1 The Offer................................................ 2
Section 1.2 Company Actions.......................................... 3
ARTICLE II
THE MERGER
Section 2.1 The Merger............................................... 4
Section 2.2 Effective Time........................................... 4
Section 2.3 Effects of the Merger.................................... 5
Section 2.4 Charter and Bylaws; Directors and Officers............... 5
Section 2.5 Conversion of Securities................................. 5
Section 2.6 Exchange of Certificates................................. 6
Section 2.7 Merger Without Meeting of Stockholders................... 8
Section 2.8 Further Assurances....................................... 8
Section 2.9 Closing.................................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 3.1 Organization............................................. 8
Section 3.2 Authority................................................ 8
Section 3.3 Consents and Approvals; No Violations.................... 9
Section 3.4 Information Supplied..................................... 10
Section 3.5 Interim Operations of Sub................................. 10
Section 3.6 Brokers................................................... 10
Section 3.7 Financing................................................. 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization, Standing and Power.......................... 11
Section 4.2 Capital Structure......................................... 11
Section 4.3 Authority................................................. 12
Section 4.4 Consents and Approvals; No Violation...................... 13
Section 4.5 SEC Documents and Other Reports........................... 14
Section 4.6 Information Supplied...................................... 14
Section 4.7 Absence of Certain Changes or Events...................... 14
Section 4.8 Permits and Compliance.................................... 15
Section 4.9 Tax Matters............................................... 16
Section 4.10 Actions and Proceedings.................................. 17
Section 4.11 Compensation Agreements.................................. 17
Section 4.12 Employee Benefits........................................ 18
Section 4.13 Liabilities.............................................. 19
Section 4.14 Labor Matters............................................ 20
Section 4.15 Intellectual Property.................................... 20
Section 4.16 Title to Assets.......................................... 21
Section 4.17 State Takeover Statutes.................................. 21
Section 4.18 Required Vote of Company Stockholders.................... 21
Section 4.19 Transactions with Affiliates............................. 22
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Section 4.20 Brokers............................................... 22
Section 4.21 Compliance with Worker Safety Laws.................... 22
Section 4.22 Products.............................................. 23
Section 4.23 Opinion of Financial Advisor.......................... 23
Section 4.24 Accounts Receivable................................... 23
Section 4.25 Inventories........................................... 24
Section 4.26 Certain Agreements.................................... 24
Section 4.27 Environmental Matters................................. 24
Section 4.28 Regulatory Compliance................................. 26
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger.. 26
Section 5.2 No Solicitation........................................ 29
Section 5.3 Third Party Standstill Agreements...................... 29
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Stockholder Meeting.................................... 30
Section 6.2 Access to Information.................................. 31
Section 6.3 Directors.............................................. 31
Section 6.4 Fees and Expenses...................................... 32
Section 6.5 Company Stock Options.................................. 33
Section 6.6 Reasonable Best Efforts................................ 34
Section 6.7 Public Announcements................................... 35
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Section 6.8 State Takeover Laws................................... 35
Section 6.9 Indemnification; Directors and Officers Insurance..... 35
Section 6.10 Notification of Certain Matters....................... 35
Section 6.11 Employee Benefit Plans................................ 36
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect
the Merger............................................. 36
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination............................................ 37
Section 8.2 Effect of Termination.................................. 38
Section 8.3 Amendment.............................................. 38
Section 8.4 Waiver................................................. 38
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties......... 39
Section 9.2 Notices................................................ 39
Section 9.3 Interpretation; Certain Definitions.................... 40
Section 9.4 Counterparts........................................... 42
Section 9.5 Entire Agreement; No Third-Party Beneficiaries......... 42
Section 9.6 Governing Law.......................................... 42
Section 9.7 Assignment............................................. 42
Section 9.8 Severability........................................... 42
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Section 9.9 Enforcement of this Agreement.......................... 42
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EXHIBITS
A Stockholder Agreement
B Conditions of the Offer
C Certificate of Incorporation
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 13, 2000 (this
"Agreement"), among Tupperware Corporation, a Delaware corporation ("Parent"),
B-C Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of
Parent ("Sub"), and BeautiControl, Inc., a Delaware corporation (the "Company")
(Sub and the Company being hereinafter collectively referred to as the
"Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all of the issued and outstanding
shares (the "Shares") of Common Stock, par value $0.10 per share, of the Company
(the "Company Common Stock") at a purchase price of $7.00 per Share (the "Offer
Price"), net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in this Agreement; and the Board of
Directors of the Company has adopted resolutions approving the Offer and the
Merger (as defined below) and recommending that holders of Shares accept the
Offer and that the Company's stockholders approve this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and declared advisable the merger of Sub and the Company
(the "Merger"), upon the terms and subject to the conditions set forth herein,
whereby each issued and outstanding Share not owned directly or indirectly by
Parent or the Company will be converted into the right to receive the price per
share paid in the Offer and the respective Boards of Directors of Sub and the
Company have approved and adopted this Agreement; and
WHEREAS, in order to induce Parent and Sub to enter into this
Agreement, concurrently herewith Parent and certain of the stockholders of the
Company are entering into Stockholder Agreements dated as of the date hereof
(the "Stockholder Agreements" and, together with this Agreement, the
"Transaction Agreements") in the form of the attached Exhibit A.
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable, Sub shall, and Parent shall cause Sub to,
commence, within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (together with the rules and regulations thereunder, the
"Exchange Act"), the Offer. The obligation of Sub to, and of Parent to cause Sub
to, commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject only to the conditions set forth in the
attached Exhibit B (the "Offer Conditions") (any of which may be waived in whole
or in part by Sub in its sole discretion, except that Sub shall not waive the
Minimum Condition (as defined in Exhibit B) without the consent of the Company)
and subject to the rights of Parent and Sub to terminate this Agreement as
provided in Section 8.1. Sub expressly reserves the right to modify the terms of
the Offer, except that, without the consent of the Company, Sub shall not (i)
reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price,
(iii) impose any other conditions to the Offer other than the Offer Conditions
or modify the Offer Conditions (other than to waive any Offer Conditions to the
extent permitted by this Agreement), (iv) except as provided in the next
sentence, extend the Offer or (v) change the form of consideration payable in
the Offer. Notwithstanding the foregoing, Sub may, without the consent of the
Company, (i) extend the Offer, if at the scheduled or extended expiration date
of the Offer any of the Offer Conditions shall not be satisfied or waived, until
such time as such conditions are satisfied or waived, (ii) extend the Offer for
any period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff thereof applicable
to the Offer and (iii) extend the Offer for any reason on one or more occasions
for an aggregate period of not more than 15 business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence, in each case subject to the right of Parent, Sub or the Company
to terminate this Agreement pursuant to the terms hereof. Subject to the terms
and conditions of the Offer and this Agreement, Sub shall, and Parent shall
cause Sub to, accept for payment, and pay for, all Shares validly tendered and
not withdrawn pursuant to the Offer, and pay for, pursuant to the Offer as soon
as practicable after the expiration of the Offer, and in any event in compliance
with the obligations respecting prompt payment pursuant to Rule 14e-1(c) under
the Exchange Act.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO")
with respect to the Offer, which shall contain as an exhibit or incorporate by
reference an offer to purchase and a related letter of transmittal and summary
advertisement (such Schedule TO and the documents included therein pursuant to
which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"), and Parent and Sub shall cause to be
disseminated the Offer Documents to holders of Shares as and to the extent
required by applicable federal securities laws. Parent, Sub and the Company each
agrees promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect, and Parent and Sub further agree to take all
steps necessary to cause the Schedule TO as so corrected to be filed with the
SEC and the other Offer
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Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws. The Company
and its counsel shall be given reasonable opportunity to review and comment upon
the Offer Documents prior to their filing with the SEC or dissemination to the
stockholders of the Company. Parent and Sub agree to provide the Company and its
counsel any comments Parent, Sub or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of such
comments and to cooperate with the Company and its counsel in responding to any
such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to accept for payment, and pay for, any Shares that
Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board of Directors of
the Company, at a meeting duly called and held, at which all directors were
present (in person or by telephone), duly and unanimously adopted resolutions
approving and adopting this Agreement, approving the Offer and the Merger,
taking all action necessary to render the provisions of Section 203 of the DGCL
(as defined below) inapplicable to the Offer, the Merger and the Stockholder
Agreements, determining that the terms of the Offer and the Merger are fair to,
and in the best interests of, the Company's stockholders and recommending that
holders of Shares accept the Offer and that the Company's stockholders approve
this Agreement and the Merger. The Company has been advised by each of its
directors and by each of its executive officers that, prior to the date hereof,
has knowledge of the transactions contemplated by this Agreement that each such
person intends to tender all Shares owned by such person pursuant to the Offer.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendation described in
paragraph (a), and the Company shall cause the Schedule 14D-9 to be disseminated
to holders of Shares as and to the extent required by applicable federal
securities laws. Each of the Company, Parent and Sub agrees promptly to correct
any information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given reasonable opportunity to
review and comment upon the Schedule 14D-9 prior to its filing with the SEC or
dissemination to stockholders of the Company. The Company agrees to provide
Parent and its counsel any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments and to cooperate with Parent, Sub and their counsel in
responding to any such comments.
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(c) In connection with the Offer and the Merger, the Company shall
cause its transfer agent or agents to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control, to the extent reasonably available to the Company,
regarding the beneficial owners of Shares and any securities convertible into
Shares, and shall furnish to Sub such information (including updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
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 Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if this Agreement shall be terminated, will, upon request, deliver, and will use
their best efforts to cause their agents to deliver, to the Company all copies
of such information then in their possession or control.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company
at the Effective Time (as hereinafter defined). Following the Merger, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of Sub in accordance with the DGCL.
Notwithstanding anything to the contrary herein, at the election of Parent, any
direct wholly-owned Subsidiary (as hereinafter defined) of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement, in form
and substance reasonably satisfactory to Parent and the Company, in order to
reflect such substitution.
Section 2.2 Effective Time. The Merger shall become effective when the
certificate of merger or, if applicable, the certificate of ownership and merger
(each, the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, is filed with the Secretary of State of the State of
Delaware; provided, however, that, upon mutual consent of the Constituent
Corporations, the Certificate of Merger may provide for a later date of
effectiveness of the Merger. When used in this Agreement, the term "Effective
Time" shall mean the date and time at which the Certificate of Merger is
accepted for record or such later time established by the Certificate of Merger.
The filing of the Certificate of Merger shall be made on the date of the Closing
(as hereinafter defined).
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Section 2.3 Effects of the Merger. The Merger shall have the effects set
forth in this Agreement and the DGCL.
Section 2.4 Charter and Bylaws; Directors and Officers. (a) At the
Effective Time, the Restated Certificate of Incorporation, as amended, as
further amended to read in its entirety as indicated on the attached Exhibit C,
of the Company (the "Company Charter") shall be the Certificate of Incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law. At the Effective Time, the Bylaws of Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by the Company Charter or applicable law.
(b) The directors of Sub at the Effective Time shall be the directors
of the Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be. The officers of the Company at the Effective Time shall be the officers
of the Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
Section 2.5 Conversion of Securities. (a) As of the Effective Time, by
virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any securities of the Constituent Corporations:
(i) Each issued and outstanding share of common stock, par value $.01
per share, of Sub shall be converted into one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
(ii) All Shares that are held in the treasury of the Company or by any
wholly-owned Subsidiary of the Company and any Shares owned by Parent or by
any wholly-owned Subsidiary of Parent shall be canceled and no capital
stock of Parent or other consideration shall be delivered in exchange
therefor.
(iii) Subject to the provisions of Section 2.5(a)(iv), each Share
issued and outstanding immediately prior to the Effective Time (other than
shares to be canceled in accordance with Section 2.5(a)(ii) and other than
Dissenting Shares (as hereinafter defined)) shall be converted into the
right to receive from the Surviving Corporation in cash, without interest,
the Offer Price (the "Merger Consideration"). All such Shares, when so
converted, shall no longer be outstanding and shall automatically be
canceled and retired and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration.
(iv) Notwithstanding any provision of this Agreement to the contrary,
if required by the DGCL but only to the extent required thereby, Shares
which are issued and outstanding immediately prior to the Effective Time
and which are held by holders who have properly exercised appraisal rights
with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Shares") will not be exchangeable for the right to receive the
Merger Consideration, and holders of such Shares will be entitled to
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receive payment of the appraised value of such Shares in accordance with
the provisions of such Section 262 unless and until such holders fail to
perfect or effectively withdraw or lose their rights to appraisal and
payment under the DGCL. If, after the Effective Time, any such holder fails
to perfect or effectively withdraws or loses such right, such Shares will
thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration, without any interest thereon. The Company will give Parent
prompt notice of any demands received by the Company for appraisals of
Shares. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal or offer
to settle or settle any such demands.
(b) Each Company Stock Option (as hereinafter defined) shall be
treated in accordance with Section 6.5 of this Agreement.
Section 2.6 Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall designate a bank or trust company (or such other
person or persons as shall be reasonably acceptable to Parent and the Company)
to act as paying agent in the Merger (the "Paying Agent"), and, from time to
time on, prior to or after the Effective Time, Parent shall make available, or
cause the Surviving Corporation to make available, to the Paying Agent cash in
amounts and at the times necessary for the payment of the Merger Consideration
upon surrender of certificates representing Shares as part of the Merger
pursuant to Section 2.5. Any and all interest earned on funds made available to
the Paying Agent pursuant to this Agreement shall be paid over to Parent.
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a certificate or certificates that immediately prior to the Effective
Time represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions not inconsistent
with this Agreement as Parent may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, Parent shall cause the Paying Agent
to pay the holder of such Certificate, in exchange for such Certificate, the
Merger Consideration, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, payment may be made to a
person other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of such Certificate or establish to the satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.6, each Certificate (other
than Certificates representing Dissenting Shares) shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
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surrender the amount of cash, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.5. No interest will be paid or will accrue on the cash payable upon
the surrender of any Certificate. Parent or the Paying Agent shall be entitled
to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Shares such amounts as Parent or the Paying Agent is
required to deduct and withhold with respect to the making of such payment under
the Code (as hereinafter defined) or under any provisions of state, local or
foreign tax law. To the extent that amounts are so withheld by Parent or the
Paying Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the person in respect of which such deduction
or withholding was made by the Parent or the Paying Agent.
(c) No Further Ownership Rights in Shares. All cash paid upon the
surrender of Certificates in accordance with the terms of this Article II shall
be deemed to have been paid in full satisfaction of all rights pertaining to the
Shares theretofore represented by such Certificates. At the Effective Time, the
stock transfer books of the Company shall be closed, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article II.
(d) Termination of Payment Fund. Any portion of the funds made
available to the Paying Agent to pay the Merger Consideration which remains
undistributed to the holders of Shares for six months after the Effective Time
shall be delivered to Parent, upon demand, and any holders of Shares who have
not theretofore complied with this Article II and the instructions set forth in
the letter of transmittal mailed to such holders after the Effective Time shall
thereafter look only to Parent for payment of the Merger Consideration to which
they are entitled.
(e) No Liability. None of Parent, Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to seven years after
the Effective Time (or immediately prior to such earlier date on which any
payment pursuant to this Article II would otherwise escheat to or become the
property of any Governmental Entity (as hereinafter defined)), the cash payment
in respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interests of any person previously entitled thereto.
(f) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Paying Agent, the posting by such person of a bond, in such
reasonable amount as Parent or the Paying Agent may direct as indemnity against
any claim that may be made against them with respect to such Certificate, the
Paying Agent will pay in exchange for such lost, stolen or destroyed Certificate
the amount of cash to which the holders thereof are entitled pursuant to Section
2.5.
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Section 2.7 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing, if Sub, or any other direct or indirect subsidiary of Parent, shall
acquire at least 90 percent of the outstanding Shares, pursuant to the Offer or
otherwise, the parties hereto agree to take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after expiration
of the Offer without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
Section 2.8 Further Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either of the Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either
Constituent Corporation, all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm the Surviving Corporation's
right, title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
Section 2.9 Closing. The closing of the Merger (the "Closing") and all
actions specified in this Agreement to occur at the Closing shall take place at
the offices of Sidley & Austin, Bank One Plaza, 00 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, at 5:00 p.m., local time, no later than the second
business day following the day on which the last of the conditions set forth in
Article VII shall have been fulfilled or waived (if permissible) or at such
other time and place as Parent and the Company shall agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
Section 3.1 Organization. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware and has all requisite corporate power and authority to carry on its
business as now being conducted. Each of Parent and Sub is duly qualified to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
Section 3.2 Authority. On or prior to the date of this Agreement, the
Boards of Directors of Parent and Sub have declared the Merger advisable and
approved and adopted this Agreement in accordance with the DGCL. Each of Parent
and Sub has all requisite corporate
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power and authority to execute and deliver the Transaction Agreements to which
it is a party, and each of Parent and Sub has all requisite corporate power and
authority to consummate the transactions contemplated in the Transaction
Agreements to which it is a party. The execution, delivery and performance by
Parent and Sub of the Transaction Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action (including Board action) on the
part of Parent and Sub subject, in the case of this Agreement, to the filing of
the Certificate of Merger as required by the DGCL. Each of Parent and Sub has
duly executed and delivered the Transaction Agreements to which it is a party,
and (assuming the valid authorization, execution and delivery of this Agreement
by the Company, the valid authorization, execution and delivery of the
Stockholder Agreements by the stockholders who are parties thereto and the
validity and binding effect hereof and thereof on the Company and such
stockholders), such agreements constitute the valid and binding obligation of
each of Parent and Sub enforceable against them in accordance with their
respective terms.
Section 3.3 Consents and Approvals; No Violations. Assuming that all
consents, approvals, authorizations and other actions described in this Section
3.3 have been obtained and all filings and obligations described in this Section
3.3 have been made, the execution and delivery of this Agreement and the
Stockholder Agreements do not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions hereof and
thereof will not, result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or result in the loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of Parent
or any of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the by-laws of Parent or Sub, each as amended to date, (ii) any
provision of the comparable charter or organization documents of any of Parent's
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
Parent or Sub, materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or under the Stockholder Agreements or prevent
the consummation of any of the transactions contemplated hereby or thereby. No
filing or registration with, or authorization, consent or approval of, any
domestic (federal and state), foreign or supranational court, commission,
governmental body, regulatory agency, (including the Food and Drug
Administration) authority or tribunal (a "Governmental Entity") is required by
or with respect to Parent or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the Stockholder Agreements by Parent
or Sub or is necessary for the consummation of the Offer, the Merger and the
other transactions contemplated by this Agreement or the Stockholder Agreements,
except for (i) in connection, or in compliance, with the provisions of the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
the Exchange Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate
9
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Offer, the Merger or by the transactions contemplated by this
Agreement or the Stockholder Agreements, (iv) such filings, authorizations,
orders and approvals as may be required by state takeover laws (the "State
Takeover Approvals"), (v) applicable requirements, if any, of state securities
or "blue sky" laws ("Blue Sky Laws"), (vi) as may be required under foreign laws
and (vii) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on Parent or
Sub, materially impair the ability of Parent or Sub to perform its obligations
hereunder or under the Stockholder Agreements or prevent the consummation of any
of the transactions contemplated hereby or thereby.
Section 3.4 Information Supplied. None of the information supplied or to be
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
(iv) the proxy statement (together with any amendments or supplements thereto,
the "Proxy Statement") relating to the Stockholder Meeting (as hereinafter
defined) will (a) in the case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times the Offer Documents, the Schedule
14D-9 and the Information Statement are filed with the SEC or first published,
sent or given to the Company's stockholders, or (b) in the case of the Proxy
Statement, at the time the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act, except that no representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
Section 3.5 Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
Section 3.6 Brokers. No broker, investment banker, financial advisor or
other person, other than Lazard Freres & Co., LLC, the fees and expenses of
which will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.
Section 3.7 Financing. Parent has available (through existing credit
arrangements or otherwise) sufficient funds to purchase all of the Shares
outstanding on a fully-diluted basis at the Offer Price and to pay all fees and
expenses related to the transactions contemplated herein.
10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
Section 4.1 Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as now being conducted. Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has all requisite corporate (in the
case of a Subsidiary that is a corporation) or other power and authority to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. The Company and each of its Subsidiaries are duly qualified to do
business, and are in good standing, in each jurisdiction where the character of
their properties owned or held under lease or the nature of their activities
makes such qualification necessary, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. A list of all Subsidiaries of the Company, together with the
jurisdiction of incorporation of each Subsidiary, the percentage of the
outstanding capital stock of each Subsidiary owned by the Company and each other
Subsidiary and the name of any person other than the Company or another
Subsidiary that owns capital stock of the Subsidiary, is set forth in Section
4.1 of the letter dated the date hereof and delivered on the date hereof by the
Company to Parent, which relates to this Agreement and is designated therein as
the Company Letter (the "Company Letter").
Section 4.2 Capital Structure. (a) As of the date hereof, the authorized
capital stock of the Company consists of 20,000,000 Shares and 1,000,000 shares
of Preferred Stock, par value $.10 per share ("Company Preferred Stock").
(b) At the close of business on September 11, 2000:
(i) 7,231,448 Shares were issued and outstanding, all of which were
validly issued, fully paid and nonassessable and free of preemptive rights;
(ii) no shares of Company Preferred Stock were issued and outstanding;
(iii) 3,708,800 Shares were held in the treasury of the Company or by
Subsidiaries of the Company;
(iv) 843,825 Shares were reserved for issuance upon the exercise of
outstanding vested and exercisable stock options issued under the Company's
Incentive Stock Option Plan, as amended, Non-Qualified Stock Option Plan,
as amended, Special Stock Option Plan, as amended, 1996 Incentive Stock
Option Plan, as amended, the 1996 Non-Qualified Stock Option Plan, as
amended, and the 1998 Special Stock Option Plan, as amended, (the "Company
Stock Option Plans"); and
11
(v) 793,775 Shares were reserved for issuance upon the exercise of
outstanding unvested or unexercisable stock options issued under the
Company Stock Option Plans;
(c) Section 4.2 of the Company Letter contains a correct and complete
list as of the date of this Agreement of each outstanding option to purchase
Shares issued under any of the Company Option Plans (collectively, the "Company
Stock Options"), including the holder, date of grant, term, exercise price and
number of shares of Company Common Stock subject thereto and whether the option
is vested and exercisable or subject to acceleration.
(d) Except for the Company Stock Options, there are no options,
warrants, calls, rights or agreements to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the Company
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of the Company or any of
its Subsidiaries or obligating the Company or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right or agreement, and
there are no outstanding contractual rights to which the Company or any of its
Subsidiaries is a party the value of which is based on the value of Shares.
Except as set forth in Section 4.2 of the Company Letter, there are no
outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of or any equity interests in the Company or any Subsidiary.
(e) Each outstanding share of capital stock of each Subsidiary of the
Company is duly authorized, validly issued, fully paid and nonassessable and,
except as set forth in Section 4.2 of the Company Letter, each such share is
owned by the Company or another Subsidiary of the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, charges and other encumbrances of any
nature whatsoever.
(f) The Company does not have any outstanding bonds, debentures, notes
or other obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter.
Section 4.3 Authority. On or prior to the date of this Agreement, the Board
of Directors of the Company has unanimously approved the Offer and declared the
Merger advisable and fair to and in the best interest of the Company and its
stockholders, approved and adopted this Agreement and the transactions
contemplated hereby in accordance with the DGCL, resolved to recommend the
acceptance of the Offer by the Company's stockholders and directed that this
Agreement, if necessary, be submitted to the Company's stockholders for
approval. The Company has all requisite corporate power and authority to enter
into this Agreement and, subject to approval by the stockholders of the Company
of this Agreement, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action (including Board action) on the part of the
12
Company, subject to (x) approval and adoption of this Agreement by the
stockholders of the Company and (y) the filing of the Certificate of Merger as
required by the DGCL. This Agreement has been duly executed and delivered by the
Company and (assuming the valid authorization, execution and delivery of this
Agreement by Parent and Sub and the validity and binding effect of this
Agreement on Parent and Sub) constitutes the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
Section 4.4 Consents and Approvals; No Violation. Assuming that all
consents, approvals, authorizations and other actions described in this Section
4.4 have been obtained and all filings and obligations described in this Section
4.4 have been made, the execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or result in the
loss of a material benefit 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 provision of (i) the Company
Charter or the Amended and Restated Bylaws of the Company, (ii) any provision of
the comparable charter or organization documents of any of the Company's
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to the Company or any of its Subsidiaries or (iv) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its Subsidiaries or any of their respective properties
or assets, other than, in the case of clauses (ii), (iii) or (iv), any such
violations, defaults, rights, liens, security interests, charges or encumbrances
that, individually or in the aggregate, would not have a Material Adverse Effect
on the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization, consent
or approval of, any Governmental Entity is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or is necessary for the consummation of the
Offer, the Merger and the other transactions contemplated by this Agreement,
except for (i) in connection, or in compliance, with the provisions of the HSR
Act and the Exchange Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business, (iii) such filings and consents as may
be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered by the
Offer, the Merger or the transactions contemplated by this Agreement, (iv) such
filings, authorizations, orders and approvals as may be required to obtain the
State Takeover Approvals, (v) applicable requirements, if any, of Blue Sky Laws
or the Nasdaq National Market, (vi) as may be required under foreign laws and
(vii) such other consents, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made would not, individually
or in the aggregate, have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
13
Section 4.5 SEC Documents and Other Reports. The Company has filed all
required documents (including proxy statements) with the SEC since December 1,
1998 (the "Company SEC Documents"). As of their respective dates, the Company
SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and, at the respective times they were filed, none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements (including, in each
case, any notes thereto) of the Company included in the Company SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with United States generally accepted
accounting principles ("GAAP") (except, in the case of the unaudited statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC Documents
or as required by GAAP, the Company has not, since December 1, 1998, made any
change in the accounting practices or policies applied in the preparation of
financial statements. Since December 1, 1998, the SEC has not (i) to the
Knowledge of the Company, conducted any investigation of the Company, (ii)
initiated any enforcement action against the Company or (iii) provided to the
Company any comments on any of the Company SEC Documents, and, to the Knowledge
of the Company, no such investigation, enforcement action or comments is pending
or threatened.
Section 4.6 Information Supplied. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Information
Statement or (iv) the Proxy Statement, will (a) in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or (b) in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholder Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Schedule 14D-9, the Information Statement and the
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act, except that no representation or warranty is
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub specifically for
inclusion or incorporation by reference therein.
Section 4.7 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed with the SEC prior to the date of this Agreement
or as set forth
14
in the Company Letter, since December 1, 1999, (i) the Company and its
Subsidiaries have not incurred any material liability or obligation (indirect,
direct or contingent), or entered into any material oral or written agreement or
other transaction, that is not in the ordinary course of business or that would
result in a Material Adverse Effect on the Company, (ii) the Company and its
Subsidiaries have not sustained any loss or interference with their business or
properties from fire, flood, windstorm, accident or other calamity (whether or
not covered by insurance) that has had a Material Adverse Effect on the Company,
(iii) there has been no change in the capital stock of the Company except for
the issuance of shares of the Company Common Stock pursuant to Company Stock
Options and no dividend or distribution of any kind declared, paid or made by
the Company on any class of its stock, (iv) there has not been (A) any adoption
of a new Company Plan (as hereinafter defined), (B) any amendment to a Company
Plan materially increasing benefits thereunder or any repricing, directly or
indirectly of any Company Stock Option or other right to purchase shares of
Company Common Stock, (C) any granting by the Company or any of its Subsidiaries
to any executive officer or other key employee of the Company or any of its
Subsidiaries of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent audited financial
statements included in the Company SEC Documents filed prior to the date hereof,
(D) any granting by the Company or any of its Subsidiaries to any such executive
officer or other key employee of any increase in severance or termination
agreements in effect as of the date of the most recent audited financial
statements included in the Company SEC Documents filed prior to the date hereof
or (E) any entry by the Company or any of its Subsidiaries into any employment,
severance or termination agreement with any such executive officer or other key
employee, (v) there has not been any material changes in the amount or terms of
the indebtedness of the Company and its Subsidiaries from that described in the
Company SEC Documents filed prior to the date hereof and (vi) there has been no
event causing a Material Adverse Effect on the Company, nor any development that
would reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect on the Company.
Section 4.8 Permits and Compliance. (a) Each of the Company and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. No suspension or
cancellation of any of the Company Permits is pending or, to the Knowledge of
the Company (as hereinafter defined), threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries is in violation of (A) its charter, by-laws or other
organizational documents, (B) any law, ordinance, administrative or governmental
rule or regulation, (C) any order, decree or judgment of any Governmental Entity
having jurisdiction over the Company or any of its Subsidiaries, or (D) any
Company Permits except, in the case of clauses (B), (C) or (D), for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company.
15
(b) Except as disclosed in the Company SEC Documents filed prior to
the date of this Agreement, there are no contracts or agreements of the Company
or its Subsidiaries having terms or conditions which would have a Material
Adverse Effect on the Company or having covenants not to compete that materially
impair the ability of the Company to conduct its business as currently conducted
or purport to bind any stockholder or any Affiliated Person (as defined herein)
of any stockholder of the Company after the Effective Time. Except as set forth
in the Company SEC Documents filed prior to the date of this Agreement, no event
of default or event that, but for the giving of notice or the lapse of time or
both, would constitute an event of default exists or, upon the consummation by
the Company of the transactions contemplated by this Agreement, will exist under
any indenture, mortgage, loan agreement, note or other agreement or instrument
for borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject, other than any
defaults that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company.
Section 4.9 Tax Matters. Except as otherwise set forth in Section 4.9 of
the Company Letter, (i) the Company and each of its Subsidiaries have filed all
Tax Returns (as hereinafter defined) required to have been filed, and such Tax
Returns are correct and complete and disclose all Taxes (as hereinafter defined)
required to be paid by the Company and its Subsidiaries for the periods covered
thereby, except to the extent that any failure to so file or any failure to be
correct and complete or to disclose all Taxes required to be paid would not,
individually or in the aggregate, have a Material Adverse Effect on the Company;
(ii) all Taxes shown to be due on such Tax Returns have been timely paid or
extensions for payment have been properly obtained, or such Taxes are being
contested in good faith; (iii) the Company and each of its Subsidiaries have
complied with all rules and regulations relating to the withholding of Taxes and
the remittance of withheld Taxes, except to the extent that any failure or
failures to so comply would not, individually or in the aggregate, have a
Material Adverse Effect on the Company; (iv) neither the Company nor any of its
Subsidiaries has waived any statute of limitations in respect of its Taxes; (v)
any Tax Returns required to have been filed by or with respect to the Company
and each of its Subsidiaries relating to federal and state income Taxes have
been examined by the Internal Revenue Service ("IRS") or the appropriate foreign
or state taxing authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has expired; (vi) no issues
that have been raised by the relevant taxing authority in connection with the
examination of Tax Returns required to have been filed by or with respect to the
Company and each of its Subsidiaries are currently pending; (vii) all
deficiencies asserted or assessments made as a result of any examination of such
Tax Returns by any taxing authority have been paid in full or properly reflected
on the books of the Company; and (viii) there is no action, suit, investigation,
audit, claim or assessment pending or, to the Knowledge of the Company, proposed
or threatened with respect to Taxes of the Company or any Subsidiary; (ix) there
are no liens for Taxes upon the assets of the Company or any Subsidiary except
liens relating to current Taxes not yet due; (x) none of the Company or any
Subsidiary has been a member of any group of corporations filing Tax Returns on
a consolidated, combined, unitary or similar basis other than each such group of
which it is currently a member;
16
(xi) no transaction contemplated by this Agreement is subject to withholding
under Section 1445 of the Code (relating to "FIRPTA") and no material stock
transfer Taxes, sales Taxes, use Taxes, real estate transfer Taxes, or other
similar Taxes will be imposed on the transactions contemplated by this
Agreement; (xii) no material liability for any state or local Taxes attributable
to the transfer of the beneficial ownership of the Company's and its
Subsidiaries' real properties, or any penalties or interest with respect
thereto, will be incurred in connection with the consummation of the Offer and
the Merger; (xiii) except as may be limited by the transactions contemplated by
this Agreement, the "regular" and, if applicable, "alternative minimum tax" net
operating loss carry forwards of the Company and its Subsidiaries for each of
the taxable years ended on or prior to November 30, 1999 (collectively, the
"NOLs") are set forth (for each year) in Section 4.9 of the Company Letter and
are each available to the Company (or the applicable Subsidiary) for the period
set forth in Section 172(b)(1)(A) of the Code as in effect for the taxable year
in which the applicable NOL was incurred; and (xiv) except as may be limited as
a result of the transactions contemplated by this Agreement, immediately prior
to the Effective Time, none of the NOLs will constitute separate return
limitation year (SRLY) losses, consolidated return change of ownership (CRCO)
losses or "dual consolidated losses" and none of the NOLs will be limited by
sections 382 or 384 of the Code and the regulations thereunder.
Section 4.10 Actions and Proceedings. There are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity against or
involving the Company or any of its Subsidiaries, or against or involving any of
the present or former directors, officers, employees, consultants, agents or
stockholders of the Company or any of its Subsidiaries with respect to the
Company or any of its Subsidiaries, any of the properties, assets or business of
the Company or any of its Subsidiaries or any Company Plan (as hereinafter
defined) that, individually or in the aggregate, would have a Material Adverse
Effect on the Company or materially impair the ability of the Company to perform
its obligations hereunder. Except as set forth in Section 4.10 of the Company
Letter, there are no actions, suits or claims or legal, administrative or
arbitrative proceedings or investigations (including claims for workers'
compensation) pending or, to the Knowledge of the Company, threatened against or
involving the Company or any of its Subsidiaries or any of its or their present
or former directors, officers, employees, consultants, agents or stockholders
with respect to the Company or any of its Subsidiaries, or any of the
properties, assets or business of the Company or any of its Subsidiaries or any
Company Plan that, individually or in the aggregate, would have a Material
Adverse Effect on the Company or materially impair the ability of the Company to
perform its obligations hereunder. There are no actions, suits, labor disputes
or other litigation, legal or administrative proceedings or governmental
investigations pending or, to the Knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries or any of its or their
present or former officers, directors, employees, consultants, agents or
stockholders with respect to the Company or its Subsidiaries, or any of the
properties, assets or business of the Company or any of its Subsidiaries
relating to the transactions contemplated by this Agreement.
Section 4.11 Compensation Agreements. Except as set forth in Section 4.11
of the Company Letter, neither the Company nor any of its Subsidiaries is a
party to any oral or written agreement or plan, including any employment
agreement, severance agreement, stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan (collectively, the
17
"Compensation Agreements"), pension plan (as defined in Section 3(2) of ERISA)
or welfare plan (as defined in Section 3(1) of ERISA), any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. Except as set
forth in Section 4.11 of the Company Letter, no holder of any option to purchase
Shares, or Shares granted in connection with the performance of services for the
Company or its Subsidiaries, is or will be entitled to receive cash from the
Company or any Subsidiary in lieu of or in exchange for such option or shares as
a result of the transactions contemplated by this Agreement. Section 4.11 of the
Company Letter sets forth (i) for each officer, director or employee who is a
party to, or will receive benefits under, any Compensation Agreement as a result
of the transactions contemplated herein, the total amount that each such person
may receive, or is eligible to receive, assuming that the transactions
contemplated by this Agreement are consummated on the date hereof, and (ii) the
total amount of indebtedness owed to the Company or its Subsidiaries from each
officer, director or employee of the Company and its Subsidiaries.
Section 4.12 Employee Benefits. (a) Each Company Plan (as hereinafter
defined), is listed in Section 4.12(a) of the Company Letter. With respect to
each Company Plan, the Company has provided to Parent a true and correct copy of
(i) the three most recent annual reports (Form 5500) filed with the IRS, if
applicable, (ii) each such Company Plan that has been reduced to writing and all
amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to each such Company Plan, (iv) a written
summary of each unwritten Company Plan, (v) the most recent summary plan
description or other written explanation of each Company Plan provided to
participants, (vi) the most recent determination letter and request therefor, if
any, issued by the IRS with respect to any Company Plan intended to be qualified
under Section 401(a) of the Code, (vii) any request for a determination
currently pending before the IRS and (viii) all correspondence with the IRS, the
Department of Labor, or the SEC relating to any outstanding controversy. Each
Company Plan complies in all material respects with ERISA, the Code and all
other applicable Statutes and governmental rules and regulations. Neither the
Company nor any ERISA Affiliate currently maintains, contributes to or has any
liability under, or at any time during the past six years has maintained or
contributed to, any pension plan which is subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA. Neither the Company nor any ERISA
Affiliate currently maintains, contributes to or has any liability under, or at
any time during the past six years has maintained or contributed to, any
"multiemployer Plan" (as defined in Section 4001(a)(3) of ERISA).
(b) Except as listed in Section 4.12(b) of the Company Letter, with
respect to the Company Plans, no event has occurred and there exists no
condition or set of circumstances in connection with which the Company or any
Subsidiary or ERISA Affiliate or Company Plan fiduciary could be subject to any
material liability under the terms of such Company Plans, ERISA, the Code or any
other applicable law. All Company Plans that are intended to be qualified under
Section 401(a) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending and the Company is
not aware of any reason why any such Company Plan is not so qualified in
operation. Except as disclosed in Section 4.12(b) of the Company Letter, neither
the Company nor any of its ERISA Affiliates has
18
any liability or obligation under any welfare plan to provide benefits after
termination of employment to any employee or dependent other than as required by
Section 4980B of the Code.
(c) As used herein, (i) "Company Plan" means a "pension plan" (as
defined in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a
"welfare plan" (as defined in Section 3(1) of ERISA), or any other written or
oral bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, restricted stock, stock
appreciation right, holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel policy,
insurance or other plan, arrangement or understanding, in each case established
or maintained by the Company or any of its ERISA Affiliates or as to which the
Company or any of its ERISA Affiliates has contributed or otherwise may have any
liability, and (ii) "ERISA Affiliate" means any trade or business (whether or
not incorporated) which would be considered a single employer with the Company
or any of its Subsidiaries pursuant to Section 414(b), (c), (m) or (o) of the
Code and the regulations promulgated under those sections or pursuant to Section
4001(b) of ERISA and the regulations promulgated thereunder.
(d) Section 4.12(d) of the Company Letter contains a list of all (i)
severance and employment agreements with employees of the Company and each of
its Subsidiaries, (ii) severance programs and policies of the Company and each
of its Subsidiaries with or relating to its employees and (iii) plans, programs,
agreements and other arrangements of the Company and each of its Subsidiaries
with or relating to its employees containing change of control or similar
provisions.
(e) Except as set forth in Section 4.12(e) of the Company Letter,
neither the Company nor any of its Subsidiaries is a party to any agreement,
contract or arrangement that could result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code.
(f) No Company Plan is subject to laws outside of the United States.
Section 4.13 Liabilities. Except as set forth in Section 4.13 of the
Company Letter or as fully reflected or reserved against in the financial
statements included in the Company SEC Documents filed prior to the date hereof,
or disclosed in the footnotes thereto, since December 1, 1999 the Company and
its Subsidiaries have incurred no liabilities (including Tax liabilities) or
obligations of any nature, absolute or contingent, other than liabilities or
obligations that (i) would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or (ii) that would not be required by
GAAP to be reflected or reserved in the financial statements of the Company or
in the footnotes thereto, prepared in accordance with GAAP consistent with past
practices, or (iii) that arise in the ordinary course of business consistent
with past practices. Except as set forth in Section 4.13 of the Company Letter,
as of the date hereof, none of the Company or its Subsidiaries has any
indebtedness for borrowed money (other than advances from the Company to such
Subsidiaries).
19
Section 4.14 Labor Matters. Except as set forth in Section 4.14 of the
Company Letter, neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or labor contract. Neither the Company nor
any of its Subsidiaries has engaged in any unfair labor practice with respect to
any persons employed by or otherwise performing services primarily for the
Company or any of its Subsidiaries (the "Company Business Personnel"), and there
is no unfair labor practice complaint or grievance against the Company or any of
its Subsidiaries by any person pursuant to the National Labor Relations Act or
any comparable state or foreign law pending or threatened in writing with
respect to the Company Business Personnel, except where such unfair labor
practice, complaint or grievance would not have a Material Adverse Effect on the
Company. There is no union-organizing activity, labor strike, dispute, slowdown
or stoppage pending or, to the Knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries which may interfere with the
respective business activities of the Company or any of its Subsidiaries, except
where such union-organizing activity, labor strike, dispute, slowdown or
stoppage would not have a Material Adverse Effect on the Company.
Section 4.15 Intellectual Property. (a) As used herein, "Company
Intellectual Property" means all trademarks, trademark registrations, trademark
rights and renewals thereof, trade names, trade name rights, patents, patent
rights, patent applications, industrial models, inventions, invention
disclosures, designs, utility models, inventor rights, software, computer
programs, computer systems, modules and related data and materials, copyrights,
copyright registrations and renewals thereof, servicemarks, servicemark
registrations and renewals thereof, servicemark rights, trade secrets,
applications for trademark and servicemark registrations, know-how, confidential
information and other proprietary rights, and any data and information of any
nature or form used or held for use in connection with the businesses of the
Company and/or the Subsidiaries as currently conducted or as currently
contemplated by the Company, together with all applications currently pending or
in process for any of the foregoing.
(b) Except as disclosed in the Company SEC Documents filed with the
SEC prior to the date hereof, the Company and the Subsidiaries own, or possess
adequate licenses or other valid rights to use (including the right to
sublicense to customers, suppliers or others as needed), all of the Company
Intellectual Property that is necessary for the conduct or contemplated conduct
of the Company's or Subsidiaries' businesses, except for such failures to own or
possess as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Section 4.15 of the Company Letter lists each material
license or other agreement pursuant to which the Company or any Subsidiary has
the right to use Company Intellectual Property utilized in connection with any
product of, or service provided by, the Company and the Subsidiaries, the
cancellation or expiration of which would have a Material Adverse Effect on the
Company (the "Company Licenses"). There are no pending, or, to the Knowledge of
the Company, threatened interferences, re-examinations, oppositions or
cancellation proceedings involving any patents or patent rights, trademarks or
trademark rights, or applications therefor, of the Company or any Subsidiary,
except such as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. There is no breach or violation by the Company or
by any Subsidiary under, and, to the Knowledge of the Company, there is no
breach or violation by any other party to, any Company License that is
reasonably likely to give rise to any termination or any loss of
20
rights thereunder. To the Knowledge of the Company, there has been no
unauthorized disclosure or use of confidential information, trade secret rights,
processes and formulas, research and development results and other know-how of
the Company or any Subsidiary, except where such disclosure or use of such
information would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. The conduct of the business of the Company and the
Subsidiaries as currently conducted or contemplated does not and will not
infringe upon or conflict with, in any way, any license, trademark, trademark
right, trade name, trade name right, patent issued as of the date hereof, patent
right, industrial model, invention, service xxxx, service xxxx right, copyright
or trade secret of any third party that, individually or in the aggregate, would
have a Material Adverse Effect on the Company. Except as disclosed in the
Company SEC Documents filed with the SEC prior to the date hereof, to the
Knowledge of the Company, there are no infringements of, or conflicts with, any
Company Intellectual Property which, individually or in the aggregate, would
have a Material Adverse Effect on the Company. Except as set forth in Section
4.15 of the Company Letter, neither the Company nor any Subsidiary has licensed
or otherwise permitted the use by any third party of any proprietary information
or Company Intellectual Property on terms or in a manner which, individually or
in the aggregate, would have a Material Adverse Effect on the Company.
Section 4.16 Title to Assets. (a) As of the date hereof, the Company and
the Subsidiaries own, and as of the Effective Time the Company and the
Subsidiaries will own, good and marketable title to all of their assets material
to their business (excluding, for purposes of this sentence, assets held under
leases), free and clear of any and all mortgages, liens, encumbrances, charges,
claims, restrictions, pledges, security interests or impositions, except as set
forth in the Company SEC Documents filed with the SEC prior to the date hereof,
or Section 4.16 of the Company Letter.
(b) Except as set forth in Section 4.16 of the Company Letter, neither
the Company nor any of its Subsidiaries owns any Real Estate. The leases to all
Real Estate occupied by the Company and the Subsidiaries which are material to
the operation of the businesses of the Company are in full force and effect and
no event has occurred which with the passage of time, the giving of notice, or
both, would constitute a default or event of default by the Company or any
Subsidiary or, to the Knowledge of the Company, any other person who is a party
signatory thereto, other than such defaults or events of default which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.
Section 4.17 State Takeover Statutes. The Board of Directors of the Company
has, to the extent such statute is applicable, taken all action so to render the
provisions of Section 203 of the DGCL inapplicable to the Offer, the Merger and
the Stockholder Agreements and the consummation of the transactions contemplated
by this Agreement and the Stockholder Agreements. No other state takeover
statute is applicable to the Offer, the Merger, this Agreement, the Stockholder
Agreements and the transactions contemplated hereby and thereby.
Section 4.18 Required Vote of Company Stockholders. The affirmative vote of
the holders of at least a majority of Shares entitled to vote is required to
adopt this Agreement. No other vote of the security holders of the Company is
required by law, the Company Charter or the
21
Amended and Restated Bylaws of the Company or otherwise in order for the Company
to consummate the Merger and the transactions contemplated hereby.
Section 4.19 Transactions with Affiliates. (a) For purposes of this
Agreement, "Affiliated Person" means (i) any holder of 2% or more of the Company
Common Stock, (ii) any director, officer or senior executive of the Company or
any Subsidiary, (iii) any person, firm or corporation that directly or
indirectly controls, is controlled by, or is under common control with, any of
the Company or any subsidiary or (iv) any member of the immediate family or any
of such persons, in each case other than Parent or its Subsidiaries.
(b) Except as set forth in Section 4.19 of the Company Letter or in
the Company SEC Documents filed with the SEC prior to the date hereof, since
December 1, 1999, the Company and the Subsidiaries have not, in the ordinary
course of business or otherwise, (i) purchased, leased or otherwise acquired any
material property or assets or obtained any material services from, (ii) sold,
leased or otherwise disposed of any material property or assets or provided any
material services to (except with respect to remuneration for services rendered
in the ordinary course of business as director, officer or employee of the
Company or any Subsidiary), (iii) entered into or modified in any manner any
contract with, or (iv) borrowed any money from, or made or forgiven any loan or
other advance (other than expenses or similar advances made in the ordinary
course of business) to, any Affiliated Person.
(c) Except as set forth in Section 4.19 of the Company Letter or in
the Company SEC Documents filed with the SEC prior to the date hereof, (i) the
contracts of the Company and the Subsidiaries do not include any material
obligation or commitment between the Company or any Subsidiary and any
Affiliated Person, (ii) the assets of the Company or any Subsidiary do not
include any receivable or other obligation or commitment from an Affiliated
Person to the Company or any Subsidiary and (iii) the liabilities of the Company
and the Subsidiaries do not include any payable or other obligation or
commitment from the Company or any Subsidiary to any Affiliated Person.
(d) To the Knowledge of the Company and except as set forth in Section
4.19 of the Company Letter or in the Company SEC Documents filed with the SEC
prior to the date hereof, no Affiliated Person of any of the Company or any
Subsidiary is a party to any contract with any supplier of the Company or any
Subsidiary that affects in any material manner the business, financial condition
or results of operation of the Company or any Subsidiary.
Section 4.20 Brokers. No broker, investment banker, financial advisor or
other person, other than Xxxx Xxxxxxxxx Xxxxxxxx & Co. ("HBW"), the fees and
expenses of which will be paid by the Company (as reflected in an agreement
between HBW and the Company, a copy of which has been furnished to Parent), is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
Section 4.21 Compliance with Worker Safety Laws. The properties, assets and
operations of the Company and its Subsidiaries are in compliance with all
applicable federal,
22
state, local and foreign laws, rules and regulations, orders, decrees,
judgments, permits and licenses relating to public and worker health and safety
(collectively, "Worker Safety Laws"), except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. With respect to such properties, assets and operations, including
any previously owned, leased or operated properties, assets or operations, there
are no past, present or reasonably anticipated future events, conditions,
circumstances, activities, practices, incidents, actions or plans (other than
those taken by subsequent owners of such properties, assets or operations) of
the Company or any of its Subsidiaries that may interfere with or prevent
compliance or continued compliance with applicable Worker Safety Laws, other
than any such interference or prevention as would not, individually or in the
aggregate with any such other interference or prevention, have a Material
Adverse Effect on the Company.
Section 4.22 Products. Except as set forth in Section 4.22 of the Company
Letter, since December 1, 1999, neither the Company nor any Subsidiary has
received a written, or to the Knowledge of the Company, oral claim for or based
upon breach of product or service warranty or guaranty or similar claim (other
than warranty or guaranty claims in the ordinary course of business not material
in amount or significance), strict liability in tort, negligent design of
product, negligent provision of services or any other allegation of liability,
including or arising from the materials, design, testing, manufacture,
packaging, labeling (including instructions for use), or sale of its products or
from the provision of services; and, to the Knowledge of the Company, there is
no basis for any such claim which, if asserted, would likely have a Material
Adverse Effect on the Company. Except as set forth in Section 4.22 of the
Company Letter, the Company has never undertaken any recall of any of its
products.
Section 4.23 Opinion of Financial Advisor. The Company has received the
written opinion of HBW to the effect that the Merger Consideration is fair to
the Company's shareholders from a financial point of view, a copy of which
opinion has been delivered to Parent.
Section 4.24 Accounts Receivable. All of the accounts and notes receivable
of the Company and its Subsidiaries set forth on the books and records of the
Company (net of the applicable reserves, which such reserves are adequate
notwithstanding the items set forth in the Company Letter, reflected on the
books and records of the Company and in the financial statements included in the
Company SEC Documents) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) except as set forth in Section 4.24(ii) of the Company
Letter, constitute valid claims, and (iii) except as set forth on Section
4.24(iii) of the Company Letter, are good and collectible at the aggregate
recorded amounts thereof (net of such reserves, which such reserves are adequate
notwithstanding the items set forth in the Company Letter,) without right of
recourse, defense, deduction, return of goods, counterclaim, or offset and have
been or will be collected in the ordinary course of business and consistent with
past experience, except for such failures of accounts and notes receivable to
satisfy the conditions set forth in clauses (i), (ii) and (iii) of this Section
4.24 as would not have a Material Adverse Effect on the Company.
23
Section 4.25 Inventories. Except as set forth in Section 4.25 of the
Company Letter, all inventories of the Company and its Subsidiaries consist of
items of merchantable quality and quantity usable or saleable in the ordinary
course of business, are saleable at prevailing market prices that are not less
than the book value amounts thereof or the price customarily charged by the
Company or the applicable Subsidiary therefor, and all finished goods or
products of the Company and its Subsidiaries conform to the specifications
established therefor, and have been manufactured in accordance with applicable
regulatory requirements, except to the extent that the failure so to consist, be
saleable, conform, or be manufactured would not have a Material Adverse Effect
on the Company. Except as set forth in Section 4.25 of the Company Letter, the
quantities of all inventories, materials and supplies of the finished products
of the Company and each Subsidiary (net of the obsolescence reserves, which such
reserves are adequate notwithstanding the items set forth in the Company Letter,
therefor shown in the financial statements included in the Company SEC Documents
and determined in the ordinary course of business consistent with past practice)
are not obsolete, damaged, slow-moving, defective, or excessive, except to the
extent that the failure of such inventories to be in such conditions would not
have a Material Adverse Effect on the Company.
Section 4.26 Certain Agreements.
(a) Set forth in Section 4.26(a) of the Company Letter is a list of
all contracts (except for contracts that have been filed, prior to the date
hereof, with Company SEC Documents) that are material to the business of the
Company and its Subsidiaries taken as a whole (whether oral or written),
including all distribution contracts, sole-source supply contracts, national
accounts contracts, any indenture, mortgage, loan agreement, note or other
agreement or instrument for borrowed money, any guarantee of any agreement or
instrument for borrowed money or any material lease, contractual license or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any such Subsidiary is bound or to which any
of the properties, assets or operations of the Company or any such Subsidiary is
subject (collectively, "Significant Contracts"). Prior to the date hereof, the
Company has provided true and complete copies of all such contracts to Parent.
(b) Except as set forth in Section 4.26(b) of the Company Letter, each
Significant Contract is a legal, valid and binding agreement of the Company or
its Subsidiaries, neither the Company nor any of its Subsidiaries (or to the
Knowledge of the Company, any other party thereto) is in default under any
Significant Contract, and none of such Significant Contracts has been canceled
by the other party thereto; each Significant Contract is in full force and
effect and no event has occurred which, with the passage of time or the giving
of notice or both, would constitute a default, event of default or other breach
by the Company or any Subsidiary party thereto which would entitle the other
party to such Significant Contract to terminate the same or declare a default or
event of default thereunder; the Company and the Subsidiaries are not in receipt
of any claim of default under any such agreement; in each instance, except where
it would not have a Material Adverse Effect on the Company.
Section 4.27 Environmental Matters. (a) For purposes of this Agreement, the
following terms shall have the following meanings: (i) "Hazardous Substances"
means (A)
24
petroleum and petroleum products, by-products or breakdown products, radioactive
materials, asbestos-containing materials and polychlorinated biphenyls, and (B)
any other chemicals, materials or substances regulated as toxic or hazardous or
as a pollutant, contaminant or waste under any applicable Environmental Law;
(ii) "Environmental Law" means any law, past, present or future (up until the
Effective Time) and as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, or common law, relating to pollution or protection of the
environment, health or safety or natural resources, including those relating to
the use, handling, transportation, treatment, storage, disposal, release, or
discharge of Hazardous Substances; and (iii) "Environmental Permit" means any
permit, approval, identification number, license or other authorization required
under any applicable Environmental Law.
(b) The Company and the Subsidiaries are and have been in material
compliance with all applicable Environmental Laws, have obtained all
Environmental Permits and are in material compliance with their requirements,
and have resolved all past non-compliance with Environmental Laws and
Environmental Permits without any pending, on-going or future obligation, cost
or liability, except as set forth in Section 4.27 of the Company Letter.
(c) Except as set forth in Section 4.27 of the Company Letter (i)
neither the Company nor any of its Subsidiaries has placed, held, located,
released, transported or disposed of any Hazardous Substances on, under, from or
at any of the Company's or any of its Subsidiaries' properties or any other
properties, other than in a manner that would not, in all such cases taken
individually or in the aggregate, result in a Material Adverse Effect on the
Company, (ii) to the Knowledge of the Company there are no Hazardous Substances
on, under, emanating from, or at any of the Company's or any of its
Subsidiaries' properties or any other property but arising from the Company's or
any of its Subsidiaries' current or former properties or operations, other than
in a manner that would not result in a Material Adverse Effect on the Company,
or (iii) to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has any reason to know, or has received any written notice, (A) of
any violation of or liability under any Environmental Laws, (B) of the
institution or pendency of any suit, action, claim, proceeding or investigation
by any Governmental Entity or any third party in connection with any such
violation or liability, (C) requiring the investigation of, response to or
remediation of Hazardous Substances at or arising from any of the Company's or
any of its Subsidiaries' current or former properties or operations or any other
properties, (D) alleging noncompliance by the Company or any of its Subsidiaries
with the terms of any Environmental Permit in any manner reasonably likely to
require material expenditures or to result in material liability or (E)
demanding payment for response to or remediation of Hazardous Substances at or
arising from any of the Company's or any of its Subsidiaries' current or former
properties or operations or any other properties, except in each case for the
notices or matters set forth in Section 4.27 of the Company Letter.
(d) Except as set forth in Section 4.27 of the Company Letter, no
Environmental Law imposes any material obligation upon the Company or any of its
subsidiaries arising out of or as a condition to any transfer or transaction
contemplated by this Agreement, including any requirement to modify or to
transfer any Environmental Permit or license, any
25
requirement to file any notice or other submission with any Governmental Entity,
the placement of any notice, acknowledgment or covenant in any land records, or
the modification of or provision of notice under any agreement, consent order or
consent decree.
(e) Except as set forth in Schedule 4.27 (e) of the Company Letter,
there are no environmental assessments or audit reports or other similar studies
or analyses in the possession or control of the Company or any of its
Subsidiaries relating to any real property currently or formerly owned, leased
or occupied by the Company or any of its Subsidiaries.
Section 4.28 Regulatory Compliance. Except as set forth in Section 4.28 of
the Company Letter, (i) the Company is in compliance with, and has complied
with, all applicable federal and state statutes, laws, ordinances, decrees,
rules and regulations relating to the manufacture, sale and distribution of
food, dietary supplements, cosmetics and/or drugs and (ii) the Company holds and
is in compliance with all licenses, registrations, permits and other approvals
relating to food, dietary supplements, cosmetics and/or drugs that are necessary
for the lawful operation of its business as it is currently conducted, except in
each case for such failures as would not have a Material Adverse Effect on the
Company.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger. Except
as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during
the period from the date of this Agreement through the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, in all material
respects carry on its business in the ordinary course of its business as
currently conducted and, to the extent consistent therewith, use reasonable best
efforts to preserve intact its current business organizations, keep available
the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement or as set forth in the
Company Letter (with specific reference to the applicable subsection below), the
Company shall not, and shall not permit any of its Subsidiaries to, without the
prior written consent of Parent:
(i) (A) other than dividends paid by wholly-owned Subsidiaries,
declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital
stock, or otherwise make any payments to its stockholders in their capacity
as such, (B) other than in the case of any Subsidiary, split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (C) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities;
26
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options (including options under the Company Option Plans) to acquire any
such shares, voting securities, equity equivalent or convertible
securities, other than the issuance of shares of Company Common Stock upon
the exercise of Company Stock Options outstanding on the date of this
Agreement in accordance with their current terms;
(iii) amend its charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, limited liability
company, partnership, association or other business organization or
division thereof or, except in the ordinary course of business consistent
with past practice, otherwise acquire or agree to acquire any assets;
(v) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than in the ordinary course
of business consistent with past practice;
(vi) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (A) in the ordinary
course of business consistent with past practices and (B) indebtedness,
loans, advances, capital contributions and investments between the Company
and any of its wholly-owned Subsidiaries or between any of such wholly-
owned Subsidiaries, in each case in the ordinary course of business
consistent with past practices;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or ownership
of the Company or any Subsidiary;
(viii) except as provided in Section 6.5 or as required by applicable
law, enter into or adopt any, or amend any existing, severance plan,
agreement or arrangement or enter into or amend any Company Plan or
employment or consulting agreement;
(ix) increase the compensation payable or to become payable to its
directors, officers or employees (except for increases in the ordinary
course of business consistent with past practice in salaries or wages of
employees of the Company or any of its Subsidiaries who are not officers of
the Company or any of its Subsidiaries) or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any director or officer of the Company or any of its Subsidiaries, or
establish, adopt, enter into, or, except as may be required to comply with
applicable law, amend in any material respect or take action to enhance in
any material respect or accelerate any rights or benefits under, any labor,
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
27
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or
duty imposed upon it or any Subsidiary by any applicable material federal,
state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than
actions required to be taken by GAAP);
(xii) prepare or file any Tax Return inconsistent with past practice
or, on any such Tax Return, take any position, make any election, or adopt
any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability in excess of $10,000;
(xiv) settle or compromise any claims or litigation in excess of
$10,000 or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) having a term
in excess of 12 months and which is not terminable by the Company or a
Subsidiary without penalty or premium by notice of 60 days or less or (ii)
which involves or is expected to involve payments of $50,000 or more during
the term thereof; enter into or amend any other agreement or contract
material to the Company and its Subsidiaries, taken as a whole; or purchase
any real property, or make or agree to make any new capital expenditure or
expenditures (other than the purchase of real property) which in the
aggregate are in excess of $50,000;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of any such claims, liabilities
or obligations in the ordinary course of business consistent with past
practice or in accordance with their terms;
(xvii) adopt a shareholders' rights plan or enter into a shareholders'
rights agreement or adopt or enter into any other plan or agreement
implementing a "poison pill" or any similar device;
(xviii) reprice, either directly or indirectly, any Company Stock
Option or other right to purchase shares of Company Common Stock; or
(xix) authorize, recommend, propose or announce an intention to do any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
28
Section 5.2 No Solicitation. (a) The Company shall not, nor shall it permit
any of its Subsidiaries to, nor shall it authorize and it shall use its best
efforts not to permit any officer, director or employee of or any financial
advisor, attorney or other advisor or representative of, the Company or any of
its Subsidiaries to, (i) solicit, initiate or encourage the submission of, any
Takeover Proposal (as hereinafter defined), (ii) enter into any agreement with
respect to or approve or recommend any Takeover Proposal or (iii) participate in
any discussions or negotiations regarding, or furnish to any person any
information with respect to the Company or any Subsidiary in connection with, or
take any other action to knowingly facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal; provided, however, that nothing contained in this Agreement
shall prohibit the Company or its directors from (i) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer or
(ii) referring a third party to this Section 5.2(a) or making a copy of this
Section 5.2(a) available to any third party; and provided, further, that prior
to the acceptance for payment of Shares pursuant to the Offer, if the Board of
Directors of the Company reasonably determines that a Takeover Proposal
constitutes a Superior Proposal (as hereinafter defined), then, to the extent
required by the fiduciary obligations of the Board of Directors of the Company,
as determined in good faith by a majority thereof after consultation with
outside counsel (who may be the Company's regularly engaged outside counsel),
the Company may, in response to an unsolicited request therefor, and subject to
compliance with Section 5.2(b), furnish information with respect to the Company
and its Subsidiaries to any person pursuant to a confidentiality agreement, in
customary form and in any event containing terms, taken as a whole, at least as
stringent as those contained in the Confidentiality Agreement (as hereinafter
defined), and participate in discussions or negotiations with such person.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer or director of
the Company or any of its Subsidiaries or any financial advisor, attorney or
other advisor or representative of the Company or any of its Subsidiaries,
whether or not such person is purporting to act on behalf of the Company or any
of its Subsidiaries or otherwise, shall be deemed to be a breach of this Section
5.2(a) by the Company.
(b) The Company shall advise Parent orally and in writing of (i) any
Takeover Proposal or any inquiry with respect to or which reasonably could lead
to any Takeover Proposal received by any officer or director of the Company or,
to the Knowledge of the Company, any financial advisor, attorney or other
advisor or representative of the Company, (ii) the material terms of such
Takeover Proposal (including a copy of any written proposal), and (iii) the
identity of the person making any such Takeover Proposal or inquiry no later
than 24 hours following receipt of such Takeover Proposal or inquiry. If the
Company intends to furnish any Person with any information with respect to any
Takeover Proposal in accordance with Section 5.2(a), the Company shall advise
Parent orally and in writing of such intention not less than two business days
in advance of providing such information. The Company will keep Parent fully
informed of the status and material terms of any such Takeover Proposal or
inquiry.
Section 5.3 Third Party Standstill Agreements. During the period from the
date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which the Company or any
29
of its Subsidiaries is a party. During such period, the Company agrees to
enforce, to the fullest extent permitted under applicable law, the provisions of
any such agreements, including, but not limited to, obtaining injunctions to
prevent any breaches of such agreements and to enforce specifically the terms
and provisions thereof in any court of the United States or any state thereof
having jurisdiction.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Stockholder Meeting. (a) If Sub is unable to effectuate the
merger pursuant to Section 253 of the DGCL, the Company will duly call, give
notice of, convene and hold a meeting of stockholders (the "Stockholder
Meeting") for the purpose of considering the approval of this Agreement and at
such meeting call for a vote and cause proxies that have been voted in favor of
the transactions contemplated herein to be voted in respect of the approval and
adoption of this Agreement. The Stockholder Meeting shall be held as soon as
practicable following the purchase of Shares pursuant to the Offer, and the
Company will, through its Board of Directors, recommend to its stockholders the
approval of this Agreement, and shall not withdraw or modify such
recommendation. The Company agrees to submit this Agreement, as soon as
practicable following the purchase of Shares pursuant to the Offer, to its
stockholders for approval whether or not the Board of Directors of the Company
determines at any time subsequent to the date hereof that this Agreement is no
longer advisable and recommends that the stockholders of the Company reject it.
The record date for the Stockholder Meeting shall be a date subsequent to the
date Parent or Sub becomes a record holder of Company Common Stock purchased
pursuant to the Offer.
(b) The Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, prepare and file a preliminary Proxy
Statement with the SEC and shall use its reasonable best efforts to respond to
any comments of the SEC or its staff and to cause the Proxy Statement to be
mailed to the Company's stockholders as promptly as practicable after responding
to all such comments to the satisfaction of the staff. The Company shall notify
Parent promptly of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If at any time prior to the Stockholder Meeting there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company shall promptly prepare and mail to its
stockholders such an amendment or supplement. The Company shall not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects. Parent shall cooperate with the Company in the preparation
of the Proxy Statement or any amendment or supplement thereto, including the
supply of any information required to be included in the Proxy Statement
regarding Parent or Sub.
30
(c) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares owned by Parent or any subsidiary of Parent to be voted in
favor of approval of the Merger.
Section 6.2 Access to Information. Subject to currently existing
contractual and legal restrictions applicable to the Company or any of its
Subsidiaries, the Company shall, and shall cause each of its Subsidiaries to,
afford to the accountants, counsel, financial advisors and other representatives
of Parent reasonable access to, and permit them to make such inspections as they
may reasonably require of, during the period from the date of this Agreement
through the Effective Time, all of their respective properties, books,
contracts, commitments and records (including accounting records and Tax Returns
and the work papers of independent accountants, if available and subject to the
consent of such independent accountants) and, during such period, the Company
shall, and shall cause each of its Subsidiaries to (i) furnish promptly to
Parent a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of federal
or state securities laws, (ii) furnish promptly to Parent all other information
concerning its business, properties and personnel as Parent may reasonably
request and (iii) promptly make available to Parent all personnel of the Company
and its Subsidiaries knowledgeable about matters relevant to such inspections.
Parent shall make all reasonable efforts to minimize any disruption to the
businesses of the Company and its Subsidiaries that may result from any
investigation conducted pursuant to this Section 6.2. No investigation pursuant
to this Section 6.2 shall affect any representation or warranty in this
Agreement of any party hereto or any condition to the obligations of the parties
hereto. All information obtained by Parent pursuant to this Section 6.2 shall be
kept confidential in accordance with the Confidentiality Agreement dated August
18, 2000 between Parent and the Company (the "Confidentiality Agreement").
Section 6.3 Directors. Promptly after such time as Sub purchases at least a
majority of the outstanding Shares pursuant to the Offer, Sub shall be entitled,
to the fullest extent permitted by law, to designate at its option up to that
number of directors, rounded to the nearest whole number, of the Company's Board
of Directors, subject to compliance with Section 14(f) of the Exchange Act, as
will make the percentage of the Company's directors designated by Sub equal to
the percentage of the aggregate voting power of the shares of Common Stock held
by Parent or any of its Subsidiaries; provided, however, that in the event that
Sub's designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least three directors who
are directors on the date of this Agreement and who are not officers of the
Company (the "Independent Directors"); and provided further that, in such event,
if the number of Independent Directors shall be reduced below three for any
reason whatsoever, the remaining Independent Directors or Director shall
designate a person or persons to fill such vacancy or vacancies, each of whom
shall be deemed to be an Independent Director for purposes of this Agreement or,
if no Independent Directors then remain, the other directors shall designate
three persons to fill such vacancies who shall not be officers or affiliates of
the Company or any of its Subsidiaries, or officers or affiliates of Parent or
any of its Subsidiaries, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Following the election or appointment
of Sub's designees pursuant to this Section 6.3 and prior to the Effective Time,
any amendment, or waiver of any term or condition, of this Agreement or
31
the Restated Certificate of Incorporation or the Restated 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 Sub or waiver or assertion of any of the Company's rights hereunder, and any
other consent or action by the Board of Directors of the Company with respect to
this Agreement, will require the concurrence of a majority of the Independent
Directors and no other action by the Company, including any action by any other
director of the Company, shall be required for purposes of this Agreement. To
the fullest extent permitted by applicable law, the Company shall take all
action requested by Parent that is reasonably necessary to effect any such
election, including mailing to its stockholders 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 (provided that Sub shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company will promptly, at the option of Parent, to the fullest
extent permitted by law, either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current directors
as is necessary to enable Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
Section 6.4 Fees and Expenses. (a) Except as provided in this Section
6.4, whether or not the Offer or the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including the fees and disbursements of counsel, financial
advisors and accountants, shall be paid by the party incurring such costs and
expenses.
(b) The Company shall pay, or cause to be paid, in same day funds to
Parent the following amounts under the circumstances and at the times set forth
as follows:
(i) if Parent or Sub terminates this Agreement under Section 8.1(d),
the Company shall pay the Expenses of Parent (not to exceed $1,000,000) and
the Termination Fee upon demand;
(ii) if the Company terminates this Agreement under Section 8.1(e),
the Company shall pay the Termination Fee and the Expenses of Parent (not
to exceed $1,000,000) upon demand; or
(iii) if any other termination of this Agreement occurs (other than a
termination by the Company pursuant to Section 8.1(f)) and at the time of
any such termination a Takeover Proposal shall have been made (other than a
Takeover Proposal made prior to the date hereof), (x) the Company shall pay
the Expenses of Parent (not to exceed $1,000,000) upon demand, and (y) if
concurrently therewith or within 12 months thereafter, (A) the Company
enters into a merger agreement, acquisition agreement or similar agreement
(including a letter of intent) with respect to a Takeover Proposal, or a
Takeover Proposal is consummated, involving any party (1) with whom the
Company had any discussions with respect to a Takeover Proposal, (2) to
whom the Company
32
furnished information with respect to or with a view to a Takeover Proposal
or (3) who had submitted a proposal or expressed any interest publicly in a
Takeover Proposal, in the case of each of clauses (1), (2) and (3), prior
to such termination, or (B) the Company enters into a merger agreement,
acquisition agreement or similar agreement (including a letter of intent)
with respect to a Superior Proposal, or a Superior Proposal is consummated,
then, in the case of either (A) or (B) above, the Company shall pay the
Termination Fee upon the earlier of the execution of such agreement or upon
consummation of such Takeover Proposal or Superior Proposal.
Section 6.5 Company Stock Options. (a) Prior to the consummation of
the Offer, the Board of Directors of the Company (or, if appropriate, any
committee thereof) shall adopt appropriate resolutions and take all other
actions necessary or appropriate to cause each Company Stock Option that is
outstanding as of the Effective Time to vest in full and become exercisable
immediately prior to the Effective Time with respect to all of the shares of
Company Common Stock at the time subject to such Company Stock Option. Each
Company Stock Option that is outstanding upon the Effective Time shall be
canceled as of the Effective Time, in consideration for which the holder thereof
(an "Option Holder") shall be entitled to receive from the Company an amount
equal to (i) the product of (A) the number of shares of Company Common Stock
subject to such Company Stock Option and (B) the excess, if any, of the Offer
Price over the exercise price per share for the purchase of the Company Common
Stock subject to such Company Stock Option, minus (B) all applicable federal,
state and local Taxes required to be withheld in respect of such payment. The
amounts payable pursuant to the second sentence of this Section 6.5 shall be
paid within three Business Days following the Effective Time, with payment being
deemed to be made, for the purposes of this sentence, on the day that the Paying
Agent mails such payment to Option Holders. The surrender of an Option in
exchange for the consideration contemplated by the second sentence of this
Section 6.5 shall be deemed a release of any and all rights the Option Holder
had or may have had in respect thereof.
(b) The Company shall take all actions necessary to provide that, as
of the Effective Time, (i) each Company Option Plan and any similar plan or
agreement of the Company shall be terminated, (ii) any rights under any other
plan, program, agreement or arrangement relating to the issuance or grant of any
other interest in respect of the capital stock of the Company or any of its
Subsidiaries shall be terminated, and (iii) no Option Holder will have any right
to receive any shares of capital stock of the Company or, if applicable, the
Surviving Corporation, upon exercise of any Company Stock Option.
(c) The Company represents and warrants that it has the power and
authority under the terms of each Company Option Plan or option agreement
thereunder to comply with this Section 6.5 without the consent of any Option
Holder.
(d) Notwithstanding Section 6.5(a), Parent may, at its option, offer
to certain Company Option Holders who are employees of the Company at the
Effective Time, the option to receive, in lieu of any payments pursuant to
Section 6.5(a), in exchange for each Company Stock Option held by such company
employee that is outstanding as of the Effective Time, an option ( a "Substitute
Option") to purchase the number of shares of common stock of the Parent,
33
par value of $.01 per share, (the "Parent Common Stock") determined by
multiplying (i) the number of shares of Company Common Stock subject to such
Company Stock Option immediately prior to the Effective Time by (ii) the
Exchange Ratio, at an exercise price per share of Parent Common Stock (rounded
up to the nearest cent) equal to the exercise price per share of Company Common
Stock immediately prior to the Effective Time divided by the Exchange Ratio. All
Substitute Options will, upon issuance, be fully vested in the Option Holder and
immediately exercisable. After the Effective Time, except as provided above in
this Section 6.5(d), each Substitute Option shall be exercisable upon the terms
and conditions set forth in the Tupperware Corporation 2000 Incentive Plan. As
soon as reasonably practicable, and in no event later than twenty days after the
Effective Time, Parent shall file a registration statement on Form S-8 (or any
successor or other appropriate form) with respect to Parent Common Stock subject
to such Substitute Options, or shall cause such Substitute Options to be deemed
to be issued pursuant to a stock plan of Parent registered pursuant to an
appropriate registration form.
Section 6.6 Reasonable Best Efforts. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including: (i) the
obtaining of all necessary actions or non-actions, waivers, consents and
approvals from all Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Entity
(including those in connection with the HSR Act, any other pre-merger filings
and State Takeover Approvals), (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement. No party to this Agreement shall consent to any
voluntary delay of the consummation of the Offer or the Merger at the behest of
any Governmental Entity without the consent of the other parties to this
Agreement, which consent shall not be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not take any
action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action to be
taken by either Parent or the Company to effect the Offer, the Merger and to
consummate the other transactions contemplated hereby, the Company shall not,
without Parent's prior written consent, commit to any divestiture transaction,
and neither Parent nor any of its Affiliates shall be required to divest or hold
separate or otherwise take or commit to take any action that limits its freedom
of action with respect to, or
34
its ability to retain, the Company or any of the businesses or assets of Parent
or any of its Subsidiaries or that otherwise would have a Material Adverse
Effect on Parent.
Section 6.7 Public Announcements. Parent and the Company will not issue
any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions without prior consultation with the other party, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange.
Section 6.8 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or
the Stockholder Agreements, Parent and the Company and their respective Boards
of Directors shall use their reasonable best efforts to grant such approvals and
take such actions as are necessary so that the transactions contemplated hereby
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to minimize the effects of any such statute or regulation on
the transactions contemplated hereby.
Section 6.9 Indemnification; Directors and Officers Insurance. (a) From
and after the Effective Time, Parent shall cause the Surviving Corporation to
indemnify and hold harmless all past and present officers and directors of the
Company and of its Subsidiaries to the fullest extent permitted by the DGCL for
acts or omissions occurring at or prior to the Effective Time.
(b) Parent shall cause the Surviving Corporation to provide, for an
aggregate period of not less than three years from the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring prior to the Effective Time (the
"D&O Insurance") on terms no less favorable to the Company's existing policy or,
if such insurance coverage is not available, the best available coverage;
provided, however, that the Surviving Corporation shall not be required to pay
an annual premium for the D&O Insurance in excess of 150% of the last annual
premiums paid prior to the date hereof (which premiums the Company has disclosed
to Parent), but in such case shall purchase as much coverage as possible for
such amount.
Section 6.10 Notification of Certain Matters. Parent shall use its
reasonable best efforts to give prompt notice to the Company, and the Company
shall use its reasonable best efforts to give prompt notice to Parent, of: (i)
the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which it is aware and which would be reasonably likely to cause
(x) any representation or warranty contained in this Agreement and made by it to
be untrue or inaccurate in any material respect or (y) any covenant, condition
or agreement contained in this Agreement and made by it not to be complied with
or satisfied in all material respects, (ii) any failure of Parent or the
Company, as the case may be, to comply in a timely manner with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on the Company; provided, however, that the delivery
of any notice pursuant to this Section 6.10
35
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 6.11 Employee Benefit Plans. For a period of one year
immediately following the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, maintain in effect employee benefit plans and
arrangements that provide benefits that have a value that is substantially
comparable, in the aggregate, to the benefits provided by the Company Plans (not
taking into account the value of any benefits under any such plans that are
equity based). For purposes of determining eligibility to participate, vesting
and accrual or entitlement to benefits where length of service is relevant under
any employee benefit plan or arrangement of the Surviving Corporation, employees
of the Company and its Subsidiaries as of the Effective Time shall receive
service credit for service with the Company and its Subsidiaries to the same
extent such credit was granted under the Company Plans, subject to offsets for
previously accrued benefits and no duplication of benefits.
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement (including the Merger)
shall have been approved and adopted by the affirmative vote of the stockholders
of the Company (unless the vote of stockholders is not required under the DGCL)
as required by the DGCL and the Company Charter.
(b) HSR Act Filings. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
(c) Purchase of Shares. Sub shall have previously accepted for
payment and paid for Shares pursuant to the Offer, except that this condition
shall not apply if Sub shall have failed to purchase Shares pursuant to the
Offer in breach of its obligations under this Agreement.
(d) No Order. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the Merger illegal.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
36
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the Offer
Conditions the Offer shall have terminated or expired in accordance
with its terms without Sub having accepted for payment any Shares
pursuant to the Offer or (y) Sub shall not have accepted for payment
any Shares pursuant to the Offer prior to March 31, 2001; provided,
however, that the right to terminate this Agreement pursuant to this
Section 8.1(b)(i) shall not be available to any party whose failure to
perform any of its obligations under this Agreement results in the
failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a breach of any
representation or warranty under this Agreement by such party; or
(ii) if any Governmental Entity 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 pursuant to the Offer and such order, decree or ruling or
other action shall have become final and nonappealable;
(c) by Parent or Sub in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in this
Agreement which (i) would give rise to the failure of a condition set forth
in paragraph (e) or (f) of Exhibit B and (ii) cannot be or has not been
cured within 30 days after the giving of written notice to the Company;
(d) by Parent or Sub if either Parent or Sub is entitled to terminate
the Offer as a result of the occurrence of any event set forth in paragraph
(d) of Exhibit B;
(e) by the Company if the Board of Directors of the Company
reasonably determines that a Takeover Proposal constitutes a Superior
Proposal and a majority of the members of the Board of Directors
determines, in its reasonable good faith judgment, after consultation with
outside counsel, that failing to terminate this Agreement would constitute
a breach of such Board's fiduciary duties under applicable law, provided
that the Company may not terminate this Agreement pursuant to this Section
8.1 unless (i) the Company has complied with all provisions of Section 5.2,
including the notice provisions therein, (ii) the Company has delivered to
Parent a written notice of the Company's intent to enter into an agreement
to effect a Superior Proposal, (iii) 72 hours have elapsed following
delivery to Parent of such written notice by the Company, (iv) during such
72-hour period the Company has reasonably cooperated with Parent, including
informing Parent of the terms and conditions of the Takeover Proposal and
identifying the identity
37
of the person making the Takeover Proposal, with the intent of enabling
Parent to agree to a modification of the terms and conditions of this
Agreement so the transactions contemplated hereby may be effected, (v) at
the end of such 72-hour period the Board of directors continues reasonably
to believe that the Takeover Proposal constitutes a Superior Proposal when
compared to the Offer and the Merger (taking into account any such
modifications as may be proposed by Parent) and (vi) the Company has
complied with the requirements of Section 6.4(b) relating to the payment
(including the timing of any payment) of the Expenses and the Termination
Fee to the extent required by Section 6.4(b); and provided further that the
Company may not terminate this Agreement pursuant to this Section 8.1(e)
until one business day after the Initial Expiration Date (as defined
herein);
(f) by the Company, if (i) any of the representations or warranties
of Parent or Sub set forth in this Agreement that are qualified as to
materiality shall not be true and correct in any respect or any such
representations or warranties that are not so qualified shall not be true
and correct in any material respect, or (ii) Parent or Sub shall have
failed to perform in any material respect any material obligation or to
comply in any material respect with any material agreement or covenant of
Parent or Sub to be performed or complied with by it under this Agreement
and such untruth, incorrectness or failure cannot be or has not been cured
within 30 days after the giving of written notice to Parent or Sub, as
applicable.
The right of any party hereto to terminate this Agreement pursuant to
this Section 8.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
Section 8.2 Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company, as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent, Sub or their respective officers or
directors (except for the last sentence of Section 6.2 and the entirety of
Section 6.4, which shall survive the termination); provided, however, that
nothing contained in this Section 8.2 shall relieve any party hereto from any
liability for any breach of a representation or warranty contained in this
Agreement, the breach of any covenant contained in this Agreement or for fraud.
Section 8.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 8.4 Waiver. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties
38
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein which may
legally be waived. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.
Section 9.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
Tupperware Corporation
00000 X. Xxxxxx Xxxxxxx Xx.
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to copies to:
Sidley & Austin
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Xxxxxx Xxxxxxxxxx
Facsimile: 312-853-7036
(b) if to the Company, to:
BeautiControl, Inc.
0000 Xxxxxx
Xxxxxxxxxx, XX
Attention: Xxxxxxx X. Xxxxx
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Facsimile: 000-000-0000
with a copy to:
Xxxxxx and Xxxxx, LLP
0000 X. Xxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile: 000-000-0000
Section 9.3 Interpretation; Certain Definitions. (a) When a reference
is made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
(b) For purposes of this Agreement, the following terms have the
meaning specified in this Section 9.3:
"Average Closing Price" shall mean the average, rounded to the nearest
cent, of the last reported sales price per share of Parent Common Stock on the
New York Stock Exchange for the ten trading days immediately preceding the date
of the Closing.
"Business Day" means any day that is not a Saturday, Sunday or a day
on which the New York Stock Exchange is not open for trading.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Ratio" means the quotient, rounded to the nearest
thousandth, of the Offer Price divided by the Average Closing Price of Parent
Common Stock.
"Expenses" means documented reasonable out-of-pocket fees and expenses
incurred or paid by or on behalf of Parent in connection with the Offer, the
Merger or the consummation of any of the transactions contemplated by this
Agreement, including all fees and expenses of law firms, commercial banks,
investment banking firms, accountants, experts and consultants to Parent.
"Initial Expiration Date" means 12:00 Midnight, New York City time, on
the date that is 20 business days (as defined in Rule 14d-1 under the Exchange
Act) from and including the date of commencement of the Offer.
40
"Knowledge of the Company" means the actual knowledge of the directors
and executive officers of the Company.
"Material Adverse Change" or "Material Adverse Effect" means, when
used with respect to the Company or Parent, as the case may be, any change or
effect that is or could reasonably be expected (as far as can be foreseen at the
time) to be materially adverse to the business, operations, properties, assets,
liabilities, earnings or results of operations, financial projections or
forecasts, or the business prospects and condition (financial or otherwise),
with all such matters being considered in the aggregate, of the Company and its
Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a
whole, as the case may be.
"Real Estate" means, with respect to the Company or any Subsidiary, as
applicable, all of the fee or leasehold ownership right, title and interest of
such person, in and to all real estate and improvement owned or leased by any
such person and which is used by any such person in connection with the
operation of its business.
"Subsidiary" means any corporation, partnership, limited liability
company, joint venture or other legal entity of which Parent or the Company, as
the case may be (either alone or through or together with any other Subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity interests
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation, partnership,
limited liability company, joint venture or other legal entity.
"Superior Proposal" means a bona fide proposal made by a third party
to acquire the Company pursuant to a tender or exchange offer, a merger, a sale
of all or substantially all of the Company's assets or otherwise on terms which
a majority of the members of the Board of Directors of the Company determines,
at a duly constituted meeting of the Board of Directors or by unanimous written
consent, in its reasonable good faith judgment to be more favorable to the
Company's stockholders than the Offer and the Merger (based on the advice of the
Company's independent financial advisor that the value of the consideration
provided for in such proposal exceeds the value of the consideration provided
for in the Offer and the Merger) and for which financing, to the extent
required, is then committed.
"Takeover Proposal" means any proposal for (i) a merger or other
business combination involving the Company or any of its Subsidiaries, (ii) any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in or any voting securities of the Company representing 15% or more of
the Shares or of the total voting securities of the Company outstanding or (iii)
an offer to acquire in any manner, directly or indirectly, a substantial portion
of the assets of the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement.
"Taxes" means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, value-added, transfer or
excise tax, or other tax, custom, duty,
41
governmental fee or any other like assessment or charge of any kind whatsoever,
together with any interest or penalty imposed by any Governmental Entity.
"Tax Return" means any return, report or similar statement (including
the attached schedules) required to be filed with respect to any Tax, including
any information return, claim for refund, amended return or declaration of
estimated Tax.
"Termination Fee" means $1,865,500.00.
Section 9.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, except as provided in the last sentence of Section 6.2, constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof. This Agreement, except for the provisions of Section 6.9, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 9.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.7 Assignment. Subject to Section 2.1, neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties.
Section 9.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement may be
consummated as originally contemplated to the fullest extent possible.
Section 9.9 Enforcement of this Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific wording or
were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, such
remedy being in addition to any other remedy to which any party is entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the District of Delaware in
any action, suit or proceeding arising in connection
42
with this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto waives
any right to a trial by jury in connection with any such action, suit or
proceeding.
43
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
TUPPERWARE CORPORATION
/s/ Xxxx Xxxxxx
By: ________________________________
Name: Xxxx Xxxxxx
Title: Chairman and Chief Executive Officer
B-C MERGER CORPORATION
/s/ Xxxx X. Xxx Xxxxxx
By: ________________________________
Name: Xxxx X. Xxx Xxxxxx
Title: Vice President
BEAUTICONTROL, INC.
/s/ Xxxxxxx X. Xxxxx
By: ________________________________
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
44
Exhibit A
---------
See attached.
45
Exhibit B
---------
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for any Shares tendered pursuant
to the Offer unless (i) there shall have been validly tendered and not withdrawn
prior to the expiration of the Offer such number of Shares that would constitute
at least a majority of the Shares that in the aggregate are outstanding
determined on a fully diluted basis (assuming the exercise of all options to
purchase Company Common Stock and the conversion or exchange of all securities
convertible or exchangeable into, Shares outstanding at the expiration date of
the Offer) ("Minimum Condition") and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated prior to the expiration date of the Offer (the "HSR Condition").
Furthermore, notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject as aforesaid, to pay for
any Shares not theretofore accepted for payment or paid for, and may terminate
the Offer if, at any time on or after the date of this Agreement and before the
acceptance of such Shares for payment or the payment therefor, any of the
following conditions exists (other than as a result of any action or inaction of
Parent or any of its subsidiaries that constitutes a breach of this Agreement):
(a) there shall be threatened or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Parent or
Sub of any Shares under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or the Stockholder
Agreements (including the voting provisions thereunder), or seeking to
obtain from the Company, Parent or Sub any damages that are material in
relation to the Company and its Subsidiaries taken as a whole, (ii) seeking
to prohibit or materially limit the ownership or operation by the Company,
Parent or any of their respective Subsidiaries of a material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or Parent and its Subsidiaries, taken as a whole, or to compel the Company
or Parent to dispose of or hold separate any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or Parent and its Subsidiaries, taken as a whole, as a result of the Offer
or any of the other transactions contemplated by this Agreement or the
Stockholder Agreements, (iii) seeking to impose material limitations on the
ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any Shares to be accepted for payment pursuant to the Offer,
including the right to vote such Shares on all matters properly presented
to the stockholders of the Company, (iv) seeking to prohibit Parent or any
of its Subsidiaries from effectively controlling in any material respect
any material portion of the business or operations of the Company or its
Subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect on the Company, or there shall be pending by
46
any other person any suit, action or proceeding which would have a Material
Adverse Effect on the Company.
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any Governmental Entity any
statute, rule, regulation, judgment, order or injunction, other than the
application to the Offer or the Merger of applicable waiting periods under
the HSR Act, that is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there shall have occurred any Material Adverse Change with
respect to the Company;
(d) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Sub its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any Takeover Proposal or (ii) the
Board of Directors of the Company or any committee thereof shall have
resolved to take any of the foregoing actions;
(e) the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in each case at the date of
this Agreement and at the scheduled or extended expiration of the Offer
unless the inaccuracies (without giving effect to any materiality or
Material Adverse Effect qualifications or exceptions contained therein)
under such representations and warranties, taking all the inaccuracies
under all such representations and warranties together in their entirety,
do not, individually or in the aggregate, result in a Material Adverse
Effect on the Company;
(f) 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 covenant of the Company to be performed or complied
with by it under this Agreement;
(g) any person or "group" (as defined in Section 13(d)(3) of the
Exchange Act), other than Parent, Sub or their affiliates or any group of
which any of them is a member, shall have acquired or announced its
intention to acquire beneficial ownership (as determined pursuant to Rule
13d-3 promulgated under the Exchange Act) of 15% or more of the Shares;
(h) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on a
national securities exchange in the United States (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index), (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (iii)
any limitation (whether or not mandatory) by any Governmental Entity on, or
other event that materially adversely affects, the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States which in any case is reasonably
47
expected to have a Material Adverse Effect on the Company or to materially
adversely affect Parent's or Sub's ability to complete the Offer and/or the
Merger or materially delay the consummation of the Offer and/or the Merger,
or (v) from the date of this Agreement through the date of termination or
expiration, a decline of at least 25% in either the Dow Xxxxx Industrial
Average, the Standard & Poor's 500 Index or the Nasdaq Composite Index.
(i) this Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Parent and Sub
and may, subject to the terms of this Agreement, be waived by Parent and Sub in
whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Terms used but not defined herein shall have the meanings assigned to such terms
in the Agreement to which this Exhibit B is a part.
48
Exhibit C
---------
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BEAUTICONTROL, INC.
Pursuant to Section 251(e) of the Delaware General Corporation Law,
the Certificate of Incorporation of BeautiControl, Inc., a Delaware corporation
(the "Corporation"), is hereby amended and restated to read, in its entirety, as
follows:
FIRST: The name of the Corporation is BeautiControl, Inc.
SECOND: The address of the Corporation's registered office in the
State of Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, xx xxx Xxxx
xx Xxxxxxxxxx, Xxxxxx of New Castle, and the name of the Corporation's
registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is five thousand (5,000) shares of
Common Stock of the par value of one cent ($.01) each.
FIFTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
SIXTH: The Board of Directors is expressly authorized and empowered
to make, alter and repeal the By-laws of the Corporation.
SEVENTH: The Corporation reserves the right at any time to amend,
alter, change or repeal any provision contained in this Amended and Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by law,
and all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Amended and Restated Certificate of Incorporation in its present form or as
hereafter amended are granted subject to the right reserved herein.
* * *
49