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EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
between
THE PROCTER & XXXXXX COMPANY,
X.X. XXXXXXXXX, INC.
and
TAMBRANDS INC.
Dated as of April 8, 1997
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TABLE OF CONTENTS
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Page
ARTICLE 1 1
1. The Merger 1
1.1. The Merger 1
1.2. The Closing 1
1.3. Effective Time 1
ARTICLE 2 2
2. Certificate of Incorporation and Bylaws of the
Surviving Corporation. 2
2.1. Certificate of Incorporation 2
2.2. Bylaws 2
ARTICLE 3 2
3. Directors and Officers of the Surviving
Corporation. 2
3.1. Directors 2
3.2. Officers 2
ARTICLE 4 2
4. Effect of the Merger on Securities of Merger
Sub and the Company. 2
4.1. Merger Sub Stock. 2
4.2. Company Securities. 3
4.3. Exchange of Certificates Representing
Common Stock. 4
4.4. Adjustment of Merger Consideration 5
4.5. Dissenting Company Stockholders 5
4.6. Merger Without Meeting of Stockholders 6
ARTICLE 5 6
5. The Offer 6
5.1. The Offer 6
5.2. Actions by Purchaser and Merger Sub 7
5.3. Actions by the Company 8
5.4. Directors 10
ARTICLE 6 10
6. Representations and Warranties of the Company. 10
6.1. Existence; Good Standing; Corporate
Authority. 11
6.2. Authorization, Validity and Effect of
Agreements 11
6.3. Compliance with Laws 11
6.4. Capitalization 12
6.5. Subsidiaries 13
6.6. No Violation 13
6.7. Company Reports; Offer Documents 14
6.8. Litigation 15
6.9. Absence of Certain Changes 15
6.10. Taxes 16
6.11. Employee Benefit Plans 17
6.12. Labor and Employment Matters 17
6.13. Brokers and Finders 18
6.14. Fairness Opinion 18
6.15. Licenses and Permits 18
6.16. Environmental Compliance and Disclosure 18
6.17. Material Contracts 20
6.18. Intellectual Property Rights 22
6.19. Required Vote of Company Stockholders 22
6.20. Disclosures 22
ARTICLE 7 22
7. Representations and Warranties of Purchaser and
Merger Sub. 22
7.1. Existence; Good Standing; Corporate
Authority 22
7.2. Authorization, Validity and Effect of
Agreements 22
7.3. Offer Documents 23
7.4. No Violation 23
7.5. Financing 23
7.6. Brokers and Finders 23
ARTICLE 8 24
8. Covenants. 24
8.1. No Solicitation 24
8.2. Interim Operations 24
8.3. Company Stockholder Approval; Proxy
Statement 30
8.4. Filings; Other Action 31
8.5. Access to Information 32
8.6. Publicity 33
8.7. Further Action 33
8.8. Insurance; Indemnity. 33
8.9. Restructuring of Merger 34
8.10. Employees and Employee Benefit Plans 35
8.11. Transfer Taxes 36
ARTICLE 9 36
9. Conditions. 36
9.1. Conditions to Each Party's Obligation to
Effect the Merger 36
9.2. Additional Conditions to Obligations of
Purchaser and Merger Sub to Effect
the Merger 36
ARTICLE 10 36
10. Termination; Amendment; Waiver. 36
10.1. Termination 36
10.2. Effect of Termination 38
10.3. Amendment 38
10.4. Extension; Waiver 38
ARTICLE 11 39
11. General Provisions. 39
11.1. Nonsurvival of Representations and
Warranties 39
11.2. Notices 39
11.3. Assignment; Binding Effect 39
11.4. Entire Agreement 40
11.5. Fees and Expenses 40
11.6. Governing Law 42
11.7. Headings 42
11.8. Interpretation 42
11.9. Investigations 42
11.10. Severability 42
11.11. Enforcement of Agreement 43
11.12. Counterparts 43
DEFINITIONS
Defined Term Section Reference
"Acquisition Date" Section 8.10(b)
"Action" Section 8.8(d)
"affiliate" Section 11.8
"Agreement" First Paragraph
"Alternative Proposal" Section 8.1
"associate" Section 11.8
"Board" or "Board of Directors" Section 5.3(a)
"Cap" Section 8.8(a)
"Category A Key Jurisdiction" Section 6.17
"Certificate" Section 4.2(b)
"Closing" Section 1.2
"Closing Date" Section 1.2
"Commitment Amount" Section 11.5(b)
"Common Stock" Section 4.2(a)
"Company" First Paragraph
"Company Benefit Plans" Section 6.11
"Company Reports" Section 6.7(a)
"Confidentiality Agreement" Section 8.5(b)
"Consents" Section 8.4
"Continuing Directors" Section 5.4(b)
"Contract" or "Contracts" Section 6.6
"Current Policies" Section 8.8(a)
"Delaware Courts" Section 11.6
"Derivative" or "Derivatives" Section 6.17
"Designated Contract Provision" Exhibit A
"DGCL" Section 4.5
"Disclosure Letter" Section 6
"Dissenting Common Stock" Section 4.5
"Effective Time" Section 1.3
"Employee Agreements" Section 6.11
"Encumbrances" Section 6.5
"Environmental Costs" Section 6.16(a)
"Environmental Laws" Section 6.16(a)
"Environmental Matters" Section 6.16(a)
"excess parachute payment" Section 6.11
"Exchange Act" Section 5.1(a)
"Exchange Fund" Section 4.3(a)
"Fairness Opinion" Section 5.3(a)
"Financial Advisor" Section 5.3(a)
"Foreign Antitrust Laws" Section 6.6
"Governmental Entity" Section 6.3
"group" Exhibit A
"Hazardous Materials" Section 6.16(a)
"HSR Act" Section 6.6
"Indemnified Party" Section 8.8(d)
"Information" Section 8.5(b)
"Information Statement" Section 6.7(b)
"Intellectual Property" Section 6.18
"Key Jurisdiction" Section 6.17
"Laws" Section 6.3
"Litigation" Section 6.8
"Losses" Section 8.8(b)
"Material Adverse Effect" Section 6.1
"Material Contracts" Section 6.17
"Merger" Section 1.1
"Merger Consideration" Section 4.2(a)
"Merger Sub" First Paragraph
"Minimum Condition" Exhibit A
"Minority JV Interest" Section 8.2(c)
"Offer" Section 5.1(a)
"Offer Documents" Section 5.2(a)
"Option" or "Options" Section 4.2(d)
"Other Antitrust Consents" Section 8.4
"Other Antitrust Filings" Section 8.4
"Paying Agent" Section 4.3(a)
"Percentage" Section 5.4(a)
"Permits" Section 6.15
"person" Exhibit A
"Proxy Statement" Section 8.3(b)
"Purchaser" First Paragraph
"Regulatory Filings" Section 6.6
"Restricted Stock" Section 6.4
"Restructuring" Section 8.2(c)
"Rights" Section 6.4
"Rights Agreement" Section 5.3(a)
"Schedule 14D-9 Section 5.3(b)
"SEC" Section 5.1(b)
"Securities Act" Section 6.7(a)
"Significant Subsidiary" Section 6.1
"Stock Option Plans" Section 4.2(d)
"Stockholders Meeting" Section 8.3(a)
"Subsidiary" Section 11.8
"Surviving Corporation" Section 1.1
"Tax" or "Taxes" Section 6.10
"Tax Return" Section 6.10
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 8, 1997
(this "Agreement"), between THE PROCTER & XXXXXX COMPANY, an Ohio
corporation ("Purchaser"), X.X. XXXXXXXXX, INC., a Delaware
corporation and a wholly owned subsidiary of Purchaser ("Merger
Sub"), and TAMBRANDS INC., a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the
Company each have determined that it is in the best interests of
their respective companies and stockholders for Purchaser to
acquire the Company upon the terms and subject to the conditions
set forth herein.
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in
connection herewith.
NOW, THEREFORE, in consideration of the foregoing, and of
the representations, warranties, covenants and agreements
contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
1.1. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time (defined terms used
herein not previously defined having the meanings as hereinafter
defined), Merger Sub shall be merged with and into the Company in
accordance with this Agreement, and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger").
The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving
Corporation"). The Merger shall have the effects specified in
the DGCL.
1.2. The Closing. Subject to the terms and conditions
of this Agreement, the closing of the Merger (the "Closing")
shall take place at the offices of Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx, One New York Plaza, New York, New York, at 10:00
a.m., local time, as soon as practicable following the
satisfaction (or waiver if permissible) of the conditions set
forth in Article 9 or at such other time, date or place as
Purchaser and the Company may agree. The date on which the
Closing occurs is hereinafter referred to as the "Closing Date."
1.3. Effective Time. If all the conditions to the
Merger set forth in Article 9 shall have been fulfilled or waived
in accordance herewith and this Agreement shall not have been
terminated as provided in Article 10, the parties hereto shall
cause a Certificate of Merger meeting the requirements of
Sections 103 and 251 of the DGCL to be properly executed and
filed in accordance with such Sections on the Closing Date. The
Merger shall become effective at the time of filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with the DGCL or at such later time which
the parties hereto shall have agreed upon and designated in such
filing as the effective time of the Merger (the "Effective
Time").
ARTICLE 2
CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
2.1. Certificate of Incorporation. The Certificate of
Incorporation of Merger Sub in effect immediately prior to the
Effective Time in the form attached hereto as Exhibit B shall be
adopted as the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with applicable
law, except that the name of Merger Sub as set forth in the
Certificate of Incorporation shall be changed to Tambrands Inc.
2.2. Bylaws. The Bylaws of Merger Sub in effect
immediately prior to the Effective Time shall be adopted as the
Bylaws of the Surviving Corporation, until duly amended in
accordance with applicable law.
ARTICLE 3
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1. Directors. The directors of Merger Sub
immediately prior to the Effective Time shall be the directors of
the Surviving Corporation as of the Effective Time and until
their successors are duly appointed or elected in accordance with
applicable law.
3.2. Officers. The officers of the Company
immediately prior to the Effective Time, together with such
additions thereto as Merger Sub shall designate, shall be the
officers of the Surviving Corporation as of the Effective Time
and until their successors are duly appointed or elected in
accordance with applicable law.
ARTICLE 4
EFFECT OF THE MERGER ON SECURITIES
OF MERGER SUB AND THE COMPANY
4.1. Merger Sub Stock. At the Effective Time, each
share of common stock, $1.00 par value per share, of Merger Sub
outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid
and non-assessable share of common stock, $1.00 par value per
share, of the Surviving Corporation.
4.2. Company Securities.
(a) At the Effective Time, each share of Common Stock,
par value $.25 per share (the "Common Stock") of the Company,
together with the associated Rights, issued and outstanding
immediately prior to the Effective Time (other than shares of
Common Stock owned by Purchaser or Merger Sub or held by the
Company or owned or held by any of their respective Subsidiaries,
all of which shall be canceled as provided in Section 4.2(c), and
other than shares of Dissenting Common Stock) shall, by virtue of
the Merger and without any action on the part of the holder
thereof, be converted into the right to receive cash in the
amount of $50.00 per share, without interest (the "Merger
Consideration"). Except where the context otherwise requires,
all references herein to shares of Common Stock shall include the
associated Rights.
(b) As a result of the Merger and without any action on
the part of the holders thereof, at the Effective Time, all
shares of Common Stock shall cease to be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of
shares of Common Stock (other than Merger Sub, Purchaser, the
Company and each of their respective Subsidiaries) shall
thereafter cease to have any rights with respect to such shares
of Common Stock, except the right to receive, without interest,
the Merger Consideration in accordance with Section 4.3 upon the
surrender of a certificate or certificates (a "Certificate")
representing such shares of Common Stock or, with respect to
shares of Dissenting Common Stock, payment of the appraised value
of shares of Dissenting Common Stock in accordance with Section
4.5.
(c) Each share of Common Stock issued and owned or held
by Purchaser, Merger Sub, the Company or any of their respective
Subsidiaries at the Effective Time shall, by virtue of the
Merger, cease to be outstanding and shall be canceled and retired
without payment of any consideration therefor.
(d) All options (individually, an "Option" and
collectively, the "Options") outstanding immediately prior to the
Effective Time under any Company stock option plan (the "Stock
Option Plans"), whether or not then exercisable, shall be
canceled and each holder of an Option will be entitled to
receive, for each share of Common Stock subject to an Option, an
amount in cash equal to the excess, if any, of the Merger
Consideration over the per share exercise price of such Option,
without interest. The amounts payable pursuant to this
Section 4.2(d) shall be subject to all applicable withholding of
taxes. The Company shall use its reasonable best efforts to
obtain all necessary consents of the holders of Options to the
cancellation of the Options in accordance with this Section
4.2(d).
4.3. Exchange of Certificates Representing Common
Stock
(a) Prior to the Effective Time, Purchaser shall
appoint a commercial bank or trust company having net capital of
not less than $100,000,000 and which is reasonably satisfactory
to the Company, to act as paying agent hereunder for payment of
the Merger Consideration upon surrender of Certificates (the
"Paying Agent"). Purchaser shall, or shall cause the Surviving
Corporation to, provide the Paying Agent with cash in amounts
necessary to pay for all the shares of Common Stock pursuant to
Section 4.2(a) and to make all payments in connection with the
Options pursuant to Section 4.2(d), as and when such amounts are
needed by the Paying Agent. Such amounts shall hereinafter be
referred to as the "Exchange Fund."
(b) Promptly after the Effective Time, Purchaser shall
cause the Paying Agent to mail to each holder of record of shares
of Common Stock immediately prior to the Effective Time (i) a
letter of transmittal which shall specify that delivery shall be
effected, and risk of loss and title to such Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent
and which letter shall be in customary form and have such other
provisions as Purchaser may reasonably specify and (ii)
instructions for effecting the surrender of such Certificates in
exchange for the Merger Consideration. Upon surrender of a
Certificate to the Paying Agent together with such letter of
transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably
be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of
cash into which shares of Common Stock theretofore represented by
such Certificate shall have been converted pursuant to Section
4.2, and the shares represented by the Certificate so surrendered
shall forthwith be canceled. No interest will be paid or will
accrue on the cash payable upon surrender of any Certificate. In
the event of a transfer of ownership of Common Stock which is not
registered in the transfer records of the Company, payment may be
made with respect to such Common Stock to such a transferee if
the Certificate representing such shares of Common Stock is
presented to the Paying Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.
(c) At and after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the
shares of Common Stock which were outstanding immediately prior
to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged as provided in this Article 4.
(d) Any portion of the Exchange Fund (including the
proceeds of any interest and other income received by the Paying
Agent in respect of all such funds) that remains unclaimed by the
former stockholders of the Company six months after the Effective
Time shall be delivered to the Surviving Corporation. Any former
stockholders of the Company who have not theretofore complied
with this Article 4 shall thereafter look only to the Surviving
Corporation for payment of any Merger Consideration that may be
payable upon surrender of any Certificates such stockholder
holds, as determined pursuant to this Agreement, without any
interest thereon.
(e) None of Purchaser, the Company, the Surviving
Corporation, the Paying Agent or any other person shall be liable
to any former holder of shares of Common Stock for any amount
properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(f) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation, the posting by
such person of a bond in such reasonable amount as the Surviving
Corporation may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration payable in respect thereof
pursuant to this Agreement.
4.4. Adjustment of Merger Consideration. If, subsequent
to the date of this Agreement but prior to the Effective Time,
the outstanding shares of Common Stock shall have been changed
into a different number of shares or a different class as a
result of a stock split, reverse stock split, stock dividend,
subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Merger
Consideration shall be appropriately adjusted.
4.5. Dissenting Company Stockholders. Notwithstanding
any provision of this Agreement to the contrary, if required by
the DGCL but only to the extent required thereby, shares of
Common Stock which are issued and outstanding immediately prior
to the Effective Time and which are held by holders of such
shares of Common Stock who have properly exercised appraisal
rights with respect thereto (the "Dissenting Common Stock") in
accordance with Section 262 of the Delaware General Corporation
Law ("DGCL") will not be exchangeable for the right to receive
the Merger Consideration, and holders of such shares of
Dissenting Common Stock will be entitled to receive payment of
the appraised value of such shares of Dissenting Common Stock 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 of
Dissenting Common Stock will thereupon be treated as if they had
been converted into and to have become exchangeable for, at the
Effective Time, the right to receive the Merger Consideration,
without any interest thereon. Notwithstanding anything to the
contrary contained in this Section 4.5, if (i) the Merger is
rescinded or abandoned or (ii) the stockholders of the Company
revoke the authority to effect the Merger, then the right of any
stockholder to be paid the fair value of such stockholder's
Dissenting Common Stock pursuant to Section 262 of the DGCL shall
cease. The Company will give Purchaser prompt notice of any
demands and withdrawals of such demands received by the Company
for appraisals of shares of Dissenting Common Stock. The Company
shall not, except with the prior written consent of Purchaser,
make any payment with respect to any demands for appraisal or
offer to settle or settle any such demands.
4.6. Merger Without Meeting of Stockholders.
Notwithstanding the foregoing, if Merger Sub, or any other direct
or indirect subsidiary of Purchaser, shall acquire at least 90
percent of the outstanding shares of Common Stock pursuant to the
Offer, the parties hereto shall take all necessary and
appropriate action to cause the Merger to become effective as
soon as practicable after the expiration of the Offer without a
meeting of stockholders of the Company, in accordance with
Section 253 of the DGCL.
ARTICLE 5
THE OFFER
5.1 The Offer.
(a) Subject to the provisions of this Agreement,
Purchaser shall have the option, but not the obligation, at any
time prior to the mailing of the Proxy Statement to the
stockholders of the Company pursuant to Section 8.3(b) and
provided Merger Sub has given the Company at least five business
days' prior written notice thereof, to cause Merger Sub to
commence, within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), an offer to purchase
all of the outstanding shares of Common Stock of the Company,
together with the associated Rights, at a price per share equal
to the Merger Consideration, net to the seller in cash (the
"Offer"). Purchaser intends to cause the Offer to be commenced
if Purchaser concludes that it is reasonably likely that the
Offer can be completed before the Closing of the Merger. If
Merger Sub so commences the Offer, the obligation of Merger Sub
to accept for payment, and pay for, any shares of Common Stock
tendered pursuant to the Offer shall be subject only to the
conditions set forth in Exhibit A. Subject to the provisions of
this Agreement, the Offer shall expire 20 business days after the
date of its commencement (provided that in no event shall the
Offer expire earlier than 30 calendar days after the date of this
Agreement), unless this Agreement is terminated in accordance
with Article 10, in which case the Offer (whether or not
previously extended in accordance with the terms hereof) shall
expire on such date of termination.
(b) Without the prior written consent of the Company,
Merger Sub shall not (i) waive the Minimum Condition (as defined
in Exhibit A), (ii) reduce the number of shares of Common Stock
subject to the Offer, (iii) reduce the price per share of Common
Stock to be paid pursuant to the Offer, (iv) extend the Offer if
all of the Offer conditions are satisfied or waived, (v) change
the form of consideration payable in the Offer, or (vi) amend or
modify any term or condition of the Offer (including the
conditions set forth on Exhibit A) in any manner adverse to the
holders of Common Stock. Notwithstanding anything herein to the
contrary, Merger Sub may, in its sole discretion without the
consent of the Company, extend the Offer at any time and from
time to time (i) if at the then scheduled expiration date of the
Offer any of the conditions to Merger Sub's obligation to accept
for payment and pay for shares of Common Stock shall not have
been satisfied or waived; (ii) for any period required by any
rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or its staff applicable to
the Offer; (iii) for any period required by applicable law in
connection with an increase in the consideration to be paid
pursuant to the Offer; and (iv) if all Offer conditions are
satisfied or waived but the number of shares of Common Stock
tendered is less than 90% of the then outstanding number of
shares of Common Stock, for an aggregate period of not more than
10 business days (for all such extensions under this clause
(iv)) beyond the latest expiration date that would be permitted
under clause (i), (ii) or (iii) of this sentence. So long as
this Agreement is in effect and the Offer conditions have not
been satisfied or waived, Merger Sub shall, and Purchaser shall
cause Merger Sub to, cause the Offer not to expire. Subject to
the terms and conditions of the Offer and this Agreement (but
subject to the right of termination in accordance with
Article 10), Merger Sub shall, and Purchaser shall cause Merger
Sub to, accept for payment, in accordance with the terms of the
Offer, all shares of Common Stock validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the
expiration of the Offer.
5.2. Actions by Purchaser and Merger Sub.
(a) On the date of commencement of the Offer, Purchaser
and Merger Sub shall file with the SEC a Tender Offer Statement
on Schedule 14D-1 with respect to the Offer, which shall contain
an offer to purchase and a related letter of transmittal (such
Schedule 14D-1 and the documents therein pursuant to which the
Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"). The Company and its counsel
shall be given an opportunity to review and comment upon the
Offer Documents (and shall provide any comments thereon as soon
as practicable) prior to the filing thereof with the SEC. The
Offer Documents shall comply as to form in all material respects
with the requirements of the Exchange Act, and on the date filed
with the SEC and on the date first published, sent or given to
the Company's stockholders, the Offer Documents shall not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no
representation is made by Purchaser or Merger Sub with respect to
information supplied by the Company for inclusion in the Offer
Documents. Each of Purchaser, Merger Sub and the Company 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 each
of Purchaser, Merger Sub and the Company further agrees to take
all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to holders of
shares of Common Stock, in each case as and to the extent
required by applicable federal securities laws. Purchaser and
Merger Sub agree to provide the Company and its counsel in
writing with any comments Purchaser, Merger Sub or their counsel
may receive from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments.
(b) Purchaser shall provide or cause to be provided to
Merger Sub all of the funds necessary to purchase any shares of
Common Stock that Merger Sub becomes obligated to purchase
pursuant to the Offer.
5.3. Actions by the Company.
(a) The Company hereby approves of and consents to the
Offer and represents and warrants that the Board of Directors of
the Company (the "Board of Directors" or the "Board") at a
meeting duly called and held has duly adopted resolutions
(i) approving this Agreement, the Offer (if made) and the Merger,
determining that the Merger is advisable and that the terms of
the Offer (if made) and the Merger are fair to, and in the best
interests of, the Company and the Company's stockholders and
recommending that the Company's stockholders accept the Offer (if
made) and approve the Merger and this Agreement, and (ii) taking
all action necessary so that Section 203 of the DGCL and the
Company's Rights Agreement, dated as of October 24, 1989, between
the Company and First Chicago Trust Company of New York, as
rights agent (the "Rights Agreement"), are and, through the
Effective Time, will be inapplicable to, and have no adverse
effect on, Purchaser and Merger Sub, the Offer, the Merger, this
Agreement, or any of the transactions contemplated hereby. The
Company further represents and warrants that the Board of
Directors has received the written opinion of Xxxxxx Xxxxxxx &
Co. Inc. (the "Financial Advisor") that the proposed
consideration to be received by the holders of shares of Common
Stock pursuant to the Offer (if made) and the Merger is fair to
such holders from a financial point of view (the "Fairness
Opinion"). The Company hereby consents to the inclusion in the
Offer Documents of the recommendation of the Board of Directors
described in the first sentence of this Section 5.3(a). The
Company hereby represents and warrants that it has been
authorized by the Financial Advisor to permit the inclusion of
the Fairness Opinion and references thereto, subject to prior
review and consent by the Financial Advisor (such consent not to
be unreasonably withheld), in the Offer Documents, the
Schedule 14D-9 and the Proxy Statement.
(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 recommendations
described in Section 5.3(a) and shall disseminate the Schedule
14D-9 to the stockholders of the Company as required by Rule 14d-
9 promulgated under the Exchange Act. To the extent practicable,
the Company shall cooperate with Purchaser in mailing or
otherwise disseminating the Schedule 14D-9 with the appropriate
Offer Documents to the Company's stockholders. Purchaser and its
counsel shall be given an opportunity to review and comment upon
the Schedule 14D-9 (and shall provide any comments thereon as
soon as practicable) prior to the filing thereof with the SEC.
The Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and, on the
date filed with the SEC and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by
Purchaser or Merger Sub for inclusion in the Schedule 14D-9.
Each of the Company, Purchaser and Merger 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 cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of shares of Common Stock, in each
case as and to the extent required by applicable federal
securities laws. The Company agrees to provide Purchaser and
Merger Sub and their counsel in writing with 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.
(c) In connection with the Offer, the Company shall
cause its transfer agent to furnish Merger Sub with mailing
labels containing the names and addresses of the record holders
of Common Stock 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 regarding the beneficial owners of Common
Stock, and shall furnish to Merger Sub such information and
assistance (including updated lists of stockholders, security
position listings and computer files) as Merger Sub may
reasonably request in communicating the Offer to the Company's
stockholders. Subject to the requirements of law, and except for
such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Offer and the
Merger, Purchaser and Merger Sub and each of their affiliates and
associates shall hold in confidence the information contained in
any of such labels, lists and files, shall use such information
only in connection with the Offer and the Merger, and, if this
Agreement is terminated, shall promptly deliver to the Company
all copies of such information then in their possession or under
their control.
(d) Subject to the terms and conditions of this
Agreement, if there shall occur a change in law or in a binding
judicial interpretation of existing law which would, in the
absence of action by the Company or the Board, prevent Merger
Sub, were it to acquire a specified percentage of the shares of
Common Stock then outstanding, from approving and adopting this
Agreement by its affirmative vote as the holder of a majority of
shares of Common Stock and without the affirmative vote of any
other stockholder, the Company will use its reasonable best
efforts to promptly take or cause such action to be taken.
5.4. Directors.
(a) Promptly upon the purchase of shares of Common
Stock pursuant to the Offer, and from time to time thereafter,
Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, as will give
Purchaser representation on the Board of Directors equal to the
product of (i) the number of directors on the Board of Directors
and (ii) the percentage that the number of shares of Common Stock
purchased by Merger Sub or Purchaser or any affiliate bears to
the number of shares of Common Stock outstanding (the
"Percentage"), and the Company shall, upon request by Purchaser,
promptly increase the size of the Board of Directors and/or
exercise its reasonable best efforts to secure the resignations
of such number of directors as is necessary to enable Purchaser's
designees to be elected to the Board of Directors and shall cause
Purchaser's designees to be so elected; provided, however, that
until the Effective Time, the Board of Directors will have at
least one Continuing Director. At the request of Purchaser, the
Company will use its reasonable best efforts to cause such
individuals designated by Purchaser to constitute the same
Percentage of (i) each committee of the Board, (ii) the board of
directors of each Subsidiary and (iii) the committees of each
such board of directors. The Company's obligations to appoint
designees to the Board of Directors shall be subject to Section
14(f) of the Exchange Act. The Company shall take, at its
expense, all action necessary to effect any such election, and
shall include in the Schedule 14D-9 the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. Purchaser will supply to Company in writing and be
solely responsible for any information with respect to itself and
its nominees, directors and affiliates required by Section 14(f)
and Rule 14f-1.
(b) Following the election or appointment of
Purchaser's designees pursuant to this Section 5.4 and prior to
the Effective Time, the approval of a majority of the directors
of the Company then in office who are not designated by Purchaser
(the "Continuing Directors") shall be required to authorize (and
such authorization shall constitute the authorization of the
Board of Directors and no other action on the part of the
Company, including any action by any other director of the
Company, shall be required to authorize) any termination of this
Agreement by the Company, any amendment of this Agreement
requiring action by the Board of Directors, any extension of time
for the performance of any of the obligations or other acts of
Purchaser or Merger Sub, and any waiver of compliance with any of
the agreements or conditions contained herein for the benefit of
the Company.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser
and Merger Sub as follows, except as specifically disclosed in
the writing from the Company to Purchaser and Merger Sub that is
dated the date of this Agreement and that is identified by the
Company to Purchaser as the disclosure letter to this Agreement
(the "Disclosure Letter"):
6.1. Existence; Good Standing; Corporate Authority.
Each of the Company and its Significant Subsidiaries (as such
term is defined in Rule 1-02(w) of Regulation S-X of the
Securities Act) is (i) a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of incorporation and (ii) is duly licensed or qualified to do
business as a foreign corporation and is in good standing under
the laws of any other state of the United States or any other
jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes
such licensure, qualification or good standing necessary, except
where the failure to be so in good standing or to be so licensed
or qualified, individually or in the aggregate, would not have a
material adverse effect on the business, operations, results of
operations, assets, financial condition or prospects of the
Company and its Subsidiaries taken as a whole (a "Material
Adverse Effect," it being understood and agreed that for the
purpose of this Agreement, adverse events or circumstances which
result from general economic conditions shall not constitute a
Material Adverse Effect). Each of the Company and its
Significant Subsidiaries has the requisite corporate power and
authority in all material respects to own, operate and lease its
properties and carry on its business as now conducted. The
Company has heretofore delivered to Purchaser true and correct
copies of the Certificate of Incorporation and Bylaws of the
Company as currently in effect.
6.2. Authorization, Validity and Effect of Agreements.
The Company has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors, and no other
corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions
contemplated hereby (other than the approval of this Agreement by
the holders of a majority of the shares of Common Stock, if
required by applicable law). This Agreement has been duly and
validly executed and delivered by the Company, and (assuming this
Agreement constitutes a valid and binding obligation of Purchaser
and Merger Sub) constitutes the valid and binding obligation of
the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights
and general principles of equity.
6.3. Compliance with Laws. Except as set forth in the
Disclosure Letter, neither the Company nor any of its
Subsidiaries is in violation of any foreign, federal, state or
local law, statute, ordinance, rule, regulation, order, judgment,
ruling or decree ("Laws") of any foreign, federal, state or local
judicial, legislative, executive, administrative or regulatory
body or authority or any court, arbitration, board or tribunal
(each such entity, a "Governmental Entity") applicable to the
Company or any of its Subsidiaries or any of their respective
properties or assets, except for violations which, individually
or in the aggregate, would not have a Material Adverse Effect.
6.4. Capitalization. The authorized capital stock of the
Company consists of 300,000,000 shares of Common Stock. As of
April 7, 1997, (a) 36,964,587 shares of Common Stock were issued
and outstanding, (b) 36,964,587 shares of Common Stock were
subject to Common Stock Purchase Rights ("Rights") issued
pursuant to the Company's Rights Agreement, (c) Options to
purchase an aggregate of 2,600,882 shares of Common Stock were
outstanding, 2,600,882 shares of Common Stock were reserved for
issuance upon the exercise of outstanding Options and 2,506,802
shares were reserved for future grants under the Stock Option
Plans, and there were no stock appreciation rights or limited
stock appreciation rights outstanding other than those attached
to such Options, (d) 46,351 shares of Common Stock ("Restricted
Stock") issued under the Company's 1989 Restricted Stock Plan
were outstanding, (e) 6,583,351 shares of Common Stock were held
by the Company in its treasury, and (f) no shares of Common Stock
of the Company were held by the Company's Subsidiaries. Except
for the Rights, the Company has no outstanding bonds, debentures,
notes or other obligations or securities entitling the holders
thereof 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. Since January 1, 1997, the Company (i)
has not issued any shares of Common Stock other than (w) upon the
exercise of Options, (x) the issuance of 14,011 shares of
Restricted Stock under the Company's 1989 Restricted Stock Plan,
(y) the issuance of 14,602 shares of Common Stock under the
Company's savings plan and the 1991 Employee Stock Purchase Plan
and (z) pursuant to the terms of any compensation plan for the
benefit of non-employee directors (the "Directors Plans"),
representing in the aggregate, for the programs specified in
clauses (w), (x), (y) and (z), no more than 33,753 shares of
Common Stock, (ii) has granted Options to purchase an aggregate
of 3,200 shares of Common Stock under the Stock Option Plans, and
(iii) has not split, combined or reclassified any of its shares
of capital stock. All issued and outstanding shares of Common
Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except for the
Rights and except as set forth in this Section 6.4 or in the
Disclosure Letter, there are no other shares of capital stock of
the Company, no securities of the Company convertible or
exchangeable for shares of capital stock or voting securities of
the Company, and no existing options, warrants, calls,
subscriptions, convertible securities, or other rights,
agreements or commitments which obligate the Company or any of
its Subsidiaries to issue, transfer or sell any shares of capital
stock of, or equity interests in, the Company or any of its
Subsidiaries. There are no outstanding obligations of the
Company or any Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company and, other
than outstanding Options, awards under the Company's 1989
Restricted Stock Plan, purchase rights under the 1991 Employee
Stock Purchase Plan, or rights under the Directors Plans, there
are no awards outstanding under the Stock Option Plans or the
Company's 1989 Restricted Stock Plan or any other outstanding
stock-related awards. After the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell
any shares of capital stock of the Company or the Surviving
Corporation pursuant to any Options or any Company Benefit Plan.
Except as set forth in the Disclosure Letter, there are no voting
trusts or other agreements or understandings to which the Company
or any of its Subsidiaries is a party with respect to the voting
of capital stock of the Company or any of its Subsidiaries.
6.5. Subsidiaries. Except as set forth in the
Disclosure Letter, (i) the Company owns, directly or indirectly
through a Subsidiary, all of the outstanding shares of capital
stock (or other ownership interests having by their terms
ordinary voting power to elect directors or others performing
similar functions with respect to such Subsidiary) of each of the
Company's Subsidiaries, and (ii) each of the outstanding shares
of capital stock of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable, and is
owned, directly or indirectly, by the Company free and clear of
all liens, pledges, security interests, claims or other
encumbrances ("Encumbrances"). The Disclosure Letter sets forth
for each Subsidiary of the Company: (i) its name and
jurisdiction of incorporation or organization; (ii) to the
knowledge of the Company, its authorized capital stock or share
or equity capital; (iii) to the knowledge of the Company, the
number of issued and outstanding shares of capital stock or share
or equity capital; and (iv) to the knowledge of the Company, the
holder or holders of such shares. Except for interests in the
Company's Subsidiaries or as set forth in the Disclosure Letter,
neither the Company nor any of its Subsidiaries owns directly or
indirectly any interest or investment (whether equity or debt) in
any corporation, partnership, joint venture, business, trust or
other entity.
6.6. No Violation. Except as set forth in the
Disclosure Letter, neither the execution and delivery by the
Company of this Agreement nor the consummation by the Company of
the transactions contemplated hereby will: (i) violate, conflict
with or result in a breach of any provisions of the Certificate
of Incorporation or Bylaws (or comparable constituent documents)
of the Company or any of its Subsidiaries; (ii) violate, conflict
with, result in a breach of any provision of, constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, result in the termination or
in a right of termination of, accelerate the performance required
by or benefit obtainable under, result in the triggering of any
payment or other obligations pursuant to, result in the creation
of any Encumbrance upon any of the properties of the Company or
its Subsidiaries under, or result in there being declared void,
voidable, subject to withdrawal, or without further binding
effect, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any license,
franchise, Permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Company or any
of its Subsidiaries is a party, by which the Company or any of
its Subsidiaries or any of their respective properties is bound,
or under which the Company or any of its Subsidiaries or any of
their respective properties is entitled to a benefit (each of the
foregoing, to the extent the same have any continuing force or
effect, a "Contract" and collectively, "Contracts"), except for
any of the foregoing matters which individually or in the
aggregate would not have a Material Adverse Effect or prevent or
delay the consummation of the transactions contemplated hereby;
(iii) other than the filings provided for in Section 1.3, the
filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), the Exchange Act, or
filings in connection with the maintenance of qualification to do
business in other jurisdictions (the filings disclosed in the
Disclosure Letter in response to this clause (iii), the other
filings referred to in this clause (iii) and the Other Antitrust
Filings and Consents required or permitted to be made or
obtained, collectively, the "Regulatory Filings"), require any
consent, approval or authorization of, or declaration, filing or
registration with, any Governmental Entity, including, but only
to the knowledge of the Company, any such consent, approval,
authorization, declaration, filing or registration under any Laws
of any foreign jurisdiction relating to antitrust matters or
competition ("Foreign Antitrust Laws") or any other Law of any
foreign jurisdiction, except for those consents, approvals,
authorizations, declarations, filings or registrations the
failure of which to obtain or make individually or in the
aggregate would not have a Material Adverse Effect; or (iv)
violate any Laws applicable to the Company, any of its
Subsidiaries or any of their respective assets, except for
violations which individually or in the aggregate would not have
a Material Adverse Effect.
6.7. Company Reports; Offer Documents.
(a) The Company has made available to Purchaser each
registration statement, report, proxy statement or information
statement (as defined under the Exchange Act) prepared by it for
filing with the SEC since December 31, 1994, each in the form
(including exhibits and any amendments thereto) filed with the
SEC (collectively, the "Company Reports"). As of their
respective dates, the Company Reports (i) complied as to form in
all material respects with the applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act") and the Exchange Act and (ii)
did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
Each of the consolidated balance sheets of the Company included
in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents the
consolidated financial position of the Company and its
consolidated Subsidiaries as of its date, and each of the
consolidated statements of earnings and cash flows of the Company
included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents the
results of operations, earnings or cash flows, as the case may
be, of the Company and its Subsidiaries for the periods set forth
therein, in each case in accordance with generally accepted
accounting principles consistently applied during the periods
involved, except as may be noted therein. Except as set forth in
the Disclosure Letter, neither the Company nor any of its
Subsidiaries has any liabilities or obligations, contingent or
otherwise, except (i) liabilities and obligations in the
respective amounts reflected or reserved against in the Company's
consolidated balance sheet as of December 31, 1996 included in
the Company Reports or (ii) liabilities and obligations incurred
in the ordinary course of business since that date which
individually or in the aggregate would not have a Material
Adverse Effect.
(b) None of the information contained in the
Schedule 14D-9, the information statement, if any, filed by the
Company in connection with the Offer pursuant to Rule 14f-1 under
the Exchange Act (the "Information Statement"), or any amendment
or supplement thereto, at the respective times such documents are
filed with the SEC or first published, sent or given to the
Company's stockholders, contain or will contain any untrue
statement of a material fact or omit or will omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they are made, not misleading, except that no
representation is made by the Company with respect to information
supplied by Purchaser or Merger Sub specifically for inclusion in
the Schedule 14D-9 or Information Statement or any amendment or
supplement. None of the information supplied or to be supplied
by the Company for inclusion or incorporation by reference in the
Offer Documents will, at the date of filing with the SEC, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading. If at any time prior
to the Effective Time the Company shall obtain knowledge of any
facts with respect to itself, any of its officers and directors
or any of its Subsidiaries that would require the supplement or
amendment to any of the foregoing documents in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, or to comply with applicable
Laws, such amendment or supplement shall be promptly filed with
the SEC and, as required by Law, disseminated to the stockholders
of the Company, and in the event Purchaser shall advise the
Company as to its obtaining knowledge of any facts that would
make it necessary to supplement or amend any of the foregoing
documents, the Company shall promptly amend or supplement such
document as required and distribute the same to its stockholders.
6.8. Litigation. Except as set forth in the Disclosure
Letter, there are no claims, actions, suits, proceedings,
arbitrations, investigations or audits (collectively,
"Litigation") by a third party (including a Governmental Entity)
pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, at law or in equity,
other than those which individually or in the aggregate would not
have a Material Adverse Effect. Except as set forth in the
Disclosure Letter, to the knowledge of the Company, no
Governmental Entity has indicated an intention to conduct any
audit, investigation or other review with respect to the Company
or any of its Subsidiaries, except for those investigations or
reviews, which if adversely determined, individually or in the
aggregate, would not have a Material Adverse Effect.
6.9. Absence of Certain Changes. Except as set forth
in the Disclosure Letter, since December 31, 1996, the Company
and its Significant Subsidiaries have conducted their business
only in the ordinary course of such business consistent with past
practices, and there has not been (i) any Material Adverse Effect
suffered by the Company or any of its Subsidiaries; (ii) any
declaration, setting aside or payment of any dividend (other than
regular quarterly cash dividends at a rate not in excess of $.46
per share of Common Stock) or other distribution with respect to
the capital stock of the Company or its Subsidiaries (other than
wholly-owned Subsidiaries) or any repurchase, redemption or any
other acquisition by the Company or its Subsidiaries of any
outstanding shares of capital stock or other securities of, or
other ownership interests in, the Company or its Subsidiaries;
(iii) any material change in accounting principles, practices or
methods; (iv) any entry into or amendment of any employment
agreement with, or any increase in the rate or terms (including,
without limitation, any acceleration of the right to receive
payment) of compensation payable or to become payable by the
Company or any of its Subsidiaries to, their respective
directors, officers or employees, except increases in the
ordinary course of business in accordance with the past practice
of the Company; (v) any increase in the rate or terms (including,
without limitation, any acceleration of the right to receive
payment) of any bonus, insurance, pension or other employee
benefit plan or arrangement covering any such directors, officers
or employees, except increases in the ordinary course of business
in accordance with the past practice of the Company; or (vi) any
material revaluation by the Company or any of its Subsidiaries of
any of their respective assets, including, without limitation,
write-downs of inventory or write-offs of accounts receivable.
6.10. Taxes. The Company and each of its Subsidiaries
have timely filed all material Tax Returns required to be filed
by any of them. All such Tax Returns are true, correct and
complete, except for such instances which individually or in the
aggregate would not have a Material Adverse Effect. All material
Taxes of the Company and its Subsidiaries which are (i) shown as
due on such Returns, (ii) otherwise due and payable or (iii)
claimed or asserted by any Taxing authority to be due, have been
paid, except for those Taxes being contested in good faith and
for which adequate reserves have been established in the
financial statements included in the Company Reports in
accordance with generally accepted accounting principles. The
Company does not know of any proposed or threatened Tax claims or
assessments which, if upheld, would individually or in the
aggregate have a Material Adverse Effect. Except as set forth in
the Disclosure Letter, the Company and each Subsidiary has
withheld and paid over to the relevant Taxing authority all Taxes
required to have been withheld and paid in connection with
payments to employees, independent contractors, creditors,
stockholders or other third parties, except for such Taxes which
individually or in the aggregate would not have a Material
Adverse Effect. For purposes of this Agreement, (a) "Tax" (and,
with correlative meaning, "Taxes") means any federal, state,
local or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer
or excise tax, or any other tax, custom, duty, governmental fee
or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any
Governmental Entity, and (b) "Tax Return" means any return,
report or similar statement required to be filed with respect to
any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
6.11. Employee Benefit Plans. All employee benefit
plans and other benefit arrangements covering employees of the
Company or any of its Subsidiaries (the "Company Benefit Plans")
and all employee agreements providing compensation, severance or
other benefits to any employee or former employee of the Company
or any of its Subsidiaries, other than agreements which have been
satisfied in full (the "Employee Agreements") are set forth in
the Disclosure Letter. True and complete copies of the Company
Benefit Plans and the Employee Agreements have been made
available to Purchaser. Any Company Benefit Plan intended to be
qualified under Section 401(a) of the Code has received a
determination letter and, to the knowledge of the Company,
continues to satisfy the requirements for such qualification. No
Company Benefit Plan nor the Company nor any Subsidiary has
incurred any material liability or penalty under Section 4975 of
the Code or Section 502(i) of ERISA or engaged in any transaction
that is reasonably likely to result in any such material
liability or penalty. Each Company Benefit Plan has been
maintained and administered in compliance with its terms and with
ERISA and the Code to the extent applicable thereto, except for
such non-compliance which individually or in the aggregate would
not have a Material Adverse Effect. There is no pending or, to
the knowledge of the Company, threatened Litigation against or
otherwise involving any of the Company Benefit Plans and no
Litigation has been brought against or with respect to any such
Company Benefit Plan, except for any of the foregoing which
individually or in the aggregate would not have a Material
Adverse Effect. Except as described in the Company Reports and
except for matters which would not have a Material Adverse
Effect, neither the Company nor any of its Subsidiaries maintains
or contributes to any plan or arrangement which provides or has
any liability to provide life insurance or medical or other
employee welfare benefits to any employee or former employee upon
his or her retirement or termination of employment, and neither
the Company nor any of its Subsidiaries has ever represented,
promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided.
Except as set forth in the Disclosure Letter, (i) the execution
of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any
benefit plan, policy, arrangement or agreement or any trust or
loan that will or may result in any payment (whether of severance
pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee and (ii) no payment or
benefit which will or may be made by the Company, any of its
Subsidiaries, or Purchaser or Merger Sub with respect to any
employee will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code.
6.12. Labor and Employment Matters. Except as set
forth in the Disclosure Letter, (a) neither the Company nor any
of its Subsidiaries is a party to, or bound by, any collective
bargaining agreement or other Contracts or understanding with a
labor union or labor organization; and (b) except as would not,
individually or in the aggregate, have a Material Adverse Effect,
there is no (i) unfair labor practice, labor dispute (other than
routine individual grievances) or labor arbitration proceeding
pending or, to the knowledge of the Company, threatened against
the Company or its Subsidiaries, (ii) activity or proceeding by a
labor union or representative thereof to organize any employees
of the Company or any of its Subsidiaries, or (iii) lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees. The Company and its Subsidiaries each
is in compliance with all Laws regarding employment, employment
practices, terms and conditions of employment and wages, except
for such noncompliance which individually or in the aggregate
would not have a Material Adverse Effect.
6.13. Brokers and Finders. Except for Xxxxxx Xxxxxxx &
Co. Inc. pursuant to an engagement letter, a true and complete
copy of which has previously been delivered to Purchaser, no
broker, dealer or financial advisor is entitled to receive from
the Company or any of its Subsidiaries any broker's, finder's or
investment banking fee in connection with this Agreement or the
transactions contemplated hereby.
6.14. Fairness Opinion. The Company has received the
opinion of Xxxxxx Xxxxxxx & Co. Inc., to the effect that, as of
the date of this Agreement, the terms of the Offer (if made) and
the Merger are fair from a financial point of view to the holders
of Common Stock.
6.15. Licenses and Permits. Except as set forth in the
Disclosure Letter, the Company and its Subsidiaries have, and/or
have caused to be maintained, all necessary licenses, permits,
certificates of need, approvals and authorizations (collectively,
"Permits") from all Governmental Entities required to lawfully
conduct their respective businesses as presently conducted,
except for those Permits the lack of which individually or in the
aggregate would not have a Material Adverse Effect, and (a) no
Permit is subject to revocation or forfeiture by virtue of any
existing circumstances, (b) there is no Litigation pending or, to
the knowledge of the Company, threatened to modify or revoke any
Permit, and (c) no Permit is subject to any outstanding order,
decree, judgment, stipulation, or investigation that would be
likely to affect such Permit, except for instances of any of the
foregoing items (a) through (c) which individually or in the
aggregate would not have a Material Adverse Effect.
6.16. Environmental Compliance and Disclosure.
(a) For the purposes of this Agreement:
"Environmental Matters" means any matter arising out
of, relating to, or resulting from, pollution, protection of the
environment and human health or safety, health or safety of
employees, sanitation, and any matters relating to emissions,
discharges, releases or threatened releases of Hazardous
Materials or otherwise arising out of, resulting from, or
relating to, the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials.
"Environmental Costs" means, without limitation, any
actual or potential cleanup costs, remediation, removal, or other
response costs (which, without limitation, shall include costs
necessary to cause compliance with any and all Environmental
Laws), investigation costs (including without limitation, fees of
consultants, counsel, and other experts in connection with any
environmental investigation, testing, audits or studies), losses,
liabilities or obligations (including, without limitation,
liabilities or obligations under any lease or other contract),
payments, damages (including, without limitation, any actual,
punitive or consequential damages under any statutory law, common
law cause of action or contractual obligation, including, without
limitation, damages (a) of third parties for personal injury or
property damage, or (b) to natural resources), civil or criminal
fines or penalties, judgments, and amounts paid in settlement
arising out of or relating to or resulting from any Environmental
Matter.
"Environmental Laws" means, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. 9601 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq., the Toxic Substances Control Act, 15 U.S.C. 2601 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7
U.S.C. 136 et seq., the Clean Air Act, 42 U.S.C. 7401 et
seq., the Clean Water Act (Federal Water Pollution Control Act),
33 U.S.C. 1251 et seq., the Safe Drinking Water Act, 42 U.S.C.
300f et seq., the Occupational Safety and Health Act, 29
U.S.C. 651 et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. 1801 et seq., as any of the above statutes have
been or may be amended from time to time, all rules and
regulations promulgated pursuant to any of the above statutes,
and any other foreign, federal, state or local law, statute,
ordinance, rule or regulation governing Environmental Matters, as
the same have been or may be amended from time to time, including
any common law cause of action providing any right or remedy with
respect to Environmental Matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to
Environmental Matters.
"Hazardous Materials" means any pollutants,
contaminants, toxic or hazardous or extremely hazardous
substances, materials, wastes, constituents, elements, forces, or
chemicals that are regulated by, or may form the basis for
liability under, any Environmental Laws.
(b) Except as set forth in the Disclosure Letter and
except for any matters which individually or in the aggregate
would not have a Material Adverse Effect,
(i) there are no Hazardous Materials in amounts
required to be remediated under applicable Environmental Laws at,
on, under or within any real property owned, leased or occupied
by the Company or any of its Subsidiaries;
(ii) there are no claims, notices, civil, criminal
or administrative actions, suits, hearings, investigations,
inquiries or proceedings pending or, to the knowledge of the
Company, threatened that are based on or relate to any
Environmental Matters or the failure to have any Permits required
to be obtained by the Company and each of its Subsidiaries under
applicable Environmental Laws for the use, storage, treatment,
transportation, release, emission and disposal of raw materials,
by-products, wastes and other substances used or produced by or
otherwise relating to its business;
(iii) neither the Company nor any of its
Subsidiaries has used any waste disposal site, or otherwise
disposed of, transported, or arranged for the transportation of,
any Hazardous Materials to any place or location, nor in
violation of any Environmental Laws;
(iv) there are no underground storage tanks or
surface impoundments at, on, under or within any of real property
owned, leased or occupied by the Company or any of its
Subsidiaries, or any portion thereof;
(v) none of the Company or its Subsidiaries has
received any notice asserting that it may be a potentially
responsible party at any waste disposal site or other location
used for the disposal of any Hazardous Materials;
(vi) none of the Company or its Subsidiaries has
been requested or required by any Governmental Entity to perform
any investigatory or remedial activity or other action in
connection with any actual or alleged release of Hazardous
Materials or any other Environmental Matter; and
(vii) there are no past or present conditions,
events, circumstances, facts, activities, practices, incidents,
actions, omissions, or plans that may form the basis of any
claim, action, suit, proceeding, hearing, investigation, or
inquiry against or involving the Company nor any of its
Subsidiaries allegedly or actually based on or related to any
Environmental Matter or that is reasonably likely to require the
Company or any of its Subsidiaries to incur any Environmental
Costs.
6.17. Material Contracts. The Disclosure Letter sets
forth a list as of the date hereof of all (i) Contracts for
borrowed money or guarantees thereof, other than Contracts
entered into in the ordinary course of business consistent with
the past practice of the Company involving less than $2,000,000
individually or $10,000,000 in the aggregate or Contracts between
the Company and any of its wholly owned Subsidiaries or between
any of the Company's wholly owned Subsidiaries, (ii) Contracts
involving any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect to
any of these transactions), or any combination of these
transactions (each a "Derivative" and collectively,
"Derivatives"), other than Derivatives entered into in the
ordinary course of business consistent with the past practice of
the Company and with the Company's policies regarding Derivatives
as previously disclosed to Purchaser, (iii) Contracts containing
covenants by the Company or any Subsidiary restricting its
ability or the ability of any of the affiliates of the Company or
any of its Subsidiaries to engage in any line of business, (iv)
Contracts to purchase materials, supplies or other assets, other
than purchase orders entered into in the ordinary course of
business consistent with the past practice of the Company and
other Contracts involving obligations of less than $2,000,000
individually and $10,000,000 in the aggregate, (v) Contracts to
purchase or acquire advertising or other product promotion or
brand support other than spot orders purchased in the ordinary
course of business or involving commitments by the Company of
less than $1,000,000, (vi) Contracts with distributors, brokers
or sales agents for the distribution of the products of the
Company in any of the Key Jurisdictions identified as Category A
Key Jurisdictions in the Disclosure Letter or in which the
Company acts as distributor, broker or sales agent for others in
any Key Jurisdiction, other than Contracts involving or likely to
involve payments of less than $200,000 per year, (vii) Contracts
entered into by the Company since January 1, 1986 and in which
the Company's surviving liability (including indemnities) could
reasonably be expected to exceed $1,000,000 and involving the
sale or other disposition by the Company of one or more business
units, divisions or entities (including former Subsidiaries),
(viii) Contracts involving the investment, including by way of
capital contribution, loan or advance, by the Company or any of
its Subsidiaries of more than $1,000,000 in any other person,
firm or entity (other than wholly-owned Subsidiaries), other than
investments no longer owned by the Company or its Subsidiaries,
(ix) other Contracts under which the obligation of the Company
and its Subsidiaries is $1,000,000 or more, and (x) promotion
Contracts in the United States with the Company's ten largest
customers having a term of longer than three (3) months (all
Contracts described in each of the categories (i) through (x)
above, "Material Contracts"). For the purposes of this
Agreement, "Key Jurisdiction" shall mean each of the countries
identified as such in the Disclosure Letter. "Category A Key
Jurisdiction" shall mean each of the countries identified as such
in the Disclosure Letter. All Contracts to which the Company or
any of its Subsidiaries is a party or by which any of their
respective assets are bound are valid and binding, in full force
and effect and enforceable against the parties thereto in
accordance with their respective terms, except where the failure
to be so valid and binding, in full force and effect or
enforceable would not individually or in the aggregate have a
Material Adverse Effect. There is not under any such Contract,
any existing default, or event, which after notice or lapse of
time, or both, would constitute a default, by the Company or any
of its Subsidiaries, or to the Company's knowledge, any other
party, other than any such defaults or events which, individually
or in the aggregate, would not have a Material Adverse Effect.
6.18. Intellectual Property Rights. Except as
disclosed in the Disclosure Letter, (i) each of the Company and
its Subsidiaries owns or has the right to use pursuant to
license, sublicense, agreement or permission all of the
Intellectual Property used by it in the conduct of its businesses
as presently conducted, except where the absence of any thereof,
individually or in the aggregate, would not have a Material
Adverse Effect, and (ii) neither the Company nor any of its
Subsidiaries has interfered with, infringed upon or
misappropriated any Intellectual Property rights of third parties
which interference, infringement or misappropriation individually
or in the aggregate would have a Material Adverse Effect.
"Intellectual Property" means all patents, patent applications,
trademarks, service marks, logos, trade names and corporate
names, copyrights, computer software, management information
systems and other intellectual property and proprietary rights.
6.19. Required Vote of Company Stockholders. Unless
the Merger may be consummated in accordance with Section 253 of
the DGCL, the only vote of the stockholders of the Company
required to adopt this Agreement and approve the Merger is the
affirmative vote of the holders of a majority of the outstanding
shares of Common Stock. No greater or other vote of the
stockholders of the Company is required by Law or the Certificate
of Incorporation or By-Laws of the Company to adopt this
Agreement and approve the Merger.
6.20. Disclosures. This Agreement and the Disclosure
Letter furnished by the Company or any of its Subsidiaries
pursuant hereto, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements contained herein, in the light of the circumstances
under which they were made, not misleading.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB
Purchaser and Merger Sub hereby represent and warrant to
the Company as follows:
7.1. Existence; Good Standing; Corporate Authority.
Each of Purchaser and Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation.
7.2. Authorization, Validity and Effect of Agreements.
Each of Purchaser and Merger Sub has the requisite corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by Purchaser
and Merger Sub of the transactions contemplated hereby have been
duly and validly authorized by the respective Boards of Directors
of Purchaser and Merger Sub, as applicable, and by Purchaser as
the sole stockholder of Merger Sub and no other corporate
proceedings on the part of Purchaser or Merger Sub are necessary
to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and Merger Sub, and (assuming
this Agreement constitutes a valid and binding obligation of the
Company) constitutes the valid and binding obligation of each of
Purchaser and Merger Sub, enforceable against Purchaser and
Merger Sub in accordance with its respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of
equity.
7.3. Offer Documents. None of the information
contained in the Offer Documents or any schedule thereto required
to be filed with the SEC or in any amendment or supplement
thereto will contain, on the date of filing with the SEC, any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under
which they are made, not misleading, except that no
representation is made by Purchaser or Merger Sub with respect to
information supplied by the Company specifically for inclusion in
the Offer Documents or any schedule thereto required to be filed
with the SEC or in any amendment or supplement thereto. None of
the information supplied by Purchaser or Merger Sub specifically
for inclusion in the Schedule 14D-9 will, at the date of filing
with the SEC, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
7.4. No Violation. Neither the execution and delivery
of this Agreement by Purchaser and Merger Sub nor the
consummation by them of the transactions contemplated hereby will
(i) violate, conflict with or result in any breach of any
provision of the Certificate of Incorporation or By-Laws of
Merger Sub or the Articles of Incorporation Regulations or By-
Laws, in each case as amended, of Purchaser; (ii) other than the
Regulatory Filings and pursuant to the Foreign Antitrust Laws,
require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental
Entity, the lack of which individually or in the aggregate would
have a material adverse effect on the ability of Purchaser or
Merger Sub to consummate the transactions contemplated hereby and
(iii) violate any Laws applicable to Purchaser or Merger Sub or
any of their respective assets, except for violations which
individually or in the aggregate would not have a material
adverse effect on the ability of Purchaser or Merger Sub to
consummate the transactions contemplated hereby.
7.5. Financing. At the consummation of the Offer and
at the Effective Time, Purchaser will cause Merger Sub to have
funds available to it sufficient to consummate the Offer and the
Merger on the terms contemplated hereby.
7.6. Brokers and Finders. No actions by Purchaser or
Merger Sub or by anyone acting on behalf of either of them has
given rise to any valid claim against the Company for any
broker's, finder's or investment banking fee in connection with
this Agreement or the transactions contemplated hereby.
Purchaser is to be solely responsible for any fee payable to
Xxxxxxx, Sachs & Co. in connection with the transactions
contemplated by this Agreement.
ARTICLE 8
COVENANTS
8.1. No Solicitation. Neither the Company nor any of
its Subsidiaries, nor any of their respective officers,
directors, employees, representatives, agents or affiliates,
shall, directly or indirectly, encourage, solicit, initiate or,
except as is required in the exercise of the fiduciary duties of
the Company's directors to the Company or its stockholders after
consultation with outside counsel to the Company, participate in
any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or
records of the Company or any of its Subsidiaries to, or
otherwise assist, facilitate or encourage, any corporation,
partnership, person or other entity or group (other than
Purchaser or any affiliate or associate of Purchaser) concerning
any merger, consolidation, business combination, liquidation,
reorganization, sale of substantial assets, sale of shares of
capital stock or similar transactions involving the Company or
any Subsidiary or any division of any thereof (an "Alternative
Proposal"), and shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the
foregoing (other than in connection with the Restructuring as
contemplated by Section 8.2(c)(i)) and take the necessary steps
to inform such parties of the obligations undertaken in this
Section 8.1; provided, however, that nothing contained in this
Section 8.1 shall prohibit the Company or its Board of Directors
from taking and disclosing to the Company's stockholders a
position with respect to a tender offer by a third party pursuant
to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making such disclosure to the Company's stockholders which,
in the judgment of the Board of Directors with the advice of
outside counsel, may be required under applicable law. The
Company will promptly notify Purchaser if any such information is
requested from it or any such negotiations or discussions are
sought to be initiated with the Company and will promptly
communicate to Purchaser the terms of any proposal or inquiry
which it may receive in respect of any such transaction.
8.2. Interim Operations.
(a) From the date of this Agreement to the Effective
Time, except as set forth in the Disclosure Letter or as
otherwise required pursuant to this Agreement, unless Purchaser
has consented in writing thereto, the Company shall, and shall
cause each of its Subsidiaries to:
(i) conduct its operations according to its usual,
regular and ordinary course of business consistent with past
practice;
(ii) use its reasonable best efforts to preserve
intact their business organizations and goodwill, to maintain in
effect all existing qualifications, licenses, Permits, approvals
and other authorizations referred to in Sections 6.1 and 6.15, to
keep available the services of their officers and employees and
to maintain satisfactory relationships with customers, suppliers,
distributors, brokers, sales agents and all other persons having
business relationships with them, including through the payment
of additional compensation reasonably acceptable to Purchaser to
such distributors, brokers and sales agents reasonably calculated
to maintain at least the current level of merchandising,
distribution and shelving;
(iii) promptly notify Purchaser upon becoming
aware of any material breach of any representation, warranty or
covenant contained in this Agreement, the occurrence of any event
that would cause any representation, warranty or covenant
contained in this Agreement no longer to be true and correct in
all material respects or any breach of the representations and
warranties specified in Section 6.17(iii);
(iv) promptly deliver to Purchaser true and correct copies
of any report, statement or schedule filed with the SEC
subsequent to the date of this Agreement and any internal monthly
reports prepared for or delivered to the Board of Directors after
the date hereof; and
(v) deliver, within 20 business days after the end of each
accounting month, monthly consolidated financial statements, in
the same format as heretofore furnished to Purchaser, for the
Company and its Subsidiaries for and as of the end of each such
month.
(b) From the date of this Agreement to the Effective
Time, except as set forth in the Disclosure Letter, unless
Purchaser has consented in writing thereto, the Company shall
not, and shall not permit any of its Subsidiaries to:
(i) amend its Certificate of Incorporation or
Bylaws or comparable governing instruments;
(ii) except with respect to the issuance of
treasury stock under the Company's savings plan, the Directors'
Plans and the 1991 Employee Stock Purchase Plan in the ordinary
course of business consistent with the terms of the governing
documents, or where the documents do not govern such issuances,
in accordance with the past practice of the Company representing
in the aggregate no more than 40,000 shares of Common Stock,
issue, sell, pledge or otherwise dispose of any shares of its
capital stock or other ownership interest in the Company (other
than issuances of Common Stock in respect of any exercise of
Options outstanding on the date hereof and disclosed in the
Disclosure Letter) or any of the Subsidiaries, or any securities
convertible into or exchangeable for any such shares or ownership
interest, or any rights, warrants or options to acquire or with
respect to any such shares of capital stock, ownership interest,
or convertible or exchangeable securities; or accelerate any
right to convert or exchange or acquire any securities of the
Company or any of its Subsidiaries for any such shares or
ownership interest;
(iii) effect any stock split, reverse stock split,
stock dividend, subdivision, reclassification or similar
transaction, or otherwise change its capitalization as it exists
on the date hereof;
(iv) grant, confer, award or amend any option,
warrant, convertible security or other right to acquire any
shares of its capital stock or take any action to cause to be
exercisable any otherwise unexercisable option under any stock
option plan or restricted stock plan;
(v) declare, set aside or pay any dividend (other
than regular quarterly cash dividends at a rate not in excess of
$.46 per share of Common Stock) or make any other distribution
or payment with respect to any shares of Common Stock or other
capital stock or ownership interests (other than such payments by
a wholly-owned Subsidiary to the Company or another wholly-owned
Subsidiary);
(vi) directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock or the capital
stock of any of its Subsidiaries;
(vii) sell, lease, assign, transfer or otherwise
dispose of (by merger or otherwise) any of its property, business
or assets (including, without limitation, receivables, leasehold
interests or Intellectual Property and including any sale
leaseback transaction) except for (i) the sale of inventory in
the ordinary course of business, (ii) the disposition of assets
pursuant to the Restructuring as contemplated by
Section 8.2(c)(i) and (iii) other asset sales for fair value in
the ordinary course of business provided that the proceeds of
such other asset sales do not exceed $2,000,000 in any single
transaction or $10,000,000 in the aggregate prior to the
Effective Time;
(viii) settle or compromise any pending or
threatened Litigation without Purchaser's consent (which consent
will not be unreasonably withheld or delayed), other than
settlements (a) of product liability Litigation in the ordinary
course of business consistent with the Company's past practice of
settling similar product liability claims, provided, in the case
of settlements of product liability Litigations in excess of
$100,000 only (I) the Company has kept Purchaser reasonably
apprised of the status of such Litigation and has provided
Purchaser with reasonable advance notice of its intention to
settle any such Litigation and (II) the settlement would not have
a Material Adverse Effect, (b) of other Litigations which involve
solely the payment of money (without admission of liability) not
to exceed $200,000 in any one case and (c) of Tax Litigation,
which is governed by paragraph (xiii);
(ix) make any advance, loan, extension of credit or
capital contribution to, or purchase or acquire (by merger or
otherwise) any stock, bonds, notes, debentures or other
securities of, or any assets constituting a business unit of, or
make any other investment in, any person, firm or entity, except
(a) extensions of trade credit and endorsements of negotiable
instruments and other negotiable documents in the ordinary course
of business, (b) investments in cash and cash equivalents,
(c) payroll and travel advances in the ordinary course of
business, (d) investments in wholly owned Subsidiaries, and
(e) the acquisition by the Company of the Minority JV Interest as
contemplated by Section 8.2(c)(ii);
(x) make any capital expenditures in the aggregate
for the Company and its Subsidiaries in excess of the amounts
specified in the Company's budget for capital expenditures, a
true and complete copy of which has previously been delivered to
Purchaser, or otherwise acquire assets having a value, in the
aggregate, in excess of $500,000 not in the ordinary course of
business;
(xi) incur, assume or create any indebtedness for
borrowed money or the deferred purchase price for property or
services or pursuant to any capital lease or other financing,
except indebtedness incurred in the ordinary course of business
consistent with past practice for working capital purposes
pursuant to the Company's existing credit facilities or
commercial paper program as disclosed in the Disclosure Letter
and except for the incurrence, assumption or creation of
indebtedness in the ordinary course of business consistent with
the past practice of the Company not exceeding $2,000,000 in any
one instance or $10,000,000 in the aggregate at any one time
outstanding; or amend in a manner materially adverse to the
Company, any of the Company's existing credit facilities;
(xii) assume, guarantee or otherwise become liable
or responsible (whether directly, contingently or otherwise) for
the obligations of any other person except wholly-owned
Subsidiaries of the Company and except for obligations in the
ordinary course of business consistent with the past practice of
the Company not exceeding $1,000,000 individually and $5,000,000
in the aggregate;
(xiii) make any material Tax election (unless
required by law or unless consistent with prior practice) or
settle or compromise any material income tax liability except, in
each case, if Purchaser is given reasonable prior notice thereof;
(xiv) waive or amend any term or condition of any
confidentiality or "standstill" agreement to which the Company is
a party and which relates to a business combination with the
Company or the purchase of shares or assets of the Company;
(xv) grant or amend any stock-related or
performance awards;
(xvi) except with respect to agreements which are
terminable at will by the Company without any material penalty to
the Company, enter into or amend any legally binding employment,
severance, consulting or salary continuation agreements with any
officers, directors or employees or grant any increases in
compensation or benefits to employees other than increases to
officers and employees in the ordinary course of business
consistent with the past practice of the Company;
(xvii) adopt, amend or terminate any employee
benefit plan or arrangement (except as expressly contemplated by
this Agreement);
(xviii) enter into (a) any agreements with
distributors or sales agents other than agreements terminable
without penalty on less than 30 days' notice, (b) any agreements
to distribute products for others or which restrict the ability
of the Company or its Subsidiaries or affiliates to compete or
(c) any other agreements, other than agreements relating to
product promotions, that would constitute Material Contracts; or
amend any of the foregoing agreements as exist on the date
hereof;
(xix) amend, change or waive (or exempt any
person or entity from the effect of) the Rights Agreement, except
in connection with the exercise of its fiduciary duties by the
Board of Directors as set forth in Section 8.1 of this Agreement
or in connection with the transactions contemplated under this
Agreement;
(xx) make any material changes in the type or
amount of their insurance coverages;
(xxi) except as may be required by law or
generally acceptable accounting principles and with prior written
notice to the Purchaser, change any material accounting
principles or practices used by the Company or its Subsidiaries;
(xxii) effect any material change in the
Company's advertising, product promotion or brand support
policies or programs or commit to any significant new product
promotion or advertising campaign except, in each case, for
matters in the ordinary course of business consistent with the
past practice of the Company;
(xxiii) effect any material change in the
Company's billing practices or sales terms, or cause a material
acceleration or delay in the manufacture, shipment or sale of
inventory, the collection of accounts or notes receivable or the
payment of accounts or notes payable except, in each case, for
matters in the ordinary course of business consistent with the
past practice of the Company;
(xxiv) enter into any Contracts for Derivatives,
except for spot, option and forward Contracts entered into in the
ordinary course of business consistent with the past practice of
the Company and with the Company's policies regarding Derivatives
as previously disclosed to Purchaser;
(xxv) waive, relinquish, release or terminate
any right or claim, including any such right or claim under any
Material Contract or permit any rights of material value to use
any Intellectual Property to lapse or be forfeited, in each case,
except in the ordinary course of business consistent with the
past practice of the Company;
(xxvi) apply for, consent to, or acquiesce in,
the appointment of a trustee, receiver, sequestrator or other
custodian for any substantial part of the property of the Company
or any Significant Subsidiary, or make a general assignment for
the benefit of creditors, or permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement
or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution, winding up or liquidation proceeding, in
respect of the Company or any Significant Subsidiary;
(xxvii) take any action to cause the Common Stock
to be delisted from the New York Stock Exchange prior to the
completion of the Offer or (if no Offer is made) the Merger; or
(xxviii) agree in writing or otherwise to
take any of the foregoing actions.
(c) The Company will use reasonable best efforts to (i)
carry out its restructuring announced during the third quarter of
fiscal 1996 as described in the Disclosure Letter (the
"Restructuring") in a manner and on a schedule materially
consistent with its plans as previously disclosed to Purchaser,
including the sale of its manufacturing facilities in Rutland,
Vermont and Tipperary, Ireland and (ii) to acquire, for a
purchase price not to exceed $1,000,000 and on other terms
reasonably acceptable to Purchaser, the minority interest (the
"Minority JV Interest") held by its joint venture partner
(Northeast No. 6 Pharmaceutical Factory of China) in the
Company's Chinese joint venture subsidiary. At Purchaser's
request, the Company will cooperate with Purchaser (including, by
conducting mutual negotiations or by seeking declaratory relief)
to minimize the possible impact on Purchaser and/or its
Subsidiaries of any non-compete covenants to which the Company or
any of its Subsidiaries or affiliates may be subject or may be
parties following the Closing. The Company shall keep Purchaser
reasonably apprised of the status of each of the matters referred
to in this Section 8.2(c).
8.3. Company Stockholder Approval; Proxy Statement.
(a) Subject to Section 4.6, the Company shall (i)
call a meeting of its stockholders (the "Stockholders Meeting")
for the purpose of voting upon the Merger, (ii) hold the
Stockholder Meeting as soon as practicable following the date of
this Agreement, and (iii) subject to its fiduciary duties under
applicable law as advised by outside counsel, recommend to its
stockholders the approval of the Merger through its Board of
Directors. If Merger Sub purchases shares of Common Stock
pursuant to the Offer prior to the mailing of the Proxy
Statement, the record date for the Stockholders Meeting shall be
a date subsequent to the date Purchaser or Merger Sub becomes a
record holder of Common Stock purchased pursuant to the Offer.
(b) The Company will, as soon as practicable following
the date of this Agreement, prepare and file a preliminary Proxy
Statement or, if applicable following the purchase by Merger Sub
of shares of Common Stock pursuant to the Offer, an information
statement (such proxy or information statement, and any
amendments or supplements thereto, the "Proxy Statement"), with
the SEC with respect to the Stockholders Meeting and will use its
reasonable best efforts to respond to any comments of the SEC or
its staff and to cause the Proxy Statement to be cleared by the
SEC. The Company will notify Purchaser 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 Purchaser 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. The Company shall give Purchaser and its counsel (who
shall provide any comments thereon as soon as practicable) the
opportunity to review the Proxy Statement prior to its being
filed with the SEC and shall give Purchaser and its counsel (who
shall provide any comments thereon as soon as practicable) the
opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional
information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company and Purchaser
agrees to use its reasonable best efforts, after consultation
with the other parties hereto, to respond promptly to all such
comments of and requests by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the
Company shall mail the Proxy Statement to the stockholders of the
Company. If at any time prior to the approval of this Agreement
by the Company's stockholders there shall occur any event that
should be set forth in an amendment or supplement to the Proxy
Statement, the Company will prepare and mail to its stockholders
such an amendment or supplement.
(c) The Company represents and warrants that the Proxy
Statement will comply as to form in all material respects with
the Exchange Act and, at the respective times filed with the SEC
and distributed to stockholders of the Company, will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, that the
Company makes no representation or warranty as to any information
included in the Proxy Statement which was provided by Purchaser
or Merger Sub. Purchaser represents and warrants that none of the
information supplied by Purchaser or Merger Sub for inclusion in
the Proxy Statement will, at the respective times filed with the
SEC and distributed to stockholders of the Company, 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 the light of the circumstances under
which they were made, not misleading.
(d) Subject to the fiduciary duties of the Board of
Directors as advised by counsel, the Company shall use its
reasonable best efforts to obtain the necessary approvals by its
stockholders of the Merger, this Agreement and the transactions
contemplated hereby.
(e) Purchaser agrees, subject to applicable law, to
cause all shares of Common Stock purchased by Merger Sub pursuant
to the Offer and all other shares of Common Stock owned by
Purchaser, Merger Sub or any other subsidiary or affiliate of
Purchaser to be voted in favor of the approval of the Merger.
8.4. Filings; Other Action. Subject to the terms and
conditions herein provided, the Company, Purchaser, and Merger
Sub shall: (a) promptly make their respective filings and
thereafter make any other required submissions under the HSR Act
with respect to the Merger and, if applicable, the Offer;
(b) cooperate and consult with one another in (i) determining
which Regulatory Filings are required or, in the case of Other
Antitrust Filings, permitted to be made prior to the Effective
Time with, and which consents, approvals, Permits, authorizations
or waivers (collectively, "Consents") are required or, in the
case of Other Antitrust Consents, permitted to be obtained prior
to the Effective Time from Governmental Entities or other third
parties in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, (x) all such Regulatory
Filings and Consents as relate to Foreign Antitrust Laws (the
"Other Antitrust Filings" and the "Other Antitrust Consents,"
respectively; collectively, the "Other Antitrust Filings and
Consents") and (y) all Consents required to transfer to the
Company any Permits or registrations held on behalf of the
Company or any of its Subsidiaries by or in the name of
distributors, brokers or sales agents; (ii) preparing all
Regulatory Filings and all other filings, submissions and
presentations required or prudent to obtain all Consents,
including by providing to the other party drafts of such material
reasonably in advance of the anticipated filing or submission
dates; and (iii) timely making all such Regulatory Filings and
timely seeking all such Consents (it being understood that the
parties will make or seek to obtain all Other Antitrust Filings
and Consents, whether mandatory or voluntary); and (c) use their
reasonable best efforts to take, or cause to be taken, all other
action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement. Each of Purchaser
and the Company shall use its reasonable best efforts to contest
any proceeding seeking a preliminary injunction or other legal
impediment to, and to resolve any objections as may be asserted
by any Governmental Entity with respect to, the Offer and/or the
Merger under the HSR Act or Foreign Antitrust Laws; provided that
the foregoing shall not require Purchaser to take any action that
could directly or indirectly (x) impose limitations on the
ability of Purchaser or Merger Sub (or any of their affiliates or
Subsidiaries) effectively to acquire, operate or hold, or require
Purchaser, Merger Sub or the Company or any of their respective
affiliates or Subsidiaries to dispose of or hold separate, any
portion of their respective assets or business that (I) is either
material to the business of Purchaser and its Subsidiaries or
material to the business of the Company and its Subsidiaries, in
each case, conducted in (A) any Category 1 Key Jurisdiction, (B)
any two or more Category 2 Key Jurisdictions, or (C) any three or
more Category 2 and Category 3 Key Jurisdictions, or (II) is
reasonably likely to have a Material Adverse Effect, (y) restrict
any future business activity by Purchaser, Merger Sub, the
Company or any of their affiliates or Subsidiaries that (I) is
either material to the business of Purchaser and its Subsidiaries
or material to the business of the Company and its Subsidiaries,
in each case, conducted in (A) any Category 1 Key Jurisdiction,
(B) any two or more Category 2 Key Jurisdictions, or (C) any
three or more Category 2 and Category 3 Key Jurisdictions, or
(II) is reasonably likely to have a Material Adverse Effect,
including, without limitation, requiring the prior consent of any
Governmental Entity to future transactions by Purchaser, Merger
Sub, the Company or any of their affiliates or Subsidiaries, or
(z) otherwise adversely affect Purchaser, Merger Sub, the Company
or any of their respective affiliates or Subsidiaries in a manner
that (I) is either material to the business of Purchaser and its
Subsidiaries or material to the business of the Company and its
Subsidiaries, in each case, conducted in (A) any Category 1 Key
Jurisdiction, (B) any two or more Category 2 Key Jurisdictions,
or (C) any three or more Category 2 and Category 3 Key
Jurisdictions, or (II) is reasonably likely to have a Material
Adverse Effect. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers and directors of
Purchaser and the Surviving Corporation shall take all such
necessary action.
8.5. Access to Information.
(a) From the date of this Agreement to the Closing,
upon reasonable notice, the Company shall, and shall cause its
Subsidiaries to, subject to the compliance with applicable laws
and confidentiality obligations to third parties, (i) give
Purchaser and its authorized representatives reasonable access
during normal business hours to all books, records, personnel,
research and other consultants, offices and other facilities and
properties of the Company and its Subsidiaries and their
accountants and accountants' work papers, (ii) permit Purchaser
to make such copies and inspections thereof as Purchaser may
reasonably request and (iii) furnish Purchaser with such
financial and operating data and other information with respect
to the business and properties of the Company and its
Subsidiaries as Purchaser may from time to time reasonably
request; provided that no investigation or information furnished
pursuant to this Section 8.5 shall affect any representations or
warranties made by the Company herein or the conditions to the
obligations of Purchaser to consummate the transactions
contemplated hereby.
(b) All such information and access shall be subject
to the provisions of the letter agreement between Purchaser and
the Company (the "Confidentiality Agreement") relating to the
confidential treatment of "Information" (as defined therein).
8.6. Publicity. The initial press release relating to
this Agreement shall be a joint press release and thereafter the
Company and Purchaser shall, subject to their respective legal
obligations, obtain the prior consent of the other party (which
consent will not be unreasonably withheld or delayed) before
issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby
and in making any filings with any national securities exchange
with respect thereto.
8.7. Further Action. Each party hereto shall, subject
to the fulfillment at or before the Effective Time of each of the
conditions of performance set forth herein or the waiver thereof,
perform such further acts and execute such documents as may be
reasonably required to effect the Merger. Purchaser shall use
reasonable best efforts to assist the Company in causing the
condition specified in subsection (j) of Exhibit A not to exist
at the time the Merger (and the purchase of Common Stock pursuant
to the Offer, if applicable) is otherwise to be consummated
(unless Purchaser waives such condition).
8.8. Insurance; Indemnity.
(a) For a period of six years after the Effective
Time, Purchaser shall cause to be maintained officers' and
directors' liability insurance covering the parties who are
currently covered, in their capacities as officers and directors,
by the Company's existing officers' and directors' liability
insurance policies (the "Current Policies") on terms
substantially no less advantageous to such parties than such
Current Policies; provided, however, that Purchaser shall not be
required, in order to maintain or procure such coverage, to pay
annual premiums in excess of 200% of the aggregate annual
premiums paid by the Company for the Current Policies during 1996
(the "Cap"); and provided, further, that if equivalent coverage
cannot be obtained, or can be obtained only by paying an amount
in excess of the Cap, Purchaser shall only be required to obtain
such coverage for such six-year period as can be obtained by
paying annual premiums equal to the Cap.
(b) From and after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless, to the fullest
extent permitted under applicable law, each person who is, or has
been at any time prior to the date hereof or who becomes prior to
the Effective Time, an officer or director of the Company or any
of its Subsidiaries against all losses, claims, damages,
liabilities, costs or expenses (including attorneys' fees),
judgments, fines, penalties and amounts paid in settlement
(collectively, "Losses") in connection with any Litigation
arising out of or pertaining to acts or omissions, or alleged
acts or omissions, by them in their capacities as such, which
acts or omissions occurred prior to the Effective Time. Without
limiting the foregoing, the Company and after the Effective Time
the Surviving Corporation shall periodically advance expenses as
incurred with respect to the foregoing to the fullest extent
permitted under applicable law provided that the person to whom
the expenses are advanced provides an undertaking to repay such
advance if it is ultimately determined that such person is not
entitled to indemnification.
(c) If the Merger shall have been consummated, the
Surviving Corporation shall, to the fullest extent permitted
under applicable law, indemnify and hold harmless Purchaser and
any person or entity who was an officer, director or affiliate of
Purchaser prior to the Effective Time against any Losses in
connection with any Litigation arising out of or pertaining to
any of the transactions contemplated by this Agreement.
(d) If any Litigation described in paragraph (b) or
(c) of this Section 8.8 (each, an "Action") arises or occurs, the
Surviving Corporation shall control the defense of such Action
with counsel selected by the Surviving Corporation, which counsel
shall be reasonably acceptable to the party seeking
indemnification pursuant to paragraph (b) or (c) of this Section
8.8 (each, an "Indemnified Party"); provided that the Indemnified
Party shall be permitted to participate in the defense of such
Action through counsel selected by the Indemnified Party, which
counsel shall be reasonably acceptable to the Surviving
Corporation, at the Indemnified Party's expense. Notwithstanding
the foregoing, if there is any conflict between the Surviving
Corporation and any Indemnified Parties or there are additional
defenses available to any Indemnified Parties, the Indemnified
Parties shall be permitted to participate in the defense of such
Action with counsel selected by the Indemnified Parties, which
counsel shall be reasonably acceptable to the Surviving
Corporation, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; provided
that the Surviving Corporation shall not be obligated to pay the
reasonable fees and expenses of more than one counsel for all
Indemnified Parties in any single Action except to the extent
that, in the opinion of counsel for the Indemnified Parties, two
or more of such Indemnified Parties have conflicting interests in
the outcome of such Action. The Surviving Corporation shall not
be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld.
8.9. Restructuring of Merger. Upon the mutual
agreement of Purchaser and the Company, the Merger shall be
restructured in the form of a forward subsidiary merger of the
Company into Merger Sub, with Merger Sub being the surviving
corporation, or as a merger of the Company into Purchaser, with
Purchaser being the surviving corporation. In such event, this
Agreement shall be deemed appropriately modified to reflect such
form of merger.
8.10. Employees and Employee Benefit Plans.
(a) From and after the Effective Time, Purchaser shall
cause the Surviving Corporation and any of its Subsidiaries to
honor in accordance with their terms and the past practice of the
Company all existing employment agreements and severance plans
and agreements between the Company or any of its Subsidiaries,
except as otherwise provided herein, and any officer, director,
or employee of the Company or any of its Subsidiaries so long as
such plans and agreements shall have been identified to Purchaser
in the Disclosure Letter and to the extent such terms are in
effect on the date hereof or as otherwise provided hereunder or
in the Disclosure Letter. To the extent any such employment
agreements or severance plans or agreements can be unilaterally
amended by the Company, Purchaser agrees not to amend any such
plan or agreement prior to the first anniversary of the Closing
in a manner that will reduce or otherwise impair the benefits
that would be payable thereunder to any employee who is covered
thereby and who is terminated on or before the first anniversary
of the Closing.
(b) Prior to the earlier of the purchase of shares of
Common Stock by Merger Sub pursuant to the Offer and the
Effective Time (the "Acquisition Date"), the Company shall have
taken all such action, including approval of the Board of
Directors, as may be necessary in order to amend (i) the Pension
Plan for the Employees of the Company and (ii) the Executive
Severance Program in the manner set forth in the Disclosure
Letter.
(c) For a period of one year following the Closing,
Purchaser will provide employees and former employees of the
Company with benefits that, at Purchaser's sole option, are
either (x) in the aggregate at least as favorable as the benefits
they were entitled to receive immediately prior to the Closing or
(y) generally the same as the benefits that Purchaser makes
available to its employees generally, except that Purchaser shall
provide severance benefits to employees in accordance with the
provision of Section 8.10(a).
(d) The Company will use its reasonable best efforts
consistent with past practice to enforce any existing non-compete
and confidentiality provisions contained in agreements with
employees and former employees.
(e) Effective as of the date hereof, the Company shall
amend the 1991 Employee Stock Purchase Plan to preclude any
increase in the level of contribution made by any eligible
employee thereunder, whether by reason of commencing
participation or increasing the level of contribution (other than
increases as to which notification had been given prior to the
date hereof).
8.11 Transfer Taxes. Any liability for New York State
Real Property Transfer Tax and similar real property transfer
taxes and real property gains taxes imposed by any other state
with respect to the transactions contemplated by this Agreement,
together with applicable interest, penalties and additions
thereto, if any, shall be paid or caused to be paid by the
Purchaser.
ARTICLE 9
CONDITIONS
9.1. Conditions to Each Party's Obligation to Effect
the Merger The respective obligation of each party to effect the
Merger shall be subject to the satisfaction or waiver, where
permissible, prior to the Effective Time, of the following
conditions:
(a) The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been
terminated.
(b) None of the parties hereto shall be subject to any
order or injunction of a court of competent jurisdiction which
prohibits the consummation of the transactions contemplated by
this Agreement.
(c) If required by applicable law, this Agreement and
the Merger shall have been approved by the stockholders of the
Company in accordance with the DGCL and the Company's Certificate
of Incorporation and By-laws.
9.2. Additional Conditions to Obligations of Purchaser
and Merger Sub to Effect the Merger. Notwithstanding anything to
the contrary contained herein, if the Offer shall not have been
made or Merger Sub shall not have purchased any shares of Common
Stock pursuant to the Offer, unless otherwise waived by
Purchaser, Purchaser and Merger Sub shall not be required to
effect the Merger, if at the time the Merger is otherwise to be
effected, any of the conditions set forth in subsections (a)
through (j) of Exhibit A exist or shall occur.
ARTICLE 10
TERMINATION; AMENDMENT; WAIVER
10.1. Termination. This Agreement may be
terminated and the Merger contemplated hereby may be abandoned at
any time notwithstanding approval thereof by the stockholders of
the Company, if any, but prior to the Effective Time:
(a) by mutual written consent of the Board of Directors
of the Company (subject to Section 5.4) and Purchaser;
(b) by Purchaser or the Company:
(i)if the Effective Time shall not have occurred on
or before September 30, 1997 (provided that the right to
terminate this Agreement pursuant to this clause (i) shall not be
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of or resulted in the
failure of the Effective Time to occur on or before such date;
provided, further, that, to the extent the Company's cure period
under paragraph (e) of Exhibit A would extend beyond such date,
such date shall be extended by the additional length of the cure
period; and provided, further, that if the Effective Time shall
not occur on or before September 30, 1997 as a result of the
existence or occurrence of the condition specified in subsection
(j) of Exhibit A, at the option of the Company, such date shall
be extended until November 15, 1997).
(ii) if there shall be any statute, law, rule or
regulation that makes consummation of the Offer or the Merger
illegal or prohibited or if any court or other Governmental
Entity of competent jurisdiction in the United States or any
other Key Jurisdiction shall have issued an order, judgment,
decree or ruling, or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, ruling or other action shall have become final
and non-appealable; or
(iii)upon a vote at a duly held meeting or upon any
adjournment thereof, the stockholders of the Company shall have
failed to give any approval required by applicable law;
(c) by Purchaser upon (x) termination of the Offer as a
result of the failure of the Minimum Condition at any time after
all other conditions to the Offer set forth in Exhibit A shall
have been satisfied or waived or (y) the failure of any condition
specified in subsections (e) (other than to the extent it relates
to a breach of the representations and warranties specified in
Section 6.17(iii)), (f) or (g) of Exhibit A prior to Purchaser
having purchased any shares of Common Stock under the Offer,
regardless of whether the Offer is made (provided that the right
to terminate this Agreement pursuant to this clause (c) shall not
be available to Purchaser if Purchaser's failure to fulfill any
obligation under this Agreement has been the cause of or resulted
in the failure of any such condition);
(d) by the Company, at any time prior to the earlier
of (x) the purchase of shares of Common Stock by Merger Sub
pursuant to the Offer and (y) the approval of the Merger by the
stockholders of the Company in accordance with applicable law, if
there is an Alternative Proposal which the Board of Directors in
good faith determines represents a superior transaction for the
stockholders of the Company as compared to the Offer and/or the
Merger, and the Board of Directors determines, after consultation
with Debevoise & Xxxxxxxx, that failure to terminate this
Agreement would be inconsistent with the compliance by the Board
of Directors with its fiduciary duties to stockholders imposed by
law; provided, however, that the right to terminate this
Agreement pursuant to this Section 10.1(d) shall not be available
(i) if the Company has breached in any material respect its
obligations under Section 8.1, or (ii) if the Alternative
Proposal is subject to a financing condition, unless the Board of
Directors is of the opinion, after consultation with the
Financial Advisor or another nationally recognized investment
banking firm, that the Alternative Proposal is financeable, or
(iii) if, prior to or concurrently with any purported termination
pursuant to this Section 10.1(d), the Company shall not have paid
the fees and expenses contemplated by Section 11.5, or (iv) if
the Company has not provided Purchaser and Merger Sub with five
business days' prior written notice of its intent to so terminate
this Agreement together with a summary of the material terms and
conditions of such offer; and
(e) by Purchaser if the Board of Directors of the
Company shall have withdrawn, modified or amended in any material
respect its approval or recommendation of the Offer or the
Merger, or shall have recommended acceptance of any Alternative
Proposal, or shall have resolved to do any of the foregoing.
10.2. Effect of Termination. If this Agreement is
terminated and the Merger is abandoned pursuant to Section 10.1
hereof, this Agreement, except for the provisions of Sections
8.5(b), 8.6 and 11.5, shall terminate, without any liability on
the part of any party or its directors, officers or stockholders.
Nothing herein shall relieve any party to this Agreement of
liability for breach of this Agreement or prejudice the ability
of the non-breaching party to seek damages from any other party
for any breach of this Agreement, including without limitation,
attorneys' fees and the right to pursue any remedy at law or in
equity.
10.3. Amendment. To the extent permitted by applicable
law, this Agreement may be amended by action taken by or on
behalf of the Board of Directors of the Company (subject to
Section 5.4) and Purchaser at any time before or after adoption
of this Agreement by the stockholders of the Company but, after
any such stockholder approval, no amendment shall be made which
decreases the Merger Consideration or which adversely affects the
rights of the Company's stockholders hereunder without the
approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of all of the
parties.
10.4. Extension; Waiver. At any time prior to the
Effective Time, the parties hereto, by action taken by or on
behalf of the Board of Directors (subject to Section 5.4) and
Purchaser, may (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii)
waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any
document, certificate or writing delivered pursuant hereto by any
other applicable party or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the
part of any party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of
such party.
ARTICLE 11
GENERAL PROVISIONS
11.1. Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or
in any instrument delivered pursuant to this Agreement shall
survive the Effective Time.
11.2. Notices. Any notice required to be given
hereunder shall be sufficient if in writing, and sent by
facsimile transmission (with a confirmatory copy sent by
overnight courier), by courier service (with proof of service),
hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to Purchaser or Merger Sub: If to the Company:
The Procter & Xxxxxx Company Tambrands Inc.
One Procter & Xxxxxx Plaza 000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000 Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Attention: General Counsel
Vice President and
General Counsel -
North America
With a copy to: With a copy to:
Fried, Frank, Harris, Debevoise & Xxxxxxxx
Xxxxxxx & Xxxxxxxx 000 Xxxxx Xxxxxx
Xxx Xxx Xxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Attention: Xxxxxxxx X. Xxxxx, Esq.
Attention: Xxxxxxx Xxxxxxx, P.C.
or to such other address as any party shall specify by written
notice so given, and such notice shall be deemed to have been
delivered as of the date so telecommunicated, personally
delivered or mailed.
11.3. Assignment; Binding Effect. 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; provided, however, that
either Purchaser or Merger Sub (or both) may assign its rights
hereunder (including without limitation the right to make the
Offer and/or to purchase shares of Common Stock in the Offer) to
an affiliate but nothing shall relieve the assignor from its
obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the
contrary, except for the provisions of Sections 8.8 and 8.11,
nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
11.4. Entire Agreement. This Agreement, the Disclosure
Letter, the Schedules, the Exhibits and any other documents
delivered by the parties in connection herewith constitute the
entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
11.5 Fees and Expenses.
(a) Except as provided in Section 11.5(b), whether or
not the Offer or the Merger is consummated, all costs and
expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party
incurring such expenses; provided, however, that if this
Agreement is terminated by the Purchaser or the Company other
than in circumstances in which Section 11.5(b)(2) is applicable,
the Purchaser shall (i) pay the Company $1,000,000 for
reimbursement of expenses plus (ii) pay or reimburse the Company
for the SEC filing fees relating to the Proxy Statement.
(b)(1) To compensate Purchaser and its affiliates for
entering into this Agreement and taking action to consummate the
transactions hereunder and incurring the costs and expenses
related thereto and other losses and expenses, including the
foregoing by Purchaser of other opportunities, the Company and
Purchaser agree that the Company shall pay to Purchaser an
aggregate amount equal to $50,000,000 less any amount due
pursuant to paragraph (b)(2) below (the "Commitment Amount") if
this Agreement is terminated (i) by the Company pursuant to
Section 10.1(d); (ii) by Purchaser pursuant to Section 10.1(e)
(unless the event described therein occurs solely as a result of
Purchaser's willful breach in any material respect of its
representations, warranties or obligations contained herein) or
(iii) pursuant to Section 10.1(c) if the Minimum Condition shall
not have been satisfied at the expiration date of the Offer or
pursuant to Section 10.1(b)(iii), provided that in either case
specified in this clause (iii) (x) prior to the time the Offer
was terminated or otherwise expired or the time of the
stockholders' meeting, as the case may be, an Alternative
Proposal with a party other than Purchaser shall have been
publicly announced or shall have become publicly known and (y)
during the term of this Agreement or within six months after the
termination of this Agreement, the Board of Directors recommends
an Alternative Proposal with a party other than Purchaser or the
Company enters into an agreement providing for an Alternative
Proposal with a party other than Purchaser or an Alternative
Proposal with a party other than Purchaser occurs.
The Commitment Amount shall be payable (x) at the time
of termination if such amount becomes payable pursuant to clause
(i) above, (y) on the next business day following termination if
such amount becomes payable pursuant to clause (ii) above, and
(z) on the next business day following the earliest of the
recommendation of an Alternative Proposal, the entering into of
an agreement providing for an Alternative Proposal or the
occurrence of an Alternative Proposal, if such amount becomes
payable pursuant to clause (iii) above.
(2) The Company shall reimburse Purchaser and its
affiliates for the documented reasonable out-of-pocket expenses,
not to exceed $10,000,000, of Purchaser and its affiliates
incurred in connection with or arising out of the Offer, the
Merger, this Agreement and the transactions contemplated hereby
(including, without limitation, amounts paid or payable to
investment bankers, fees and expenses of counsel, accountants and
consultants, and printing expenses), regardless of when those
expenses are incurred, if this Agreement is terminated (i) by the
Company pursuant to Section 10.1(d); (ii) by Purchaser (x)
pursuant to Section 10.1(e) (unless the event described therein
occurs solely as a result of Purchaser's willful breach in any
material respect of its representations, warranties or
obligations contained herein) or (y) pursuant to Section 10.1(c)
because of the failure of the condition set forth in paragraph
(e) of Exhibit A, or (iii) pursuant to Section 10.1(c) if the
Minimum Condition shall not have been satisfied at the expiration
date of the Offer or pursuant to Section 10.1(b)(iii), provided
that in either case specified in this clause (iii) (x) prior to
the time the Offer was terminated or otherwise expired or the
time of the stockholders' meeting, as the case may be, an
Alternative Proposal with a party other than Purchaser shall have
been publicly announced or otherwise shall have become publicly
known and (y) during the term of this Agreement or within six
months after the termination of this Agreement, the Board of
Directors recommends an Alternative Proposal with a party other
than Purchaser or the Company enters into an agreement providing
for an Alternative Proposal with a party other than Purchaser or
an Alternative Proposal with a party other than Purchaser occurs.
(3) The Company acknowledges that the agreements
contained in this Section 11.5(b) are an integral part of the
transactions contemplated by this Agreement, and that, without
these agreements, Purchaser would not enter into this Agreement;
accordingly, if the Company fails to promptly pay any amounts
owing pursuant to this Section 11.5(b) when due, the Company
shall in addition thereto pay to Purchaser all costs and expenses
(including, pursuant to Section 11.11(b), fees and disbursements
of counsel) incurred in collecting such amounts, together with
interest on such amounts (or any unpaid portion thereof) from the
date such payment was required to be made until the date such
payment is received by Purchaser at the prime rate of Citibank,
N.A. as in effect from time to time during such period.
11.6. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware without regard to its rules of conflict of laws. Each
of the Company, Purchaser and Merger Sub hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Delaware and of the United States
of America located in the State of Delaware (the "Delaware
Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such
courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts and agrees not to plead or
claim in any Delaware Court that such litigation brought therein
has been brought in an inconvenient forum.
11.7. Headings. Headings of the Articles and Sections
of this Agreement are for the convenience of the parties only,
and shall be given no substantive or interpretive effect
whatsoever.
11.8. Interpretation. In this Agreement, unless the
context otherwise requires, words describing the singular number
shall include the plural and vice versa, and words denoting any
gender shall include all genders and words denoting natural
persons shall include corporations and partnerships and vice
versa. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed
by the words "without limitation." As used in this Agreement,
the words "Subsidiary," "affiliate" and "associate" shall have
the meanings ascribed thereto in Rule 12b-2 under the Exchange
Act. For purposes of this Agreement, one party shall be
considered "wholly owned" by another party if all of the shares
of its outstanding capital stock, other than directors'
qualifying shares, are beneficially owned by such other party.
As used in this Agreement, the words "to the knowledge of the
Company" shall mean the knowledge of the individuals specified in
the Disclosure Letter.
11.9. Investigations. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or
on behalf of any party, shall be deemed to constitute a waiver by
the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in
this Agreement.
11.10. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
11.11. Enforcement of Agreement.
(a) 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 its specific terms or was
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any Delaware Court, this being in
addition to any other remedy to which they are entitled at law or
in equity.
(b) The prevailing party in any judicial action shall
be entitled to receive from the other party reimbursement for the
prevailing party's reasonable attorneys' fees and disbursements,
and court costs.
11.12. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all,
of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this
Agreement and caused the same to be duly delivered on their
behalf on the day and year first written above.
TAMBRANDS INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
THE PROCTER & XXXXXX COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board
and Chief Executive Officer
X.X. XXXXXXXXX, INC.
By: /s/ X.X. Xxxx, Xx.
------------------
Name:X.X. Xxxx, Xx.
Title: President and Treasurer
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this
Agreement, Merger Sub shall not be required to accept for payment
or pay for, subject to any applicable rules and regulations of
the SEC, including Rule 14e-1(c) of the Exchange Act, any shares
of Common Stock not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such shares of Common
Stock unless (i) there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer that number of
shares of Common Stock which would represent at least a majority
of the outstanding shares of Common Stock on a fully diluted
basis (the "Minimum Condition") and (ii) any waiting period under
the HSR Act applicable to the purchase of shares of Common Stock
pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or this
Agreement, Merger Sub shall not be required to accept for payment
or, subject as aforesaid, unless otherwise waived by Purchaser,
to pay for any shares of Common Stock not theretofore accepted
for payment or paid for, and may terminate or amend the Offer if
at any time on or after the date of this Agreement and before the
acceptance of such shares of Common Stock for payment or the
payment therefor, any of the following conditions exist or shall
occur:
(a) there shall have been instituted or pending or
specifically threatened any litigation by any Governmental
Entity which is related to the Merger or the Offer and which
seeks to or, if successful, would (i) challenge or restrict
the acquisition by Purchaser or Merger Sub (or any of its
affiliates or Subsidiaries) of shares of Common Stock
pursuant to the Offer or the Merger, restrain, prohibit or
delay the making or consummation of the Offer or the Merger,
or obtain damages in connection therewith, (ii) make the
purchase of or payment for some or all of the shares of
Common Stock pursuant to the Offer or the Merger illegal or
otherwise restrict or prohibit consummation of the Offer or
the Merger, (iii) impose limitations on the ability of
Purchaser or Merger Sub (or any of their Subsidiaries)
effectively to acquire, operate or hold, or require
Purchaser, Merger Sub or the Company or any of their
respective Subsidiaries to dispose of or hold separate, any
portion of their respective assets or business that (I) is
either material to the business of Purchaser and its
Subsidiaries or material to the business of the Company and
its Subsidiaries conducted, in each case, in (A) any
Category 1 Key Jurisdiction, (B) any two or more Category 2
Key Jurisdictions, or (C) any three or more Category 2 and
Category 3 Key Jurisdictions, or (II) is reasonably likely
to have a Material Adverse Effect, (iv) impose limitations
on the ability of Purchaser, Merger Sub or their
Subsidiaries to exercise full rights of ownership of the
shares of Common Stock acquired by it pursuant to the Offer
or the Merger, including, without limitation, the right to
vote the shares acquired by it on all matters properly
presented to the stockholders of the Company, (v) restrict
any future business activity by Purchaser, Merger Sub, the
Company or any of their Subsidiaries that (I) is either
material to the business of Purchaser and its Subsidiaries
or material to the business of the Company and its
Subsidiaries conducted, in each case, in (A) any Category 1
Key Jurisdiction, (B) any two or more Category 2 Key
Jurisdictions, or (C) any three or more Category 2 and
Category 3 Key Jurisdictions, or (II) is reasonably likely
to have a Material Adverse Effect, including, without
limitation, requiring the prior consent of any Governmental
Entity to future transactions by Purchaser, Merger Sub, the
Company or any of their affiliates or Subsidiaries, or (vi)
otherwise adversely affect Purchaser, Merger Sub, the
Company or any of their respective affiliates or
Subsidiaries in a manner that (I) is either material to the
business of Purchaser and its Subsidiaries or material to
the business of the Company and its Subsidiaries conducted,
in each case, in (A) any Category 1 Key Jurisdiction, (B)
any two or more Category 2 Key Jurisdictions, or (C) any
three or more Category 2 and Category 3 Key Jurisdictions,
or (II) is reasonably likely to have a Material Adverse
Effect;
(b) there shall have been promulgated or enacted by
any Governmental Entity, any Law that is reasonably likely,
directly or indirectly, to result in any of the consequences
referred to in clauses (i) through (vi) of subsection (a)
above;
(c) any of the Regulatory Filings or Consents
(including the Other Antitrust Filings and Consents) shall
not have been made or obtained, or any waiting period
(whether requisite or voluntary) under any Foreign Antitrust
Laws shall not have expired, in each case, to the extent
that the failure to make or obtain such Regulatory Filings
or Consents or of the waiting period to have expired, in the
aggregate, is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect or to
materially adversely affect the business of the Company or
its Subsidiaries conducted in (A) any Category 1 Key
Jurisdiction, (B) any two or more Category 2 Key
Jurisdictions or (C) any three or more Category 2 and
Category 3 Key Jurisdictions;
(d) this Agreement shall have been terminated in
accordance with its terms;
(e)(i) any of the representations or warranties made
by the Company in this Agreement shall not have been true
and correct in all respects when made, or shall thereafter
have ceased to be
true and correct in all respects as if made as of such later
date (other than representations and warranties made as of a
specified date), except where the failure to be so true and
correct (without giving effect to any materiality
qualifications or thresholds contained in such
representations and warranties), individually and in the
aggregate, would not have a Material Adverse Effect or
materially adversely affect the business of Purchaser in
relation to its decision to consummate the transactions
contemplated hereby, or (ii) the Company shall have breached
or failed to comply in any material respect with any of its
obligations under this Agreement, which untruth or
inaccuracy or breach, in the case of clauses (i) or (ii), is
not curable or, if curable, is not cured within 10 business
days after written notice thereof has been given by
Purchaser to the Company;
(f) the Board of Directors shall have modified or
amended its recommendation of the Offer or the Merger in any
manner adverse to Purchaser or Merger Sub or shall have
withdrawn its recommendation of the Offer or the Merger or
shall have recommended acceptance of any Alternative
Proposal or shall have resolved to do any of the foregoing;
(g) any corporation, entity, "group" or "person" (as
defined in the Exchange Act), other than Purchaser or Merger
Sub, shall have acquired beneficial ownership of more than
20% of the outstanding shares of Common Stock, or (ii) any
person (other than Purchaser, Merger Sub or one or more of
their affiliates) shall have entered into an agreement in
principle or definitive agreement with the Company with
respect to a tender or exchange offer for any shares of
Common Stock or a merger, consolidation or other business
combination with or involving the Company;
(h) Purchaser shall have become aware of any fact
relating to the Company or any of its Subsidiaries which
Purchaser neither knew nor should have known as of the date
of this Agreement, which has a Material Adverse Effect on
the Company and its Subsidiaries; or
(i) there shall have occurred (i) any general
suspension of, or limitation on prices for, trading in
securities on the New York Stock Exchange and national
securities exchanges generally, (ii) a declaration of any
general banking moratorium by federal or New York or Ohio
state authorities or any suspension of payments in respect
of money center banks or any limitation (whether or not
mandatory) imposed by federal or state authorities on the
extension of credit by money center banks in the United
States, (iii) a commencement of a war, armed hostilities or
any other international or national calamity directly or
indirectly involving the United States, or (iv) any
limitation (whether or not mandatory) by any United States
Governmental Entity on, or any other event which could
materially affect, the extension of credit by banks or other
United States financial institutions.
(j) Any Designated Contract Provision shall be in
effect and shall not have been resolved in a manner
reasonably satisfactory to Purchaser. The term "Designated
Contract Provision" shall mean the provisions of any
Contract to which the Company or any of its Subsidiaries is
a party, or by which the Company or any of its Subsidiaries
or any of their respective properties or assets are bound,
which restricts the ability of any of the affiliates of the
Company or any of its Subsidiaries to conduct business in a
line of business in which Purchaser or any of its
Subsidiaries is currently engaged; provided, however, that
other than the Designated Contract Provisions specified in
the second bullet point of Section 6.17 (iii) of the
Disclosure Letter, the provisions of the other Contracts
specified in Section 6.17 (iii) of the Disclosure Letter
which otherwise would constitute Designated Contract
Provisions shall not be deemed Designated Contract
Provisions for the purposes of this Agreement; and provided,
further, that the provisions of Contracts not specified in
Section 6.17 (iii) of the Disclosure Letter which otherwise
constitute Designated Contract Provisions shall only be
deemed Designated Contract Provisions for the purposes of
this Agreement if within 2 business days after the date on
which the Company notifies Purchaser of the existence of
such Designated Contract Provisions (accompanied by a copy
of such Contract (and the related Designated Contract
Provisions)), Purchaser notifies the Company that in its
reasonable judgment such Designated Contract Provision is,
or is likely to be, adverse to Purchaser or any of its
Subsidiaries.
The foregoing conditions are for the sole benefit of
Purchaser and Merger Sub and may be asserted by Purchaser or
Merger Sub with respect to the consummation of the Offer or the
Merger (as applicable) regardless of the circumstances (including
any action or inaction by Purchaser or the Company) giving rise
to any such condition and may be waived by Purchaser or Merger
Sub, in whole or in part, at any time and from time to time, in
the sole discretion of Purchaser. The failure by Purchaser or
Merger Sub at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances shall
not be deemed a waiver with respect to any other facts or
circumstances, and each right will be deemed an ongoing right
which may be asserted at any time and from time to time,
provided, that the Minimum Condition may not be waived or
modified without the prior written consent of the Company.
Should the Offer be terminated pursuant to the
foregoing provisions, all tendered shares of Common Stock not
theretofore accepted for payment shall forthwith be returned by
the Paying Agent to the tendering stockholders.
