1
EXHIBIT 7.1
AGREEMENT AND PLAN
OF MERGER
DATED AS OF
JANUARY 14, 1998
AMONG
SUIZA FOODS CORPORATION
CC ACQUISITION CORPORATION
AND
CONTINENTAL CAN COMPANY, INC.
2
TABLE OF CONTENTS
Page
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I. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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II. THE SURVIVING CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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2.1 Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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2.3 Board of Directors; Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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2.4 Effects of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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III. CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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3.1 Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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3.2 Parent to Make Certificates Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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3.3 Dividends; Stock Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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3.4 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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3.5 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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3.6 Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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3.7 Closing of the Company's Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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3.8 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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3.9 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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IV. REPRESENTATIONS AND WARRANTIES OF PARENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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4.4 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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4.5 Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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4.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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4.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.8 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.9 Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.10 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.12 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.13 Tax and Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.14 Relationship with Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5.4 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.5 Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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5.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.8 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.9 Company Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.10 Financial Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.11 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.13 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.14 Tax and Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.15 Relationship with Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.16 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.17 Minority Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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5.18 Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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VI. REPRESENTATIONS AND WARRANTIES REGARDING SUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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6.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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6.3 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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VII. CONDUCT OF BUSINESS PENDING THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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7.1 Conduct of Business by the Company Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 26
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7.2 Conduct of Business by Parent Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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7.3 Conduct of Business of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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VIII. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.1 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.2 Registration Statement/Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.3 Compliance with the Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.4 Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.5 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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8.7 HSR Act and Foreign Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.8 Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.9 No Shop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.10 Advice of Changes; SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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8.11 Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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IX. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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9.1 Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . 34
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9.2 Conditions to Obligation of the Company to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . 35
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9.3 Conditions to Obligations of Parent and Sub to Effect the Merger . . . . . . . . . . . . . . . . . . . . 35
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X. TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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10.1 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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10.2 Termination by Either Parent or the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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10.3 Other Termination Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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10.4 Effect of Termination and Abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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11.1 Non-Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . 38
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11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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11.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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11.4 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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11.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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11.6 Assignment; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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11.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.11 Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.12 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.13 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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11.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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EXHIBITS
A - Form of Inducement Agreement
B - Form of Affiliate Letter
C-1 - Form of Tax Opinion of Xxxxxx, Xxxxxxx & Xxxxxxx
C-2 - Form of Tax Opinion of Xxxxxx & Xxxx, L.L.P.
D-1 - Certificate of the Company re: Tax Opinion of Xxxxxx, Xxxxxxx & Xxxxxxx
X-0 - Certificate of the Company re: Tax Opinion of Xxxxxx & Xxxx, L.L.P.
E-1 - Certificate of Parent re: Tax Opinion of Xxxxxx, Xxxxxxx & Xxxxxxx
E-2 - Certificate of Parent re: Tax Opinion of Xxxxxx & Xxxx, L.L.P.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
January 14, 1998, by and among Suiza Foods Corporation, a Delaware corporation
("Parent"), CC Acquisition Corporation, a Delaware corporation and a subsidiary
of Parent ("Sub"), and Continental Can Company, Inc., a Delaware corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, each of Parent and the Company has concluded that a business
combination between Parent and the Company represents a strategic combination
of their complementary businesses and operational and long term vision and is
in the best interests of the stockholders of Parent and the Company,
respectively, and accordingly, Parent and the Company desire to effect a
business combination by means of the merger of Sub with and into the Company
(the "Merger");
WHEREAS, the Boards of Directors of Parent, Sub and the Company have
approved the Merger, upon the terms and subject to the conditions set forth
herein;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, in order to induce Parent and Sub to enter into this
Agreement, certain stockholders of the Company have entered into an Inducement
Agreement with Parent, the form of which is attached hereto as Exhibit A,
pursuant to which, among other things, such stockholders have granted Parent an
irrevocable proxy to vote their shares of the Company's common stock in favor
of the Merger and have granted Parent certain rights in connection with certain
dispositions of such common stock, on the terms and conditions set forth
therein;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein the parties hereto
agree as follows:
I.
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in Section 1.2), Sub shall be merged
with and into the Company and the separate existence of Sub shall thereupon
cease, and the Company, as the corporation surviving the Merger (the "Surviving
Corporation"), shall by virtue of the Merger continue its corporate existence
under the laws of the State of Delaware.
1.2 Effective Time of the Merger. The Merger shall become
effective at the date and time (the "Effective Time") when a properly executed
Certificate of Merger is filed with the
1
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Secretary of State of the State of Delaware, which Certificate shall be filed
as soon as practicable following fulfillment of the conditions set forth in
Article IX hereof.
II.
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Company as in effect at the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation, and thereafter may
be amended in accordance with its terms and as provided by law and this
Agreement.
2.2 Bylaws. The Bylaws of the Company as in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation, and thereafter
may be amended in accordance with their terms and as provided by law and this
Agreement.
2.3 Board of Directors; Officers. The directors of Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, and the officers of Sub immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, in each case until their
respective successors are duly elected and qualified.
2.4 Effects of Merger. The Merger shall have the effects set
forth in Section 259 of the Delaware General Corporation Law (the "DGCL").
III.
CONVERSION OF SHARES
3.1 Exchange Ratio. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any common stock,
par value $.25 per share, of the Company ("Company Stock"):
(a) All shares of Company Stock which are held by the Company, and
any shares of Company Stock owned by Parent, Sub or any other subsidiary of
Parent, shall be canceled.
(b) Subject to Section 3.4, each remaining outstanding share of
Company Stock shall be converted into the right to receive 0.629 (the "Exchange
Ratio") fully paid and nonassessable shares of the common stock, par value $.01
per share, of Parent ("Parent Common Stock").
(c) In the event of any dividend, stock split, reclassification,
recapitalization, combination or exchange of shares or other similar
transaction with respect to the Parent Common Stock or Company Stock after the
date of this Agreement and prior to the Effective
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Time, the Exchange Ratio and the per share price referenced in Section 10.3(c)
shall be appropriately adjusted.
(d) All of the issued and outstanding shares of stock of Sub shall
be converted into and become, in the aggregate, 1,000 fully paid and
nonassessable shares of capital stock of the Surviving Corporation.
3.2 Parent to Make Certificates Available. (a) Prior to the
Effective Time, Parent shall select an Exchange Agent, which shall be Parent's
Transfer Agent or such other person or persons reasonably satisfactory to the
Company, to act as Exchange Agent for the Merger (the "Exchange Agent"). As
soon as practicable after the Effective Time, Parent shall make available, and
each holder of Company Stock will be entitled to receive, upon surrender to the
Exchange Agent of one or more certificates ("Certificates") representing shares
of Company Stock for cancellation, certificates representing the number of
shares of Parent Common Stock into which such shares are converted in the
Merger and cash in consideration of fractional shares as provided in Section
3.4 (the "Share Consideration").
(b) Any holder of shares of Company Stock who has not exchanged
his Certificates for Parent Common Stock in accordance with subsection (a) of
this Section 3.2 within twelve months after the Effective Time shall have no
further claim upon the Exchange Agent and shall thereafter look only to Parent
and the Surviving Corporation for payment of the Share Consideration in respect
of his shares of Company Stock. Until so surrendered, Certificates shall
represent solely the right to receive the Share Consideration.
3.3 Dividends; Stock Transfer Taxes. No dividends or other
distributions that are declared or made on Parent Common Stock will be paid to
persons entitled to receive certificates representing Parent Common Stock
pursuant to this Agreement until such persons surrender their Certificates
representing Company Stock. Upon such surrender, there shall be paid to the
person in whose name the certificates representing such Parent Common Stock
shall be issued (i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time and a payment
date prior to surrender with respect to such whole shares of Parent Common
Stock and which have not been paid, less the amount of any withholding taxes
which may be required thereon, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Parent Common Stock,
less the amount of any withholding taxes which may be required thereon. In no
event shall the person entitled to receive such dividends be entitled to
receive interest on such dividends. In the event that any certificates
representing shares of Parent Common Stock are to be issued in a name other
than that in which the Certificates surrendered in exchange therefor are
registered, it shall be a condition of such exchange that the Certificate or
Certificates so surrendered shall be properly endorsed or be otherwise in
proper form for transfer and that the person requesting such exchange shall pay
to the Exchange Agent any transfer or other taxes required by reason of the
issuance of certificates for such shares of Parent Common Stock in a name other
than that of the registered holder of the Certificate or Certificates
surrendered, or shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not applicable.
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Notwithstanding the foregoing, neither the Exchange Agent nor any party hereto
shall be liable to a holder of shares of Company Stock for any shares of Parent
Common Stock or dividends thereon delivered to a public official pursuant to
any applicable abandoned property, escheat or similar laws. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, 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 the Surviving Corporation
or any other party hereto with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
shares of Parent Common Stock and cash in lieu of fractional shares, and unpaid
dividends and distributions on shares of Parent Common Stock as provided in
this Section 3.3, deliverable in respect thereof pursuant to this Agreement.
3.4 No Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates pursuant to Section 3.1(b). Notwithstanding any other
provision of this Agreement, each holder of Company Stock exchanged pursuant to
the Merger who would otherwise be entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all Certificates delivered by
such holder) shall receive, in lieu thereof, cash from Parent in an amount
equal to such fractional part of a share of Parent Common Stock multiplied by
the Average Closing Price. For purposes of this Section 3.4, "Average Closing
Price" is defined to mean the average of the daily closing prices for the
shares of Parent Common Stock for the twenty (20) consecutive trading days on
which such shares are actually traded on the New York Stock Exchange ("NYSE")
(as reported by the Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Parent) ending at the close of trading on the
second trading day immediately preceding the Closing Date.
3.5 Stock Options. (a) Each of the Company's stock option plans
(the "Option Plans"), each of which is set forth in Section 5.2 of the Company
Disclosure Schedule (as defined in Article V), and each option to acquire
shares of Company Stock outstanding thereunder or otherwise outstanding
immediately prior to the Effective Time, whether vested or unvested (each, an
"Option" and collectively, the "Options"), shall be assumed by Parent at the
Effective Time, and each such Option shall become an option to purchase a
number of shares of Parent Common Stock (a "Substitute Option") equal to the
number of shares of Company Stock subject to such Option multiplied by the
Exchange Ratio (rounded down to the nearest whole share). The per share
exercise price for each Substitute Option shall be the current exercise price
per share of Company Stock divided by the Exchange Ratio (rounded up to the
nearest full cent), and each Substitute Option otherwise shall be subject to
all of the other terms and conditions of the original option to which it
relates, including, without limitation, the provisions therein with respect to
vesting and forfeiture. Prior to the Effective Time, the Company shall take
such additional actions as are necessary under applicable law and the
applicable agreements and Option Plans to ensure that each outstanding Option
shall, from and after the Effective Time, represent only the right to purchase,
upon exercise, shares of Parent Common Stock. It is the intention of the
parties that, to the extent that any Option constitutes an "incentive stock
option" (within the meaning of Section 422 of the Code) immediately prior to
the Effective Time, that the Substitute Option relating
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thereto shall also qualify as an incentive stock option, and that the
assumption by Parent of such Option and the substitution of a Substitute Option
therefor as provided by this Section 3.5(a) will satisfy each of the conditions
of Section 422(a) of the Code with respect to such continued qualification.
(b) As soon as practicable after the Effective Time, Parent shall
cause to be included under a registration statement on Form S-8 of Parent all
shares of Parent Common Stock which are subject to Substitute Options, and
shall maintain the effectiveness of such registration statement until all
Substitute Options have been exercised, expired or forfeited.
3.6 Stockholders' Meeting. The Company will take all action
necessary in accordance with applicable law and its Certificate of
Incorporation and Bylaws to convene a meeting of its stockholders as promptly
as practicable to consider and vote upon the approval by the holders of a
majority of the shares of Company Stock outstanding and entitled to vote
thereon of this Agreement and the transactions contemplated hereby. The Board
of Directors of the Company shall recommend such approval, and the Company
shall take all lawful action to solicit such approval, including, without
limitation, timely and promptly mailing the Proxy Statement/Prospectus (as
defined in Section 8.2); provided, however, that such recommendation is subject
to Section 8.9.
3.7 Closing of the Company's Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer
of shares of Company Stock shall be made thereafter. In the event that
Certificates are presented to the Surviving Corporation or Parent after the
Effective Time, they shall be canceled and exchanged for Parent Common Stock
and/or cash as provided in Sections 3.1(b) and 3.4.
3.8 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxx, Xxxxxxx &
Xxxxxxx, 0 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 a.m. local time on
the day which is not more than one business day after the day on which the last
of the conditions set forth in Article IX (other than those that can be
fulfilled only at the Effective Time) is fulfilled or waived or at such other
time and place as Parent and the Company shall agree in writing.
3.9 Transfer Taxes. Parent and the Company shall cooperate in the
preparation, execution and filing of all returns, applications or other
documents regarding any real property transfer, stamp, recording, documentary
or other taxes and any other fees and similar taxes which become payable in
connection with the Merger other than transfer or stamp taxes payable in
respect of transfers pursuant to the fourth sentence of Section 3.3
(collectively, "Transfer Taxes"). From and after the Effective Time, Parent
shall pay or cause to be paid, without deduction or withholding from any
amounts payable to the holders of Company Stock, all Transfer Taxes.
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IV.
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows (such
representations and warranties (as well as other provisions of this Agreement)
are qualified by the matters identified (with references to the appropriate
Section and, if applicable, subsection being qualified) on a disclosure
schedule (the "Parent Disclosure Schedule") delivered by Parent to the Company
prior to execution of this Agreement):
4.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to carry on its business as it is now
being conducted or currently proposed to be conducted. Parent is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities make such qualification necessary, except
where the failure to be so qualified will not, alone or in the aggregate, have
a Parent Material Adverse Effect. For the purposes of this Agreement, a
"Parent Material Adverse Effect" means any material adverse effect on the
business, properties, assets, condition (financial or otherwise), liabilities
or results of operations of Parent and its subsidiaries taken as a whole, other
than any effects arising out of, resulting from or relating to changes in
general economic or financial conditions. Complete and correct copies as of
the date hereof of the Certificate of Incorporation and Bylaws of Parent have
been delivered to the Company as part of the Parent Disclosure Schedule.
4.2 Capitalization. The authorized capital stock of Parent
consists of 100,000,000 shares of Parent Common Stock, and 1,000,000 shares of
Preferred Stock, par value $.01 per share (the "Parent Preferred Stock"), of
which 11,691 shares are designated as Series A Preferred Stock ("Series A
Preferred Stock"). As of December 31, 1997, the issued and outstanding capital
stock of Parent consisted solely of 31,177,084 shares of Parent Common Stock
and 11,691 shares of Series A Preferred Stock, all of which were validly issued
and outstanding, fully paid, and nonassessable. There are no bonds,
debentures, notes or other indebtedness issued or outstanding having the right
to vote on any matters on which Parent's stockholders may vote. As of December
31, 1997, there are no options, warrants, calls, convertible securities or
other rights, agreements or commitments presently outstanding obligating Parent
to issue, deliver or sell shares of its capital stock or debt securities, or
obligating Parent to grant, extend or enter into any such option, warrant, call
or other such right, agreement or commitment, other than as identified in
Section 4.2 of the Parent Disclosure Schedule. Section 4.2 of the Parent
Disclosure Schedule sets forth the name of each optionee, the number of options
held by such optionee and the exercise price for such options under the Parent
Stock Plans (as defined below). Since December 31, 1997, Parent has not issued
any shares of its capital stock except shares of Parent Common Stock issued
under, or issued upon exercise of options granted under, Parent's stock option,
restricted stock and stock purchase plans described in Section 4.2 of the
Parent Disclosure Schedule (the "Parent Stock Plans"). Notwithstanding the
foregoing, the Company acknowledges that, after the date hereof and prior to
the Closing, Parent may authorize and issue additional capital stock as
consideration for any acquisition of a business or assets if (i) the acquired
business or assets are
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primarily engaged in a business currently conducted by Parent or one or more of
its subsidiaries and (ii) with respect to each such acquisition, none of the
conditions specified in the definition of "significant subsidiary" in Rule
1-02(w) of Regulation S-X (17 CFR 210) exceeds 50% (any such acquisition being
referred to as a "Permitted Acquisition"). All of the shares of Parent Common
Stock issuable in exchange for Company Stock at the Effective Time in
accordance with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights and
shall be delivered free and clear of all liens, claims, charges and
encumbrances of any kind or nature whatsoever.
4.3 Subsidiaries. Each subsidiary of Parent is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization (except where the
failure to be validly existing and in good standing would not be material to
the business of such subsidiary) and has the corporate or similar power to
carry on its business as it is now being conducted or currently proposed to be
conducted. Each subsidiary of Parent is duly qualified to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified, when
taken together with all such failures, has not had, and would not have, a
Parent Material Adverse Effect. Section 4.3 of the Parent Disclosure Schedule
contains, with respect to each subsidiary of Parent, its name and jurisdiction
of organization and, with respect to each subsidiary that is not wholly owned,
the number of issued and outstanding shares of capital stock or share capital
and the number of shares of capital stock or share capital owned by Parent or a
subsidiary, in each case as of the date of this Agreement. All the outstanding
shares of capital stock or share capital of each subsidiary of Parent are
validly issued, fully paid and nonassessable, and except as set forth in
Section 4.3 of the Parent Disclosure Schedule, those owned by Parent or by a
subsidiary of Parent as of the date of this Agreement are owned free and clear
of any liens, claims or encumbrances. Except as described in Section 4.3 of
the Parent Disclosure Schedule, as of the date of this Agreement, there are no
existing options, warrants, calls, convertible securities or other rights,
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of any of the subsidiaries of Parent. Except
as set forth in Parent's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, any Parent SEC Report (as hereinafter defined) filed
subsequent to such date and prior to the date hereof, or in Section 4.3 of the
Parent Disclosure Schedule, and except for Permitted Acquisitions after the
date hereof, Parent does not directly or indirectly own any interest in any
other corporation, partnership, joint venture or other business association or
entity or have any obligation, commitment or undertaking to acquire any such
interest.
4.4 Authority Relative to this Agreement. Parent has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by Parent's
Board of Directors. This Agreement constitutes a valid and binding obligation
of Parent enforceable in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding therefor may be
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brought. No other corporate proceedings on the part of Parent are necessary to
authorize this Agreement and the transactions contemplated hereby. Except as
described in Section 4.4 of the Parent Disclosure Schedule, Parent is not
subject to or obligated under (i) any charter or bylaw provision or (ii) any
contract, indenture, loan or credit document, license, franchise, permit,
order, decree, concession, lease, instrument, judgment, statute, law,
ordinance, rule or regulation applicable to Parent or any of its subsidiaries
or their respective properties or assets, which would be breached or violated,
or under which there would be a default (with or without notice or lapse of
time, or both), or under which there would arise a right of termination,
cancellation, modification or acceleration of any obligation, or any right to
payment or compensation, or the loss of a benefit, by its executing and
carrying out this Agreement, other than the laws and regulations referred to in
the next sentence. Except as required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), similar pre-acquisition
notification or approval requirements applicable to the Company's foreign
operations (the "Foreign Acts"), the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the corporation, securities or blue sky laws or
regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign and including European Union, national, regional, state, provincial and
municipal authorities (each, a "Governmental Entity"), is necessary for the
consummation by Parent of the Merger or the other transactions contemplated by
this Agreement.
4.5 Reports and Financial Statements. Parent has previously
furnished the Company with true and complete copies of its (i) Annual Reports
on Form 10-K for the fiscal years ended December 31, 1995 and December 31,
1996, as filed with the Securities and Exchange Commission (the "Commission"),
(ii) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June
30, 1997 and September 30, 1997, as filed with the Commission, (iii) proxy
statements related to all meetings of its stockholders (whether annual or
special) since December 31, 1995, and (iv) all other reports or registration
statements filed by Parent with the Commission since December 31, 1995, except
for preliminary material (in the case of clauses (iii) and (iv) above) and
except for registration statements on Form S-8 relating to employee benefit
plans, shelf registration statements on Form S-3 filed on behalf of selling
stockholders and annual reports on Form 11-K with respect to such plans, which
are all the documents that Parent was required to file with the Commission
since that date (the documents in clauses (i) through (iv) being referred to
herein collectively as the "Parent SEC Reports"). As of their respective
dates, the Parent SEC Reports complied as to form in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the Commission thereunder applicable to such
Parent SEC Reports. As of their respective dates, the Parent SEC Reports did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim financial
statements of Parent included in the Parent SEC Reports comply as to form in
all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto. The
financial statements included in the Parent SEC Reports: (i) have been
prepared in accordance
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with generally accepted accounting principles applied on a consistent basis,
except as may be indicated therein or in the notes thereto and subject, in the
case of the unaudited interim financial statements, to normal year-end
adjustments, any other adjustments described therein and the fact that certain
information and notes have been condensed or omitted in accordance with the
Exchange Act and the rules promulgated thereunder; (ii) present fairly, in all
material respects, the financial position of Parent and its subsidiaries as at
the dates thereof and the results of their operations and cash flows for the
periods then ended; and (iii) are in all material respects in accordance with
the books of account and records of Parent and its subsidiaries. As of
September 30, 1997, there was no basis for any claim or liability of any nature
against Parent or its subsidiaries, whether absolute, accrued, contingent or
otherwise, which, alone or in the aggregate, has had, or would have, a Parent
Material Adverse Effect, other than as reflected in the Parent SEC Reports.
4.6 Absence of Certain Changes or Events. Except as disclosed in
the Parent SEC Reports filed prior to the date of this Agreement or as set
forth in Section 4.6 of the Parent Disclosure Schedule, since September 30,
1997, Parent and its subsidiaries have operated their respective businesses in
the ordinary course of business consistent with past practice and there has not
been (i) any transaction, commitment, dispute or other event or condition
(financial or otherwise) of any character (whether or not in the ordinary
course of business) which, alone or in the aggregate, has had, or would have, a
Parent Material Adverse Effect; (ii) any damage, destruction or loss, whether
or not covered by insurance, which has had, or would have, a Parent Material
Adverse Effect; (iii) any declaration, setting aside or payment of any dividend
or distribution (whether in cash, stock or property) with respect to the Parent
Common Stock; (iv) any material change in Parent's accounting principles,
practices or methods; (v) any reclassification of the Parent Common Stock or
the issuance or authorization of any issuance of any other securities in lieu
of or in substitution for shares of Parent Common Stock; (vi) any grant or
amendment of the terms of any option to purchase shares of Parent Common Stock
other than pursuant to the Parent Stock Plans or in connection with a Permitted
Acquisition; or (vi) any agreement (whether or not in writing), arrangement or
understanding to do any of the foregoing.
4.7 Litigation. Except as disclosed in the Parent SEC Reports
filed prior to the date of this Agreement, there is no suit, action or
proceeding pending or, to Parent's knowledge, threatened against Parent or any
of its subsidiaries which, alone or in the aggregate, has had or would have, a
Parent Material Adverse Effect, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
Parent or any of its subsidiaries which, alone or in the aggregate, has had, or
would have, any such Parent Material Adverse Effect. For purposes of this
Agreement, the phrases "Parent's knowledge," and "to the knowledge of Parent"
and other phrases of like import shall mean the actual knowledge of any
executive officer of Parent.
4.8 Employee Benefit Plans. (a) Section 4.8 of the Parent
Disclosure Schedule hereto sets forth a list of all "employee benefit plans,"
as defined in Section 3(3) of ERISA, and all other employee benefit or
compensation arrangements or payroll practices, including, without limitation,
any such arrangements or payroll practices providing severance pay, sick leave,
vacation pay, salary continuation for disability, retirement benefits, deferred
compensation, bonus
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pay, incentive pay, stock options (including those held by directors,
employees, and consultants), hospitalization insurance, medical insurance, life
insurance, scholarships or tuition reimbursements, that are maintained by
Parent, any subsidiary of Parent or any Parent ERISA Affiliate (as defined
below) or to which Parent, any subsidiary of Parent or any Parent ERISA
Affiliate is obligated to contribute thereunder for current or former
directors, employees, independent contractors, consultants and leased employees
of Parent, any subsidiary of Parent or any Parent ERISA Affiliate (the "Parent
Employee Benefit Plans"); provided that Parent will have no obligation to add
any Parent Employee Benefit Plans assumed or acquired by Parent or any of its
subsidiaries after the date hereof as a result of any Permitted Acquisition (an
"Acquired Plan") to Section 4.8 of the Parent Disclosure Schedule.
(b) Except as set forth in Section 4.8 of the Parent Disclosure
Schedule and except for Acquired Plans, none of the Parent Employee Benefit
Plans is a "multiemployer plan", as defined in Section 4001(a)(3) of ERISA (a
"Multiemployer Plan"), and since December 31, 1995, neither Parent nor any
Parent ERISA Affiliate has contributed or contributes, or has been or is
required to contribute, to any such plan. With respect to any Multiemployer
Plan that Parent or any Parent ERISA Affiliate are required or have been
required in the past to contribute to:
(i) Parent and each Parent ERISA Affiliate has or will
have, as of the Closing Date, made all contributions to the Multiemployer Plan
required by the terms of such Multiemployer Plan or any collective bargaining
agreement;
(ii) neither Parent nor the Company would be subject to
any withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA if, as
of the Closing Date, Parent or any Parent ERISA Affiliate were to engage in a
complete withdrawal (as defined in ERISA Section 4203) or a partial withdrawal
(as defined in ERISA Section 4205) from the Multiemployer Plan; and
(iii) Parent has made available to Company current,
accurate, and complete copies of the Multiemployer Plan and of all collective
bargaining agreements requiring contributions to be made to such Multiemployer
Plan.
(c) Except as set forth in Section 4.8 of the Parent Disclosure
Schedule, Parent does not maintain or contribute 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, officer or director or former
employee, officer or director upon his retirement or termination of employment,
and Parent has never represented, promised or contracted (whether in oral or
written form) to any employee, officer or director or former employee, officer
or director that such benefits would be provided.
(d) Except as set forth in Section 4.8 of the Parent Disclosure
Schedule, the execution of, and performance of the transactions contemplated
in, this Agreement will not, either alone or upon the occurrence of subsequent
events, 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, officer
or director. The only severance
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agreements or severance policies applicable to Parent or its subsidiaries in
the event of a change of control of Parent are the agreements and policies
specifically referred to in Section 4.8 of the Parent Disclosure Schedule.
(e) Each Parent Employee Benefit Plan that is intended to qualify
under Section 401 of the Code, and each trust maintained pursuant thereto, has
been determined to be exempt from federal income taxation under Section 501 of
the Code by the Internal Revenue Service (the "IRS"), and, to Parent's
knowledge, nothing has occurred with respect to the operation or organization
of any such Parent Employee Benefit Plan that would cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code. With respect to any Parent Employee Benefit Plan or
other employee benefit plan which is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA, (i) Parent has not incurred and is not
reasonably likely to incur any liability under Title IV of ERISA (other than
for the payment of premiums, all of which have been paid when due), (ii) Parent
has not incurred any accumulated funding deficiency within the meaning of
Section 412 of the Code and has not applied for or obtained a waiver of any
minimum funding standard or an extension of any amortization period under
Section 412 of the Code, (iii) no "reportable event" (as such term is defined
in Section 4043 of ERISA but excluding any event for which the provision for
30-day notice to the Pension Benefit Guaranty Corporation has been waived by
regulation) has occurred or is expected to occur and (iv) since December 31,
1996, no material adverse change in the financial condition of any such plan
has occurred.
(f) (i) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made under
any of the Parent Employee Benefit Plans to any funds or trusts established
thereunder or in connection therewith have been made by the due date thereof,
(ii) Parent has complied in all material respects with any notice, reporting
and documentation requirements of ERISA and the Code, (iii) there are no
pending actions, claims or lawsuits which have been asserted, instituted or, to
Parent's knowledge, threatened, in connection with the Parent Employee Benefit
Plans, (iv) the Parent Employee Benefit Plans have been maintained, in all
material respects, in accordance with their terms and with all provisions of
ERISA and the Code (including rules and regulations thereunder) and other
applicable federal and state laws and regulations, and (v) except as set forth
in Section 4.8 of the Parent Disclosure Statement, each Parent Employee Benefit
Plan could be terminated as of the Closing Date with no liability to Parent,
Company or any Parent ERISA Affiliate.
(g) To Parent's knowledge, neither Parent nor any Parent ERISA
Affiliate, has engaged in any transaction in violation of Section 406(a) or (b)
of ERISA or any "prohibited transaction" (as defined in Section 4975(c)(1) of
the Code), which would subject Parent or any Parent ERISA Affiliate to any
taxes, penalties or other liabilities resulting from such prohibited
transaction, and no condition exists that would subject Parent or any Parent
ERISA Affiliate to any excise tax, penalty tax or fine related to any Parent
Employee Benefit Plans.
(h) With respect to each Parent Employee Benefit Plan, Parent has
furnished or made available to the Company true, correct and complete copies of
(i) the plan documents and summary plan descriptions; (ii) the most recent
determination letter received from the Internal
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Revenue Service; (iii) the annual reports to be filed for the three most recent
plan years of each such plan; (iv) all related trust agreements, insurance
contracts or other funding agreements that implement such plans; and (v) all
other documents, records or other materials related thereto reasonably
requested by the Company.
For purposes of this Agreement, "Parent ERISA Affiliate" means
any business or entity which is a member of the same "controlled group of
corporations," under "common control" or an "affiliated service group" with
Parent within the meanings of Sections 414 (b), (c) or (m) of the Code, or
required to be aggregated with Parent under Section 414(o) of the Code, or is
under "common control" with Parent, within the meaning of Section 4001(a)(14)
of ERISA, or any regulations promulgated or proposed under any of the foregoing
Sections.
4.9 Financial Advisor. Except for Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corp. ("DLJ"), no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
Merger or the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent. Parent has previously delivered
to the Company a copy of the engagement letter executed on December 12, 1997
between Parent and DLJ. In addition to any such fee and commission
arrangements, Parent has previously delivered to the Company a good faith
estimate of all additional fees, costs and expenses to be incurred by Parent
and its subsidiaries in connection with this Agreement and the transactions
contemplated by this Agreement (but not including any estimate of legal or
accounting fees, costs and expenses).
4.10 Compliance with Applicable Laws. Parent and each of its
subsidiaries holds all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary or appropriate for the
operation of its respective business, except for such permits, licenses,
variances, exemptions, orders and approvals the failure to hold which, alone or
in the aggregate, has not had, and would not have, a Parent Material Adverse
Effect (the "Parent Permits"). Parent and each of its subsidiaries is in
compliance with the terms of the Parent Permits, except for any failure to
comply which, alone or in the aggregate, has not had, and would not have, a
Parent Material Adverse Effect. Except as disclosed in the Parent SEC Reports
filed prior to the date of this Agreement, the businesses of Parent and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for possible violations which,
alone or in the aggregate, have not had, and would not have, a Parent Material
Adverse Effect. To Parent's knowledge, during the past five years, none of
Parent's or any of its subsidiaries' officers, employees or agents, nor any
other person acting on behalf of any of them or Parent or any of its
subsidiaries, has, directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other
person in violation of any law, ordinance or regulation of any Governmental
Entity, including, without limitation, the Foreign Corrupt Practices Act.
4.11 Taxes. Except to the extent that the inaccuracy of any of the
succeeding representations has not had, or would not have, a Parent Material
Adverse Effect: (i) all Tax Returns required to be filed by or with respect to
Parent and each of its subsidiaries have been filed; (ii) neither Parent nor
any of its subsidiaries has requested or been granted an extension of
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time for filing any Tax Return that has not yet been filed; (iii) Parent and
each of its subsidiaries has paid all Taxes that are due from or with respect
to it; (iv) Parent and each of its subsidiaries has withheld and paid all Taxes
required by all applicable laws to be withheld or paid in connection with any
amounts paid or owing to any employee, creditor, independent contractor or
other third party; (v) there are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitation applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to Parent or any of its subsidiaries for any taxable period; (vi)
no audit, action, proceeding, investigation, dispute or claim by any court,
governmental or regulatory authority, or similar person is pending or, to
Parent's knowledge, threatened in regard to any Taxes due from or with respect
to Parent or any of its subsidiaries or any Tax Return filed by or with respect
to Parent or any of its subsidiaries; (vii) no claim has been made by a taxing
authority in a jurisdiction in which Parent does not file Tax Returns that
Parent is required to file Tax Returns in such jurisdiction, and, to Parent's
knowledge, no taxing authority could reasonably make such a claim; (viii) no
assessment of any deficiency for Taxes is proposed against Parent or any of its
subsidiaries or any of their assets; (ix) there are no liens for Taxes (other
than for current Taxes not yet due and payable) upon the assets of Parent; (x)
Parent has not been a member of an affiliated group as defined in Section 1504
of the Code (or any analogous combined, consolidated or unitary group as
defined under state, local or foreign income tax law) other than one of which
Parent was the common parent; (xi) Parent has no obligation or liability for
the payment of Taxes of any other person arising as a result of any obligation
to indemnify another person or as a result of Parent assuming or succeeding to
the tax liability of any other person as a successor, transferee or otherwise;
(xii) Parent will not be required to include any amount in taxable income for
any taxable period (or portion thereof) ending after the Effective Time as a
result of (A) a change in method of accounting for a taxable period ending
prior to the Effective Time, (B) any "closing agreement" as described in
Section 7121 of the Code (or any corresponding provision of state, local or
foreign income tax laws) entered into prior to the Effective Time, (C) any sale
reported on the installment method that occurred prior to the Effective Time or
(D) any prepaid amount received prior to the Effective Time; (xiii) all Taxes
accrued but not yet due and all contingent liabilities for Taxes are adequately
reflected in the reserves for Taxes in the financial statements contained in
the Parent SEC Reports; and (xiv) there has been no "ownership change" as
described in Section 382 of the Code that has resulted in any limitation on the
Parent's ability to offset pre-change losses against its taxable income.
"Taxes" shall mean all taxes, charges, fees, levies, or other similar
assessments or liabilities, including without limitation (a) income, gross
receipts, ad valorem, premium, excise, real property, personal property, sales,
use, transfer, withholding, employment, payroll, and franchise taxes imposed by
the United States of America, or by any state, local, or foreign government, or
any subdivision, agency, or other similar person of the United States or any
such government; and (b) any interest, fines, penalties, assessments, or
additions to taxes resulting from, attributable to, or incurred in connection
with any Tax or any contest, dispute, or refund thereof. "Tax Returns" shall
mean any report, return, or statement required to be supplied to a taxing
authority in connection with Taxes.
4.12 Certain Agreements. Neither Parent nor any of its
subsidiaries is in default (or would be in default with notice or lapse of
time, or both) under any indenture, note, credit agreement, loan document,
lease, license, concession or other agreement, whether or not such
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default has been waived, which default, alone or in the aggregate with other
such defaults, has had, or would have, a Parent Material Adverse Effect.
4.13 Tax and Accounting Matters. To Parent's knowledge, Parent has
not taken any action which would prevent the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code.
4.14 Relationship with Customers and Suppliers. Parent has made
available to the Company a list of (i) the ten largest customers of Parent and
its subsidiaries taken as a whole as determined by the dollar volume of sales
for the year ended December 31, 1996 and for the nine months ended September
30, 1997, together with such sales volumes and (ii) the ten largest suppliers
of Parent and its subsidiaries taken as a whole as determined by the dollar
volume of purchases for the year ended December 31, 1996 and for the nine
months ended September 30, 1997, together with such purchase volumes. In the
last 12 months, no such supplier or customer of Parent or its subsidiaries has
notified Parent or its subsidiaries that it has canceled or otherwise
terminated, or, to Parent's knowledge, threatened to cancel or otherwise
terminate, its relationship with Parent or any of its subsidiaries, and, to
Parent's knowledge, there has not been any material dispute with any such
customer or supplier.
4.15 Intellectual Property. (a) Parent has made available to the
Company a list of the following (collectively, the "Parent Intellectual
Property"): (i) each trademark, trade name, brand name, service xxxx or other
trade designation owned or licensed by or to Parent or any of its subsidiaries,
each patent, copyright and similar intellectual property owned or licensed to
or by Parent and each license, royalty, assignment or other similar agreement
and each registration and application relating to the foregoing that is
material to the conduct of the business of Parent and its subsidiaries taken as
a whole; and (ii) each agreement relating to Parent Intellectual Property or
any technology, know-how or processes that Parent or its subsidiaries is
licensed or authorized to use, or which it licenses or authorizes others to
use, that is material to the conduct of the business of Parent and its
subsidiaries taken as a whole.
(b) Parent and its subsidiaries own the Parent Intellectual
Property, or have the right to use the same without infringing or violating the
rights of any third parties, except where such infringement or violation has
not had, or would not have, either alone or in the aggregate, a Parent Material
Adverse Effect. No consent of third parties will be required for the use of
the Parent Intellectual Property after the Effective Time, except where the
failure to obtain such consent would not have, either alone or in the
aggregate, a Parent Material Adverse Effect. No claim has been asserted by any
person against Parent or any of its subsidiaries regarding the ownership of or
the right to use any Parent Intellectual Property or challenging the rights of
Parent or any of its subsidiaries with respect to any of the Parent
Intellectual Property which, if adversely determined, would have, either alone
or in the aggregate, a Parent Material Adverse Effect.
(c) To Parent's knowledge, no person or entity has asserted any
claim that any product, activity or operation of Parent or any of its
subsidiaries infringes upon or involves, or has resulted in the infringement
of, any proprietary right of such person or entity, except for such
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infringement which has not had, or would not have, either alone or in the
aggregate, a Parent Material Adverse Effect; and no proceedings have been
instituted, are pending or, to Parent's knowledge, are threatened which
challenge the rights of Parent or any of its subsidiaries with respect thereto,
which, if adversely determined, would have, either alone or in the aggregate, a
Parent Material Adverse Effect.
V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows (such
representations and warranties (as well as other provisions of this Agreement)
are qualified by the matters identified (with references to the appropriate
Section and, if applicable, subsection being qualified) on a disclosure
schedule (the "Company Disclosure Schedule") delivered by the Company to Parent
prior to execution of this Agreement):
5.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to carry on its business as it is
now being conducted or currently proposed to be conducted. The Company is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified will not, alone or in the
aggregate, have a Company Material Adverse Effect. For the purposes of this
Agreement, a "Company Material Adverse Effect" means a material adverse effect
on the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of the Company and its subsidiaries taken
as a whole, other than any effects arising out of, resulting from or relating
to changes in general economic or financial conditions. Complete and correct
copies as of the date hereof of the Certificate of Incorporation and Bylaws of
the Company have been delivered to Parent as part of the Company Disclosure
Schedule.
5.2 Capitalization. The authorized stock of the Company consists
of 20,000,000 shares of Company Stock, 250,000 shares of first preferred stock,
par value $25.00 per share, and 1,535 shares of second preferred stock, par
value $100.00 per share. As of December 31, 1997, the issued and outstanding
capital stock of the Company consisted solely of 3,217,355 shares of Company
Stock, all of which were validly issued and outstanding, fully paid and
nonassessable. There are no bonds, debentures, notes or other indebtedness
issued or outstanding having the right to vote on any matters on which the
Company's stockholders may vote. There are no options, warrants, calls,
convertible securities or other rights, agreements or commitments presently
outstanding obligating the Company to issue, deliver or sell shares of its
stock or debt securities, or obligating the Company to grant, extend or enter
into any such option, warrant, call or other such right, agreement or
commitment, other than as identified in Section 5.2 of the Company Disclosure
Schedule. Section 5.2 of the Company Disclosure Schedule sets forth the name
of each optionee, the number of Options held by such optionee and the exercise
price for such Options under the Option Plans. Since December 31, 1997, the
Company has not issued any shares of its capital stock except shares of Company
Stock issued upon exercise of Options.
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After the Effective Time, the Surviving Corporation will have no obligation to
issue, transfer or sell any shares of stock of the Company or the Surviving
Corporation pursuant to any Company Employee Benefit Plan (as defined in
Section 5.8).
5.3 Subsidiaries. Each subsidiary of the Company is a
corporation, partnership or other entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization (except
where the failure to be validly existing and in good standing would not be
material to the business of such subsidiary) and has the corporate or similar
power to carry on its business as it is now being conducted or currently
proposed to be conducted. Each subsidiary of the Company is duly qualified to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so
qualified, when taken together with all such failures, has not had, and would
not have, a Company Material Adverse Effect. Section 5.3 of the Company
Disclosure Schedule contains, with respect to each subsidiary of the Company,
its name and jurisdiction of organization and, with respect to each subsidiary
that is not wholly owned, the number of issued and outstanding shares of
capital stock or share capital and the number of shares of capital stock or
share capital owned by the Company or a subsidiary. Except as described in
Section 5.3 of the Company Disclosure Schedule, all the outstanding shares of
capital stock or share capital of each subsidiary of the Company are validly
issued, fully paid and nonassessable, and those owned by the Company or by a
subsidiary of the Company are owned free and clear of any liens, claims or
encumbrances. Except as described in Section 5.3 of the Company Disclosure
Schedule, there are no existing options, warrants, calls, convertible
securities or other rights, agreements or commitments of any character relating
to the issued or unissued capital stock or other securities of any of the
subsidiaries of the Company. Except as set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 or any Company
SEC Report (as hereinafter defined) filed subsequent to such date and prior to
the date hereof, or as set forth in Section 5.3 of the Company Disclosure
Schedule, the Company does not directly or indirectly own any interest in any
other corporation, partnership, joint venture or other business association or
entity or have any obligation, commitment or undertaking to acquire any such
interest.
5.4 Authority Relative to this Agreement. The Company has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by the
Company's Board of Directors. This Agreement constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors rights generally and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought. Except for the approval of this Agreement and the transactions
contemplated hereby by the holders of a majority of the shares of Company Stock
outstanding and entitled to vote thereon as described in Section 3.6, no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement and the transactions contemplated hereby. Except as described
in Section 5.4 of the Company Disclosure Schedule, the Company is not subject
to or obligated under (i) any charter or bylaw provision or (ii) any contract,
indenture, loan or credit
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document, license, franchise, permit, order, decree, concession, lease,
instrument, judgment, statute, law, ordinance, rule or regulation applicable to
the Company or any of its subsidiaries or their respective properties or assets
which would be breached or violated, or under which there would be a default
(with or without notice or lapse of time, or both), or under which there would
arise a right of termination, cancellation, modification or acceleration of any
obligation, or any right to payment or compensation, or the loss of a benefit,
by its executing and carrying out this Agreement, other than the laws and
regulations referred to in the next sentence. Except as required by the HSR
Act, the Foreign Acts, the Securities Act, the Exchange Act, and the
corporation, securities or blue sky laws or regulations of the various states,
no filing or registration with, or authorization, consent or approval of, any
Governmental Entity is necessary for the consummation by the Company of the
Merger or the other transactions contemplated by this Agreement.
5.5 Reports and Financial Statements. The Company has previously
furnished Parent with true and complete copies of its (i) Annual Reports on
Form 10-K for the fiscal years ended December 31, 1995 and December 31, 1996,
as filed with the Commission, (ii) Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997, as filed
with the Commission, (iii) proxy statements related to all meetings of its
stockholders (whether annual or special) since December 31, 1995 and (iv) all
other reports or registration statements filed by the Company with the
Commission since December 31, 1995, except for preliminary material (in the
case of clauses (iii) and (iv) above) and except for registration statements on
Form S-8 relating to employee benefit plans and annual reports on Form 11-K
with respect to such plans, which are all the documents that the Company was
required to file with the Commission since that date (the documents in clauses
(i) through (iv) being referred to herein collectively as the "Company SEC
Reports"). As of their respective dates, the Company SEC Reports complied as
to form in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to such Company SEC Reports. As of their
respective dates, the Company SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
the Company included in the Company SEC Reports comply as to form in all
material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto. The
financial statements included in the Company SEC Reports: (i) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as may be indicated therein or in the notes thereto
and subject, in the case of the unaudited interim financial statements, to
normal year-end adjustments and any other adjustments described therein and the
fact that certain information and notes have been condensed or omitted in
accordance with the Exchange Act and the rules promulgated thereunder; (ii)
present fairly, in all material respects, the financial position of the Company
and its subsidiaries, as at the dates thereof and the results of their
operations and cash flows for the periods then ended; and (iii) are in all
material respects in accordance with the books of account and records of the
Company and its subsidiaries. As of September 30, 1997, there was no basis for
any claim or liability of any nature against the Company or any of its
subsidiaries, whether absolute, accrued, contingent or otherwise, which,
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alone or in the aggregate, has had, or would have, a Company Material Adverse
Effect, other than as reflected in the Company SEC Reports.
5.6 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement or in Section
5.6 of the Company Disclosure Schedule, since September 30, 1997, the Company
and its subsidiaries have operated their respective businesses in the ordinary
course of business consistent with past practice and there has not been (i) any
transaction, commitment, dispute or other event or condition (financial or
otherwise) of any character (whether or not in the ordinary course of business)
which, alone or in the aggregate, has had, or would have, a Company Material
Adverse Effect; (ii) any damage, destruction or loss, whether or not covered by
insurance, which has had, or would have, a Company Material Adverse Effect;
(iii) any declaration, setting aside or payment of any dividend or distribution
(whether in cash, stock or property) with respect to the stock of the Company
or any of its subsidiaries (other than dividends or distributions between the
Company and its wholly owned subsidiaries); (iv) any material change in the
Company's accounting principles, practices or methods; (v) any repurchase or
redemption with respect to its stock; (vi) any stock split, combination or
reclassification of any of the Company's stock or the issuance or authorization
of any issuance of any other securities in respect of, in lieu of or in
substitution for, shares of the Company's stock; (vii) any grant or amendment
of the terms of any option to purchase shares of stock of the Company other
than pursuant to the Option Plans; (viii) any granting by the Company or any of
its subsidiaries to any director, officer or employee of the Company or any of
its subsidiaries of (A) any increase in compensation (other than in the case of
employees in the ordinary course of business consistent with past practice),
(B) any increase in severance or termination pay, or (C) acceleration of
compensation or benefits; (ix) any entry by the Company or any of its
subsidiaries into any employment, severance, bonus or termination agreement
with any director, officer or employee of the Company or any of its
subsidiaries; or (x) any agreement (whether or not in writing), arrangement or
understanding to do any of the foregoing.
5.7 Litigation. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement, there is no suit, action or
proceeding pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries which, alone or in the aggregate, has had or
would have, a Company Material Adverse Effect, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any of its subsidiaries which, alone or in
the aggregate, has had, or would have, any such Company Material Adverse
Effect. For purposes of this Agreement, the phrases "the Company's knowledge"
and "knowledge of the Company" and other phrases of like import shall mean the
actual knowledge of any executive officer of the Company.
5.8 Employee Benefit Plans. (a) Section 5.8(a) of the Company
Disclosure Schedule hereto sets forth a list of all "employee benefit plans,"
as defined in Section 3(3) of ERISA, and all other material employee benefit or
compensation arrangements or payroll practices, including, without limitation,
any such arrangements or payroll practices providing severance pay, sick leave,
vacation pay, salary continuation for disability, retirement benefits, deferred
compensation, bonus pay, incentive pay, stock options (including those held by
directors, employees, and consultants), hospitalization insurance, medical
insurance, life insurance, scholarships or tuition
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reimbursements, that are maintained by the Company, any subsidiary of the
Company or any Company ERISA Affiliate (as defined below) or to which the
Company, any subsidiary of the Company or any Company ERISA Affiliate is
obligated to contribute thereunder for current or former directors, employees,
independent contractors, consultants and leased employees of the Company, any
subsidiary of the Company or any Company ERISA Affiliate (the "Company Employee
Benefit Plans").
(b) Except as set forth in Section 5.8(b) of the Company
Disclosure Schedule, none of the Company Employee Benefit Plans is a
"multiemployer plan", as defined in Section 4001(a)(3) of ERISA (a
"Multiemployer Plan"), and since December 31, 1995, neither the Company nor any
Company ERISA Affiliate has contributed or contributes, or has been or is
required to contribute, to any such plan. With respect to any Multiemployer
Plan that the Company or any Company ERISA Affiliate are required or have been
required in the past to contribute to:
(i) the Company and each Company ERISA Affiliate has or
will have, as of the Closing Date, made all contributions to the Multiemployer
Plan required by the terms of such Multiemployer Plan or any collective
bargaining agreement;
(ii) neither the Company nor Parent would be subject to
any material withdrawal liability under Part 1 of Subtitle E of Title IV of
ERISA if, as of the Closing Date, the Company or any Company ERISA Affiliate
were to engage in a complete withdrawal (as defined in ERISA Section 4203) or a
partial withdrawal (as defined in ERISA Section 4205) from the Multiemployer
Plan; and
(iii) the Company has made available to Parent current,
accurate, and complete copies of the Multiemployer Plan and of all collective
bargaining agreements requiring contributions to be made to such Multiemployer
Plan.
(c) Except as set forth in Section 5.8(c) of the Company
Disclosure Schedule, the Company does not maintain or contribute 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, officer or director
or former employee, officer or director upon his retirement or termination of
employment, and the Company has never represented, promised or contracted
(whether in oral or written form) to any employee, officer or director or
former employee, officer or director that such benefits would be provided.
(d) Except as set forth in Section 5.8(d) of the Company
Disclosure Schedule, the execution of, and performance of the transactions
contemplated in, this Agreement will not, either alone or upon the occurrence
of subsequent events, 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, officer or director. The only severance agreements or severance
policies applicable to the Company or its subsidiaries in the event of a change
of control of the Company are the agreements and policies specifically referred
to in Section 5.8 of the Company Disclosure Schedule.
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(e) Each Company Employee Benefit Plan that is intended to qualify
under Section 401 of the Code, and each trust maintained pursuant thereto, has
been determined to be exempt from federal income taxation under Section 501 of
the Code by the IRS, and, to the Company's knowledge, nothing has occurred with
respect to the operation or organization of any such Company Employee Benefit
Plan that would cause the loss of such qualification or exemption or the
imposition of any liability, penalty or tax under ERISA or the Code. With
respect to any Company Employee Benefit Plan or other employee benefit plan
which is a "defined benefit plan" within the meaning of Section 3(35) of ERISA,
(i) the Company has not incurred and is not reasonably likely to incur any
liability under Title IV of ERISA (other than for the payment of premiums, all
of which have been paid when due), (ii) the Company has not incurred any
accumulated funding deficiency within the meaning of Section 412 of the Code
and has not applied for or obtained a waiver of any minimum funding standard or
an extension of any amortization period under Section 412 of the Code, (iii) no
"reportable event" (as such term is defined in Section 4043 of ERISA but
excluding any event for which the provision for 30-day notice to the Pension
Benefit Guaranty Corporation has been waived by regulation) has occurred or is
expected to occur and (iv) since December 31, 1996, no material adverse change
in the financial condition of any such plan has occurred.
(f) (i) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made under
any of the Company Employee Benefit Plans to any funds or trusts established
thereunder or in connection therewith have been made by the due date thereof,
(ii) the Company has complied in all material respects with any notice,
reporting and documentation requirements of ERISA and the Code, (iii) there are
no pending actions, claims or lawsuits which have been asserted, instituted or,
to the Company's knowledge, threatened, in connection with the Company Employee
Benefit Plans, (iv) the Company Employee Benefit Plans have been maintained, in
all material respects, in accordance with their terms and with all provisions
of ERISA and the Code (including rules and regulations thereunder) and other
applicable federal and state laws and regulations, and (v) except as set forth
in Section 4.8 of the Company Disclosure Statement, each Company Employee
Benefit Plan could be terminated as of the Closing Date with no liability to
the Company, Parent or any Company ERISA Affiliate.
(g) To the Company's knowledge, neither the Company nor any
Company ERISA Affiliate, has engaged in any transaction in violation of Section
406(a) or (b) of ERISA or any "prohibited transaction" (as defined in Section
4975(c)(1) of the Code), which would subject the Company or any Company ERISA
Affiliate to any taxes, penalties or other liabilities resulting from such
prohibited transaction, and no condition exists that would subject the Company
or any Company ERISA Affiliate to any excise tax, penalty tax or fine related
to any Company Employee Benefit Plans.
(h) With respect to each Company Employee Benefit Plan, the
Company has furnished or made available to Parent true, correct and complete
copies of the following (to the extent applicable): (i) the plan documents and
summary plan descriptions; (ii) the most recent determination letter received
from the Internal Revenue Service; (iii) the annual reports to be filed for the
three most recent plan years of each such plan; (iv) all related trust
agreements, insurance
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contracts or other funding agreements that implement such plans; and (v) all
other documents, records or other materials related thereto reasonably
requested by Parent.
(i) Each Company Employee Benefit Plan covering any employee
residing or working outside the United States or sponsored or maintained by a
foreign subsidiary of the Company (i) complies in all material respects with
applicable law; and (ii) could be terminated on the Closing Date without any
material liability to Parent, the Surviving Corporation or any subsidiary of
the Company.
For purposes of this Agreement, "Company ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," under "common control" or an "affiliated service group" with the
Company within the meanings of Sections 414 (b), (c) or (m) of the Code, or
required to be aggregated with the Company under Section 414(o) of the Code, or
is under "common control" with the Company, within the meaning of Section
4001(a)(14) of ERISA, or any regulations promulgated or proposed under any of
the foregoing Sections.
5.9 Company Action. The Board of Directors of the Company (at a
meeting duly called and held) has by the unanimous vote of all directors
present (a) determined that the Merger is advisable and fair to and in the best
interests of the Company and its stockholders, (b) approved the Merger in
accordance with the provisions of Section 251 of the DGCL, and (c) recommended
the approval of this Agreement and the Merger by the holders of the Company
Stock and directed that the Merger be submitted for consideration by the
Company's stockholders at the meeting of stockholders contemplated by Section
3.6.
5.10 Financial Advisors. The Company has received the opinion of
Societe Generale Securities Corporation to the effect that, as of the date
hereof, the Exchange Ratio is fair from a financial point of view to the
holders of Company Stock. Except for Societe Generale Securities Corporation
and DLJ, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger or the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. The Company has previously delivered to Parent a
copy of the engagement letter executed on December 17, 1997, between the
Company and Societe Generale Securities Corporation and a copy of the
engagement letter executed on December 1, 1997 between the Company and DLJ. In
addition to any such fee and commission arrangements, the Company has
previously delivered to Parent a good faith estimate of all additional fees,
costs, and expenses to be incurred by the Company and its subsidiaries in
connection with this Agreement (but not including any estimate of legal or
accounting fees, costs and expenses).
5.11 Compliance with Applicable Laws. The Company and each of its
subsidiaries holds all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary or appropriate for the
operation of its respective business, except for such permits, licenses,
variances, exemptions, orders and approvals the failure to hold which, alone or
in the aggregate, has not had, and would not have a Company Material Adverse
Effect (the "Company Permits"). The Company and each of its subsidiaries is in
compliance with the terms of the Company Permits, except for any failure to
comply which, alone or in the aggregate, has
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not had, and would not have, a Company Material Adverse Effect. Except as
disclosed in the Company SEC Reports filed prior to the date of this Agreement,
the businesses of the Company and its subsidiaries are not being conducted in
violation of any law (including, with respect to the operations of the
Company's foreign subsidiaries, any "social law" as defined below), ordinance
or regulation of any Governmental Entity, except for possible violations which
alone or in the aggregate have not had, and would not have, a Company Material
Adverse Effect. To the Company's knowledge, during the past five years, none
of the Company's or any of its subsidiaries' officers, employees or agents, nor
any other person acting on behalf of any of them or the Company or any of its
subsidiaries, has, directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other
person in violation of any law, ordinance or regulation of any Governmental
Entity, including, without limitation, the Foreign Corrupt Practices Act.
"Social law" means any European Union, national, regional, state, provincial
and municipal laws, regulations, ordinances and decisions and any collective
bargaining agreements agreed on any level, affecting the employment of labor,
including but not limited to social security, wages, hours, discrimination,
plant closing notices, working conditions, health and safety in the work place,
works council information and consultation of the work force, the organization
of participation by the work force, internal regulations, maternity and
sickness leave, etc.
5.12 Taxes. Except to the extent that the inaccuracy of any of the
succeeding representations has not had, or would not have, a Company Material
Adverse Effect: (i) all Tax Returns required to be filed by or with respect to
the Company and each of its subsidiaries have been filed; (ii) neither the
Company nor any of its subsidiaries has requested or been granted an extension
of time for filing any Tax Return that has not yet been filed; (iii) the
Company and each of its subsidiaries has paid all Taxes that are due from or
with respect to it; (iv) the Company and each of its subsidiaries has withheld
and paid all Taxes required by all applicable laws to be withheld or paid in
connection with any amounts paid or owing to any employee, creditor,
independent contractor or other third party; (v) there are no outstanding
agreements, waivers, or arrangements extending the statutory period of
limitation applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to the Company or any of its
subsidiaries for any taxable period; (vi) no audit, action, proceeding,
investigation, dispute or claim by any court, governmental or regulatory
authority, or similar person is pending or, to the Company's knowledge,
threatened in regard to any Taxes due from or with respect to the Company or
any of its subsidiaries or any Tax Return filed by or with respect to the
Company or any of its subsidiaries; (vii) no claim has been made by a taxing
authority in a jurisdiction in which the Company does not file Tax Returns that
the Company is required to file Tax Returns in such jurisdiction, and, to the
Company's knowledge, no taxing authority could reasonably make such a claim;
(viii) no assessment of any deficiency for Taxes is proposed against the
Company or any of its subsidiaries or any of their assets; (ix) there are no
liens for Taxes (other than for current Taxes not yet due and payable) upon the
assets of the Company; (x) the Company has not been a member of an affiliated
group as defined in Section 1504 of the Code (or any analogous combined,
consolidated or unitary group as defined under state, local or foreign income
tax law) other than one of which the Company was the common parent; (xi) the
Company has no obligation or liability for the payment of Taxes of any other
person arising as a result of any obligation to indemnify another person or as
a result of the Company assuming or succeeding to
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the tax liability of any other person as a successor, transferee or otherwise;
(xii) the Company will not be required to include any amount in taxable income
for any taxable period (or portion thereof) ending after the Effective Time as
a result of (A) a change in method of accounting for a taxable period ending
prior to the Effective Time, (B) any "closing agreement" as described in
Section 7121 of the Code (or any corresponding provision of state, local or
foreign income tax laws) entered into prior to the Effective Time, (C) any sale
reported on the installment method that occurred prior to the Effective Time or
(D) any prepaid amount received prior to the Effective Time; (xiv) all Taxes
accrued but not yet due and all contingent liabilities for Taxes are adequately
reflected in the reserves for Taxes in the financial statements contained in
the Company SEC Reports; and (xv) except as described in Section 5.12 of the
Company Disclosure Schedule, there has been no "ownership change" as described
in Section 382 of the Code that has resulted in any limitation on the Company's
ability to offset pre-change losses against its taxable income.
5.13 Certain Agreements. Neither the Company nor any of its
subsidiaries is in default (or would be in default with notice or lapse of
time, or both) under any indenture, note, credit agreement, loan document,
lease, license, concession or other agreement, whether or not such default has
been waived, which default, alone or in the aggregate with other such defaults,
has had, or would have, a Company Material Adverse Effect.
5.14 Tax and Accounting Matters. To the Company's knowledge, the
Company has not taken any action which would prevent the Merger from
constituting a reorganization within the meaning of Section 368(a) of the Code.
5.15 Relationship with Customers and Suppliers. The Company has
made available to Parent a list of (i) the ten largest customers of the Company
and its subsidiaries taken as a whole as determined by the dollar volume of
sales for the year ended December 31, 1996 and for the nine months ended
September 30, 1997, together with such sales volumes and (ii) the ten largest
suppliers of the Company and its subsidiaries taken as a whole as determined by
the dollar volume of purchases for the year ended December 31, 1996 and for the
nine months ended September 30, 1997, together with such purchase volumes. In
the last 12 months, no such supplier or customer of the Company or its
subsidiaries has notified the Company or its subsidiaries that it has canceled
or otherwise terminated, or, to the Company's knowledge, threatened to cancel
or otherwise terminate, its relationship with the Company or any of its
subsidiaries, and, to the Company's knowledge, there has not been any material
dispute with any such customer.
5.16 Intellectual Property. (a) The Company has made available to
Parent a list of the following (collectively, the "Company Intellectual
Property"): (i) each trademark, trade name, brand name, service xxxx or other
trade designation owned or licensed by or to the Company or any of its
subsidiaries, each patent, copyright and similar intellectual property owned or
licensed to or by the Company and each license, royalty, assignment or other
similar agreement and each registration and application relating to the
foregoing that is material to the conduct of the business of the Company and
its subsidiaries taken as a whole; and (ii) each agreement relating to Company
Intellectual Property or any technology, know-how or processes that the Company
or its subsidiaries is licensed or authorized to use, or which it licenses or
authorizes others to use,
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that is material to the conduct of the business of the Company and its
subsidiaries taken as a whole.
(b) The Company and its subsidiaries own the Company Intellectual
Property, or have the right to use the same without infringing or violating the
rights of any third parties, except where such infringement or violation has
not had, or would not have, either alone or in the aggregate, a Company
Material Adverse Effect. No consent of third parties will be required for the
use of the Company Intellectual Property after the Effective Time, except where
the failure to obtain such consent would not have, either alone or in the
aggregate, a Company Material Adverse Effect. No claim has been asserted by
any person against the Company or any of its subsidiaries regarding the
ownership of or the right to use any Company Intellectual Property or
challenging the rights of the Company or any of its subsidiaries with respect
to any of the Company Intellectual Property which, if adversely determined,
would have, either alone or in the aggregate, a Company Material Adverse
Effect.
(c) To the Company's knowledge, no person or entity has asserted
any claim that any product, activity or operation of the Company or any of its
subsidiaries infringes upon or involves, or has resulted in the infringement
of, any proprietary right of such person or entity, except for such
infringement which has not had, or would not have, either alone or in the
aggregate, a Company Material Adverse Effect; and no proceedings have been
instituted, are pending or, to the Company's knowledge, are threatened which
challenge the rights of the Company or any of its subsidiaries with respect
thereto, which, if adversely determined, would have, either alone or in the
aggregate, a Company Material Adverse Effect.
5.17 Minority Interests.
(a) The Company has the right to purchase the entire
minority interest in Plastic Containers, Inc. ("PCI"), thereby acquiring
ownership of 100% of the outstanding capital stock of PCI, on the terms
described in Section 5.17(a) of the Company Disclosure Schedule, and such right
will continue at least until the date specified in such Section of the Company
Disclosure Schedule and will not be affected by the completion of the Merger or
the other transactions contemplated by this Agreement.
(b) The Company has the right to purchase minority
interests in Ferembal, S.A. ("Ferembal") to the extent and on the terms
described in Section 5.17(b) of the Company Disclosure Schedule, and such right
will continue at least until the date specified in such Section of the Company
Disclosure Schedule and will not be affected by the completion of the Merger or
the other transactions contemplated by this Agreement.
5.18 Takeover Statutes. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation to
which the Company or its subsidiaries or operations is subject (a "Takeover
Statute") is applicable to the transactions contemplated by this Agreement or
the Inducement Agreement.
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VI.
REPRESENTATIONS AND WARRANTIES REGARDING SUB
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
6.1 Organization. Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Sub has
not engaged in any business since it was incorporated other than in connection
with its organization and the transactions contemplated by this Agreement.
6.2 Capitalization. The authorized capital stock of Sub consists
of 10,000 shares of common stock, par value $.01 per share, of which 1,000
shares are validly issued and outstanding, fully paid and nonassessable and are
owned by Parent or by a subsidiary of Parent free and clear of all liens,
claims and encumbrances.
6.3 Authority Relative to this Agreement. Sub has the corporate
power to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and sole stockholder, and no other corporate proceedings on the part
of Sub are necessary to authorize this Agreement and the transactions
contemplated hereby. Except as disclosed in Section 4.3 of the Parent
Disclosure Schedule or as required by the HSR Act, the Foreign Acts, the
Securities Act, the Exchange Act and the corporation, securities or blue sky
laws or regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any Governmental Entity is necessary for
the consummation by Sub of the Merger or the transactions contemplated by this
Agreement, other than filings, registrations, authorizations, consents or
approvals the failure to make or obtain which would not prevent the
consummation of the transactions contemplated hereby.
VII.
CONDUCT OF BUSINESS PENDING THE MERGER
7.1 Conduct of Business by the Company Pending the Merger. After
the date of this Agreement and prior to the Effective Time, unless Parent shall
otherwise agree in writing or except as otherwise required by this Agreement:
(i) the Company shall, and shall cause its subsidiaries
to, carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted, and shall, and shall cause its subsidiaries to, use their
reasonable efforts to preserve intact their present business
organizations and preserve their relationships with customers,
suppliers and others having business dealings with them to the end
that their goodwill and on-going businesses shall be unimpaired at the
Effective Time;
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(ii) the Company shall, and shall cause its subsidiaries
to, (A) maintain insurance coverages and their books, accounts and
records in the usual manner consistent with past practice; (B) comply
in all material respects with all laws (including "social laws"),
ordinances and regulations of Governmental Entities applicable to the
Company and its subsidiaries; (C) maintain and keep their material
properties and equipment in good repair, working order and condition,
ordinary wear and tear excepted; and (D) perform in all material
respects their obligations under all material contracts and
commitments to which any of them is a party or by which any of them is
bound;
(iii) the Company shall not and shall not propose or agree
to (A) sell or pledge or agree to sell or pledge any capital stock
owned by it in any of its subsidiaries or owned by any of its
subsidiaries, (B) amend its Certificate of Incorporation or Bylaws,
(C) split, combine or reclassify its outstanding stock or issue or
authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of stock of the Company,
or declare, set aside, authorize or pay any dividend or other
distribution payable in cash, stock or property, or (D) directly or
indirectly redeem, purchase or otherwise acquire or agree to redeem,
purchase or otherwise acquire any shares of Company stock;
(iv) the Company shall not, nor shall it permit any of
its subsidiaries to, (A) issue, deliver or sell or agree to issue,
deliver or sell any additional shares of, or rights of any kind to
acquire any shares of, its respective stock of any class, any
indebtedness having the right to vote on any matter on which the
Company's stockholders may vote or any option, rights or warrants to
acquire, or securities convertible into, exercisable for or
exchangeable for, shares of stock other than (1) issuances, deliveries
or sales of Company Stock pursuant to obligations outstanding as of
the date of this Agreement under the Option Plans and (2) issuances of
Company Stock to directors of the Company in lieu of cash directors'
fees in the ordinary course of business and consistent with past
practice; (B) acquire, lease or dispose or agree to acquire, lease or
dispose of any capital assets or any other assets other than in the
ordinary course of business; (C) incur additional indebtedness or
encumber or grant a security interest in any asset or enter into any
other material transaction other than in each case in the ordinary
course of business; (D) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in,
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof; (E)
incur any material transaction fees, costs or expenses in addition to
those disclosed or referenced pursuant to Section 5.10; or (F) enter
into any contract, agreement, commitment or arrangement with respect
to any of the foregoing;
(v) the Company shall not, nor shall it permit any of its
subsidiaries to, except as required to comply with applicable law and
except as provided in Section 8.5 hereof, enter into any new (or amend
any existing) Company Employee Benefit Plan or any new (or amend any
existing) employment, severance or consulting agreement, grant any
general increase in the compensation of current or former directors,
officers or employees (including any such increase pursuant to any
bonus, pension, profit-sharing or other plan
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or commitment) or grant any increase in the compensation payable or to
become payable to any director, officer or employee, except in any of
the foregoing cases in accordance with pre-existing contractual
provisions or in the ordinary course of business consistent with past
practice;
(vi) the Company shall not, nor shall it permit any of
its subsidiaries to, take or cause to be taken any action, whether
before or after the Effective Time, which would disqualify the Merger
as a "reorganization" within the meaning of Section 368(a) of the
Code; and
(vii) the Company shall not, nor shall it permit any of
its subsidiaries to, amend, modify, terminate, waive or permit to
lapse any material right of first refusal, preferential right, right
of first offer, or any other material right of the Company or any of
its subsidiaries, except in the ordinary course of business.
7.2 Conduct of Business by Parent Pending the Merger. After the
date of this Agreement and prior to the Effective Time, unless the Company
shall otherwise agree in writing or except as otherwise required by this
Agreement:
(i) Parent shall, and shall cause its subsidiaries to,
carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted and shall, and shall cause its subsidiaries to, use their
reasonable efforts to preserve intact their present business
organizations and preserve their relationships with customers,
suppliers and others having business dealings with them to the end
that their goodwill and ongoing businesses shall be unimpaired at the
Effective Time;
(ii) Parent shall, and shall cause its subsidiaries to,
(A) maintain insurance coverages and their books, accounts and records
in the usual manner consistent with past practice; (B) comply in all
material respects with all laws, ordinances and regulations of
Governmental Entities applicable to Parent and its subsidiaries; (C)
maintain and keep their material properties and equipment in good
repair, working order and condition, ordinary wear and tear expected;
and (D) perform in all material respects their obligations under all
material contracts and commitments to which any of them is a party or
by which any of them is bound;
(iii) Parent shall not and shall not agree to combine or
reclassify the Parent Common Stock or issue or authorize the issuance
of any other securities in lieu of or in substitution for shares of
Parent Common Stock, or declare, set aside, authorize or pay any
dividend or other distribution in respect of the Parent Common Stock
payable in cash, stock or property, except (in each case) for a stock
split effected as a stock dividend, as a result of which the Exchange
Ratio would be appropriately adjusted pursuant to Section 3.1(c);
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(iv) except in connection with any Permitted
Acquisition, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in, or by any
other manner, any business or any corporation, partnership,
association or other business organization or division thereof; and
(v) Parent shall use its best efforts to not, nor shall
it permit any of its subsidiaries to, take or cause to be taken any
action, whether before or after the Effective Time, which would
disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code.
7.3 Conduct of Business of Sub. During the period from the date
of this Agreement to the Effective Time, Sub shall not engage in any activities
of any nature except as provided in or contemplated by this Agreement.
VIII.
ADDITIONAL AGREEMENTS
8.1 Access and Information. Each of the Company and Parent and
their respective subsidiaries shall afford to the other and to the other's
accountants, counsel and other representatives reasonable access during normal
business hours (and at such other times as the parties may mutually agree)
throughout the period prior to the Effective Time to all of its properties,
books, contracts, commitments, records and personnel, subject to existing
confidentiality obligations, and, during such period, each shall furnish
promptly to the other (i) a copy of each report, schedule and other document
filed or received by it pursuant to the requirements of federal or state
securities laws and (ii) all other information concerning its business,
properties and personnel as the other may reasonably request. Each of the
Company and Parent shall hold, and shall cause their and their respective
subsidiaries, respective employees, agents and representatives to hold, in
confidence all such information in accordance with the terms of the
Non-Disclosure Agreement dated as of November 20, 1997 between Parent and the
Company (the "Non-Disclosure Agreement").
8.2 Registration Statement/Proxy Statement. Parent and the
Company shall cooperate and promptly prepare, and Parent shall file with the
Commission as soon as practicable, a Registration Statement on Form S-4 (the
"Form S-4") under the Securities Act, with respect to the Parent Common Stock
issuable in the Merger, portions of which Registration Statement shall also
serve as the proxy statement of the Company with respect to the meeting of
stockholders of the Company contemplated by Section 3.6 (the "Proxy
Statement/Prospectus"). The respective parties will cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder. Parent shall use all reasonable
efforts, and the Company will cooperate with Parent, to have the Form S-4
declared effective by the Commission as promptly as practicable after the
filing thereof (including without limitation, responding to any comments
received from the Commission with respect thereto) and to keep the Form S-4
effective as long as
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is necessary to consummate the Merger. Each of Parent and the Company shall,
as promptly as practicable, provide to the other copies of any written comments
received from the Commission with respect to the Proxy Statement/Prospectus or
the Form S-4 and advise the other of any oral comments with respect to the
Proxy Statement/Prospectus or the Form S-4 received from the Commission.
Parent shall use its best efforts to obtain, prior to the effective date of the
Form S-4, all necessary state securities law or "Blue Sky" permits or approvals
required to carry out the transactions contemplated by the Merger Agreement and
will pay all expenses incident thereto. Parent agrees that none of the
information supplied or to be supplied by Parent for inclusion or incorporation
by reference in the Form S-4 or the Proxy Statement/Prospectus (i) in the case
of the Proxy Statement/Prospectus and each amendment or supplement thereto, at
the time of mailing thereof and at the time of the meeting of stockholders of
the Company contemplated by Section 3.6, or (ii) in the case of the Form S-4
and each amendment or supplement thereto, at the time it is filed or becomes
effective, will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company agrees that none of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in the
Form S-4 or the Proxy Statement/Prospectus (i) in the case of the Proxy
Statement/Prospectus and each amendment or supplement thereto, at the time of
mailing thereof and at the time of the meeting of stockholders of the Company
contemplated by Section 3.6, or, (ii) in the case of the Form S-4 or any
amendment or supplement thereto, at the time it is filed or becomes effective,
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. For
purposes of the foregoing, it is understood and agreed that information
concerning or related to Parent will be deemed to have been supplied by Parent
and information concerning or related to the Company shall be deemed to have
been supplied by the Company. No amendment or supplement to the Proxy
Statement/Prospectus will be made by Parent or the Company without the approval
of the other party. Parent will advise the Company, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, or the
suspension of the qualification of Parent Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction.
8.3 Compliance with the Securities Act. At least 30 days prior
to the Effective Time, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment, at
the record date for the Company's special meeting of stockholders, "affiliates"
(each such person, an "Affiliate") of the Company within the meaning of Rule
145 of the rules and regulations promulgated under the Securities Act. The
Company shall use all reasonable efforts to deliver or cause to be delivered to
Parent, prior to the Effective Time, from each of the Affiliates of the Company
identified in the foregoing list, an Affiliate Letter in the form attached
hereto as Exhibit B (an "Affiliate Letter"). Parent shall be entitled to place
legends as specified in such Affiliate Letters on the certificates evidencing
any Parent Common Stock to be received by such Affiliates pursuant to the terms
of the Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the Parent Common Stock, consistent with the terms of such
Affiliate Letters.
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8.4 Stock Exchange Listing. Parent shall use its best efforts to
list on the NYSE, upon official notice of issuance, the Parent Common Stock to
be issued pursuant to the Merger.
8.5 Employee Matters. As of the Effective Time, the employees of
the Company and each subsidiary shall continue employment with the Surviving
Corporation and the subsidiaries, respectively, in the same positions and at
the same level of wages and/or salary and without having incurred a termination
of employment or separation from service; provided, however, except as may be
specifically required by applicable law or any contract, the Surviving
Corporation and the subsidiaries shall not be obligated to continue any
employment relationship with any employee for any specific period of time.
Except with respect to the Option Plans to be assumed by the Parent as provided
by Section 3.5(a) hereto, as of the Effective Time, the Surviving Corporation
shall be the sponsor of the Company Employee Benefit Plans sponsored by the
Company immediately prior to the Effective Time, and Parent shall cause the
Surviving Corporation and the subsidiaries to satisfy all existing obligations
and liabilities under such Company Employee Benefit Plans; provided, however,
that, except as hereafter provided in this Section 8.5 or in the Company
Disclosure Schedule, nothing contained in this Agreement shall limit or
restrict the Surviving Corporation's right on or after the Effective Time to
amend, modify or terminate any of the Company Employee Benefit Plans. To the
extent any employee benefit plan, program or policy of Parent, the Surviving
Corporation, or their affiliates is made available to any person who is an
employee of the Company or any of its subsidiaries immediately prior to the
Effective Time: (i) continuous service with the Company and the subsidiaries by
any employee prior to the Effective Time shall be credited for eligibility and
vesting purposes and for purposes of qualifying for any additional benefits
tied to periods of service (such as higher rates of matching contributions and
eligibility for early retirement) under such plan, program or policy, but not
for benefit accrual purposes (except for disability, vacation and severance
plans and any Company Employee Benefit Plans, with respect to which service
with the Company and the subsidiaries shall be credited for benefit accrual
purposes); and (ii) with respect to any welfare benefit plans to which such
employees may become eligible, Parent shall cause such plans to provide credit
for any co-payments or deductibles by such employees during the current plan
year of the Surviving Corporation and waive all pre-existing condition
exclusions and waiting periods, other than limitations or waiting periods that
have not been satisfied under any welfare plans maintained by the Company and
the subsidiaries for their employees prior to the Effective Time.
8.6 Indemnification. (a) From and after the Effective Date, the
Surviving Corporation and Parent shall indemnify, defend and hold harmless the
officers, directors and employees of the Company and its subsidiaries who were
such at any time prior to the Effective Time (the "Indemnified Parties") from
and against all losses, expenses, claims, damages or liabilities arising out of
the transactions contemplated by this Agreement to the fullest extent permitted
or required under applicable law, and the Indemnified Parties shall be advanced
expenses subject to a customary reimbursement agreement. All rights to
indemnification existing in favor of the directors, officers or employees of
the Company as provided in the Company's Certificate of Incorporation or
Bylaws, as in effect as of the date hereof, with respect to matters occurring
through the Effective Time, shall survive the Merger and shall continue in full
force and effect thereafter. The Surviving Corporation shall maintain in
effect for not less than three years after the Effective Time the current
policies of directors' and officers' liability insurance maintained by
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the Company with respect to matters occurring on or prior to the Effective
Time; provided, however, that the Surviving Corporation or Parent may
substitute therefor policies of at least the same coverage (with carriers
comparable to the Company's existing carriers) containing terms and conditions
which are not materially less advantageous to the Indemnified Parties; and
provided, further, that the Surviving Corporation (or Parent, if it shall
substitute policies) shall not be required in order to maintain or procure such
coverage to pay an annual premium in excess of 200% of the current annual
premium paid by the Company for its existing coverage (the "Cap"); and
provided, further, that if equivalent coverage cannot be obtained, or can be
obtained only by paying an annual premium in excess of the Cap, the Surviving
Corporation shall only be required to obtain as much coverage as can be
obtained by paying an annual premium equal to the Cap.
(b) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated by this
Agreement is commenced, whether before or after the Effective Time, the parties
hereto agree to cooperate and use their respective reasonable efforts to
vigorously defend against and respond to the same.
8.7 HSR Act and Foreign Acts. The Company and Parent shall use
their best efforts to file as soon as practicable notifications under the HSR
Act and the Foreign Acts in connection with the Merger and the transactions
contemplated hereby, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice (the "Antitrust Division") or any other
applicable Governmental Entities for additional information or documentation.
Notwithstanding the foregoing or any other provision of this Agreement, Parent
shall have no obligation to comply with any request or requirement imposed by
the FTC, the DOJ or any such other Governmental Entity in connection with the
HSR Act or any Foreign Act, including without limitation any request or
requirement (i) to disclose confidential information about Parent or its
affiliates; (ii) to dispose of any assets or operations of Parent or its
affiliates; or (iii) to comply with any restriction on the manner in which
Parent or its affiliates conduct their operations.
8.8 Additional Agreements. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using all commercially
reasonable efforts to obtain all necessary waivers, consents and approvals, to
effect all necessary registrations and filings and to lift any injunction to
the Merger (and, in such case, to proceed with the Merger as expeditiously as
possible).
(b) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and/or directors of Parent, the Company and the Surviving
Corporation shall take all such necessary action.
(c) Following the Effective Time, Parent shall file all Tax
Returns of Parent and the Company on the basis that the Merger qualifies as a
"reorganization" within the meaning of
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Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code and shall take no
action which is inconsistent with or contrary to such classification of the
Merger for Tax purposes.
8.9 No Shop. (a) The Company agrees (i) that neither it nor any
of its subsidiaries shall, and each of them shall direct and use their best
efforts to cause their officers, directors, employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its subsidiaries) not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company or
any of its subsidiaries (any such proposal or offer being hereinafter referred
to as an "Alternative Proposal"), or engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person relating to an Alternative Proposal, or release any third party from
any obligations under any existing standstill agreement or arrangement, or
enter into any agreement with respect to an Alternative Proposal; (ii) that it
will 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; and (iii) that it will notify Parent with reasonable
promptness if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company or any of its
subsidiaries and disclose to Parent the material substance thereof.
(b) Notwithstanding the foregoing, if the Company receives a
written proposal, which the Board of Directors of the Company, in the exercise
of its reasonable judgment, believes is likely to result in an Alternative
Proposal, and such written proposal was not solicited by the Company and did
not result from a breach of this Section 8.9 (an "Unsolicited Proposal"), the
Company may directly or indirectly furnish information and access to, and may
participate in discussions and negotiate with, the person or entity that has
submitted such Unsolicited Proposal, but only if (i) the Board of Directors of
the Company reasonably concludes that (A) all holders of Company Stock would
receive Superior Consideration (as defined below) if the Alternative Proposal
is accepted and consummated, and (B) the proposed acquiror has the legal
ability (including, without limitation, under antitrust laws) to complete such
acquisition on a timely basis, and (C) such Alternative Proposal is not subject
to a financing contingency, and (ii) the Board of Directors of the Company,
following consultation with and considering the advice of its independent legal
counsel relating thereto, determines in its good faith judgment that failing to
take such action would constitute a breach of such Board of Directors'
fiduciary duties to the Company's stockholders imposed by law. For purposes of
this Agreement, "Superior Consideration" means consideration consisting of cash
and/or securities for all the shares of Company Stock then outstanding or for
all or substantially all the assets of the Company that the Company's Board of
Directors determines in its good faith judgment (having received the advice of
a financial advisor of nationally recognized reputation) to be more favorable
to holders of the Company Stock than the Merger.
(c) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent, the
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approval or recommendation by such Board of Directors of this Agreement or the
Merger or (ii) approve or recommend, or propose to approve or recommend, any
Alternative Proposal, unless (A) as a result of actions taken in compliance
with Section 8.9(b), the Company has received an Unsolicited Proposal
concerning an Alternative Proposal that meets the requirements set forth in
clauses (A), (B) and (C) of the preceding paragraph, and (B) the Board of
Directors of the Company, following consultation with and considering the
advice of its independent legal counsel relating thereto, determines in its
good faith judgment that failing to take such action would constitute a breach
of such Board of Directors' fiduciary duties to the Company's stockholders
imposed by law, and (C) the Company has given Parent two business days' prior
notice of such action specifying the material terms of such Unsolicited
Proposal.
(d) Nothing herein shall prevent the Board of Directors of the
Company from taking, and disclosing to its stockholders, a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act, provided that
the Board of Directors of the Company shall not recommend that the stockholders
of the Company tender their shares in connection with any such tender offer
unless such recommendation is permitted by Section 8.09(c).
8.10 Advice of Changes; SEC Filings. The Company shall confer on a
regular basis with Parent on operational matters. Parent and the Company shall
promptly advise each other orally and in writing of any change or event that
has had, or could have, a Company Material Adverse Effect or a Parent Material
Adverse Effect, as the case may be. The Company and Parent shall promptly
provide each other (or their respective counsel) copies of all filings made by
such party with the SEC or any other Governmental Entity in connection with
this Agreement and the transactions contemplated hereby other than any filing
by the Company pursuant to the HSR Act or any Foreign Act.
8.11 Takeover Statutes. If any Takeover Statute is or may become
applicable to the transactions contemplated hereby or by the Inducement
Agreement, the Company's Board of Directors will grant such approvals and take
such actions as are necessary so that the transactions contemplated hereby and
thereby may be consummated as promptly as practicable on the terms contemplated
hereby and thereby and otherwise act to eliminate the effects of any Takeover
Statute on any of such transactions.
IX.
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) This Agreement and the transactions contemplated hereby shall
have been approved and adopted by the requisite vote of the holders of the
Company Stock, as provided in Section 3.6.
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(b) The waiting period and any other requirements applicable to
the consummation of the Merger under the HSR Act and the Foreign Acts shall
have expired or been terminated.
(c) The Form S-4 shall have become effective in accordance with
the provisions of the Securities Act. No stop order suspending the
effectiveness of the Form S-4 shall have been issued by the Commission and
remain in effect and all necessary approvals under state securities laws
relating to the issuance of the Parent Common Stock to be issued to
stockholders of the Company in connection with the Merger shall have been
obtained.
(d) No preliminary or permanent injunction or other order by any
federal or state court in the United States of competent jurisdiction which
prevents the consummation of the Merger shall have been issued and remain in
effect (each party agreeing to use all commercially reasonable efforts to have
any such injunction lifted).
(e) The Parent Common Stock to be issued to Company stockholders
in connection with the Merger shall have been approved for listing on the NYSE,
subject only to official notice of issuance.
9.2 Conditions to Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the additional following
conditions, unless waived by the Company:
(a) Parent and Sub shall have performed in all material respects
their agreements contained in this Agreement required to be performed on or
prior to the Effective Time, and the representations and warranties of Parent
and Sub contained in this Agreement shall be true and correct when made and on
and as of the Effective Time as if made on and as of such date (except to the
extent they relate to a particular date), except (i) as expressly contemplated
or permitted by this Agreement and (ii) with respect to representations and
warranties of Parent and Sub that are not subject to a Parent Material Adverse
Effect qualification, where the failure to be true and correct has not, and
would not have, either alone or in the aggregate with all such failures, a
Parent Material Adverse Effect. The Company shall have received a certificate
of the President and Chief Executive Officer or a Vice President of each of
Parent and Sub to that effect.
(b) The Company shall have received an opinion substantially in
the form attached hereto as Exhibit C-1, dated the date of Closing, from
Xxxxxx, Xxxxxxx & Xxxxxxx, based upon certificates from the Company
substantially in the form attached hereto as Exhibit D-1 and from Parent
substantially in the form attached hereto as Exhibit E-1 (and such other
assumptions, certificates, and certifications as are customary or reasonably
necessary in connection therewith), to the effect that the Merger will qualify
as a reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, such counsel may receive and rely upon representations
of fact contained in certificates as specified in the preceding sentence.
9.3 Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the additional
following conditions, unless waived by Parent:
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(a) The Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Time, and the representations and warranties of the Company
contained in this Agreement shall be true in all material respects when made
and on and as of the Effective Time as if made on and as of such date (except
to the extent they relate to a particular date), except (i) as expressly
contemplated or permitted by this Agreement and (ii) with respect to
representations and warranties of the Company that are not subject to a Company
Material Adverse Effect qualification, where the failure to be true and correct
has not, and would not have, either alone or in the aggregate with all such
failures, a Company Material Adverse Effect. Parent and Sub shall have
received a certificate of the President and Chief Executive Officer or a Vice
President of the Company to that effect.
(b) Parent shall have received an opinion substantially in the
form attached hereto as Exhibit C-2, dated the date of Closing, from Xxxxxx &
Xxxx, L.L.P., based upon certificates from the Company substantially in the
form attached hereto as Exhibit D-2 and from Parent substantially in the form
attached hereto as Exhibit E-2 (and such other assumptions, certificates, and
certifications as are customary or reasonably necessary in connection
therewith), to the effect that the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code. In rendering such opinion,
such counsel may receive and rely upon representations of fact contained in
certificates as specified in the preceding sentence.
X.
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, before or after approval by the stockholders of the Company, by the
mutual consent of Parent and the Company.
10.2 Termination by Either Parent or the Company. This Agreement
may be terminated and the Merger may be abandoned by action of the Board of
Directors of either Parent or the Company if (a) the Merger shall not have been
consummated by June 30, 1998, or (b) the approval of the Company's stockholders
required by Section 3.6 shall not have been obtained at a meeting duly convened
therefor or at any adjournment or postponement thereof, or (c) a court of
competent jurisdiction or a Governmental Entity with authority over such
matters shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and non- appealable; provided, that the party seeking
to terminate this Agreement pursuant to clause (c) above shall have used all
commercially reasonable efforts to remove such injunction, order or decree; and
provided, in the case of a termination pursuant to clause (a) above, that the
terminating party shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the failure to consummate the Merger.
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10.3 Other Termination Rights. (a) This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, by action of the Board of Directors of Parent, if the Board of Directors
of the Company shall have withdrawn or modified in a manner adverse to Parent
its approval or recommendation of this Agreement or the Merger or shall have
recommended an Alternative Proposal to the Company's stockholders.
(b) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by action of the Board of
Directors of the Company, if, in compliance with Section 8.9(c), the Board of
Directors of the Company shall have withdrawn or modified in a manner adverse
to Parent its approval or recommendation of this Agreement or the Merger or
shall have recommended an Alternative Proposal to the Company's stockholders.
(c) This Agreement may be terminated and the Merger may be
abandoned by the Company if the weighted average price of all transactions in
Parent Common Stock on the New York Stock Exchange, as reported on the
Bloomberg Financial Markets System (or an equivalent system), for the three
trading days immediately prior to the Closing Date is less than $45 per share
(as adjusted pursuant to Section 3.1(c), if applicable).
(d) This Agreement may be terminated and the Merger may be
abandoned by Parent at any time between April 29, 1998 and May 20, 1998, unless
(i) the Company's right to purchase the minority interests in Ferembal, on the
terms described in Schedule 5.17(b) of the Company Disclosure Schedule, has
been extended until at least June 30, 1998 or (ii) the Company has purchased
the minority interests in Ferembal on such terms.
10.4 Effect of Termination and Abandonment. (a) In the event that
(i) Parent shall have terminated this Agreement pursuant to Section 10.3(a) or
(ii) the Company shall have terminated this Agreement pursuant to Section
10.3(b), then, in either such case, the Company shall, concurrently with such
termination, pay Parent a fee of $7,000,000 (a "Termination Fee"), which amount
shall be payable by wire transfer of same day funds, and shall promptly
reimburse Parent for all substantiated out-of-pocket costs and expenses
incurred by Parent in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, costs and expenses of
accountants, attorneys and financial advisors (collectively, "Expenses"), up to
an aggregate of $2,000,000. The Company acknowledges that the agreements
contained in this Section 10.4(a) are an integral part of the transactions
contemplated in this Agreement, and that, without these agreements, Parent and
Sub would not enter into this Agreement; accordingly, if the Company fails to
promptly pay the amount due pursuant to this Section 10.4(a), and, in order to
obtain such payment, Parent or Sub commences a suit which results in a judgment
against the Company for the fee and expenses set forth in this Section 10.4(a),
the Company shall pay to Parent its costs and expenses (including attorneys'
fees) in connection with such suit.
(b) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article X, all obligations of the
parties hereto shall terminate, except the obligations of the parties pursuant
to this Section 10.4 and Section 11.3 and except for the provisions of Sections
11.5, 11.6, 11.7, 11.8, 11.9, 11.10, 11.11, 11.12, 11.13 and 11.14. Moreover,
in the event of termination of this Agreement pursuant to Section 10.2, nothing
herein
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shall prejudice the ability of the non-breaching party from seeking 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.
XI.
MISCELLANEOUS
11.1 Non-Survival of Representations, Warranties and Agreements.
All representations and warranties set forth in this Agreement shall terminate
at the Effective Time. All covenants and agreements set forth in this
Agreement shall survive in accordance with their terms.
11.2 Notices. All notices or other communications under this
Agreement shall be in writing and shall be given by delivery (and shall be
deemed to have been duly given upon delivery) in person, by cable, telegram,
telex or other standard form of telecommunications, or by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Company:
Continental Can Company, Inc.
000 Xxxxxxx 0 Xxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx-Xxxx, Esq.
Telecopy No. (000) 000-0000
If to Parent or Sub:
Suiza Foods Corporation
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
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With a copy to:
Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxXxxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address as any party may have furnished to the other parties
in writing in accordance with this Section.
11.3 Fees and Expenses. Whether or not the Merger is consummated,
except as provided in Section 10.4, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses, whether or not
the Merger is consummated; provided, however, that the allocable share of
Parent and Sub on the one hand and the Company on the other hand for all
expenses related to printing, filing and mailing the Form S-4 and the Proxy
Statement/Prospectus and all Commission and other regulatory filing fees
(including those related to the HSR Act and the Foreign Acts) incurred in
connection with the Form S-4 and the Proxy Statement/Prospectus shall be
one-half each.
11.4 Publicity. So long as this Agreement is in effect, Parent,
Sub and the Company agree to consult with each other in issuing any press
release or otherwise making any public statement with respect to the
transactions contemplated by this Agreement, and none of them shall issue any
press release or make any public statement prior to such consultation, except
as may be required by law or by obligations pursuant to any listing agreement
with the NYSE.
11.5 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
11.6 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. 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, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement; provided that
the third parties referenced in Sections 8.5 and 8.6 shall be third-party
beneficiaries of Parent's agreement contained in such Sections.
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11.7 Entire Agreement. This Agreement, the Exhibits, the Company
Disclosure Schedule, the Parent Disclosure Schedule, the Non-Disclosure
Agreement and any documents delivered by the parties in connection herewith and
therewith 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. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.
11.8 Amendment. This Agreement may be amended by the parties
hereto, by action taken by their respective Boards of Directors, at any time
before or after approval of matters presented in connection with the Mergers by
the stockholders of the Company and Parent, but after any such stockholder
approval, no amendment shall be made which by law requires the further approval
of stockholders without obtaining such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
11.9 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.
11.10 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.
11.11 Headings and Table of Contents. Headings of the Articles and
Sections of this Agreement and the Table of Contents are for the convenience of
the parties only, and shall be given no substantive or interpretive effect
whatsoever.
11.12 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.
11.13 Waivers. At any time prior to the Effective Time, the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
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 or in any documents delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party. Except as provided in this Agreement,
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. The waiver by
any party hereto of a breach of any provision
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hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
11.14 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.
11.15 Subsidiaries. As used in this Agreement, the word
"subsidiary" when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, of which such party
directly or indirectly owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization, or any organization of which
such party is a general partner.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunder duly authorized
all as of the date first written above.
SUIZA FOODS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx, Chairman of the Board and
Chief Executive Officer
CC ACQUISITION CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx, Chairman of the Board and
Chief Executive Officer
CONTINENTAL CAN COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx, Chairman of the Board
and Chief Executive Officer
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