EXHIBIT 2.01
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VIVENDI
EAU ACQUISITION CORP.
AND
UNITED STATES FILTER CORPORATION
DATED AS OF
MARCH 22, 1999
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER
SECTION 1.1 The Offer............................................. 2
SECTION 1.2 Company Actions....................................... 4
SECTION 1.3 Directors............................................. 5
ARTICLE II
THE MERGER
SECTION 2.1 The Merger............................................ 6
SECTION 2.2 Effective Time........................................ 6
SECTION 2.3 Effects of the Merger................................. 6
SECTION 2.4 Certificate of Incorporation and By-Laws
of the Surviving Corporation.......................... 6
SECTION 2.5 Directors............................................. 7
SECTION 2.6 Officers.............................................. 7
SECTION 2.7 Conversion of Common Shares........................... 7
SECTION 2.8 Conversion of Purchaser Common Stock.................. 7
SECTION 2.9 Options; Stock Plans.................................. 7
SECTION 2.10 Stockholders'Meeting.................................. 8
SECTION 2.11 Merger Without Meeting of Stockholders................ 9
SECTION 2.12 Closing............................................... 9
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 Dissenting Shares..................................... 9
SECTION 3.2 Payment for Common Shares............................. 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1 Organization and Qualification; Subsidiaries.......... 11
SECTION 4.2 Charter; By-Laws and Rights Agreement................. 11
SECTION 4.3 Capitalization; Subsidiaries.......................... 12
SECTION 4.4 Authority............................................. 13
SECTION 4.5 No Conflict; Required Filings and Consents............ 13
SECTION 4.6 SEC Reports and Financial Statements.................. 14
SECTION 4.7 Environmental Matters................................. 15
SECTION 4.8 Compliance with Applicable Laws....................... 16
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SECTION 4.9 Litigation............................................ 16
SECTION 4.10 Information........................................... 16
SECTION 4.11 Certain Approvals..................................... 17
SECTION 4.12 Employee Benefit Plans................................ 17
SECTION 4.13 Intellectual Property................................. 20
SECTION 4.14 Taxes................................................. 20
SECTION 4.15 Absence of Certain Changes............................ 21
SECTION 4.16 Labor Matters......................................... 21
SECTION 4.17 Rights Agreement...................................... 22
SECTION 4.18 Brokers............................................... 22
SECTION 4.19 Opinion of Financial Advisor.......................... 22
SECTION 4.20 Material Contracts.................................... 22
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
SECTION 5.1 Organization and Qualification........................ 23
SECTION 5.2 Authority............................................. 24
SECTION 5.3 No Conflict; Required Filings and Consents............ 24
SECTION 5.4 Information........................................... 25
SECTION 5.5 Financing............................................. 25
SECTION 5.6 Stock Ownership....................................... 25
SECTION 5.7 Purchaser's Operations................................ 25
ARTICLE VI
COVENANTS
SECTION 6.1 Conduct of Business of the Company.................... 26
SECTION 6.2 Access to Information................................. 29
SECTION 6.3 Efforts............................................... 29
SECTION 6.4 Public Announcements.................................. 30
SECTION 6.5 Employee Benefit Arrangements......................... 30
SECTION 6.6 Indemnification....................................... 31
SECTION 6.7 Notification of Certain Matters....................... 32
SECTION 6.8 Rights Agreement...................................... 33
SECTION 6.9 State Takeover Laws................................... 33
SECTION 6.10 No Solicitation....................................... 33
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions............................................ 34
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ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 Termination........................................... 35
SECTION 8.2 Effect of Termination................................. 36
SECTION 8.3 Fees and Expenses..................................... 37
SECTION 8.4 Amendment............................................. 37
SECTION 8.5 Extension; Waiver..................................... 38
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Non-Survival of Representations and Warranties........ 38
SECTION 9.2 Entire Agreement; Assignment.......................... 38
SECTION 9.3 Validity.............................................. 39
SECTION 9.4 Notices............................................... 39
SECTION 9.5 Governing Law......................................... 40
SECTION 9.6 Descriptive Headings.................................. 40
SECTION 9.7 Counterparts.......................................... 40
SECTION 9.8 Parties in Interest................................... 40
SECTION 9.9 Certain Definitions................................... 40
SECTION 9.10 Specific Performance.................................. 41
SECTION 9.11 Jurisdiction.......................................... 41
Signatures............................................................. 43
ANNEX I Conditions to the Offer
ANNEX II-A List of Parties to Support Agreements
ANNEX II-B Forms of Support Agreements
ANNEX III Forms of Employment Agreements
ANNEX IV Form of Company Stock Option Agreement
Attachment 1 Form of FIRPTA Certificate
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March
22, 1999, by and among VIVENDI, a SOCIETE ANONYME organized under the laws of
France ("Parent"), EAU ACQUISITION CORP., a Delaware corporation and a
subsidiary of Parent (the "Purchaser"), and UNITED STATES FILTER CORPORATION, a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the Purchaser
and the Company have approved the acquisition of the Company on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to this Agreement the Purchaser has agreed to
commence a tender offer (the "Offer") to purchase all of the outstanding shares
of the Company's common stock, par value $.01 per share (the "Common Shares"),
including the associated preferred share purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of November 27, 1998, between the
Company and The Bank of New York, as Rights Agent (the "Rights Agreement") (the
Common Shares, together with the Rights, are hereinafter referred to as the
"Shares"), at a price per Share of $31.50 net to the seller in cash (the "Offer
Price");
WHEREAS, the Board of Directors of the Company (the "Company Board")
has (i) approved the Offer and (ii) approved and adopted this Agreement,
declared its advisability and is recommending that the Company's stockholders
accept the Offer, tender their Shares to the Purchaser and approve and adopt
this Agreement;
WHEREAS, the respective Boards of Directors of the Purchaser and the
Company have approved and adopted the merger of the Purchaser with and into the
Company,
as set forth below (the "Merger"), in accordance with the General Corporation
Law of Delaware (the "GCL") and upon the terms and subject to the conditions set
forth in this Agreement, whereby each of the issued and outstanding Shares not
owned directly or indirectly by Parent, the Purchaser or the Company will be
converted into the right to receive the Offer Price in cash;
WHEREAS, as a condition and inducement to Parent's and the
Purchaser's willingness to enter into this Agreement, upon the execution and
delivery of this Agreement, the individuals and entities set forth in Annex II-A
are simultaneously entering into and delivering support agreements (the "Support
Agreements") in the forms attached hereto as Annex II-B;
WHEREAS, as a condition and inducement to Parent's and the
Purchaser's willingness to enter into this Agreement, the individuals set forth
on Annex II-A are simultaneously entering into and delivering the Employment
Agreements in the form of Annex III attached hereto;
WHEREAS, as a condition and inducement to Parent's and the
Purchaser's willingness to enter into this Agreement, the Purchaser and the
Company are simultaneously entering into and delivering the Company Stock Option
Agreement in the form of Annex IV attached hereto;
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the acquisition of the Company by Parent
and the Purchaser upon the terms and subject to the conditions set forth herein;
and
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII hereof and none of the events set forth in Annex I
hereto (the "Tender Offer Conditions") shall have occurred, as promptly as
practicable but in no event later than the fifth business day from the date of
this Agreement, Parent shall cause the Purchaser to, and the Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (including the rules and regulations promulgated thereunder,
the "Exchange Act")) the Offer to purchase all outstanding Shares at the Offer
Price and shall file all necessary documents with the Securities and Exchange
Commission (the "SEC") in connection with the Offer (together with any
amendments or supplements to the "Offer Documents"). The Offer shall remain open
until at least the twentieth business day after the commencement of the Offer.
Purchaser shall disseminate to holders of Common Shares the Offer Documents to
the extent required by law. The obligation of the Purchaser to accept for
payment or pay for any Shares tendered pursuant thereto will be subject only to
the satisfaction of the conditions set forth in Annex I hereto.
(b) Without the prior written consent of the Company, the Purchaser
shall not decrease the Offer Price or change the form of consideration payable
in the Offer, decrease the number of Shares sought to be purchased in the Offer,
impose additional conditions to the Offer or amend any other term of the Offer
in any manner adverse to the holders of Shares or reduce the time period during
which the Offer shall remain open. Subject to the terms of the Offer and this
Agreement and the satisfaction or waiver of all the Tender Offer Conditions as
of any expiration date, the Purchaser will accept for payment and pay for all
Shares validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after such expiration date of the Offer. Notwithstanding the
foregoing, the Purchaser shall be entitled to extend the Offer, if at the
initial expiration of the Offer, or any extension thereof, any condition to the
Offer is not satisfied or waived, and Parent agrees to cause the Purchaser to
extend the Offer up to 40 days in the aggre-
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gate, in one or more periods of not more than 10 business days, if, at the
initial expiration date of the Offer, or any extension thereof, any condition to
the Offer set forth in paragraphs (a), (b) or (g) of Annex I is not satisfied or
waived; provided, however, that the Purchaser shall not be required to extend
the Offer as provided in this sentence unless, in Parent's reasonable judgment,
(i) each such condition is reasonably capable of being satisfied and (ii) the
Company is in material compliance with all of its covenants under this
Agreement. In addition, without limiting the foregoing, the Purchaser may,
without the consent of the Company, if, on the expiration date of the Offer, the
Shares validly tendered and not withdrawn pursuant to the Offer are sufficient
to satisfy the Minimum Condition (as defined in Annex I hereto) but equal to
less than 90% of the outstanding Shares, extend the Offer for up to 15 business
days in the aggregate notwithstanding that all the conditions to the Offer have
been satisfied so long as Purchaser irrevocably waives the satisfaction of any
of the conditions to the Offer (other than those set forth in paragraphs (a),
(b) or (d) of Annex I) that subsequently may not be satisfied during any such
extension of the Offer. In addition, the Offer Price may be increased and the
Offer may be extended to the extent required by law in connection with such
increase in each case without the consent of the Company.
(c) Parent and the Purchaser represent that the Offer Documents will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, except
that no representation is made by Parent or the Purchaser with respect to
information supplied by the Company for inclusion in the Offer Documents. The
Company and its counsel shall be given an opportunity to review and comment on
the Offer Documents and any material amendments thereto prior to the filing
thereof with the SEC. Each of Parent and the Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to stockholders of the Company,
in each case, as and to the extent required by applicable federal securities
laws. Parent and Purchaser will provide the Company and its counsel with a copy
of any written comments or telephonic notification of any oral comments Parent
or Purchaser may received from the SEC or its staff with respect to the Offer
Documents promptly after receipt thereof and will provide the Company and its
counsel with a copy of any written responses and telephonic notification of any
oral responses of Parent, Purchaser or their counsel.
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SECTION 1.2 COMPANY ACTIONS. The Company shall file with the SEC
and mail to the holders of Common Shares, on the date of the filing by Parent
and the Purchaser of the Offer Documents, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "Schedule 14D-9") reflecting the recommendation of the Company
Board that holders of Shares tender their Shares pursuant to the Offer, and
shall disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under
the Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby
represents, that the Company Board, at a meeting duly called and held, has (i)
determined by unanimous vote of its directors present at the meeting at which
this Agreement was approved that the transactions contemplated hereby, including
each of the Offer and the Merger, are fair to and in the best interests of the
Company and its stockholders, (ii) approved the Offer and adopted this Agreement
and declared its advisability in accordance with the GCL, (iii) recommended
acceptance of the Offer and approval of this Agreement by the Company's
stockholders (if such approval is required by applicable law), and (iv) taken
all other action necessary to render Section 203 of the GCL and the Rights
inapplicable to the Offer, the Merger, the Company Stock Option Agreement and
the Support Agreements. The Company further represents that, prior to the
execution hereof, each of Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB") and X.X. Xxxxxx &
Co. Incorporated ("X.X. Xxxxxx") has delivered to the Company Board its written
opinion that the consideration to be received for the Shares pursuant to the
Offer and the Merger is fair to the Company's stockholders from a financial
point of view. The Company further represents and warrants that it has been
authorized by each of SSB and X.X. Xxxxxx to permit, subject to prior review and
consent by each of SSB and X.X. Xxxxxx, respectively (such consent not to be
unreasonably withheld), the inclusion of the respective fairness opinion (or a
reference thereto) in the Offer Documents and in the Schedule 14D-9. The Company
hereby consents to the inclusion in the Offer Documents of the recommendations
of the Company Board described in this Section 1.2(a).
(b) The Company represents that the Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser for inclusion in the Schedule 14D-9. Parent and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-9 and any material amendments thereto prior to the filing thereof with the
SEC. Each of the Company, on the one hand, and Parent and the Purchaser, on the
other hand, agree promptly to correct any information provided by either of them
for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of Shares, in each case, as and to the extent
required by applicable federal securities law. The Company will provide Parent,
Purchaser and their counsel with a copy of any written comments or telephonic
notification of any oral comments the Company may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt thereof and
will provide Parent, Purchaser and their counsel with a copy of any written
responses and telephonic notification of any oral responses of the Company or
its counsel.
(c) In connection with the Offer, the Company will promptly furnish
the Purchaser with mailing labels, security position listings, any non-objecting
beneficial owner lists and any available listing or computer list containing the
names and addresses of the record holders of
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the Shares as of the most recent practicable date and shall furnish the
Purchaser with such additional information (including, but not limited to,
updated lists of holders of Shares and their addresses, mailing labels and lists
of security positions and non-objecting beneficial owner lists) and such other
assistance as the Purchaser or its agents may reasonably request in
communicating the Offer to the Company's record and beneficial stockholders.
SECTION 1.3 DIRECTORS.
(a) Subject to compliance with applicable law, promptly upon the
payment by the Purchaser for the Shares pursuant to the Offer and from time to
time thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number provided, however, that the Purchaser shall
not be entitled to designate any members to the Company Board without owning a
majority of the Shares, on the Company Board as is equal to the product of the
total number of directors on the Company Board (determined after giving effect
to the directors elected pursuant to this sentence) multiplied by the percentage
that the aggregate number of Shares beneficially owned by Parent or its
affiliates bears to the total number of Shares then outstanding, and the Company
shall, upon request of Parent, promptly take all actions necessary to cause
Parent's designees to be so elected, including, if necessary, seeking the
resignations of one or more existing directors; PROVIDED, HOWEVER, that prior to
the Effective Time (as defined herein), the Company Board shall always have at
least two members who are neither officers, directors or designees of the
Purchaser or any of its affiliates ("Purchaser Insiders") (including at least
two members who are "independent directors" for purposes of the rules of the New
York Stock Exchange). If the number of directors who are not Purchaser Insiders
is reduced below two prior to the Effective Time, the remaining director who is
not a Purchaser Insider shall be entitled to designate a person to fill such
vacancy who is not a Purchaser Insider and who shall be a director not deemed to
be a Purchaser Insider for all purposes of this Agreement.
(b) The Company's obligations to appoint Parent's designees to the
Company Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 thereunder. The Company shall promptly take all actions required pursuant
to such Section and Rule in order to fulfill its obligations under this Section
1.3 and shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under such Section and
Rule in order to fulfill its obligations under this Section 1.3. Parent will
supply any information with respect to itself and its officers, directors and
affiliates required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.3 and prior to the Effective Time (as defined
herein), if any of the directors of the Company then in office are not Purchaser
Insiders, any amendment or termination of this Agreement by the Company, any
extension of time for performance of any of the obligations of Parent or the
Purchaser hereunder, any waiver of any condition or any of the Company's rights
hereunder or other action by the Company hereunder adversely affecting the
rights of the minority stockholders of the Company, will require the concurrence
of a majority of such directors.
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ARTICLE II
THE MERGER
SECTION 2.1 THE MERGER. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the GCL, at the Effective Time the
Purchaser shall be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation").
SECTION 2.2 EFFECTIVE TIME. As soon as practicable after the
satisfaction of the conditions set forth in Sections 7.1(a) and 7.1(b), but
subject to Sections 7.1(c) and 7.1(d), the Company shall execute, in the manner
required by the GCL, and deliver to the Secretary of State of the State of
Delaware a duly executed certificate of merger, and the parties shall take such
other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time."
SECTION 2.3 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in the GCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and the Purchaser shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.4 CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE
SURVIVING CORPORATION.
(a) The Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) Subject to the provisions of Section 6.6 of this Agreement, the
By-Laws of the Purchaser in effect at the Effective Time shall be the By-Laws of
the Surviving Corporation until amended in accordance with the provisions
thereof and applicable law.
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SECTION 2.5 DIRECTORS. Subject to applicable law, the directors of
the Purchaser immediately prior to the Effective Time, as well as Xx. Xxxxxxx X.
Xxxxxxxx shall be the initial directors of the Surviving Corporation and shall
hold office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal.
SECTION 2.6 OFFICERS. The officers of the Company immediately prior
to the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.7 CONVERSION OF COMMON SHARES. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
each Common Share issued and outstanding immediately prior to the Effective Time
(other than (i) any Common Shares held by Parent, the Purchaser, any wholly
owned subsidiary of Parent or the Purchaser, in the treasury of the Company or
by any wholly owned subsidiary of the Company, which Common Shares, by virtue of
the Merger and without any action on the part of the holder thereof, shall be
cancelled and retired and shall cease to exist with no payment being made with
respect thereto and (ii) Dissenting Shares (as defined herein)), shall be
cancelled and retired and shall be converted into the right to receive $31.50 in
cash (the "Merger Price"), payable to the holder thereof, without interest
thereon, upon surrender of the certificate formerly representing such Common
Share.
SECTION 2.8 CONVERSION OF PURCHASER COMMON STOCK. The Purchaser has
outstanding 100 shares of common stock, par value $.01 per share, all of which
are entitled to vote with respect to approval of this Agreement. At the
Effective Time, each share of common stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and
non-assessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
SECTION 2.9 OPTIONS; STOCK PLANS. Prior to the consummation of the
Offer, the Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and take all other actions necessary or desirable
(including obtaining all applicable consents from optionees) to provide for the
cancellation, effective at the Effective Time, of all of the outstanding stock
options (the "Options") heretofore granted under any stock option or similar
plan of the Company (the "Stock Plans") or under any agreement, without any
payment therefor except as otherwise provided in this Section 2.9. Immediately
prior to the Effective Time, all Options (whether vested or unvested) which are
listed in Section 2.9 of the disclosure schedule delivered to Parent by the
Company prior to the date hereof (the "Company Disclosure Schedule"), which list
includes all outstanding Options, shall be canceled, to the extent such Options
remain outstanding as of immediately prior to the Effective Time (and to the
extent exercisable shall no longer be exercisable) and shall entitle each holder
thereof, in cancellation and settlement therefor, to a payment, if any, in cash
by the Company (less any applicable withholding taxes), as soon as practicable
following the Effective Time, equal to the product of (i) the total number of
Common Shares subject to such Option (without regard to whether such Option was
vested or unvested) and (ii) the excess, if any, of the Merger Price over the
exercise price per Share subject to such Option (the "Cash Payments"); PROVIDED
that no such payment shall be due until following such time that the Company has
delivered to Parent a true and complete list of the Options which remained
outstanding as of immediately prior to the Effective Time. The Company
represents and warrants that the Company Board has taken all necessary action to
terminate the 1991 Employee Stock Option Plan, the 1991 Director Stock Option
Plan, as amended, and the 1998 Stock Incentive Plan, and all other Stock Plans
and any other plan, program or arrangement providing for the issuance or grant
of any other interest in respect of the capital stock of the Company or any
subsidiary in each case effective prior to the Effective Time; PROVIDED,
HOWEVER, that with respect to any employment agreements that provide for grants
of Options, the Company will
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take such necessary action prior to the Effective Time. The Company and the
Parent agree that the Cash Payments are the sole payments that will be made with
respect to or in relation to the Options. The Company may take all such steps as
may be required to cause the transactions contemplated by this Section 2.9 and
any other dispositions of Company equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of the Company to be exempt under Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended, such steps to be taken in
accordance with the No-Action Letter dated January 12, 1999, issued by the SEC
to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
SECTION 2.10 STOCKHOLDERS' MEETING.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through the Company Board, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as practicable
following the acceptance for payment of and payment for Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking
action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to this Agreement, and use its reasonable efforts (A) to obtain
and furnish the information required to be included by the SEC in the Proxy
Statement (as hereinafter defined) and, after consultation with Parent, to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy statement and cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and (B) to obtain the
necessary approvals of the Merger and adoption of this Agreement by its
stockholders; and
(iii) include in the Proxy Statement the recommendation of
the Company Board that stockholders of the Company vote in favor of the
approval of the Merger and adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, the Purchaser or any of its other subsidiaries in favor
of the approval of the Merger and of this Agreement. Parent agrees that it will
not transfer, sell or assign any of the shares of the Purchaser prior to the
Effective Date.
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SECTION 2.11 MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding
Section 2.10, in the event that the Purchaser shall acquire at least 90% of the
outstanding Shares pursuant to the Offer, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after the acceptance for payment of and payment for
Shares by the Purchaser pursuant to the Offer without a meeting of stockholders
of the Company, in accordance with Section 253 of the GCL.
SECTION 2.12 CLOSING. The closing of the Merger (the "Closing")
shall take place at 10:00 a.m., on a date to be specified by the parties, which
shall be as soon as practicable, but in no event later than the third business
day, after satisfaction or waiver of all of the conditions set forth in Article
VII hereof (the "Closing Date"), at the offices of Wachtell, Lipton, Xxxxx &
Xxxx, unless another date or place is agreed to in writing by the parties
hereto.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 DISSENTING SHARES. Notwithstanding Section 2.7, Common
Shares outstanding immediately prior to the Effective Time and held by a holder
who has not voted in favor of the Merger or consented thereto in writing and who
has demanded appraisal for such Common Shares in accordance with the GCL
("Dissenting Shares") shall not be converted into a right to receive the Merger
Price, unless such holder fails to perfect or withdraws or otherwise loses such
holder's right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses such holder's right to appraisal, such Common
Shares shall be treated as if they had been converted as of the Effective Time
into a right to receive the Merger Price. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Common Shares,
and Parent shall have the right to conduct all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to, or settle or offer to
settle, or otherwise negotiate, any such demands.
-9-
SECTION 3.2 PAYMENT FOR COMMON SHARES.
(a) From and after the Effective Time, such bank or trust company
as shall be mutually acceptable to Parent and the Company shall act as paying
agent (the "Paying Agent") in effecting the payment of the Merger Price in
respect of certificates (the "Certificates") that, prior to the Effective Time,
represented Shares entitled to payment of the Merger Price pursuant to Section
2.7.
(b) At the Effective Time, Parent or the Purchaser shall deposit, or
cause to be deposited, in trust with the Paying Agent the aggregate Merger Price
to which holders of Shares shall be entitled at the Effective Time pursuant to
Section 2.7. Promptly after the Effective Time, the Paying Agent shall mail to
each record holder of Certificates a form of letter of transmittal which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent and instructions for use in surrendering such Certificates and
receiving the Merger Price in respect thereof. Upon the surrender of each such
Certificate, the Paying Agent shall pay the holder of such Certificate the
Merger Price multiplied by the number of Shares formerly represented by such
Certificate, in consideration therefor, and such Certificate shall forthwith be
cancelled. Until so surrendered, each such Certificate (other than Certificates
representing Shares held by Parent or the Purchaser, any wholly owned subsidiary
of Parent or the Purchaser, in the treasury of the Company or by any wholly
owned subsidiary of the Company or Dissenting Shares) shall represent solely the
right to receive the aggregate Merger Price relating thereto. No interest or
dividends shall be paid or accrued on the Merger Price. If the Merger Price (or
any portion thereof) is to be delivered to any person other than the person in
whose name the Certificate surrendered is registered, it shall be a condition to
such right to receive such Merger Price that the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the person surrendering such Shares shall pay to the Paying Agent any transfer
or other taxes required by reason of the payment of the Merger Price to a person
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such taxes have been paid
or are not applicable.
(c) Promptly following the date which is 180 days after the effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in consideration therefor the aggregate Merger Price
relating thereto, without any interest or dividends thereon. Notwithstanding the
foregoing, none of Parent, the Purchaser, the Company or the Paying Agent shall
be liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered immediately prior to such date on
which any payment pursuant to this Article III would otherwise escheat to or
become the property of any Governmental Entity (as hereinafter defined), the
cash payment in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any person previously entitled thereto.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Common Shares which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Paying Agent, they shall be surrendered and cancelled in return for the payment
of the aggregate Merger Price relating thereto, as provided in this Article III.
-10-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser,
except as set forth by specific reference to the applicable Section of this
Article IV in the Company Disclosure Schedule (as hereinafter defined), as
follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's significant
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The Company
and each of its significant subsidiaries has the requisite corporate power and
authority to own, operate or lease its properties and to carry on its business
as it is now being conducted, and is duly qualified or licensed to do business,
and is in good standing, in each jurisdiction in which the nature of its
business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on the Company. The term
"Material Adverse Effect on the Company," as used in this Agreement, means any
change in or effect on the business, financial condition, results of operation
or prospects of the Company or any of its subsidiaries that could reasonably be
expected to have a material adverse effect on the Company and its subsidiaries
taken as a whole or could reasonably be expected to prevent or delay
consummation of the Offer or the Merger.
SECTION 4.2 CHARTER; BY-LAWS AND RIGHTS AGREEMENT. The Company has
heretofore made available to Parent and the Purchaser a complete and correct
copy of the certificate of incorporation and the by-laws or comparable
organizational documents, each as amended to the date hereof, of the Company and
each of its domestic subsidiaries and has made available a complete and correct
copy of the Rights Agreement as amended through the date hereof.
-11-
SECTION 4.3 CAPITALIZATION; SUBSIDIARIES. The authorized capital
stock of the Company consists of 300,000,000 Common Shares and 3,000,000 shares
of Preferred Stock, par value $.10 per share (the "Preferred Stock") of which
300,000 shares are designated Series A Junior Participating Preferred Stock, par
value $.10 per share (the "Junior Preferred Stock"). As of the close of business
on March 20, 1999, 182,027,902 Common Shares were issued and outstanding, all of
which are entitled to vote on this Agreement, and 119,129 Common Shares were
held in treasury. As of the close of business on March 20, 1999 there were no
shares of Preferred Stock issued and outstanding. The Company has no shares
reserved for issuance, except that, as of March 20, 1999, there were 14,626,972
Common Shares reserved for issuance pursuant to outstanding Options granted
under the Stock Plans there were 1,231,050 Common Shares reserved for issuance
pursuant to outstanding warrants and 300,000 shares of Junior Preferred Stock
reserved for issuance upon exercise of the Rights. Section 4.3 of the Company
Disclosure Schedule sets forth the holders of all outstanding Options and the
number, exercise prices and expiration dates of each grant to such holders.
Except as set forth in Section 4.3 of the Company Disclosure Schedule, since
December 31, 1998, the Company has not granted any Options or issued any shares
of capital stock except pursuant to the exercise of Options outstanding as of
such date. All the outstanding Common Shares are, and all Common Shares which
may be issued pursuant to the exercise of outstanding Options will be, when
issued and paid for in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and nonassessable and are not subject to,
nor were they issued in violation of, any preemptive rights. Except as set forth
in Section 4.3 of the Company Disclosure Schedule, there are no bonds,
debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its subsidiaries issued and outstanding. Except as set forth above or
in Section 4.3 of the Company Disclosure Schedule or for the Rights and except
for the transactions contemplated by this Agreement, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or unissued
capital stock of the Company or any of its subsidiaries, obligating the Company
or any of its subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any of its subsidiaries or securities
convertible into or exchangeable for such shares or equity interests and neither
the Company nor any of its subsidiaries is obligated to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except as contemplated by this Agreement or the
Rights Agreement, there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Common Shares or the capital stock of the Company or any of its
subsidiaries. Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable (except, in the case of foreign subsidiaries, for immaterial
failures to be such), and such shares of the Company's subsidiaries are owned by
the Company or by a subsidiary of the Company in each case free and clear of any
lien, claim, option, charge, security interest, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien"). Set forth in
Section 4.3 of the Company Disclosure Schedule is a complete and correct list of
each domestic subsidiary (direct or indirect) of the Company, each material
foreign subsidiary (direct or indirect) of the Company and any joint ventures or
partnerships in which the Company or any of its subsidiaries has an interest
(and the amount and percentage of any such interest). No entity in which the
Company or any of its subsidiaries owns, directly or indirectly, less than a 50%
equity interest is, individually or when taken together with all such other
entities, material to the business of the Company and its subsidiaries taken as
a whole.
-12-
SECTION 4.4 AUTHORITY. The Company has all necessary corporate
power and authority to execute and deliver this Agreement and the Company Stock
Option Agreement and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Company Stock
Option Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by the Company Board and no other corporate proceedings
on the part of the Company are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby and thereby (other than,
with respect to the Merger, the approval of this Agreement by the affirmative
vote of the holders of a majority of the then outstanding Shares entitled to
vote thereon, to the extent required by applicable law). Each of this Agreement
and the Company Stock Option Agreement has been duly and validly executed and
delivered by the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement and the Company Stock Option Agreement
by Parent and the Purchaser (to the extent Parent or Purchaser is a party
thereto), constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
SECTION 4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming (i) the filings required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended and the rules and regulations
thereunder (the "HSR Act") are made and the waiting periods thereunder have been
terminated or have expired, (ii) the requirements of the Exchange Act and any
applicable state securities, "blue sky" or takeover law are met, (iii) the
filing of the certificate of merger and other appropriate merger documents, if
any, as required by the GCL, is made, (iv) approval of this Agreement by the
holders of a majority of the Common Shares, if required by the GCL, is received,
and (v) the filings required under the competition and foreign investment and
other applicable laws, each as set forth on Section 4.5(b) of the Company
Disclosure Schedule, and the approvals and consents thereunder have been
obtained (or waiting periods thereunder have been terminated or have expired),
none of the execution and delivery of this Agreement by the Company, the
consummation by the Company of the transactions contemplated hereby or
compliance by the Company with any of the provisions hereof will (i) conflict
with or violate the Certificate of Incorporation or By-Laws of the Company or
the comparable organizational documents of any of its material subsidiaries,
(ii) except as disclosed on Section 4.5(a) of the Company Disclosure Schedule,
result in a breach or violation of, a default under or the triggering of any
payment or the increase in any other obligations pursuant to, any of the
Company's existing Employee Benefit Arrangements (as hereinafter defined) or any
grant or award made under any of the foregoing, (iii) conflict with or violate
any statute, ordinance, rule, regulation, order, judgment, decree, permit or
license applicable to the Company or any of its subsidiaries, or by which any of
them or any of their respective properties or assets may be bound or affected,
or (iv) except as set forth in Section 4.5 of the Company Disclosure Schedule,
require the consent from or the giving of notice to a third party pursuant to,
result in a violation or breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in any loss of any benefit, the triggering of any payment by, or the
increase in any other obligation of, the Company or any of its subsidiaries or
the creation of any material Lien on any of the property or assets of the
Company or any of its subsidiaries (any of the foregoing referred to in clause
(ii), (iii) or this clause (iv) being a "Violation") pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise Plan (as defined in Section 4.13), or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties may be
bound or affected, except in the case of (ii), (iii) and (iv) for any of the
foregoing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company or a material adverse
effect on the ability of the parties to consummate the Offer or the Merger.
(b) None of the execution and delivery of this Agreement or the
Company Stock Option Agreement by the Company, the consummation by the Company
of the transactions contemplated hereby or thereby or compliance by the Company
with any of the provisions hereof or thereof will require any consent, waiver,
approval, authorization or permit of, or registration or filing with or
notification to (any of the foregoing with respect to any Governmental Entity
(as hereinafter defined) or any other third party being a "Consent"), any
government or subdivision thereof, domestic or foreign (including supranational)
or any administrative, governmental, legislative or regulatory authority,
agency, commission, tribunal, court or body, domestic or foreign (including
supranational) (a "Governmental Entity"), except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a certificate of
merger pursuant to the GCL, (iii) compliance with the HSR Act, (iv) such
filings, authorizations, orders and approvals, if any, as set forth on Section
4.5(b) of the Company Disclosure Schedule, as are required under foreign laws or
(v) where the failure to obtain such consent, approval, authorization or permit,
or to make such filing or notification, would not, individually or in the
aggregate, reasonably be expected to (i) have a Material Adverse Effect on the
Company, (ii) impair in any material respect the ability of the Company to
perform its obligations hereunder or (iii) prevent or materially delay
consummation of the transactions contemplated hereby.
-13-
SECTION 4.6 SEC REPORTS AND FINANCIAL STATEMENTS.
(a) The Company and its subsidiaries have filed with the SEC all
forms, reports, schedules, registration statements and definitive proxy
statements required to be filed by them with the SEC since March 31, 1996 (as
amended since the time of their filing and prior to the date hereof,
collectively, the "SEC Reports"). As of their respective dates, the SEC Reports
(including, but not limited to, any financial statements or schedules included
or incorporated by reference therein) complied in all material respects with the
requirements of the Exchange Act or the Securities Act of 1933, as amended,
including the rules and regulations of the SEC promulgated thereunder (the
"Securities Act") applicable, as the case may be, to such SEC Reports, and none
of the SEC Reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(b) The (i) consolidated balance sheets as of March 31, 1998 (the
"3/31/98 Balance Sheet") and March 31, 1997 and the consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended March 31, 1998 (including the related notes and schedules
thereto) of the Company contained in the Company's Form 10-K for the fiscal year
ended March 31, 1998 as amended or restated prior to the date hereof and (ii)
the unaudited consolidated balance sheet as of December 31, 1998 and the
unaudited consolidated statements of operations, stockholders' equity and cash
flows for the three- and nine-month periods ended December 31, 1998 of the
Company contained in the Company's Form 10-Q for the three-month period ended
December 31, 1998 present fairly in all material respects the consolidated
financial position and the consolidated results of operations and cash flows of
the Company and its subsidiaries as of the dates or for the periods presented
therein and were prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied during the periods involved
(except as set forth in the notes contained therein and subject, in the case of
unaudited statements, to recurring audit adjustments normal in nature and
amount).
(c) Except as reflected in the SEC Reports or reserved against in
the 12/31/98 Balance Sheet or as set forth in Section 4.6(c) of the Company
Disclosure Schedule, as of the date hereof, neither the Company nor any of its
subsidiaries have any material liabilities or obligations (absolute, accrued,
fixed, contingent or otherwise), other than liabilities incurred in the ordinary
course of business consistent with past practice since the date of the 12/31/98
Balance Sheet.
(d) The Company has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications which have not yet been filed
with the SEC (but which it would or will be required to file with the SEC) to
agreements, documents or other instruments which previously had been filed by
the Company with the SEC pursuant to the Securities Act or the Exchange Act.
-14-
SECTION 4.7 ENVIRONMENTAL MATTERS. Except as set forth in the
Company Disclosure Schedule or except as disclosed in the SEC Reports or
otherwise would not have a Material Adverse Effect:
(a) the Company and its subsidiaries are and have been in compliance
in all respects with federal, state, local and foreign laws and regulations
relating to pollution, protection or preservation of human health or the
environment ("Environmental Laws") relating to the generation, storage,
containment, disposal, transport or handling of regulated levels of hazardous or
toxic materials, substances or wastes ("Hazardous Materials"), including
compliance with any environmental permits or similar governmental authorizations
or the terms and conditions thereof;
(b) there is no pending claim, investigation, order, or judicial or
administrative proceeding against the Company or any of its subsidiaries for any
violation of Environmental Laws or for investigation, remediation or clean up of
Hazardous Materials, or payment therefor, by any third party included in any
governmental authority, pursuant to any Environmental Law at any location owned
or operated by the Company or its subsidiaries, or at any location to which the
Company or any of its subsidiaries have sent Hazardous Materials; and
(c) there currently exist no facts or circumstances that could
reasonably be expected to (i) give rise to proceedings described in subsection
(b) above and (ii) prevent the renewal or reissuance, on terms reasonably
comparable to those in existence, or any permits or authorizations required for
the Company's operations under any Environmental Law as such laws currently
exist.
-15-
SECTION 4.8 COMPLIANCE WITH APPLICABLE LAWS. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities (the "Company Permits") required in order
to own their assets and to conduct their respective businesses as currently
conducted, except where the failure to hold such Company Permits, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits except where the failure to
comply would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. The operations of the Company and
its subsidiaries have been conducted in compliance with all applicable laws,
ordinances and regulations of any Governmental Entity, except violations which
will not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.9 LITIGATION. Except as reflected in the SEC Reports or
as set forth in Section 4.9 of the Company Disclosure Schedule, there is no
suit, claim, action, proceeding or investigation pending or, to the knowledge of
the Company, threatened, against the Company or any of its subsidiaries, which,
if adversely determined, could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Except as set forth
in Section 4.9 of the Company Disclosure Schedule, neither the Company nor any
of its subsidiaries is subject to any outstanding order, writ, injunction or
decree which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on the Company or could reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated
hereby.
SECTIN 4.10 INFORMATION. None of the information supplied by the
Company for inclusion or incorporation by reference in (i) the Offer Documents,
(ii) the Proxy Statement or (iii) any other document to be filed with the SEC or
any other Governmental Entity in connection with the transactions contemplated
by this Agreement (the "Other Filings") will, at the respective times filed with
the SEC or other Governmental Entity and, in addition, in the case of the Proxy
Statement, at the date it or any amendment or supplement is mailed to
stockholders, at the time of the Special Meeting and at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
statements made therein based on information supplied by Parent or the Purchaser
in writing specifically for inclusion in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act.
-16-
SECTION 4.11 CERTAIN APPROVALS. The Company Board has taken any
and all necessary and appropriate action to render inapplicable to the Offer,
the Merger and the transactions contemplated by this Agreement, the Company
Stock Option Agreement and the Support Agreements the provisions of Section 203
of the GCL. No other state takeover statute or similar domestic or foreign
statute or regulation applies or purports to apply to the Offer, the Merger or
the transactions contemplated by this Agreement, the Company Stock Option
Agreement, or the Support Agreements.
SECTION 4.12 EMPLOYEE BENEFIT PLANS.
(a) Section 4.12(a) of the Company Disclosure Schedule include s a
complete list of all material employee benefit plans, programs, agreements and
other arrangements providing benefits to any former, current or future employee,
officer or director of the Company or any of its subsidiaries or any beneficiary
or dependent thereof, whether or not written, and whether covering one person or
more than one person, sponsored or maintained by the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries contributes or
is obligated to contribute for the benefit of U.S. employees of the Company and
its subsidiaries ("Listed Plans"). Without limiting the generality of the
foregoing, the term "Listed Plans" includes all employee welfare benefit plans
within the meaning of Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended, and the regulations promulgated thereunder ("ERISA")
and all employee pension benefit plans within the meaning of Section 3(2) of
ERISA and all other material employee benefit, employment, bonus, incentive,
profit sharing, thrift, compensation, restricted stock, retirement, savings,
deferred compensation, stock purchase, stock option, termination, severance,
change in control, fringe benefit and other similar plans, programs, agreements
or arrangements. For purposes of this Agreement, the term "Plans" shall mean all
Listed Plans and all plans, programs, agreements and other arrangements which
would have been Listed Plans, if there were no materiality qualifier for the
definition of Listed Plans or if plans, programs, agreements and other
arrangements for non-U.S. employees of the Company and its subsidiaries (other
than employment agreements for non-U.S. employees that are not material) were on
the Company Disclosure Schedule.
(b) With respect to each Listed Plan, the Company has made available
to Parent a true, correct and complete copy of: (i) each writing constituting a
part of such Listed Plan, including, without limitation, all plan documents,
benefit schedules, trust agreements, and insurance contracts and other funding
vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying
schedule, if any; (iii) the current summary plan description (and any material
modification to such description), if any; (iv) the most recent annual financial
report, if any; (v) the most recent actuarial report, if any; and (vi) the most
recent determination letter from the Internal Revenue Service (the "IRS"), if
any. As soon as practicable following the date of this Agreement, the Company
will provide to Parent the foregoing information, if applicable, with respect to
the Plans that are not Listed Plans and a list of such Plans. Except as both
previously made available to Parent and set forth on the Company Disclosure
Plan, there are no material amendments to any Plan (or the establishment of any
new Plan) that have been adopted or approved nor has the Company or any of its
subsidiaries undertaken or committed to make any such amendments or to adopt or
approve any new Plans.
-17-
(c) Section 4.12(c) of the Company Disclosure Schedule identifies
each Listed Plan that is intended to be a "qualified plan" within the meaning of
Section 401(a) of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations thereunder (the "Code") ("Qualified Plans"). The IRS has
issued a favorable determination letter (or, with respect to standardized
prototype plans, an opinion letter) with respect to each Qualified Plan that has
not been revoked, and, to the Company's knowledge, there are no existing
circumstances nor any events that have occurred that could reasonably be
expected to adversely affect the qualified status of any Qualified Plan or the
related trust. No Plan is intended to meet the requirements of Section 501(c)(9)
of the Code. Except as disclosed on actuarial reports previously provided to
Parent, with respect to each Plan that is subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code, the fair market value of the assets of
such Plan equals or exceeds the actuarial present value of all accrued benefits
under such Plan (whether or not vested), based upon the actuarial assumptions
used to prepare the most recent actuarial report for such Plan and, to the
knowledge of the Company, no event has occurred which would be reasonably
expected to change any such funded status.
(d) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including but not
limited to ERISA and the Code. With respect to each Plan, no event has occurred
and there exists no condition or set of circumstances in connection with which
the Company could be subject to any liability that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
(e) With respect to each such multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") in which the Company,
any subsidiary or any ERISA Affiliate participates or has participated, (i) none
of the Company, any of its subsidiaries or any ERISA Affiliate has withdrawn,
partially withdrawn, or received any notice of any claim or demand for
withdrawal liability or partial withdrawal liability; (ii) none of the Company
nor any of its subsidiaries or any ERISA Affiliate has received any notice that
any such plan is in reorganization, that increased contributions may be required
to avoid a reduction in plan benefits or the imposition of any excise tax, or
that any such plan is or may become insolvent; (iii) none of the Company, any of
its subsidiaries or any ERISA Affiliate has failed to make any required
contributions; (iv) to the Company's knowledge, no such plan is a party to any
pending merger or asset or liability transfer; (v) to the Company's knowledge,
there are no PBGC proceedings against or affecting any such plan; and (vi) none
of the Company, any of its subsidiaries or any ERISA Affiliate has any
withdrawal liability by reason of a sale of assets pursuant to Section 4204 of
ERISA. With respect to each Multiemployer Plan, as of its last valuation date,
the amount of potential withdrawal liability of the Company, any of its
subsidiaries and any ERISA Affiliates would not reasonably be expected to have a
Material Adverse Effect. To the best knowledge of the Company, nothing has
occurred or is expected to occur that would materially increase the amount of
the total potential withdrawal liability for any such plan over the amount shown
in the Company Disclosure Schedule.
(f) Except as set forth in the Company's Disclosure Schedule, neither
the Company nor any of its subsidiaries has any liability for life, health,
medical or other welfare benefits to former employees or beneficiaries or
dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA at no expense to the
Company and its subsidiaries.
-18-
(g) There are no pending or, to the knowledge of the Company,
threatened claims (other than claims for benefits in the ordinary course),
lawsuits, arbitrations or other alternate dispute resolution proceedings which
have been asserted or instituted against the Plans, any fiduciaries thereof with
respect to their duties to the Plans or the assets of any of the trusts under
any of the Plans which could reasonably be expected to result in any liability
of the Company or any of its subsidiaries to any Plan participant or
beneficiary, the PBGC, the Department of Treasury, the Department of Labor or
any Multiemployer Plan.
(h) All Plans covering foreign employees of the Company or any of its
subsidiaries comply in all material respects with applicable local law
(including any qualification or registration requirements) and, to the extent
applicable, are fully funded and/or fully book reserved in accordance with
applicable law and GAAP.
(i) Other than as disclosed in the Company Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby or by the Company Stock Option Agreement or the
Support Agreements will (either alone or in conjunction with any other act)
result in, cause the accelerated vesting or delivery of, or increase the amount
or value of, any payment or benefit to any employee of the Company or any of its
subsidiaries, or to fund any "rabbi" trust or similar trust.
(j) Except as set forth in the Company Disclosure Schedule, no Plans
provide for the reimbursement of any excise taxes under Section 4999 of the
Code.
(k) Except as set forth on Section 4.12(k) of the Company Disclosure
Schedule, no employment agreement or stock option agreement between the Company
and any of its executive officers has been amended subsequent to December
31,1998.
-19-
SECTION 4.13 INTELLECTUAL PROPERTY.
(a) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company, the
Company owns or possesses adequate licenses or other valid rights to use all
Intellectual Property used in connection with the business of the Company as
currently conducted. As used herein "Intellectual Property" shall mean all
patents, patent applications, patent disclosures, assumed names, trade names,
trademarks, trademark registrations and trademark applications, service marks,
service xxxx registrations and service xxxx applications, certification marks,
certification xxxx registrations and certification xxxx applications,
copyrights, copyright registrations and copyright registration applications,
chip registrations and chip registration applications, both domestic and
foreign, which are owned by the Company or any of its subsidiaries and all
computer software (and related documentation), trade secrets, know-how,
industrial property, technology or other proprietary rights used or held for use
in connection with the business of the Company and its subsidiaries as currently
conducted.
(b) Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company, none of the
licenses which are part of the Intellectual Property is subject to termination
or cancellation or change in its terms or provisions as a result of this
Agreement or the transactions provided for in this Agreement.
(c) To the knowledge of the Company, no Person or entity is
infringing, or has misappropriated, any Intellectual Property.
(d) Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company, no claims with
respect to the Intellectual Property have been asserted or, to the best
knowledge of the Company, are threatened by any Person nor does the Company know
of any valid grounds for any claims (i) to the effect that the manufacture, sale
or use of any product or process or the furnishing of any service as previously
used, now used or offered or proposed for use or sale by the Company infringes
on any copyright, trade secret, patent, tradename or other intellectual property
right of any Person, (ii) against the use by the Company or any of its
subsidiaries of any Intellectual Property, or (iii) challenging the ownership,
validity or effectiveness of any Intellectual Property. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, all granted and issued patents and all registered
trademarks and service marks and all copyrights held by the Company or any of
its subsidiaries are valid, enforceable and subsisting.
SECTION 4.14 TAXES.
(a) The Company and each of its subsidiaries has duly filed (or has
had duly filed on their behalf) or will duly file or cause to be duly filed all
material federal, state, local and foreign income and other Tax Returns (as
hereinafter defined) required to be filed by it, and has duly paid or caused to
be paid all Taxes (as hereinafter defined) shown to be due on such Tax Returns
in respect of the periods covered by such Tax Returns and has made adequate
provision according to GAAP in the Company's financial statements for payment of
all Taxes in respect of all taxable periods or portions thereof ending on or
before the date hereof. Section 4.14 of the Company Disclosure Schedule lists
the periods through which the Tax Returns required to be filed by the Company or
its subsidiaries have been examined by the IRS or, to the Company's knowledge,
other appropriate taxing authority, or the periods during which the opportunity
for any assessments to be made by the IRS or, to the Company's knowledge, other
appropriate taxing authority has expired. All material deficiencies and
assessments asserted in writing as a result of such examinations or other audits
by federal, state, local or foreign taxing authorities have been paid, fully
settled or adequately provided for according to GAAP in the Company's financial
statements, and no issue or claim has been asserted or threatened in writing for
Taxes by any taxing authority for any prior period, other than those heretofore
paid or adequately provided for according to GAAP in the Company's financial
statements. Except as set forth in Section 4.14 of the Company Disclosure
Schedule, there are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any material Tax Return of the Company or any
of its subsidiaries. Except as set forth in Section 4.14 of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to any agreement, contract or arrangement that could result, separately or in
the aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code or that would not be deductible pursuant to
the terms of Section 162(a)(l), 162(m) or 162(n) of the Code. Except as set
forth in Section 4.14 of the Company Disclosure Schedule, neither the Company
nor any of its subsidiaries is a party to a material Tax sharing or Tax
indemnity agreement or any other agreement of a similar nature that remains in
effect.
(b) For purposes of this Agreement, the term "Taxes" means all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, excise, property, sales, use, transfer, license,
payroll, withholding, export, import, and customs duties, capital stock and
franchise taxes, imposed by the United States or any state, local or foreign
government or subdivision or agency thereof, including any interest, penalties
or additions thereto. For purposes of this Agreement, the term "Tax Return"
means any report, return or other information or document required to be
supplied to a taxing authority in connection with Taxes.
-20-
SECTION 4.15 ABSENCE OF CERTAIN CHANGES. Except as disclosed in
Section 4.15 of the Company Disclosure Schedule or the SEC Reports, since
December 31, 1998 through the date hereof (i) there has not been any Material
Adverse Effect on the Company or any event, development or circumstance which
could reasonably be expected to have a Material Adverse Effect on the Company;
and (ii) the businesses of the Company and its subsidiaries have been conducted
only in the ordinary course and in a manner consistent with past practice.
SECTION 4.16 LABOR MATTERS. No work stoppage involving the Company
or any of its subsidiaries is pending or, to the knowledge of the Company,
threatened and neither the Company nor any of its subsidiaries is involved in,
threatened with or affected by any labor dispute, arbitration, lawsuit or
administrative proceeding which would reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on the Company. Except as
disclosed in Section 4.16 of the Company Disclosure Schedule, none of the
employees of the Company or of any of its subsidiaries are represented by any
labor union or any collective bargaining organization and, to the best knowledge
of the Company, no labor union is attempting to organize employees of the
Company or any of its subsidiaries. There is no pending charge or complaint
against the Company or any of its subsidiaries by the National Labor Relations
Board or any comparable state agency.
-21-
SECTION 4.17 RIGHTSAGREEMENT. The Company and the Company Board
have taken all necessary action to amend the Rights Agreement (without redeeming
the Rights) so that (a) none of the execution or delivery of this Agreement, the
Company Stock Option Agreement and the Support Agreements, the making of the
Offer, the acquisition of Common Shares pursuant to the Offer under this
Agreement, the Company Stock Option Agreement and the Support Agreements, or the
consummation of the Merger will (i) cause any Rights issued pursuant to the
Rights Agreement to become exercisable or to separate from the stock
certificates to which they are attached, (ii) cause Parent, the Purchaser or any
of their Affiliates or Associates to be an Acquiring Person (as each such term
is defined in the Rights Agreement) or (iii) trigger other provisions of the
Rights Agreement, including giving rise to a Distribution Date or a Triggering
Event (as each such term is defined in the Rights Agreement), and (b) the Rights
Agreement will expire immediately prior to the Effective Time; and the Rights
Agreement, as so amended, has not been further amended or modified. Copies of
all such amendments to the Rights Agreement have been previously provided to
Parent.
SECTION 4.18 BROKERS. Except for the engagement of SSB and X.X.
Xxxxxx, none of the Company, any of its subsidiaries, or any of their respective
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement. The Company has previously
delivered to Parent a copy of the Company's engagement letter with each of SSB
and X.X. Xxxxxx.
SECTION 4.19 OPINION OF FINANCIAL ADVISOR. The Company has received
the written opinion of each of SSB and X.X. Xxxxxx, its financial advisors, to
the effect that, as of the date hereof, the consideration to be received in the
Offer and the Merger by the Company's stockholders is fair to the Company's
stockholders from a financial point of view. The Company will promptly deliver
to Parent a copy of such opinions.
SECTION 4.20 MATERIAL CONTRACTS. Except as identified in the SEC
Reports, neither the Company nor any of its subsidiaries is party to, nor is the
Company or any of its subsidiaries (or their respective assets) bound by, any
contract, indenture, lease or other agreement which, individually or in the
aggregate, is material to the Company and the subsidiaries taken as a whole.
Except as identified in the SEC Reports or in Section 4.20 of the Company
Disclosure Schedule, there are no (i) contracts, indentures, leases or other
agreements between the Company or any subsidiary, on the one hand, and any
current or former director, officer, employee or 5% or greater shareholder of
the Company or any of their affiliates or family members, on the other, or (ii)
any material non-competition agreement or any other agreement or obligation
which purports to limit in any respect the manner in which, or the localities in
which, the business of the Company and its subsidiaries, is or would be
conducted. All contracts, indentures, leases and agreement to which the Company
or any of the subsidiaries is a party or by which any of their respective assets
is bound are valid and binding, in full force and effect in accordance with its
terms would and enforceable against the parties thereto in accordance with their
respective terms, other than such failures to be so valid and binding, in full
force and effect or enforceable which would not, either individually or in the
aggregate, have a Material Adverse Effect on the Company. There is not under any
such contract, indenture or agreement any existing default, or event, which
after notice or lapse of time, or both, would constitute a default, by the
Company or any of its subsidiaries, or to the Company's knowledge, any other
party, except to the extent any such defaults or events would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.
-22-
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company,
except as set forth by specific reference to the applicable Section of this
Article V in the Parent Disclosure Schedule (as hereinafter defined), as
follows:
SECTION 5.1 ORGANIZATION AND QUALIFICATION. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware. Parent is a SOCIETE ANONYME organized under the laws
of France. Each of Parent and the Purchaser has the requisite corporate power
and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent", as used in this Agreement, means any change
in or effect on the business, financial condition, results of operation or
prospects of Parent or any of its subsidiaries that would reasonably be expected
to have a material adverse effect on Parent and its subsidiaries taken as a
whole or could reasonably be expected to prevent or delay consummation of the
Offer or the Merger.
-23-
SECTION 5.2 AUTHORITY. Each of Parent and the Purchaser has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the Company Stock Option Agreement by Parent and
the Purchaser (to the extent Parent or Purchaser is a party thereto) and the
consummation by Parent and the Purchaser to the extent Parent or Purchaser is a
party thereto of the transactions contemplated hereby and thereby have been duly
and validly authorized and approved by the respective Boards of Directors of
Parent and the Purchaser and by Parent as sole stockholder of the Purchaser and
no other corporate proceedings on the part of Parent or the Purchaser are
necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby or thereby (to the extent Parent or Purchaser
is a party thereto). Each of this Agreement and the Company Stock Option
Agreement has been duly executed and delivered by each of Parent and the
Purchaser (to the extent Parent or Purchaser is a party thereto) and, assuming
the due and valid authorization, execution and delivery by the Company,
constitutes a valid and binding obligation of each of Parent and the Purchaser
(to the extent Parent or Purchaser is a party thereto) enforceable against each
of them in accordance with its terms.
SECTION 5.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming (i) the filings required under the HSR Act are made and
the waiting periods thereunder have terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable state securities, "blue sky"
or takeover law are met, (iii) the filings required under the competition and
foreign investment and other applicable laws, each as set forth on Section 5.3
of the disclosure schedule delivered to the Company by the Parent prior to the
date hereof (the "Parent Disclosure Schedule"), and the approvals and consents
thereunder have been obtained (or waiting periods thereunder have been
terminated or have expired), and (iv) the filing of the certificate of merger
and other appropriate merger documents, if any, as required by the GCL, is made,
none of the execution and delivery of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the transactions contemplated
hereby or compliance by Parent or the Purchaser with any of the provisions
hereof will (i) conflict with or violate the organizational documents of Parent
or the Purchaser, (ii) conflict with or violate any statute, ordinance, rule,
regulation, order, judgment, decree, permit or license applicable to Parent or
the Purchaser or any of their subsidiaries, or by which any of them or any of
their respective properties or assets may be bound or affected, or (iii) result
in a violation pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or the Purchaser or any of their subsidiaries is a party or by
which Parent or the Purchaser or any of their subsidiaries or any of their
respective properties or assets may be bound or affected.
(b) None of the execution and delivery of this Agreement by Parent
and the Purchaser, the consummation by Parent and the Purchaser of the
transactions contemplated hereby or compliance by Parent and the Purchaser with
any of the provisions hereof will require any Consent of any Governmental
Entity, except for (i) compliance with any applicable requirements of the
Exchange Act and any state securities, "blue sky" or takeover law, (ii) the
filing of a certificate of merger pursuant to the GCL, (iii) compliance with the
HSR Act, and (iv) such filings, authorizations, orders and approvals, if any, as
set forth on Section 5.3 of the Parent Disclosure Schedule, as are required
under foreign laws.
-24-
SECTION 5.4 INFORMATION. None of the information supplied or to be
supplied by Parent and the Purchaser for inclusion in (i) the Schedule 14D-9,
(ii) the Proxy Statement or (iii) the Other Filings will, at the respective
times filed with the SEC or such other Governmental Entity and, in addition, in
the case of the Proxy Statement, at the date it or any amendment or supplement
is mailed to stockholders, at the time of the Special Meeting and at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. The Offer Documents and any supplement thereto will comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder, and the Offer Documents and any
supplement thereto will not contain, as of the date thereof, any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statement herein, in light of
the circumstances under which they are made, not misleading, except that no
representation or warranty is made by Parent or Purchaser with respect to the
statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation therein.
SECTION 5.5 FINANCING. Parent and Purchaser collectively will have
at the closing of the Offer and the Effective Time and Parent will make
available to Purchaser sufficient funds to enable Purchaser to purchase all
Shares, on a fully diluted basis, and to pay all fees and expenses related to
the transactions contemplated by this Agreement payable by them.
SECTION 5.6 STOCK OWNERSHIP. As of the date hereof, except as set
forth on Section 5.6 of Parent's Disclosure Schedule, none of the Parent,
Purchaser or any of their respective "affiliates" or "associates" (as those
terms are defined under Rule 12b-2 under the Exchange Act) beneficially own any
Shares.
SECTION 5.7 PURCHASER'S OPERATIONS. Purchaser was formed solely for
the purpose of engaging in the transactions contemplated by this Agreement and
has not engaged in any business activities or conducted any operations other
than in connection with such transactions.
-25-
ARTICLE VI
COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as required
by this Agreement or otherwise with the prior written consent of Parent, during
the period from the date of this Agreement to the Effective Time, the Company
will, and will cause each of its subsidiaries to, conduct its operations only in
the ordinary and usual course of business consistent with past practice and will
use all reasonable efforts, and will cause each of its subsidiaries to use its
all reasonable efforts, to preserve intact the business organization of the
Company and each of its subsidiaries, to keep available the services of its and
their present officers and employees, and to preserve the good will of those
having business relationships with it, including, without limitation,
maintaining satisfactory relationships with licensors, suppliers, customers and
others having business relationships with the Company and its subsidiaries.
Without limiting the generality of the foregoing, and except as otherwise
required by this Agreement or as set forth in Section 6.1 of the Company
Disclosure Schedule, the Company will not, and will not permit any of its
subsidiaries to, prior to the Effective Time, without the prior written consent
of Parent:
(a) adopt any amendment to its certificate of incorporation or
by-laws or comparable organizational documents or the Rights Agreement or adopt
a plan of merger, consolidation, reorganization, dissolution or liquidation;
(b) sell, pledge or encumber any stock owned by it in any of its
subsidiaries; (i) issue, reissue or sell, or authorize the issuance, reissuance
or sale of (A) additional shares of capital stock of any class, or securities
convertible into capital stock of any class, or any rights, warrants or options
to acquire any convertible securities or capital stock, other than the issuance
of Shares, in accordance with the terms of the instruments governing such
issuance on the date hereof, pursuant to the exercise of Options outstanding on
the date hereof, or (B) any other securities in respect of, in lieu of, or in
substitution for, Common Shares or any other capital stock of any class
outstanding on the date hereof or (ii) make any other changes in its capital
structure (other than incurrence of indebtedness in the amount of up to $100
million in the aggregate under existing revolving credit facilities);
(d) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in respect
of any class or series of its capital stock other than between any of the
Company and any of its wholly owned subsidiaries;
(e) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities; increase, or
accelerate payment of, the compensation or benefits payable or to become payable
to its directors, officers or, except in the ordinary course of business
consistent with past practice in accordance with regular review and promotion
cycles, employees (whether from the Company or any of its subsidiaries), or pay
or award any benefit not required by any existing plan or arrangement to any
officer, director or, except in the ordinary course of business consistent with
past practice in accordance with regular review and promotion cycles, employee
(including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Stock Plans or otherwise), or grant any severance or termination pay to any
officer, director or other employee of the Company or any of its subsidiaries
(other than as required by existing agreements or policies described in Section
6.1 of the Company Disclosure Schedule), or enter into any employment or
severance agreement with, any director, officer or other employee of the Company
or any of its subsidiaries or establish, adopt, enter into, amend, or waive any
performance or vesting criteria or amend the exercise or xxxxx xxxxx for any
equity-based awards under any Plan for the benefit or welfare of any current or
former directors, officers or employees of the Company or its subsidiaries or
their beneficiaries or dependents (any of the foregoing being an "Employee
Benefit Arrangement"), except, in each case, to the extent required by
applicable law or regulation;
(g) acquire, mortgage, encumber, sell, pledge, lease, license or
dispose of any assets (including Intellectual Property or resource rights),
except in the ordinary course of business consistent with past practice or any
securities;
-26-
(h) (i) incur, assume or prepay any long-term debt or incur or assume
any short-term debt, except that the Company and its subsidiaries may incur or
prepay debt in the ordinary course of business in amounts and for purposes
consistent with past practice under existing lines of credit, but in any event
such incurrences, assumptions or prepayments not to exceed $100 million in the
aggregate, (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any third party except in the ordinary course of business consistent with past
practice, (iii) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, contingent or otherwise), except in the ordinary course of
business consistent with past practice and (except as would not be material) in
accordance with their terms, (iv) make any loans, advances or capital
contributions to, or investments in, any other person or entity, except for
loans, advances, capital contributions or investments in the ordinary course,
consistent with past practice (in an amount not to exceed $10 million in the
aggregate), or between any wholly owned subsidiary of the Company and the
Company or another wholly owned subsidiary of the Company, (v) authorize or make
capital expenditures (other than those previously committed as disclosed in the
Capital Plan of the Company, a copy of which has been provided to the Purchaser)
in excess of $10 million, (vi) accelerate or delay collection of notes or
accounts receivable in advance of or beyond their regular due dates or the dates
when the same would have been collected in the ordinary course of business
consistent with past practice, or (vii) change any method or principle of
accounting in a manner that is inconsistent with past practice except to the
extent required by generally accepted accounting principles as advised by the
Company's regular independent accountants;
(i) settle or compromise any suit or claim or threatened suit or
claim where the amount involved is greater than $5 million;
(j) other than in the ordinary course of business consistent with
past practice, (i) modify, amend or terminate any contract, (ii) waive, release,
relinquish or assign any contract (or any of the rights of the Company or any of
its subsidiaries thereunder), right or claim, or (iii) cancel or forgive any
indebtedness owed to the Company or any of its subsidiaries; PROVIDED, HOWEVER,
that neither the Company nor any of its subsidiaries may under any circumstance
waive or release any of its rights under any confidentiality agreement to which
it is a party;
(k) file any income Tax Return (other than in the ordinary course in
a manner consistent with past practice), make any Tax election not required by
law or settle or compromise any Tax liability;
(l) permit any insurance policy naming it as a beneficiary or a loss
payable payee to be canceled or terminated, except in the ordinary course of
business consistent with past practice;
(m) acquire (by merger, consolidation, acquisition of stock or
assets, combination or other similar transaction) any material corporation,
partnership or other business organization or division or assets thereof;
(n) enter into any material contract or agreement other than in the
ordinary course of business consistent with past practice;
-27-
(o) except as may be required as a result of a change in law or in
(p) GAAP, make any change in its methods of accounting, including
Tax accounting policies and procedures; enter into any agreement of a nature
that would be required to be filed as an exhibit to Form 10-K under the Exchange
Act;
(q) except as specifically permitted pursuant to Section 6.10 take,
or agree to commit to take, or fail to take any action that would result or is
reasonably likely to result in any of the conditions to the Offer set forth in
Annex I or any of the conditions to the Merger set forth in Article VII not
being satisfied, or would make any representation or warranty of the Company
contained herein inaccurate in any material respect at, or as of any time prior
to, the Effective Time, or that would impair the ability of the Company to
consummate the Merger in accordance with the terms hereof or materially delay
such consummation;
(r) convene any regular or special meeting (or any adjournment
thereof) of the stockholders of the Company other than the meeting contemplated
by Section 2.10 of this Agreement;
(s) agree in writing or otherwise to take any of the foregoing
actions prohibited under this Section 6.1.
Notwithstanding the foregoing provisions of this Section 6.1, any action taken
by or with the consent of the full Board of Directors after the time directors
nominated by the Purchaser have been elected or appointed to, and shall
constitute a majority of, the Company Board pursuant to Section 1.3 hereof,
shall not constitute a violation of this Section 6.1.
-28-
SECTION 6.2 ACCESS TO INFORMATION. From the date of this Agreement
until the Effective Time, the Company will, and will cause its subsidiaries, and
each of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to, give Parent
and the Purchaser and their respective officers, employees, counsel, advisors
and representatives (collectively, the "Parent Representatives") full access
during normal business hours, to the offices and other facilities and to the
books and records of the Company and its subsidiaries and will cause the Company
Representatives and the Company's subsidiaries to furnish Parent, the Purchaser
and the Parent Representatives to the extent available with such financial and
operating data and such other information (with sensitivity to competitive
information) with respect to the business and operations of the Company and its
subsidiaries as Parent and the Purchaser may from time to time reasonably
request provided that the foregoing shall not require the Company to permit any
inspection, or to disclose any information, which would result in the disclosure
of any trade secrets of third parties or violate any obligation of the Company
with respect to confidentiality if such disclosure would reasonably be expected
to result in liability to the Company, and provided that the Company shall have
used reasonable best efforts to obtain the consent of such third party to such
inspection or disclosure. The Confidentiality Agreement dated March 15, 1999, as
amended through the date hereof, between Parent and the Company (the
"Confidentiality Agreement") shall apply with respect to the Evaluation
Materials (as defined in the Confidentiality Agreement). The Company shall
furnish promptly to Parent and the Purchaser a copy of each report, schedule,
registration statement and other document filed by it or its subsidiaries during
such period pursuant to the requirements of federal or state or foreign
securities laws. The Company shall cause its independent auditors to allow the
review of the work papers of such auditors relating to the Company and its
subsidiaries. No review pursuant to this Section 6.2 shall affect any
representation or warranty given by the Company.
SECTION 6.3 EFFORTS.
(a) Subject to the terms and conditions provided herein, each of the
Company, Parent and the Purchaser shall, and the Company shall cause each of its
subsidiaries to, cooperate and use their respective reasonable best efforts to
take, or cause to be made, all filings necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to
cooperation in the preparation and filing of the Offer Documents, the Schedule
14D-9, the Proxy Statement, any required filings or requests for additional
information under the HSR Act, or other foreign filings and any amendments to
any thereof. In addition, if at any time prior to the Effective Time any event
or circumstance relating to either the Company or Parent or the Purchaser or any
of their respective subsidiaries should be discovered by the Company or Parent,
as the case may be, which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance.
(b) Each of the parties will use its reasonable best efforts to
obtain as promptly as practicable all Consents of any Governmental Entity or any
other person required in connection with, and waivers of any Violations that may
be caused by, the consummation of the transactions contemplated by the Offer and
this Agreement.
(c) Neither the Company nor the Company Board nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or modify, in
a manner adverse to Parent or Purchaser, the recommendation of the Company Board
of this Agreement, the Offer or the Merger, or approve or recommend, or propose
publicly to approve or recommend, an Acquisition Transaction, unless the Company
Board determines in good faith by a vote of a majority of the members of the
full Company Board that failing to take such action would create a reasonable
likelihood of a breach of the fiduciary duties of the Company Board, after
consultation with and receipt of advice from its outside counsel to such effect.
Nothing contained in this Section 6.3(c) shall prohibit the Company from taking
and disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any required disclosure to the
Company's stockholders if the Company Board determines in good faith by a vote
of a majority of the members of the full Company Board, based on the opinion of
outside counsel, that a failure so to disclose would be inconsistent with its
obligations under applicable law. Any withdrawal, modification or change of the
recommendation of the Company Board of this Agreement, the Merger or the Offer
shall not change the approval of the Company Board for purpose of causing any
state takeover statute or other law or the Rights Agreement or the Rights to be
inapplicable to this Agreement, the Merger, the Company Stock Option Agreement
and the Support Agreements, and the transactions contemplated hereby and
thereby.
(d) Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use their respective reasonable best efforts to
take, or cause to be taken, all action, 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.
If at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the parties hereto shall
take or cause to be taken all such necessary action, including, without
limitation, the execution and delivery of such further instruments and documents
as may be reasonably requested by the other party for such purposes or otherwise
to consummate and make effective the transactions contemplated hereby.
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SECTION 6.4 PUBLIC ANNOUNCEMENTS. The Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree to consult promptly with each
other prior to issuing any press release or otherwise making any public
statement with respect to the Offer, the Merger and the other transactions
contemplated hereby, agree to provide to the other party for review a copy of
any such press release or statement, and shall not issue any such press release
or make any such public statement prior to such consultation and review, unless
required by applicable law or any listing agreement with a securities exchange.
SECTION 6.5 EMPLOYEE BENEFIT ARRANGEMENTS.
(a) Except for employees subject to collective bargaining agreements,
until December 31, 2000, Parent shall maintain, or cause the Surviving
Corporation to maintain compensation and employee benefits substantially
equivalent in the aggregate to those provided by the Company immediately prior
to the Effective Time (not taking into account equity-based incentive
compensation provided by the Company). Parent agrees that, from and after the
Effective Time, Parent will honor or will cause the Surviving Corporation to
honor, all obligations under the Listed Plans. Notwithstanding the foregoing,
from and after the Effective Time, the Surviving Corporation shall have the
right to amend, modify, alter or terminate any Plan to the extent the terms of
such Plans permit such action; PROVIDED, HOWEVER, that for a period of no less
than 12 months following the Effective Time, the Surviving Corporation shall
neither terminate nor adversely amend or modify the Company's severance pay
policy in effect as of April 1, 1999, other than with respect to requiring a
binding waiver and release from the terminated employee prior to the payment of
severance benefits.
(b) Except for employees subject to collective bargaining agreements,
for purposes of determining eligibility to participate, vesting and accrual or
entitlement to benefits where length of service is relevant under any employee
benefit plan of the Parent or the Surviving Corporation, the Employees shall
receive service credit for service with the Company and any of its subsidiaries
to the same extent such service credit was granted under the Plans, subject to
offsets for previously accrued benefits and to no duplication of benefits
(except that no such credit shall be applied for benefit accrual or entitlement
purposes under defined benefit pension plans). Such employees shall also be
given credit for any deductible or co-payment amounts paid in respect of the
plan year in which the Effective Time occurs, to the extent that, following the
Effective Time, they participate in any Parent Plan for which deductibles or
co-payments are required. Parent agrees that it shall also cause each Parent
Plan to waive (i) any pre-existing condition restriction which was waived under
the terms of any analogous Plan immediately prior to the Effective Time or (ii)
waiting period limitation which would otherwise be applicable to an Employee on
or after the Effective Time to the extent such Employee had satisfied any
similar waiting period limitation under an analogous Plan prior to the Effective
Time.
(c) Parent hereby acknowledges and agrees that consummation of the
transactions contemplated by this Agreement constitute a "Change of Control" of
the Company for purposes of the Plans.
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SECTION 6.6 INDEMNIFICATION.
(a) Parent agrees that all rights to indemnification now existing in
favor of any director, officer, or employee of the Company and its subsidiaries
(the "Indemnified Parties") as provided in their respective charters or by-laws
shall survive the Merger and shall continue in full force and effect for a
period of not less than six years from the Effective Time. After the Effective
Time, Parent agrees to cause the Surviving Corporation to honor all rights to
indemnification referred to in the preceding sentence.
(b) Parent agrees that the Company, and from and after the Effective
Time, the Surviving Corporation shall cause to be maintained in effect for not
less than six years (except as provided in the last sentence of this Section
6.6(b)) from the Effective Time the current policies of the directors' and
officers' liability insurance maintained by the Company; PROVIDED that the
Surviving Corporation may substitute therefor other policies not less
advantageous (other than to a DE MINIMIS extent) to the beneficiaries of the
current policies and PROVIDED that such substitution shall not result in any
gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time; and PROVIDED, HOWEVER, that the Surviving Corporation shall not
be required to pay an annual premium in excess of 200% of the last annual
premium paid by the Company prior to the date hereof (which the Company
represents to be not more than $400,000 for the 12-month period ending December
31, 1998) and if the Surviving Corporation is unable to obtain the insurance
required by this Section 6.6(b) it shall obtain as much comparable insurance as
possible for an annual premium equal to such maximum amount. The provisions of
the immediately preceding sentence shall be deemed to have been satisfied if
prepaid policies have been obtained by the Company prior to the Effective Time,
which policies provide such directors and officers with coverage for an
aggregate period of six years with respect to claims arising from facts or
events that occurred on or before the Effective Time, including, without
limitation, in respect of the transactions contemplated by this Agreement and
for a premium not in excess of the aggregate of the premiums set forth in the
preceding sentence. Notwithstanding the foregoing, at any time on or after the
second anniversary of the Effective Time, Parent may, at its election, undertake
to provide funds to the Surviving Corporation to the extent necessary so that
the Surviving Corporation may self-insure with respect to the level of insurance
coverage required under this Section 6.6(b) in lieu of causing to remain in
effect any directors' and officers' liability insurance policy.
(c) From and after the Effective Time, any Indemnified Party wishing
to claim indemnification under paragraph (a) of this Section 6.6, upon learning
of any such claim, action, suit, proceeding or investigation, shall promptly
notify Parent thereof. In the event of any such claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), (i)
Parent or the Surviving Corporation shall have the right, from and after the
purchase of Shares pursuant to the Offer, to assume the defense thereof and
Parent shall not be liable to such Indemnified Parties for any legal expenses of
other counsel or any other expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof, (ii) the Indemnified Parties
will cooperate in the defense of any such matter and (iii) Parent shall not be
liable for any settlement effected without its prior written consent, provided
that Parent shall not have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall ultimately determine, and
such determination shall have become final, that such person is not entitled to
indemnification under applicable law.
(d) In the event Parent or the Purchaser or any of their successors
or assigns, (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary
to effectuate the purposes of this Section 6.6, proper provision shall be made
so that the successors and assigns of Parent and the Purchaser assume the
obligations set forth in this Section 6.6.
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SECTION 6.7 NOTIFICATION OF CERTAIN MATTERS. Parent and the
Company shall promptly notify each other of (i) the occurrence or non-occurrence
of any fact or event which would be reasonably likely (A) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (B) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied in any material respect and (ii)
any failure of the Company or Parent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect; PROVIDED, HOWEVER, that no such
notification shall modify the representations or warranties of any party or the
conditions to the obligations of any party hereunder. Each of the Company,
Parent and the Purchaser shall give prompt notice to the other parties hereof of
any notice or other communication from any third party alleging that the consent
of such third party is or may be required in connection with the transactions
contemplated by this Agreement.
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SECTION 6.8 RIGHTSAGREEMENT. The Company covenants and agrees that
it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take
any action which would allow any Person (as defined in the Rights Agreement)
other than Parent or the Purchaser to acquire beneficial ownership of 15% or
more of the Common Shares without causing a Distribution Date or a Triggering
Event to occur.
SECTION 6.9 STATE TAKEOVER LAWS. The Company shall, upon the
request of the Purchaser, take all reasonable steps to assist in any challenge
by the Purchaser to the validity or applicability to the transactions
contemplated by this Agreement, including the Offer and the Merger, of any state
takeover law.
SECTION 6.10 NO SOLICITATION.
(a) The Company, its controlled affiliates and their respective
officers, directors, employees, representatives and agents shall immediately
cease any existing discussions or negotiations, if any, with any parties
conducted heretofore with respect to any acquisition or exchange of all or any
material portion of the assets of, or any equity interest in, the Company or any
of its subsidiaries or any business combination with the Company or any of its
subsidiaries. The Company agrees that, prior to the Effective Time, it shall
not, and shall not authorize or permit any of its subsidiaries or any of its or
its subsidiaries' directors, officers, employees, agents or representatives,
directly or indirectly, to solicit, initiate, encourage or facilitate, or
furnish or disclose non-public information in furtherance of, any inquiries or
the making of any proposal with respect to any merger, liquidation,
recapitalization, consolidation or other business combination involving the
Company or any of its subsidiaries or acquisition of any capital stock or any
material portion of the assets of the Company or its subsidiaries, or any
combination of the foregoing (an "Acquisition Transaction"), or negotiate,
explore or otherwise engage in discussions with any person (other than the
Purchaser, Parent or their respective directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by this
Agreement; provided that prior to the purchase of a majority of the Shares
pursuant to the Offer, the Company may furnish information, pursuant to a
customary confidentiality agreement with terms not more favorable to such third
party than the Confidentiality Agreement, to, and negotiate or otherwise engage
in discussions with, any party who delivers a bona fide written proposal for an
Acquisition Transaction for which all necessary financing is then in the
judgment of the Company Board readily obtainable, if the Company Board
determines in good faith by a vote of a majority of the members of the full
Company Board that failing to take such action would create a reasonable
likelihood of a breach of the fiduciary duties of the Company Board (after
consultation and receipt of advice from its outside legal counsel to such
effect) and such a proposal is, in the written opinion of each of SSB and X.X.
Xxxxxx, more favorable to the Company's stockholders from a financial point of
view than the transactions contemplated by this Agreement as the same has been
proposed to be amended by Parent pursuant to Section 6.10(b). This Section 6.10
shall not limit the Company's rights under Section 6.1 to effect specified
divestitures.
(b) From and after the execution of this Agreement, the Company shall
promptly advise the Purchaser in writing of the receipt, directly or indirectly,
of any inquiries, discussions, negotiations or proposals relating to an
Acquisition Transaction, identify the offeror and furnish to the Purchaser a
copy of any such proposal or inquiry, if it is in writing, relating to an
Acquisition Transaction. The Company shall promptly advise Parent of any
material development relating to such proposal, including the results of any
discussions or negotiations with respect thereto. Notwithstanding anything in
this Agreement to the contrary, prior to the approval of an Acquisition
Transaction by the Company Board in accordance with Section 8.1(e), Company
shall give Parent sufficient notice of the material terms and conditions of any
such Acquisition Transaction, and negotiate in good faith with Parent for a
period of not less than three business days after receipt of a written proposal
or a written summary of any oral proposal to make such adjustments in the terms
and conditions of this Agreement as would enable Company to proceed with the
transactions contemplated herein.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 CONDITIONS. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) STOCKHOLDER APPROVAL. The stockholders of the Company shall have
duly approved the transactions contemplated by this Agreement, if required by
applicable law.
(b) PURCHASE OF SHARES. Parent, the Purchaser or any of their
affiliates shall have accepted for payment and paid for Shares pursuant to the
Offer in accordance with the terms hereof.
(c) INJUNCTIONS; ILLEGALITY. The consummation of the Merger shall
not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity provided, however, that each of the parties shall have used reasonable
best efforts to prevent the entry of any such injunction or other order and to
appeal any injunction or other order that may be entered; and there shall not
have been any statute, rule or regulation enacted, promulgated or deemed
applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger or has the effect of making the purchase of Shares
illegal.
(d) HSR ACT. Any waiting period (and any extension thereof) under
the HSR Act applicable to the Merger shall have expired or terminated and all
approvals or consents listed on Section 5.3 of the Parent Disclosure Schedule
(or waiting periods thereunder have been terminated or expired) (the "Foreign
Approval Law") shall have been received or obtained.
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ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding any approval thereof by the stockholders of the Company
(with any termination by Parent also being an effective termination by the
Purchaser):
(a) by the mutual written consent of the Company, by action of its
Board of Directors and Parent (in accordance with Section 1.3(c), if
applicable);
(b) by the Company if (i) the Purchaser fails to commence the Offer
in violation of Section 1.1 hereof, (ii) the Purchaser shall not have accepted
for payment and paid for Shares pursuant to the Offer in accordance with the
terms thereof on or before October 31, 1999 or (iii) the Purchaser fails to
purchase validly tendered Shares in violation of the terms of this Agreement;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any Shares being purchased thereunder; provided,
however, that neither Parent nor the Company may terminate this Agreement
pursuant to this Section 8.1(c) if such party shall have materially breached
this Agreement;
(d) by Parent or the Company if any court or other Governmental
Entity shall have issued an order, decree, judgment or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, Shares pursuant to the Offer or the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable;
(e) by the Company if, prior to the purchase of a majority of the
Shares pursuant to the Offer in accordance with the terms of this Agreement, and
following compliance with the Company of its obligations under Section 6.10, (i)
the Company Board approves an Acquisition Transaction, for which all necessary
financing is then in the judgment of the Company Board readily obtainable, on
terms which a majority of the members of the full Company Board have determined
in good faith after consultation and receipt of advice from its outside legal
counsel to the effect that failing to take such action would create a reasonable
likelihood of a breach of the fiduciary duties of the Company's Board, and (ii)
such Acquisition Transaction is, in the written opinion of each of SSB and X.X.
Xxxxxx, more favorable from a financial point of view to the Company's
stockholders than the transactions contemplated by this Agreement (as the same
has been proposed to be amended by Parent); provided that the termination
described in this Section 8.1(e) shall not be effective unless and until the
Company shall have paid to Parent all of the fees and expenses described in
Section 8.3(b) including, without limitation, the Termination Fee (as
hereinafter defined);
(f) b y Parent, if the Company breaches any of its covenants in
Sections 6.3(c), 6.8 or 6.10, if the Company Board shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner adverse to
the Purchaser its approval or recommendation of the Offer, this Agreement or the
Merger, shall have approved or recommended another Acquisition Transaction, or
shall have resolved to effect any of the foregoing (and such resolution shall be
made public);
(g) by Parent if the Minimum Condition (as defined in Annex I) shall
not have been satisfied by the expiration date of the Offer and on or prior to
such date (A) a third party shall have made or caused to be made a proposal or
public announcement of a proposal to the Company or its stockholders with
respect to (i) the acquisition of the Company by merger, tender offer or
otherwise; (ii) a merger, consolidation or similar business combination with the
Company or any of its subsidiaries; (iii) the acquisition of 50% or more of the
assets of the Company and its subsidiaries, taken as a whole, or any material
asset of the Company or any of its subsidiaries; (iv) the acquisition of 50% or
more of the outstanding Common Shares; (v) the adoption by the Company of a plan
of liquidation or the declaration or payment of an extraordinary dividend; or
(vi) the repurchase by the Company or any of its subsidiaries of 50% or more of
the outstanding Common Shares at a price in excess of the Offer Price or (B) any
person (including the Company or any of its affiliates or subsidiaries), other
than Parent or any of its affiliates, shall have become the beneficial owner of
more than 50% of the Common Shares.
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SECTION 8.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers, employees or stockholders, other than the provisions of
this Section 8.2 and Section 8.3, which shall survive any such termination.
Nothing contained in this Article VIII shall relieve any party from liability
for any breach of this Agreement.
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SECTION 8.3 FEES AND EXPENSES.
(a) Whether or not the Merger is consummated, except as otherwise
specifically provided herein, all costs and expenses incurred in connection with
the Offer, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such expenses.
(b) In the event that this Agreement is terminated pursuant to
Section 8.1(e), (f) or (g) (B) or pursuant to Section 8.1(c) following the
termination of the Offer by the Purchaser as a result of the failure to satisfy
any of the conditions set forth in paragraph (c) (1) of Annex I, then the
Company shall simultaneously with such termination (or, in the case of a
termination by Parent, within one business day thereafter) reimburse Parent for
the out-of-pocket fees and expenses of Parent and the Purchaser (including
printing fees, filing fees and fees and expenses of its legal and financial
advisors) related to the Offer, this Agreement, the transactions contemplated
hereby and any related financing up to a maximum of $25 million (collectively
"Expenses"), and at the same time pay Parent a termination fee of $220 million
(the "Termination Fee") in immediately available funds by wire transfer to an
account designated by Parent. In the event that (x) this Agreement is terminated
pursuant to Section 8.1(g)(A) or pursuant to Section 8.1(c) following the
termination of the Offer by the Purchaser as a result of the failure to satisfy
any of the conditions set forth in paragraph (c)(2), (3) or (4) of Annex I, and
(y) within twelve months of the date of such termination, the Company shall
enter into an agreement for an Acquisition Transaction with any person other
than Parent and its affiliates, then, prior to or simultaneously with entering
into such agreement, the Company shall pay Parent the Termination Fee and
reimburse Parent and the Purchaser for their Expenses, in each case in
immediately available funds by wire transfer to an amount designated by Parent.
Without limiting the foregoing, in the event this Agreement is terminated
pursuant to Section 8.1(c) as a result of the failure to satisfy the conditions
set forth in paragraph (e) of Annex I, then the Company shall promptly (and in
any event with one business day after such termination) reimburse Parent for
Expenses in immediately available funds by wire transfer to an account
designated by Parent.
(c) The prevailing party in any legal action undertaken to enforce
this Agreement or any provision hereof shall be entitled to recover from the
other party the costs and expenses (including attorneys' and expert witness
fees) incurred in connection with such action.
SECTION 8.4 AMENDMENT. Subject to Section 1.3(c), this Agreement
may be amended by the Company, Parent and the Purchaser at any time before or
after any approval of this Agreement by the stockholders of the Company but,
after any such approval, no amendment shall be made which decreases the Merger
Price or which adversely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of all the parties.
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SECTION 8.5 EXTENSION; WAIVER. Subject to Section 1.3(c), at any
time prior to the Effective Time, the parties hereto may (i) extend the time for
the performance of any of the obligations or other acts of any other party
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein by any other party or in any document, certificate or writing
delivered pursuant hereto by any other party or (iii) waive compliance with any
of the agreements of any other party or with any conditions to its own
obligations. Any agreement on the part of any party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 3.1 and Section 6.6 shall survive the Effective Time indefinitely
(except to the extent a shorter period of time is explicitly specified therein).
SECTION 9.2 ENTIRE AGREEMENT; ASSIGNMENT.
(a) This Agreement (including the documents and the instruments
referred to herein, including the Company Stock Option Agreement) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of each other
party, except that Parent may assign its rights and the Purchaser may assign its
rights, interest and obligations to any affiliate or direct or indirect
subsidiary of Parent without the consent of the Company provided that no such
assignment shall relieve Parent of any liability for any breach by such
assignee. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
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SECTION 9.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement, each of which shall
remain in full force and effect or the validity or enforceability of such
provisions in any other jurisdiction.
SECTION 9.4 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties as follows:
If to Parent or the Purchaser:
Vivendi
00, Xxxxxx xx Xxxxxxxxx
00000 Xxxxx Cedex 08
France
Attention: Guillaume Hannezo
Fax: (000) 000-00-00-00-00
with a copy to:
Cabinet Xxxxxx Prat
000 xxx xx Xxxxxxxx Xxxxx Xxxxxx
00000
Xxxxx
Attention: Xxxxx X. Xxxxxx, Esq.
and:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
If to the Company:
United States Filter Corporation
00-000 Xxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Fax:
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxx, Xx., Esq.
Xxxxx X. XxXxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
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SECTION 9.5 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.6 DESCRIPTIVE HEADINGS. he descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.7 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, by facsimile, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.
SECTION 9.8 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except with
respect to Section 6.6, nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.9 CERTAIN DEFINITIONS. As used in this Agreement:
(a) the term "affiliate", as applied to any Person, shall mean any
other person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act);
(c) and the term "subsidiary" or "subsidiaries" means, with respect
to Parent, the Company or any other person, any corporation, partnership, joint
venture or other legal entity of which Parent, the Company or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, stock or other equity interests the
holders of which are generally entitled to 50% or more of the vote for the
election of the board of directors or other governing body of such corporation
or other entity or 50% or more of the profits of such corporation or other
entity.
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SECTION 9.10 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.
SECTION 9.11 JURISDICTION.
(a) Any legal action or proceeding with respect to this Agreement
or any matters arising out of or in connection with this Agreement or otherwise,
and any action for enforcement of any judgment in respect thereof shall be
brought exclusively in the courts of the State of New York or of the United
States of America for the Southern District of New York, the Court of Chancery
of Delaware or the courts of the United States of America for the District of
Delaware and, by execution and delivery of this Agreement, the Company, Parent
and the Purchaser each hereby accepts for itself and in respect of its property,
generally and unconditionally, the exclusive jurisdiction of the aforesaid
courts and appellate courts thereof. The Company, Parent and the Purchaser
irrevocably consent to service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, or by recognized international
express carrier or delivery service, to the Company, Parent or the Purchaser at
their respective addresses referred to in Section 9.4 hereof.
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(b) Each of Parent and the Purchaser hereby designates Vivendi North
America, Inc. as its respective agent for service of process, and service upon
Parent or the Purchaser shall be deemed to be effective upon service of Vivendi
North America, Inc., 000 Xxxxx Xxxxxx, 00xx Floor, Attention: General Counsel,
as aforesaid or of its successor designated in accordance with the following
sentence. Parent or the Purchaser may designate another corporate agent or law
firm reasonably acceptable to the Company and located in the Borough of
Manhattan, in the City of New York, as successor agent for service of process
upon 30-days prior written notice to the Company.
(c) The Company, Parent and the Purchaser each hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or otherwise brought in the courts referred to above and
hereby further irrevocably waives and agrees, to the extent permitted by
applicable law, not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any party hereto to serve process in
any other manner permitted by law.
* * *
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its respective officer thereunto duly authorized,
all as of the day and year first above written.
VIVENDI
By:/s/ Xxxx-Xxxxx Xxxxxxx
-------------------------------------------
Name: Xxxx-Xxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
EAU ACQUISITION CORP.
By:/s/ Xxxx-Xxxxx Xxxxxxx
-------------------------------------------
Name: Xxxx-Xxxxx Xxxxxxx
Title: President
UNITED STATES FILTER CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
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ANNEX I
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex I shall have the meanings
set forth in the Agreement and Plan of Merger to which this Annex is attached,
except that the term "Merger Agreement" shall be deemed to refer to such
Agreement and Plan of Merger.
CONDITIONS TO THE OFFER. Notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or pay for any
tendered Shares and may terminate or, subject to the terms of the Merger
Agreement, amend the Offer, if (i) there shall not be validly tendered and not
properly withdrawn prior to the expiration date for the Offer (the "Expiration
Date") that number of Shares which represents at least a majority of the total
number of outstanding Shares on a fully diluted basis on the date of purchase
(the "Minimum Condition"), (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated, and any applicable approvals or
consents have not been obtained under any Foreign Approval Laws (or any
applicable waiting periods thereunder have not expired or been terminated),
(iii) the Company shall not have delivered to the Purchaser and Parent a duly
executed FIRPTA certificate in the form of Attachment 1 hereto, or (iv) at any
time on or after the date of the Merger Agreement and prior to the time of
payment for any Shares, any of the following events (each, an "Event") shall
occur:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, ruling, condition, judgment, order
or injunction enacted, enforced, promulgated, proposed, amended, issued or
deemed applicable to the Offer, by any Governmental Entity that could
reasonably be expected to, directly or indirectly: (1) make illegal or
otherwise prohibit consummation of the Offer or the Merger, (2) prohibit or
materially limit the ownership or operation by Parent or the Purchaser of
all or a portion of the business or assets of the Company and its
subsidiaries or compel Parent or the Purchaser to dispose of or hold
separately all or a portion of the business or assets of Parent or the
Purchaser or the Company and its subsidiaries, or seek to impose a
limitation on the ability of Parent or the Purchaser to conduct its
business or own such assets, (3) impose a limitations on the ability of
Parent or the Purchaser effectively to acquire, hold or exercise full
rights of ownership of the Shares, including, without limitation, the right
to vote any Shares acquired or owned by the Purchaser or Parent on all
matters properly presented to the Company's stockholders, (4) require
divestiture by Parent or the Purchaser of Shares, in the case of any of the
foregoing in clauses (2), (3) or (4), which would reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
respective businesses of the Company or Compagnie Generale des Eaux, or (5)
result in a Material Adverse Effect on the Company or Parent;
(b) there shall be instituted or pending any action or proceeding
by any Governmental Entity seeking any of the consequences referred to in
clauses (1) through (4) of paragraph (a) above; or
(c) (1) it shall have been publicly disclosed or the Purchaser
shall have otherwise learned that beneficial ownership (determined for the
purposes of this
paragraph (c) as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 50% or more of the outstanding Common Shares has been acquired by
any person (including the Company or any of its subsidiaries or affiliates)
or group (as defined in Section 13(d)(3) under the Exchange Act), (2) the
Company Board or any committee thereof shall have withdrawn, or shall have
modified or amended in a manner adverse to Parent or the Purchaser, the
approval, adoption or recommendation, as the case may be, of the Offer, the
Merger or the Merger Agreement, or approved or recommended any, merger,
consolidation, other business combination, sale of material assets,
takeover proposal or other acquisition of Common Shares other than the
Offer and the Merger, (3) a third party shall have entered into a
definitive agreement or a written agreement in principle with the Company
with respect to a tender offer or exchange offer for any Common Shares or a
merger, consolidation, other business combination with the Company or sale
of material assets with or involving the Company or any of its subsidiaries
(except as specifically permitted by Section 6.1 of the Merger Agreement),
or (4) the Company Board or any committee thereof shall have resolved to do
any of the foregoing (and such resolution shall be made public); or
(d) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or
(e) the Merger Agreement shall have been terminated in accordance
with its terms; or (i) any of the representations and warranties of the
Company set forth in the Merger Agreement, when read without any exception
or qualification as to materiality or to Material Adverse Effect on the
Company, shall not be true and correct as of the date of the Merger
Agreement except where the failure or failures to be so true and correct
would not, individually or in the aggregate, reasonably be expected to
adversely affect the value of the Company and its subsidiaries taken as a
whole, in an amount equal to or in excess of $500 million, (ii) any of the
representations and warranties of the Company set forth in Section 4.3 of
the Merger Agreement shall not be true and correct (except for immaterial
inaccuracies), as if such representations and warranties were made at the
time of such determination; or (iii) the Company shall have breached or
failed to observe or perform in any material respect any of its covenants
or agreements under the Merger Agreement, PROVIDED, HOWEVER, that any
breach or failure to observe or perform by the Company which is capable of
being cured without a material adverse effect upon the Company and its
subsidiaries or Parent and its subsidiaries, shall not be deemed a breach
or failure to observe or perform by the Company if, without a material
adverse effect upon the Company and its subsidiaries or Parent and its
subsidiaries, such breach or failure to perform or observe is cured by the
Company within five business days after written notice thereof by Parent is
provided; or
(f) any Consent (other than the filing of a certificate of merger or
approval by the stockholders of the Company of the Merger if required by
the General Corporation Law of Delaware) required to be filed, occurred or
been obtained by the Company or any of its subsidiaries in connection with
the execution and delivery of this Agreement, the Offer and the
consummation of the transactions contemplated by this
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Agreement shall not have been filed or obtained or shall not have occurred
except where the failure to obtain such Consent could not reasonably be
expected to have individually or in the aggregate a Material Adverse Effect
on the Company;
(g) or there shall have occurred, and continued to exist, (1) any
general suspension of, or limitation on prices for, trading in securities
on the New York Stock Exchange or the Paris Bourse, (2) (excluding any
coordinated trading half-triggered solely as a result of a specified
decrease in a market index and suspensions on limitations resulting solely
from physical damage or interference with such exchanges not related to
market conditions), (3) any decline of at least 35% in the CAC-40 Index
from the close of business on the last trading day immediately preceding
the date of the Merger Agreement, (4) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
France or the European Union, or a material limitation (whether or not
mandatory) by any Governmental Entity on the extension of credit by banks
or other lending institutions, or (5) in the case of any of the foregoing
clauses (1) and (2) existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof.
The foregoing conditions (including those set forth in clauses (i),
(ii) and (iii) of the initial paragraph) are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived by Parent or
the Purchaser, in whole or in part, at any time and from time to time in their
reasonable discretion, in each case, subject to the terms of the Merger
Agreement. The failure by Parent or the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. Any reasonable determination by the Purchaser concerning
the events described in this Annex I will be final and binding on all parties.
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