Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TYCO ACQUISITION CORP. XVIII (NV),
R2 MERGERSUB INC.
AND
XXXXX TECHNOLOGIES, INC.
INCLUDING
GUARANTEE
OF
TYCO INTERNATIONAL LTD.
February 4, 2001
ARTICLE I THE MERGER............................................................ 7
Section 1.01 The Merger............................................................ 7
Section 1.02 Effective Time........................................................ 7
Section 1.03 Effect of the Merger.................................................. 7
Section 1.04 Certificate of Incorporation; By-laws................................. 7
Section 1.05 Directors and Officers................................................ 7
Section 1.06 Effect on Securities, Etc............................................. 8
Section 1.07 Exchange of Shares.................................................... 9
Section 1.08 Stock Transfer Books.................................................. 11
Section 1.09 No Further Ownership Rights in Company Common Stock................... 11
Section 1.10 Lost, Stolen or Destroyed Certificates................................ 11
Section 1.11 Tax Consequences...................................................... 11
Section 1.12 Taking of Necessary Action; Further Action............................ 11
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... 12
Section 2.01 Organization and Qualification; Subsidiaries; Material Adverse Effect. 12
Section 2.02 Certificate of Incorporation and By-laws.............................. 13
Section 2.03 Capitalization........................................................ 13
Section 2.04 Authority Relative to This Agreement.................................. 14
Section 2.05 Material Contracts; No Conflict; Required Filings and Consents........ 15
Section 2.06 Compliance; Permits................................................... 16
Section 2.07 SEC Filings; Financial Statements..................................... 17
Section 2.08 Absence of Certain Changes or Events.................................. 17
Section 2.09 No Undisclosed Liabilities; Retained Liabilities...................... 18
Section 2.10 Absence of Litigation................................................. 18
Section 2.11 Employee Benefit Plans; Employment Agreements......................... 18
Section 2.12 Employment and Labor Matters.......................................... 22
Section 2.13 Registration Statement; Proxy Statement/Prospectus.................... 23
Section 2.14 Restrictions on Business Activities................................... 24
Section 2.15 Properties............................................................ 24
Section 2.16 Taxes................................................................. 25
Section 2.17 Environmental Matters................................................. 26
Section 2.18 Brokers............................................................... 27
Section 2.19 Intellectual Property................................................. 27
Section 2.20 Interested Party Transactions......................................... 29
Section 2.21 Insurance............................................................. 29
Section 2.22 Product Liability and Recalls......................................... 29
Section 2.23 Compliance With The Foreign Corrupt Practices Act..................... 30
Section 2.24 Opinion of Financial Advisor.......................................... 30
Section 2.25 Rights Agreement...................................................... 30
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB............... 30
Section 3.01 Organization and Qualification; Subsidiaries.......................... 30
Section 3.02 Capitalization........................................................ 31
Section 3.03 Authority Relative to this Agreement.................................. 32
Section 3.04 No Conflicts; Required Filings and Consents........................... 32
Section 3.05 Compliance............................................................ 33
Section 3.06 SEC Filings; Financial Statements..................................... 33
Section 3.07 Absence of Certain Changes or Events.................................. 34
Section 3.08 No Undisclosed Liabilities............................................ 34
Section 3.09 Absence of Litigation................................................. 34
Section 3.10 Registration Statement; Proxy Statement/Prospectus.................... 34
Section 3.11 Brokers............................................................... 35
Section 3.12 Ownership of Parent and Merger Sub.................................... 35
Section 3.13 No Prior Activities................................................... 35
Section 3.14 Ownership Interest in the Company..................................... 36
Section 3.15 No Vote Required...................................................... 36
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER................................ 36
Section 4.01 Conduct of Business by the Company.................................... 36
Section 4.02 No Solicitation....................................................... 38
Section 4.03 Conduct of Business by Guarantor...................................... 41
ARTICLE V ADDITIONAL AGREEMENTS................................................. 42
Section 5.01 Proxy Statement/Prospectus; Registration Statement.................... 42
Section 5.02 Company Stockholders Meeting.......................................... 43
Section 5.03 Access to Information; Confidentiality................................ 43
Section 5.04 Consents; Approvals................................................... 44
Section 5.05 Agreements with Respect to Affiliates................................. 44
Section 5.06 Indemnification and Insurance......................................... 45
Section 5.07 Notification of Certain Matters....................................... 46
Section 5.08 Further Action/Tax Treatment.......................................... 46
Section 5.09 Public Announcements.................................................. 47
Section 5.10 Guarantor Common Shares............................................... 47
Section 5.11 Stock Options and ESPP................................................ 48
Section 5.12 Certain Employee Benefits............................................. 49
Section 5.13 Accountants Letters................................................... 50
Section 5.14 Compliance with State Property Transfer Statutes...................... 50
Section 5.15 Conveyance Taxes...................................................... 51
ARTICLE VI CONDITIONS TO THE MERGER.............................................. 51
Section 6.01 Conditions to Obligation of Each Party to Effect the Merger........... 51
Section 6.02 Additional Conditions to Obligations of Parent and Merger Sub......... 52
Section 6.03 Additional Conditions to Obligation of the Company.................... 53
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ARTICLE VII TERMINATION........................................................... 54
Section 7.01 Termination........................................................... 54
Section 7.02 Effect of Termination................................................. 56
Section 7.03 Fees and Expenses..................................................... 56
ARTICLE VIII GENERAL PROVISIONS.................................................... 58
Section 8.01 Effectiveness of Representations, Warranties and Agreements........... 58
Section 8.02 Notices............................................................... 58
Section 8.03 Certain Definitions................................................... 59
Section 8.04 Amendment............................................................. 60
Section 8.05 Waiver................................................................ 60
Section 8.06 Headings.............................................................. 60
Section 8.07 Severability.......................................................... 60
Section 8.08 Entire Agreement...................................................... 61
Section 8.09 Assignment............................................................ 61
Section 8.10 Parties in Interest................................................... 61
Section 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative................. 61
Section 8.12 Governing Law; Jurisdiction........................................... 61
Section 8.13 Counterparts.......................................................... 62
Section 8.14 WAIVER OF JURY TRIAL.................................................. 62
Section 8.15 Performance of Obligations............................................ 62
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AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of February 4, 2001, among Tyco Acquisition Corp. XVIII (NV) ("Parent"),
a Nevada corporation and a wholly owned first tier subsidiary of Tyco
International Ltd., a Bermuda company ("Guarantor"), R2 Mergersub Inc., a
Delaware corporation and a wholly owned first tier subsidiary of Parent ("Merger
Sub"), and Xxxxx Technologies, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company
have each determined that it is advisable and in the best interests of their
respective stockholders, and consistent with and in furtherance of their
respective business strategies and goals, for Parent to acquire all of the
outstanding shares of the Company through the merger of Merger Sub with and into
the Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Parent, Merger Sub and the Company have each adopted this Agreement providing
for the merger (the "Merger") of Merger Sub with and into the Company in
accordance with the applicable provisions of the Delaware General Corporation
Law (the "DGCL"), and upon the terms and subject to the conditions set forth
herein;
WHEREAS, Parent, Merger Sub and the Company intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder (the "Code") and
that the transactions contemplated by this Agreement be undertaken pursuant to
such plan;
WHEREAS, Parent, Merger Sub and the Company intend that the Merger be
accounted for as a purchase for financial reporting purposes;
WHEREAS, pursuant to the Merger, each outstanding share of the Company's
common stock, par value $0.10 per share (the "Company Common Stock"), together
with the associated preferred stock purchase rights attached thereto (together,
a "Share"), shall be converted into the right to receive the Merger
Consideration (as defined in Section 1.07(b)), upon the terms and subject to the
conditions set forth herein; and
WHEREAS, concurrently with the execution and delivery of this Agreement,
and as a condition to the Company's willingness to enter into this Agreement,
Guarantor has agreed fully and unconditionally to guarantee the representations,
warranties, covenants, agreements and other obligations of Parent and Merger Sub
in this Agreement (the "Guarantee").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
Definitions:
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"Acquisition Proposal" is defined in Section 4.02(a).
"Adjusted Option" is defined in Section 5.11(b).
"affiliates" is defined in Section 8.03(a).
"Affiliate Plan" is defined in Section 2.11(a)
"Agreement" is defined in preamble.
"Alternative Transaction" is defined in Section 4.02(a).
"Alternative Transaction Condition" is defined in Section 7.03(b).
"Average Share Price" is defined in Section 1.06(a)
"2000 Balance Sheet" is defined in Section 2.09(a).
"Benefits Continuation Period" is defined in Section 5.12(a).
"business day" is defined in Section 8.03(b).
"Cash-Out Option" is defined in Section 5.11(a).
"Certificate of Merger" is defined in Section 1.02.
"Certificates" is defined in Section 1.06(f).
"COBRA" is defined in Section 2.11(b).
"Code" is defined in the preamble.
"Company" is defined in the preamble.
"Company Charter Documents" is defined in Section 2.02.
"Company Common Stock" is defined in preamble.
"Company Disclosure Schedule" is defined in Section 2.01(a).
"Company Employee" is defined in Section 5.12(a).
"Company Employee Plans" is defined in Section 2.11(a).
"Company ESPP" is defined in Section 1.06(c).
"Company Financial Advisors" is defined in Section 2.18.
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"Company Intellectual Property Assets" is defined in Section 2.19(a)
"Company Permits" is defined in Section 2.06(b).
"Company Preferred Stock" is defined in Section 2.03.
"Company SEC Documents" is defined in Section 2.03.
"Company Series A Preferred Stock" is defined in Section 2.03.
"Company Stock Options" is defined in Section 1.06(c).
"Company Stockholders Meeting" is defined in Section 2.04(c).
"Confidentiality Agreement" is defined in section 5.03.
"control" is defined in Section 8.3(c).
"Covered Persons" is defined in Section 5.06(c).
"Daily Per Share Price" is defined in Section 1.06(a).
"Defined Benefit Plan" is defined in Section 2.11(e).
"DGCL" is defined in the preamble.
"D&O Insurance" is defined in Section 5.06(d).
"DOL" is defined in Section 2.11(a).
"dollars" or "$" is defined in Section 8.3(d).
"Effective Time" is defined in Section 1.02.
"Environmental Claim" is defined in Section 2.17(e).
"Environmental Health and Safety Laws" is defined in Section 2.05(c).
"Environmental Laws" is defined in Section 2.17(e).
"ERISA" is defined in Section 2.11(a).
"Exchange Act" is defined in Section 2.05(a).
"Exchange Agent" is defined in Section 1.07(a).
"Exchange Ratio" is defined in Section 1.06(a).
"Expenses" is defined in section 7.03(b).
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"Fee" is defined in section 7.03(b).
"GAAP" is defined in Section 2.07(b).
"Governmental Authority" is defined in Section 2.05(c).
"Guarantee" is defined in the preamble.
"Guarantor" is defined in the preamble.
"2000 Guarantor Balance Sheet" is defined in Section 3.08.
"Guarantor Charter Documents" is defined in Section 3.01(a).
"Guarantor Common Shares" is defined in Section 1.06(a).
"Guarantor Preference Shares" is defined in Section 3.02(a).
"Guarantor SEC Documents" is defined in Section 3.05.
"HSR Act" is defined in Section 2.05(c).
"Indemnified Parties" is defined in section 5.06(b).
"Intellectual Property Assets" is defined in Section 2.19(a).
"IRS" is defined in Section 2.11(b).
"ISO" is defined in Section 2.11(c).
"knowledge" is defined in Section 8.03(e).
"Material Adverse Effect" is defined in Section 2.01(b).
"Materials of Environmental Concern" is defined in Section 2.17(e).
"Merger" is defined in the preamble.
"Merger Consideration" is defined in Section 1.07(b).
"Merger Sub" is defined in the preamble.
"NASDAQ" is defined in Section 2.05(c).
"Non-U.S. Monopoly Laws" is defined in Section 2.05(c).
"NYSE" is defined in Section 1.06(a).
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"Parent" is defined in the preamble.
"PBGC" is defined in Section 2.11(b).
"PCBs" is defined in Section 2.17(d).
"person" is defined in Section 8.03(f).
"Post-1997 Company SEC Documents" is defined in Section 2.07(a).
"Post-1998 Guarantor SEC Documents" is defined in Section 3.06(a).
"Proxy Statement/Prospectus" is defined in Section 2.13(a).
"Registration Statement" is defined in Section 3.10(a).
"Rights" is defined in Section 4.02(d).
"Rights Agreement" is defined in 4.02(d).
"SEC" is defined in Section 2.03.
"Securities Act" is defined in Section 2.05(c).
"Share" is defined in the preamble.
"significant subsidiary" is defined in Section 8.03(g).
"subsidiary" or "subsidiaries" is defined in Section 8.03(h).
"Subsidiary Documents" is defined in Section 2.02.
"Superior Proposal" is defined in Section 4.02(a).
"Surviving Corporation" is defined in Section 1.01.
"Tax" is defined in Section 2.16(b).
"Tax Return" is defined in Section 2.16(b).
"Terminating Breach" is defined in Section 7.01(h).
"Terminating Change" is defined in Section 7.01(g).
"Terminating Misrepresentation" is defined in Section 7.01(f).
"Third Party" is defined in Section 4.02(a).
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"Third Party Intellectual Property Assets" is defined in Section 2.19(c).
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ARTICLE I
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THE MERGER
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Section 1.01 The Merger. (a) At the Effective Time, and subject to and
upon the terms and conditions of this Agreement and the DGCL, Merger Sub shall
be merged with and into the Company, the separate corporate existence of Merger
Sub shall cease, and the Company shall continue as the surviving corporation
(hereinafter sometimes referred to as the "Surviving Corporation").
Section 1.02 Effective Time. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.01, as promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the conditions set forth
in Article VI, the parties hereto shall cause the Merger to be consummated by
filing a properly executed agreement or certificate of merger as contemplated by
the DGCL (the "Certificate of Merger"), together with any required related
certificates, with the Secretary of State of the State of Delaware, in such form
as required by, and executed in accordance with the relevant provisions of, the
DGCL. The Merger shall become effective at the time of such filing or at such
later time, which will be as soon as reasonably practicable, specified in the
Certificate of Merger (the "Effective Time"). Prior to such filing, a closing
shall be held at the offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX, unless another time or place is agreed to in writing by
the parties hereto, for the purpose of confirming the satisfaction or waiver, as
the case may be, of the conditions set forth in Article VI.
Section 1.03 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Certificate of Merger and
the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.04 Certificate of Incorporation; By-laws. (a) Subject to Section
5.06, at the Effective Time, the Certificate of Incorporation of Merger Sub in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation of the Surviving Corporation.
(b) Subject to Section 5.06, at the Effective Time, the By-laws of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the By-laws
of the Surviving Corporation until thereafter amended.
Section 1.05 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be
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the initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
Section 1.06 Effect on Securities, Etc. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Merger Sub, the
Company or the holders of any securities of the Company:
(a) Conversion of Securities. (i) Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 1.06(b)) shall be converted, subject to Sections 1.06 (e)
and (f), into the right to receive from Parent that number of fully paid and
nonassessable common shares of Guarantor, par value U.S. $0.20 per share (the
"Guarantor Common Shares"), equal to the Exchange Ratio.
For purposes of this Agreement:
"Average Share Price" means the average (rounded to the nearest 1/10,000)
of the Daily Per Share Prices for the five consecutive trading days ending on
the fourth trading day immediately preceding the date of the Company's
Stockholders Meeting.
"Daily Per Share Price" for any trading day means the volume-weighted
average (rounded to the nearest 1/10,000) of the per share selling price on the
NYSE of Guarantor Common Shares for that day, as reported by Bloomberg Financial
Markets (or if such service is unavailable, a service providing similar
information selected by Parent and the Company).
"Exchange Ratio" means $23.00 divided by the Average Share Price, subject
to adjustment as provided in Section 7.01(j).
"NYSE" means the New York Stock Exchange.
(b) Cancellation. Each Share held in the treasury of the Company and each
Share owned by Guarantor, Parent, Merger Sub or any direct or indirect, wholly-
owned subsidiary of the Company or Guarantor immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, be canceled and retired without payment
of any consideration therefor and cease to exist.
(c) Stock Options; Employee Stock Purchase Plans. At the Effective Time,
all options ("Company Stock Options") to purchase Company Common Stock then
outstanding, whether under (i) the Company's Key Employee Stock Option Plan,
(ii) the Company's Director's Stock Option Plan, or (iii) otherwise, shall be
treated in accordance with Section 5.11 of this Agreement. Rights to purchase
shares of Company Stock outstanding under any employee stock purchase or
restricted stock plan or any similar U.S. or non-U.S. plan (collectively, the
"Company ESPP") shall be treated as set forth in Section 5.11 of this Agreement.
Any rights to purchase Company Common Stock under the Company's 401(k) plans
shall be treated as set forth in Section 5.12 of this Agreement.
(d) Capital Stock of Merger Sub. Each share of common stock, $0.01 par
value per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one issued, fully paid
and nonassessable share of
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common stock, par value $0.01 per share, of the Surviving Corporation. Following
the Effective Time, each certificate evidencing ownership of shares of Merger
Sub common stock shall evidence ownership of such shares of capital stock of the
Surviving Corporation.
(e) Adjustments to Exchange Ratio, Etc. If, during the period between the
date of this Agreement and the Effective Time, any change in the outstanding
shares of capital stock of Guarantor or the Company shall occur, including by
reason of any reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, or any stock dividend thereon with a record
date during such period or the exercise of the Rights, the Exchange Ratio, the
Merger Consideration and any other amounts payable pursuant to the Merger or
otherwise pursuant to this Agreement shall be appropriately adjusted.
(f) Fractional Shares. No certificates or scrip representing less than one
Guarantor Common Share shall be issued in exchange for Shares upon the surrender
for exchange of a certificate which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"). In lieu of any such
fractional share, each holder of Shares who would otherwise have been entitled
to a fraction of a Guarantor Common Share upon surrender of Certificates for
exchange shall be paid upon such surrender (and after taking into account all
certificates surrendered by such holder) cash (without interest) in an amount
equal to such fraction multiplied by the Average Share Price.
Section 1.07 Exchange of Shares. (a) Exchange Agent. Parent shall cause to
be supplied to or for such bank or trust company as shall be designated by
Parent and shall be reasonably acceptable to the Company (the "Exchange Agent"),
in trust for the benefit of the holders of Company Common Stock, as needed for
exchange and payment in accordance with this Section 1.07 through the Exchange
Agent, certificates evidencing the Guarantor Common Shares issuable pursuant to
Section 1.06(a), the cash to be paid in lieu of fractional shares in exchange
for outstanding Shares pursuant to Section 1.06(f) and the cash or other
property in respect of any dividends or other distributions payable pursuant to
Section 1.07(c).
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will cause the Exchange Agent to mail to each holder of
record of Certificates (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify), and (ii) instructions to effect the surrender of the Certificates in
exchange for the certificates evidencing Guarantor Common Shares and cash in
lieu of fractional shares. Upon surrender of a Certificate for cancellation to
the Exchange Agent together with such letter of transmittal, duly executed, and
such other customary documents as may be required pursuant to such instructions,
the holder of such Certificate shall be entitled to receive in exchange therefor
solely (A) certificates evidencing that number of whole Guarantor Common Shares
which such holder has the right to receive in accordance with Section 1.06(a) in
respect of the Shares formerly evidenced by such Certificate and (B) cash in
respect of fractional shares as provided in Section 1.06(f) (the Guarantor
Common Shares and cash in respect of fractional shares being referred to,
collectively, as the "Merger Consideration"), except that Shares held at the
Effective Time in book-entry form shall be exchanged for Merger Consideration in
accordance with the customary procedures of the Depository Trust Company.
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The holder of each Certificate, upon its exchange for Guarantor Common
Shares, shall also receive any dividends or other distributions to which such
holder is entitled pursuant to Section 1.07(c). Certificates surrendered shall
forthwith be canceled following the Effective Time. In the event of a transfer
of ownership of Shares which is not registered in the transfer records of the
Company as of the Effective Time, the Merger Consideration, dividends and
distributions may be issued and paid in accordance with this Article I to a
transferee if the Certificate evidencing such Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer pursuant to this Section 1.07(b) and by evidence that any
applicable stock transfer taxes have been paid. Until so surrendered, each
outstanding Certificate that, prior to the Effective Time, represented Shares
will be deemed from and after the Effective Time, for all corporate purposes,
other than the payment of dividends or other distributions, to evidence the
ownership of the number of full Guarantor Common Shares, and cash in respect of
fractional shares, into which such Shares shall have been so converted.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Guarantor Common Shares with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the
Guarantor Common Shares such holder is entitled to receive until the holder of
such Certificate shall surrender such Certificate in accordance with the
provisions of Section 1.07(b). Subject to applicable law, following surrender of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole Guarantor Common Shares issued in exchange
therefor, without interest, at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole Guarantor Common Shares.
(d) Transfers of Ownership. If any certificate for Guarantor Common Shares
is to be issued in a name other than that in which the Certificate surrendered
in exchange therefor is registered, it will be a condition of the issuance
thereof that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
exchange shall have paid to Parent or any agent designated by it any transfer or
other taxes required by reason of the issuance of a certificate for Guarantor
Common Shares in any name other than that of the registered holder of the
Certificate surrendered, or establish to the satisfaction of Parent or any agent
designated by it that such tax has been paid or is not payable.
(e) Escheat. Neither Parent, Merger Sub nor the Company nor any of their
respective affiliates shall be liable to any holder of Company Common Stock for
any Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(f) Withholding Rights. The Exchange Agent shall be entitled to deduct and
withhold from the Merger Consideration otherwise payable pursuant to this
Agreement to any holder of Company Common Stock, and from any cash dividends or
other distributions that the holder is entitled to receive under Section
1.07(c), such amounts as the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or non-United States tax law. To the extent that amounts are so
withheld by the Exchange Agent, such portion of the Merger Consideration and
other such amounts payable under Section 1.07(c) that are withheld shall be
treated for all purposes of this
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Agreement as having been received by the holder of the Shares in respect of
which such deduction and withholding was made by the Exchange Agent.
(g) Undistributed Certificates. Any portion of the certificates evidencing
the Guarantor Common Shares, the cash to be paid in lieu of fractional shares
and the cash or other property in respect of dividends or other distributions
supplied to the Exchange Agent which remains undistributed to the holders of the
Certificates for one year after the Effective Time shall be delivered to Parent,
upon demand, and any holders of the Certificates who have not theretofore
complied with this Section 1.07 shall thereafter look only to Parent for payment
of their claim for Merger Consideration and any dividends or distributions with
respect to Guarantor Common Shares.
Section 1.08 Stock Transfer Books. At the close of business on the date of
the Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers of the Company Common Stock
thereafter on the records of the Company.
Section 1.09 No Further Ownership Rights in Company Common Stock. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Shares which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article I.
Section 1.10 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such Merger
Consideration and any dividends or other distributions as may be required
pursuant to this Article I; provided, however, that Parent may, in its
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discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against Guarantor, Parent or the Exchange Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
Section 1.11 Tax Consequences. It is intended by the parties hereto that
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code. The parties hereto hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
Section 1.12 Taking of Necessary Action; Further Action. Each of Parent,
Merger Sub and the Company will take, and cause their affiliates to take, all
such reasonable and lawful actions as may be necessary or appropriate in order
to effectuate the Merger and the other transactions contemplated by this
Agreement in accordance with this Agreement as promptly as possible. If, at any
time after the Effective Time, any such further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of
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the Company and Merger Sub, the officers and directors of the Company and Merger
Sub immediately prior to the Effective Time are fully authorized in the name of
their respective corporations or otherwise to take, and will take, all such
lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Parent and Merger Sub as
follows:
Section 2.01 Organization and Qualification; Subsidiaries; Material
Adverse Effect.
(a) Each of the Company and its subsidiaries is an entity duly organized,
validly existing and (to the extent the concept of good standing exists in the
applicable jurisdiction) in good standing under the laws of the jurisdiction of
its organization and has the requisite corporate or other power and authority
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power or authority would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its subsidiaries is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not reasonably be expected to have a Material Adverse
Effect. A list of all subsidiaries of the Company together with the jurisdiction
of organization of each such subsidiary and the percentage of each such
subsidiary's outstanding capital stock owned by the Company or another
subsidiary of the Company (in the case of any non-U.S. subsidiaries, without
giving effect to any qualifying share ownerships of less than 1%) is contained
in Section 2.01 of the written disclosure schedule previously delivered by the
Company to the Parent (the "Company Disclosure Schedule"). Except as set forth
in Section 2.01 of the Company Disclosure Schedule or the Company SEC Documents,
neither the Company nor any of its subsidiaries directly or indirectly owns any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity (other than
its wholly-owned subsidiaries), with respect to which interest the Company or a
subsidiary has invested (and currently owns) or is required to invest $500,000
or more, excluding securities in any publicly-traded company held for investment
by the Company and comprising less than five-percent of the outstanding stock of
such company.
(b) When used in connection with the Company or any of its subsidiaries or
Guarantor or any of its subsidiaries, as the case may be, the term "Material
Adverse Effect" means any change, effect or circumstance that is materially
adverse to the business, assets (including intangible assets), financial
condition or results of operations of the Company and its subsidiaries or
Guarantor and its subsidiaries, as the case may be, in each case taken as a
whole; provided, however, that the following shall be excluded from the
-------- -------
definition of Material Adverse
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Effect and from any determination as to whether a Material Adverse Effect has
occurred or may occur: changes, effects or circumstances, that are applicable to
(A) the health and safety and aviation industries generally, (B) the United
States securities markets generally, (C) personnel and other changes customarily
attendant to transactions of the type contemplated by this Agreement and (D)
changes in economic, regulatory or political conditions generally.
(c) The failure of a representation or warranty to be true and correct,
either individually or together with the failure of other representations or
warranties to be true and correct, or the failure to perform an obligation,
agreement or covenant shall be deemed to have a Material Adverse Effect if (x)
the business, assets (including intangible assets), financial condition or
results of operations of the Company and its subsidiaries, or of Guarantor and
its subsidiaries, as the case may be, in each case taken as a whole, are
materially worse than if such representation or warranty had been true and
correct or such obligation, agreement or covenant had been performed, excluding,
however, the effects of the changes specified in the proviso set forth in
Section 2.01(b), (y) in the case of the Company, such representation or warranty
materially misstates the capitalization of the Company and/or its subsidiaries
or (z) the failure of such representation or warranty to be true and correct or
the failure to perform such obligation, agreement or covenant materially and
adversely affects the ability of the Company or Parent, Merger Sub and Guarantor
as the case may be, timely to consummate the transactions contemplated by this
Agreement and, in the case of Guarantor, the Guarantee.
Section 2.02 Certificate of Incorporation and By-laws. The Company has
heretofore made available to Parent a complete and correct copy of its Amended
and Restated Certificate of Incorporation and Amended and Restated By-laws, each
as amended to date (the "Company Charter Documents"), and will make available to
Parent, as promptly as practicable, the Certificate of Incorporation and By-laws
(or equivalent organizational documents) of each of its subsidiaries reasonably
requested by Parent (the "Subsidiary Documents"). All such Company Charter
Documents and Subsidiary Documents are in full force and effect, except in the
case of Subsidiary Documents where the failure to be in full force and effect
would not reasonably be expected, either individually or in the aggregate, to
have a Material Adverse Effect. Neither the Company nor any of its subsidiaries
is in violation of any of the provisions of its Certificate of Incorporation or
By-laws or equivalent organizational documents, except for violations of the
documents which do not and are not reasonably likely to materially interfere
with the operations of such entity.
Section 2.03 Capitalization. The authorized capital stock of the Company
consists of 36,000,000 shares of the Company Common Stock and 3,217,495 shares
of Preferred Stock, $1.00 par value per share (the "Company Preferred Stock"),
of which 500,000 shares have been designated Series A Junior Participating
Preferred Shares (the "Company Series A Preferred Stock"). As of February 1,
2001, (i) 16,964,518 shares of the Company Common Stock were issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
nonassessable (excluding treasury shares which are issued but not outstanding,
all of which are not entitled to vote) and none of which were issued in
violation of preemptive or similar rights, (ii) no shares of the Company Common
Stock were held by subsidiaries of the Company, (iii) 1,457,501 shares of the
Company Common Stock were reserved for existing grants and 937,092 shares were
reserved for future grants pursuant to the Company Option Plans, (iv) no shares
of the Company Common Stock were reserved and available for future issuance
pursuant
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to the Company ESPP and the Company's 401(k) plans. There are no outstanding
shares of Company Preferred Stock (including shares of Company Series A
Preferred Stock). Except as set forth in Section 2.03 of the Company Disclosure
Schedule, no change in such capitalization has occurred since February 1, 2001,
except for changes resulting from the exercise or termination of Company Stock
Options. Except as set forth in Section 2.01, this Section 2.03 or Section 2.11
or in Section 2.03 or Section 2.11 of the Company Disclosure Schedule or the
Company SEC Documents, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character (including, without
limitation, registration rights) binding on the Company or any of its
subsidiaries relating to the issued or unissued capital stock of the Company or
any of its subsidiaries or obligating the Company or any of its subsidiaries,
directly or indirectly, to issue, sell or register any shares of capital stock
of, or other equity interests in, the Company or any of its subsidiaries. All
shares of the Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be duly authorized, validly issued, fully-paid
and nonassessable.
Except as set forth in Section 2.03 of the Company Disclosure Schedule or
the reports, schedules, forms, statements, registration statements, proxy
statements and other documents filed by the Company with the Securities and
Exchange Commission ("SEC") since December 31, 1999 and prior to the date of
this Agreement, including those incorporated therein by reference (the "Company
SEC Documents"), there are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of the Company Common Stock or the capital stock of any subsidiary.
Except as set forth in Section 2.03 of the Company Disclosure Schedule or the
Company SEC Documents, there are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any such
subsidiary or any other entity other than guarantees of bank obligations of
subsidiaries entered into in the ordinary course of business. Except as set
forth in Section 2.01 or 2.03 of the Company Disclosure Schedule, all of the
outstanding shares of capital stock (other than directors' qualifying shares) of
each of the Company's subsidiaries are duly authorized, validly issued, fully-
paid and nonassessable, and all such shares (other than directors' qualifying
shares and a de minimis number of shares owned by employees of such
subsidiaries) are owned by the Company or another subsidiary free and clear of
all security interests, liens, claims, pledges, agreements, limitations in the
Company's voting rights, charges or other encumbrances of any nature whatsoever.
Section 2.04 Authority Relative to This Agreement.
(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than the adoption of this Agreement by the
Company's shareholders in accordance with the DGCL and the Company Charter
Documents and the filings and recording of appropriate merger documents as
required by the DGCL).
14
(b) Assuming the accuracy of the representations and warranties in Section
3.14, the provisions of Section 203 of the DGCL and Article SIXTH of the
Company's Certificate of Incorporation will not apply to the Merger.
(c) As of the date hereof, the Board of Directors of the Company has
unanimously (i) determined that it is advisable and in the best interest of the
Company's shareholders for the Company to enter into this Agreement and to
consummate the Merger upon the terms and subject to the conditions of this
Agreement, (ii) adopted this Agreement in accordance with the applicable
provisions of the DGCL and (iii) recommended the adoption of this Agreement by
holders of the Company Common Stock and directed that this Agreement be
submitted for consideration by the Company's stockholders at the meeting of the
stockholders of the Company to consider the Merger Agreement (the "Company
Stockholders Meeting"). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Guarantor, Parent and Merger Sub of this Agreement and/or the
Guarantee hereof, as applicable, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
Section 2.05 Material Contracts; No Conflict; Required Filings and
Consents. (a) Subject to the following sentence, Section 2.05(a) of the Company
Disclosure Schedule includes, as of the date hereof, a list of (i) other than
intercompany, all loan agreements, indentures, mortgages, pledges, conditional
sale or title retention agreements, security agreements, guaranties, standby
letters of credit (to which the Company or any subsidiary is the responsible
party), equipment leases or lease purchase agreements, each in an amount equal
to or exceeding $3,000,000 to which the Company or any of its subsidiaries is a
party or by which any of them is bound; (ii) all contracts, agreements,
commitments or other understandings or arrangements to which the Company or any
of its subsidiaries is a party or by which any of them or any of their
respective properties or assets are bound or affected, but excluding contracts,
agreements, commitments or other understandings or arrangements entered into in
the ordinary course of business and involving, in the case of any such contract,
agreement, commitment, or other understanding or arrangement, individual
payments or receipts by the Company or any of its subsidiaries of less than
$2,000,000 over the term of such contract, commitment, agreement, or other
understanding or arrangement; and (iii) all agreements which are required to be
filed as "material contracts" with the SEC pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, and the SEC's rules and regulations
thereunder (the "Exchange Act") but have not been so filed with the SEC. With
regard to agreements for the purchase or sale of raw materials or inventory in
the ordinary course of business and licensing or royalty arrangements, the
threshold referred to in clause (ii) of the preceding sentence shall be measured
on an annual basis.
(b) Except as set forth in Section 2.05(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, (i) conflict with
or violate the Company Charter Documents, (ii) conflict with or violate the
Subsidiary Documents or any law, rule, regulation, order, judgment or decree
applicable to the Company or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or impair the Company's or any of its
subsidiaries' rights or alter the
15
rights or obligations of any third party under, or give to others any rights of,
or cause any, termination, amendment, redemption, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on (including a right to
purchase) any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, credit facility,
contract, agreement, lease, license, permit, franchise 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 its or any of their respective
properties is bound or affected, except, in the case of clause (ii) or (iii),
for any such conflicts, violations, breaches, defaults or other occurrences that
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(c) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental, administrative or regulatory authority, U.S. and non-U.S.
(each, a "Governmental Authority"), except (i) for applicable requirements, if
any, of the Securities Act of 1933, as amended, and the rules and regulations of
the SEC thereunder (the "Securities Act"), the Exchange Act, state securities
laws, the pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), the Nasdaq Stock Market ("NASDAQ") and the NYSE;
filings and consents under any applicable non-United States laws intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade ("Non-U.S. Monopoly Laws"); filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement
("Environmental, Health and Safety Laws"); and the filing and recordation of
appropriate merger or other documents as required by the DGCL, (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay
consummation of the Merger, or otherwise prevent or materially delay the Company
from performing its material obligations under this Agreement, or would not
otherwise reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, or (iii) as to which any necessary consents, approvals,
authorizations, permits, filings or notifications have heretofore been obtained
or filed, as the case may be, by the Company.
Section 2.06 Compliance; Permits. (a) Except as set forth in Section
2.06(a) of the Company Disclosure Schedule or the Company SEC Documents, neither
the Company nor any of its subsidiaries is, or has been, as a result of which it
could reasonably be expected now or in the future to have liability, in conflict
with, or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to the Company or any of its subsidiaries or by
which its or any of their respective properties is bound or affected or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise 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
its or any of their respective properties is bound or affected, except for any
such conflicts, defaults or violations which would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. To the
Company's knowledge, no investigation by any Governmental Authority with respect
to the Company or any of its subsidiaries is pending or threatened, except as
disclosed in the Company SEC Documents.
16
(b) Except as set forth in Section 2.06(b) of the Company Disclosure
Schedule or the Company SEC Documents, the Company and its subsidiaries hold all
permits, licenses, easements, variances, exemptions, consents, certificates,
orders and approvals from governmental authorities which are material to the
operation of the business of the Company and its subsidiaries, taken as a whole,
as it is now being conducted (collectively, the "Company Permits"), except where
the failure to hold such Company Permits would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. The Company
and its subsidiaries are in compliance with the terms of the Company Permits,
and have not failed to comply therewith as a result of which they would
reasonably be expected to have liability now or in the future, except as
described in the Company SEC Documents or where the failure to so comply would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
Section 2.07 SEC Filings; Financial Statements. (a) The Company has filed
all reports, schedules, forms, statements and other documents (including all
exhibits to the Company SEC Documents) required to be filed with the SEC since
December 31, 1997 (the "Post-1997 Company SEC Documents"). Except as disclosed
in Section 2.07 of the Company Disclosure Schedule or the Company SEC Documents,
such reports, schedules, forms, statements and other documents (i) complied in
all material respects with the applicable requirements of the Securities Act or
the Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Except as set forth in
Section 2.07 of the Company Disclosure Schedule, none of the Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Post-1997 Company SEC
Documents was prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or in the
Post-1997 Company SEC Documents), and each fairly presents in all material
respects, the consolidated financial position of the Company and its
subsidiaries as at the respective dates thereof and the consolidated results of
its operations and cash flows for the periods indicated, except that for
purposes of the foregoing representation, the unaudited interim financial
statements (i) shall be read in conjunction with the Company's consolidated
financial statements contained in the Company's 1999 Annual Report on Form 10-K,
and (ii) were or are subject to normal and recurring year-end adjustments which
were not or are not expected to be material in amount.
Section 2.08 Absence of Certain Changes or Events. Except as set forth in
Section 2.08 of the Company Disclosure Schedule or the Company SEC Documents,
since September 30, 2000, the Company has conducted its business in the ordinary
course and there has not occurred: (i) any changes, effects or circumstances ,
including any damage to, destruction or loss of any asset of the Company
(whether or not covered by insurance) constituting, individually or in the
aggregate, a Material Adverse Effect; (ii) any amendments or changes in the
Company Charter Documents; (iii) any material changes to any Company Employee
Plans or
17
other employee benefit arrangements or agreements, including the establishment
of any new such plans, arrangements or agreements or the extension of coverage
under any such plans, arrangements or agreements to new groups of employees or
other individuals; (iv) any material change by the Company in its accounting
methods, principles or practices (other than as required by GAAP subsequent to
the date of this Agreement); or (v) other than in the ordinary course of
business, any sale of a material amount of assets of the Company.
Section 2.09 No Undisclosed Liabilities; Retained Liabilities.
(a) Except as set forth in Section 2.09 of the Company Disclosure Schedule
or the Company SEC Documents, neither the Company nor any of its subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in the Company's
unaudited balance sheet (including any related notes thereto) as of September
30, 2000, included in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2000 (the "2000 Balance Sheet"), (b) incurred in the
ordinary course of business and not required under GAAP to be reflected on the
2000 Balance Sheet, (c) incurred since September 30, 2000 in the ordinary course
of business, (d) incurred in connection with this Agreement or the Merger or the
other transactions contemplated hereby or (e) which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
(b) Section 2.09 of the Company Disclosure Schedule sets forth a list of
all purchase and sale contracts or agreements relating to the sale and/or
divestiture of product lines, businesses and/or assets since January 1, 1994 and
prior to the date hereof pursuant to which the Company now has or is reasonably
expected in the future to have any material liability under such contracts or
agreements.
Section 2.10 Absence of Litigation. Except as set forth in Section 2.10
and Section 2.19(c) of the Company Disclosure Schedule or the Company SEC
Documents or arising out of the transactions contemplated by this Agreement,
there are no claims, actions, suits, arbitrations, proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries, or any properties or rights of the Company or any of
its subsidiaries, before any court, arbitrator or Governmental Authority, that
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
Section 2.11 Employee Benefit Plans; Employment Agreements. (a) "Company
Employee Plans" shall mean all "employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), all "employee welfare benefit plans" (as defined in Section 3(1) of
ERISA), all non-U.S. non-statutory plans and all other U.S. and non-U.S. non-
statutory bonus, stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, severance and other similar fringe or employee benefit
plans, programs or arrangements (including those which contain change of control
provisions or pending change of control provisions), and any employment,
executive compensation or severance agreements (including those which contain
change of control provisions or pending change of control provisions), written
or otherwise, as amended, modified or supplemented, currently in effect or
currently being maintained or administered for the benefit
18
of, or relating to, any former or current employee, officer, director or
consultant (or any of their beneficiaries) of the Company or a subsidiary of the
Company. The term "Affiliate Plan" shall mean any other such plan, program or
arrangement with respect to which the Company or any subsidiary of the Company
has or could reasonably be expected to have any liability, either as a member of
a controlled group of corporations or trades or businesses as defined under
section 414 of the Code and comparable provisions of ERISA, or by contractual
arrangement. Section 2.11(a) of the Company Disclosure Schedule lists each
Company Employee Plan and each Affiliate Plan. With respect to each plan
included on the Company Disclosure Schedule the Company shall indicate (i)
whether such plan includes a change of control provision, including, without
limitation, provisions referring to a "Forced Takeover," to the extent such
provision may be relevant to the Merger, (ii) with respect to employee benefit
welfare plans, whether such plan is fully insured or has a stop-loss insurance
contract and (iii) whether any employees have entered into an agreement or a
provision of an agreement prohibiting or restricting such employee from
accepting employment or otherwise engaging in activity that is in competition
with the business of the Company or its subsidiaries (other than with respect to
the use of confidential information or trade secrets) after the termination of
such individual's employment with the Company. With respect to each Company
Employee Plan listed in Section 2.11(a) of the Company Disclosure Schedule the
Company has provided or made available to Parent (or in the case of any non-U.S.
Company Employee Plan, will provide or make available as soon as practicable,
but in no event later than thirty (30) days after the date hereof) copies of (i)
each such written Company Employee Plan (or a written description in English of
any Company Employee Plan which is not written and, with respect to Company
Employee Plans covering 50 or more participants, a written description in
English of any such plan that is written in a language other than English) and
any related trust agreement, insurance and other contract (including a policy),
the most recently prepared summary plan description, summary of material
modifications the substance of which is not already incorporated in the
corresponding summary plan description, and communications distributed to plan
participants that could reasonably be expected to materially modify the terms of
any Company Employee Plan, whether through information actually conveyed in the
communication or a failure to convey information, (ii) the three most recent
annual reports on Form 5500 series (or equivalent filing with respect to non-
U.S. plans), with accompanying schedules and attachments, filed with respect to
each U.S. or non-U.S. non-statutory Company Employee Plan required to make such
a filing, (iii) the most recent actuarial valuation, if any, for each Company
Employee Plan and Affiliate Plan subject to Title IV of ERISA and all non-U.S.
pension and post-retirement welfare plans, (iv) the latest reports which have
been filed with the Department of Labor ("DOL") to satisfy the alternative
method of compliance for pension plans for certain selected employees pursuant
to DOL regulation Section 2520.104-23 and (v) the most recent favorable
determination letters issued for each Company Employee Plan and related trust
which is intended to be qualified under Section 401(a) of the Code (and, if an
application for such determination is pending, a copy of the application for
such determination).
(b) Except as set forth in Section 2.11(b) of the Company Disclosure
Schedule and except as would not reasonably be expected to have a Material
Adverse Effect, (i) none of the Company Employee Plans or Affiliate Plans
promises or provides medical or other welfare benefits to any director, officer,
employee or consultant (or any of their beneficiaries) after their service with
the Company or its subsidiary or affiliate terminates, other than as required by
Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA
(hereinafter, "COBRA"), or
19
any similar state laws; (ii) none of the Company Employee Plans or Affiliate
Plans is a "multiemployer plan" as such term is defined in Section 3(37) of
ERISA and no non-U.S. Company Employee Plan is a multiemployer plan and no
Company Employee Plan or Affiliate Plan has incurred any withdrawal liability
that remains unsatisfied and the transactions contemplated herein will not
result in the assessment of any withdrawal liability; (iii) neither the Company,
any of its subsidiaries nor, to the knowledge of the Company, any other party in
interest (as defined in Section 3(14) of ERISA) or disqualified person (as
defined in Section 4975 of the Code) has engaged in a transaction with respect
to any Company Employee Plan or Affiliate Plan which could subject the Company
or any subsidiary, directly or indirectly, to a tax, penalty or other liability
for prohibited transactions under ERISA or Section 4975 of the Code; (iv)
neither the Company nor any of its executives, nor to the Company's knowledge,
any other fiduciary of any of the Company Employee Plans has breached any of the
responsibilities or obligations imposed upon fiduciaries under Title I of ERISA;
(v) all Company Employee Plans and, to the knowledge of the Company, all
Affiliate Plans have been established and maintained in accordance with their
terms and have been operated in compliance in all material respects with the
requirements of applicable law (including, but not limited to, to the extent
applicable, the notification and other requirements of COBRA, the Health
Insurance Portability and Accountability Act of 1996, the Newborns' and Mothers'
Health Protection Act of 1996, the Mental Health Parity Act of 1996, and the
Women's Health and Cancer Rights Act of 1998) (vi) each Company Employee Plan
which is intended to be qualified under Section 401(a) of the Code is the
subject of a favorable determination letter from the Internal Revenue Service
(the "IRS"), and nothing has occurred which may reasonably be expected to impair
such determination, taking into account available correction programs; (vii) all
contributions required to be made with respect to any Company Employee Plan
(whether pursuant to the terms of such plan, Section 412 of the Code, any
collective bargaining agreement, insurance contract or policy, or otherwise)
have been made on or before their due dates (including any extensions thereof);
(viii) with respect to each Company Employee Plan and Affiliate Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the 30-day notice requirement has been waived under the
regulations to Section 4043 of ERISA) has occurred with respect to which the
Company or one of its subsidiaries has any outstanding liability and no Company
action has occurred that resulted or will result in any liability for any non-
U.S. Company Employee Plan; (ix) none among the Company or any subsidiary
thereof has incurred (or could reasonably be expected to incur) any liability
that remains unsatisfied, or reasonably expects to incur any liability, under
Title IV of ERISA with respect to either a Company Employee Plan or an Affiliate
Plan including, without limitation, with respect to an event described in
Section 4062, 4063 or 4041 of ERISA (other than liability for premium payments
to the Pension Benefit Guaranty Corporation (the "PBGC") arising in the ordinary
course); (x) other than routine claims for benefits made in the ordinary course
of the operation of the Company Employee Plans, there are no pending or to the
Company's knowledge threatened, claims, investigations or causes of action with
respect to any U.S. or non-U.S. non-statutory Company Employee Plan or Affiliate
Plan, whether made by a participant or beneficiary of such a plan, a
governmental agency or otherwise, against the Company or any subsidiary of the
Company, any Company director, officer or employee, any Company Employee Plan,
or Affiliate Plan or any fiduciary of a Company Employee Plan or Affiliate Plan;
and (xi) each Company Employee Plan that provides for the provision of post-
termination or post-retirement
20
welfare benefits may by its terms be amended or terminated at any time subject
to applicable law.
(c) Section 2.11(c) of the Company Disclosure Schedule sets forth a true
and complete list of each current or former employee, consultant, officer or
director of the Company or any of its subsidiaries who holds (i) any option to
purchase Company Common Stock as of the date hereof, together with the number of
shares of Company Common Stock subject to such option, the exercise price of
such option (to the extent determined as of the date hereof), whether such
option is intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code (an "ISO"), and the expiration date of such option; (ii)
any shares of Company Common Stock that are restricted or subject to
performance-based vesting; and (iii) any other award or right (including share
units), directly or indirectly, to receive Company Common Stock (or any other
unit of Company equity) or any amount payable by reference to Company Common
Stock (or any other unit of Company equity), together with the number of shares
of Company Common Stock (or any other unit of Company equity) subject to such
right.
(d) To the extent not already included and so labeled in Section 2.11(a)
or such other section of the Company Disclosure Schedule as is specifically
referenced in Section 2.11(d) of the Company Disclosure Schedule, Section
2.11(d) of the Company Disclosure Schedule sets forth a true and complete (i)
list of all material outstanding agreements with any consultants who provide
services to the Company or any of its subsidiaries; (ii) list of all material
agreements with respect to the services of independent contractors or leased
employees who provide services to the Company or any of its subsidiaries,
whether or not they participate in any of the Company Employee Plans; (iii)
description of any situation in which a material portion of the workforce of a
component of the Company or its subsidiaries, whether such component is a
subsidiary, unit, work location, line of business or otherwise, is composed of
non-common law employees, whether consultants, independent contractors or
otherwise, which description shall include, if applicable, representative
samples of agreements with such non-common law employees and (iv) list of all
worker council agreements of the Company or any of its subsidiaries with or
relating to its employees. Section 2.11(d) of the Company Disclosure Schedule
shall indicate which, if any, of such agreements includes a change in control
provision.
(e) Except as set forth in Section 2.11(e) of the Company Disclosure
Schedule: (i) the PBGC has not instituted proceedings to terminate any Company
Employee Plan or, to the knowledge of the Company, an Affiliate Plan, that is
subject to Title IV of ERISA (each, a "Defined Benefit Plan"); (ii) no Defined
Benefit Plan has an accumulated or waived funding deficiency within the meaning
of Section 412 of the Code, nor have any extensions of any amortization period
within the meaning of Section 412 of the Code or Section 302 of ERISA been
applied for with respect thereto; (iii) since the date of the most recent
actuarial report prepared by each such plan's actuary with respect to that
plan's most recently completed fiscal year, to the knowledge of the Company,
nothing has occurred that would materially adversely affect the funding status
of such plan; (iv) all applicable premiums required to be paid to the PBGC with
respect to the Defined Benefit Plans have been paid; and (v) no facts or
circumstances exist with respect to any Defined Benefit Plan which would give
rise to a material lien on the assets of the Company under Section 4068 of ERISA
or otherwise.
21
(f) Except as set forth in Section 2.08 or 2.11(f) of the Company
Disclosure Schedule, since December 31, 1999, neither the Company nor any of its
subsidiaries has announced, proposed or agreed to any increase in benefits under
any Company Employee Plan (or to the creation or implementation of new benefits
or new plans), any change in employee coverage which would increase the expense
of maintaining any Company Employee Plan, or the grant of any Company Stock
Options or other equity based awards or benefits.
(g) Except as set forth in Section 2.08 or 2.11(g) of the Company
Disclosure Schedule, the consummation of the transactions contemplated by this
Agreement, either alone or in combination with another event, will not (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute or bonus payments or otherwise) becoming due to
any current or former director, officer, employee or consultant of the Company,
(ii) result in any increase in the amount of compensation or benefits payable in
respect of any director, officer, employee or consultant of the Company, (iii)
accelerate the vesting or timing of payment of any benefits or compensation
payable in respect of any director, officer, employee or consultant of the
Company, or (iv) result in any "parachute payment" under Section 280G of the
Code, whether or not such amount may be considered reasonable compensation for
personal services rendered.
(h) Except as set forth in Section 2.11(h) of the Company Disclosure
Schedule, to the knowledge of the Company, each non-U.S. Company Employee Plan
has been maintained in compliance with its terms and with the requirements
prescribed by any and all applicable laws (including any special provisions
relating to registered or qualified plans with which such non-U.S. Company
Employee Plan is intended to qualify) and has been maintained in good standing
with applicable regulatory authorities. Except as set forth on Section 2.11(h)
of the Company Disclosure Schedule, since the date of the most recent actuarial
report prepared by each such plan's actuary with respect to that plan's most
recently completed fiscal year, nothing has occurred that would adversely affect
the funding status of such plan.
(i) Except as set forth in Section 2.11(i) of the Company Disclosure
Schedule, there are no complaints, charges or claims against the Company or any
of its subsidiaries pending or threatened to be brought by or filed with any
governmental authority based on, arising out of, in connection with or otherwise
relating to the classification of any individual by the Company as an
independent contractor or "leased employee" (within the meaning of section
414(n) of the Code) rather than as an employee, and no conditions exist under
which the Company or any of its subsidiaries could incur any such liability.
(j) Except as set forth in Section 2.11(j) of the Company Disclosure
Schedule, each Company Employee Plan that provides for deferred compensation and
is not qualified under section 401(a) of the Code is fully funded through a
rabbi trust, insurance policy or otherwise.
Section 2.12 Employment and Labor Matters. Except as set forth in Section
2.11(b) or Section 2.12 of the Company Disclosure Schedule or the Company SEC
Documents:
(a) Each of the Company and its subsidiaries is in compliance, and has not
failed to be in compliance as a result of which it could reasonably be expected
now or in the
22
future to have liability, with all applicable U.S. and non-U.S. laws, agreements
and contracts relating to employment practices, terms and conditions of
employment, and the employment of former, current, and prospective employees,
independent contractors and "leased employees" (within the meaning of Section
414(n) of the Code) of the Company including all such U.S. and non-U.S. laws,
agreements and contracts relating to wages, hours, collective bargaining,
employment discrimination, immigration, disability, civil rights, human rights,
fair labor standards, occupational safety and health, workers' compensation, pay
equity, wrongful discharge and violation of the potential rights of such former,
current, and prospective employees, independent contractors and leased
employees, and has timely prepared and filed all appropriate forms (including
Immigration and Naturalization Service Form I-9) required by any relevant
governmental authority, except where the failure to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) There is no litigation, suit, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened between the Company or
any of its subsidiaries and any of their respective employees which in each case
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(c) Neither the Company nor any of its subsidiaries is a party to any
U.S. or non-U.S. collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or its subsidiaries, nor, to the
knowledge of the Company, are there any activities or proceedings of any labor
union to organize any employees of the Company or any of its subsidiaries.
(d) Neither the Company nor any of its subsidiaries is in breach of any
U.S. or non-U.S. collective bargaining agreement or labor union contract, or has
any knowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
subsidiaries.
Section 2.13 Registration Statement; Proxy Statement/Prospectus.
(a) Subject to the accuracy of the representations of Parent and Merger
Sub in Section 3.10:
(i) the information supplied by the Company for inclusion in the
Registration Statement shall not at the time the Registration Statement is
declared effective by the SEC contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and
(ii) the information supplied by the Company for inclusion in the proxy
statement/prospectus to be sent to the stockholders of the Company in connection
with the Company Stockholders Meeting (such proxy statement/prospectus as
amended or supplemented is referred to herein as the "Proxy
Statement/Prospectus") will not, on the date the Proxy Statement/Prospectus (or
any amendment thereof or supplement thereto) is filed with the SEC or first
mailed to stockholders or at the time of the Company Stockholders Meeting,
contain any statement which, at such time and in light of the circumstances
under which it shall be made, is false or misleading with respect to any
material fact, or omit to state any material fact required to
23
be stated therein or necessary in order to make the statements made therein not
false or misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders Meeting which has become false or misleading.
(b) If at any time prior to the Effective Time any event relating to the
Company or any of its respective affiliates, officers or directors should be
discovered by the Company which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement/Prospectus, the
Company shall promptly inform Parent and Merger Sub.
(c) The Proxy Statement/Prospectus shall comply in all material respects
with the requirements of the Securities Act and the Exchange Act.
(d) Notwithstanding the foregoing, the Company makes no representation or
warranty with respect to any information supplied by Guarantor, Parent or Merger
Sub which is contained or incorporated by reference in, or furnished in
connection with the preparation of, the Proxy Statement/Prospectus.
Section 2.14 Restrictions on Business Activities. Except for this
Agreement or as set forth in Section 2.14 of the Company Disclosure Schedule or
the Company SEC Documents, to the Company's knowledge, there is no agreement,
judgment, injunction, order or decree binding upon the Company or any of its
subsidiaries which has or would reasonably be expected to have the effect of
prohibiting or impairing the conduct of business by the Company or any of its
subsidiaries as currently conducted by the Company or such subsidiary, or
restricting any transactions (including payment of dividends and distributions)
between the Company and its subsidiaries, except for any prohibition or
impairment as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Section 2.15 Properties. (a) Except as set forth in Sections 2.15(a) and
2.19(b) of the Company Disclosure Schedule or the Company SEC Documents, the
Company and each of its subsidiaries have good title to all of their owned real
properties and other owned assets used in their current operations, free and
clear of all liens, charges and encumbrances, except (i) liens for taxes not yet
due and payable, (ii) such liens or other imperfections of title, if any, as do
not materially interfere with the present use of the property affected thereby
or which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, (iii) liens which secure indebtedness reflected
in the 2000 Balance Sheet and identified as such in the Company SEC Documents;
and all leases pursuant to which the Company or any of its subsidiaries lease
from others material amounts of real or personal property, are in good standing,
valid and effective in accordance with their respective terms, and there is not,
to the knowledge of the Company, under any of such leases, any existing default
or event of default (or event which with notice or lapse of time, or both, would
constitute a default), except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
24
(b) Except as set forth in Section 2.15(b) of the Company Disclosure
Schedule or the Company SEC Documents, (i) all buildings, structures, fixtures
and other improvements located on and affixed to the real properties of the
Company and its subsidiaries are structurally sound, are in good operating
condition and repair, ordinary wear and tear excepted, are free from latent and
patent defects, and are adequate for the uses to which they are being put and
(ii) each item of tangible personal property of the Company and its subsidiaries
is in good operating condition and repair, ordinary wear and tear excepted, is
free from latent and patent defects and is suitable for immediate use in the
ordinary course of business, except, in each case, as would not, individually or
in the aggregate, be reasonably expected to have a Material Adverse Effect.
Section 2.16 Taxes. Except as set forth in Section 2.16 of the Company
Disclosure Schedule:
(a) The Company and each of its subsidiaries has timely and accurately
filed, or caused to be timely and accurately filed, all material Tax Returns
required to be filed by it, and has paid, collected or withheld, or caused to be
paid, collected or withheld, all material amounts of Taxes required to be paid,
collected or withheld, other than such Taxes for which adequate reserves in the
2000 Balance Sheet have been established or which are being contested in good
faith. Except as set forth in Section 2.16(a) of the Company Disclosure
Schedule, there are no material claims or assessments pending against the
Company or any of its subsidiaries for any alleged deficiency in any Tax, there
are no pending or, to the knowledge of the Company, threatened audits or
investigations for or relating to any material liability in respect of any
Taxes, and the Company has not been notified in writing of any proposed material
Tax claims or assessments against the Company or any of its subsidiaries (other
than in each case, claims or assessments for which adequate reserves in the 2000
Balance Sheet have been established or which are being contested in good faith).
Neither the Company nor any of its subsidiaries has executed any waivers or
extensions of any applicable statute of limitations to assess any material
amount of Taxes. There are no outstanding requests by the Company or any of its
subsidiaries for any extension of time within which to file any material Tax
Return or within which to pay any material amounts of Taxes shown to be due on
any Tax Return. To the best knowledge of the Company, there are no liens for
material amounts of Taxes on the assets of the Company or any of its
subsidiaries except for statutory liens for current Taxes not yet due and
payable. There are no outstanding powers of attorney enabling any party to
represent the Company or any of its subsidiaries with respect to Taxes. Other
than with respect to the Company and its subsidiaries, neither the Company nor
any of its subsidiaries is liable for Taxes of any other Person, or is currently
under any contractual obligation to indemnify any person with respect to Taxes
(except for customary agreements to indemnify lenders or security holders in
respect of Taxes and except for provisions in agreements for the divestiture of
subsidiaries, assets or business lines of the Company or its subsidiaries that
require the Company or its subsidiaries (as applicable) to indemnify a purchaser
or purchase group for material amounts of Taxes of the Company or its
subsidiaries (as applicable) in the nature of sales or similar Taxes incurred as
a consequence of any such divestiture transactions), or is a party to any tax
sharing agreement or any other agreement providing for payments by the Company
or any of its subsidiaries with respect to Taxes.
(b) For purposes of this Agreement, the term "Tax" shall mean any United
States federal, national, state, provincial, local or other jurisdictional
income, gross receipts,
25
property, sales, use, license, excise, franchise, employment, payroll,
estimated, alternative or add-on minimum, ad valorem, transfer or excise tax, or
any other tax, custom, duty, governmental fee or other like assessment or charge
imposed by any Governmental Authority, together with any interest or penalty
imposed thereon. The term "Tax Return" shall mean a report, return or other
information (including any attached schedules or any amendments to such report,
return or other information) required to be supplied to or filed with a
Governmental Authority with respect to any Tax, including an information return,
claim for refund, amended return or declaration or estimated Tax.
Section 2.17 Environmental Matters. (a) Except as set forth in Section
2.17(a) of the Company Disclosure Schedule or in the Company SEC Documents or as
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, the operations and properties of the Company and its
subsidiaries are in compliance with the Environmental Laws, which compliance
includes the possession by the Company and its subsidiaries of all permits and
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof.
(b) Except as set forth in Section 2.17(b) of the Company Disclosure
Schedule or in the Company SEC Documents or as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, there are
no Environmental Claims, including claims based on "arranger liability," pending
or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed.
(c) Except as set forth in Section 2.17(c) of the Company Disclosure
Schedule or in the Company SEC Documents, there are no past or present actions,
circumstances, conditions, events or incidents, including the release, emission,
discharge, presence or disposal of any Materials of Environmental Concern, that
are reasonably likely to form the basis of any Environmental Claim against the
Company or any of its subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries
have retained or assumed, except for such Environmental Claims that would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(d) Except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect or as set forth in Section 2.17(d)
of the Company Disclosure Schedule (it being understood that, although the
representations set forth in clauses (i) - (iv) of this Section 2.17(d) apply to
assets and/or properties previously owned or leased by the Company, the Company
will not be able to include in Section 2.17(d) of the Company Disclosure
Schedule matters as to which it does not have knowledge) or the Company SEC
Documents, (i) there are no off-site locations where the Company or any of its
subsidiaries has stored, disposed or arranged for the disposal of Materials of
Environmental Concern which have been listed on the National Priority List,
CERCLIS, or state Superfund site list, and the Company and its subsidiaries have
not been notified that any of them is a potentially responsible party at any
such location; (ii) there are no underground storage tanks located on property
owned or leased by the Company or any of its subsidiaries; (iii) there is no
friable asbestos containing material contained in or forming part of any
building, building component, structure or office space owned, leased or
operated by the Company or any of its subsidiaries; and (iv) there are no
26
polychlorinated biphenyls ("PCBs") or PCB-containing items contained in or
forming part of any building, building component, structure or office space
owned, leased or operated by the Company or any of its subsidiaries.
(e) For purposes of this Agreement:
(i) "Environmental Claim" means any claim, action, cause of action,
investigation or notice (in each case in writing or, if not in writing, to the
knowledge of the Company) by any person or entity alleging potential liability
(including potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from the
presence, release or threat of release into the environment, of any Material of
Environmental Concern at any location, whether or not owned or operated by the
Company or any of its subsidiaries.
(ii) "Environmental Laws" means, as they exist on the date hereof, all
applicable United States federal, state, local and non-United States laws,
regulations, codes and ordinances, relating to pollution or protection of human
health (as relating to the environment or the workplace) and the environment
(including ambient air, surface water, ground water, land surface or sub-surface
strata), including laws and regulations relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern, including, but not limited to
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. (S) 9601 et seq., Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. (S) 6901 et seq., Toxic Substances Control Act ("TSCA"), 15 U.S.C. (S)
2601 et seq., Occupational Safety and Health Act ("OSHA"), 29 U.S.C. (S) 651 et
seq., the Clean Air Act, 42 U.S.C. (S) 7401 et seq., the Clean Water Act, 33
U.S.C. (S) 1251 et seq., each as may have been amended or supplemented, and any
applicable environmental transfer statutes or laws.
(iii) "Materials of Environmental Concern" means chemicals, pollutants,
contaminants, hazardous materials, hazardous substances and hazardous wastes,
medical waste, toxic substances, petroleum and petroleum products and by-
products, asbestos-containing materials, PCBs, and any other chemicals,
pollutants, substances or wastes, in each case regulated under any Environmental
Law.
Section 2.18 Brokers. No broker, finder or investment banker, other than
Credit Suisse First Boston and Quarterdeck Investment Partners (the "Company
Financial Advisors"), the fees and expenses of each of which will be paid by the
Company, is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has heretofore
furnished to Parent a complete and correct copy of all agreements between the
Company and each of the Company Financial Advisors pursuant to which each such
firm would be entitled to any payment relating to the transactions contemplated
hereunder.
Section 2.19 Intellectual Property
27
(a) As used herein, the term "Intellectual Property Assets" shall mean all
worldwide intellectual property rights, including, without limitation, patents,
trademarks, service marks, copyrights, and registrations and applications
therefor, licenses, trade names, Internet domain names, know-how, trade secrets,
computer software programs and development tools and proprietary information,
technologies and processes, and all documentation and media describing or
relating to the above, in any format, whether hard copy or machine-readable
only. As used herein, "Company Intellectual Property Assets" shall mean the
Intellectual Property Assets used or owned by the Company or any of its
subsidiaries.
(b) Except as set forth in Section 2.19(b) of the Company Disclosure
Schedule or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, the Company and/or each of its
subsidiaries owns, or is licensed or otherwise possesses legally enforceable
rights to use, all the Company Intellectual Property Assets that are used in the
business of the Company and its subsidiaries as currently conducted, without
infringing or violating the rights of others.
(c) Except as disclosed in Section 2.19(c) of the Company Disclosure
Schedule, no material claims (i) are currently pending or, to the knowledge of
the Company, are threatened by any person with respect to the Company
Intellectual Property Assets, or (ii) are currently pending or, to the knowledge
of the Company, threatened by any person with respect to the Intellectual
Property Assets of a third party (the "Third Party Intellectual Property
Assets") to the extent arising out of any manufacture, importation, offer for
sale, reproduction or distribution of, or of products or methods covered by,
such Third Party Intellectual Property Assets by or through the Company or any
of its subsidiaries.
(d) Except as disclosed in Section 2.19(d) of the Company Disclosure
Schedule or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, to the knowledge of the Company,
there are no valid grounds for any bona fide claim to the effect that the
manufacture, importation, offer for sale, sale, licensing or use of any product,
system or method now manufactured, imported, used, offered for sale, sold,
reproduced or licensed or proposed for manufacture, importation, use, offer for
sale, sale, reproduction or license by or for the Company or any of its
subsidiaries infringes any Third Party Intellectual Property Assets.
(e) Section 2.19(e) of the Company Disclosure Schedule sets forth a list
of (i) all patents and patent applications owned by the Company and/or each of
its subsidiaries worldwide; (ii) all trademark and service xxxx registrations
and all trademark and service xxxx applications, material common law trademarks,
material trade dress and material slogans, and all trade names owned by the
Company and/or each of its subsidiaries worldwide; (iii) all copyright
registrations and copyright applications owned by the Company and/or each of its
subsidiaries worldwide; (iv) all Internet domain name registrations owned by the
Company and/or its subsidiaries worldwide; and (v) to the Company's knowledge,
all licenses of the Company and/or each of its subsidiaries in which the Company
and/or each of its subsidiaries is (A) a licensor with respect to any of the
patents, trademarks, service marks, trade names, copyrights or Internet domain
names listed in Section 2.19(e) of the Company Disclosure Schedule which are
material to the Company or (B) a licensee of any other person's patents, trade
names, trademarks, service marks, copyrights or Internet domain names material
to the Company except
28
for any licenses of software programs that are commercially available "off the
shelf." Except as set forth in Section 2.19(e)(v) of the Company Disclosure
Schedule, the Company and/or each of its subsidiaries has made all necessary
filings and recordations to protect and maintain its interest in the patents,
patent applications, trademark and service xxxx registrations, trademark and
service xxxx applications, copyright registrations and copyright applications,
Internet domain names and licenses set forth in Section 2.19(e) of the Company
Disclosure Schedule, except where the failure to so protect or maintain would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(f) To the knowledge of the Company, except as set forth in Section
2.19(e)(v) or 2.19(f) of the Company Disclosure Schedule or the Company SEC
Documents: (i) each patent, trademark, service xxxx and copyright application
and registration of the Company and/or each of its subsidiaries is valid,
subsisting of record in the Company of such subsidiary, and enforceable and (ii)
each material license of the Company Intellectual Property Assets and of any
Third Party Intellectual Property Assets listed in Section 2.19(e) of the
Company Disclosure Schedule is valid, subsisting in the Company or its
subsidiaries, and enforceable.
(g) Except as set forth in Section 2.19(g) of the Company Disclosure
Schedule, to the knowledge of the Company, there is no unauthorized use,
infringement or misappropriation of any of the Company's Intellectual Property
Assets by any third party, including any employee, former employee, independent
contractor or consultant of the Company or any of its subsidiaries.
Section 2.20 Interested Party Transactions. Except as set forth in Section
2.20 of the Company Disclosure Schedule or the Company SEC Documents or for
events as to which the amounts involved do not, in the aggregate, exceed
$100,000, since the Company's proxy statement dated April 13, 2000, no event has
occurred that would be required to be reported as a Certain Relationship or
Related Transaction pursuant to Item 404 of Regulation S-K promulgated by the
SEC.
Section 2.21 Insurance. Section 2.21 of the Company Disclosure Schedule
lists all material fire and casualty, general liability, business interruption,
product liability and sprinkler and water damage insurance policies maintained
by the Company or any of its subsidiaries. Except as set forth in Section 2.21
of the Company Disclosure Schedule, all such policies are with reputable
insurance carriers and provide coverage amounts which the Company reasonably
believes are both adequate for all normal risks incident to the current business
of the Company and its subsidiaries and their respective properties and assets,
and appropriate for the businesses currently conducted by the Company, except as
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
Section 2.22 Product Liability and Recalls. (a) Except as set forth in
Section 2.22(a) of the Company Disclosure Schedule or the Company SEC Documents,
to the Company's knowledge, there is no claim, pending or threatened, against
the Company or any of its subsidiaries for injury to person or property of
employees or any third parties suffered as a result of the sale of any product
currently manufactured, sold or produced by the Company or any of its
Subsidiaries or performance of any service currently performed by the Company or
any of its subsidiaries, including claims arising out of the defective or unsafe
nature of its current
29
products or services, which would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(b) Except as set forth in Section 2.22(b) of the Company Disclosure
Schedule or the Company SEC Documents, there is no pending or, to the knowledge
of the Company, threatened recall or investigation of any product sold by the
Company or any of its subsidiaries, which recall or investigation would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, nor has there been any such recall or investigation since
December 28, 1997.
Section 2.23 Compliance With The Foreign Corrupt Practices Act. Since
December 28, 1997, none of the Company nor any of its subsidiaries has committed
a material violation of the United States Foreign Corrupt Practices Act or any
law, rule or regulation of any other jurisdiction to the same effect.
Section 2.24 Opinion of Financial Advisor. The Board of Directors of the
Company has been advised by Credit Suisse First Boston to the effect that in its
opinion, as of the date of this Agreement, the Exchange Ratio is fair from a
financial point of view to the holders of the Shares, assuming no adjustment of
the Exchange Ratio pursuant to Section 7.01(j).
Section 2.25 Rights Agreement. The Board of Directors of the Company has
authorized and approved an amendment to the Rights Agreement to the effect that
(i) none of Parent, Merger Sub and their respective affiliates, either
individually or as a group, shall become an "Acquiring Person" (as defined in
the Rights Agreement) by virtue of the approval, execution or delivery of this
Agreement, the consummation of the transactions contemplated hereby or any
announcement of the same, (ii) no Distribution Date, Section 11(a)(ii) Event,
Section 13 Event, Stock Acquisition Date or Triggering Event (as each such term
is defined in the Rights Agreement) shall occur by virtue of the approval,
execution or delivery of this Agreement, the consummation of the transactions
contemplated hereby or any announcement of the same. The Company and the Rights
Agent (as defined in the Rights Agreement) shall execute such amendment to the
Rights Agreement no later than the second business day following the date
hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
-------------------------------------------------------
Parent and Merger Sub hereby, jointly and severally, represent and warrant
to the Company as follows:
Section 3.01 Organization and Qualification; Subsidiaries. (a) Each of
Guarantor, Parent and Merger Sub is a corporation duly incorporated, validly
existing and in good standing (to the extent the concept of good standing exists
in the applicable jurisdiction) under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority necessary to
own, lease and operate the properties it purports to own, lease and operate and
to carry on its business as now conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not reasonably be
30
expected to have a Material Adverse Effect. Each of Guarantor, Parent and Merger
Sub is duly qualified or licensed as a foreign corporation to do business, and
is in good standing, in each jurisdiction where the character of its properties
owned, leased or operated by it or the nature of its activities make such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Parent
has heretofore made available to the Company true and complete copies of
Guarantor's Memorandum of Association and Bye-Laws, as amended to date (the
"Guarantor Charter Documents").
(b) Each subsidiary of Guarantor is an entity duly organized, validly
existing and in good standing (to the extent the concept of good standing exists
in the applicable jurisdiction) under the laws of its jurisdiction of
organization, has the requisite corporate or other power and authority necessary
to own, lease and operate the properties it purports to own, lease and operate
and to carry on its business as now conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not reasonably be expected to have a Material Adverse Effect. Each
subsidiary of Guarantor is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified or in good standing would not reasonably be expected to have a
Material Adverse Effect. All of Guarantor's significant subsidiaries and their
respective jurisdictions of incorporation are included in the subsidiary list
contained in Guarantor's Annual report on Form 10-K for the fiscal year ended
September 30, 2000.
Section 3.02 Capitalization. (a) The authorized capital stock of Guarantor
consists of 2,500,000,000 Guarantor Common Shares and 125,000,000 Preference
Shares, par value $1.00 per share ("Guarantor Preference Shares"). As of January
19, 2001, (i) 1,750,373,296 Guarantor Common Shares were issued and outstanding,
all of which are duly authorized, validly issued, fully paid and non-assessable
and none of which were issued in violation of preemptive or similar rights, (ii)
no Guarantor Preference Shares were outstanding and (iii) no more than
14,000,000 Guarantor Common Shares and no Guarantor Preference Shares were held
by subsidiaries of Guarantor. As of December 31, 2000, no more than 180,000,000
Guarantor Common Shares were reserved for issuance upon exercise of stock
options issued under Guarantor's stock option plans.
(b) Except (i) as set forth in Section 3.02(a), (ii) for changes since
December 31, 2000 resulting from the exercise of stock options, (iii) for Liquid
Yield Option Notes (XXXXX) issued by Guarantor or its subsidiary and reflected
in the notes to Guarantor's consolidated financial statements included in
Guarantor's 2000 Form 10-K and changes resulting from the exchange therefor,
(iv) for other rights to acquire immaterial amounts of Guarantor Common Shares
and changes resulting from the exercise thereof, (v) for changes resulting from
the grant of stock based compensation to directors or employees or (iv) for
changes resulting from the issuance of stock in connection with a merger or
other acquisition or business combination or an underwritten public offering
determined by Guarantor's Board of Directors to be in the best interests of
Guarantor and its shareholders, there are no outstanding (x) shares of capital
stock or voting securities of Guarantor, (y) securities of Guarantor convertible
into or exchangeable for shares of capital stock or voting securities of
Guarantor or (z) options or other rights to acquire from Guarantor or other
obligation of Guarantor to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of Guarantor. There are no outstanding
31
obligations of Guarantor or any of its subsidiaries to repurchase, redeem or
otherwise acquire any of its equity securities.
(c) The Guarantor Common Shares to be delivered as Merger Consideration
have been duly authorized and, when issued and delivered in accordance with the
terms of this Agreement, will have been validly issued and will be fully paid
and nonassessable, and the issuance thereof is not subject to any preemptive or
other similar right.
Section 3.03 Authority Relative to this Agreement. (a) The execution,
delivery and performance by Guarantor, Parent and Merger Sub of this Agreement,
the execution, delivery and performance by Guarantor of the Guarantee and the
consummation by Guarantor, Parent and Merger Sub of the transactions
contemplated hereby and thereby, as applicable, are within the respective
corporate powers of Guarantor, Parent and Merger Sub and have been duly
authorized by all necessary corporate action. This Agreement has been duly and
validly executed and delivered and constitutes a valid and binding agreement of
each of Parent and Merger Sub enforceable against each of them in accordance
with its terms, and the Guarantee has been duly and validly executed and
delivered and constitutes a valid and binding agreement of Guarantor enforceable
against it in accordance with its terms.
(b) At a meeting duly called and held, or by written consent in lieu of
meeting, the respective Boards of Directors of Parent and Merger Sub, as
applicable, have (i) unanimously determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of
Parent, Merger Sub and their respective stockholders, as applicable, and (ii)
unanimously adopted this Agreement and approved the transactions contemplated
hereby. At a meeting duly called and held, Guarantor's Board of Directors has
approved the Guarantee and the transactions contemplated thereby and the
issuance of the Guarantor Common Shares to be delivered to the Company
stockholders in connection with the Merger.
Section 3.04 No Conflicts; Required Filings and Consents. (a) The
execution, delivery and performance by Parent and Merger Sub of this Agreement,
the execution, delivery and performance by Guarantor of the Guarantee and the
consummation by Guarantor, Parent and Merger Sub of the Merger and the other
transactions contemplated hereby and thereby, as applicable, require no action
by or in respect of, or filing with, any Governmental Authority, other than (i)
the filing of Certificate of Merger with respect to the Merger with the
Secretary of State of the State of Delaware (ii) compliance with any applicable
requirements of the HSR Act and applicable Non-U.S. Monopoly Laws, (iii)
compliance with any applicable requirements of the Securities Act, the Exchange
Act, any applicable state securities laws, NASDAQ, the NYSE, the Bermuda Stock
Exchange and the London Stock Exchange, (iv) compliance with Environmental
Health and Safety Laws and (v) any actions or filings the absence of which would
not be reasonably expected, individually or in the aggregate, to have a Material
Adverse Effect or materially impair the ability of Parent and Merger Sub to
consummate the Merger and the other transactions contemplated by this Agreement
or the ability of Guarantor to fulfill its obligations under the Guarantee.
(b) The execution, delivery and performance by Parent and Merger Sub of
this Agreement, the execution, delivery and performance by Guarantor of the
Guarantee and the
32
consummation by Guarantor, Parent and Merger Sub of the transactions
contemplated hereby and thereby, as applicable, do not and will not (i)
contravene, conflict with, or result in any violation or breach of any provision
of the Guarantor Charter Documents or the articles of incorporation or by-laws
of Parent or Merger Sub (or equivalent organizational documents), (ii) assuming
compliance with the matters referred to in Section 3.04(a), contravene, conflict
with or result in a violation or breach of any provision of any law, rule,
regulation, judgment, injunction, order or decree applicable to Guarantor or any
of its subsidiaries, (iii) require any consent or other action by any person
under, constitute a default under, or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which Guarantor or any of its subsidiaries is entitled
under any provision of any Material Agreement or instrument binding upon
Guarantor or any of its subsidiaries or any material license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating in
any way to, the assets or business of the Parent and its subsidiaries; provided
--------
that, for purposes of this subsection 3.04(b)(iii), "Material Agreement" shall
mean any agreement identified in Guarantor's Annual Report on Form 10-K for the
fiscal year ended September 30, 2000 or any agreement entered into since
September 30, 2000 that would be required to be so identified in Guarantor's
Annual Report on Form 10-K for the fiscal year ended September 30, 2001 or (iv)
result in the creation or imposition of any encumbrance on any material asset of
Guarantor or any of its subsidiaries.
Section 3.05 Compliance. Except as set forth in the reports, schedules,
forms, statements and other documents (the "Guarantor SEC Documents") filed by
the Guarantor with the SEC since September 30, 2000 and prior to the date of
this Agreement, neither Guarantor nor any of its subsidiaries is in conflict
with, or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Guarantor or any of its subsidiaries or by
which its or any of their respective properties is bound or affected or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Guarantor or any of its
subsidiaries is a party or by which Guarantor or any of its subsidiaries or its
or any of their respective properties is bound or affected, except for any such
conflicts, defaults or violations which would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. To Parent's
knowledge, no investigation by any Governmental Authority with respect to
Guarantor or any of its subsidiaries is pending or threatened, except as
set forth in the Guarantor SEC Documents.
Section 3.06 SEC Filings; Financial Statements. (a) Guarantor has filed
with the SEC all reports, schedules, forms, statements and other documents
(including all exhibits thereto) required to be filed with the SEC since
September 30, 1998 (the "Post-1998 Guarantor SEC Documents"). Except as
set forth in the Guarantor SEC Documents, such reports, schedules, forms
statements and other documents were prepared in all material respects in
accordance with the applicable requirements of the Securities Act or the
Exchange Act, as the case may be; and did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. With the exception of Tycom Ltd., none of the
Guarantor's subsidiaries is required to file with the SEC periodic reports
pursuant to the Exchange Act.
33
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Post-1998 Guarantor SEC
Documents were prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes thereto
or in the Post-1998 Guarantor SEC Documents), and each fairly presents in all
material respects, the consolidated financial position of Guarantor and its
consolidated subsidiaries as at the respective dates thereof and the
consolidated results of operations and cash flows for the periods indicated,
except that for purposes of the foregoing representation, the unaudited interim
financial statements (i) shall be read in conjunction with the Guarantor's
consolidated financial statements contained in the Guarantor's 2000 Annual
Report on Form 10-K, and (ii) were or are subject to normal and recurring year
end adjustments which were not or are not expected to be material in amount.
Section 3.07 Absence of Certain Changes or Events. Except as set forth in
the Guarantor SEC Documents, since September 30, 2000, the business of Guarantor
and its subsidiaries has been conducted in the ordinary course and there has not
occurred: (i) any changes, effects or circumstances, including any damage to,
destruction or loss of any asset of the Company (whether or not covered by
insurance) constituting, individually or in the aggregate, a Material Adverse
Effect; (ii) any amendments or changes in the Guarantor Charter Documents,
except as provided in Section 4.03(a); (iii) any material change by Guarantor in
its accounting methods, principles or practices (other than as required by GAAP
subsequent to the date of this Agreement); or (iv) any sale of a material amount
of assets of Guarantor, except in the ordinary course of business.
Section 3.08 No Undisclosed Liabilities. Except as set forth in the
Guarantor SEC Documents, neither Guarantor nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise), except liabilities (i)
in the aggregate adequately provided for in Guarantor's balance sheet (including
any related notes thereto) as of September 30, 2000 included in Guarantor's 2000
Form 10-K for the fiscal period ended September 30, 2000 (the "2000 Guarantor
Balance Sheet"), (ii) incurred in the ordinary course of business and not
required under GAAP to be reflected on the 2000 Guarantor Balance Sheet, (iii)
incurred since September 30, 2000 in the ordinary course of business, (iv)
incurred in connection with this Agreement, or the Merger or the other
transactions contemplated hereby, or (v) which would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
Section 3.09 Absence of Litigation. Except as set forth in the
Guarantor SEC Documents or arising out of the transactions contemplated by this
Agreement, there are no claims, actions, suits, proceedings or investigations
pending or, to the knowledge of Guarantor, threatened against Guarantor or any
of its subsidiaries, or any properties or rights of Guarantor or any of its
subsidiaries, before any court, arbitrator or Governmental Authority, that would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
Section 3.10 Registration Statement; Proxy Statement/Prospectus. (a)
Subject to the accuracy of the representations of the Company in Section 2.13:
(i) the registration statement on Form S-4 (or on such other form as shall
be appropriate) (as it may be amended, the "Registration Statement"), pursuant
to which the Guarantor Common Shares to be delivered to the stockholders of the
Company by Parent in
34
connection with the Merger will be registered with the SEC, shall not, at the
respective times the Registration Statement (including any amendments or
supplements thereto) is filed with the SEC or is declared effective by the SEC,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements included therein not misleading;
and
(ii) the information supplied by Guarantor, Parent or Merger Sub for
inclusion in the Proxy Statement/Prospectus will not, on the date the Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is filed
with the SEC or first mailed to stockholders or at the time of the Company
Stockholders Meeting, contain any statement which, at such time and in light of
the circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein not
false or misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders Meeting which has become false or misleading.
(b) If at any time prior to the Effective Time any event relating to
Parent, Merger Sub or any of their respective affiliates, officers or directors
should be discovered by Parent or Merger Sub which should be set forth in an
amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, Parent or Merger Sub will promptly inform the Company.
(c) The Registration Statement and the Proxy Statement/Prospectus shall
comply in all material respects with the requirements of all applicable laws,
including the Securities Act and the Exchange Act and the rules and regulations
thereunder.
(d) Notwithstanding the foregoing, Parent and Merger Sub make no
representation or warranty with respect to any information supplied by the
Company which is contained or incorporated by reference in, or furnished in
connection with the preparation of, the Registration Statement or the Proxy
Statement/Prospectus.
Section 3.11 Brokers. There is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of Parent or Guarantor who might be entitled to any fee or commission from
Parent, Guarantor or any of their respective affiliates in connection with the
transactions contemplated by this Agreement.
Section 3.12 Ownership of Parent and Merger Sub. Merger Sub is a direct,
wholly-owned subsidiary of Parent, and Parent is a direct, wholly-owned
subsidiary of Guarantor.
Section 3.13 No Prior Activities. (a) Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement.
(b) Except for obligations or liabilities incurred by Merger Sub in
connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, Merger Sub has not
incurred, directly or indirectly, through any subsidiary or
35
affiliate, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person.
Section 3.14 Ownership Interest in the Company. Other than by reason of
this Agreement or the transactions contemplated hereby, neither Parent nor any
of its affiliates is, or has been during the past three years, an "interested
stockholder" of the Company, as that term is defined in Section 203 of the DGCL
or a "related company," "an affiliate of a related company" or "an associated
person of a related company," as those terms are defined in Article SIXTH of the
Company's Amended and Restated Certificate of Incorporation.
Section 3.15 No Vote Required. No vote of the shareholders of Guarantor is
required by law, Guarantor's Charter Documents or otherwise in order for Parent
and Merger Sub to consummate the Merger and the other transactions contemplated
hereby, as applicable.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
Section 4.01 Conduct of Business by the Company. The Company covenants and
agrees that, during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Effective Time,
unless Parent shall otherwise agree in writing, and except as set forth in
Section 4.01 of the Company Disclosure Schedule, the Company shall conduct its
business and shall cause the businesses of its subsidiaries to be conducted only
in, and the Company and its subsidiaries shall not take any action except in,
the ordinary course of business and in a manner consistent with past practice;
and the Company shall use reasonable commercial efforts to preserve
substantially intact the business organization of the Company and its
subsidiaries, to keep available the services of the present officers, employees
and consultants of the Company and its subsidiaries and to preserve the present
relationships of the Company and its subsidiaries with customers, suppliers and
other persons with which the Company or any of its subsidiaries has significant
business relations. By way of amplification and not limitation, except as
contemplated by this Agreement, neither the Company nor any of its subsidiaries
shall, during the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time, and
except as set forth in Section 4.01 of the Company Disclosure Schedule, directly
or indirectly do, or propose to do, any of the following without the prior
written consent of Parent, which, in the case of clauses (c), (d)(iv), (e), (f),
(h) or (i), will not be unreasonably withheld or delayed:
(a) amend or otherwise change the Company Charter Documents;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company, any of its subsidiaries or affiliates (except for the issuance of
shares of Company Common Stock issuable pursuant to Company Stock Options
outstanding on the date hereof;
36
(c) sell, pledge, dispose of or encumber any assets of the Company or any
of its subsidiaries (except for (i) sales of assets in the ordinary course of
business and in a manner consistent with past practice, (ii) dispositions of
obsolete or worthless assets, and (iii) sales of immaterial assets not in excess
of $1 million in the aggregate);
(d) (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly-owned subsidiary of the Company
may declare and pay a dividend to its parent that is not a cross-border
dividend, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, (iii) except (A) as
contemplated by this Agreement, (B) as required by the terms of any security as
in effect on the date hereof and set forth in Section 4.01(d) of the Company
Disclosure Schedule and (C) to the extent necessary to effect withholding to
meet minimum tax withholding obligations in connection with the exercise of any
Company Stock Option, amend the terms or change the period of exercisability of,
purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to
amend the terms or change the period of exercisability of, purchase, repurchase,
redeem or otherwise acquire, any of its securities or any securities of its
subsidiaries, including, without limitation, shares of Company Common Stock, or
any option, warrant or right, directly or indirectly, to acquire any such
securities, or propose to do any of the foregoing, (iv) settle, pay or discharge
any claim, suit or other action brought or threatened against the Company with
respect to or arising out of a Stockholder equity interest in the Company, or
(v) make any cross-border capital contributions to a subsidiary;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, limited liability company or other
business organization or division thereof other than those listed on Section
4.01(e) of the Company Disclosure Schedule; (ii) incur any indebtedness for
borrowed money, except for borrowings and reborrowings under the Company's or
any of its subsidiaries' existing credit facilities listed on Section 4.01(e) of
the Company Disclosure Schedule not in excess of $2 million; (iii) issue any
debt securities or assume, guarantee (other than guarantees of the Company's
subsidiaries entered into in the ordinary course of business) or endorse, or
otherwise as an accommodation become responsible for, the obligations of any
person, or make any loans or advances, except in the ordinary course of business
consistent with past practice (but not loans or advances to employees of the
Company to fund the exercise price of Company Stock Options or otherwise to
purchase shares of the Company Common Stock); or (iv) authorize any capital
expenditures or purchases of fixed assets which are, in the aggregate, in excess
of $5 million over the next 12 month period; or (v) enter into or materially
amend any contract, agreement, commitment or arrangement to effect any of the
matters prohibited by this Section 4.01(e);
(f) (i) increase the compensation or severance payable or to become
payable to its directors, officers, employees or consultants, except for
increases in salary or wages of employees of the Company or its subsidiaries,
including in connection with promotions, in accordance with past practices; or
(ii) grant any severance or termination pay (except to make payments required to
be made under obligations existing on the date hereof in accordance with the
terms of such obligations) to, or enter into or amend any employment or
severance agreement, with any current or prospective employee of the Company or
any of its subsidiaries,
37
except for new hire employees in the ordinary course of business whose annual
salary does not exceed $100,000 and whose severance benefits do not exceed one
times annual salary; or (iii) establish, adopt, enter into or amend any
collective bargaining agreement, Company Employee Plan, including, without
limitation, any plan that provides for the payment of bonuses or incentive
compensation, trust, fund, policy or arrangement for the benefit of any current
or former directors, officers, employees or consultants or any of their
beneficiaries, except, in each case, as may be required by law;
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable) except as
required by a change in GAAP or the interpretations thereof occurring after the
date hereof;
(h) make any tax election or settle or compromise any United States
federal, state, local or non-United States tax liability;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise) in excess
of $1 million in the aggregate, other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice of liabilities reflected or reserved against in the financial
statements contained in the Company SEC Documents or incurred in the ordinary
course of business and consistent with past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.01(a) through (i) above, or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect or prevent the Company from performing or cause
the Company not to perform its covenants hereunder.
Section 4.02 No Solicitation.
(a) The Company shall not, directly or indirectly, through any officer,
director, employee, representative or agent of the Company or any of its
subsidiaries, solicit or encourage the initiation of (including by way of
furnishing information) any inquiries or proposals regarding any merger, sale of
assets, sale of shares of capital stock (including, without limitation, by way
of a tender offer) or similar transactions involving the Company or any
subsidiaries of the Company that if consummated would constitute an Alternative
Transaction (as defined below) (any of the foregoing inquiries or proposals
being referred to herein as an "Acquisition Proposal"). Nothing contained in
this Agreement shall prevent the Board of Directors of the Company, at any time
prior to the adoption of this Agreement at the Company's Stockholders Meeting,
from (i) furnishing information to a third party which has made a bona fide
---- ----
Acquisition Proposal that the Board of Directors of the Company concludes in
good faith after consulting with a nationally recognized investment banking firm
would, if consummated, constitute a Superior Proposal (as defined below) not
solicited in violation of this Agreement, provided that such third party has,
prior to its receipt of such information, executed an agreement with
confidentiality provisions no less favorable (taken as a whole) to the Company
than those then in effect between the Company and a subsidiary of Guarantor or
(ii) subject to compliance with the other terms of this Section 4.02, including
Sections 4.02(c) and (d), considering and
38
negotiating a bona fide Acquisition Proposal that the Board of Directors of the
Company concludes in good faith after consulting with a nationally recognized
investment banking firm would, if consummated, constitute a Superior Proposal
not solicited in violation of this Agreement; provided, however, that, as to
-------- -------
each of clauses (i) and (ii), the Board of Directors of the Company reasonably
determines in good faith (after due consultation with independent counsel, which
may be Xxxxxx, Halter & Xxxxxxxx LLP) that it is or is reasonably likely to be
required to do so in order to discharge properly its fiduciary duties.
For purposes of this Agreement, "Alternative Transaction" means any of (i)
a transaction pursuant to which any person (or group of persons) other than
Parent or its affiliates (a "Third Party") acquires or would acquire more than
25% of the outstanding shares of any class of equity securities of the Company,
whether from the Company or pursuant to a tender offer or exchange offer or
otherwise, (ii) a merger or other business combination involving the Company
pursuant to which any Third Party acquires or would acquire more than 25% of the
outstanding equity securities of the Company or the entity surviving such merger
or business combination, (iii) any transaction pursuant to which any Third Party
acquires or would acquire control of assets (including for this purpose the
outstanding equity securities of subsidiaries of the Company and securities of
the entity surviving any merger or business combination including any of the
Company's subsidiaries) of the Company, or any of its subsidiaries having a fair
market value (as determined by the Board of Directors of the Company in good
faith) equal to more than 25% of the fair market value of all the assets of the
Company and its subsidiaries, taken as a whole, immediately prior to such
transaction, or (iv) any other consolidation, business combination,
recapitalization or similar transaction involving the Company or any significant
subsidiary of the Company, other than the transactions contemplated by this
Agreement; provided, however, that the term Alternative Transaction shall not
--------- -------
include any acquisition of securities by a broker dealer in connection with a
bona fide public offering of such securities.
For purposes of this Agreement, "Superior Proposal" means any proposal
made by a Third Party to acquire, directly or indirectly, for consideration
consisting of cash and/or marketable securities, all of the Company Common Stock
entitled to vote generally in the election of directors or all or substantially
all the assets of the Company, on terms which the Board of Directors of the
Company reasonably believes (after consultation with a financial advisor of
nationally recognized reputation) to be more favorable from a financial point of
view to its stockholders than the Merger Consideration taking into account at
the time of determination any changes to the financial terms of this Agreement
proposed by Parent; provided, however, that a Superior Proposal may be subject
--------- -------
to a due diligence review of confidential information and to other customary
conditions (other than financing conditions), including by way of example, those
contained herein.
(b) The Company shall notify Parent promptly (but in no event later than
24 hours) after receipt of any Acquisition Proposal, or any modification of or
amendment to any Acquisition Proposal, or any request for nonpublic information
relating to the Company or any of its subsidiaries in connection with an
Acquisition Proposal or for access to the properties, books or records of the
Company or any subsidiary by any person or entity that informs the Board of
Directors of the Company or such subsidiary that it is considering making, or
has made, an Acquisition Proposal. Such notice to Parent shall be made orally
and in writing, and shall indicate the identity of the person making the
Acquisition Proposal or intending to make an
39
Acquisition Proposal or requesting non-public information or access to the books
and records of the Company, the terms of any such Acquisition Proposal or
modification or amendment to an Acquisition Proposal, and whether the Company is
providing or intends to provide the person making the Acquisition Proposal with
access to information concerning the Company as provided in Section 4.02(a). The
Company shall keep Parent fully informed, on a current basis, of any material
changes in the status and any material changes or modifications in the material
terms of any such Acquisition Proposal, indication or request. The Company shall
also promptly notify Parent, orally and in writing, if it enters into
negotiations concerning any Acquisition Proposal.
(c) Except to the extent the Board of Directors of the Company reasonably
determines in good faith (after due consultation with independent counsel, which
may be Xxxxxx, Halter & Xxxxxxxx LLP ) that it is or is reasonably likely to be
required to act to the contrary in order to discharge properly its fiduciary
duties (and, with respect to the approval, recommendation or entering into of
any Acquisition Proposal, it may take such contrary action only after the second
full business day following Parent's and Merger Sub's receipt of written notice
of the Board of Directors' intention to do so), neither the Company nor the
Board of Directors of the Company shall withdraw or modify, or publicly propose
to withdraw or modify, in a manner adverse to Parent or Merger Sub, the adoption
by such Board of Directors of this Agreement or its approval of the Merger.
(d) The Company and the Board of Directors of the Company shall not (i)
redeem the rights (the "Rights") issued under the Rights Agreement, dated as of
December 15, 1998, as amended, between the Company and National City Bank, as
Rights Agent (the "Rights Agreement"), or waive or amend any provision of the
Rights Agreement, in any such case to permit or facilitate the consummation of
any Acquisition Proposal or Alternative Transaction, or (ii) enter into any
agreement with respect to (other than a confidentiality agreement entered into
not in violation of Section 4.02(a)), or otherwise approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or Alternative
Transaction, unless this Agreement has been terminated in accordance with its
terms. It is understood and agreed that a deferral of the distribution of Rights
following the commencement of a tender offer or exchange offer shall not be
prohibited hereunder.
(e) Nothing contained in this Section 4.02 shall prohibit the Company from
taking and disclosing to its stockholders a position required by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to its
stockholders required by applicable law, rule or regulation or by NASDAQ.
(f) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any persons (other than Parent and
Merger Sub) conducted heretofore with respect to any of the foregoing. The
Company agrees not to release any third party from the confidentiality and
standstill provisions of any agreement to which the Company is a party, other
than agreements with the Company's customers and suppliers entered into in the
ordinary course of business.
(g) The Company shall ensure that the officers and directors of the
Company and the Company subsidiaries and any investment banker or other advisor
or representative
40
retained by the Company, or providing services to the Company, in connection
with the transactions contemplated hereby are aware of the restrictions
described in this Section 4.02. It is understood that any violation of the
restrictions set forth in this Section 4.02 by any officer or director of the
Company or the Company subsidiaries and any investment banker, attorney or other
advisor or representative of the Company shall be deemed to be a breach of this
Section 4.02 by the Company.
Section 4.03 Conduct of Business by Guarantor. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective Time, Parent covenants and agrees that, unless
the Company shall otherwise agree in writing, Parent shall take all action
necessary so that (i) Guarantor shall conduct its business, and cause the
businesses of its subsidiaries to be conducted, in the ordinary course of
business and consistent with past practice, including actions taken by Guarantor
or its subsidiaries in contemplation of consummation of the Merger or other
business acquisitions, and (ii) Guarantor shall not directly or indirectly do,
or propose to do, any of the following without the prior written consent of the
Company:
(a) amend or otherwise change the Guarantor Charter Documents, except as
proposed in Guarantor's proxy statement for its 2001 annual general meeting of
shareholders filed with the SEC on January 29, 2001;
(b) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person, or dispose of any assets, which, in any
such case, would, or would reasonably be expected to, materially delay or
prevent the consummation of the Merger and the other transactions contemplated
by this Agreement;
(c) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of Guarantor may
declare and pay a dividend to its parent, and except that Guarantor may declare
and pay quarterly cash dividends on the Guarantor Common Shares of up to $0.0125
per share consistent with past practice;
(d) take any action to change its accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable), except as
required by a change in GAAP occurring after the date hereof; or
(e) take or agree in writing or otherwise to take any of the actions
described in Sections 4.03(a) through (d) above, or any action that would make
any of the representations or warranties of Parent contained in this Agreement
untrue or incorrect or prevent Parent from performing or cause Parent not to
perform its covenants hereunder.
41
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
Section 5.01 Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as reasonably practicable after the execution of this
Agreement, the Company shall, and Parent shall cause Guarantor to, prepare and
file with the SEC, preliminary proxy materials which shall constitute the Proxy
Statement/Prospectus and, if the parties so agree at the time, the Registration
Statement. As promptly as reasonably practicable after comments are received
from the SEC thereon and after the furnishing by the Company and Guarantor of
all information required to be contained therein, the Company shall, and Parent
shall, and shall cause Guarantor to, file with the SEC, the definitive Proxy
Statement/Prospectus and the Registration Statement (or, if the Registration
Statement has been previously filed, an amendment thereto) relating to the
adoption of this Agreement by the Company's stockholders as set forth in Section
2.04(c) and the other transactions contemplated hereby, and to the payment of
the Merger Consideration in the form of Guarantor Common Shares pursuant to this
Agreement, and shall use all reasonable efforts to cause the Registration
Statement to become effective, and the Company shall mail the Proxy
Statement/Prospectus to its stockholders as soon thereafter as reasonably
practicable. Parent shall also cause Guarantor to take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under the applicable state securities laws in connection with the issuance
of Guarantor Common Shares in connection with the Merger, and the Company shall
furnish to Guarantor all information concerning the Company and the holders of
capital stock of the Company as may be reasonably requested in connection with
any such action and the preparation, filing and distribution of the Proxy
Statement/Prospectus.
No filing of, or amendment or supplement to, or correspondence to the SEC
or its staff with respect to the Proxy Statement/Prospectus will be made by the
Company or Guarantor, without providing the other party a reasonable opportunity
to review and comment thereon. Parent will advise the Company, promptly after
Guarantor receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment has been filed, the issuance
of any stop order, the suspension of the qualification of the Guarantor Common
Shares issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. The Company will advise Parent, promptly after it
receives notice thereof, of any request by the SEC for the amendment of the
Proxy Statement/Prospectus or comments thereon and responses thereto or requests
by the SEC for additional information.
If at any time prior to the Effective Time any information relating to the
Company or Parent, or any of their respective affiliates, officers or directors,
should be discovered by the Company or Parent which should be set forth in an
amendment or supplement to either of the Registration Statement or the Proxy
Statement/Prospectus so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not
42
misleading, the party which discovers such information shall promptly notify the
other parties hereto and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent required by
law, disseminated to the stockholders of the Company.
(b) Parent shall cause Guarantor to include as an exhibit to the
Registration Statement tax opinions of PricewaterhouseCoopers LLP and Xxxxxx,
Halter & Xxxxxxxx LLP, in form and substance reasonably satisfactory to Parent
and to the Company, on the basis of customary facts, representations,
warranties, covenants and assumptions set forth in such opinions, that the
Merger will be treated for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code that is not
subject to Section 367(a)(1) of the Code pursuant to Treasury Regulation Section
1.367(a)-(3)(c) (other than with respect to Company stockholders who are or will
be "five-percent transferee stockholders" within the meaning of Treasury
Regulation Section 1.367(a)-3(c)(5)(ii)), and that each of Guarantor, Parent and
the Company will be a party to the reorganization within the meaning of Section
368(b) of the Code.
(c) The Proxy Statement/Prospectus shall include the recommendation of
the Board of Directors of the Company in favor of adoption of this Agreement.
Notwithstanding anything to the contrary set forth in this Section 5.01 or
Section 5.02, the Company shall not be obligated to take the action set forth in
the preceding sentence of this Section 5.01(c) or to take the actions set forth
in the second sentence of Section 5.02 to the extent that the Board of Directors
of the Company determines (after due consultation with independent counsel,
which may be Xxxxxx, Halter & Xxxxxxxx LLP) that such action is, or it is
reasonably likely that such action is, inconsistent with the proper discharge of
its fiduciary duties.
Section 5.02 Company Stockholders Meeting.The Company shall establish a
record date for, duly call, give notice of, convene and hold the Company
Stockholders Meeting as promptly as practicable for the purpose of voting upon
the adoption of this Agreement, and the Company shall use all reasonable efforts
to cause the Proxy Statement/Prospectus to be mailed to the Company's
stockholders and to hold the Company Stockholders Meeting as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act. The Company shall solicit from its stockholders proxies in favor
of adoption of this Agreement and shall take all other reasonable action
necessary or advisable to secure the vote or consent of stockholders in favor of
such adoption.
Section 5.03 Access to Information; Confidentiality. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements (from which
such party shall use reasonable efforts to be released), the Company shall (and
shall cause its subsidiaries to) and Parent shall take all action necessary such
that Guarantor and its subsidiaries shall (i) afford to the officers, employees,
accountants, counsel and other representatives of the other, reasonable access,
during the period after the execution and delivery of this Agreement and prior
to the Effective Time, to the properties, books, contracts, commitments and
records of the Company or the Guarantor, as applicable, and, (ii) during such
period, furnish promptly to the other all information concerning the business,
properties and personnel of the Company or the Guarantor, as applicable, as such
other party may reasonably request, and each shall make available to the other
the appropriate individuals (including attorneys, accountants and other
professionals) for
43
discussion of the Company's or Guarantor's, as applicable, business, properties
and personnel as either Parent or the Company may reasonably request. Such
information shall be kept confidential in accordance with the terms of the
confidentiality agreement, dated September 5, 2000 (the "Confidentiality
Agreement"), between an affiliate of Guarantor and the Company.
Section 5.04 Consents; Approvals.
(a) Subject to Section 5.08, the Company and Parent shall each use its
reasonable best efforts (and Parent shall cause Guarantor to use its reasonable
best efforts) to obtain and to cooperate with each other in order to obtain all
consents, waivers, approvals, authorizations or orders (including, without
limitation, all United States and non-United States governmental and regulatory
rulings and approvals), and the Company and Parent shall make (and Parent shall
cause Guarantor to make) all filings (including, without limitation, all filings
with United States and non-United States governmental or regulatory agencies)
required in connection with the authorization, execution and delivery of this
Agreement by the Company and Parent and the consummation by them of the
transactions contemplated hereby. The Company and Parent shall furnish (and
Parent shall cause Guarantor to furnish) all information required to be included
in the Proxy Statement/Prospectus and the Registration Statement, or for any
application or other filing to be made pursuant to the rules and regulations of
any United States or non-United States governmental body in connection with the
transactions contemplated by this Agreement.
(b) The Company shall, and Parent shall and shall cause Guarantor to,
notify the other promptly upon the receipt of any comments from the SEC or its
staff or any other government officials in connection with any filing made
pursuant hereto and of any request by the SEC or its staff or any other
government officials for amendments or supplements to the Registration
Statement, the Proxy Statement/Prospectus or any other filings or for additional
information and will supply the other with copies of all correspondence between
such party or any of its representatives, on the one hand, and the SEC, or its
staff or any other government officials, on the other hand, with respect to the
Registration Statement, the Proxy Statement/Prospectus, the Merger or any other
filing. The Company shall, and Parent shall and shall cause Guarantor to, cause
all documents that it is responsible for filing with the SEC or other regulatory
authorities under Section 5.01 and this Section 5.04 to comply in all material
respects with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Registration Statement, the Proxy
Statement/Prospectus or any other filing, the Company will, or Parent will cause
Guarantor to, as the case may be, promptly inform the other of such occurrence
and cooperate in filing with the SEC or its staff or any other government
officials and/or mailing to stockholders of the Company, such amendment or
supplement.
Section 5.05 Agreements with Respect to Affiliates. The Company shall
deliver to Parent, prior to the date the Registration Statement becomes
effective under the Securities Act, a letter identifying all persons who, at the
Effective Time, are anticipated to be "affiliates" of the Company for purposes
of Rule 145 under the Securities Act. The Company shall use its reasonable best
efforts to cause each person who is identified as an "affiliate" in the
Affiliate Letter to deliver to Parent prior to the Effective Time a written
agreement in connection with
44
restrictions on affiliates under Rule 145 under the Securities Act in a form
mutually agreeable to the Company and Parent.
Section 5.06 Indemnification and Insurance.
(a) The Certificate of Incorporation and By-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Company Charter Documents, which provisions shall not be amended,
modified or otherwise repealed for a period of six years from the Effective Time
in any manner that would adversely affect the rights thereunder as of the
Effective Time of individuals who at the Effective Time were directors or
officers of the Company, unless such modification is required after the
Effective Time by law and then only to the minimum extent required by such law.
(b) The Surviving Corporation shall, to the fullest extent permitted under
applicable law or under the Surviving Corporation's Certificate of Incorporation
or By-laws, indemnify and hold harmless, each present and former director or
officer of the Company or any of its subsidiaries (collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, (x)
arising out of or pertaining to the transactions contemplated by this Agreement
or (y) otherwise with respect to any acts or omissions occurring at or prior to
the Effective Time, to the same extent as provided in the Company Charter
Documents or any applicable contract or agreement as in effect on the date
hereof, in each case for a period of six years after the Effective Time. In the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) any counsel retained by the
Indemnified Parties for any period after the Effective Time (which may be
Xxxxxx, Halter & Xxxxxxxx LLP or otherwise) shall be reasonably satisfactory to
the Surviving Corporation, (ii) after the Effective Time, the Surviving
Corporation shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, provided that the Indemnified Parties
shall be required to reimburse the Surviving Corporation for such payments in
the circumstances and to the extent required by the Company Charter Documents,
any applicable contract or agreement with such Indemnified Party or applicable
law, and (iii) the Surviving Corporation will cooperate in the defense of any
such matter; provided, however, that the Surviving Corporation shall not be
--------- -------
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld); and provided further that, in the event
-------- -------
that any claim or claims for indemnification are asserted or made within such
six-year period, all rights to indemnification in respect of any such claim or
claims shall continue until the final disposition of any and all such claims.
The Indemnified Parties as a group may retain only one law firm to represent
them in each applicable jurisdiction with respect to any single action unless
there is, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified Parties,
in which case each Indemnified Person with respect to whom such a conflict
exists (or group of such Indemnified Persons who among them have no such
conflict) may retain one separate law firm in each applicable jurisdiction.
(c) The Surviving Corporation shall honor and fulfill in all respects the
obligations of the Company pursuant to indemnification agreements and employment
agreements
45
(the parties under such agreements being referred to as the "Covered Persons")
with the Company's directors and officers existing at or before the Effective
Time, provided such agreements do not violate Section 4.01(f).
(d) In addition, Parent will provide, or cause the Surviving Corporation
to provide, for a period of not less than six years after the Effective Time,
the Company's current directors and officers (as defined to mean those persons
insured under such policy) with an insurance and indemnification policy that
provides coverage for events occurring at or prior to the Effective Time (the
"D&O Insurance") that is no less favorable than the existing policy or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that Parent and the Surviving Corporation shall not
-------- -------
be required to pay an annual premium for the D&O Insurance in excess of 200% of
the annual premium currently paid by the Company for such insurance, but in such
case shall purchase as much such coverage as possible for such amount.
(e) From and after the Effective Time, Parent shall unconditionally
guarantee the timely payment of all funds owing by, and the timely performance
of all other obligations of, the Surviving Corporation under this Section 5.06.
(f) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation,
the Indemnified Parties and the Covered Persons, shall be binding on all
successors and assigns of the Surviving Corporation and shall be enforceable by
the Indemnified Parties and the Covered Persons.
Section 5.07 Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence
of which would reasonably be expected to cause any representation or warranty
contained in this Agreement to be materially untrue or inaccurate, or (ii) any
failure of the Company, Parent or Merger Sub, as the case may be, materially to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
-------- -------
pursuant to this Section shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice; and provided further
-------- -------
that failure to give such notice shall not be treated as a breach of covenant
for the purposes of Section 7.01(h) unless and except to the extent that the
failure to give such notice results in material prejudice to the other party.
Section 5.08 Further Action/Tax Treatment.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use all reasonable efforts to, and Parent shall cause
Guarantor to use all reasonable efforts to, take, or cause to be taken, all
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and otherwise to satisfy or cause to be satisfied all
conditions precedent to its obligations under this Agreement. The foregoing
covenant shall include the obligation by Guarantor to agree to divest, abandon,
license, hold separate or take similar action with respect to any assets
(tangible or intangible)
46
which are not material to Guarantor or the Company (but shall not include any
obligation by Guarantor to agree to divest, abandon, license, hold separate or
take similar action with respect to any material assets (tangible or intangible)
of Guarantor or the Company). For this purpose, assets shall be deemed not to be
material to the Company, only if they account for no more than 5% of the total
revenues of the Company and its subsidiaries taken as a whole, or to Guarantor,
only if they account for no more than 0.3% of the total revenues of Guarantor's
Fire and Security Group.
(b) Each of Parent, Merger Sub and the Company shall, and Parent shall
cause Guarantor to, use its reasonable best efforts to cause the Merger to
qualify, and will not (both before and after the Effective Time) take any
actions, or fail to take any action, which could reasonably be expected to
prevent the Merger from qualifying, as a reorganization under the provisions of
Section 368(a) of the Code that is not subject to Section 367(a)(1) of the Code
pursuant to Treasury Regulation Section 1.367(a)-(3)(c) (other than with respect
to Company stockholders who are or will be "five-percent transferee
stockholders" within the meaning of Treasury Regulation Section 1.367(a)-
3(c)(5)(ii)). Parent shall, and shall cause the Surviving Corporation and
Guarantor to, report, to the extent required by the Code or the regulations
thereunder, the Merger for income tax purposes as a reorganization within the
meaning of Section 368 of the Code. Each of Parent and the Company shall make,
and shall cause their affiliates to make, such representations, warranties and
covenants as shall be requested reasonably in the circumstances by
PricewaterhouseCoopers LLP and Xxxxxx, Halter & Xxxxxxxx LLP in order for such
firms to render their opinions referred to in Section 5.01(b).
Section 5.09 Public Announcements. Parent and the Company shall consult
with each other before issuing (and in the case of Parent, before Guarantor
issues) any press release or making any written public statement with respect to
the Merger or this Agreement and shall not issue any such press release or make
any such public statement without the prior consent of the other party, which
shall not be unreasonably withheld; provided, however, that either party may,
-------- -------
without the prior consent of the other, issue such press release or make such
public statement as may upon the advice of counsel be required by law or the
applicable rules and regulations of the SEC (including, without limitation,
Rules 165 and 425 under the Securities Act and Rule 14a-12 under the Exchange
Act), NYSE or NASDAQ if it has used all reasonable efforts to consult with the
other party.
Section 5.10 Guarantor Common Shares.
(a) Parent shall obtain from Guarantor, and shall cause Guarantor to
transfer to Parent, the Guarantor Common Shares to be delivered by Parent to the
holders of Company Common Stock in the Merger.
(b) Parent shall cause Guarantor to use its best efforts to cause the
Guarantor Common Shares to be delivered by Parent to the holders of Company
Common Stock in the Merger to be listed, upon official notice of issuance, on
the NYSE prior to the Effective Time.
(c) Parent shall cause Guarantor on a timely basis to take any action
required to be taken under non-U.S. securities laws in connection with the
issuance of Guarantor Common Shares in the Merger.
47
Section 5.11 Stock Options and ESPP. (a) At the Effective Time, by virtue
of the Merger and without any further action on the part of the holders thereof,
with respect to each outstanding Company Stock Option, the terms of which permit
the Company, upon full exercisability, to terminate such Stock Option as of the
Effective Time (each such Company Stock Option, a "Cash-Out Option"), the Board
of Directors of the Company (or the appropriate committee thereof) shall cause
such Cash-Out Option to (i) become exercisable in full as of or immediately
prior to the Effective Time and (ii) expire as of the Effective Time, and to
thereby constitute the right to receive an amount in cash equal to the positive
difference, if any, between (A) the product of the Exchange Ratio and the
Average Share Price, multiplied by the number of shares of Company Common Stock
for which the Cash-Out Option was exercisable as of or immediately prior to the
Effective Time and (B) the aggregate exercise price for the Company Common Stock
purchasable pursuant to such Cash-Out Option. Any Cash-Out Option, the exercise
price of which as of the Effective Time equals or exceeds the amount equal to
the product of the Exchange Ratio and the Average Share Price, shall be
cancelled and be of no further force and effect as of the Effective Time.
(b) At the Effective Time, and subject to the last sentence of this
Section 5.11(b), Parent shall take all necessary action to provide that each
outstanding Company Stock Option under the Company's Director's Stock Option
Plan and any other Company Stock Options the terms of which do not permit the
Company to terminate such Company Stock Option as of or immediately prior to the
Effective Time, whether or not then exercisable, will continue to have, and be
subject to, the same terms and conditions set forth in the relevant Company
Stock Option Plan and applicable award agreement (and separation agreement, if
applicable) immediately prior to the Effective Time; provided, however, that all
Company Stock Options, other than Company Stock Options granted after the date
hereof, shall be 100% vested and exercisable at the Effective Time, except that,
(i) each Company Stock Option will be exercisable (or will become exercisable in
accordance with its terms) for that number of whole Guarantor Common Shares
equal to the product of the number of shares of Company Common Stock that were
issuable upon exercise of such the Company Stock Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, rounded to the nearest whole
number of Guarantor Common Shares and (ii) the per share exercise price for the
Guarantor Common Shares issuable upon exercise of such Company Stock Option will
be equal to the quotient determined by dividing the exercise price per share of
the Company Common Stock at which such Company Stock option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded to the
nearest whole cent (each such Company Stock Option, as modified, an "Adjusted
Option"). The foregoing notwithstanding, the Company shall use commercially
reasonable efforts to obtain the consent of the holders of Company Stock Options
subject to this Section 5.11(b) that such Company Stock Options will be governed
by Section 5.11(a) and deemed a Cash-Out Option and not be deemed an Adjusted
Option.
(c) Parent will cause Guarantor to take all corporate action necessary to
reserve for issuance a sufficient number of Guarantor Common Shares for delivery
upon exercise of the Adjusted Options and, if and to the extent necessary to
deliver to holders of Adjusted Options upon the exercise of such options,
Guarantor Common Shares registered pursuant to the Securities Act and listed on
the NYSE. At the Effective Time, Parent will cause Guarantor to have a
sufficient number of Guarantor Common Shares issuable upon exercise of the
Adjusted Options registered pursuant to the Securities Act and listed on the
NYSE.
48
(d) Beginning on the date hereof, the Company shall not establish any new
employee stock purchase plans or extend the availability of the Company ESPP to
any employees not previously included in the Company ESPP, or, in either case,
implement any decisions to do the same, whether or not such decisions have been
communicated to employees. The Company shall take such action as is necessary to
terminate such plans as of the Effective Time. All shares of Company Common
Stock under the Company ESPP shall be issued to participants in a manner such
that the shares will be treated as all other shares of Company Common Stock.
Section 5.12 Certain Employee Benefits.
(a) From the Effective Time through December 31, 2001 (the "Benefits
Continuation Period"), the Surviving Corporation shall provide each person who,
as of the Effective Time, is an employee of the Company or any subsidiary of the
Company (a "Company Employee") with employee benefits that are comparable in the
aggregate to those provided to such Company Employee immediately prior to the
Effective Time, provided, however, subject to applicable law and contractual
-------- -------
restrictions, that the Surviving Corporation shall have the right to amend any
Company Employee Plans, including without limitation, any retiree welfare
benefit plans or pension benefit plans, in effect as of the Effective Time.
Notwithstanding the foregoing, from the Effective Time through the end of the
Benefits Continuation Period, the Surviving Corporation shall maintain severance
plans, policies and programs for the benefit of each Company employee that are
substantially comparable to the severance plans, policies and programs of the
Company as in effect for such employee immediately prior to the Effective Time,
provided, however, that, except as required by contractual obligation, no such
-------- -------
employee shall be entitled to a severance benefit in excess of one year's salary
and one year's continuation of health and welfare benefits.
(b) After the Benefits Continuation Period the Surviving Corporation shall
provide the Company Employees with employee benefits that are comparable in the
aggregate to those provided to similarly situated employees of subsidiaries of
the Guarantor. For the avoidance of doubt, it is understood that the Surviving
Corporation shall have no obligation to provide Company Employees with post-
termination welfare or pension benefits, except to the extent required by
applicable law or contractual agreement.
(c) With respect to the benefits provided pursuant to this Section 5.12,
(i) service accrued by Company Employees during employment with the Company and
its subsidiaries prior to the Effective Time shall be recognized for eligibility
and vesting and, except with respect to defined benefit plans, benefit accrual,
(ii) any and all pre-existing condition limitations (to the extent such
limitations did not apply to a pre-existing condition under the applicable
Company Employee Plan) and eligibility waiting periods under any group health
plan shall be waived with respect to such Company Employees and their eligible
dependents, and (iii) Company Employees shall be given credit for amounts paid
under a Company Employee Plan during the same period for purposes of applying
deductibles, co-payments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the employee welfare
plans maintained by the Surviving Corporation or the applicable subsidiary of
the Guarantor.
49
(d) With respect to the Company's 1982 Deferred Compensation Plan, 1983
Deferred Compensation Plan, and Senior Executive Benefits Program (collectively
the "Deferred Compensation Plans") and any other non-qualified plan providing
employees with deferred compensation, the Board of Directors of the Company (or
the appropriate committee thereof) shall determine that the Merger will not
constitute a Forced Takeover and, with respect to the Deferred Compensation
Plans, (i) as of the Effective Time no further benefit accruals shall be made
under such plans and (ii) all accrued benefits under such plans shall be paid
pursuant to the terms thereof.
(e) Except as provided in Sections 5.11(b) and 5.12(f), awards payable in
shares of Company Common Stock under any Company Employee Plan, program or
agreement not paid out or deferred prior to the Effective Time shall be
converted to an award payable in cash only, and Guarantor will be under no
obligation to issue any Guarantor Common Shares pursuant to any Company Employee
Plan, program or agreement after the Effective Time.
(f) The Company shall amend the Xxxxx Technologies, Inc. 401(k) Savings
Plan for Salaried Employees, the Xxxxx Technologies, Inc. 401(k) Savings Plan
for Hourly Paid Employees, the Xxxxx Technologies, Inc. 401(k) Savings Plan for
Bargaining Unit Employees, and the Av-Ox 401(k) Profit Sharing Plan, where
necessary, to preclude any additional purchases of stock of the Company, as of
the date 2 days prior to the Effective Time, and the Company shall communicate
this amendment to the participants in such plans.
(g) It is expressly agreed that (i) the provisions of Section 5.12 are not
intended to be for the benefit of or otherwise enforceable by any third party,
including, without limitation, any Company Employees and (ii) except as provided
in Section 5.12(a), nothing herein shall prevent the Surviving Corporation or
any other subsidiary of Guarantor from amending or modifying any employee
benefit plan, program or arrangement in any respect or terminating or modifying
the terms and conditions of employment or other service of any particular
employee or any other person.
Section 5.13 Accountants Letters. Upon reasonable notice from the other,
the Company shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to deliver
to Parent, and Parent shall use its best efforts to cause PricewaterhouseCoopers
to deliver to the Company, a letter covering such matters as are reasonably
requested by Parent or the Company, as the case may be, and as are customarily
addressed in accountants' "comfort letters."
Section 5.14 Compliance with State Property Transfer Statutes. The Company
agrees that it shall use its reasonable commercial efforts to comply promptly
with all requirements of applicable state property transfer laws as may be
required by the relevant state agency and shall take all action necessary to
cause the transactions contemplated hereby to be effected in compliance with
applicable state property transfer laws, except where the failure to so comply
will not materially affect the right to use or enjoy any applicable property
after the Effective Time. The Company, after consultation with Parent, shall
determine which actions must be taken prior to or after the Effective Time to
comply with applicable state property transfer laws. The Company agrees to
provide Parent with any documents required to be submitted to the relevant state
agency prior to submission, and the Company shall not take any action to comply
with applicable state property transfer laws without Parent's prior consent,
50
which consent shall not be unreasonably withheld or delayed. Parent shall
provide, and shall cause Guarantor to provide, to the Company any assistance
reasonably requested by the Company with respect to such compliance.
Section 5.15 Conveyance Taxes. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated hereby that are
required or permitted to be filed on or before the Effective Time, and the
Company shall be responsible for the payment of all such taxes and fees. In no
event shall Parent or any affiliate thereof (other than a subsidiary of the
Company) reimburse the Company for the payment of such taxes and fees.
ARTICLE VI
CONDITIONS TO THE MERGER
------------------------
Section 6.01 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose and no
similar proceeding in respect of the Proxy Statement/Prospectus shall have been
initiated or threatened by the SEC;
(b) Stockholder Adoption. This Agreement shall have been adopted by the
requisite vote of the stockholders of the Company;
(c) Antitrust. All waiting periods applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated, and all
clearances and approvals required to be obtained in respect of the Merger prior
to the Effective Time under any Non-U.S. Monopoly Laws shall have been obtained,
except where the failure to have obtained any such clearances or approvals with
respect to any Non-U.S. Monopoly Laws would not reasonably be expected to have a
Material Adverse Effect on the Company, Guarantor or Guarantor's Fire and
Security Group;
(d) Governmental Actions. There shall not have been instituted, pending or
threatened any action or proceeding (or any investigation or other inquiry that
is reasonably likely to result in such an action or proceeding) by any
Governmental Authority or before any Governmental Authority or court of
competent jurisdiction, United States or non-United States, that is reasonably
likely to result in an order, nor shall there be in effect any judgment, decree
or order of any Governmental Authority or court of competent jurisdiction, or
any other legal restraint (i) preventing or seeking to prevent consummation of
the Merger, (ii) prohibiting or seeking to prohibit, or limiting or seeking to
limit, Parent from exercising all material rights and
51
privileges pertaining to its ownership of the Surviving Corporation or the
ownership or operation by Guarantor or any of its subsidiaries of all or a
material portion of the business or assets of the Surviving Corporation and its
subsidiaries, or (iii) compelling or seeking to compel Guarantor or any of its
subsidiaries (including the Surviving Corporation and its subsidiaries) to
dispose of or hold separate assets which are material to Guarantor or the
Company, as a result of the Merger or the transactions contemplated by this
Agreement; provided that for purposes of this Section 6.01(d), assets shall be
--------
deemed to be not material to the Company, only if they account for no more than
5% of the total revenues of the Company and its subsidiaries taken as a whole or
to Guarantor, only if they account for no more than 0.3% of the total revenues
of Guarantor's Fire and Security Group;
(e) Illegality. No statute, rule, regulation or order shall be enacted,
entered, enforced or deemed applicable to the Merger which makes the
consummation of the Merger illegal; and
(f) Tax Opinions. The Company shall have received a written opinion of
Xxxxxx, Halter & Xxxxxxxx LLP, and Parent shall have received a written opinion
of PricewaterhouseCoopers LLP, in form and substance reasonably satisfactory to
each of them, on the basis of customary representations, warranties, covenants
and assumptions set forth in such opinions, and delivered as of the date of the
Effective Time, to the effect that the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Code that is not subject to Section
367(a)(1) of the Code pursuant to Treasury Regulation Section 1.367(a)-(3)(c)
(other than with respect to Company stockholders who are or will be "five-
percent transferee stockholders" within the meaning of Treasury Regulation
Section 1.367(a)-3(c)(5)(ii)), and that each of Guarantor, Parent and the
Company will be a party to the reorganization within the meaning of Section
368(b) of the Code.
Section 6.02 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger are also
subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Company contained in this Agreement shall be true and correct in all
respects (without for this purpose giving effect to qualifications of
materiality contained in such representations and warranties) on and as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time, except for (i) changes contemplated by this Agreement, (ii)
those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such date, subject
to clause (iii)), or (iii) where the failure to be true and correct would not
reasonably be expected, individually or in the aggregate with all other such
failures, to have a Material Adverse Effect, and Parent and Merger Sub shall
have received a certificate of the Company to such effect signed by the Chief
Executive Officer or Chief Financial Officer of the Company;
(b) Agreements and Covenants. The Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time, and Parent and Merger Sub shall have received a certificate to such effect
signed by the Chief Executive Officer or
52
Chief Financial Officer of the Company; provided, however, that unless the
-------- -------
Company knowingly breaches Section 4.01(j), the Company shall be deemed to have
complied with Section 4.01(j) unless the failure to comply with such section
also results in the failure of the condition set forth in Section 6.02(a);
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to be
made, by the Company for the authorization, execution and delivery of this
Agreement and the consummation by it of the transactions contemplated hereby
shall have been obtained and made by the Company, except where the failure to
receive such consents, waivers, approvals, authorizations or orders or to make
such filings would not reasonably be expected, individually or in the aggregate
with all other such failures, to have a Material Adverse Effect on the Company,
Parent or Guarantor; and
(d) Affiliate Agreements. Parent shall have received from each person who
is identified in the Affiliate Letter as an "affiliate" of the Company an
Affiliate Agreement, and such Affiliate Agreement shall be in full force and
effect
Section 6.03 Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. The representations and warranties of
Parent and Merger Sub contained in this Agreement shall be true and correct in
all respects (without for this purpose giving effect to qualifications of
materiality contained in such representations and warranties) on and as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time, except for (i) changes contemplated by this Agreement, (ii)
those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such date, subject
to clause (iii)), or (iii) where the failure to be true and correct could not
reasonably be expected, individually or in the aggregate with all other such
failures, to have a Material Adverse Effect, and the Company shall have received
a certificate to such effect signed by the President or Chief Financial Officer
of Parent;
(b) Agreements and Covenants. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate of Parent to
such effect signed by the President or Chief Financial Officer of Parent;
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to be
made, by Parent, Merger Sub or Guarantor for the authorization, execution and
delivery of this Agreement and the Guarantee, as applicable, and the
consummation by them of the transactions contemplated hereby and thereby shall
have been obtained and made by Parent, Merger Sub or Guarantor, except where the
failure to receive such consents, waivers, approvals, authorizations or orders
or to make such filings would not reasonably be expected, individually or in the
aggregate with all other such failures, to have a Material Adverse Effect on the
Company, Parent or Guarantor; and
53
(d) Listing. The Guarantor Common Shares to be delivered by Parent in
connection with the Merger shall have been authorized for listing on the NYSE
upon official notice of issuance.
ARTICLE VII
TERMINATION
-----------
Section 7.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding adoption thereof by the
stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent and the Company; or
(b) by either Parent or the Company, if the Merger shall not have been
consummated by August 31, 2001 (other than for the reasons set forth in clause
(c) below); provided, however, that the right to terminate this Agreement under
-------- -------
this Section 7.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Merger to be consummated on or prior to such date; or
(c) by either Parent or the Company, if the requisite vote of the
stockholders of the Company shall not have been obtained by August 31, 2001, or
if the stockholders of the Company shall not have adopted this Agreement at the
Company Stockholders Meeting; provided, however, that the Company may not
-------- -------
terminate pursuant to this clause if the Company has not complied with its
obligations under Section 5.02; or
(d) by either Parent or the Company, if a court of competent jurisdiction
or Governmental Authority shall have issued a nonappealable final order, decree
or ruling or taken any other nonappealable final action having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; or
(e) by Parent, if, whether or not permitted to do so by this Agreement,
the Board of Directors of the Company or the Company shall (x) (i) withdraw,
modify or change its approval, adoption or recommendation of this Agreement or
the Merger in a manner adverse to Parent or shall have resolved to do so; (ii)
approve or recommend to the stockholders of the Company an Acquisition Proposal
or Alternative Transaction; (iii) approve or recommend that the stockholders of
the Company tender their shares in any tender or exchange offer that is an
Alternative Transaction; or (iv) fail to include the recommendation of the Board
of Directors of the Company in favor of approval of this Agreement pursuant to
Section 5.01(c) or fail to take the action required by the second sentence of
Section 5.02; or (y) take any public position or make any disclosures to the
Company's stockholders generally, whether or not permitted pursuant to Section
4.02, which has the effect of any of the foregoing (it being understood and
agreed that a communication by the Board of Directors of the Company to the
Company's stockholders pursuant to Rule 14d-9(f)(3) of the Exchange Act, or any
similar type of communication to the Company's stockholders in connection with
the making or amendment of a
54
tender offer or exchange offer, shall not be deemed to constitute a basis for
termination under this Section 7.01(e)); or
(f) by Parent or the Company, if any representation or warranty of the
Company or Parent and Merger Sub, respectively, set forth in this Agreement
shall be untrue when made, such that the conditions set forth in Sections
6.02(a) or 6.03(a), as the case may be, would not be satisfied (a "Terminating
Misrepresentation"); provided that if such Terminating Misrepresentation is
--------
curable prior to August 31, 2001 by the Company or Parent, as the case may be,
through the exercise of its reasonable best efforts and for so long as the
Company or Parent, as the case may be, continues to exercise such reasonable
best efforts, neither Parent nor the Company, respectively, may terminate this
Agreement under this Section 7.01(f); or
(g) by Parent, if any representation or warranty of the Company shall have
become untrue such that the condition set forth in Section 6.02(a) would not be
satisfied, or by the Company, if any representation or warranty of Parent and
Merger Sub shall have become untrue such that the condition set forth in Section
6.03(a) would not be satisfied (in either case, a "Terminating Change"), in
either case other than by reason of a Terminating Breach (as hereinafter
defined); provided that if any such Terminating Change is curable prior to
--------
August 31, 2001 by the Company or Parent, as the case may be, through the
exercise of its reasonable best efforts, and for so long as the Company or
Parent, as the case may be, continues to exercise such reasonable best efforts,
neither Parent nor the Company, respectively, may terminate this Agreement under
this Section 7.01(g); or
(h) by Parent or the Company, upon a breach of any covenant or agreement
on the part of the Company or of Parent or Merger Sub, respectively, set forth
in this Agreement such that the conditions set forth in Sections 6.02(b) or
6.03(b), as the case may be, would not be satisfied (a "Terminating Breach");
provided that, except for any breach of the Company's obligations under Section
--------
4.02, if such Terminating Breach is curable prior to August 31, 2001 by the
Company or Parent, as the case may be, through the exercise of its reasonable
best efforts and for so long as the Company or Parent, as the case may be,
continues to exercise such reasonable best efforts, neither Parent nor the
Company, respectively, may terminate this Agreement under this Section 7.01(h);
or
(i) by the Company, if (w) the Board of Directors of the Company shall
have authorized the Company, subject to complying with the terms of this
Agreement, including Section 4.02, to enter into a definitive agreement with
respect to a Superior Proposal and the Company shall have notified Parent in
writing that it intends to enter into such an agreement, attaching a summary of
the material terms thereof, (x) Parent shall not have made, within two full
business days (disregarding any partial business days) of receipt of the
Company's written notification of its intention to enter into a definitive
agreement with respect to a Superior Proposal, an offer that the Board of
Directors of the Company determines, in good faith after consultation with a
financial advisor of nationally recognized reputation, is at least as favorable,
from a financial point of view, to the stockholders of the Company as the
Superior Proposal, (y) prior to such termination pursuant to this clause (i),
the Company shall have paid to Parent in immediately available funds the Fee and
the Expenses required to be paid pursuant to Section 7.03(b), and (z) this
Agreement shall not theretofore have been adopted at the Company stockholders
Meeting; or
55
(j) by Parent, if the Average Share Price is less than $45.00, provided
--------
that (i) Parent shall have given the Company notice of its intention to
terminate pursuant to this Section 7.01(j) prior to 5:00 p.m. New York City time
on the third trading day immediately preceding the date of the Company's
Stockholders Meeting and (ii) the Company shall not, by 5:00 p.m. New York City
time on the trading day immediately preceding the date of the Company's
Stockholders Meeting, have delivered a notice to Parent agreeing that the
Exchange Ratio shall equal 0.5111; provided further that if the Company shall
-------- -------
deliver the notice referred to in the preceding clause (ii), (A) this Agreement
shall not be terminated under this Section 7.01(j) and the Exchange Ratio for
all purposes of this Agreement shall equal 0.5111 or, if the parties shall so
agree in their sole and absolute discretion, a higher number; and (B) the
Company may postpone the Company Stockholders Meeting for one business day,
provided that the Average Share Price shall be computed in such case without
regard to such postponement.
Section 7.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.01, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or stockholders except that (i) the Company,
Parent or Merger Sub may have liability or obligations as set forth in Section
7.03 and as set forth in or contemplated by Section 8.01 hereof. Notwithstanding
the foregoing, nothing herein shall relieve the Company, Parent or Merger Sub
from liability for any willful breach hereof or willful misrepresentation herein
(it being understood that (x) the provisions of Section 7.03 do not constitute a
sole or exclusive remedy for such willful breach or misrepresentation and (y)
the mere existence of a Material Adverse Effect, by itself, shall not constitute
such a willful breach).
Section 7.03 Fees and Expenses. (a) Except as set forth in this Section
7.03, all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; provided, however, that
-------- -------
Parent and the Company shall share equally (i) all SEC filing fees and printing
expenses incurred in connection with the printing and filing of the Proxy
Statement/Prospectus (including any preliminary materials related thereto) and
the Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto and (ii) conveyance and similar taxes required
to be paid or which Parent has agreed should be paid prior to the Effective Time
pursuant to Section 5.16.
(b) The Company shall pay Guarantor a fee of $9.5 million (the "Fee")
and shall also pay Parent's and Guarantor's respective actual, documented and
reasonable out-of-pocket expenses relating to the transactions contemplated by
this Agreement (including, but not limited to, fees and expenses of counsel and
accountants and out-of-pocket expenses (but not fees) of financial advisors)
("Expenses," as applicable to Parent, Guarantor or the Company) in a combined
amount not to exceed $1.5 million, upon the first to occur of any of the
following events:
(i) the termination of this Agreement by Parent or the Company pursuant to
Section 7.01(c) following the Company Stockholders Meeting at which the
stockholders of the Company failed to adopt this Agreement, provided that (A)
the Alternative Transaction Condition is satisfied and (B) the Exchange Ratio
has not been adjusted pursuant to Section 7.01(j);
56
(ii) the termination of this Agreement by Parent pursuant to Section
7.01(e); or
(iii) the termination of this Agreement by the Company pursuant to Section
7.01(i).
The "Alternative Transaction Condition" shall be satisfied in respect of a
termination of this Agreement if an Alternative Transaction shall be publicly
announced by the Company or any third party during the period beginning on the
date of this Agreement and ending 12 months following the date of termination of
this Agreement and such transaction shall at any time thereafter be consummated
on substantially the terms theretofore announced; provided, that in the case of
--------
Section 7.03(b)(i), such transaction provides for a per Share consideration with
a fair market value greater than $23.00; and provided further, that for purposes
-------- -------
of this definition, the definition of Alternative Transaction set forth in
Section 4.02(a) shall be modified to replace "25%," as it appears in such
definition, with 40%.
(c) Upon a termination of this Agreement by Parent pursuant to Section
7.01(h), (i) the Company shall pay to Guarantor and Parent their respective
Expenses relating to the transactions contemplated by this Agreement in a
combined amount not to exceed $1.5 million, and (ii) the Company shall pay
Guarantor the Fee provided that (I) such Termination Breach is willful and (II)
the Alternative Transaction Condition is satisfied.
(d) Upon a termination of this Agreement by Parent pursuant to Section
7.01(f), the Company shall pay to Guarantor and Parent their respective Expenses
in a combined amount not to exceed $1.5 million.
(e) Upon a termination of this Agreement by the Company pursuant to
Section 7.01(f) or Section 7.01(h), Parent shall pay to the Company its Expenses
in an amount not to exceed $2.0 million.
(f) The Fee and Expenses payable pursuant to Section 7.03(b) or Section
7.03(c), or the Expenses payable pursuant to Section 7.03(d) or Section 7.03(e),
shall be paid within one business day after a demand for payment following the
first to occur of any of the events described in the aforesaid Sections, as
applicable; provided that, in no event shall the Company be required to pay the
--------
Fee or any Expenses to Parent, nor shall Parent be required to pay any Expenses
to the Company if, immediately prior to the termination of this Agreement, the
entity otherwise entitled to receive such fee and/or expenses was in material
breach of its obligations under this Agreement or, in the case of Parent, Merger
Sub was in material breach of its obligations under this Agreement or Guarantor
was in material breach of the Guarantee.
(g) Each of the Company, Parent and Merger Sub agrees that the payments
provided for in this Section 7.03 shall be the sole and exclusive remedy of
Parent and Merger Sub upon a termination of this Agreement by Parent pursuant to
Section 7.01(c), (e), (f), (h) or (i), and the payments provided for in this
Section 7.03 shall be the sole and exclusive remedy of the Company upon a
termination of this Agreement by the Company pursuant to Section 7.01(f) or (h),
regardless of the circumstances giving rise to such termination; provided,
--------
however, that the foregoing shall not apply to any willful breach of this
-------
Agreement or any willful
57
misrepresentation hereunder giving rise to such termination. Subject to Section
7.03(f), if a party is entitled to terminate this Agreement pursuant to more
than one clause of Section 7.01, such party shall be entitled to receive the
Fees and Expenses to which it is entitled as a result of any such termination,
provided that in no event shall there be any duplication of payment.
ARTICLE VIII
GENERAL PROVISIONS
------------------
Section 8.01 Effectiveness of Representations, Warranties and Agreements.
(a)Except as otherwise provided in this Section 8.01, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.01, as the case may be, except that the agreements set
forth in Article I and Sections 5.06 and 5.08 and any other agreement in this
Agreement which contemplates performance after the Effective Time shall survive
the Effective Time indefinitely and those set forth in Sections 7.02 and 7.03
and this Article VIII shall survive termination indefinitely. The
Confidentiality Agreement shall survive termination of this Agreement in
accordance with its terms.
(b) Any disclosure made with reference to one or more Sections of the
Company Disclosure Schedule shall be deemed disclosed with respect to each other
section therein as to which such disclosure is relevant provided that such
relevance is reasonably apparent. Disclosure of any matter in the Company
Disclosure Schedule shall not be deemed an admission that such matter is
material.
Section 8.02 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
If to Parent or Merger Sub:
Tyco Acquisition Corp. XVIII (NV)/R2 Mergersub Inc.
c/o Tyco International (US) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attn: President
Telecopy: (603) 778- 7700
With a copy (which shall not constitute notice) to:
Tyco International (US) Inc.
58
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attn: Chief Corporate Counsel
Telecopy: (000) 000-0000
and
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to the Company:
Xxxxx Technologies, Inc.
One Chagrin Highlands
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx, Halter & Xxxxxxxx LLP
1400 XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Section 8.03 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliates", with respect to any person, means a person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned person;
(b) "business day" means any day other than a day on which banks in New
York City are required or authorized to be closed;
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
59
(d) "dollars" or "$" means United States dollars;
(e) "knowledge" means, with respect to any matter in question, that the
executive officers or any employee having primary or substantial oversight
responsibility for the matter of the Company, Parent or Guarantor, as the case
may be, have or at any time had actual knowledge of such matter;
(f) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, other entity
or group (as defined in Section 13(d)(3) of the Exchange Act);
(g) "significant subsidiary" has the meaning assigned to such term in Rule
1-02 under SEC Regulation S-X; and
(h) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent, Guarantor or any other person means any corporation,
partnership, joint venture or other legal entity of which the Company, the
Surviving Corporation, Parent, Guarantor or such other person, as the case may
be (either alone or through or together with any other subsidiary), owns,
directly or indirectly, more than 50% of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
When reference is made in this Agreement to the Company, Parent or
Guarantor, such reference shall include their respective subsidiaries, as and to
the extent the context so requires, whether or not explicitly stated in this
Agreement.
Section 8.04 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after adoption
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of this Agreement by the stockholders of the Company, no amendment may be made
which by law requires approval by such stockholders without such approval. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
Section 8.05 Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
Section 8.06 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.07 Severability. (a) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected
60
in any material manner adverse to any party. Upon a determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
(b) The Company and Parent agree that the Fee provided in Section 7.03(b)
is fair and reasonable in the circumstances. If a court of competent
jurisdiction shall nonetheless, by a final, non-appealable judgment, determine
that the amount of the Fee exceeds the maximum amount permitted by law, then the
amount of the Fee shall be reduced to the maximum amount permitted by law in the
circumstances, as determined by such court of competent jurisdiction.
Section 8.08 Entire Agreement. This Agreement and the Guarantor's
guarantee hereof constitute the entire agreement and supersede all prior
agreements and undertakings (other than the Confidentiality Agreement), both
written and oral, among the parties, or any of them, with respect to the subject
matters hereof and thereof, except as otherwise expressly provided herein or
therein.
Section 8.09 Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that all or any of the rights of Parent and/or
Merger Sub hereunder may be assigned to Guarantor or any direct or indirect
wholly-owned subsidiary of Guarantor, provided that no such assignment shall
relieve the assigning party of its obligations hereunder.
Section 8.10 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
Section 5.06 (which is intended to be for the benefit of the Indemnified Parties
and Covered Persons and may be enforced by such Indemnified Parties and Covered
Persons) and Section 7.03 (which contains provisions intended to be for the
benefit of Guarantor and may be enforced by Guarantor).
Section 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
Section 8.12 Governing Law; Jurisdiction. (a) This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
Delaware applicable to contracts executed and fully performed within the State
of Delaware.
(b) Each of the parties hereto submits to the non-exclusive jurisdiction
of the federal courts of the United States located in the City of New York,
Borough of Manhattan and
61
in Cleveland, Ohio with respect to any claim or cause of action arising out of
this Agreement or the transactions contemplated hereby.
Section 8.13 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 8.14 WAIVER OF JURY TRIAL. EACH OF PARENT, MERGER SUB AND THE
COMPANY HEREBY IRREVOCABLY WAIVES (AND IN RESPECT OF ANY DISPUTE IN RESPECT OF
THE GUARANTEE, PARENT SHALL CAUSE GUARANTOR TO WAIVE), TO THE FULLEST EXTENT
PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.15 Performance of Obligations. Unless otherwise previously
performed, Parent shall cause each of Merger Sub and the Surviving Corporation
to perform all of its obligations set forth in this Agreement and Guarantor to
perform all of its obligations under the Guarantee.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
62
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
TYCO ACQUISITION CORP. XVIII (NV)
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
R2 MERGERSUB INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXX TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxx
---------------------------
Name: Xxxx X. Xxxx
Title: President and Chief Executive Officer
63
GUARANTEE
Tyco International Ltd. ("Guarantor") irrevocably guarantees each and
---------
every representation, warranty, covenant, agreement and other obligation of
Parent and Merger Sub, and/or any of their respective permitted assigns (and
where any such representation or warranty is made to the knowledge of Parent or
Merger Sub, such representation or warranty shall be deemed made to the
knowledge of Guarantor), and the full and timely performance of their respective
obligations under the provisions of the foregoing Agreement. This is a guarantee
of payment and performance, and not of collection, and Guarantor acknowledges
and agrees that this guarantee is full and unconditional, and no release or
extinguishment of Parent's and Merger Sub's obligations or liabilities (other
than in accordance with the terms of the Agreement), whether by decree in any
bankruptcy proceeding or otherwise, shall affect the continuing validity and
enforceability of this guarantee, as well as any provision requiring or
contemplating performance by Guarantor.
Guarantor hereby waives, for the benefit of the Company, (i) any right to
require the Company as a condition of payment or performance by Guarantor, to
proceed against Parent or Merger Sub or pursue any other remedy whatsoever and
(ii) to the fullest extent permitted by law, any defenses or benefits that may
be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, except to the extent that any such defense is available
to Parent or Merger Sub.
Without limiting in any way the foregoing guarantee, Guarantor covenants
and agrees to take all actions to enable Parent and Merger Sub to adhere to each
provision of the Agreement which requires an act or omission on the part of
Guarantor or any of its subsidiaries to enable Parent or Merger Sub to comply
with its obligations under the Agreement.
The provisions of Article VIII of the Agreement are incorporated herein,
mutatis mutandis, except that notices and other communications hereunder to
Guarantor shall be delivered to Tyco International Ltd., The Zurich Centre,
Second Floor, 90 Xxxxx Bay Road, Pembroke HM 08, Bermuda, Attn: Chief Corporate
Counsel, Telecopy No. (000) 000-0000, Confirm No. (000) 000-0000 (with a copy as
provided therefor in Section 8.02(a)).
Guarantor understands that the Company is relying on this guarantee in
entering into the Agreement and may enforce this guarantee as if Guarantor were
a party thereto.
TYCO INTERNATIONAL LTD.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
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