Exhibit 99.1
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AGREEMENT AND PLAN OF MERGER
by and among:
CRANE MERGERCO HOLDINGS, INC.,
a Delaware corporation;
CRANE MERGERCO INC.,
a Delaware corporation; and
AMERICAN COIN MERCHANDISING, INC.,
a Delaware corporation
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Dated as of September 9, 2001
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TABLE OF CONTENTS
PAGE
SECTION 1 . THE MERGER; EFFECTIVE TIME.................................2
1.1 Merger of Acquisition Sub into the Company.......................2
1.2 Effect of the Merger.............................................2
1.3 Closing; Effective Time..........................................2
1.4 Certificate of Incorporation and Bylaws; Directors...............2
1.5 Conversion of Shares.............................................3
1.6 Closing of the Company's Transfer Books..........................3
1.7 Payment for Shares...............................................3
1.8 Appraisal Rights.................................................5
1.9 Company Stock Options............................................5
SECTION 2 . REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............5
2.1 Due Organization and Good Standing; Subsidiaries.................6
2.2 Certificate of Incorporation; Bylaws; Corporate Records..........6
2.3 Capitalization, Etc..............................................6
2.4 SEC Filings; Financial Statements................................7
2.5 Absence of Certain Changes.......................................8
2.6 Proprietary Assets..............................................10
2.7 Title to Assets; Real Property..................................12
2.8 Contracts.......................................................12
2.9 Compliance with Legal Requirements..............................13
2.10 Legal Proceedings; Orders.......................................13
2.11 Governmental Authorizations.....................................13
2.12 Tax Matters.....................................................13
2.13 Employee Benefit Plans..........................................15
2.14 Labor Matters...................................................17
2.15 Environmental Matters...........................................17
2.16 Insurance.......................................................17
2.17 Certain Business Practices......................................18
2.18 Product Warranties..............................................18
2.19 Authority; Binding Nature of Agreement..........................18
TABLE OF CONTENTS
(CONTINUED)
PAGE
2.20 Non-Contravention; Consents.....................................18
2.21 Section 203 of the DGCL Not Applicable..........................19
2.22 Opinion of Financial Advisor....................................19
2.23 Brokers.........................................................19
2.24 Rights Agreement................................................19
2.25 Liabilities.....................................................20
2.26 Transactions with Affiliates....................................20
2.27 Vote Required...................................................20
SECTION 3 . REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION SUB..............................................20
3.1 Due Organization................................................20
3.2 Legal Proceedings...............................................20
3.3 Authority; Binding Nature of Agreement..........................21
3.4 Non-Contravention; Consents.....................................21
3.5 Not an Interested Stockholder...................................22
3.6 Financing.......................................................22
3.7 Ownership of Shares.............................................22
3.8 Brokers.........................................................22
SECTION 4 . Covenants.................................................22
4.1 Interim Operations of the Company...............................22
4.2 No Solicitation.................................................25
4.3 Meeting of the Company's Stockholders...........................25
4.4 Filings; Other Action...........................................26
4.5 Proxy Statement.................................................27
4.6 Access..........................................................28
4.7 Notification of Certain Matters.................................28
4.8 Publicity.......................................................29
4.9 Stock Options; Employee Stock Purchase Plan.....................29
4.10 Other Employee Benefits.........................................29
4.11 Indemnification; Directors' and Officers' Insurance.............30
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
4.12 Assumption of Trust Preferred Liabilities.......................31
4.13 Section 16 Matters..............................................31
4.14 Resignation of Directors........................................31
4.15 Change in Financing.............................................31
4.16 Delivery of Fairness Opinion....................................31
SECTION 5 . CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT
AND ACQUISITION SUB TO EFFECT THE MERGER.....................32
5.1 Accuracy of Representations.....................................32
5.2 Performance of Covenants........................................32
5.3 Stockholder Approval............................................32
5.4 Consents........................................................32
5.5 Compliance Certificate..........................................33
5.6 No Material Adverse Effect......................................33
5.7 HSR Act.........................................................33
5.8 No Restraints...................................................33
5.9 No Governmental Litigation......................................33
5.10 No Other Litigation.............................................33
SECTION 6 . CONDITIONS TO THE COMPANY'S OBLIGATION TO
EFFECT THE MERGER............................................33
6.1 Stockholder Approval............................................33
6.2 No Injunctions; Laws............................................33
6.3 Accuracy of Representations.....................................33
6.4 Performance of Covenants........................................34
6.5 Documents.......................................................34
6.6 HSR Act.........................................................34
6.7 No Restraints...................................................34
6.8 No Governmental Litigation......................................34
6.9 No Other Litigation.............................................34
SECTION 7 . TERMINATION...............................................35
7.1 Termination.....................................................35
7.2 Effect of Termination...........................................36
iii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
7.3 Termination Fee.................................................36
SECTION 8 . MISCELLANEOUS PROVISIONS..................................37
8.1 Amendment.......................................................37
8.2 Waiver..........................................................37
8.3 No Survival of Representations and Warranties...................37
8.4 Entire Agreement; Counterparts..................................37
8.5 Applicable Law; Jurisdiction....................................38
8.6 Attorneys' Fees.................................................38
8.7 Payment of Expenses.............................................38
8.8 Binding Effect; Assignability...................................38
8.9 Notices.........................................................38
8.10 Severability....................................................39
8.11 Remedies Cumulative; Specific Performance.......................39
8.12 Obligation of Parent............................................39
8.13 Construction....................................................40
EXHIBIT A (Certain Definitions)..............................................A-1
iv.
EXECUTION COPY
AGREEMENT AND PLAN
OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT") is made and entered
into as of September 9, 2001, by and among: CRANE MERGERCO HOLDINGS, INC., a
Delaware corporation ("PARENT"); CRANE MERGERCO INC., a Delaware corporation and
a wholly owned subsidiary of Parent ("ACQUISITION SUB"); and AMERICAN COIN
MERCHANDISING, INC., a Delaware corporation (the "COMPANY"). Certain capitalized
terms used in this Agreement are defined in Exhibit A.
RECITALS
WHEREAS, each of the Boards of Directors of the Company, Parent and
Acquisition Sub has determined that it is in the best interests of its
respective stockholders for Parent to acquire the Company on the terms and
subject to the conditions set forth herein (the "ACQUISITION");
WHEREAS, the Company, Parent and Acquisition Sub each desire that
Parent cause Acquisition Sub to purchase all of the issued and outstanding
Common Stock, par value $.01 per share, of the Company ("SHARES"), for $8.50 per
share, net to the seller in cash, on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, to complete the Acquisition, the respective Boards of
Directors of the Company, Parent, on its own behalf as a party to this Agreement
and as the sole stockholder of Acquisition Sub, and Acquisition Sub have
approved this Agreement and the merger of Acquisition Sub with and into the
Company, with the Company as the surviving corporation of such merger, wherein
all issued and outstanding Shares (other than Appraisal Shares described in
Section 1.8(c) hereof and Shares held by Parent, Acquisition Sub or any other
subsidiary of Parent) will be converted into the right to receive the Merger
Consideration (as hereinafter defined), on the terms and subject to the
conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL");
WHEREAS, the Board of Directors of the Company has declared that this
Agreement is advisable and resolved to recommend that all holders of Shares (the
"STOCKHOLDERS") approve this Agreement and the Merger (as defined below), and
has determined that the Merger is fair to and in the best interests of the
Company and the Stockholders;
WHEREAS, concurrently with the execution and delivery of this
Agreement, certain Stockholders (collectively, the "IDENTIFIED STOCKHOLDERS")
have duly executed and delivered to Parent Voting Agreements pursuant to which,
among other things, each of the Identified Stockholders has granted an
irrevocable proxy to Parent and a representative of Parent agreed to
vote all Shares owned, or later acquired, by such Identified Stockholder to
approve this Agreement and the Merger, each on the terms set forth in such
Voting Agreements; and
WHEREAS, the parties desire to make certain representations, warranties
and covenants in connection with the Merger and also to prescribe various terms
and conditions of the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent and Acquisition Sub
hereby agree as follows:
SECTION 1. THE MERGER; EFFECTIVE TIME
1.1 MERGER OF ACQUISITION SUB INTO THE COMPANY. Upon the terms and
subject to the conditions set forth in this Agreement and in accordance with the
DGCL, at the Effective Time (as defined in Section 1.3), Acquisition Sub shall
be merged with and into the Company (the merger of Acquisition Sub into the
Company being referred to herein as the "MERGER"), and the separate existence of
Acquisition Sub shall cease. The Company will continue as the surviving
corporation in the Merger (the "SURVIVING CORPORATION").
1.2 EFFECT OF THE MERGER. The Merger shall have the effects set forth
in this Agreement and in the applicable provisions of the DGCL.
1.3 CLOSING; EFFECTIVE TIME. At a date designated by the Company, which
date shall be no later than the third business day after the satisfaction or
waiver of the conditions set forth in Sections 5 and 6, the parties hereto shall
cause a properly executed certificate of merger (or, if appropriate, a
certificate of ownership and merger) conforming to the requirements of the DGCL
(the "CERTIFICATE OF MERGER") to be filed with the Secretary of State of the
State of Delaware. The Merger shall take effect at the time the Certificate of
Merger is filed with the Secretary of State of the State of Delaware (the
"EFFECTIVE TIME"). At 10:00 a.m. (
Colorado time) on the date (the "CLOSING
DATE") on which the Certificate of Merger is to be so filed, a closing (the
"CLOSING") shall be held at the offices of Xxxxxx Godward LLP, 000 Xxxxxxxxxxx
Xxxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 (or such other place or time as Parent
and the Company may jointly designate) for the purpose of confirming the
satisfaction or waiver of each of the conditions set forth in Sections 5 and 6.
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS. Unless
otherwise jointly determined by Parent and the Company prior to the Effective
Time:
(a) subject to Section 4.11, the Certificate of Incorporation
of the Surviving Corporation shall be amended and restated as of the
Effective Time to conform to the Certificate of Incorporation of
Acquisition Sub as in effect immediately prior to the Effective Time;
(b) subject to Section 4.11, the Bylaws of the Surviving
Corporation shall be amended and restated as of the Effective Time to
conform to the Bylaws of Acquisition Sub as in effect immediately prior
to the Effective Time; and
2.
(c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the respective
individuals who are directors and officers of Acquisition Sub
immediately prior to the Effective Time.
1.5 CONVERSION OF SHARES. Subject to Section 1.8, at the Effective
Time, by virtue of the Merger and without any further action on the part of
Parent, Acquisition Sub, the Company or any Stockholder of the Company:
(a) any Shares then held by the Company or any Subsidiary of
the Company (or held in the Company's treasury) shall cease to exist,
and no consideration shall be delivered in exchange therefor;
(b) any Shares then held by Parent, Acquisition Sub or any
other subsidiary of Parent shall cease to exist, and no consideration
shall be delivered in exchange therefor;
(c) except as provided in clauses "(a)" and "(b)" above, each
Share then outstanding (including any outstanding Shares subject to any
repurchase rights in favor of the Company, but excluding any Appraisal
Shares, as defined in Section 1.8(c)) shall be converted into the right
to receive $8.50 in cash without interest (the "MERGER CONSIDERATION");
(d) each share of Common Stock, par value $.01 per share, of
Acquisition Sub then outstanding shall be converted into one Share; and
(e) if, between the date of this Agreement and the Effective
Time, the outstanding Shares are changed into a different number or
class of Shares by reason of any stock split, division or subdivision
of shares, stock dividend, reverse stock split, consolidation of
Shares, reclassification, recapitalization or other similar
transaction, then the Merger Consideration shall be appropriately
adjusted so that the aggregate Merger Consideration shall remain the
same.
1.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the Effective Time: (a)
all Shares outstanding immediately prior to the Effective Time shall cease to
exist as provided in Section 1.5 and all holders of certificates representing
Shares that were outstanding immediately prior to the Effective Time shall cease
to have any rights as Stockholders of the Company; and (b) the stock transfer
books of the Company shall be closed with respect to all Shares outstanding
immediately prior to the Effective Time. No further transfer of any such Shares
shall be made on such stock transfer books after the Effective Time. If, after
the Effective Time, a valid certificate previously representing any of such
Shares (a "COMPANY STOCK CERTIFICATE") is presented to the Paying Agent (as
defined in Section 1.7) or to the Surviving Corporation or Parent, such Company
Stock Certificate shall be canceled and shall be exchanged as provided in
Section 1.7.
1.7 PAYMENT FOR SHARES.
(a) As soon as practicable following receipt of the Required
Stockholder Vote (as defined in Section 2.27 below), (i) Parent shall select a
reputable bank or trust company to act as paying agent under this Agreement (the
"PAYING AGENT"), and (ii) Parent shall deposit with the Paying Agent cash
amounts sufficient to enable the Paying Agent to make payments pursuant
3.
to Section 1.5 to all holders of Shares outstanding immediately prior to the
Effective Time (other than Appraisal Shares).
(b) Promptly after the Effective Time, Parent shall cause the
Paying Agent to mail to each Person who was, immediately prior to the Effective
Time, a holder of record of Shares (other than Appraisal Shares) a form of
letter of transmittal in customary form and containing such provisions as are
mutually agreed to by Parent and the Company (including a provision confirming
that, subject to Section 1.7(d), delivery of Company Stock Certificates shall be
effected, and risk of loss and title shall pass, only upon delivery of the
Company Stock Certificates to the Paying Agent) and instructions for use in
effecting the surrender of Company Stock Certificates in exchange for payment
therefor. Parent shall deliver irrevocable written instructions to the Paying
Agent in form and substance reasonably satisfactory to the Company to make the
payments referred to in Section 1.5 and shall otherwise ensure that, upon
surrender to the Paying Agent of a Company Stock Certificate, together with a
properly executed letter of transmittal, the holder of such Company Stock
Certificate (or, under the circumstances described in Section 1.7(e), the
transferring of the Shares represented by such Company Stock Certificate) shall
promptly receive in exchange therefor the amount of cash to which such Person is
entitled pursuant to this Agreement.
(c) On or after the date which is one hundred eighty (180) days
after the Effective Time, the Surviving Corporation shall be entitled to cause
the Paying Agent to deliver to the Surviving Corporation any funds made
available to the Paying Agent which have not been disbursed to holders of
Company Stock Certificates, and thereafter Parent and the Surviving Corporation
shall be jointly and severally liable with respect to the cash amounts payable
upon surrender of their Company Stock Certificates. Neither Parent, the Paying
Agent nor the Surviving Corporation shall be liable to any holder of a Company
Stock Certificate or of any Company Options for any amount properly paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(d) If any Company Stock Certificate shall have been lost, stolen
or destroyed, then, upon the making of an affidavit of that fact by the Person
claiming such Company Stock Certificate to be lost, stolen or destroyed (and, if
required by the Surviving Corporation, the signing of an agreement to indemnify
the Surviving Corporation against any claim that may be made against it with
respect to such Company Stock Certificate), Parent shall cause the Paying Agent
to pay in exchange for such lost, stolen or destroyed Company Stock Certificate
the cash amount payable in respect thereof pursuant to this Agreement.
(e) In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, payment may be made with
respect to such Shares to a transferee of such Shares if the Company Stock
Certificate representing such Shares is presented to the Paying Agent,
accompanied by all documents reasonably required by the Paying Agent to evidence
and effect such transfer and to evidence that any applicable stock transfer
taxes relating to such transfer have been paid.
(f) Each of the Paying Agent, Parent and the Surviving Corporation
shall be entitled to deduct and withhold from any consideration payable or
otherwise deliverable pursuant to this Agreement to any holder or former holder
of Shares or options such amounts as may be
4.
required to be deducted or withheld therefrom under the Code or any provision of
state, local or foreign tax law or under any other applicable Legal Requirement.
To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the Person
to whom such amounts would otherwise have been paid and shall be paid to the
appropriate Governmental Entity on behalf of such Person.
(g) The Surviving Corporation shall pay all charges and expenses,
including those of the Paying Agent, in connection with the exchange of the
Merger Consideration for Shares.
1.8 APPRAISAL RIGHTS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, any Shares that constitute Appraisal Shares (as defined in Section
1.8(c)) shall not be converted into or represent the right to receive Merger
Consideration in accordance with Section 1.5, and each holder of Appraisal
Shares shall be entitled only to such rights with respect to such Appraisal
Shares as may be granted to such holder pursuant to Section 262 of the DGCL.
From and after the Effective Time, a holder of Appraisal Shares shall not have
and shall not be entitled to exercise any of the voting rights or other rights
of a stockholder of the Surviving Corporation. If any holder of Appraisal Shares
shall fail to perfect or shall otherwise lose such holder's right of appraisal
under Section 262 of the DGCL, then (i) any right of such holder to require the
Surviving Corporation to purchase the Appraisal Shares for cash shall be
extinguished, and (ii) such Appraisal Shares shall automatically be converted
into and shall represent only the right to receive (upon the surrender of the
certificate or certificates representing such Appraisal Shares) Merger
Consideration in accordance with Section 1.5.
(b) The Company (i) shall give Parent written notice of any demand
by any Stockholder of the Company for appraisal of such Stockholder's Shares
pursuant to the DGCL, and (ii) shall negotiate and proceed with respect to any
such demand pursuant to the instructions of Parent.
(c) For purposes of this Agreement, "APPRAISAL SHARES" shall refer
to any Shares outstanding immediately prior to the Effective Time that are held
by Stockholders who are entitled to demand and who properly demand appraisal of
such Shares pursuant to, and who comply with the applicable provisions of,
Section 262 of the DGCL.
1.9 COMPANY STOCK OPTIONS. The Company, the Company's Board of
Directors and each committee thereof shall promptly after the date of this
Agreement, take all such actions as it is permitted or required to take under
the terms of the Company Stock Option Plans to give effect to Section 4.9
hereof, and Parent and Acquisition Sub shall cooperate with the Company
therewith.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Acquisition Sub that,
except to the extent set forth in the disclosure schedule delivered to Parent on
the date of this Agreement (the "COMPANY DISCLOSURE SCHEDULE"):
5.
2.1 DUE ORGANIZATION AND GOOD STANDING; SUBSIDIARIES. Each of the
Acquired Corporations (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to (i) conduct its business in the manner in which its business is
currently being conducted, (ii) own and use its assets in the manner in which
its assets are currently owned and used, and (iii) perform its obligations under
all Material Contracts by which it is bound. Each Acquired Corporation is
qualified to do business as a foreign corporation, and is in good standing,
under the laws of the jurisdictions where the nature of its business requires
such qualification, except where the failure to so qualify would not have a
Material Adverse Effect on the Company. The Company has no subsidiaries except
for American Coin Merchandising Trust I and ACMI Canada, Inc. Neither subsidiary
constitutes a "Significant Subsidiary" (as defined in Regulation S-X of the SEC)
of the Company. (The Company, together with its subsidiaries are referred to
collectively in this Agreement as the "ACQUIRED CORPORATIONS.") None of the
Acquired Corporations is a general partner of, or is otherwise liable for any of
the debts or other obligations of any general partnership, limited partnership
or other Entity.
2.2 CERTIFICATE OF INCORPORATION; BYLAWS; CORPORATE RECORDS. The
Company has delivered or made available to Parent or its counsel accurate and
complete copies of (i) the certificate of incorporation and bylaws of the
Company and other charter and organizational documents of the respective
Acquired Corporations, including all amendments thereto, and (ii) the minutes of
the meetings of the stockholders of the Company, the Board of Directors of the
Company and all committees of the Board of Directors of the Company and the
other Acquired Corporations since October 13, 1995.
2.3 CAPITALIZATION, ETC.
(a) The authorized capital stock of the Company consists of: (i)
20,000,000 Shares, of which 6,531,774 Shares had been issued and were
outstanding as of September 7, 2001, none of which are held by the Company in
its treasury as of the date of this Agreement; and (ii) 500,000 shares of
Preferred Stock, $0.10 par value per share, of which no shares are outstanding
or are held by the Company in its treasury as of the date of this Agreement. The
Company is not in violation of its certificate of incorporation or bylaws. All
of the outstanding Shares have been duly authorized and validly issued, and are
fully paid and nonassessable. As of the date of this Agreement, there are no
Shares held by any of the other Acquired Corporations. None of the outstanding
Shares is entitled or subject to any preemptive right, right of participation,
right of maintenance or any similar right. None of the outstanding Shares is
subject to any right of first refusal in favor of the Company. There is no
Acquired Corporation Contract relating to the voting or registration of, or
restricting any Person from purchasing, selling, pledging or otherwise disposing
of (or granting any option or similar right with respect to), any Shares. None
of the Acquired Corporations is under any obligation, or is bound by any
Contract pursuant to which it may become obligated, to repurchase, redeem or
otherwise acquire any outstanding Shares,
(b) As of the date of this Agreement: (i) 707,542 Shares are
subject to issuance pursuant to outstanding options to purchase Shares or
existing contractual obligations to issue shares; (ii) 692,458 Shares are
reserved for future issuance pursuant to the Company Stock
6.
Option Plans; (iii) 143,295 Shares are reserved for future issuance pursuant to
the Company's Employee Stock Purchase Plan (the "ESPP"); and (iv) 500,000 shares
of Preferred Stock are reserved for future issuance pursuant to the Rights
Agreement between the Company and Norwest Bank Minnesota, N.A., dated as of
April 29, 1999 (the "RIGHTS AGREEMENT"). (Stock options granted by the Company
pursuant to the Company Stock Option Plans or otherwise are referred to in this
Agreement as "COMPANY OPTIONS.") Section 2.3(b) of the Company Disclosure
Schedule sets forth the following information with respect to each Company
Option or contractual obligation outstanding as of the date of this Agreement:
(i) the particular plan (if any) or agreement pursuant to which such Company
Option or contractual obligation was granted or incurred; (ii) the name of the
optionee; (iii) the number of Shares subject to such Company Option or
contractual obligation; and (iv) the exercise price of such Company Option. The
Company has delivered or made available to Parent or its counsel accurate and
complete copies of all Company Stock Option Plans covering the Company Options
outstanding as of the date of this Agreement, and the forms of all stock option
and all other agreements related to or evidencing such Company Options or such
contractual obligations.
(c) Except for options, rights, securities, instruments,
obligations and plans referred to in Section 2.3(b), as of the date of this
Agreement, there is no: (i) outstanding subscription, option, call, warrant or
right to acquire any shares of the capital stock of the Company; (ii)
outstanding security, instrument or obligation that is or may become convertible
into or exchangeable for any shares of the capital stock of the Company; (iii)
stockholder rights plan (or similar plan commonly referred to as a "poison
pill") under which the Company is or may become obligated to sell or otherwise
issue any shares of its capital stock or any other securities; or (iv) to the
best of the knowledge of the Company, any claim, condition or circumstance by
any Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of the Company.
(d) Except as set forth in Section 2.3(d) of the Company Disclosure
Schedule, all outstanding shares of each Acquired Corporation have been issued
and granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all requirements set forth in applicable
Contracts.
(e) All of the outstanding shares of capital stock of the Acquired
Corporations have been duty authorized and are validly issued, are fully paid
and nonassessable, and all of the shares of capital stock of the Acquired
Corporations (other than the Company), are owned beneficially and of record by
the Company, free and clear of any Encumbrances other than restrictions arising
under the Securities Act.
2.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) All registration statements (on a form other than Form S-8),
reports and definitive proxy statements required to be filed by the Company with
the SEC between January 1, 2000 and the date of this Agreement (the "COMPANY SEC
DOCUMENTS") have been so filed. As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing): (i) each of the Company SEC Documents
7.
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act (as the case may be); and (ii) none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) As of the time filed with the SEC, the financial statements
(including any related notes) contained in the Company SEC Documents: (i)
complied as to form in all material respects with the published rules and
regulations of the SEC applicable thereto; (ii) were prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered (except as may
be indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end adjustments); and (iii) fairly presented, in all
material respects, the financial position of the Acquired Corporations, as of
the respective dates thereof and the results of operations of the Acquired
Corporations for the periods covered thereby.
2.5 ABSENCE OF CERTAIN CHANGES. Between December 31, 2000 and the date
of this Agreement, except as set forth in the Company's financial statements
contained in the June 30, 2001 Form 10-Q (as defined in Section 2.7 below) and
the notes related thereto, neither the Company nor any other Acquired
Corporation has:
(a) suffered any adverse change with respect to its business or
financial condition which has had a Material Adverse Effect on the Company;
(b) suffered any loss, damage or destruction to or any material
interruption in the use of any of the assets of any Acquired Corporation that
has had a Material Adverse Effect on the Company;
(c) amended its certificate of incorporation or bylaws or any other
charter or organizational documents;
(d) changed, in any material respect, its accounting methods,
principles or practices except as required by changes in GAAP;
(e) sold or transferred any material portion of its assets, except
in the ordinary course of business;
(f) declared, set aside or paid any dividend or other distribution
with respect to any of its capital stock;
(g) except pursuant to the terms of the instrument pursuant to
which such rights were granted, a list of such instruments which is set forth in
Section 2.5(g) of the Company Disclosure Schedule, the Company has not amended
or waived any of its rights under, or permitted the acceleration of vesting
under, (i) any provision of any of the Company Stock Option Plans, (ii) any
provision of any agreement evidencing any outstanding Company Option, or (iii)
any restricted stock purchase agreement.
8.
(h) effected or been a party to any merger, consolidation,
amalgamation, share exchange, business combination, recapitalization,
reclassification of shares, stock split, division or subdivision of shares,
reverse stock split, consolidation of shares or similar transaction;
(i) none of the Acquired Corporations has formed any Subsidiary or
acquired any equity interest or other interest in any other Entity;
(j) none of the Acquired Corporations has made any capital
expenditure which, when added to all other capital expenditures made on behalf
of the Acquired Corporations since June 30, 2001, exceeds $2,000,000 in the
aggregate;
(k) except as set forth in Section 2.5(k) of the Company Disclosure
Schedule, entered into, amended or terminated, or waived any material right or
remedy under, any Material Contract;
(l) (i) acquired, leased or licensed any material right or other
material asset from any other Person or (ii) sold or otherwise disposed of, or
leased or licensed, any material right or other material assets to any other
Person, in either case other than in the ordinary course of business;
(m) except as set forth in Section 2.5(m) of the Company Disclosure
Schedule, written off as uncollectible, or established any extraordinary reserve
with respect to, any accounts receivable or other indebtedness other than in the
ordinary course of business and which in the aggregate are not material to the
Company;
(n) made any pledge of any of its assets or otherwise permitted any
of its assets to become subject to any Encumbrance, except for pledges of
immaterial assets made in the ordinary course of business and consistent with
past practices;
(o) (i) lent money to any Person, or (ii) incurred or guaranteed
any indebtedness for borrowed money, in each case other than in the ordinary
course of business;
(p) except as set forth in Section 2.5(p) of the Company Disclosure
Schedule, (i) established or adopted any Plan (as defined in Section 2.13(a)),
(ii) caused or permitted any Plan to be amended in any material respect; or
(iii) paid any bonus or made any profit-sharing or similar payment to, or
materially increased the amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees other than bonuses, raises or other similar compensation
paid or given in the ordinary course of business consistent with past practice;
(q) made any Tax election;
(r) commenced or settled any Legal Proceeding;
(s) entered into any material transaction or taken any other
material action that has had a Material Adverse Effect on the Acquired
Corporations;
9.
(t) entered into any material transaction outside the ordinary
course of business or inconsistent with past practices;
(u) entered into any agreement to take any of the actions referred
to in clauses "(c)" through "(t)" of this sentence.
2.6 PROPRIETARY ASSETS.
(a) (i) Section 2.6(a)(i) of the Company Disclosure Schedule sets
forth, with respect to each Proprietary Asset owned by the Acquired Corporations
and registered with any Governmental Entity or for which an application has been
filed with any Governmental Entity: (A) a brief description of such Proprietary
Asset; and (B) the names of the jurisdictions covered by the applicable
registration or application.
(ii) Section 2.6(a)(ii) of the Company Disclosure Schedule
identifies and provides a brief description of all other Proprietary Assets
owned by the Acquired Corporations that are material to the business of the
Acquired Corporations.
(iii) Section 2.6(a)(iii) of the Company Disclosure Schedule
identifies and provides a brief description of any ongoing royalty or payment
obligations with respect to, each Proprietary Asset that is licensed or
otherwise made available to the Acquired Corporations by any Person and is
material to the business of the Acquired Corporations (except for any
Proprietary Asset that is licensed to the Acquired Corporations under any third
party software license generally available to the public), and identifies the
Contract under which such Proprietary Asset is being licensed or otherwise made
available to such Acquired Corporation.
(iv) The Acquired Corporations have good, valid and marketable
title to all of the Acquired Corporation Proprietary Assets identified in
Sections 2.6(a)(i) and 2.6(a)(ii) of the Company Disclosure Schedule, free and
clear of all Encumbrances, except for (A) any lien for current taxes not yet due
and payable, and (B) minor liens that have arisen in the ordinary course of
business and that do not (individually or in the aggregate) materially detract
from the value of the asset subject thereto or materially impair the operations
of any of the Acquired Corporations. The Acquired Corporations have a valid
right to use, license and otherwise exploit all Proprietary Assets identified in
Sections 2.6(a)(i) and 2.6(a)(ii) of the Company Disclosure Schedule. Except as
set forth in Section 2.6(a)(iv) of the Company Disclosure Schedule, none of the
Acquired Corporations has developed jointly with any other Person any Acquired
Corporation Proprietary Asset that is material to the business of the Acquired
Corporations with respect to which such other Person has ownership rights, it
being acknowledged for this purpose, Proprietary Assets do not include any data
which a Person may have provided to the Company, and "developed jointly" and do
not include any facility or assistance such Person may have provided to the
Company with respect to data acquisition. Such data, facility and assistance are
identified in Part 2.6(a)(iv) of the Company Disclosure Schedule.
(b) The Acquired Corporations have taken reasonable measures and
precautions to protect and maintain the confidentiality and secrecy of all
Acquired Corporation Proprietary Assets that are material to the business of the
Acquired Corporations (except
10.
Acquired Corporation Proprietary Assets whose value would be unimpaired by
disclosure). Without limiting the generality of the foregoing, except as set
forth in Section 2.6(b) of the Company Disclosure Schedule (i) since January 1,
2000, all current and former employees of the Acquired Corporations who are or
were involved in, or who have contributed to, the creation or development of any
material Acquired Corporation Proprietary Asset have executed and delivered to
the Acquired Corporations an agreement that is substantially similar to the form
of Employee Secrecy Agreement previously delivered by the Company to Parent, and
(ii) since June 30, 1998, all current and former consultants and independent
contractors to the Acquired Corporations who are or were involved in, or who
have contributed to, the creation or development of any material Acquired
Corporation Proprietary Asset have executed and delivered to the Company an
agreement that contains restrictions substantially similar to those contained in
the form of Confidentiality Agreement previously delivered to Parent. To the
Company's knowledge, no current or former employee, officer, director,
stockholder, consultant or independent contractor has any right, claim or
interest in or with respect to any Acquired Corporation Proprietary Assets.
(c) To the knowledge of the Company: (i) all patents, trademarks,
service marks and copyrights listed in Section 2.6(a)(i) of the Company
Disclosure Schedule are valid and subsisting; (ii) none of the Acquired
Corporation Proprietary Assets and no Proprietary Asset that is currently being
developed by any of the Acquired Corporations (either by itself or with any
other Person) infringes or misappropriates any Proprietary Assets owned or used
by any other Person, (iii) none of the products that are or have been designed,
created, developed, assembled, manufactured or sold by any of the Acquired
Corporations is infringing, misappropriating or making any unlawful or
unauthorized use of any Proprietary Assets owned or used by any other Person,
and none of such products has at any time infringed, misappropriated or made any
unlawful or unauthorized use of, and none of the Acquired Corporations has
received any written notice or other written communication of any actual,
alleged, possible or potential infringement, misappropriation or unlawful or
unauthorized use of, any Proprietary Asset owned or used by any other Person;
and (iv) no other Person is infringing, misappropriating or making any unlawful
or unauthorized use of, and no Proprietary Assets owned or used by any other
Person infringes, any material Acquired Corporation Proprietary Asset.
(d) The Acquired Corporation Proprietary Assets constitute all the
Proprietary Assets necessary to enable the Acquired Corporations to conduct
their business in the manner in which such business has been and is now being
conducted. Except as set forth in Section 2.6(d) of the Company Disclosure
Schedule, none of the Acquired Corporations has (i) licensed any of the material
Acquired Corporation Proprietary Assets to any Person on an exclusive basis, or
(ii) entered into any covenant not to compete or Contract limiting its ability
to exploit fully any material Acquired Corporation Proprietary Assets or to
transact business in any market or geographical area or with any Person.
(e) To the knowledge of the Company, no current or former executive
officer of the Company is competing against, soliciting customers or employees
from, or using Proprietary Assets of the Company.
11.
2.7 TITLE TO ASSETS; REAL PROPERTY. The Acquired Corporations own, and
have good and valid title to, all tangible assets reflected on the balance sheet
included in the Company's Report on Form 10-Q filed with the SEC for the fiscal
quarter ended June 30, 2001 (the "JUNE 30, 2001 FORM 10-Q") (except for tangible
assets sold or disposed of since June 30, 2001 in the ordinary course of
business consistent with past practice) free and clear of any Encumbrances,
except that such tangible assets may be subject to (a) liens for Taxes not yet
due and payable, (b) liens, encumbrances or imperfections of title that have
arisen in the ordinary course of business, (c) the specific liens, encumbrances
or imperfections of title identified in Section 2.7(c) of the Company Disclosure
Schedule resulting from or relating to any of the contracts referred to in such
Section of the Company Disclosure Schedule and (d) liens, encumbrances or
imperfections of title relating to liabilities reflected in the financial
statements (including any related notes) contained in the Company SEC Documents.
The Company does not own any interest in any real property other than leaseholds
created under the real property leases identified in Section 2.7 of the
Disclosure Schedule.
2.8 CONTRACTS. The Company has delivered or made available to Parent an
accurate and complete copy of each contract that is currently in effect and
either (i) has been filed (or is required to be filed) by the Company as an
exhibit to a Report on Form 10-K under the Exchange Act, (ii) is a location
contract that generates, or is reasonably expected to generate, aggregate
revenues for the Acquired Corporations in excess of $1,000,000 on an annualized
basis or (iii) is a contract other than a location contract that requires by its
terms payments by the Company (excluding payments already paid) in excess of
$100,000 (each, a "MATERIAL CONTRACT"). Except as set forth in Section 2.8 of
the Company Disclosure Schedule, no Acquired Corporation is in breach of or
default under any Material Contract, except for breaches and defaults that would
not have a Material Adverse Effect on such Acquired Corporation; and, to the
knowledge of the Company, no other Person is in breach of or default under any
Material Contract, except for breaches and defaults that would not have a
Material Adverse Effect on the Company. With respect to the Company's
obligations under the Material Contracts, each Material Contract is valid and in
full force and effect and is enforceable against the Company in accordance with
its terms. With respect to the obligations of third parties under the Material
Contracts, to the knowledge of the Company, each Material Contract is valid and
in full force and effect and, to the knowledge of the Company, is enforceable
against such third parties in accordance with its terms. Except as set forth in
Section 2.8 of the Company Disclosure Schedule, to the best of the knowledge of
the Company, no event has occurred, and no circumstance or condition exists,
that (with or without notice or lapse of time) may (a) give any Person the right
to declare a default or exercise any remedy under any Material Contract, (b)
give any Person the right to accelerate the maturity or performance of any
Material Contract, or (c) give any Person the right to cancel, terminate or
modify any Material Contract, except in each such case for defaults,
acceleration rights, termination rights and other rights that have not had and
would not reasonably be expected to have a Material Adverse Effect on the
Company. None of the Acquired Corporations has received any written notice or
other communication regarding any actual or possible violation or breach of, or
default under, any Material Contract, except in each such case for defaults,
acceleration rights, termination rights and other rights that have not had and
would not reasonably be expected to have a Material Adverse Effect on the
Company. With respect to each location contract that does generate, or is
reasonably expected to generate, aggregate revenues for the Acquired
Corporations in excess of $100,000 on an annualized basis, but less than
$1,000,000 on an annualized basis ("SIGNIFICANT CUSTOMER CONTRACTS"), (i) all
such
12.
Significant Customer Contracts are valid and enforceable with respect to the
Acquired Corporations and, to the knowledge of the Company, the other parties
thereto, (ii) no Acquired Corporation is in material breach or default of such
Significant Customer Contracts and (iii) to the knowledge of the Company, no
circumstance or conditions exist that (with or without notice or lapse of time)
may give any person the right to declare a default or exercise any remedy under
a Significant Customer Contract or give any person the right to cancel or
terminate any Significant Customer Contract, except, with respect to any of the
foregoing, for breaches, defaults, and all other events and conditions described
in this sentence that will not result in lost revenues to the Acquired
Corporations in excess of $1,300,000.
2.9 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in Section
2.9 of the Company Disclosure Schedule, each of the Acquired Corporations is,
and has at all times been, in compliance with all material Legal Requirements.
Except as set forth in Section 2.9 of the Company Disclosure Schedule, none of
the Acquired Corporations has received any written notice from any Governmental
Entity or other Person regarding any actual or alleged violation of, or failure
to comply with, any Legal Requirement, the impact of which is, was or is
reasonably expected to be material to the Company.
2.10 LEGAL PROCEEDINGS; ORDERS. Except as set forth in Section 2.10 of
the Company Disclosure Schedule, as of the date of this Agreement:
(a) there is no Legal Proceeding pending (or, to the knowledge of
the Company, being overtly threatened) against any Acquired Corporation;
(b) there is no material order, writ, injunction or judgment to
which any Acquired Corporation is subject; and
(c) to the Company's knowledge, no investigation or review by any
Governmental Entity with respect to the Company is pending or is being overtly
threatened.
2.11 GOVERNMENTAL AUTHORIZATIONS. As of the date of this Agreement, the
Acquired Corporations hold all Governmental Authorizations necessary to enable
the Acquired Corporations to conduct their businesses in the manner in which
their businesses are currently being conducted. The Governmental Authorizations
held by the Company are valid and in full force and effect. Except as set forth
in Section 2.11 of the Company Disclosure Schedule, the Company is, and at all
times since its formation has been, in compliance with the terms and
requirements of such Governmental Authorizations. Between January 1, 2001 and
the date of this Agreement, the Company has not received any written notice from
any Governmental Entity (a) asserting any material violation of or failure to
comply with any term or requirement of any material Governmental Authorization
or (b) notifying the Company of the actual or threatened revocation, suspension,
cancellation, termination, modification or withdrawal of any material
Governmental Authorization. Section 2.11 of the Company Disclosure Schedule sets
forth each of the material Governmental Authorizations held by the Acquired
Corporations.
2.12 TAX MATTERS.
(a) All Tax Returns required to be filed by the Acquired
Corporations with any Governmental Entities before the Effective Time (the
"COMPANY RETURNS") (i) have been or
13.
will be filed on or before the applicable due date (as such due date may have
been or may be extended), and (ii) have been, or will be when filed, prepared in
compliance with applicable Legal Requirements. The amounts shown on the Company
Returns to be due at or before the Effective Time have been or will be paid at
or before the Effective Time. The Company has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(b) The balance sheet included in the June 30, 2001 Form 10-Q
fully accrues the Company's material and contingent liabilities for Taxes with
respect to all periods through June 30, 2001 in accordance with GAAP. Each
Acquired Corporation will establish, in the ordinary course of business and
consistent with its past practices, appropriate reserves for the payment of
Taxes due for the period from January 1, 2001 through the Effective Time, and
will disclose the amount of such reserves to Parent no later than 10 business
days prior to the Closing Date. Since June 30, 2001, none of the Acquired
Corporations has incurred any Liability for any Tax other than in the ordinary
course of its business.
(c) Except as set forth in Section 2.12(c) of the Company
Disclosure Schedule, no examinations or audits of any Company Return is ongoing,
and no extension or waiver of the limitation period applicable to any Company
Return is in effect or has been requested by an Acquired Corporation. No Legal
Proceeding is pending (or, to the knowledge of the Company, is being threatened)
by any tax authority against any Acquired Corporation in respect of any material
Tax. There are no material unsatisfied liabilities for Taxes with respect to any
notice of deficiency or similar document received by any Acquired Corporation
with respect to any material Tax (other than liabilities for Taxes asserted
under any such notice of deficiency or similar document which are being
contested in good faith and with respect to which adequate reserves for payment
have been established on the June 30, 2001 Form 10-Q). There are no liens for
material Taxes upon any of the assets of any Acquired Corporation, except liens
for current Taxes not yet due and payable. None of the Acquired Corporations has
entered into or become bound by any agreement or consent pursuant to Section
341(f) of the Code. None of the Acquired Corporations is or will be required to
include any adjustment in taxable income for any tax period pursuant to Section
481 or 263A of the Code or any comparable provision under state or foreign Tax
laws as a result of transactions or events occurring, or accounting methods
employed, prior to the date of this Agreement. The Company has not been a member
of any combined, consolidated or unitary group for which it is or will be liable
for Taxes under principles of Section 1.1502-6 of the Treasury Regulations
except the group of which the Company is a common parent.
(d) Except as set forth in Section 2.12(d) of the Company
Disclosure Schedule, none of the Acquired Corporations is a party to or bound by
any agreement, plan, arrangement or other Contract covering any current or
former employee or independent contractor of any of the Acquired Corporations,
considered individually or with any other such Contract, that will give rise to
any material payment that would not be deductible pursuant to Section 280G or
Section 162(m) of the Code (or any provision that is comparable under state or
foreign Tax laws). None of the Acquired Corporations is, or has ever been, a
party to or bound by any material tax indemnity agreement, tax sharing
agreement, tax allocation agreement or similar contract.
14.
2.13 EMPLOYEE BENEFIT PLANS.
(a) Section 2.13(a) of the Company Disclosure Schedule identifies
each material salary, bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance pay, termination pay, hospitalization,
medical, insurance, supplemental unemployment benefits, profit-sharing, pension
or retirement plan, program or agreement maintained, sponsored, contributed to
or required to be contributed to by any of the Acquired Corporations for the
benefit of any current or former employee, director or consultant of any of the
Acquired Corporations. (All plans, programs and agreements referred to in the
prior sentence are referred to in this Agreement as the "PLANS.")
(b) Except as set forth in Section 2.13(a) of the Company
Disclosure Schedule, none of the Acquired Corporations maintains, sponsors or
contributes to, and none of the Acquired Corporations has at any time in the
past maintained, sponsored or contributed to, any employee pension benefit plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or any similar pension benefit plan under the laws
of any foreign jurisdiction, whether or not excluded from coverage under
specific Titles or Merger Subtitles of ERISA), for the benefit of any current or
former employee or director of any of the Acquired Corporations (a "PENSION
PLAN").
(c) Except as set forth in Section 2.13(a) of the Company
Disclosure Schedule, none of the Acquired Corporations maintains, sponsors or
contributes to any: (i) employee welfare benefit plan (as defined in Section
3(l) of ERISA) or any similar welfare benefit plan under the laws of any foreign
jurisdiction, whether or not excluded from coverage under specific Titles or
Merger Subtitles of ERISA, for the benefit of any current or former employee or
director of any of the Acquired Corporations (a "WELFARE PLAN"), or (ii)
self-funded medical, dental or other similar Plan. None of the Plans identified
in the Company Disclosure Schedule is a multiemployer plan (within the meaning
of Section 3(37) of ERISA).
(d) With respect to each material Plan, the Company has delivered
to Parent or Parent's advisors or representatives: (i) an accurate and complete
copy of such Plan (including all amendments thereto); (ii) an accurate and
complete copy of the annual report, if required under ERISA, with respect to
such Plan for each of the last two years; (iii) an accurate and complete copy of
the most recent summary plan description, together with each Summary of Material
Modifications, if required under ERISA, with respect to such Plan; (iv) if such
Plan is funded through a trust or any third party funding vehicle, an accurate
and complete copy of the trust or other funding agreement (including all
amendments thereto) and accurate and complete copies of the most recent
financial statements thereof; (v) accurate and complete copies of all Contracts
relating to such Plan, including service provider agreements, insurance
contracts, minimum premium contracted, stop-loss agreements, investment
management agreements, subscription and participation agreements and
recordkeeping agreements; and (vi) an accurate and complete copy of the most
recent determination letter received from the Internal Revenue Service with
respect to such Plan (if such Plan is intended to be qualified under Section
401(a) of the Code).
(e) None of the Acquired Corporations is or has ever been required
to be treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or
15.
Section 414(b), (c), (m) or (o) of the Code. None of the Acquired Corporations
has ever been a member of an "affiliate service group" within the meaning of
Section 414(m) of the Code. None of the Acquired Corporations has ever made a
complete or partial withdrawal from a multiemployer plan, as such term is
defined in Section 3(37) of ERISA, resulting in "withdrawal liability," as such
term is defined in Section 4201 of ERISA (without regard to any subsequent
reduction or waiver of such liability under either Section 4207 or 4208 of
ERISA).
(f) None of the Acquired Corporations has any plan or commitment
to create any Welfare Plan or any Pension Plan, or to modify or change any
existing Welfare Plan or Pension Plan (other than to comply with applicable law)
in a manner that materially would affect any current or former employee or
director of any of the Acquired Corporations.
(g) No Plan provides death, medical or health benefits (whether or
not insured) with respect to any current or former employee or director of any
of the Acquired Corporations after any termination of service of such employee
or director (other than (i) benefit coverage mandated by applicable law,
including coverage provided pursuant to Section 4980B of the Code, (ii) deferred
compensation benefits accrued as liabilities on the June 30, 2001 Form 10-Q,
(iii) benefits the full cost of which are borne by current or former employees
or directors of any of the Acquired Corporations (or their beneficiaries)).
(h) With respect to any Plan constituting a group health plan
within the meaning of Section 4980B(g)(2) of the Code, the provisions of Section
4980B of the Code ("COBRA") have been complied with in all material respects.
(i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
ERISA, the Code and applicable foreign Legal Requirements.
(j) Each of the Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, and the Company is not aware of any reason why any
such determination letter could be revoked.
(k) Except as set forth in Section 2.13(k) of the Company
Disclosure Schedule, neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions
contemplated by this Agreement will result in any bonus, golden parachute,
severance or other payment or obligation to any current or former employee or
director of any of the Acquired Corporations (whether or not under any Plan), or
materially increase the benefits payable or provided under any Plan, or result
in any acceleration of the time of payment, provision or vesting of any such
benefit.
(l) Section 2.13(l) of the Company Disclosure Schedule identifies
each employee of each of the Acquired Corporations as of the date of this
Agreement, and correctly reflects, in all material respects, the current salary
and other compensation payable to such employee, such employee's employer, date
of hire and position and the principal office of such employee. None of the
Acquired Corporations is a party to any collective bargaining contract or other
Contract with a labor union involving any of its employees. All of the employees
of the Acquired Corporations are "at will" employees.
16.
(m) Section 2.13(m) of the Company Disclosure Schedule identifies
each employee of any of the Acquired Corporations who is not fully available to
perform work because of disability or other leave and sets forth the basis of
such disability or leave and the anticipated date of such employee's return to
full service.
(n) Each of the Acquired Corporations is in compliance in all
material respects with all applicable Legal Requirements and Material Contracts
relating to employment, employment practices, wages, bonuses and terms and
conditions of employment, including employee compensation matters.
(o) To the knowledge of the Company, as of the date of this
Agreement, no officer or group of employees of any of the Acquired Corporations
intends to terminate his, her or their employment with such Acquired Corporation
as a result of the execution of this Agreement or the consummation of the
transactions contemplated herein.
2.14 LABOR MATTERS. There are no collective bargaining agreements or
other labor union agreements to which the Company is a party or by which it is
bound, and, to the knowledge of the Company, the Company is not the subject of
any proceeding asserting that it has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages or
conditions. To the Company's knowledge, since January 1, 2001 the Company has
not encountered any labor union organizing activity or had any actual or
threatened employee strikes, work stoppages, slowdowns or lockouts.
2.15 ENVIRONMENTAL MATTERS. The Acquired Corporations are in compliance
with all applicable Environmental Laws, except where the failure to be in such
compliance would not have a Material Adverse Effect on the Acquired
Corporations. Between January 1, 2001 and the date of this Agreement, the
Acquired Corporations have not received any written notice from a Governmental
Entity, that alleges that any of the Acquired Corporations are materially
violating any Environmental Law. To the knowledge of the Acquired Corporations,
no current or prior owner of any property leased or controlled by any Acquired
Corporation has received any written notice from a Governmental Entity between
January 1, 2001 and the date of this Agreement that alleges that such current or
prior owner or any Acquired Corporation is materially violating any
Environmental Law. (For purposes of this Section 2.15, "ENVIRONMENTAL LAW" means
any Legal Requirement relating to pollution or protection of human health or the
environment, including any law regulating emissions, discharges or releases of
chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and
petroleum products or otherwise regulating the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and
petroleum products or any other substance that is inherently dangerous to
health, reproduction or the environment.) All material Governmental
Authorizations currently held by the Company pursuant to Environmental Laws are
identified in Section 2.15 of the Company Disclosure Schedule.
2.16 INSURANCE. Section 2.16 of the Company Disclosure Schedule lists
each material insurance policy and self-insurance program relating to the
business, assets and operations of the Acquired Companies, each of which is in
full force and effect. Between January 1, 2001 and the date of this Agreement,
no Acquired Corporation has received any written communication
17.
regarding any actual or threatened (a) cancellation or invalidation of any
insurance policy held by any Acquired Corporation, (b) refusal of any coverage
or rejection of any material claim under any insurance policy held by any
Acquired Corporation, or (c) material adjustment in the amount of the premiums
payable with respect to any insurance policy held by any Acquired Corporation.
There is no pending material claim by any Acquired Corporation under any
insurance policy held by any Acquired Corporation.
2.17 CERTAIN BUSINESS PRACTICES. To the knowledge of the Company, the
Company has not: (i) used any material funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to political activity; or (ii)
made any material unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns or
materially violated any provision of the Foreign Corrupt Practices Act of 1977.
2.18 PRODUCT WARRANTIES. Except as would not have a Material Adverse
Effect on the Company, as of the date of this Agreement there are no claims
pending or, to the knowledge of the Company, being overtly threatened against
any Acquired Corporation with respect to any warranties provided by any Acquired
Corporation with respect to products of any Acquired Corporation.
2.19 AUTHORITY; BINDING NATURE OF AGREEMENT. The Company has the
requisite corporate power and authority to enter into and to perform its
obligations under this Agreement. The Board of Directors of the Company has (a)
determined that the Merger is fair to, and in the best interests of, the Company
and its Stockholders, (b) authorized and approved the execution, delivery and
performance of this Agreement by the Company and approved the Merger and (c)
recommended the approval of this Agreement and the Merger by the holders of
Shares and directed that this Agreement and the Merger be submitted for
consideration by the Company's stockholders at the Company's Stockholders'
Meeting (as defined in Section 4.3). 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 on the part of the Company, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement other than,
with respect to the Merger, the adoption of this Agreement by the holders of a
majority of the then outstanding Shares and the filing and recordation of the
appropriate merger documents as required by the DGCL. This Agreement has been
duly and validly executed and delivered on behalf of the Company and, assuming
the due authorization, execution and delivery of this Agreement by Parent and
Acquisition Sub, constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to (i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
2.20 NON-CONTRAVENTION; CONSENTS. Except as set forth in Section 2.20
of the Company Disclosure Schedule, neither (1) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (2) the consummation of the Merger or any of the other
transactions contemplated by this Agreement, will (with or without notice or
lapse of time):
18.
(i) contravene, conflict with or result in a violation of (i)
any of the provisions of the certificate of incorporation, bylaws or other
charter or organizational documents of any of the Acquired Corporations, or (ii)
any resolution adopted by the stockholders, the board of directors or any
committee of the board of directors of any of the Acquired Corporations;
(ii) contravene, conflict with or result in a violation of, or
give any Governmental Entity or other Person the right to exercise any remedy or
obtain any relief under, any Legal Requirement or any outstanding order, writ,
injunction, judgment or decree to which any of the Acquired Corporations, or any
of the assets owned or used by any of the Acquired Corporations, is subject;
(iii) contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any Material Contract,
or give any Person the right to (i) declare a default or exercise any remedy
under any such Material Contract, (ii) a rebate, chargeback, penalty, or change
in delivery schedule under any such Material Contract, (iii) accelerate the
maturity or performance of any such Material Contract or (iv) cancel, terminate,
or modify any term of any such Material Contract; or
(iv) result in the imposition or creation of any Encumbrance
upon or with respect to any asset owned or used by any of the Acquired
Corporations (except for liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Acquired Corporations).
Except as may be required by the Securities Act, the Exchange Act, the
DGCL, the HSR Act and the NASD Bylaws, none of the Acquired Corporations was, is
or will be required to make any filing with or give any notice to, or obtain any
Consent from, any Governmental Entity or Person in connection with (x) the
execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of the Merger
or any of the other transactions contemplated by this Agreement.
2.21 SECTION 203 OF THE DGCL NOT APPLICABLE. The Board of Directors of
the Company has taken or will take all action necessary to render Section 203 of
the DGCL inapplicable to the Merger.
2.22 OPINION OF FINANCIAL ADVISOR. The Company has received the oral
opinion of Xxxxxxxxxx & Partners, Inc. ("XXXXXXXXXX") on the date of this
Agreement to the effect that the Merger Consideration is fair, from a financial
point of view, to the Stockholders.
2.23 BROKERS. No broker, finder or investment banker (other than
Xxxxxxxxxx & Partners, Inc.) is entitled to any brokerage, finder's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company. The
terms of the fee payable to Xxxxxxxxxx & Partners, Inc. are set forth in Section
2.23 of the Company Disclosure Schedule.
2.24 RIGHTS AGREEMENT. The Company has taken all action necessary to
provide that the execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement will not enable or require
the Rights (as such term is defined in
19.
the Rights Agreement) to be exercised or distributed and no Distribution Date
has occurred thereunder.
2.25 LIABILITIES. Except for liabilities reflected or reserved against
in the Company's financial statements or as disclosed in the Company SEC
Documents, none of the Acquired Corporations has any accrued, contingent or
other liabilities of any nature, either matured or unmatured, that would be
required by GAAP to be reflected on a consolidated balance sheet of the Company
and its subsidiaries except for: (a) normal and recurring liabilities that have
been incurred by the Acquired Corporations since June 30, 2001 in the ordinary
course of business and consistent with past practices and that have not had, in
the aggregate, a Material Adverse Effect on the Company and (b) liabilities
described in Section 2.25 of the Company Disclosure Schedule.
2.26 TRANSACTIONS WITH AFFILIATES. Except as set forth in the Company
SEC Reports, since the date of the Company's last proxy statement filed with the
SEC, no event has occurred that would be required to be reported by the Company
pursuant to Item 404 of Regulation S-K promulgated by the SEC. Section 2.26 of
the Company Disclosure Schedule identifies each person who is (or who may be
deemed to be) an "affiliate" (as that term is used in Rule 145 under the
Securities Act) of the Company as of the date of this Agreement.
2.27 VOTE REQUIRED. The affirmative vote of the holders of a majority
of the shares of Company Common Stock outstanding on the record date for the
Company Stockholders' Meeting (the "REQUIRED STOCKHOLDER VOTE") is the only vote
of the holders of any class or series of the Company's capital stock necessary
to approve this Agreement, the Merger and the other transactions contemplated by
this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB
Parent and Acquisition Sub hereby jointly and severally represent and
warrant to the Company that:
3.1 DUE ORGANIZATION. Parent and Acquisition Sub are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and have all requisite corporate power and authority to conduct their
business in the manner in which such business is currently being conducted.
3.2 LEGAL PROCEEDINGS.
(a) There is no Legal Proceeding pending (or, to the knowledge of
Parent, being threatened) against Parent or Acquisition Sub that would
materially and adversely affect Parent's or Acquisition Sub's ability to
consummate any of the transactions contemplated by this Agreement.
(b) There is no order, writ, injunction or judgment to which Parent
or Acquisition Sub is subject that would materially and adversely affect
Parent's or Acquisition Sub's ability to consummate any of the transactions
contemplated by this Agreement.
20.
(c) To Parent's knowledge, as of the date of this Agreement, no
investigation or review by any Governmental Entity with respect to Parent or
Acquisition Sub is pending or threatened, other than any investigation or review
that would not materially and adversely affect Parent's or Acquisition Sub's
ability to consummate any of the transactions contemplated by this Agreement.
3.3 AUTHORITY; BINDING NATURE OF AGREEMENT. Parent has the requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement. The Board of Directors of Parent has (a) determined that the
transactions contemplated by this Agreement are fair and in the best interests
of Parent, and (b) authorized and approved the execution, delivery and
performance of this Agreement by Parent. The execution and delivery of this
Agreement by Parent and the consummation by Parent of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Parent, and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement.
This Agreement has been duly and validly executed and delivered by Parent and,
assuming the due authorization, execution and delivery of this Agreement by the
Company, constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies. Acquisition Sub is a newly formed, wholly-owned
subsidiary of Parent and has the requisite corporate power and authority to
enter into and to perform its obligations under this Agreement. The Board of
Directors of Acquisition Sub has (a) determined that the transactions
contemplated by this Agreement are fair and in the best interests of Acquisition
Sub, and (b) authorized and approved the execution, delivery and performance of
this Agreement by Acquisition Sub. The execution and delivery of this Agreement
by Acquisition Sub and the consummation by Acquisition Sub of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Acquisition Sub, and no other
corporate proceedings on the part of Acquisition Sub are necessary to authorize
this Agreement other than, with respect to the Merger, the filing and
recordation of the appropriate merger documents as required by the DGCL. This
Agreement has been duly and validly executed and delivered by Acquisition Sub
and, assuming the due authorization, execution and delivery of this Agreement by
the Company, constitutes the legal, valid and binding obligation of Acquisition
Sub, enforceable against Acquisition Sub in accordance with its terms, subject
to (i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.4 NON-CONTRAVENTION; CONSENTS. Except for violations and defaults
that would not materially and adversely affect Parent's or Acquisition Sub's
ability to consummate any of the transactions contemplated by this Agreement,
the execution and delivery of this Agreement by Parent and Acquisition Sub, and
the consummation of the transactions contemplated by this Agreement, will not:
(a) cause a violation of any of the provisions of the certificate of
incorporation or bylaws of Parent or Acquisition Sub; (b) cause a violation by
Parent or Acquisition Sub of any Legal Requirement applicable to Parent or
Acquisition Sub; or (c) cause a default on the part of Parent or Acquisition Sub
under any contract. Except as may be required by the Exchange Act, the DGCL or
the HSR Act, neither Parent nor Acquisition Sub, nor any of Parent's other
Affiliates, is required to make any filing with or give any notice to, or to
obtain
21.
any consent from, any Person at or prior to the Closing Date in connection with
the execution and delivery of this Agreement by Parent or Acquisition Sub or the
consummation by Parent or Acquisition Sub of any of the transactions
contemplated by this Agreement, except where the failure to make any such
filing, give any such notice or obtain any such consent would not materially and
adversely affect Parent's or Acquisition Sub's ability to consummate any of the
transactions contemplated by this Agreement. No vote of Parent's stockholders is
necessary to approve this Agreement or any of the transactions contemplated by
this Agreement.
3.5 NOT AN INTERESTED STOCKHOLDER. Neither Parent nor any of its
Affiliates is an "interested stockholder" (as such term is defined in Section
203 of Delaware Law) of the Company.
3.6 FINANCING. Parent has delivered to the Company complete and
accurate copies of those fully executed financing commitment letters set forth
in Schedule 3.6 hereto (the financing commitments reflected in such letters is
hereinafter referred to as the "COMMITTED FINANCING"). To the best of Parent's
knowledge, as of the date of this Agreement and subject to the conditions set
forth in the commitment letters set forth in Schedule 3.6 hereto and assuming
the facts and circumstances as of the date hereof, the Committed Financing is in
an amount sufficient to consummate the Merger and will be available at the
Effective Time.
3.7 OWNERSHIP OF SHARES. Neither Parent nor any of Parent's Affiliates
beneficially owns any Shares; PROVIDED, HOWEVER, that the parties hereto
acknowledge and agree that Xxxxx X. Xxxxxxx beneficially owns Shares.
3.8 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Acquisition Sub.
SECTION 4. COVENANTS
4.1 INTERIM OPERATIONS OF THE COMPANY.
(a) During the period from the date of this Agreement to the
Effective Time (the "PRE-CLOSING PERIOD"): (i) the Company shall ensure that it
and each other Acquired Corporation conducts its business and operations (A) in
the ordinary course and in accordance with past practices and (B) in compliance
with all material Legal Requirements and the requirements of all Material
Contracts; (ii) the Company shall use its reasonable efforts to ensure that it
and each other Acquired Corporation preserves intact its current business
organization, keeps available the services of its current officers and other
employees and maintains its relations and goodwill with all suppliers,
customers, landlords, creditors, licensors, licensees, employees and other
Persons having business relationships with it or its subsidiaries, as the case
may be; (iii) the Company shall use its reasonable efforts to keep in full force
all insurance policies referred to in Section 2.16; and (iv) the Company shall
(to the extent reasonably requested by Parent) cause its officers and the
officers of each other Acquired Corporation to report to Parent concerning the
status of the Company's business.
22.
(b) The Company agrees that, during the Pre-Closing Period, except
to the extent Parent shall otherwise consent in writing, which consent shall not
be unreasonably withheld (except that with respect to Section 4.1(b)(v) below,
Parent shall be entitled to withhold its consent in its sole discretion), the
Company shall not and shall not permit any of its subsidiaries to:
(i) amend its certificate of incorporation or bylaws or other
charter or organizational documents, or effect a stock split,
division, or subdivision of shares, reverse stock split,
consolidation of shares or similar transaction;
(ii) effect or become a party to any merger, consolidation,
amalgamation, share exchange or other business combination
(iii) declare, set aside or pay any dividend (whether payable
in cash, stock or property) or make any other distribution in
respect of any shares of capital stock;
(iv) form any subsidiary or acquire any equity interest in any
other Entity other than acquisitions of franchisees of the Company
pursuant to rights the Company has under agreements existing and
outstanding as of the date of this Agreement;
(v) issue, sell, grant or authorize the issuance or grant of
any capital stock or other security, or any instrument convertible
into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any capital stock or other
securities, other than (i) options to purchase up to 10,000 Shares
granted in the ordinary course of business with an exercise price
equal to the fair market value of the Company's common stock as of
the date of such grant; (ii) Shares issuable upon the valid
exercise of Company Options outstanding on, or granted (pursuant to
Section 4.1(b)(v)(i)) after, the date of this Agreement, (iii)
Shares issuable pursuant to warrants outstanding as of the date of
this Agreement and disclosed on Section 2.3(c) of the Company
Disclosure Schedule and (iv) up to 7,000 Shares issuable pursuant
to the ESPP;
(vi) amend or waive any of its rights under, or alter the
acceleration of the vesting under, any provision of any of the
Company's stock option plans, any provision of any agreement
evidencing any outstanding stock option or any restricted stock
purchase agreement, or otherwise modify any of the terms of any
outstanding option, warrant or other security or any related
Contract;
(vii) transfer, lease or license to any third party, or
encumber, any assets other than (A) in the ordinary course of
business, or (B) as security for any borrowings permitted by
Section 4.1(ix);
(viii) repurchase, redeem or otherwise acquire any shares of
the capital stock or other securities except shares repurchased
from employees or former employees of the Company pursuant to the
exercise of repurchase rights;
23.
(ix) lend money to any Person or incur any indebtedness for
borrowed money or guarantee any indebtedness, except for (A)
short-term borrowings incurred in the ordinary course of business,
and (B) borrowings pursuant to existing credit facilities in the
ordinary course of business;
(x) establish, adopt or materially amend any bonus, profit
sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, pension, retirement, deferred
compensation or other employee benefit agreements or plans for the
benefit of any director, officer or employee, or pay any bonus or
increase the wages, salary, considerations, fringe benefits or
other compensation or remuneration payable to any director, officer
or employee (except for increases in the ordinary course of
business that are consistent with past practices or that, in the
aggregate, do not result in a material increase in benefits or
compensation expense);
(xi) enter into or become bound by, or permit any of the
material assets owned by or used by it to become bound by, any
Material Contract, or amend or prematurely terminate any Material
Contract or exercise, waive, release or assign any material right
or claim under any Material Contract (except in the ordinary course
of business consistent with the Company's past practice or where
the failure to amend or terminate a Material Contract would, in the
reasonable judgment of the Company's Board of Directors, have a
material adverse impact on the Company);
(xii) change any of its methods of accounting or accounting
practices in any material respect except as may be specifically
required by GAAP or the SEC;
(xiii) make any Tax election (except for elections made in the
ordinary course of business consistent with the Company's past
practices);
(xiv) make any capital expenditure which, when added to all
other capital expenditures made by the Acquired Corporations during
the Pre-Closing Period, would exceed $3,500,000 in the aggregate;
(xv) commence or settle any Legal Proceeding for an amount in
excess of $20,000;
(xvi) hire any employee at the level of Vice President or
above, or with an annual base salary in excess of $90,000;
(xvii) acquire, lease or license or sell or otherwise dispose
of any right or any other asset of the Company, or waive or
relinquish any right of the Company, in any such case with a fair
market value in excess of $50,000;
(xviii) enter into any transaction outside the ordinary course
of business that requires by its terms payment by or to the Company
of more than $100,000; or
24.
(xix) enter into an agreement to take any of the actions
described in clauses "(i)" through "(xviii)" of this Section 4.1.
4.2 NO SOLICITATION.
(a) The Company shall not directly or indirectly, and shall not
authorize or permit any Acquired Corporation or any of its or their
representatives directly or indirectly to, (i) solicit, initiate, encourage or
induce the making or submission of any Acquisition Proposal, (ii) furnish any
information regarding the Company or any other Acquired Corporation to any
Person in connection with or in response to an Acquisition Proposal, (iii)
engage in discussions or negotiations with any Person with respect to any
Acquisition Proposal; (iv) approve, endorse or recommend any Acquisition
Proposal or (v) enter into any letter of intent or similar document or any
Contract contemplating or otherwise relating to any Acquisition Proposal;
PROVIDED, HOWEVER, that prior to the adoption and approval of this Agreement by
the Required Stockholder Vote, neither the Company nor any of its agents or
representatives shall be prohibited by this Section 4.2(a) from furnishing
nonpublic information regarding the Company to, or entering into discussions or
negotiations with, or accepting or recommending an Acquisition Proposal from, or
entering into definitive agreements relating to an alternative Acquisition
Proposal with, any Person in response to a Superior Proposal that is submitted
by such Person (and not withdrawn) if (A) neither the Company nor any
representative of any of the Company or any other Acquired Corporation shall
have violated any of the restrictions set forth in Section 4.2(a), (B) the Board
of Directors of the Company concludes in good faith, after consulting with its
outside legal counsel, that the failure to take such action would be reasonably
likely to constitute a breach of the Company's Board of Directors' fiduciary
obligations to the Company's stockholders under applicable law and (C) prior to
or contemporaneously with furnishing any such nonpublic information to such
Person, the Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously furnished by the
Company to Parent). The Company will immediately cease and cause to be
terminated any existing discussions or negotiations with any third parties
relating to any Acquisition Proposals.
(b) The Company shall promptly advise Parent orally and in writing
of any Acquisition Proposal (including the material terms thereof) that is made
or submitted by any Person during the Pre-Closing Period.
(c) Subject to the terms and conditions set forth in Section 7
below, nothing contained in this Section 4.2 or elsewhere in this Agreement
shall prohibit the Company or its Board of Directors from complying with Rule
14d-9 or Rule 14e-2 under the Exchange Act, if applicable, or from making any
disclosure to the Company's stockholders which, in the reasonable judgment of
the Company's Board of Directors, is required under applicable law.
4.3 MEETING OF THE COMPANY'S STOCKHOLDERS.
(a) The Company shall use all reasonable efforts to call, give
notice of, convene and hold a meeting of the holders of Shares to consider, act
upon and vote upon the adoption and approval of this Agreement and the approval
of the Merger (the "STOCKHOLDERS' MEETING"). The Stockholders' Meeting will be
held as promptly as reasonably practicable. The Company shall use all reasonable
efforts to ensure that the Stockholders' Meeting is called,
25.
noticed, convened, held and conducted, and that all proxies solicited in
connection with the Stockholders' Meeting are solicited, in compliance with all
applicable Legal Requirements. Parent will furnish to the Company all
information regarding Parent and its Affiliates that may be required (pursuant
to the Exchange Act and other applicable Legal Requirements) to be set forth in
the Company's proxy or information statement with respect to such meeting (the
"PROXY STATEMENT"). The Company will not file the Proxy Statement with the SEC,
and will not amend or supplement the Proxy Statement, without consulting Parent
and its counsel.
(b) Subject to Section 4.3(c): (i) the Board of Directors of the
Company shall recommend that the Company's stockholders vote in favor of and
adopt and approve this Agreement and approve the Merger at the Stockholders'
Meeting; (ii) the Proxy Statement shall include a statement to the effect that
the Board of Directors of the Company has recommended that the Company's
stockholders vote in favor of and adopt and approve this Agreement and approve
the Merger at the Stockholders' Meeting; and (iii) neither the Board of
Directors of the Company nor any committee thereof shall withdraw, amend or
modify, or propose or resolve to withdraw, amend or modify, in a manner adverse
to Parent the recommendation of the Board of Directors of the Company that the
Company's stockholders vote in favor of and adopt and approve this Agreement and
approve the Merger.
(c) Subject to the terms and conditions set forth in Section 7
below, nothing in Section 4.3(b) shall prevent the Board of Directors of the
Company from withdrawing, amending or modifying its recommendation in favor of
the Merger at any time prior to the adoption and approval of this Agreement by
the Required Stockholder Vote if (i) neither the Company nor any of its
representatives shall have violated any of the restrictions set forth in Section
4.2(a) and (ii) the Board of Directors of the Company concludes in good faith,
after consulting with its outside counsel, that the failure to take any such
action would be reasonably likely to constitute a breach of the Company's Board
of Directors' fiduciary obligations to the Company's stockholders under
applicable law. Subject to Section 7.1, nothing contained in this Section 4.3
shall limit the Company's obligation to call, give notice of, convene and hold
the Stockholders' Meeting (regardless of whether the recommendation of the Board
of Directors of the Company shall have been withdrawn, amended or modified).
4.4 FILINGS; OTHER ACTION.
(a) Each of the Company, Parent and Acquisition Sub shall: (i)
promptly make and effect all registrations, filings and submissions required to
be made or effected by it pursuant to the HSR Act, the Exchange Act and other
applicable Legal Requirements with respect to the Merger; and (ii) use
reasonable efforts to cause to be taken, on a timely basis, all other actions
and to execute and deliver such further documents, certificates and instruments
necessary or appropriate or as may reasonably be requested by Parent for the
purpose of consummating, evidencing, reflecting and/or effectuating the
transactions contemplated by, and to carry out the intent and purposes of, this
Agreement. Without limiting the generality of the foregoing, each of the parties
agrees to use its reasonable best efforts to (A) promptly provide all
information requested by any Governmental Entity in connection with the Merger
or any of the other transactions contemplated by this Agreement, (B) promptly
take, and cause its Affiliates to take, all actions and steps necessary to
obtain any antitrust clearance or similar clearance required to be obtained from
the Federal Trade Commission, the Department of Justice, any state
26.
attorney general, any foreign competition authority or any other Governmental
Entity in connection with the transactions contemplated by this Agreement and
(C) seek early termination of the waiting period required under the HSR Act.
(b) Without limiting the generality of anything contained in
Section 4.4(a), each party hereto shall (i) give the other parties prompt notice
of the commencement of any investigation, action or Legal Proceeding by or
before any Governmental Entity with respect to the Merger or any of the other
transactions contemplated by this Agreement, (ii) keep the other parties
informed as to the status of any such investigation, action or Legal Proceeding,
and (iii) promptly inform the other parties of any communication to or from the
Federal Trade Commission, the Department of Justice or any other Governmental
Entity regarding the Merger. Each party hereto will consult and cooperate with
the other parties and will consider in good faith the views of the other parties
in connection with any analysis, appearance, presentation, memorandum, brief,
argument, opinion or proposal made or submitted in connection with any
investigation, action or Legal Proceeding under or relating to the HSR Act or
any other federal or state antitrust, competition or fair trade law. In
addition, except as may be prohibited by any Governmental Entity or by any Legal
Requirement, in connection with any investigation, action or Legal Proceeding
under or relating to the HSR Act or any other federal or state antitrust,
competition or fair trade law or any other similar investigation, action or
Legal Proceeding, each party hereto will permit authorized representatives of
the other parties to be present at each meeting or conference relating to any
such investigation, action or Legal Proceeding and to have access to and be
consulted in connection with any document, opinion or proposal made or submitted
to any Governmental Entity in connection with any such investigation, action or
Legal Proceeding.
4.5 PROXY STATEMENT. Following the date of this Agreement, each of
Parent and the Company shall use its best efforts to prepare and cause to be
filed with the SEC the Proxy Statement. The Company shall cause the Proxy
Statement to comply with the requirements of the Exchange Act and the rules and
regulations thereunder, and to respond promptly to any comments of the SEC or
its staff. The Parent shall use its best efforts to assist the Company in
causing the Proxy Statement to comply with the requirements of the Exchange Act
and the rules and regulations thereunder, in responding promptly to any comments
of the SEC or its staff. The Company will use its reasonable best efforts to
cause the Proxy Statement to be mailed to the Company's stockholders as promptly
as practicable. Each of the Company and Parent shall promptly furnish to the
other all information that may be required or reasonably requested in connection
with any action contemplated by this Section 4.5. If any event occurs, or if
either Parent or the Company becomes aware of any information, that should be
disclosed in an amendment or supplement to the Proxy Statement, then such party
shall promptly inform the other thereof and shall cooperate in filing such
amendment or supplement with the SEC and, if appropriate, in mailing such
amendment or supplement to the stockholders of the Company. Each of the Company
and Parent hereby represent and covenant that none of the information supplied
or to be supplied by it specifically for inclusion or incorporation by reference
in the Proxy Statement will, at the date it is first mailed to the Stockholders
or at the time of the Stockholders' Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by either such party with respect to
statements made or
27.
incorporated by reference therein based on information supplied by the other
such party specifically for inclusion or incorporation by reference in the Proxy
Statement.
4.6 ACCESS. Upon reasonable notice, the Company shall afford Parent's
officers and other authorized representatives reasonable access, during normal
business hours throughout the period prior to the Effective Time, to the
Company's representatives, personnel, books and records, tax returns, work
papers and other documents and information relating to the Company and, during
such period, the Company shall furnish promptly to Parent all readily available
information concerning its business as Parent may reasonably request; PROVIDED,
HOWEVER, that the Company shall not be required to permit any inspection or to
disclose any information, that in the reasonable judgment of the Company would
(i) result in the disclosure of any trade secrets of third parties, (ii) violate
any obligation of the Company with respect to confidentiality, (iii) jeopardize
protections afforded the Company under the attorney-client privilege or the
attorney work product doctrine or (iv) materially interfere with the conduct of
the Company's business. The Company hereby represents and warrants that the
information, if any, which is subject to the proviso to the immediately
preceding sentence is neither material, individually or in the aggregate, to the
Company or any other Acquired Corporation, nor necessary in order to make any
other information or disclosure provided or made, or to be provided or made, by
the Company or any Acquired Corporation to Parent or Merger Sub (in light of the
circumstances under which such information or disclosure were or will be made or
provided) not false or misleading, and the Company hereby agrees that, to the
extent any such information is withheld pursuant to such proviso, the Company
will provide as much information with respect to the matters withheld as is
permissible consistent with such proviso. All information obtained by Parent and
its representatives pursuant to this Section 4.6 shall be treated as
"Confidential Information" for purposes of the Confidentiality Agreement.
4.7 NOTIFICATION OF CERTAIN MATTERS. During the Pre-Closing Period,
each party hereto shall promptly notify the others in writing of: (i) the
discovery of any event, condition, fact or circumstance that occurred or existed
on or prior to the date of this Agreement and that caused or constitutes a
material inaccuracy in any representation or warranty made by such party in this
Agreement; (ii) any event, condition, fact or circumstance that occurs, arises
or exists after the date of this Agreement and that would cause or constitute a
material inaccuracy in any representation or warranty made by such party in this
Agreement if such event, condition, fact or circumstance had occurred, arisen or
existed on or prior to the date of this Agreement; (iii) any material breach of
any covenant or obligation of such party; and (iv) any event, condition, fact or
circumstance that would make the timely satisfaction of any of the conditions
set forth in Section 5 or Section 6, as applicable, impossible or unlikely or
that has had a Material Adverse Effect. Without limiting the generality of the
foregoing, each party shall promptly advise the other parties in writing of any
Legal Proceeding or material claim threatened, commenced or asserted against or
with respect to it or any of its Subsidiaries. The Company shall promptly notify
Parent if, during the Pre-Closing Period, it becomes aware of any officer or
group of employees of the Acquired Corporations intending to terminate his, her
or their employment with such Acquired Corporation. No notification given
pursuant to this Section 4.7 shall limit or otherwise affect any of the
representations, warranties, covenants or obligations contained in this
Agreement.
28.
4.8 PUBLICITY. The initial press release relating to this Agreement
shall be a joint press release issued by the Company and Parent, and thereafter
the Company and Parent shall consult with each other prior to issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated by this Agreement and prior to making any filings with any
Governmental Entity with respect to the transactions contemplated by this
Agreement; PROVIDED, HOWEVER, that the Company shall not be required to consult
with the Parent prior to making any such filing if doing so would cause the
Company to be in violation of its reporting requirements under applicable law.
4.9 STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN.
(a) Except as is otherwise agreed to in writing by the Company,
Parent and the holder of a Company Option, the Company shall take all action
necessary to ensure that each Company Option outstanding immediately prior to
the Effective Time, whether or not then vested or exercisable, shall be canceled
immediately prior to the Effective Time and shall thereafter represent the right
to receive, at the Effective Time from the Company (or as soon as practicable
thereafter from the Surviving Corporation) in consideration for such
cancellation, an amount in cash (less all applicable withholding taxes) equal to
the product of (A) the total number of Shares (whether or not then vested or
exercisable) previously subject to such Company Option, MULTIPLIED BY (B) the
amount by which the Merger Consideration exceeds the exercise price per share of
Shares previously subject to such Company Option. Promptly following the
execution of this Agreement, the Company shall mail to each person who is a
holder of outstanding Company Options (regardless of whether such Company
Options are vested or exercisable at the time) a letter describing the treatment
of and payment for such Company Options pursuant to this Section 4.9(a) and
providing instructions for use in obtaining payment for such Company Options.
(b) As of the Effective Time, the ESPP shall be terminated. Prior
to the Effective Time, the Company shall take all actions (including, if
appropriate, amending the terms of the ESPP) that are necessary to give effect
to the transactions contemplated by this Section 4.9(b)). Except as contemplated
in this Section 4.9(b), the Company shall not commence any new offering period
or grant or change any rights under the ESPP other than the offering period
currently underway.
4.10 OTHER EMPLOYEE BENEFITS.
(a) For a period of two years following the Effective Time, Parent
shall or shall cause the Surviving Corporation to maintain in effect employee
benefit plans and arrangements for employees of the Surviving Corporation (to
the extent that such plans and arrangements have heretofore been disclosed to
Parent) which, taken as a whole, provide a level of benefits which is equal to
or greater than the level of the benefits, taken as a whole, provided by the
Company's Plans prior to the date of this Agreement.
(b) Parent shall ensure that employees of the Company as of the
Effective Time receive credit (for all purposes including eligibility to
participate, vesting, vacation entitlement and severance benefits) for service
with the Company or the Company's subsidiaries (to the same extent such service
credit was granted under the Company's Plans) under the
29.
comparable employee benefit plans, programs and policies of Parent and the
Surviving Corporation in which such employees became participants.
(c) Parent shall cause the Surviving Corporation to assume and
honor in accordance with their terms all written employment, severance,
retention and termination agreements (including any change in control provisions
therein) applicable to employees of the Company, to the extent set forth in
Section 2.13(a) of the Company Disclosure Schedule.
4.11 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) From and after the Effective Time, Parent will cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
the Company pursuant to (i) each indemnification agreement now or hereafter in
effect between the Company and any Indemnified Party (as defined in Section
4.11(e)), (ii) any indemnification provision related to the indemnification of
any officer or director of an Acquired Corporation under any Contract (to the
extent that such Contract(s) have heretofore been disclosed to Parent), and
(iii) any indemnification provision and any exculpation provision set forth in
the Company's certificate of incorporation or bylaws as in effect on the date
hereof. The certificate of incorporation and bylaws of the Surviving Corporation
shall contain the provisions with respect to indemnification and exculpation
from liability set forth in the Company's certificate of incorporation and
bylaws on the date of this Agreement, and, during the period commencing as of
the Effective Time and ending on the sixth anniversary of the Effective Time,
such provisions shall not be amended, repealed or otherwise modified in any
manner that would adversely affect the rights thereunder of any Indemnified
Party.
(b) From the Effective Time through the sixth anniversary thereof,
Parent shall maintain in effect, for the benefit of the Indemnified Parties, the
current level and scope of directors' and officers' liability insurance coverage
as set forth in the Company's current directors' and officers' liability
insurance policy in effect as of the date of this Agreement (a copy of which has
been delivered to Parent); PROVIDED, HOWEVER, that in no event shall Parent be
required to expend in any one year an amount in excess of 200% of the annual
premium currently payable by the Company with respect to such current policy, it
being understood that if the annual premiums payable for such insurance coverage
exceed such amount, Parent shall be obligated to obtain a policy with the
greatest coverage available for a cost equal to such amount.
(c) Parent and the Surviving Corporation jointly and severally
agree to pay all expenses, including attorneys' fees, that may be incurred by
the Indemnified Parties in enforcing their indemnity rights and other rights
provided in this Section 4.11.
(d) This Section 4.11 shall survive consummation of the Merger and
the Effective Time. This Section 4.11 is intended to benefit, and may be
enforced by, the Indemnified Parties and their respective heirs and
representatives, and shall be binding on all successors and assigns of Parent
and the Surviving Corporation.
(e) For purposes of this Agreement, each Person who is or was an
officer or director of the Company at, or at any time prior to, the Effective
Time shall be deemed to be an "INDEMNIFIED PARTY."
30.
4.12 ASSUMPTION OF TRUST PREFERRED LIABILITIES. As of the Effective
Time, the Surviving Corporation shall assume, and the Surviving Corporation
agrees to perform, fulfill and discharge, all of the accrued and/or outstanding
liabilities and obligations of the Company, including, without limitation, the
satisfaction of all liabilities under the terms of the Amended and Restated
Trust Agreement relating to American Coin Merchandising Trust I by and among the
Company, Wilmington Trust Company, the Administrative Trustees named therein and
the holders, from time to time, of the trust securities (the "TRUST") and all
amounts owed pursuant to the terms of the Trust to the holders of the Ascending
Rate Cumulative Trust Preferred Securities issued by the Trust.
4.13 SECTION 16 MATTERS. Prior to the Effective Time, Parent and the
Company shall take all such steps as may be required to cause any dispositions
of Shares (including derivative securities with respect to the Shares) resulting
from the transactions contemplated by this Agreement by each individual who is
subject to the reporting requirements of Section 16(a) of the Exchange Act with
respect to the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act, including by taking steps in accordance with the No-Action Letter,
dated January 12, 1999, issued by the SEC regarding such matters.
4.14 RESIGNATION OF DIRECTORS. The Company shall use all reasonable
efforts to obtain and deliver to Parent on or prior to the Closing the
resignation of each director of the Company, except as set forth in Schedule
4.14 hereto.
4.15 CHANGE IN FINANCING. Parent shall as promptly as practicable, but
in any event within five business days, notify the Company in writing if it
receives written notice from a provider of Committed Financing that any part of
the Committed Financing previously committed or provided (without regard to any
contingencies or conditions thereon) by such Person has been, or may become,
unavailable, withdrawn, revoked or reduced for any reason. Upon the occurrence
of any such event, Parent shall have until the earlier of (A) sixty (60) days
from the date of the delivery of such notice to Parent and (B) March 28, 2002 to
secure alternative financing in an amount equal to the amount of Committed
Financing so withdrawn, revoked, reduced or made unavailable ("ALTERNATIVE
FINANCING") and to provide to the Company written evidence thereof (which shall
be in a form reasonably acceptable to the Company (it being understood that
written evidence that Parent has secured Alternative Financing pursuant to
clauses (i) or (ii) of the following sentence shall be deemed reasonably
acceptable to the Company)). Parent shall be entitled to secure Alternative
Financing from (i) additional equity of the Parent or any of Parent's
Affiliates, (ii) alternative debt financing subject to conditions substantially
similar to, and no broader than, the conditions contained in the commitment
letters referenced in Schedule 3.6, (iii) any other source reasonably acceptable
to the Company or (iv) any combination of the foregoing.
4.16 DELIVERY OF FAIRNESS OPINION. As promptly as practicable following
the date of this Agreement, the Company shall cause Xxxxxxxxxx to deliver to
Parent a copy of the written opinion of Xxxxxxxxxx (a form of which has been
previously delivered to Parent) to the effect that the Merger Consideration is
fair, from a financial point of view, to the Stockholders.
31.
SECTION 5 . CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND ACQUISITION SUB TO
EFFECT THE MERGER
The obligation of Parent and Acquisition Sub to effect the Merger and
purchase the Shares shall be subject to the satisfaction or waiver of the
following conditions prior to the Closing:
5.1 ACCURACY OF REPRESENTATIONS.
(a) The representations and warranties of the Company contained in
this Agreement shall have been accurate in all material respects as of the date
of this Agreement (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (i) all "Material Adverse
Effect" qualifications and other materiality qualifications contained in such
representations and warranties shall be disregarded and (ii) any update of or
modification to the Company Disclosure Schedule made or purported to have been
made after the date of this Agreement shall be disregarded); PROVIDED, HOWEVER,
that for purposes of this Section 5.1(a), representations and warranties made as
of a specific date shall have been accurate in all material respects as of such
date.
(b) The representations and warranties of the Company contained in
this Agreement shall be accurate in all respects as of the Closing Date as if
made on and as of the Closing Date, except that any inaccuracies in such
representations and warranties will be disregarded if the circumstances giving
rise to all such inaccuracies (considered collectively) do not constitute, and
could not reasonably be expected to have, a Material Adverse Effect on the
Acquired Corporations; PROVIDED, HOWEVER, that, for purposes of determining the
accuracy of such representations and warranties, (i) all "Material Adverse
Effect" qualifications and other materiality qualifications contained in such
representations and warranties shall be disregarded, (ii) any update of or
modification to the Company Disclosure Schedule made or purported to have been
made after the date of this Agreement shall be disregarded and (iii)
representations and warranties made as of a specific date shall have been
accurate in all material respects as of such date only.
5.2 PERFORMANCE OF COVENANTS. Each covenant or obligation that the
Company is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
5.3 STOCKHOLDER APPROVAL. This Agreement shall have been duly adopted
and approved, and the Merger shall have been duly approved by the Required
Stockholder Vote, and the holders of not more than 7.5% of the Shares shall have
properly demanded appraisal of such Shares pursuant to Section 262 of the DGCL.
5.4 CONSENTS. The Company shall have obtained all material Consents
required to be obtained by the Company in connection with the Merger as set
forth on Schedule 5.4.
32.
5.5 COMPLIANCE CERTIFICATE. Parent shall have received a certificate
executed on behalf of the Company by its Chief Executive Officer confirming that
the conditions set forth in Sections 5.1, 5.2 and 5.4 have been duly satisfied.
5.6 NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement, there
shall have been no change with respect to the Company and no events have
occurred since the date of this Agreement, that has had a Material Adverse
Effect with respect to the Company.
5.7 HSR ACT. If applicable, the waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
5.8 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
5.9 NO GOVERNMENTAL LITIGATION. There shall not be pending any Legal
Proceeding in which a Governmental Entity has become a party that seeks to
restrain or prohibit the consummation of the Merger; PROVIDED, HOWEVER, that
prior to invoking this provision, Parent shall use its reasonable efforts to
have such Legal Proceeding terminated and/or any injunction or restraint lifted.
5.10 NO OTHER LITIGATION. There shall not be pending any other Legal
Proceeding that challenges or seeks to restrain or prohibit the consummation of
the Merger; PROVIDED, HOWEVER, that prior to invoking this provision, Parent
shall use its reasonable best efforts to have such Legal Proceeding terminated
and/or to have any injunction or restraints lifted.
SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO EFFECT THE MERGER
The obligation of the Company to effect the Merger shall be subject to
the satisfaction or waiver of the following conditions prior to the Closing:
6.1 STOCKHOLDER APPROVAL. This Agreement and the Merger shall have been
approved by the Required Stockholder Vote.
6.2 NO INJUNCTIONS; LAWS. No injunction shall have been issued by a
court of competent jurisdiction and shall be continuing, and no law shall have
been enacted since the date of this Agreement and shall remain in effect, that
prohibits the consummation of the Merger; PROVIDED, HOWEVER, that prior to
invoking this provision, the Company shall use its reasonable efforts to have
any such injunction lifted.
6.3 ACCURACY OF REPRESENTATIONS.
(a) The representations and warranties of Parent and Acquisition
Sub contained in this Agreement shall have been accurate in all material
respects as of the date of this Agreement (it being understood that, for
purposes of determining the accuracy of such
33.
representations and warranties, all "Material Adverse Effect" qualifications and
other materiality qualifications contained in such representations and
warranties shall be disregarded); PROVIDED, HOWEVER, that for purposes of this
Section 6.3(a), representations and warranties made as of a specific date shall
have been accurate in all material respects as of such date.
(b) The representations and warranties of the Parent and
Acquisition Sub contained in this Agreement shall be accurate in all respects as
of the Closing Date as if made on and as of the Closing Date, except that any
inaccuracies in such representations and warranties will be disregarded if the
circumstances giving rise to all such inaccuracies (considered collectively) do
not constitute, and could not reasonably be expected to have, a Material Adverse
Effect on Parent and Acquisition Sub; PROVIDED, HOWEVER, that, for purposes of
determining the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other materiality qualifications
contained in such representations and warranties shall be disregarded, and (ii)
representations and warranties made as of a specific date shall have been
accurate in all material respects as of such date only.
6.4 PERFORMANCE OF COVENANTS. Each covenant or obligation that the
Parent or Acquisition Sub is required to comply with or to perform at or prior
to the Closing shall have been complied with and performed in all respects,
except where the failure to so perform has not resulted in a Material Adverse
Effect with respect to Parent or Acquisition Sub.
6.5 DOCUMENTS. The Company shall have received a certificate executed
on behalf of Parent by an executive officer of Parent confirming that conditions
set forth in Sections 6.3 and 6.4 have been duly satisfied.
6.6 HSR ACT. If applicable, the waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
6.7 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
6.8 NO GOVERNMENTAL LITIGATION. There shall not be pending any Legal
Proceeding in which a Governmental Entity has become a party that seeks to
restrain or prohibit the consummation of the Merger; PROVIDED, HOWEVER, that
prior to invoking this provision, Company shall use its reasonable best efforts
to have such Legal Proceeding terminated and/or to have any injunction or
restraints lifted.
6.9 NO OTHER LITIGATION. There shall not be pending any other Legal
Proceeding that challenges or seeks to restrain or prohibit the consummation of
the Merger or any of the other transactions contemplated by this Agreement;
PROVIDED, HOWEVER, that prior to invoking this provision, Company shall use its
reasonable best efforts to have such Legal Proceeding terminated and/or to have
any injunction or restraints lifted.
34.
SECTION 7. TERMINATION
7.1 TERMINATION. This Agreement may be terminated and the Merger may be
abandoned (notwithstanding any approval of the Merger by the Stockholders of the
Company):
(a) by mutual written consent of the Boards of Directors of the
Company and Parent at any time prior to the Effective Time;
(b) by Parent or the Company if the Merger shall not have been
consummated by March 29, 2002 (provided that the right to terminate
this Agreement pursuant to this Section 7.1(b) shall not be available
to any party whose failure to fulfill any obligation under this
Agreement has resulted in the failure to consummate the Merger on or
before March 29, 2002);
(c) by Parent or the Company at any time prior to the Effective
Time if there shall be enacted after the date hereof any law that makes
consummation of the Merger illegal, or any court of competent
jurisdiction shall have issued a final and non-appealable permanent
injunction prohibiting the Merger;
(d) by Parent if (i) any of the Company's representations and
warranties contained in this Agreement shall be inaccurate as of the
date of this Agreement, or shall have become inaccurate as of a date
subsequent to the date of this Agreement (as if made on such subsequent
date), such that the condition set forth in Section 5.1 would not be
satisfied or (ii) any of the Company's covenants contained in this
Agreement shall have been breached such that the condition set forth in
Section 5.2 would not be satisfied; PROVIDED, HOWEVER, that if an
inaccuracy in any of the Company's representations and warranties as of
a date subsequent to the date of this Agreement or a breach of a
covenant by the Company is curable by the Company, and the Company is
continuing to exercise all reasonable efforts to cure such inaccuracy
or breach, then Parent may not terminate this Agreement under this
Section 7.1(d) on account of such inaccuracy or breach until March 28,
2002;
(e) by the Company if (i) any of Parent's representations and
warranties contained in this Agreement shall be inaccurate as of the
date of this Agreement, or shall have become inaccurate as of a date
subsequent to the date of this Agreement (as if made on such subsequent
date), such that the condition set forth in Section 6.3 would not be
satisfied or (ii) if any of Parent's covenants contained in this
Agreement shall have been breached such that the condition set forth in
Section 6.4 would not be satisfied; PROVIDED, HOWEVER, that if an
inaccuracy in any of Parent's representations and warranties as of a
date subsequent to the date of this Agreement or a breach of a covenant
(other than the covenants contained in Section 4.15) by Parent is
curable by Parent, and Parent is continuing to exercise all reasonable
efforts to cure such inaccuracy or breach, then the Company may not
terminate this Agreement under this Section 7.1(e) on account of such
inaccuracy or breach until March 28, 2002; PROVIDED, FURTHER, that with
respect to the covenants contained in Section 4.15, the Company shall
have the right to terminate this Agreement under this Section 7.1(e) if
Parent shall have failed to secure Alternative
35.
Financing and to meet the other conditions required to be met
thereunder within the cure time periods set forth therein;
(f) by the Company if (i) the Stockholders Meeting shall have been
held and (ii) this Agreement and the Merger shall not have been
approved at such meeting by the Required Stockholder Vote;
(g) by Parent if (i) the Stockholders Meeting shall have been held,
and (ii) either (x) this Agreement and the Merger shall not have been
approved at such meeting by the Required Stockholder Vote, or (y)
holders of greater than 7.5% of the Shares shall have properly demanded
appraisal of such Shares pursuant to Section 262 of the DGCL; or
(h) by the Company or Parent if the Company's Board of Directors,
in the exercise of its fiduciary duties, withdraws, amends or modifies
its recommendation of the Merger in accordance with Section 4.3(c) or
otherwise or accepts or recommends an alternative Acquisition Proposal
in accordance with Section 4.2(a) or Section 4.2(c) or otherwise.
7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no further
force or effect; PROVIDED, HOWEVER, that (i) this Section 7.2, Section 7.3 and
Section 8 and the terms and conditions set forth in the Confidentiality
Agreement shall survive the termination of this Agreement and shall remain in
full force and effect, and (ii) the termination of this Agreement shall not
relieve any party from any liability for any breach of any representation,
warranty or covenant contained in this Agreement which results in such
termination or any obligations under the Confidentiality Agreement; PROVIDED,
HOWEVER, that, except for fees payable by the Company pursuant to Section
7.3(b), if any, the aggregate liability of the Acquired Corporations for all
breaches of any and all representations, warranties or covenants contained in
this Agreement (including, without limitation, damages related to the
termination of this Agreement due to any such breach) shall be limited to an
obligation to reimburse Parent in an amount equal to its and Acquisition Sub's
actual and reasonable, documented, third party, out of pocket fees and expenses
(including all attorneys' fees, accountants' fees, financial advisory fees and
filing fees) that have been paid or that may become payable by or on behalf of
Parent or Acquisition Sub in connection with the preparation and negotiation of
this Agreement and otherwise in connection with the transactions contemplated by
this Agreement, provided that in no event shall the amount of such reimbursement
exceed $1,250,000 (the "REIMBURSEMENT FEE").
7.3 TERMINATION FEE.
(a) If this Agreement is terminated pursuant to Section 7.1(f),
Section 7.1(g) or Section 7.1(h) and, in any such case, neither Parent nor
Acquisition Sub shall have materially breached this Agreement, then, within five
business days after the termination of this Agreement, the Company shall pay to
Parent the Reimbursement Fee; PROVIDED, HOWEVER, that in no event shall Parent
or Acquisition Sub be entitled to receive payment of the Reimbursement Fee under
both Section 7.2 and Section 7.3(a).
36.
(b) If (i) this Agreement is terminated pursuant to Section 7.1(d),
Section 7.1(f), Section 7.1(g) or Section 7.1(h), (ii) the Company shall have
received a Superior Proposal prior to such termination and (iii) within nine
months of such termination the Company consummates an Acquisition Transaction
with a party other than Parent, Acquisition Sub or an affiliate of Parent or
Acquisition Sub, then, within five business days after the consummation of such
Acquisition Transaction, the Company shall pay to Parent a fee in the amount of
$1,150,000. The Company's obligation to pay the fee set forth in this Section
7.3(b), if applicable, shall be in addition to, and not exclusive of, any
obligation the Company may have to pay the amounts set forth in Section 7.2 or
Section 7.3(a).
SECTION 8. MISCELLANEOUS PROVISIONS
8.1 AMENDMENT. This Agreement may be amended with the approval of the
respective Boards of Directors of the Company and Parent at any time prior to
the Effective Time (whether before or after the approval of this Agreement and
the Merger by the Company's stockholders); PROVIDED, HOWEVER, that after any
approval of the Merger by the Company's Stockholders, no amendment shall be made
which by law requires further approval of the Stockholders of the Company
without the further approval of such Stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.2 WAIVER.
(a) No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No party shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
8.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties contained in this Agreement or in any certificate
delivered pursuant to this Agreement shall survive the consummation of the
Merger.
8.4 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement, the other
agreements referred to herein and the Confidentiality Agreement constitute the
entire agreement and supersede all prior agreements and understandings, both
written and oral, among or between any of the parties with respect to the
subject matter hereof and thereof. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
37.
8.5 APPLICABLE LAW; JURISDICTION. This agreement is made under, and
shall be construed and enforced in accordance with, the laws of the State of
Delaware applicable to agreements made and to be performed solely therein,
without giving effect to principles of conflicts of law. In any action among or
between any of the parties arising out of or relating to this Agreement, each of
the parties irrevocably and unconditionally consents and submits to the
exclusive jurisdiction and venue of the state and federal courts located in the
State of
Colorado.
8.6 ATTORNEYS' FEES. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit shall be entitled to receive a reasonable sum for
its attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
8.7 PAYMENT OF EXPENSES. All fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees and expenses whether or not the Merger is
consummated, except that Company shall pay all filing fees required to be paid
under the HSR Act.
8.8 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding
upon, and shall be enforceable by and inure to the benefit of, the parties
hereto and their respective successors and assigns; PROVIDED, HOWEVER, that
neither this Agreement nor any rights or obligations of a party hereunder may be
assigned by such party without the prior written consent of the other parties,
and any attempted assignment of this Agreement or any of such rights or
obligations without such consent shall be void and of no effect. Except as set
forth in Section 4.11 with respect to the Indemnified Parties, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person,
other than the parties hereto, any right, benefit or remedy of any nature.
8.9 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received (x) when delivered by hand or (y)
two (2) business days after being sent by registered mail, by courier or express
delivery service or by facsimile to the address or facsimile telephone number
set forth beneath the name of such party below (or to such other address or
facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto):
IF TO PARENT OR ACQUISITION SUB:
c/o Wellspring Capital Management LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx.
38.
WITH A COPY TO: Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
IF TO THE COMPANY: American Coin Merchandising, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
WITH A COPY TO: Xxxxxx Godward LLP
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
8.10 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Legal Requirement or
public policy, all other terms 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 in any manner
materially adverse to any party. Upon any judicial determination that any term
or other provision of this Agreement 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 in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible. Any provision of this Agreement held invalid or unenforceable only in
part, degree or certain jurisdictions will remain in full force and effect to
the extent not held invalid or unenforceable. To the extent permitted by
applicable law, each party waives any provision of law which renders any
provision of this Agreement invalid, illegal or unenforceable in any respect.
8.11 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties
hereby agree that in the event of any breach or threatened breach of any
covenant, obligation or other provision set forth in this Agreement for the
benefit of the other party, such other party shall be entitled (in addition to
any other remedy that may be available to it) to (a) a decree or order of
specific performance or mandamus to enforce the observance and performance of
such covenant, obligation or other provision, and (b) an injunction restraining
such breach or threatened breach.
8.12 OBLIGATION OF PARENT. Parent shall ensure that each of Acquisition
Sub and the Surviving Corporation duly performs, satisfies and discharges on a
timely basis each of the covenants, obligations and liabilities of Acquisition
Sub and the Surviving Corporation under this Agreement, and Parent shall be
jointly and severally liable with Acquisition Sub and the Surviving Corporation
for the due and timely performance and satisfaction of each of said covenants,
obligations and liabilities. No stockholder of Parent shall be liable for any
obligation of Parent or Acquisition Sub hereunder.
39.
8.13 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections," "Exhibits," "Annexes" and "Schedules" are intended to
refer to Sections of this Agreement and Exhibits, Annexes and Schedules to this
Agreement.
40.
The Company, Parent and Acquisition Sub have caused this Agreement and
Plan of Merger to be executed as of the date first written above.
CRANE MERGERCO HOLDINGS, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
CRANE MERGERCO INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
AMERICAN COIN MERCHANDISING, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
41.
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUIRED CORPORATION CONTRACT. "Acquired Corporation Contract" shall
mean any Contract: (a) to which any of the Acquired Corporations is a party; (b)
by which any of the Acquired Corporations or any material asset of any of the
Acquired Corporations is or may become bound or under which any of the Acquired
Corporations has, or may become subject to, any obligation; or (c) under which
any of the Acquired Corporations has or may acquire any material right or
interest.
ACQUIRED CORPORATION PROPRIETARY ASSET. "Acquired Corporation
Proprietary Asset" shall mean any Proprietary Asset owned by or licensed to any
of the Acquired Corporations or otherwise used by any of the Acquired
Corporations,
ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer or
proposal (other than an offer or proposal by Parent) contemplating or otherwise
relating to any Acquisition Transaction.
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction or series of transactions involving:
(a) any merger, consolidation, amalgamation, share exchange,
business combination, issuance of securities, acquisition of securities, tender
offer, exchange offer or other similar transaction (i) in which any of the
Acquired Corporations is a constituent company, (ii) in which a Person or
"group" (as defined in the Exchange Act and the rules promulgated thereunder) of
Persons directly or indirectly acquires the Company or more than 50% of the
Company's business or directly or indirectly acquires beneficial or record
ownership of securities representing, or exchangeable for or convertible into,
more than 50% of the outstanding securities of any class of voting securities of
any of the Acquired Corporations, or (iii) in which any of the Acquired
Corporations issues securities representing more than 50% of the outstanding
securities of any class of voting securities of the Company;
(b) any sale, lease, exchange, transfer, license, acquisition or
disposition of more than 50% of the assets of the Company; or
(c) any liquidation or dissolution of the Company.
AFFILIATE. A Person shall be deemed to be an "Affiliate" of another
Person if such Person controls, is controlled by or is under common control with
such other Person.
AGREEMENT. "Agreement" shall mean the Agreement and Plan of Merger to
which this Exhibit A is attached, together with this Exhibit A, as such
Agreement and Plan of Merger (including this Exhibit A) may be amended from time
to time.
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CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
COMPANY STOCK OPTION PLANS. "Company Stock Option Plans" shall mean the
Company's (a) Amended and Restated Stock Option Plan and (b) 1995 Non-Employee
Director Stock Option Plan.
CONTRACT. "Contract" shall mean any binding written or oral agreement,
contract, subcontract, lease, instrument, note, option, warranty, purchase
order, license, sublicense, insurance policy, benefit plan or other legally
binding commitment, undertaking or agreement of any nature.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity (including any
Governmental Entity).
ESPP. "ESPP" shall mean the Company's Employee Stock Purchase Plan.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
GAAP. "GAAP" shall mean United States generally accepted accounting
principles, as in effect as of the relevant date.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any
permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization granted, given or otherwise made
available by or under the authority of any Governmental Entity.
GOVERNMENTAL ENTITY. "Governmental Entity" shall mean any federal,
state, local municipal or other governmental department, commission, board,
bureau, authority, court, agency or instrumentality, domestic or foreign.
HSR ACT. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
KNOWLEDGE. "knowledge" and similar words and phrases such as "to the
best of [person's] knowledge," shall mean, with respect to such person or
entity, the actual knowledge
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of such person after due inquiry or, with respect to an entity, the actual
knowledge of the executive officers and directors of such entity after due
inquiry.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Entity or any
arbitrator or arbitration panel,
LEGAL REQUIREMENT. "Legal Requirement" shall mean, with respect to any
Person, any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity (or under the authority of the Nasdaq Small Cap
Market) that is applicable to such Person.
MATERIAL ADVERSE EFFECT. An event, violation, change, failure,
inaccuracy, circumstance or other matter will be deemed to have a "Material
Adverse Effect" on the Company if such event, violation, change, failure,
inaccuracy, circumstance or other matter has had, or could reasonably be
expected to have, a material adverse effect on (i) the business, operations or
financial condition of the Company or (ii) the ability of the Company to
consummate the Merger or any other transactions contemplated by the Agreement or
to perform any of its obligations under the Agreement; PROVIDED, HOWEVER, that:
(A) any adverse effect that results from the taking of any action permitted or
required by the Agreement or from the announcement or pendency of the Merger or
any of the other transactions contemplated by the Agreement shall be disregarded
in determining whether there has been or would be a "Material Adverse Effect" on
the Company; and (B) a decline in the Company's stock price or trading volume
shall not, in and of itself, constitute a "Material Adverse Effect" on the
Company and shall be disregarded in determining whether there has been or would
be a "Material Adverse Effect" on the Company. An event, violation, change,
failure, inaccuracy, circumstance or other matter will be deemed to have a
"Material Adverse Effect" on Parent if such event, violation, change, failure,
inaccuracy, circumstance or other matter has a material adverse effect on (i)
the business, operations or financial condition of Parent and its subsidiaries
taken as a whole, (ii) the ability of Parent to consummate the Merger or any
other transactions contemplated by the Agreement or to perform any of its
obligations under the Agreement or (iii) Parent's ability to vote, receive
dividends with respect to or otherwise exercise ownership rights with respect to
the stock of the Surviving Corporation.
PERSON. "Person" shall mean any individual or Entity.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (a) patent,
patent application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, algorithm, invention, design,
blueprint, engineering drawing,
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proprietary product, technology, proprietary right or other intellectual
property right or intangible asset, or (b) right to use or exploit any of the
foregoing.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933,
as amended.
SHARES. "Shares" shall mean shares of common stock, $.01 par value per
share, of the Company.
SUBSIDIARY. An entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns, beneficially or of record,
(a) an amount of voting securities or other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity's board of directors or other governing body, or (b) at least 50% of
the outstanding equity interests of such Entity.
SUPERIOR PROPOSAL. "Superior Proposal" means any bona fide written
proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the voting
power of the Company Common Stock or all or substantially all of the assets of
the Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (after consultation with its financial
advisor) to be more favorable to the Company's stockholders than the Merger;
PROVIDED, HOWEVER, that the Board of Directors shall be required to take into
consideration the likelihood that the financing required to consummate the
transaction contemplated by such proposal will be obtained by such third party
on a timely basis in determining whether such proposal constitutes a "Superior
Proposal". An Acquisition Proposal shall not be precluded from constituting a
"Superior Proposal" solely as a result of such Acquisition Proposal being
conditioned upon the completion of due diligence.
TAX. "Tax" shall mean any tax (including income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, estimated tax,
unemployment tax, national health insurance tax, excise tax, ad valorem tax,
transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or fee, and any related charge or amount (including
any fine, penalty or interest), imposed, assessed or collected by or under the
authority of any Governmental Entity.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Entity in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
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