AGREEMENT AND PLAN OF MERGER
BETWEEN
XXXXXX GENERAL CORPORATION
AND
RIVER ACQUISITION CORP.
DATED AS OF
NOVEMBER 22, 1998
TABLE OF CONTENTS
ARTICLE I
THE MERGER
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Effective Time . . . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Effects of the Merger . . . . . . . . . . . . . . . . 2
SECTION 1.04. Certificate of Incorporation . . . . . . . . . . . . 2
SECTION 1.05. Bylaws . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.06. Directors and Officers . . . . . . . . . . . . . . . 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities . . . . . . . . . . . . . . 3
SECTION 2.02. Exchange of Certificates and Cash . . . . . . . . . . 3
SECTION 2.03. Stock Transfer Books . . . . . . . . . . . . . . . . 6
SECTION 2.04. Stock Options; Payment Rights . . . . . . . . . . . . 6
SECTION 2.05. Dissenting Shares . . . . . . . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualifications; Subsidiaries . . . . 7
SECTION 3.02. Certificate of Incorporation and Bylaws . . . . . . . 8
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . 8
SECTION 3.04. Authority Relative to This Agreement . . . . . . . . 9
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . 9
SECTION 3.06. Opinion of Financial Advisor . . . . . . . . . . . 10
SECTION 3.07. Board Approval . . . . . . . . . . . . . . . . . . 10
SECTION 3.08. Brokers . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
SECTION 4.01. Organization and Qualification . . . . . . . . . . 11
SECTION 4.02. Authority Relative to This Agreement . . . . . . . 11
SECTION 4.03. No Conflict; Required Filings and Consents . . . . 12
SECTION 4.04. Brokers . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.05. Financing . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.07. Investigation by Merger Sub . . . . . . . . . . . . 13
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the
Merger . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality . . . . . . 15
SECTION 6.02. Proxy Statement; Schedule 13E-3 . . . . . . . . . . 15
SECTION 6.03. Action by Stockholders . . . . . . . . . . . . . . 16
SECTION 6.04. No Solicitation . . . . . . . . . . . . . . . . . . 17
SECTION 6.05. Directors' and Officers' Insurance and
Indemnification . . . . . . . . . . . . . . . . . . 18
SECTION 6.06. Further Action; Best Efforts . . . . . . . . . . . 20
SECTION 6.07. Public Announcements . . . . . . . . . . . . . . . 21
SECTION 6.08. Conveyance Taxes . . . . . . . . . . . . . . . . . 21
SECTION 6.09. Employee Benefits . . . . . . . . . . . . . . . . . 22
SECTION 6.10. Commitment Letter Notices . . . . . . . . . . . . . 22
SECTION 6.11. Knowledge of Breach . . . . . . . . . . . . . . . . 22
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to
Effect the Merger . . . . . . . . . . . . . . . . . 23
SECTION 7.02. Additional Conditions to Obligations of Merger Sub . 23
SECTION 7.03. Additional Conditions to Obligations of the
Company . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . 26
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.04. Waiver . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.05. Fees, Expenses and Other Payments . . . . . . . . . 27
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . . . . 28
SECTION 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.03. Certain Definitions . . . . . . . . . . . . . . . . 29
SECTION 9.04. Headings . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.05. Severability . . . . . . . . . . . . . . . . . . . 30
SECTION 9.06. Entire Agreement . . . . . . . . . . . . . . . . . 30
SECTION 9.07. Assignment . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.08. Parties in Interest . . . . . . . . . . . . . . . . 31
SECTION 9.09. Governing Law . . . . . . . . . . . . . . . . . . . 31
SECTION 9.10. Submission to Jurisdiction; Waivers . . . . . . . . 31
SECTION 9.11. Enforcement of this Agreement . . . . . . . . . . . 31
SECTION 9.12. Counterparts . . . . . . . . . . . . . . . . . . . 32
Annex A Commitment Letter
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 22, 1998 (the
"Agreement"), between XXXXXX GENERAL CORPORATION, a Delaware corporation
(the "Company"), and RIVER ACQUISITION CORP., a Delaware corporation (the
"Merger Sub").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State
of Delaware (the "DGCL"), Merger Sub will merge with and into the Company
(the "Merger") pursuant to which each outstanding share of common stock,
par value $1.00 per share, of the Company (the "Common Stock" other than
shares owned by Merger Sub), shall be converted into the right to receive
$57.25 in cash per share of Common Stock, as more fully set forth herein;
WHEREAS, the Board of Directors of the Company, based on the unanimous
recommendation of the Special Committee (as defined in Section 3.07), has
determined that the Merger is fair to and in the best interests of the
Company and its stockholders (other than Merger Sub and its affiliates and
members of the Management Group (as defined in Section 9.03)) and has
approved this Agreement, the Merger and the other transactions contemplated
hereby and has recommended approval and adoption of this Agreement by the
stockholders of the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. 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 1.02), Merger Sub shall be merged
with and into the Company. Following the Merger, the separate existence of
Merger Sub shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware and by making any related
filings required under the DGCL in connection with the Merger. The Merger
shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware or at such later
time as is agreed to by the parties hereto and as is specified in the
Certificate of Merger (the "Effective Time" or the "Closing").
SECTION 1.03. Effects of the Merger. From and after the Effective
Time, the Merger shall have the effects set forth in the DGCL (including,
without limitation, Sections 259, 260 and 261 thereof). Without limiting
the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of the
Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation. The certificate of
incorporation of the Company immediately prior to the Effective Time shall
be the certificate of incorporation of the Surviving Corporation (the
"Surviving Certificate") until thereafter amended in accordance with the
DGCL.
SECTION 1.05. Bylaws. The bylaws of Merger Sub immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation until
thereafter amended in accordance with the Surviving Certificate and the
DGCL.
SECTION 1.06. Directors and Officers. From and after the Effective
Time, until their respective successors are duly elected or appointed and
qualified in accordance with applicable law, (a) the directors of Merger
Sub at the Effective Time shall be the directors of the Surviving
Corporation and (b) the officers of the Company at the Effective Time shall
be the officers of the Surviving Corporation.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holders of any of the following securities:
(a) Each share of the Common Stock issued and outstanding immediately
prior to the Effective Time (other than any shares of Common Stock to be
canceled pursuant to Section 2.01(b) and any Dissenting Shares (as defined
below)) shall be converted into the right to receive $57.25 in cash,
without interest (the "Merger Consideration"). At the Effective Time, each
share of Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such share (other than shares to be
canceled pursuant to Section 2.01(b) and any Dissenting Shares) shall
thereafter represent only the right to receive, upon the surrender of such
certificate in accordance with the provisions of Section 2.02, an amount in
cash per share equal to the Merger Consideration. The holders of such
certificates previously evidencing such shares of Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Common Stock except as otherwise provided herein
or by law.
(b) Each share of capital stock of the Company (i) held in the
treasury of the Company or by any wholly owned subsidiary of the Company or
(ii) owned by Merger Sub or any of its subsidiaries shall automatically be
canceled, retired and cease to exist without any conversion thereof and no
payment shall be made with respect thereto.
(c) Each share of common stock of Merger Sub outstanding immediately
prior to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 2.02. Exchange of Certificates and Cash. (a) Exchange
Agent. On or before the Closing Date, Merger Sub shall enter into an
agreement providing for the matters set forth in this Section 2.02 (the
"Exchange Agent Agreement") with a bank or trust company selected by Merger
Sub and reasonably acceptable to the Company (the "Exchange Agent"),
authorizing such Exchange Agent to act as Exchange Agent in connection with
the Merger. Immediately prior to the Effective Time, Merger Sub shall
deposit or shall cause to be deposited with or for the account of the
Exchange Agent, for the benefit of the holders of shares of Common Stock
(other than Dissenting Shares and shares to be canceled pursuant to Section
2.01(b)), an amount in cash equal to the Merger Consideration payable
pursuant to Section 2.01(a) (such cash funds are hereafter referred to as
the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Merger Sub will instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time evidenced outstanding shares of Common Stock (other
than Dissenting Shares and shares to be canceled pursuant to Section
2.01(b)) (the "Certificates"), (i) a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Merger Sub may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may
be appointed by Merger Sub, together with a letter of transmittal, duly
executed, and such other customary documents as may be required pursuant to
such instructions (collectively, the "Transmittal Documents"), the holder
of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Common Stock formerly represented by
such Certificate, without any interest thereon, less any required
withholding of taxes, and the Certificate so surrendered shall thereupon be
canceled. In the event of a transfer of ownership of shares of Common
Stock which is not registered in the transfer records of the Company, the
Merger Consideration may be issued and paid in accordance with this Article
II to the transferee of such shares if the Certificate evidencing such
shares of Common Stock is presented to the Exchange Agent and is properly
endorsed or otherwise in proper form for transfer. The signature on the
Certificate or any related stock power must be properly guaranteed and the
person requesting payment of the Merger Consideration must either pay any
transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificate so surrendered or establish
to the Surviving Corporation that such tax has been paid or is not
applicable. The Merger Consideration will be delivered by the Exchange
Agent as promptly as practicable following surrender of a Certificate and
the related Transmittal Documents. Cash payments may be made by check
unless otherwise required by a depositary institution in connection with
the book-entry delivery of securities. No interest will be payable on such
Merger Consideration. Until surrendered in accordance with this Section
2.02, each Certificate shall be deemed at any time after the Effective Time
to evidence only the right to receive, upon such surrender, the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate. The Exchange Fund shall not be used for any purpose other
than as set forth in this Article II. Any interest, dividends or other
income earned on the investment of cash held in the Exchange Fund shall be
for the account of the Surviving Corporation.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) which remains
undistributed to the holders of Common Stock for one year following the
Effective Time shall be delivered to the Surviving Corporation, upon
demand. Any holders of Common Stock who have not theretofore complied with
this Article II shall thereafter look only to the Surviving Corporation for
payment of the Merger Consideration.
(d) No Liability. None of Merger Sub, the Surviving Corporation or
the Company shall be liable to any holder of shares of Common Stock for any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(e) Withholding Rights. The Surviving Corporation and the Exchange
Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
Common Stock such amounts as the Surviving Corporation or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the United States Internal Revenue Code of 1986, as amended,
or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by the Surviving Corporation or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Common Stock in respect
of which such deduction and withholding was made by the Surviving
Corporation or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing shares of Common Stock shall have been lost, stolen
or destroyed, the holder of such lost, stolen or destroyed Certificate(s)
shall execute an affidavit of that fact upon request. The holder of any
such lost, stolen or destroyed Certificate(s) shall also deliver a
reasonable indemnity against any claim that may be made against Merger Sub
or the Exchange Agent with respect to the Certificate(s) alleged to have
been lost, stolen or destroyed. The affidavit and any indemnity which may
be required hereunder shall be delivered to the Exchange Agent, who shall
be responsible for making payment for such lost, stolen or destroyed
Certificates(s) pursuant to the terms hereof.
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no
further registration of transfers of shares of Common Stock thereafter on
the records of the Company. Any Certificates presented to the Exchange
Agent or the Surviving Corporation for any reason at or after the Effective
Time shall be exchanged for the Merger Consideration pursuant to the terms
hereof.
SECTION 2.04. Stock Options; Payment Rights. (a) Subject to
Sections 2.04(b) and 2.04(c), each Option (as defined below) other than any
Options held by Merger Sub which is outstanding immediately prior to the
Effective Time, whether or not then exercisable, shall be canceled and the
Company Option Plans (as defined below) shall be assumed by the Surviving
Corporation, in each case at and as of the Effective Time, and each holder
of such canceled Options shall be paid by the Surviving Corporation as soon
as practicable, but in any event within five days after the Effective Time,
for each such Option, an amount determined by multiplying (i) the excess,
if any, of the Merger Consideration over the applicable exercise price per
share of such Option by (ii) the number of shares issuable upon exercise of
such Option, subject to any required withholding of taxes.
(b) Prior to the Effective Time, the Company shall use its best
efforts to (i) obtain any consents from holders of the Options and (ii)
make any amendments to the terms of the Company Option Plans and any
Options granted thereunder that, in the case of either (i) or (ii) are
necessary or appropriate to give effect to the transactions contemplated by
this Section 2.04.
(c) In lieu of the cancellation of Options referred to in Section
2.04(a) hereof, prior to the Effective Time Merger Sub may, with the
consent of the Company (which consent will not be unreasonably withheld),
enter into mutually acceptable arrangements with any holder of Options
providing that such holder's Options will be treated in a manner other than
as provided in Section 2.04(a); provided, however, that in no event will
such holder be paid at the Effective Time an amount in cash in excess of
the amount such holder would have received had such holder's Options been
cancelled in accordance with Section 2.04(a).
SECTION 2.05. Dissenting Shares. (a) Notwithstanding any other
provision of this Agreement to the contrary, shares of Common Stock that
are outstanding immediately prior to the Effective Time and which are held
by stockholders (i) who shall not have voted in favor of adoption of this
Agreement and (ii) who shall be entitled to and shall have demanded
properly in writing appraisal for such shares in accordance with Section
262 of the DGCL ("Dissenting Shares"), shall not be converted into or
represent the right to receive the Merger Consideration unless such
stockholders fail to perfect, withdraw or otherwise lose their right to
appraisal. Such stockholders shall be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with the provisions
of the DGCL. If, after the Effective Time, any such stockholder fails to
perfect, withdraws or loses its right to appraisal, such shares of Common
Stock shall be treated as if they had been converted as of the Effective
Time into a right to receive the Merger Consideration, without interest
thereon, upon surrender of the Certificate or Certificates that formerly
evidenced such shares of Common Stock in the manner set forth in Section
2.02.
(b) The Company shall give Merger Sub prompt notice of any demands
for appraisal received by it, withdrawals of such demands, and any other
instruments served pursuant to the DGCL and received by the Company and
relating thereto. Merger Sub shall direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. The Company shall
not, except with the prior written consent of Merger Sub, make any payment
with respect to any demands for appraisal, or offer to settle, or settle,
any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Merger Sub that:
SECTION 3.01. Organization and Qualifications; Subsidiaries. The
Company and each significant subsidiary of the Company (a "Company
Subsidiary") within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), is a
corporation, partnership or other legal entity duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the requisite
power and authority and all necessary governmental approvals, to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing and in
good standing would not have a Company Material Adverse Effect (as defined
below). The Company and each Company Subsidiary is duly qualified or
licensed and in good standing to do business in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature
of its business makes such qualification or licensing necessary, except for
such failures to be so qualified or licensed and in good standing that
would not, individually or in the aggregate, have a material adverse effect
on the business, assets, results of operations or financial condition of
the Company and the Company Subsidiaries, taken as a whole (a "Company
Material Adverse Effect").
SECTION 3.02. Certificate of Incorporation and Bylaws. Merger Sub
has been given access by the Company to a complete and correct copy of the
certificate of incorporation and the bylaws or equivalent organizational
documents, each as amended to the date hereof, of the Company and each
Company Subsidiary. Such certificates of incorporation, bylaws and
equivalent organizational documents are in full force and effect. Neither
the Company nor any Company Subsidiary is in violation of any provision of
its certificate of incorporation, bylaws or equivalent organizational
documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of 7,000,000 shares of Common Stock and 100,000 shares of
preferred stock, par value $1.00 per share ("Preferred Stock"). As of
October 31, 1998, (a) 1,744,949 shares of Common Stock were outstanding,
all of which were validly issued, fully paid and nonassessable; (b) no
shares of Preferred Stock were issued and outstanding and no action had
been taken by the Board of Directors of the Company with respect to the
designation of the rights and preferences of any series of Preferred Stock;
(c) 37,100 shares of Common Stock were reserved for issuance upon the
exercise of outstanding stock options (the "Options") granted pursuant to
the Company's 1981 Non-Qualified Stock Option and Stock Appreciation Rights
Plan and 1981 Incentive Stock Option and Stock Appreciation Rights Plan
(collectively, the "Company Option Plans"); (d) 357,311 shares of Common
Stock and no shares of Preferred Stock were held in the treasury of the
Company; (e) no Company Subsidiary owns any shares of the Company's capital
stock; and (f) there are no securities of any Company Subsidiary
outstanding which are convertible into or exercisable or exchangeable for
capital stock of the Company. Except as set forth above, no shares of
capital stock or other voting securities of the Company have been issued,
are reserved for issuance or are outstanding. All shares of Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be
duly authorized, validly issued, fully paid and nonassessable.
SECTION 3.04. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect
to the Merger, the adoption of this Agreement by the holders of (x) a
majority of the aggregate voting power of the issued and outstanding shares
of Common Stock and (y) a majority of the aggregate voting power of the
issued and outstanding shares of Common Stock not owned by Merger Sub or
the members of the Management Group, (such votes being collectively
referred to as the "Company Stockholder Approval"), and the filing and
recordation of appropriate merger documents as required by, and in
accordance with, the DGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Merger Sub, constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement and the consummation of the transactions
contemplated hereby will not, (i) conflict with or violate the Company's
Restated Certificate of Incorporation, as amended to the date hereof (the
"Company Charter"), or its by-laws, or the certificate of incorporation,
by-laws or other equivalent organizational documents of any Company
Subsidiary or (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to the Company or any Company
Subsidiary or by which any property or asset of the Company or any Company
Subsidiary is bound or affected, except, in the case of clause (ii), for
any such conflicts, violations, breaches, defaults or other occurrences
which (A) would not prevent or delay consummation of the Merger in any
material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (B) would
not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby by the Company will
not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic
or foreign (each a "Governmental Entity"), except (i) for (A) any
applicable requirements of the Exchange Act or the Securities Act of 1933,
as amended (the "Securities Act"), (B) the pre-merger notification
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder (the "HSR Act"), (C)
the filing and recordation of appropriate merger and similar documents as
required by the DGCL, (D) filings under the rules and regulations of the
American Stock Exchange, Inc. and (E) filings and consents under any
applicable foreign laws, including, without limitation, the antitrust laws
or laws intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade and any filings
and consents which may be required by any foreign environmental, health or
safety laws or regulations pertaining to any notification, disclosure or
required approval triggered by the Merger or the transactions contemplated
by this Agreement, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (y) would
not, individually or in the aggregate, have a Company Material Adverse
Effect.
SECTION 3.06. Opinion of Financial Advisor. Xxxxx & Company
Incorporated has delivered to the Special Committee (as defined below) its
opinion substantially to the effect that, as of the date hereof, the
consideration to be received by the stockholders of the Company (other than
Merger Sub and its affiliates and members of the Management Group) pursuant
to the Merger is fair to such stockholders from a financial point of view.
SECTION 3.07. Board Approval. The Board of Directors of the Company,
based on the unanimous recommendation of the Special Committee of the Board
of Directors of the Company (the "Special Committee"), at a meeting duly
called and held and at which a quorum was present and voting, unanimously
(a) determined that this Agreement and the Merger are fair to and in the
best interests of the Company's stockholders (other than Merger Sub and its
affiliates and members of the Management Group), (b) approved this
Agreement, the Merger and the other transactions contemplated hereby, and
(c) resolved to recommend approval and adoption of this Agreement by the
Company's stockholders.
SECTION 3.08. Brokers. No broker, finder or investment banker (other
than Xxxxx & Company Incorporated) is entitled to any brokerage, finder's
or other fee or commission in connection with this Agreement, the Merger
and the other transactions contemplated hereby based upon arrangements made
by or on behalf of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub hereby makes to the Company the representations and
warranties set forth below:
SECTION 4.01. Organization and Qualification. Merger Sub is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has the requisite power and authority
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted.
Merger Sub is duly qualified or licensed and in good standing to do
business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such
qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that would not, individually or
in the aggregate, have a material adverse effect on the business, results
of operations or financial condition of Merger Sub and its subsidiaries,
taken as a whole ("Merger Sub Material Adverse Effect").
SECTION 4.02. Authority Relative to This Agreement. Merger Sub has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Merger Sub and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of Merger Sub and no other corporate proceedings on the part of
Merger Sub are necessary to authorize this Agreement or to consummate such
transactions (other than the filing and recordation of appropriate merger
documents as required by the DGCL). This Agreement has been duly and
validly executed and delivered by Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes the
legal, valid and binding obligation of Merger Sub, enforceable against it
in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
SECTION 4.03. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Merger Sub do not, and the
consummation of the transactions contemplated hereby will not, (i) conflict
with or violate the certificate of incorporation or by-laws of Merger Sub,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Merger Sub or by which any of its properties or assets
are bound or affected, or (iii) result in any breach of or constitute a
default (or an event which, with notice, lapse of time or both, would
become a default) under, result in the loss of a material benefit under or
give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any properties or assets of Merger Sub pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or any other instrument or obligation to which Merger Sub
is a party or by which Merger Sub or any of its properties or assets is
bound or affected, except in the case of clauses (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which
(x) would not prevent or delay consummation of the Merger in any material
respect or otherwise prevent Merger Sub from performing its obligations
under this Agreement in any material respect, or (y) would not,
individually or in the aggregate, have a Merger Sub Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Merger Sub do
not, and the performance of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby by Merger Sub will
not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except (i) for (A) any
applicable requirements, if any, of the Exchange Act, the Securities Act
and state takeover laws, (B) the pre-merger notification requirements of
the HSR Act and (C) filing and recordation of appropriate merger and
similar documents as required by the DGCL and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not (x) prevent or delay consummation of
the Merger in any material respect or otherwise prevent Merger Sub from
performing its obligations under this Agreement in any material respect, or
(y) would not, individually or in the aggregate, have a Merger Sub Material
Adverse Effect.
SECTION 4.04. Brokers. No broker, finder or investment banker (other
than Lazard Freres & Co. LLC ("Lazard") and BancBoston Xxxxxxxxx Xxxxxxxx
Inc.) is entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement, the Merger and the other transactions
contemplated hereby based upon arrangements made by or on behalf of Merger
Sub or the members of the Management Group.
SECTION 4.05. Financing. Merger Sub has delivered to the Company a
true and complete copy of a letter (the "Commitment Letter") executed by
BankBoston, N.A., European American Bank, The Chase Manhattan Bank, and
BancBoston Xxxxxxxxx Xxxxxxxx Inc. describing the sources of financing for
the transactions contemplated by this Agreement. The amount provided
pursuant to the Commitment Letter will be sufficient to provide the funds
required by Merger Sub to pay the Merger Consideration pursuant to this
Agreement and to pay all fees and expenses required to be paid by Merger
Sub in connection with the consummation of the transactions contemplated by
this Agreement. Merger Sub agrees to use its best efforts to obtain the
financing on the terms contemplated by the Commitment Letter.
SECTION 4.06. Capitalization of Merger Sub. The authorized capital
stock of Merger Sub consists of 1,000 shares of Common Stock, par value
$.01 per share ("Merger Sub Common Stock"). As of the date hereof, 200
shares of Merger Sub Common Stock are outstanding, all of which were
validly issued, fully paid and nonassessable. Schedule 4.06 sets forth the
ownership of the outstanding shares of Merger Sub as of the date hereof.
SECTION 4.07. Investigation by Merger Sub. Merger Sub:
(a) acknowledges that, except as set forth in this Agreement, none of
the Company, any Company Subsidiary or any of their respective directors,
officers, employees, affiliates, agents or representatives makes any
representation or warranty, either express or implied, as to the accuracy
or completeness of any of the information provided or made available to
Merger Sub or the members of the Management Group or their agents,
representatives or financing sources prior to the execution of this
Agreement; and
(b) agrees that, to the fullest extent permitted by law except as
provided by this Agreement, none of the Company, any Company Subsidiary or
any of their respective directors, officers, employees, stockholders,
affiliates, agents or representatives shall have any liability or
responsibility whatsoever to Merger Sub on any basis (including without
limitation in contract, tort or otherwise) based upon any information
provided or made available, or statement made to Merger Sub or the members
of the Management Group prior to the execution of this Agreement.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
The Company covenants and agrees that, between the date of this Agreement
and the Effective Time, unless Merger Sub shall have consented (which
consent shall not be unreasonably withheld), neither the Company nor any
Company Subsidiary shall:
(a) conduct its business in any manner other than in the ordinary
course of business consistent with past practice;
(b) amend or propose to amend its certificate of incorporation or by-
laws;
(c) authorize for issuance, issue, grant, sell, pledge, redeem or
acquire for value any of its or their securities, including options,
warrants, commitments, stock appreciation rights, subscriptions, rights to
purchase or otherwise (other than the issuance of equity securities upon
the conversion of outstanding convertible securities or in connection with
any dividend reinvestment plan or any Benefit Plan with an employee stock
fund or employee stock ownership plan feature, consistent with applicable
securities laws, or the exercise of options or warrants outstanding as of
the date of this Agreement and in accordance with the terms of such options
or warrants in effect on the date of this Agreement);
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property, or otherwise, with respect
to any of its capital stock or other equity interests, except for (i) the
regular semi-annual dividends of $.50 per share which shall be paid
consistent with past practice and (ii) dividends and other distributions
declared and paid by a Company Subsidiary only to the Company (and also to
LAGS (USA) Inc. in the case of Xxxxxx General LLC), or subdivide,
reclassify, recapitalize, split, combine or exchange any of its shares of
capital stock;
(e) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect
to accounting policies or procedures (including tax accounting policies and
procedures);
(f) take any action that would, or could reasonably be expected to
result in, any of its representations and warranties set forth in this
Agreement being untrue or in any of the conditions to the Merger set forth
in Article VII not being satisfied; or
(g) authorize any of, or commit or agree to take any of, the
foregoing actions.
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality. From the date
hereof to the Effective Time, the Company shall (and shall cause the
Company Subsidiaries and the officers, directors, employees, auditors and
agents of the Company and each of the Company Subsidiaries to) afford the
officers, employees and agents of Merger Sub (the "Merger Sub
Representatives") reasonable access at all reasonable times to its
officers, employees, agents, properties, offices, plants and other
facilities, books and records, and shall furnish such Merger Sub
Representatives with all financial, operating and other data and
information as may from time to time be reasonably requested. Merger Sub
agrees to be bound by the terms of the Confidentiality Agreement, dated as
of June 29, 1998, between the Company and Xxx X. Xxxxxxx (the
"Confidentiality Agreement").
SECTION 6.02. Proxy Statement; Schedule 13E-3. (a) As soon as
practicable after the date of this Agreement, the Company shall prepare and
file with the SEC a proxy statement, in form and substance reasonably
satisfactory to Merger Sub, relating to the meeting of the Company's
stockholders to be held in connection with the Merger (together with any
amendments thereof or supplements thereto, the "Proxy Statement"). Merger
Sub shall furnish to the Company such information concerning itself as the
Company may reasonably request in connection with the preparation of the
Proxy Statement. The Proxy Statement will comply in all material respects
with applicable federal securities laws, except that no representation is
made by the Company with respect to information supplied by Merger Sub for
inclusion in the Proxy Statement. As promptly as practicable after the
Proxy Statement has been cleared by the SEC, the Company shall mail the
Proxy Statement to its stockholders. The Proxy Statement shall include the
opinion of Xxxxx & Company Incorporated referred to in Section 3.06 hereof.
(b) The information provided by each of the Company and Merger Sub
for use in the Proxy Statement shall not, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed
to the stockholders of the Company or (ii) the time of the Company
stockholders' meeting contemplated by such Proxy Statement, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Effective Time any
event or circumstance relating to any party hereto, or their respective
officers or directors, should be discovered by such party which should be
set forth in an amendment or a supplement to the Proxy Statement, such
party shall promptly inform the Company and Merger Sub thereof and take
appropriate action in respect thereof.
(c) As soon as practicable after the date of this Agreement, Merger
Sub, members of the Management Group and the Company shall file with the
SEC a Rule 13E-3 Transaction Statement on Schedule 13E-3 ("Schedule 13E-
3"), with respect to the Merger. Each of the parties hereto agrees to use
its reasonable best efforts to cooperate and to provide each other with
such information as any of such parties may reasonably request in
connection with the preparation of the Schedule 13E-3. The information
provided by each of the Company and Merger Sub for use in the Schedule 13E-
3 shall not, at the time the Schedule 13E-3 is filed with the SEC, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. Each party hereto agrees promptly to supplement,
update and correct any information provided by it for use in the Schedule
13E-3 if and to the extent that it is or shall have become incomplete,
false or misleading.
SECTION 6.03. Action by Stockholders. Except as otherwise required
by the fiduciary duties of the Board of Directors of the Company (as
determined in good faith by the Special Committee after consulting with its
outside legal counsel): (a) the Company, acting through its Board of
Directors, shall, in accordance with applicable law, the Company Charter
and the Company's bylaws, duly call, give notice of, convene and hold a
special meeting of stockholders (the "Company Stockholders' Meeting") as
soon as practicable after the date of this Agreement for the purpose of
adopting this Agreement and (b) the Company will, through the Board of
Directors based on the recommendation of the Special Committee, (i)
recommend to its stockholders the adoption of this Agreement, and (ii) use
its best efforts to obtain the Company Stockholder Approval. Merger Sub
shall vote all shares of Common Stock owned by it in favor of the adoption
of this Agreement.
SECTION 6.04. No Solicitation. The Company shall not, and shall not
authorize or permit any of its officers, directors, employees or agents to
directly or indirectly, solicit, encourage, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than
Merger Sub, any of its affiliates or representatives) (collectively, a
"Person") concerning any merger, consolidation, tender offer, exchange
offer, sale of all or substantially all of the Company's assets, sale of
shares of capital stock or similar business combination transaction
involving the Company or any principal operating or business unit of the
Company or its Subsidiaries (an "Acquisition Proposal"). Notwithstanding
the foregoing, (i) if the Company or the Special Committee receives an
unsolicited, written indication of a willingness to make an Acquisition
Proposal at a price per share which the Special Committee reasonably
concludes is in excess of the Merger Consideration from any Person and if
the Special Committee reasonably concludes, based upon advice of its
financial advisor, that the Person delivering such indication is capable of
consummating such an Acquisition Proposal (based upon, among other things,
the availability of financing and the capacity to obtain financing, the
expectation of receipt of required antitrust and other regulatory approvals
and the identity and background of such Person), then the Company or the
Special Committee may, directly or indirectly, provide access to or furnish
or cause to be furnished information concerning the Company's business,
properties or assets to any such Person pursuant to an appropriate
confidentiality agreement and the Company or the Special Committee may
engage in discussions related thereto, and (ii) the Company or the Special
Committee may participate in and engage in discussions and negotiations
with any Person meeting the requirement set forth in clause (i) above in
response to a written Acquisition Proposal if the Special Committee
concludes, upon advice of its legal counsel, that the failure to engage in
such discussions or negotiations would be inconsistent with the Special
Committee's (and the Board's) fiduciary duties to the Company's
stockholders under applicable law. In the event that, after the Company
has received a written Acquisition Proposal (without breaching its
obligations under clause (i) or (ii) above) but prior to obtaining the
Company Stockholder Approval of the Merger, the Special Committee
determines, in good faith and upon advice of its financial advisor and
legal counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the
Special Committee may do any or all of the following: (x) withdraw or
modify the Board of Directors' approval or recommendation of the Merger or
this Agreement, (y) approve or recommend an Acquisition Proposal and (z)
terminate this Agreement. Furthermore, nothing contained in this Section
6.04 shall prohibit the Company or its Board of Directors, upon the
recommendation of the Special Committee, from taking and disclosing to the
Company's stockholders a position with respect to a tender or exchange
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated
under the Exchange Act or from making such disclosure to the Company's
stockholders or otherwise which, in the judgment of the Special Committee
upon advice of legal counsel, is necessary under applicable law or rules of
any stock exchange. The Company shall promptly (but in any event within
two days) advise Merger Sub in writing of any Acquisition Proposal or any
inquiry regarding the making of an Acquisition Proposal including any
request for information, the material terms and conditions of such request,
Acquisition Proposal or inquiry and the identity of the Person making such
request, Acquisition Proposal or inquiry. The Company will, to the extent
reasonably practicable, keep Merger Sub fully informed of the status and
details (including amendments or proposed amendments) of any such request,
Acquisition Proposal or inquiry.
SECTION 6.05. Directors' and Officers' Insurance and Indemnification.
(a) From and after the consummation of the Merger, the parties shall, and
shall cause the Surviving Corporation to, indemnify, defend and hold
harmless any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer or director
(the "Indemnified Party") of the Company and its subsidiaries against all
losses, claims, damages, liabilities, costs and expenses (including
attorneys' fees and expenses), judgments, fines, losses, and amounts paid
in settlement, with the written approval of the Surviving Corporation
(which approval shall not be unreasonably withheld), in connection with any
actual or threatened action, suit, claim, proceeding or investigation (each
a "Claim") to the extent that any such Claim is based on, or arises out of,
(i) the fact that such person is or was a director, officer, employee or
agent of the Company or any subsidiaries or is or was serving at the
request of the Company or any of its subsidiaries as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, or (ii) this Agreement, or any of the transactions
contemplated hereby, in each case to the extent that any such Claim
pertains to any matter or fact arising, existing, or occurring prior to or
at the Effective Time, regardless of whether such Claim is asserted or
claimed prior to, at or after the Effective Time, to the full extent
permitted under Delaware law or the Company's Certificate of Incorporation,
By-laws or indemnification agreements in effect at the date hereof,
including provisions relating to advancement of expenses incurred in the
defense of any action or suit. Without limiting the foregoing, in the
event any Indemnified Party becomes involved in any capacity in any Claim,
then from and after consummation of the Merger, the parties shall cause the
Surviving Corporation to, periodically advance to such Indemnified Party
its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provision by
such Indemnified Party of an undertaking to reimburse the amounts so
advanced in the event of a final non-appealable determination by a court of
competent jurisdiction that such Indemnified Party is not entitled thereto,
(b) Merger Sub and the Company agree that all rights to
indemnification and all limitations on liability existing in favor of the
Indemnified Party as provided in the Company's Certificate of Incorporation
and By-laws as in effect as of the date hereof shall survive the Merger and
shall continue in full force and effect, without any amendment thereto, for
a period of six years from the Effective Time to the extent such rights are
consistent with the DGCL; provided that in the event any claim or claims
are asserted or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims; provided further, that any
determination required to be made with respect to whether an Indemnified
Party's conduct complies with the standards set forth under Delaware law,
the Company's Certificate of Incorporation or By-laws or such agreements,
as the case may be, shall be made by independent legal counsel selected by
the Indemnified Party and reasonably acceptable to the Surviving
Corporation; and, provided further, that nothing in this Section 6.05 shall
impair any rights or obligations of any present or former directors or
officers of the Company.
(c) In the event the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such
case, to the extent necessary to effectuate the purposes of this Section
6.05, proper provision shall be made so that the successors and assigns of
the Surviving Corporation assume the obligations set forth in this Section
6.05 and none of the actions described in clauses (i) or (ii) shall be
taken until such provision is made.
(d) The parties shall cause the Surviving Corporation to maintain the
Company's existing officers' and directors' liability insurance policy
("D&O Insurance") for a period of not less than six years after the
Effective Date; provided, that the Surviving Corporation may substitute
therefor policies of substantially similar coverage and amounts containing
terms no less advantageous to such former directors or officers so long as
such substitution does not result in gaps or lapses in coverage; provided,
further, if the existing D&O Insurance expires or is cancelled during such
period, Merger Sub or the Surviving Corporation will use its best efforts
to obtain substantially similar D&O Insurance; provided, however, that if
the aggregate annual premiums for such D&O Insurance (or successor
insurance policy) at any time during such period exceed 200% of the per
annum rate of premiums currently paid by the Company for such insurance on
the date of this Agreement, then the parties will cause the Surviving
Corporation to, and the Surviving Corporation will, provide the maximum
coverage that shall then be available at an annual premium equal to 200% of
such rate.
(e) This Section 6.05 is intended to be for the benefit of, and shall
be enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on the Surviving Corporation and its
respective successors and assigns.
SECTION 6.06. Further Action; Best Efforts.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall (i) make promptly its respective filings and
thereafter make any other required submissions under the HSR Act with
respect to the Merger and the other transactions contemplated hereby, and
(ii) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations or otherwise to
consummate and make effective the Merger and the other transactions
contemplated hereby, including, without limitation, using its reasonable
best efforts to obtain (x) the Financing and (y) all licenses, permits,
waivers, orders, consents, approvals, authorizations, qualifications and
orders of Governmental Entities and parties to contracts with the Company
and the Company Subsidiaries as are necessary for the consummation of the
Merger and the other transactions contemplated hereby.
(b) Notwithstanding the provisions of Section 6.06(a), nothing
contained in this Agreement shall obligate Merger Sub to take any action to
consummate the Merger and the other transactions contemplated hereby, the
consummation of which is dependent or conditioned on the receipt of any
governmental or regulatory approval or consent, in the event that the
approval or consent so received specifically includes conditions or
restrictions in addition to those imposed by laws and regulations of
general applicability as in effect from time to time (including conditions
in addition to those imposed by existing laws and regulations which require
the prior approval of any governmental or regulatory agency to the taking
of any action or the consummation of any transaction), the direct or
indirect effect of which is or would be, to restrict, limit or otherwise
subject to penalty Merger Sub in the ownership of its assets or the conduct
of its business. For purposes of the foregoing, a condition, restriction
or limitation arising out of any such approval or consent shall be deemed
to be a restriction or limitation on Merger Sub (regardless of whether
Merger Sub is a party to or otherwise legally obligated by such consent or
approval) to the extent that the taking of an action or the consummation of
a transaction by Merger Sub would result in Merger Sub, the Company or any
Company Subsidiary being in breach or violation of such consent or approval
or otherwise causing such consent or approval to terminate or expire.
(c) In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of each party to this Agreement shall use
their reasonable best efforts to take all such action.
SECTION 6.07. Public Announcements. Merger Sub and the Company shall
consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the
transactions contemplated hereby and shall not issue any such press release
or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld; provided, however,
that a party may, without the prior consent of the other party, issue such
press release or make such public statement as may be required by law,
regulation or any listing agreement or arrangement to which the Company or
Merger Sub is a party with a national securities exchange or the Nasdaq
Stock Market if it has used all reasonable efforts to consult with the
other party and to obtain such party's consent but has been unable to do so
in a timely manner.
SECTION 6.08. Conveyance Taxes. Merger Sub and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes which become payable in connection with the
transactions contemplated by this Agreement that are required or permitted
to be filed on or before the Effective Time.
SECTION 6.09. Employee Benefits. For the one-year period immediately
following the Effective Time, the coverage and benefits provided to those
individuals who are employees of the Company immediately prior to the
Effective Time (the "Employees") pursuant to employee benefit plans or
arrangements maintained by the Surviving Corporation shall not be, in the
aggregate, materially less favorable than the coverage benefits provided to
the Employees immediately prior to the Effective Time.
SECTION 6.10. Commitment Letter Notices. Following receipt by Merger
Sub or any of its affiliates of any written or oral communication to the
effect that the banks that are parties to the Commitment Letter are
contemplating not providing the financing for the Merger or the terminating
or cancelling or modifying in any respect of the Commitment Letter, or that
the financing for the Merger is unlikely to be obtained, Merger Sub shall
immediately communicate such event to the Company and provide the Company
with a true and complete copy of any such written communication.
SECTION 6.11. Knowledge of Breach. If prior to the Closing Merger
Sub or any member of the Management Group shall have actual knowledge of
any breach of a representation and warranty or covenant of the Company,
Merger Sub shall promptly notify the Company of such knowledge, including
the basis of such belief set forth in reasonable detail. If an officer of
Merger Sub or any member of the Management Group had actual knowledge prior
to the execution of this Agreement of a breach by the Company of any
representation, warranty, covenant, agreement or condition of this
Agreement, such breach shall not be deemed to be a breach of this Agreement
for any purpose hereunder, and neither Merger Sub nor any member of the
Management Group shall have any claim or recourse against the Company or
its directors, officers, employees, affiliates, controlling persons,
agents, advisors or representatives with respect to such breach.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived, in whole or in part, to the extent
permitted by applicable law:
(a) Stockholder Approval. The Company Stockholder Approval shall
have been obtained.
(b) No Order. No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in
effect and which materially restricts, prevents or prohibits consummation
of the Merger or the other transactions contemplated by this Agreement;
provided, however, that the parties shall use their reasonable best efforts
(subject to Section 6.06(b)) to cause any such decree, judgment, injunction
or other order to be vacated or lifted.
(c) HSR Act. Any waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated, and no
action shall have been instituted by the Department of Justice or the
Federal Trade Commission challenging or seeking to enjoin the consummation
of the Merger, which action shall not have been withdrawn or terminated.
SECTION 7.02. Additional Conditions to Obligations of Merger Sub.
The obligation of Merger Sub to effect the Merger is also subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement, shall be true and
correct, in each case as of the Effective Time as though made on and as of
the Effective Time, except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of
such date and (iii) where the failure to be true and correct would not,
individually or in the aggregate with all other such failures, have a
Company Material Adverse Effect.
(b) Agreement and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or
prior to the Effective Time.
(c) Financing. Merger Sub shall have obtained the financing (the
"Financing") described in the Commitment Letter attached hereto as Annex A,
and the proceeds of such Financing shall have been received by or made
immediately available to Merger Sub at or immediately prior to the Closing.
(d) Dissenting Shares. On the Closing Date, Dissenting Shares shall
aggregate no more than 7.5% of the then outstanding shares of Common Stock.
(e) Material Adverse Effect. Subsequent to the date of this
Agreement, there shall not have occurred an event or events which,
individually or in the aggregate, has had or could reasonably be expected
to have a Company Material Adverse Effect, provided, however, that, for the
purposes of this Section 7.01(e), the following shall be excluded from the
definition of "Company Material Adverse Effect" and from any determination
as to whether a Company Material Adverse Effect has occurred or may occur
with respect to the Company: the effects of changes that are applicable to
(A) the United States and Canada aviation ground services business
generally, (B) the United States and Canadian economy generally or (C) the
United States securities markets generally.
(f) Officer's Certificate. Merger Sub shall have received a
certificate of an appropriate officer of the Company to the effect that the
conditions set forth in Section 7.02(a), (b), (d) and (e) have been
satisfied at the Effective Time.
SECTION 7.03. Additional Conditions to Obligations of the Company.
The obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Merger Sub contained in this Agreement shall, if qualified by
materiality, be true and correct, and if not so qualified, be true and
correct in all material respects, in each case as of the Effective Time as
though made on and as of the Effective Time, except (i) for changes
specifically permitted by this Agreement and (ii) that those
representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date.
(b) Agreement and Covenants. Merger Sub shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or
prior to the Effective Time.
(c) Officer's Certificate. The Company shall have received a
certificate of an appropriate officer of Merger Sub to the effect that the
conditions set forth in Section 7.03(a) and (b) have been satisfied at the
Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after adoption of this
Agreement by the stockholders of the Company:
(a) by mutual consent of the Company (acting through the Special
Committee) and Merger Sub;
(b) by Merger Sub upon a material breach of any covenant or agreement
on the part of the Company set forth in this Agreement which has not been
cured, or if any representation or warranty of the Company shall have
become untrue in any material respect, in either case such that such breach
or untruth is incapable of being cured prior to April 30, 1999;
(c) by the Company upon a material breach of any covenant or
agreement on the part of Merger Sub set forth in this Agreement which has
not been cured, or if any representation or warranty of the Company or
Merger Sub shall have become untrue in any material respect, in either case
such that such breach or untruth is incapable of being cured prior to April
30, 1999;
(d) by either Merger Sub or the Company, if any permanent injunction,
order, decree, ruling or other action by any Governmental Entity preventing
the consummation of the Merger shall have become final and nonappealable;
(e) by either Merger Sub or the Company, if the Merger shall not have
been consummated before April 30, 1999 (provided that the right to
terminate this Agreement under this Section 8.01(e) shall not be available
to any party whose failure to fulfill any obligation under this Agreement
has been the cause of or resulted in the failure of the Effective Time to
occur on or before such date);
(f) by Merger Sub if: (i) the Board of Directors of the Company
(acting through the Special Committee) shall withdraw, modify or change its
recommendation so that it is not in favor of this Agreement or the Merger
or shall have resolved to do any of the foregoing; (ii) the Board of
Directors of the Company (acting through the Special Committee) shall have
recommended or resolved to recommend to its stockholders an Acquisition
Proposal; or (iii) the stockholder approval required pursuant to Section
7.01(a) shall not have been obtained by April 30, 1999;
(g) by the Company (acting through the Special Committee) as provided
in Section 6.04; and
(h) by the Company (acting through the Special Committee) if it has
received a notice from Merger Sub that the Commitment Letter has been
terminated or cancelled.
The right of any party hereto to terminate this Agreement pursuant to
this Section 8.01 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto,
any person controlling any such party or any of their respective officers
or directors, whether prior to or after the execution of this Agreement.
SECTION 8.02. Effect of Termination. Except as provided in Section
8.05 or Section 9.01(b), in the event of the termination of this Agreement
pursuant to Section 8.01, this Agreement shall forthwith become void, there
shall be no liability on the part of any party hereto, or any of their
respective officers or directors, to the other and all rights and
obligations of any party hereto shall cease; provided, however, that
nothing herein shall relieve any party from liability for the wilful breach
of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.03. Amendment. Before or after adoption of this Agreement
by the stockholders of the Company, this Agreement may be amended by the
parties hereto at any time prior to the Effective Time; provided, however,
that (a) any such amendment shall, on behalf of the Company, have been
approved by the Special Committee and (b) after adoption of this Agreement
by the stockholders of the Company, no amendment which under applicable law
may not be made without the approval of the stockholders of the Company may
be made without such approval. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
either the Company (acting through the Special Committee), on the one hand,
or Merger Sub, on the other, may (a) extend the time for the performance of
any of the obligations or other acts of the other party hereto, (b) waive
any inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party or parties to be
bound thereby and, with respect to extensions or waivers granted by the
Company, if the Special Committee shall have approved such waiver or
extension.
SECTION 8.05. Fees, Expenses and Other Payments. (a) Subject to
paragraph (b) of this Section 8.05, all costs and expenses (including any
expenses related to any claims or litigation in connection with the
transactions contemplated by this Agreement, or any settlement thereof),
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants and other out-of-pocket expenses, incurred or to
be incurred by the parties hereto in connection with the transactions
contemplated hereby (with respect to such party, its "Expenses"), shall be
borne solely and entirely by the party which has incurred such costs and
expenses; provided, however, that all costs and expenses related to
printing and mailing the Proxy Statement shall be borne by the Company.
(b) The Company agrees that it will, promptly following receipt of
reasonable supporting documentation, pay to Merger Sub the reasonable
Expenses incurred by Merger Sub in connection with the transactions
contemplated by this Agreement, including any fees or expenses payable
pursuant to the Commitment Letter upon such termination, (x) up to a
maximum reimbursement amount of $1,750,000, if this Agreement shall be
terminated by Merger Sub pursuant to clause (i) and (ii) of Section 8.01(f)
hereof or if this Agreement is terminated by the Company pursuant to
Section 8.01(g) hereof and (y) up to a maximum reimbursement amount of
$875,000, if this Agreement shall be terminated by Merger Sub pursuant to
clause (iii) of Section 8.01(f) hereof.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and
Agreements. (a) Except as set forth in Section 9.01(b), the
representations, warranties and agreements of each party hereto shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any other party hereto, any person
controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
(b) The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Article VIII, except that the agreements set forth in
Articles I, II and IX and Section 6.05 shall survive the Effective Time and
those set forth in the last sentence of Section 6.01 and Sections 8.02 and
8.05 and Article IX shall survive termination.
SECTION 9.02. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date delivered or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall
be specified by like changes of address) or sent by electronic transmission
to the telecopier number specified below:
(a) If to Merger Sub:
c/o Xxx X. Xxxxxxx
River Acquisition Corp.
000 Xxxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Simeon Gold, Esq.
Telecopier No.: (000) 000-0000
(b) If to the Company:
Xxxxxx General Corporation
000 Xxxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
with separate copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" means a person that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
(b) "business day" means any day other than a day on which (i) banks
in the State of New York are authorized or obligated to be closed or (ii)
the SEC or The American Stock Exchange, Inc. is closed;
(c) "control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of
the management or polices of a person or entity, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise; and
(d) "Management Group" means those persons listed on Schedule
9.03(d).
(e) "person" means any person or any corporation, partnership,
limited liability company or other legal entity.
(f) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary)
owns, directly or indirectly, at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions
with respect to such corporation or other organization.
SECTION 9.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
SECTION 9.06. Entire Agreement. This Agreement, together with the
Confidentiality Agreement and the other documents delivered in connection
herewith, constitutes the entire agreement of the parties and supersedes
all prior agreements and undertakings including, without limitation, the
letter agreement dated July 9, 1998 relating to reimbursement of expenses,
both written and oral, between the parties, or any of them, with respect to
the subject matter hereof.
SECTION 9.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise and any purported assignment shall be null
and void, provided that Merger Sub may assign its rights, but not its
obligations, under this Agreement to any of its subsidiaries.
SECTION 9.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied (other than the provisions of Section
6.05, which provisions are intended to benefit and may be enforced by the
beneficiaries thereof), is intended to or shall confer upon any person any
right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
SECTION 9.09. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
without regard to the conflict of laws rules thereof.
SECTION 9.10. Submission to Jurisdiction; Waivers. Each party hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may
be brought and determined in the Court of Chancery, or other courts, of the
State of Delaware, and each party hereto hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the nonexclusive jurisdiction
of the aforesaid courts. Each party hereto hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a)
the defense of sovereign immunity, (b) any claim that it is not personally
subject to the jurisdiction of the courts for any reason other than the
failure to serve process in accordance with this Section 9.10, (c) that it,
or its property, is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (d) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding
in any such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
SECTION 9.11. Enforcement of this Agreement. (a) The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they
are entitled at law or in equity.
(b) The parties hereto acknowledge and agree that no director,
officer, employee, stockholder, affiliate or representative of Merger Sub
shall have any liability whatsoever for any obligation or liability of
Merger Sub.
SECTION 9.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Company and Merger Sub have caused this
Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
COMPANY:
XXXXXX GENERAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
_________________________________
Name: Xxxxxxx Xxxxx
Title: President
MERGER SUB:
RIVER ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxx
_________________________________
Name: Xxx X. Xxxxxxx
Title: Chairman
