EXHIBIT B
[EXECUTION COUNTERPART]
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AGREEMENT AND PLAN OF MERGER
among
XXXXXXXXX TECHNOLOGY CORPORATION,
SCORE ACQUISITION CORP.
and
XXXXXX INDUSTRIES, INC.
Dated September 25, 1997
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Table of Contents
Page
ARTICLE 1 - THE OFFER...................................................... 1
Section 1.1 The Offer.............................................. 1
Section 1.2 Company Actions........................................ 3
ARTICLE 2 - THE MERGER..................................................... 6
Section 2.1 The Merger............................................. 6
Section 2.2 Effective Time......................................... 7
Section 2.3 Effects of the Merger.................................. 7
Section 2.4 Certificate of Incorporation and Bylaws................ 7
Section 2.5 Directors and Officers................................. 7
Section 2.6 Conversion of Shares................................... 8
Section 2.7 Dissenting Shares...................................... 8
Section 2.8 Payments for Shares.................................... 9
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION SUB................................. 10
Section 3.1 Organization and Qualification......................... 10
Section 3.2 Authority Relating to this Agreement................... 11
Section 3.3 Information Supplied................................... 11
Section 3.4 Consents and Approvals; No Violation................... 12
Section 3.5 Financing.............................................. 12
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY................................................ 13
Section 4.1 Organization and Qualification......................... 13
Section 4.2 Capitalization......................................... 14
Section 4.3 Authority Relative to this Agreement................... 15
Section 4.4 Absence of Certain Changes............................. 16
Section 4.5 Reports................................................ 17
Section 4.6 Proxy Statement........................................ 17
Section 4.7 Consents and Approvals; No Violation................... 18
Section 4.8 Fees and Commissions................................... 18
Section 4.9 Information Supplied................................... 19
Section 4.10 Litigation............................................. 19
Section 4.11 Patents and Other Proprietary Rights................... 19
Section 4.12 Benefit Plans; ERISA Compliance........................ 20
Section 4.13 Taxes.................................................. 23
Section 4.14 Compliance with Applicable Laws........................ 25
Section 4.15 State Takeover Statutes................................ 28
Section 4.16 Labor Matters.......................................... 28
Section 4.17 Undisclosed Liabilities................................ 28
Section 4.18 Certain Agreements..................................... 28
Section 4.19 Amendment of Rights Agreement.......................... 28
ARTICLE 5 - COVENANTS...................................................... 29
Section 5.1 Conduct of Business of the Company..................... 29
Section 5.2 No Solicitation........................................ 31
Section 5.3 Access to Information.................................. 33
Section 5.4 Reasonable Best Efforts................................ 33
Section 5.5 Indemnification, Exculpation and Insurance............. 34
Section 5.6 Stock Options; Employee Plans and Benefits and Employment
Contracts......................................... 35
Section 5.7 Meeting of the Company's Stockholders.................. 37
Section 5.8 Public Announcements................................... 38
Section 5.9 Stockholder Litigation................................. 38
Section 5.10 Rights Agreement....................................... 38
ARTICLE 6 - CONDITIONS TO CONSUMMATION OF MERGER........................... 38
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger............................................ 38
ARTICLE 7 - TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination............................................ 39
Section 7.2 Effect of Termination.................................. 40
Section 7.3 Termination Fee........................................ 40
Section 7.4 Amendment.............................................. 40
Section 7.5 Extension; Waiver...................................... 41
Section 7.6 Procedure for Termination, Amendment, Extension or
Waiver............................................ 41
Section 7.7 Concurrence of Independent Directors................... 4
ARTICLE 8 - MISCELLANEOUS.................................................. 41
Section 8.1 Non-Survival of Representations and
Warranties........................................ 41
Section 8.2 Entire Agreement; Assignment........................... 42
Section 8.3 Validity............................................... 42
Section 8.4 Notices................................................ 42
Section 8.5 Governing Law.......................................... 44
Section 8.6 Jurisdiction........................................... 44
Section 7.6 Descriptive Headings................................... 41
Section 8.8 Parties in Interest.................................... 44
Section 8.9 Counterparts........................................... 44
Section 8.10 Fees and Expenses...................................... 44
Section 8.11 Certain Definitions.................................... 45
Section 8.12 Performance by Acquisition Sub......................... 46
DISCLOSURE SCHEDULES
4.1(b) Subsidiaries
4.2 Capitalization
4.4 Absence of Certain Changes
4.7 Consents and Approvals; No Violation
4.10 Litigation
4.11 Intellectual Property Rights
4.12 Benefits
4.13 Taxes
4.16 Labor Matters
4.18 Covenants Not to Compete
5.6(d) Agreements with Current and Former Officers and Directors
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated September
25, 1997, among XXXXXXXXX TECHNOLOGY CORPORATION, a Delaware corporation
("Parent"), SCORE ACQUISITION CORP., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Acquisition Sub"), and XXXXXX INDUSTRIES, INC., a
Delaware corporation (the "Company").
The respective Boards of Directors of Parent, Acquisition Sub and
the Company have each determined that it is advisable, on the terms and
subject to the conditions of this Agreement, (i) for a wholly-owned subsidiary
of Parent to commence a cash tender offer to purchase all outstanding shares
of Series A Convertible Preferred Stock ("Series A Preferred Shares"), Series
B $1 Cumulative Convertible Preferred Stock ("Series B Preferred Shares and
together with the Series A Preferred Shares, "Preferred Shares") and Common
Stock, par value $1 per share, of the Company ("Common Shares" and together
with the Preferred Shares, "Shares") and (ii) following the cash tender offer,
to merge Acquisition Sub with and into the Company.
In consideration of the premises and the mutual covenants herein
contained and intending to be legally bound hereby, Parent, Acquisition Sub
and the Company hereby agree as follows:
ARTICLE 1
THE OFFER
Section 1.1 The Offer.
(a) As promptly as practicable but in no event later than
the fifth business day after the public announcement of the execution of this
Agreement, Parent shall cause Acquisition Sub to commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), and Acquisition Sub shall commence, an offer (as amended or
supplemented in accordance with this Agreement, the "Offer") to purchase for
cash all issued and outstanding Shares at a price of $11.70 per Series A
Preferred Share, $16.00 per Series B Preferred Share and $12.00 per Common
Share net to the seller in cash (such prices, or such higher prices per Share
as may be paid in the Offer, being referred to as the "Offer Prices"). The
obligation of Acquisition Sub, and of Parent to cause Acquisition Sub, to
consummate the Offer, to accept for payment and to pay for any Shares tendered
shall be subject to only those conditions set forth in Annex A hereto (any of
which may be waived by Acquisition Sub in its sole discretion; provided that,
without the consent of the Company, Acquisition Sub shall not waive the
Minimum Tender Condition (as defined in Annex A)).
(b) As soon as practicable on the date of commencement of
the Offer, Parent and Acquisition Sub shall file with the Securities and
Exchange Commission (the "SEC") with respect to the Offer a Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1"), which will comply in all
material respects with the provisions of applicable federal securities laws
and will contain the offer to purchase relating to the Offer (the "Offer to
Purchase") and forms of related letters of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents").
Parent will deliver copies of the proposed forms of the Schedule 14D-1 and the
Offer Documents (as well as any change thereto) to the Company within a
reasonable time prior to the commencement of the Offer for prompt review and
comment by the Company and its counsel. Parent will provide the Company and
its counsel in writing any comments that Acquisition Sub, Parent or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt thereof. Parent and Acquisition Sub
represent that the Schedule 14D-1 and the Offer Documents (including any
amendments or supplements thereto) (i) shall comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder and (ii) shall not, in the case of the Schedule 14D-1
at the time filed with the SEC and at the time the Offer is consummated and in
the case of the Offer Documents when first published, sent or given to the
stockholders of the Company and at the time the Offer is consummated, 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; provided, however, that Parent and Acquisition Sub make no
covenant, representation or warranty as to any of the information relating to
and supplied by the Company in writing specifically for inclusion in the
Schedule 14D-1 or the Offer Documents (including any amendments or supplements
thereto). Parent and Acquisition Sub shall promptly correct any information
in the Schedule 14D-1 or the Offer Documents that shall have become false or
misleading in any material respect and take all steps necessary to cause such
Schedule 14D-1 or Offer Documents as so corrected to be filed with the SEC and
disseminated to the stockholders of the Company, as and to the extent required
by applicable law. Parent and Acquisition Sub will provide copies of any
amendments or supplements to the Offer Documents or the Schedule 14D-1 prior
to any filing of such amendments or supplements with the SEC in order to
provide the Company and its counsel with a reasonable opportunity to review
and comment.
(c) Each of Parent and Acquisition Sub expressly reserves
the right to modify the terms of the Offer, except that neither Parent nor
Acquisition Sub shall, without the prior written consent of the Company,
decrease the consideration payable in the Offer, change the form of
consideration payable in the Offer, decrease the number of Shares sought
pursuant to the Offer, change or modify the conditions to the Offer in a manner
adverse to the Company or holders of Shares, impose additional conditions to
the Offer, waive the Minimum Tender Condition, or amend any term of the Offer
in any manner adverse to the Company or holders of Shares. Notwithstanding
the foregoing, Acquisition Sub, without the consent of the Company, (i) shall
extend the Offer, if at the then scheduled expiration date of the Offer any
of the conditions to Acquisition Sub's obligation to accept for payment and
pay for Shares shall not have been satisfied, until such time as such
condition is satisfied or waived, if such condition may in the reasonable
judgment of Acquisition Sub be satisfied in a time period reasonable for such
satisfaction, (ii) may, if any such condition is not waived, extend the Offer
until such condition is waived, (iii) may extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer and (iv) may extend the Offer on one or
more occasions for an aggregate period of not more than five business days if
the Minimum Tender Condition has been satisfied and there has theretofore been
validly tendered and not withdrawn Shares representing at least 70% but less
than 90% of each class of the outstanding Shares (on a fully diluted basis).
(d) Parent will provide or cause to be provided to
Acquisition Sub on a timely basis the funds necessary to accept for payment,
and pay for, Shares that Acquisition Sub becomes obligated to accept for
payment, and pay for, pursuant to the Offer.
Section 1.2 Company Actions.
(a) The Company hereby consents to the Offer and represents that
(i) its Board of Directors, at a meeting duly called and held, has duly and
by the affirmative vote of at least 4/5ths of the duly elected, qualified
and acting members of the Board at the time of such meeting, adopted
resolutions approving the Offer, the Merger (as defined in Section 2.1) and
this Agreement, determining that the terms of the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders and
recommending acceptance of the Offer and approval of the Merger and this
Agreement by the stockholders of the Company and (ii) X. X. Xxxxxx
Securities Inc. ("JPMorgan") has delivered to the Company's Board of
Directors its opinion that as of the date of this Agreement the cash
consideration to be received by holders of the Common Shares for such
Shares is fair to such holders from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the
recommendations of the Company's Board of Directors described in this
Section.
(b) The Company will file with the SEC on the date of the
commencement of the Offer a Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9") containing such recommendations of the Board in
favor of the Offer and the Merger, and shall disseminate the Schedule 14D-9 as
required by Rule 14d-9 promulgated under the Exchange Act. The Company will
deliver the proposed forms of the Schedule 14D-9 and the exhibits thereto to
Parent within a reasonable time prior to the commencement of the Offer for
prompt review and comment by Parent and its counsel. Parent and its counsel
shall be given a reasonable opportunity to review any amendments and
supplements to the Schedule 14D-9 prior to their filing with the SEC or
dissemination to stockholders of the Company. The Company will provide Parent
and its counsel in writing any comments that the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after receipt thereof. The Company represents that the Schedule 14D-9, on the
date filed with the SEC and on the date first published, sent or given to the
stockholders of the Company, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company shall
promptly correct any information in the Schedule 14D-9 that shall have become
false or misleading in any material respect and take all steps necessary to
cause such Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the stockholders of the Company, as and to the extent required
by applicable federal securities laws.
(c) In connection with the Offer, the Company shall furnish to,
or cause to be furnished to, Parent mailing labels, security position
listings and any available listing or computer file containing the names
and addresses of the record holders of the Shares as of a recent date and
shall furnish Parent with such information and assistance as Parent or its
agents may reasonably request in communicating the Offer to the
stockholders of the Company. Subject to the requirements of law, and
except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, Parent and
Acquisition Sub shall, and shall cause each of their affiliates to, hold
the information contained in any of such labels and lists in confidence,
use such information only in connection with the Offer and the Merger, and,
if this Agreement is terminated, deliver to the Company all copies of such
information or extracts therefrom then in their possession or under their
control.
(d) Promptly upon the acceptance for payment of and payment for
any Shares by Acquisition Sub, Acquisition Sub shall be entitled to
designate such number of directors, rounded up to the next whole number, on
the Board of Directors of the Company as will give Acquisition Sub, subject
to compliance with Section 14(f) of the Exchange Act, representation on the
Board of Directors of the Company equal to the product of (i) the number of
directors on the Board of Directors of the Company and (ii) the percentage
that such number of votes represented by Shares so purchased bears to the
number of votes represented by Shares outstanding, and the Company shall at
such time, subject to applicable law, including applicable fiduciary
duties, cause Acquisition Sub's designees to be so elected by its existing
Board of Directors; provided, however, that in the event that Acquisition
Sub's designees are elected to the Board of Directors of the Company, until
the Effective Time such Board of Directors shall have at least three
directors who are directors on the date of this Agreement and who are not
officers or affiliates of the Company (the "Independent Directors"); and
provided further, that, in such event, if the number of Independent
Directors shall be reduced below three for any reason whatsoever any
remaining Independent Directors (or Independent Director, if there shall be
only one remaining) shall designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement
or, if no Independent Directors then remain, the other directors shall
designate three persons to fill such vacancies who shall not be officers or
affiliates of the Company, or officers or affiliates of Parent or any of
their respective subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to
applicable law, including applicable fiduciary duties, the Company shall
take all action requested by Parent necessary to effect any such election,
including mailing to its stockholders the information statement (the
"Information Statement") containing the information required by Section
14(f) of the Exchange Act and Rule 14(f)-1 promulgated thereunder, and the
Company shall make such mailing with the mailing of the Schedule 14D-9
(provided that Parent and Acquisition Sub shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Acquisition Sub's designees). In
connection with the foregoing, the Company will, subject to applicable law,
including applicable fiduciary duties, promptly, at the option of Parent,
either increase the size of the Company's Board of Directors and/or obtain
the resignation of such number of its current directors as is necessary to
enable Acquisition Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
ARTICLE 2
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the relevant provisions of the
Delaware General Corporation Law (the "DGCL"), Acquisition Sub shall be merged
with and into the Company (the "Merger") as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article 7. Following the
Merger, the Company shall continue as the surviving corporation (the
"Surviving Corporation") under the name "Score" and shall continue its
existence under the laws of the State of Delaware, and the separate corporate
existence of Acquisition Sub shall cease. At the election of Parent, and
subject to the execution of an appropriate amendment to this Agreement, any
direct or indirect wholly owned subsidiary of Parent may be substituted for
Acquisition Sub as a constituent corporation in the Merger. Notwithstanding
this Section 2.1, Parent may elect at any time prior to the fifth business day
immediately preceding the date on which the notice of the meeting of
stockholders of the Company to consider approval of the Merger and this
Agreement (the "Meeting") is first given to the Company's stockholders that
instead of merging Acquisition Sub into the Company as hereinabove provided,
to merge the Company into Acquisition Sub or another direct or indirect
wholly-owned subsidiary of Parent; provided, however, that the Company shall
not be deemed to have breached any of its representations, warranties or
covenants herein solely by reason of such election. In such event the parties
shall execute an appropriate amendment to this Agreement in order to reflect
the foregoing and to provide that Acquisition Sub or such other subsidiary of
Parent shall be the Surviving Corporation and shall continue under the name
"Score".
Section 2.2 Effective Time. Upon the terms and subject to the
conditions hereof, as soon as possible after consummation of the Offer and to
the extent required by the DGCL after the vote of the stockholders of the
Company in favor of the approval of the Merger and this Agreement has been
obtained, the Merger shall be consummated by filing with the Secretary of
State of the State of Delaware, as provided in the DGCL, a certificate of
merger or other appropriate documents (in any such case, the "Certificate of
Merger") and the parties hereto shall make all other filings or recordings
required under the DGCL (the later of the time of such filing or the time
specified in the Certificate of Merger being the "Effective Time").
Section 2.3 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL. As of the Effective Time, the
Company, as the Surviving Corporation, shall be a wholly owned subsidiary of
Parent.
Section 2.4 Certificate of Incorporation and Bylaws.
(a) The Certificate of Incorporation of the Company in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation from and after the Effective Time
until amended in accordance with applicable law.
(b) The Bylaws of Acquisition Sub in effect at the Effective
Time shall be the Bylaws of the Surviving Corporation from and after the
Effective Time until amended in accordance with applicable law.
Section 2.5 Directors and Officers. The directors of Acquisition
Sub and the officers of the Company immediately prior to the Effective Time
shall be the directors and officers of the Surviving Corporation until their
respective successors are duly elected and qualified, except that the
President and Chief Executive Officer of Acquisition Sub will become the
Chairman and Chief Executive Officer of the Surviving Corporation.
Section 2.6 Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Acquisition
Sub, the Company or the holders of any of the following securities:
(a) each Share held by the Company as treasury stock and each
issued and outstanding Share owned by Parent, Acquisition Sub or any other
subsidiary of Parent shall be cancelled and retired and no payment made with
respect thereto;
(b) each issued and outstanding Share, other than those
Shares referred to in Section 2.6(a) or Dissenting Shares (as defined in
Section 2.7), shall be converted into the right to receive from the
Surviving Corporation an amount of cash, without interest, equal to the
respective Offer Price applicable to such Share (the "Merger
Consideration"); and
(c) each common share, par value $1 per share, of Acquisition
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into one fully-paid and nonassessable share of common stock, par
value $1 per share, of the Surviving Corporation.
Section 2.7 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding Shares held by a person
(a "Dissenting Stockholder") who objects to the Merger and complies with all
the provisions of Delaware law concerning the right of holders of Shares to
require appraisal of their Shares ("Dissenting Shares") shall not be converted
as described in Section 2.6(b) but shall become the right to receive such
consideration as may be determined to be due to such Dissenting Stockholder
pursuant to the laws of the State of Delaware. If, after the Effective Time,
such Dissenting Stockholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case pursuant to the
DGCL, his Shares shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give Parent
(i) prompt notice of any demands for appraisal of Shares received by the
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands. The Company shall not,
without the prior written consent of Parent, make any payment with respect to,
or settle, offer to settle or otherwise negotiate, any such demands.
Section 2.8 Payments for Shares.
(a) Prior to the Effective Time, Parent shall appoint a commercial
bank or trust company reasonably acceptable to the Company to act as
disbursing agent for the Merger (the "Disbursing Agent"). Parent will
enter into a disbursing agent agreement with the Disbursing Agent, in form
and substance reasonably acceptable to the Company, and shall deposit or
cause to be deposited with the Disbursing Agent in trust for the benefit of
the Company's stockholders cash at such times as shall be necessary to make
the payments pursuant to Section 2.6 to holders of Shares (such amounts
being hereinafter referred to as the "Exchange Fund"). The Disbursing
Agent shall, pursuant to irrevocable instructions, make the payments
provided for in the preceding sentence out of the Exchange Fund. The
Disbursing Agent shall invest portions of the Exchange Fund as Parent
directs.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause the Disbursing Agent to mail to each record holder,
as of the Effective Time, of an outstanding certificate or certificates
which immediately prior to the Effective Time represented Shares (the
"Certificates") a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Disbursing
Agent) and instructions for use in effecting the surrender of the
Certificate or payment therefor. Upon surrender to the Disbursing Agent of
a Certificate, together with such letter of transmittal duly executed, the
holder of such Certificate shall be paid in exchange therefor cash in an
amount equal to the product of the number of Shares represented by such
Certificate multiplied by the Merger Consideration, and such Certificate
shall forthwith be cancelled. No interest will be paid or accrued on the
cash payable upon the surrender of the Certificates. If payment is to be
made to a person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered be properly endorsed or otherwise in proper form
for transfer and that the person requesting such payment pay any transfer
or other taxes required by reason of the payment to a person other than the
registered holder of the Certificate surrendered or established to the
satisfaction of the Surviving Corporation that such tax has been paid or is
not applicable. Until surrendered in accordance with the provisions of
this Section 2.8, each Certificate (other than Certificates representing
Shares owned by Parent, Acquisition Sub or any other subsidiary of Parent
or Dissenting Shares) shall represent for all purposes only the right to
receive the Merger Consideration in cash multiplied by the number of Shares
evidenced by such Certificate, without any interest thereon.
(c) At and after the Effective Time, there shall be no
transfers of Shares which were outstanding immediately prior to the
Effective Time on the stock transfer books of the Surviving Corporation.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be cancelled and exchanged for cash as provided in
this Section 2.8.
(d) Any portion of the Exchange Fund (including the proceeds
of any investments thereof) that remains unclaimed by the stockholders of
the Company for six months after the Effective Time shall be repaid to the
Surviving Corporation. Any stockholders of the Company who have not
theretofore complied with Section 2.8 shall thereafter look only to Parent
and the Surviving Corporation for payment of their claim for the Merger
Consideration per Share, without any interest thereon.
(e) To the fullest extent permitted by applicable law, none
of Parent, Acquisition Sub, the Company or the Disbursing Agent shall be
liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION SUB
Parent and Acquisition Sub represent and warrant to the Company as
follows:
Section 3.1 Organization and Qualification. Each of Parent and
Acquisition Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power to carry on its business as it is now being
conducted. Each of Parent and Acquisition Sub is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified would not result in a material adverse effect on Parent or its
ability to consummate the transactions contemplated by this Agreement.
Section 3.2 Authority Relating to this Agreement. Each of Parent
and Acquisition Sub has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Parent and Acquisition Sub of this
Agreement and the consummation by Parent and Acquisition Sub of the
transactions contemplated hereby have been duly and validly authorized by the
respective Boards of Directors of Parent and Acquisition Sub, and the
stockholder of Acquisition Sub, and no other corporate proceedings on the part
of Parent or Acquisition Sub are necessary to authorize this Agreement, or
commence the Offer or to consummate the transactions so contemplated by this
Agreement (including the Offer). This Agreement has been duly and validly
executed and delivered by each of Parent and Acquisition Sub and, assuming
this Agreement constitutes a valid and binding obligation of the Company, this
Agreement constitutes a valid and binding agreement of each of Parent and
Acquisition Sub, enforceable against each of Parent and Acquisition Sub in
accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally.
Section 3.3 Information Supplied. None of the information
supplied by Parent, Acquisition Sub and their respective affiliates
specifically for inclusion in the Schedule 14D-9 or the Proxy Statement (as
hereinafter defined), if required, shall, with respect to the Schedule 14D-
9, at the time such Schedule is filed with the SEC or first published, sent
or given to holders of Shares or the Offer is consummated or, with respect
to the Proxy Statement, at the time the Proxy Statement is mailed or at the
time of the 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 were made, not misleading. The letter to stockholders,
notice of meeting, proxy statement and form of proxy, or the information
statement, as the case may be, to be distributed to stockholders in
connection with the Merger, or any schedule required to be filed with the
SEC in connection therewith, are collectively referred to herein as the
"Proxy Statement." If, at any time prior to the Effective Time, any event
relating to Parent or any of its affiliates, officers or directors is
discovered by Parent that should be set forth in a supplement to the Proxy
Statement, Parent will promptly inform the Company.
Section 3.4 Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by Parent and Acquisition Sub nor
the consummation of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the respective
Certificates of Incorporation or Bylaws of Parent or Acquisition Sub, (ii)
require any consent, approval, order, authorization or permit of, or
registration, declaration or filing with or notification to, any Federal,
state or local government or any court, administrative or regulatory agency
or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity") by Parent or Acquisition Sub, except (A)
the filing of a premerger notification and report form by Parent under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "H-S-
R Act"), (B) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, (C) the filing of the Certificate
of Merger pursuant to the DGCL, (D) such consents, approvals, orders,
authorizations, registrations and declarations as may be required under the
law of any foreign country in which the Parent or any of its subsidiaries
conducts any business or owns any assets, (F) such filings and approvals as
may be required under the "blue sky", takeover or securities laws of
various states, or (G) where the failure to obtain any such consent,
approval, authorization or permit, or to make any such filing or
notification, would not prevent or delay consummation of the Offer or the
Merger or would not otherwise prevent Parent from performing its
obligations under this Agreement; (iii) result in a default (or give rise
to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which Parent or any of its subsidiaries is a
party or by which Parent or any of its subsidiaries or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which, in the aggregate, would not result in
a material adverse effect on Parent; or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any
of its subsidiaries or any of their respective assets, except for
violations which in the aggregate would not result in a material adverse
effect on Parent.
Section 3.5 Financing. At each of (i) the time of acceptance for
purchase by Acquisition Sub of Shares pursuant to the Offer and (ii) the
Effective Time, Parent will have, and will make available to Acquisition
Sub, the funds necessary to consummate the Offer and the Merger and the
transactions contemplated thereby, and to pay related fees and expenses.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to Parent and
Acquisition Sub as follows:
Section 4.1 Organization and Qualification.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power to carry on its business as it is now being
conducted. The Company is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
result in a Material Adverse Effect.
(b) The only subsidiaries of the Company (collectively,
"Subsidiaries") are those identified in Schedule 4.1(b). Each Subsidiary is a
corporation or other organization duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization
and has the requisite corporate or other power to carry on its business as it
is now being conducted, and each Subsidiary is duly qualified to do business,
and is in good standing, in each jurisdiction where the character of its
properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
result in a Material Adverse Effect. Except as disclosed on Schedule 4.1(b),
all of the outstanding shares of capital stock of each Subsidiary have been
validly issued and are fully paid and non-assessable and are owned by the
Company, by another wholly-owned Subsidiary of the Company or by the Company
and another such wholly-owned Subsidiary, free and clear of all pledges,
claims, equities, options, liens, charges, rights of first refusal, "tag" or
"drag" along rights, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). Except for the capital stock or other
equity interests of the Subsidiaries or as otherwise specifically indicated in
the SEC Documents (as defined in Section 4.5) or in Schedule 4.1(b), the
Company does not own, directly or indirectly, any capital stock or other
equity interest in any corporation, partnership, joint venture or other
entity. The Company has made available to Parent complete and correct copies
of its Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation") and Bylaws and the comparable charters and bylaws or other
organizational documents of the Subsidiaries, in each case as amended to the
date of this Agreement.
Section 4.2 Capitalization.
(a) The authorized capital stock of the Company consists of
20,000,000 Common Shares and 5,000,000 shares of Preferred Stock, par value $1
per share. All of the issued and outstanding Shares have been duly authorized
and validly issued and are fully paid and nonassessable and are not subject to
preemptive rights. As of September 19, 1997, 13,793 Series A Preferred
Shares, 749,486 Series B Preferred Shares and 14,113,623 Common Shares were
issued and outstanding and an aggregate of 1,622,050 Common Shares were
reserved for issuance pursuant to the 1996 Comprehensive Stock Plan of Score
Industries, Inc., the Company's 1978 and 1990 Stock Option Plans and the 1996
Non-Employee Director Stock Plan (collectively, the "Stock Plans"). Except as
disclosed in Schedule 4.2, such Common Shares reserved for issuance under the
Stock Plans have not been issued and will not prior to the Effective Time be
issued, and, except as disclosed in Schedule 4.2, no commitment has been or
will be made for their issuance other than under stock options outstanding
under the Stock Plans ("Stock Options") as of the date of this Agreement.
Schedule 4.2 sets forth the exercise prices and number of Shares in respect of
outstanding Stock Options under the Stock Plans. In addition, each outstanding
Common Share has a Preferred Stock purchase right attached, allowing the
holder upon the occurrence of certain events described in the Rights Agreement
between the Company and ChaseMellon Shareholder Services L.L.C., as Rights
Agent, relating to such rights (the "Rights"), as amended and restated on
February 2, 1996 (the "Rights Agreement"), to purchase one one-hundredth of a
share of Series C Junior Participating Preferred Stock at an exercise price of
$32. No shares of such Series C Preferred Stock have been issued as of the
date of this Agreement.
(b) There are no bonds, debentures, notes or other indebtedness
of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote. Except as set forth above or
otherwise on Schedule 4.2, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of the Subsidiaries is
a party or by which any of them is bound, obligating the Company or any of
the Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or any of the Subsidiaries or obligating the
Company or any of the Subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. Except as disclosed in Schedule 4.2, there are
no outstanding contractual obligations of the Company or any of the
Subsidiaries to repurchase, redeem or otherwise acquire, or providing
preemptive or registration rights with respect to, any shares of capital
stock of the Company or any of the Subsidiaries. The Company and the
Subsidiaries do not have outstanding any loans to any person in respect of
the purchase of securities issued by the Company or any Subsidiary.
Section 4.3 Authority Relative to this Agreement. The Company
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby (subject with
respect to the Merger to approval of the Merger and this Agreement by the
holders of a majority of the votes represented by the Shares). 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 and approved by the affirmative vote of no fewer than 4/5ths of the
duly elected, qualified and acting members of the Board of Directors of the
Company, and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated, other than (with respect to the Merger) the approval of this
Agreement by the holders of a majority of the votes represented by the Shares,
voting together as one class, and no separate vote of the Preferred Shares
will be required for such approval. This Agreement has been duly and validly
executed and delivered by the Company, and, assuming this Agreement
constitutes a valid and binding obligation of each of Parent and Acquisition
Sub, constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting creditors' rights generally.
Section 4.4 Absence of Certain Changes. Except as disclosed in
the SEC Documents or in Schedule 4.4 or as contemplated by this Agreement,
since June 30, 1997 until the commencement of the Offer, no event has occurred
or will occur and no circumstances exist or will exist, and as of the date
hereof the Company is not aware of any event or circumstances which may
reasonably be likely to occur or exist, that would be reasonably likely to
result in a Material Adverse Effect, except for general economic changes,
changes that affect the industry of the Company or any Subsidiary generally,
and changes in the Company's business after the date hereof attributable
solely to actions taken by Parent or Acquisition Sub. Except as disclosed in
the SEC Documents or in Schedule 4.4, since June 30, 1997, there has not been
(a) any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of the Company or any redemption
or other acquisition by the Company of any Shares; (b) any entry into any
agreement, commitment or transaction by the Company or any Subsidiary which
is material to the Company and the Subsidiaries taken as a whole, except
agreements, commitments or transactions in the ordinary course of business,
(c) any split, combination or reclassification of the Company's capital stock
or any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
(d)(i) any granting by the Company or any of the Subsidiaries to any officer
or key employee of the Company or any of the Subsidiaries of any increase in
compensation, except in the ordinary course of business or as was required
under employment agreements in effect as of the date of the most recent
financial statements included in the SEC Documents or (ii) any entry by the
Company or any Subsidiary into any employment, severance or termination
agreement with any such officer or key employee or granting by the Company or
any Subsidiary to any such officer or key employee of any increase in
severance or termination pay, except (A) as was required under employment,
severance or termination agreements in effect as of the date of the most
recent financial statements included in the SEC Documents or (B) as disclosed
on Schedule 5.6(d) of the Disclosure Schedule, or (e) any damage, destruction
or loss, whether or not covered by insurance, that has or would be reasonably
likely to have a Material Adverse Effect or (f) any change in accounting
methods, principles or practices by the Company or any Subsidiary materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in generally accepted accounting principles.
Section 4.5 Reports. Since January 1, 1995, the Company has
filed all required forms, reports and documents with the SEC required to be
filed by it pursuant to the federal securities laws and the SEC rules and
regulations thereunder (collectively, the "SEC Documents"), all of which have
complied as of their respective filing dates in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, and the
rules promulgated thereunder. None of such forms, reports or documents
required by the Exchange Act at the time filed, nor any of such forms, reports
or documents required by the Securities Act as of the date of their
effectiveness 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 light of the circumstances under which they
were made, not misleading, except to the extent that information contained in
any SEC Document has been revised or superseded by a later-filed SEC Document
filed and publicly available prior to the date hereof. The financial
statements of the Company included in the SEC Documents comply as to form in
all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except,
in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
Section 4.6 Proxy Statement. If a Proxy Statement is required
for the consummation of the Merger under applicable law, the Proxy Statement
will comply in all material respects with the Exchange Act, except that no
representation is made by the Company with respect to information supplied by
Parent or any affiliate of Parent specifically for inclusion in the Proxy
Statement. None of the information supplied by the Company specifically for
inclusion in the Proxy Statement shall, at the time the Proxy Statement is
mailed or at the time of the 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 were made, not misleading.
Section 4.7 Consents and Approvals; No Violation. Except as set
forth on Schedule 4.7, neither the execution and delivery of this Agreement by
the Company nor the consummation of the transactions contemplated hereby will
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or require any consent or approval
by a party under or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets or the
Company or any Subsidiary under (i) the Certificate of Incorporation or Bylaws
of the Company or the comparable charter or organizational documents of any
Subsidiary, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to the Company or any Subsidiary or its respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any
Subsidiary or their respective properties or assets, other than, in the case
of clauses (ii) or (iii), any such conflicts, violations, defaults, rights or
Liens that individually or in the aggregate would not have a Material Adverse
Effect. Except as set forth on Schedule 4.7, no consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by the Company or any Subsidiary in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated by this Agreement,
except for (i) the filing of a premerger notification and report form by the
Company under the H-S-R Act, (ii) requirements under the Securities Act and
the Exchange Act, (iii) the filing of the Certificate of Merger pursuant to
the DGCL and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business; (iv) requirements
under state environmental statutes or regulations and (v) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not have a Material Adverse
Effect.
Section 4.8 Fees and Commissions. Except for those fees and
expenses payable to JPMorgan pursuant to the letter agreement, dated July 23,
1997, no person is entitled to receive from the Company or any Subsidiary any
investment banking, brokerage or finder's fee in connection with this
Agreement or the transactions contemplated hereby. A copy of the
aforementioned agreement has previously been delivered to Parent.
Section 4.9 Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9 or (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement"),
will, at the respective times the Offer Documents, the Schedule 14D-9 and the
Information Statement are filed with the SEC or first published, sent or given
to the Company's stockholders, 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. The Schedule 14D-9 and the Information
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect
to statements made or incorporated by reference therein based on information
supplied by Parent or Acquisition Sub specifically for inclusion or
incorporation by reference therein.
Section 4.10 Litigation. Except as disclosed in the SEC
Documents or in Schedule 4.10 of the Disclosure Statement, as of the date
hereof there is no suit, action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary before any court
or arbitrator or before or by any governmental body, agency or official that
would be reasonably likely to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary having, or which
is reasonably likely to have, a Material Adverse Effect.
Section 4.11 Patents and Other Proprietary Rights. To the
Company's knowledge, except as disclosed in Schedule 4.11, the Company and
Subsidiaries have rights to use, whether through ownership, licensing or
otherwise, all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of
which the Company is aware that are necessary for its business as now
conducted (collectively, "Intellectual Property Rights"). Except as disclosed
in Schedule 4.11, the Company and Subsidiaries have not assigned, hypothecated
or otherwise encumbered any of the Intellectual Property Rights and none of
the licenses included in the Intellectual Property Rights purport to grant
sole or exclusive licenses to another entity or person, including, without
limitation, sole or exclusive licenses limited to specific fields of use. To
the Company's knowledge, except as disclosed in Schedule 4.11, the patents
owned by the Company and Subsidiaries are valid and enforceable and any patent
issuing from patent applications of the Company and Subsidiaries will be valid
and enforceable, except as such invalidity or unenforceability would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Affect. Except as disclosed in writing to Parent prior to the date
hereof: (i) the Company has no knowledge of any infringement by any other
party of any of the Intellectual Property Rights, and (ii) the Company and
Subsidiaries have not entered into any agreement to indemnify any other party
against any charge of infringement of any of its Intellectual Property Rights
except for such matters as would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Affect. To the Company's
knowledge, the Company and Subsidiaries have not and do not violate or infringe
any intellectual property right of any other person or entity, and the Company
and Subsidiaries have not received any communication alleging that any of them
violates or infringes the intellectual property right of any other person or
entity, except as disclosed in writing to Parent prior to the date hereof and
except for any such violations or infringements as would not, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect. The
Company and Subsidiaries are not subject to any pending suit for infringing
any intellectual property right of another entity or person.
Section 4.12 Benefit Plans; ERISA Compliance.
(a) Schedule 4.12(a) sets forth a complete list of all
"employee benefit plans" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), bonus,
pension, profit sharing, deferred compensation, incentive compensation,
excess benefit, stock, stock option, severance, termination pay, change in
control or other material employee benefit plans, programs or arrangements,
including, but not limited to, those providing medical, dental, vision,
disability, life insurance and vacation benefits (other than those required
to be maintained by law), qualified or unqualified, funded or unfunded,
foreign or domestic currently maintained, or contributed to, or required to
be maintained or contributed to, by the Company or any other person or
entity that, together with the Company, is treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each a "Commonly Controlled Entity") for the benefit of any
current or former employees, officers, directors or independent contractors
of the Company or any Subsidiary and with respect to which the Company or
any Subsidiary has any liability (collectively, the "Benefit Plans").
Except with respect to any "multiemployer plan" (as defined in Section
3(37) of ERISA), the Company has delivered or made available to Parent
true, complete and correct copies of each Benefit Plan and related trust
agreement and annuity contract and (to the extent applicable) a copy of
each Benefit Plan's current summary plan description. In addition, to the
extent applicable, the Company has provided or made available to Parent a
copy of the most recent IRS determination letter issued, and copies of the
two most recently filed IRS Forms 5500 together with all schedules,
actuarial reports and accountants' statements for each Benefit Plan,
including Form 5500, Schedule B for each Benefit Plan that is a "defined
benefit plan" (as defined in Section 3(35) of ERISA), other than a
multiemployer plan.
(b) To the Company's knowledge, each Benefit Plan has been
administered in accordance with its terms and in compliance with the
applicable provisions of ERISA and the Code where the failure to so
administer or comply would have a Material Adverse Effect.
(c) All Benefit Plans (other than a multiemployer plan)
intended to be qualified under Section 401(a) of the Code have been the
subject of determination letters from the Internal Revenue Service to the
effect that such Benefit Plans are qualified and exempt from Federal income
taxes under Section 401(a) and 501(a), respectively, of the Code as amended
at least through the statutory changes implemented under the Tax Reform Act
of 1986, and no such determination letter has been revoked nor, to the
knowledge of the Company, has revocation been threatened, nor has any such
Benefit Plan been amended since the date of its most recent determination
letter or application therefor in any respect that would adversely affect
its qualification.
(d) No Benefit Plan which is a "single-employer plan" (as
defined in Section 4001(a)(15) of ERISA) and which is subject to Title IV of
ERISA is, as of its most recent valuation date, unfunded by an amount which
would have Material Adverse Effect based on actuarial assumptions indicated in
the most recent actuarial valuation report. To the knowledge of the Company,
neither the Company nor any of the Subsidiaries is aware of any facts or
circumstances that would materially and adversely change the funded status of
any such Benefit Plans. None of the Benefit Plans has an "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA or Section 412 of
the Code), and there has been no application for a waiver of the minimum
funding standards imposed by Section 412 of the Code with respect to any
Benefit Plan.
(e) To the Company's knowledge, no person or entity has incurred
any liability under Title IV of ERISA or Section 412 of the Code during
the time such person or entity was required to be treated as a single
employer with the Company under Section 414 of the Code that would have a
Material Adverse Effect.
(f) During the last five years, to the Company's knowledge,
there has been no "reportable event" (as that term is defined in Section 4043
of ERISA) which is reasonably likely to have a Material Adverse Effect with
respect to any Benefit Plan that is a single employer plan subject to Title IV
of ERISA.
(g) With respect to any Benefit Plan that is an employee
welfare benefit plan (as defined in Section 3(1) of ERISA), (i) to the best
of the Company's knowledge, no such Benefit Plan provides benefits,
including without limitation, death or medical benefits, except as set
forth on Schedule 4.12(g), beyond termination of employment or retirement
other than (A) coverage mandated by law or (B) death or retirement benefits
under a Benefit Plan qualified under Section 401(a) of the Code, and (ii)
each such Benefit Plan (including any such Plan covering retirees or other
former employees) may be amended or terminated without liability that would
have a Material Adverse Effect to the Company or any of its subsidiaries on
or at any time after the consummation of the Offer.
(h) Except as set forth on Schedule 4.12(h), no employee
of the Company or any Commonly Controlled Entity will become entitled to any
retirement, severance or similar benefit or enhanced or accelerated benefit
solely as a result of the transactions contemplated hereby. Without limiting
the generality of the foregoing, no amount required to be paid or payable to
or with respect to any employee of the Company or any Commonly Controlled
Entity in connection with the transactions contemplated hereby (either solely
as a result thereof or as a result of such transactions in conjunction with
any other event) will be an "excess parachute payment" within the meaning of
Section 280G of the Code.
(i) Except as indicated on Schedule 4.12(i), at no time
since December 31, 1990, have the Company or any Commonly Controlled
Entity, been required to contribute to, or incurred any withdrawal
liability, within the meaning of Section 4201 of ERISA to any multiemployer
pension plan, within the meaning of Section 3(37) of ERISA. All required
contributions, withdrawal liability payments or other payments of any type
that the Company or any Commonly Controlled Entity have been obligated to
make to any multiemployer plan have been duly and timely made. Any
withdrawal liability incurred with respect to any multiemployer plan has
been fully paid as of the date hereof. Neither the Company nor any
Commonly Controlled Entity has undertaken any course of action that could
reasonably be expected to lead to a complete or partial withdrawal from any
multiemployer plan that would reasonably be expected to result in a
withdrawal liability that would have a Material Adverse Effect. Set forth
next to each multiemployer plan listed on Schedule 4.12(i) is the amount of
the withdrawal liability that would be incurred by the Company or any
Commonly Controlled Entity with respect to such plan, under Section 4201 of
ERISA, if the Company or any Commonly Controlled Entity were to completely
withdraw from such multiemployer plan on the date hereof.
(j) Except as listed on Schedule 4.12(j), neither the Company
nor any Commonly Controlled Entity has any secondary liability resulting
from a transaction described in ERISA Section 4204 that would, if the
Company or Commonly Controlled Entity were to become primarily liable,
reasonably be likely to have a Material Adverse Effect.
(k) Except as disclosed in the SEC Documents or in Schedule
5.6(d), there exist no employment, consulting, severance, termination or
indemnification agreements, arrangements or understandings between either of
the Company or any Subsidiary and any current or former officer or director of
either of the Company or any Subsidiary or for which either of the Company or
any Subsidiary is liable.
Section 4.13 Taxes.
(a) Each of the Company and each Subsidiary has filed all
Federal income tax returns and all other material tax returns and reports
(including information returns and reports) required to be filed by it on
or before the date hereof and on or before the date Shares are accepted for
payment pursuant to the Offer (or requests for extensions to file such tax
returns have been timely filed, granted and have not expired). All such
returns are complete and correct in all material respects, have been
prepared in accordance with all applicable laws and requirements and
accurately reflect in all material respects the taxable income (or other
measure of tax) of the party filing the same. Except as disclosed on
Schedule 4.13, each of the Company and each Subsidiary has paid (or the
Company has paid on their behalf) all taxes shown to be due on such return,
all material taxes for which no return was required to be filed and all
other taxes for which a notice of assessment or demand for payment has been
received. The most recent financial statements contained in the SEC
Documents reflect an adequate reserve for all taxes payable by the Company
and the Subsidiaries for all taxable periods and portions thereof through
the date of such financial statements.
(b) True and complete copies of federal and state income
returns of the Company and each Subsidiary for each of the taxable years
ended December 31, 1992 through December 31, 1996 have been made available
to Parent.
(c) Except as disclosed on Schedule 4.13, no deficiencies
for any taxes have been proposed, asserted or assessed against the Company
or any Subsidiary that have not yet been paid or settled, and no requests
for waivers of the time to assess any such taxes are pending and neither
the Company nor any Subsidiary is currently the subject of an audit or
examination with respect to tax matters and neither the Company nor any
Subsidiary has received notice from a taxing authority of its intention to
conduct such an audit or examination. No taxing authority for a
jurisdiction in which the Company or any Subsidiary does not file tax
returns has asserted that the Company or any such Subsidiary is or may be
subject to tax by such jurisdiction. The Federal income tax returns of the
Company and each of the Subsidiaries consolidated in such returns have been
examined by and settled with the Internal Revenue Service for all years
through December 31, 1992.
(d) Except as disclosed on Schedule 4.13, neither the Company
nor any Subsidiary (i) currently has in effect any consent under Section
341(f) of the Code; (ii) currently has in effect a waiver or consent
extending any statute of limitation for the assessment or collection of
tax, which waiver or consent remains outstanding; (iii) has ever joined in
or been required to join in the filing of a consolidated Federal income tax
return or a combined or consolidated state income tax return other than one
for which the Company is the common parent; (iv) has ever applied for a
ruling with respect to a tax matter or entered into a closing agreement
with respect to a tax matter that has a continuing effect; (v) has ever
filed or been the subject of an election under Section 338(g) or Section
338(h)(10) of the Code or caused or been the subject of a deemed election
under Section 338(e) of the Code; or (vi) has ever agreed to make or been
required to make an adjustment under Section 481 of the Code by reason of a
change in accounting method or otherwise that has continuing effect.
Except as disclosed on Schedule 4.13, neither the Company nor any
Subsidiary (i) owns an interest in any entity or is a party to an
arrangement that is treated as a partnership for federal income tax
purposes or (ii) is a party to a tax sharing or tax allocation agreement
pursuant to which it could be liable for taxes of another person.
(e) As used in this Agreement, "taxes" shall include all
Federal, state, local and foreign income, property, sales, excise and other
taxes, tariffs or governmental charges of any nature whatsoever.
(f) The Company is not a "real property holding corporation"
as defined in the Code.
Section 4.14 Compliance with Applicable Laws.
(a) Except for matters disclosed in the SEC Documents
and during the Phase I site assessments performed by Dames & Xxxxx, to the
knowledge of the Company, each of the Company and each Subsidiary has
obtained and maintained all Federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses,
notices, permits and rights ("Permits") necessary as of the Effective Time
for it to own, lease or operate its properties and assets as now owned,
leased or operated and to carry on its business as now conducted, except
for any failure to obtain or maintain such Permits which is not reasonably
likely to have a Material Adverse Effect. Except for matters disclosed in
the SEC Documents and during the Phase I site visits performed by Dames &
Xxxxx, to the knowledge of the Company, each of the Company and each
Subsidiary has complied with and is in compliance with all statutes, laws,
Environmental Laws, ordinances, rules, orders and regulations of any
Governmental Entity, Permits and Environmental Permits applicable prior to
or as of the Effective Time, except for noncompliance which is not
reasonably likely to have a Material Adverse Effect. "Environmental Permit"
means Permit under any federal, state, local or foreign Environmental Law
(as hereinafter defined) applicable prior to or as of the Effective Time.
The term "Environmental Laws" means any federal, state, local or foreign
statute, code, ordinance, rule, regulation, judgment, order, writ, decree,
injunction, common law, Permit, or settlement or consent agreement
applicable prior to or as of the Effective Time relating to the protection
of the environment or human health or to Hazardous Materials (as defined
below).
(b) Except for matters disclosed in the SEC Documents and
during the Phase I site assessments performed by Dames & Xxxxx, to the
knowledge of the Company, there have been no releases of Hazardous
Materials by the Company or any Subsidiary or by any predecessor in
interest in, on or under any properties now owned, operated or leased by
the Company or any Subsidiary which could be the basis for liability under
Environmental Laws and, to the knowledge of the Company, there have been no
releases of Hazardous Material by the Company or any Subsidiary or any
predecessor in interest in, on or under any properties formerly owned,
operated or leased by the Company or any Subsidiary which could be the
basis for liability under Environmental Laws, except for those which are
not reasonably likely to have a Material Adverse Effect. The term
"Hazardous Materials" means hazardous or toxic materials, substances or
wastes that are regulated by or that could be the basis for liability under
Environmental Laws.
(c) Except for matters disclosed in the SEC Documents and
during the Phase I site assessments performed by Dames & Xxxxx, to the
knowledge of the Company, neither the Company nor any Subsidiary has
received any written notice of violation, citation, summons or order, been
served with a complaint or assessed a penalty and no investigation is
pending or has been threatened by any governmental entity within the five
year period immediately preceding the date hereof or, if prior to that time
period, which remains unresolved, and which reasonably could be expected to
require the Company or any Subsidiary to expend money or abide by
conditions contained in settlement agreements or consent decrees, which is
reasonably likely to have a Material Adverse Effect: (i) with respect to
any alleged violation by the Company or any Subsidiary or any of its or
their predecessors in interest of any Environmental Law; or (ii) with
respect to any alleged failure by the Company or any Subsidiary to have
complied with any Environmental Permit; or (iii) with respect to any use,
possession, generation, treatment, storage, recycling, transportation or
disposal (collectively, "Management" or when used as a verb, "Managed"), or
release of any Hazardous Materials by or on behalf of the Company or any
Subsidiary or any of their predecessors in interest.
(d) Except for matters disclosed in the SEC Documents and
during the Phase I site assessments performed by Dames & Xxxxx, to the
knowledge of the Company, neither the Company nor any Subsidiary has
received any written request for information, notice of claim, demand or
notification that it or any predecessor in interest is or may be
potentially responsible or/and liable under Environmental Laws, with
respect to any investigation or clean-up of any threatened or actual
release of any Hazardous Material within the five-year period immediately
preceding the date hereof or, if prior to that time period, which remains
unresolved, and which reasonably could be expected to require the Company
or any Subsidiary to expend money to an extent which is reasonably likely
to have a Material Adverse Effect.
(e) Except for matters disclosed in the SEC Documents and
during the Phase I site assessments performed by Dames & Xxxxx, to the
knowledge of the Company, no Hazardous Materials Managed by or on behalf of
the Company or any of the Subsidiaries or any predecessor in interest has
come to be located at any site which is listed pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Comprehensive Environmental Response,
Compensation and Liability Information System ("CERCLIS") or on any similar
published state list, or which is the subject of federal, state or local
enforcement actions or investigations which may reasonably lead to claims
against the Company or any Subsidiary under Environmental Laws for cleanup
costs, remedial work, damages to natural resources or for personal injury
claims, which are reasonably likely to have a Material Adverse Effect.
(f) Except for matters disclosed in the SEC Documents,
in the materials made available for review by Parent and during the Phase I
site assessments performed by Dames & Xxxxx, to the knowledge of the
Company, there have been no environmental inspections, investigations,
studies, audits, tests, reviews or other analyses, other than those
required to be done routinely pursuant to Environmental Permits or
Environmental Laws, conducted in relation to any property or business now
or previously owned, operated or leased by the Company or any Subsidiary
which have been performed by or on behalf of the Company or any Subsidiary
or, to the knowledge of the Company, by any other person regarding any
environmental condition, matter or activity which could be the basis of
liability under Environmental Laws which is reasonably likely to have a
Material Adverse Effect.
(g) For the purposes of this Section 4.14 only, the "knowledge
of the Company" shall mean the actual knowledge of the executive officers
of the Company.
Section 4.15 State Takeover Statutes. The Board of Directors of
the Company has approved the Offer, the Merger and the other transactions
contemplated by this Agreement in accordance with the provisions of Section
203 of the DGCL.
Section 4.16 Labor Matters. Except as disclosed in Schedule
4.16, to the knowledge of the Company, as of the date hereof (a) no employee
of the Company or any Subsidiary is represented by any union or other labor
organization; (b) the Company and all of the Subsidiaries are in material
compliance with applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice; (c) there is no unfair labor practice
complaint against the Company or any of the Subsidiaries pending before the
National Labor Relations Board; (d) there is no labor strike, dispute,
slowdown, representation campaign or work stoppage pending or threatened
against or affecting the Company or any of the Subsidiaries; (e) no material
grievance or arbitration proceeding arising out of or under collective
bargaining agreements is pending and no claim therefor has been asserted
against the Company or the Subsidiaries; and (f) neither the Company nor any
of the Subsidiaries has experienced any material work stoppage since January
1, 1996.
Section 4.17 Undisclosed Liabilities. Except as and to the
extent disclosed in the SEC Documents, except for liabilities incurred in the
ordinary course of business and otherwise not in contravention of this
Agreement and except for liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby, the Company
does not have any liabilities or obligations of any nature (whether absolute,
contingent or otherwise) that would be reasonably likely to have a Material
Adverse Effect.
Section 4.18 Certain Agreements. Except as disclosed in Schedule
4.18, neither the Company nor any of the Subsidiaries is a party to, or bound
by, any contract or agreement that materially limits the ability of the
Company directly or through any of its subsidiaries to compete in any line of
business or with any person in any geographic area during any period of time.
Section 4.19 Amendment of Rights Agreement. The Board of
Directors of the Company has taken all action necessary to (i) render the
Rights Agreement inapplicable to the Offer, the Merger and the other
transactions contemplated by this Agreement and (ii) ensure that (A) neither
Parent nor any of its wholly-owned subsidiaries will become an "Acquiring
Person" (as defined in the Rights Agreement) by reason of consummation of the
transactions contemplated by this Agreement and (B) a "Shares Acquisition
Date", "Distribution Date" or "Triggering Event" (each as defined in the
Rights Agreement) does not occur by reason of the approval, execution or
delivery of this Agreement, the consummation of the Offer, the Merger or the
other transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS
Section 5.1 Conduct of Business of the Company. Except as
contemplated by this Agreement or as approved in writing by Parent, during the
period from the date of this Agreement to the acceptance of Shares for
payment, the Company and the Subsidiaries will each conduct its operations
according to its ordinary and usual course of business. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in
this Agreement, neither the Company nor any Subsidiary, without the prior
written consent of Parent, will
(i) issue, sell or pledge, or authorize or propose
the issuance, sale or pledge of (A) additional shares of capital stock of any
class (including the Shares), or securities convertible into any such shares,
or any rights, warrants or options to acquire any such shares or other
convertible securities, or grant or accelerate any right to convert or
exchange any securities of the Company for shares, other than (1) Shares
issuable pursuant to the terms of outstanding Stock Options and commitments
disclosed in Section 4.2, or (2) issuance of shares of capital stock to the
Company by a wholly-owned Subsidiary, or (B) any other securities in respect
of, in lieu of or in substitution for Shares outstanding on the date thereof or
split, combine or reclassify any of the Company's capital stock;
(ii) purchase, redeem or otherwise acquire, or
propose to purchase or otherwise acquire, any of its outstanding securities
(including the Shares);
(iii) declare, set aside or pay any dividend or other
distribution on any shares of capital stock of the Company other than the
regular quarterly dividends of $.275 per share with respect to the Series A
Preferred Shares and $.25 per share with respect to the Series B Preferred
Shares, except that a direct or indirect wholly-owned Subsidiary may pay a
dividend or distribution to its parent;
(iv) except as disclosed to Parent prior to the date
hereof, make any acquisition of a material amount of assets or securities, any
disposition (including by way of mortgage, license, encumbrance or any Lien)
of a material amount of assets or securities, or enter into a material
contract or release or relinquish any material contract rights, or make any
amendments, or modifications thereto, except in all instances for actions in
the ordinary course of business;
(v) (A) except in the ordinary course of business,
incur any indebtedness for borrowed money or guarantee any such indebtedness
of another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any Subsidiary,
guarantee any debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of the
foregoing or (B) make any loans, advances of capital contributions to, or
investments in, any other person, other than to the Company or any direct or
indirect wholly owned Subsidiary;
(vi) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business or in accordance with their
terms;
(vii) propose or adopt any amendments (initiated by the
Board of Directors) to the Certificate of Incorporation or Bylaws of the
Company (or any such similar organizational documents of the Subsidiaries);
(viii) except as disclosed in Schedule 5.6(d) of the
Disclosure Statement, enter into any new employment, severance or termination
agreements with, or grant any increase in severance or termination pay to, any
officers, directors or key employees or grant any material increases in the
compensation or benefits to officers, directors and key employees;
(ix) change any accounting methods, principles or
practices materially affecting their assets, liabilities or business, except
insofar as may be required by a change in generally accepted accounting
principles;
(x) make any material tax election or settle or
compromise any material income tax liability;
(xi) except as disclosed to Parent prior to the date
hereof, make or agree to make any new capital expenditure or expenditures not
previously committed to which individually is in excess of $500,000 or which
in the aggregate are in excess of $1 million; or
(xii) agree in writing or otherwise to take any of the
foregoing actions or any action which would make any representation or
warranty in this Agreement untrue or incorrect at any time prior to acceptance
of Shares for payment in the Offer.
Section 5.2 No Solicitation.
(a) The Company shall not, nor shall it permit any
Subsidiary to, nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other advisor or
representative of the Company or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or knowingly encourage the submission of
any Takeover Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with
respect to any inquiries or the making of any proposal that constitutes or
may reasonably be expected to lead to a Takeover Proposal; provided,
however, that prior to the acceptance for payment of Shares pursuant to the
Offer, to the extent consistent with the fiduciary obligations of the Board
of Directors of the Company, as determined in good faith by the Board of
Directors after consultation with outside counsel, the Company may upon
receipt by the Company of an unsolicited written, bona fide Takeover
Proposal, furnish information with respect to the Company pursuant to a
customary confidentiality agreement containing "standstill" provisions no
less onerous than in the Confidentiality Agreement (as defined in Section
5.3) and participate in negotiations regarding such Takeover Proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer, director
or employee of the Company or any Subsidiary or any investment banker,
attorney or other advisor or representative of the Company or any
Subsidiary, shall be deemed to be a breach of this Section 5.2(a) by the
Company. For purposes of this Agreement, "Takeover Proposal" means any
proposal or offer for, or any expression of interest (by public
announcement or otherwise) by any person other than Parent or its
affiliates in, a merger or other business combination involving the Company
or any proposal or offer to acquire in any manner (including through a
joint venture with the Company), directly or indirectly, an equity interest
in not less than 20% of the outstanding voting securities of, or assets
representing not less than 20% of the annual revenues or net earnings of
the Company and the Subsidiaries taken as a whole.
(b) Neither the Board of Directors of the Company nor
any committee thereof shall (i) approve or recommend, or propose to approve
or recommend, any Takeover Proposal or (ii) cause the Company or any of its
Subsidiaries to enter into any agreement with respect to any Takeover
Proposal. Notwithstanding the foregoing, in the event the Board of
Directors of the Company receives an unsolicited Takeover Proposal that, in
the exercise of its fiduciary obligations (as determined in good faith by
the Board of Directors and after consultation with outside counsel), it
determines to be a Superior Proposal, the Board of Directors may (subject
to the following sentences) withdraw or modify its approval or
recommendation of the Offer, this Agreement and the Merger taken together,
or approve or recommend any such Superior Proposal, in order to enter into
an agreement with respect to such a Superior Proposal, in each case at any
time after the third business day following Parent's receipt of written
notice (a "Notice of Superior Proposal") advising Parent that the Board of
Directors has received a Superior Proposal and specifying the material
terms and conditions of such Superior Proposal. For purposes of this
Agreement, a "Superior Proposal" means any bona fide Takeover Proposal on
terms which the Board of Directors of the Company determines in its good
faith judgment, after consultation with JPMorgan or another financial
advisor of nationally recognized reputation, to be more favorable to the
Company's stockholders than the Offer and the Merger and for which
financing is available. Nothing contained herein shall prohibit the
Company from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act.
(c) In addition to the obligations of the Company set
forth in paragraph (b) above, the Company shall promptly advise Parent of
any request for non-public information or any Takeover Proposal, or any
inquiry with respect to or which could reasonably be expected to lead to
any Takeover Proposal and the material terms and conditions of such
request, Takeover Proposal or inquiry.
(d) Neither the Board of Directors of the Company nor any
committee thereof shall withdraw or modify, or propose to withdraw or modify,
in a manner adverse to Parent or Acquisition Sub, the approval or
recommendation by such Board of Directors or any such committee of the Offer,
this Agreement or the Merger, unless failure to do so could be a breach of its
fiduciary obligations as they would exist without the foregoing prohibition
(as determined in good faith by the Board of Directors and after consultation
with outside counsel).
Section 5.3 Access to Information.
(a) Between the date of this Agreement and the Effective
Time, the Company will upon reasonable notice (i) give Parent and its
authorized representatives reasonable access during regular business hours
to the Company's and each Subsidiary's plants, offices, warehouses and
other facilities and to its books and records, (ii) permit Parent to make
such inspections as it may require, and (iii) cause its officers and those
of the Subsidiaries to furnish Parent with such financial and operating
data and other information with respect to the business and properties of
the Company and the Subsidiaries as Parent may from time to time reasonably
request.
(b) Information obtained by Parent pursuant to this Section 5.3
shall be subject to the provisions of the confidentiality agreement between
the Company and Parent, dated August 7, 1997 (the "Confidentiality
Agreement"), which remains in full force and effect, but shall terminate upon
the acceptance for payment of the Shares pursuant to the Offer.
Section 5.4 Reasonable Best Efforts.
(a) Subject to Section 5.2, each of the parties hereto will use
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. Such reasonable
best efforts shall include, without limitation, (i) obtaining all necessary
consents, approvals or waivers from third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this
Agreement and (ii) opposing vigorously any litigation or administrative
proceeding relating to this Agreement or the transactions contemplated hereby,
including, without limitation, promptly appealing any adverse court or agency
order. Notwithstanding the foregoing or any other provisions contained in
this Agreement to the contrary, neither Parent nor any of its affiliates shall
be under any obligation of any kind to agree with any Governmental Entity,
including but not limited to any governmental or regulatory authority with
jurisdiction over the enforcement of any applicable federal, state, local and
foreign antitrust, competition or other similar laws, or any other party to
sell or otherwise dispose of, hold separate (through the establishment of a
trust or otherwise) particular assets or categories of assets or businesses of
any of the Company, Parent or any of Parent's affiliates.
(b) The Company shall give and make all required notices,
filings and reports to the appropriate persons with respect to the Permits and
Environmental Permits and comply with all applicable requirements under
Environmental Laws that may be necessary for the sale and purchase of the
business and the ownership, operation and use of the assets of Surviving
Corporation by Parent after the Effective Time.
(c) The Company and its Board of Directors shall (i) take all
action necessary to ensure that no state takeover statute or similar statute
or regulation is or becomes applicable to the Offer, the Merger, this
Agreement or any of the other transactions contemplated by the foregoing and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Offer, the Merger, this Agreement or any other transactions
contemplated by the foregoing, take all action necessary to ensure that the
Offer, the Merger and the other transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation
on the Offer, the Merger and the other transactions contemplated by this
Agreement.
Section 5.5 Indemnification, Exculpation and Insurance.
(a) All rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
now existing in favor of the current or former directors or officers of the
Company and the Subsidiaries as provided in their respective certificates of
incorporation or by-laws (or comparable organizational documents) and any
indemnification agreements of the Company, the existence of which does not
constitute a breach of this Agreement, shall be assumed by the Surviving
Corporation in the Merger, without further action, as of the Effective Time
and shall survive the Merger and shall continue in full force and effect (to
the extent consistent with applicable law) in accordance with their terms.
(b) For six years after the Effective Time, Parent shall cause
the Surviving Corporation to honor its commitments and obligations pursuant to
this Section 5.5. In the event that Parent or the Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other person and is not 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, proper provision will be made so that the successors and
assigns of Parent or the Surviving Corporation, as the case may be, assume the
obligations set forth in this Section 5.5(b).
(c) For six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time, including
but not limited to the transactions contemplated by this Agreement, covering
each person currently covered by the Company's officers' and directors'
liability insurance policy, or who becomes covered by such policy prior to the
Effective Time, on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof; provided that in
satisfying its obligation under this Section 5.5 the Surviving Corporation
shall not be obligated to pay annual premiums in excess of 175% of the amount
per annum the Company paid in its last full fiscal year.
(d) The provisions of this Section 5.5 are (i) intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) in addition to, and not in
substitution or, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
Section 5.6 Stock Options; Employee Plans and Benefits and
Employment Contracts.
(a) As soon as practicable following the date of this Agreement,
the Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such other
actions as are required in accordance with the Stock Plans to adjust the terms
of all outstanding Stock Options to provide that, at the Effective Time, each
Stock Option, whether vested or not, outstanding immediately prior to the
Effective Time be cancelled in exchange for a cash payment by the Company of
an amount equal to (i) the excess, if any, of (x) the price per Share to be
paid pursuant to the Offer over (y) the exercise price per Share subject to
such Stock Option, multiplied by (ii) the number of Shares for which such
Stock Option shall not theretofore have been exercised.
(b) All amounts payable pursuant to Section 5.6(a) shall be
subject to any required withholding of taxes and shall be paid without
interest. The Company shall use its best efforts to obtain all consents of
the holders of the Stock Options as shall be necessary to effectuate the
foregoing. Notwithstanding anything to the contrary contained in this
Agreement, payment shall, at Parent's request, be withheld in respect of any
Stock Option until all necessary consents of the holder are obtained with
respect to such Stock Option.
(c) The Stock Plans shall terminate as of the Effective Time, and
the provisions in any other Benefit Plan providing for the potential issuance,
transfer or grant of any capital stock of the Company or any Subsidiary or any
interest in respect of any capital stock of the Company or any Subsidiary
shall be deleted as of the Effective Time, and the Company shall ensure that
following the Effective Time no holder of a Stock Option or any participant in
the Stock Plans or other Benefit Plan shall have any right thereunder to
acquire any capital stock of the Company or any Subsidiary or the Surviving
Corporation.
(d) From and after the Effective Time, Parent shall cause the
Surviving Corporation to honor in accordance with their terms all existing
employment, severance, consulting or other compensation agreements, plans or
contracts between the Company or any Subsidiary and any officer, director or
employee of the Company or any Subsidiary which are specifically disclosed on
Schedule 5.6(d).
(e) For the one-year period immediately following the Effective
Time, Parent shall cause the Company to provide such benefit plans, programs
and arrangements that are no less favorable in the aggregate than the Benefit
Plans.
Section 5.7 Meeting of the Company's Stockholders.
(a) After consummation of the Offer, to the extent required by
applicable law, the Company shall promptly take all action necessary in
accordance with the DGCL and its Certificate of Incorporation and Bylaws to
convene the Meeting to consider and vote on the Merger and this Agreement. At
the Meeting, all of the Shares then owned by Parent, Acquisition Sub or any
other subsidiary of Parent shall be voted to approve the Merger and this
Agreement. Subject to its fiduciary duties and Section 5.2, the Board of
Directors of the Company shall recommend that the Company's stockholders vote
to approve the Merger and this Agreement if such vote is sought, shall use its
best efforts to solicit from stockholders of the Company proxies in favor of
the Merger and shall take all other reasonable action in its judgment
necessary and appropriate to secure the vote of stockholders required by the
DGCL to effect the Merger.
(b) If required under applicable law, the Company and Parent
shall prepare the Proxy Statement, file it with the SEC under the Exchange Act
as promptly as practicable after Acquisition Sub purchases Shares pursuant to
the Offer, and use all reasonable efforts to have it cleared by the SEC. As
promptly as practicable after the Proxy Statement has been cleared by the SEC,
the Company shall mail the Proxy Statement to the stockholders of the Company
as of the record date for the Meeting.
(c) Parent and Acquisition Sub shall not, and they shall cause
their subsidiaries not to, sell, transfer, assign, encumber or otherwise
dispose of the Shares acquired pursuant to the Offer or otherwise prior to the
Meeting; provided, however, that this Section 5.7(c) shall not apply to the
sale, transfer, assignment, encumbrance or other disposition of any or all such
Shares in transactions involving solely Parent, Acquisition Sub and/or one or
more of their wholly owned subsidiaries.
(d) Notwithstanding the foregoing, in the event that Acquisition
Sub shall acquire Preferred Shares representing at least 90% of the votes
represented by all outstanding Preferred Shares and Common Shares representing
at least 90% of the votes represented by all outstanding Common Shares, the
parties hereto agree, at the request of Acquisition Sub, to take all necessary
and appropriate action to cause the Merger to become effective, in accordance
with Section 253 of the DGCL, as soon as reasonably practicable after such
acquisition, without a meeting of the stockholders of the Company.
Section 5.8 Public Announcements. Parent and the Company shall
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, any press release or other public
statement with respect to the transactions contemplated by this Agreement,
including the Offer and the Merger, and shall not issue any such press release
or make any such public statement prior to such consultation, except as either
party may determine is required by applicable law or by obligations pursuant
to any listing agreement with any national securities exchange.
Section 5.9 Stockholder Litigation. The Company shall keep
Parent reasonably informed, and shall consult with Parent on a regular basis,
concerning the defense or settlement of any stockholder litigation against the
Company and its directors relating to any of the transactions contemplated by
this Agreement.
Section 5.10 Rights Agreement. The Board of Directors of the
Company shall take all further action (in addition to that previously taken
referred to in Section 4.19) reasonably requested in writing by Parent
(including redeeming the Rights immediately prior to the Effective Time or
amending the Rights Agreement) in order to render the Rights inapplicable to
the Offer, the Merger and the other transactions contemplated by this
Agreement.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver, where permissible, prior to the
Effective Time, of the following conditions:
(a) Stockholder Approval. If required by applicable law, this
Agreement shall have been approved by the affirmative vote of the stockholders
of the Company by the requisite vote in accordance with applicable law;
(b) Purchase of Shares. Acquisition Sub shall have accepted for
payment and purchased Shares tendered pursuant to the Offer.
(c) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule, regulation, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any court of competent jurisdiction or
other Government Entity or other legal restraint or prohibition (collectively,
"Restraints") preventing the consummation of the Merger shall be in effect;
provided, however, that the party seeking to assert this condition shall have
used reasonable efforts to prevent the entry of any such Restraints and to
appeal as promptly as possible any such Restraints that may be entered.
ARTICLE 7
TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination. This Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of the
Company:
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if
(i) the Offer terminates or expires in accordance
with its terms without Acquisition Sub's having purchased any Shares pursuant
to the Offer because of a failure of any of the conditions set forth in Annex
A hereto to have been satisfied at the time of such termination or expiration;
provided, however, that the right to terminate this Agreement pursuant to this
Section 7.1(b)(i) shall not be available to any party whose failure to fulfill
any of its obligations under this Agreement results in the failure to have
satisfied any such condition;
(ii) Shares have not been accepted for payment
pursuant to the Offer on or prior to December 31, 1997; provided, however,
that the right to terminate this Agreement pursuant to this Section 7.1(b)(ii)
shall not be available to any party whose failure to fulfill any of its
obligations under this Agreement results in the failure of the Offer to be
consummated by such time;
(iii) any Governmental Entity shall have issued a
Restraint or taken any other action permanently enjoining, restraining or
otherwise prohibiting consummation of the Merger or any of the other
transactions contemplated by this Agreement and such Restraint or other action
shall have become final and nonappealable; provided, however, that the party
seeking to terminate this Agreement pursuant to this Section 7.1(b)(iii) shall
have used all reasonable efforts to prevent the entry of and to remove such
Restraint or other action; or
(iv) the Board of Directors of the Company (or, if
applicable, any committee thereof) shall have (A) withdrawn or modified in a
manner adverse to Parent and Acquisition Sub its approval or recommendation of
the Offer or the Merger or (B) approved or recommended any Takeover Proposal
in respect of the Company or (C) resolved to take any of the foregoing
actions, in each case in compliance with the provisions contained in Section
5.2(b) or (d).
Section 7.2 Effect of Termination. In the event of termination
of this Agreement by either Parent or the Company as provided in Section 7.1,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders,
other than the provisions of Section 5.3(b), this Section 7.2, Section 7.3 and
Section 8.9, which provisions will survive such termination, and except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or other agreements
set forth in this Agreement.
Section 7.3 Termination Fee. In the event that this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(b)(iv), the
Company shall promptly, but in no event later than two business days after
such event, pay Parent a fee of $6 million (the "Termination Fee") in cash in
immediately available funds by wire transfer to an account designated by
Parent.
Section 7.4 Amendment. To the extent permitted by applicable
law, this Agreement may be amended by the parties at any time before or after
approval of this Agreement by the stockholders of the Company; provided,
however, that after any such stockholder approval, no amendment shall be made
which by law requires further approval of the Company's stockholders without
the approval of such stockholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
Section 7.5 Extension; Waiver. At any time prior to the
Effective Time, a party hereto may (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto by any other party or (c) subject to
Section 7.4, waive compliance by any other party with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
Section 7.6 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.1, an amendment
of this Agreement pursuant to Section 7.4 or an extension or waiver pursuant
to Section 7.5 in order to be effective shall require, in the case of Parent
or the Company, action by its Board of Directors or, with respect to any
amendment of this Agreement, a duly authorized committee of its Board of
Directors.
Section 7.7 Concurrence of Independent Directors.
Notwithstanding any other provision of this Agreement, from and after the
consummation of the Offer, the concurrence of a majority of the Independent
Directors shall be required for any amendment or determination of this
Agreement by the Company, any waiver of any of the Company's rights hereunder
or otherwise pursuant to Sections 7.1, 7.4 or 7.5, any extension of the time
for performance of Parent's or Acquisition Sub's obligations or other acts
hereunder, or any other action taken by the Company's Board of Directors in
connection with this Agreement (including actions to enforce this Agreement).
ARTICLE 8
MISCELLANEOUS
Section 8.1 Non-Survival of Representations and Warranties. None
of the representations and warranties made in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive after the
Effective Time. This Section 8.1 shall not limit any covenant or agreement of
the parties hereto which by its terms contemplates performance after the
Effective Time.
Section 8.2 Entire Agreement; Assignment. This Agreement
(including the Schedules hereto) and, to the extent contemplated in Section
5.3(b), the Confidentiality Agreement, (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof and (b) shall
not be assigned by operation of law or otherwise, provided that Parent or
Acquisition Sub may assign any of their rights and obligations to any direct
or indirect wholly owned subsidiary of Parent, but no such assignment shall
relieve Parent or Acquisition Sub of its obligations hereunder. Either
Parent, Acquisition Sub or any direct or indirect wholly owned subsidiary of
Parent may purchase Shares under the Offer.
Section 8.3 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 8.4 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by facsimile transmission with
confirmation of receipt, by overnight courier (with delivery confirmed), or by
registered or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
(a) if to Parent or Acquisition Sub:
Xxxxxxxxx Technology Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.,
Vice President, General
Counsel & Secretary
Fax No. 000-000-0000
with a copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
Fax No. 000-000-0000
(b) if to the Company:
Xxxxxx Industries, Inc.
0000 Xxxxx 00xx Xxxxxx - Xxxxx 000-X
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Vice President, General Counsel
& Secretary
Fax No. 000-000-0000
with copies to:
Xxxxxx Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax No. 000-000-0000
and to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax No. 000-000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 8.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
Section 8.6 Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought against any of the parties in any federal court located in the State of
Delaware or any Delaware state court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and waives
any objection to venue laid therein. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the State of Delaware. Without limiting the generality of the
foregoing, each party hereto agrees that service of process upon such party at
the address referred to in Section 8.4, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party.
Section 8.7 Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and shall not constitute
a part of or affect the meaning or interpretation of this Agreement.
Section 8.8 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement except for Section 5.5 (which is intended to be for the benefit of
the persons entitled to therein, and may be enforced by such persons).
Section 8.9 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
Section 8.10 Fees and Expenses. Except as set forth in Section
7.3, all fees, costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such fees
and expenses, whether or not the Offer or the Merger is consummated.
Section 8.11 Certain Definitions. For purposes of this Agreement
(including Annex A hereto), the following terms shall have the meanings
ascribed to them below:
(a) "affiliate" of a person shall mean (i) 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 and
(ii) an "associate", as that term is defined in Rule 12b-2 promulgated under
the Exchange Act as in effect on the date of this Agreement.
(b) "beneficial owner" (including the term "beneficially own" or
correlative terms) with respect to any securities means a person who shall be
deemed to be the beneficial owner of such securities which (i) such person or
any of its affiliates beneficially owns, directly or indirectly, (ii) such
person or any of its affiliates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of consideration rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding or (iii) are beneficially owned, directly or
indirectly, by any other person with which such person or any of its
affiliates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any of such securities.
(c) "control" (including the terms "controlling", "controlled
by" and "under common control with" or correlative terms) shall mean the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through ownership of voting
securities, by contract, or otherwise.
(d) "fully diluted" in reference to the Shares means all
outstanding securities entitled generally to vote in the election of directors
of the Company on a fully diluted basis, after giving effect to the exercise
or conversion of all options, rights and securities exercisable or convertible
into such voting securities.
(e) "knowledge" shall mean the actual knowledge of the executive
officers of the Company after reasonable investigation, including consultation
with the principal executive officers of each of the operating Subsidiaries.
(f) "Material Adverse Effect" shall mean a material adverse
effect (i) on the financial condition, assets, liabilities, business, or
results of operations of the Company and the Subsidiaries, taken as a whole,
except for changes in the general economic conditions and changes that affect
the industry of the Company or any of the Subsidiaries generally, or (ii) on
the ability of the Company to perform its obligations under this Agreement or
to consummate the transactions contemplated by this Agreement.
(g) "person" shall mean a natural person, company, corporation,
partnership, association, trust or any unincorporated organization.
(h) "subsidiary" shall mean, when used with reference to a
person means a corporation (or other entity) the majority of the outstanding
voting securities (or equity interests) of which are owned directly or
indirectly by such person.
Section 8.12 Performance by Acquisition Sub. Parent hereby
agrees to cause Acquisition Sub to comply with its obligations hereunder and
under the Offer and to cause Acquisition Sub to consummate the Merger as
contemplated herein.
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its officer thereunto duly authorized, on the
day and year first above written.
XXXXXXXXX TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx,
Chairman, President &
Chief Executive Officer
SCORE ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx,
President &
Chief Executive Officer
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx _
---------------------------
Xxxx X. Xxxxxx
Chairman of the Board &
Chief Executive Officer
ANNEX A
to
Agreement and Plan of Merger
----------------------------
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer or this
Agreement, Acquisition Sub shall not be required to accept for payment or pay
for, subject to Rule 14e-1(c) of the Exchange Act, any Shares not theretofore
accepted for payment, and may terminate or amend the Offer if (i) that number
of Shares which would represent at least a majority of the voting power
represented by the Shares and other securities entitled generally to vote in
the election of directors of the Company outstanding on a fully diluted basis
after giving effect to the exercise or conversion of all options, rights and
securities exercisable or convertible into or exchangeable for Shares or such
voting securities shall not have been validly tendered and not withdrawn
immediately prior to the expiration of the Offer (the "Minimum Tender
Condition"), (ii) any applicable waiting period under the H-S-R Act shall not
have expired or been terminated prior to the expiration of the Offer or (iii)
at any time on or after the date of commencement of the Offer and before the
acceptance of such Shares for payment or the payment therefor, any of the
following conditions exist or shall occur:
(a) there shall have occurred (i) any general suspension
of trading in, or limitation on prices for, securities on the New York
Stock Exchange or in the over-the-counter market, (ii) any declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) any limitation, whether or not mandatory, by
any Governmental Entity on, or other event that materially affects, the
extension of credit by banks or other lending institutions, (iv) any
commencement of a war, armed hostilities or other national or
international calamity involving the armed forces of the United States,
(v) any decline, measured from the date of this Agreement, in either the
Dow Xxxxx Industrial Average or the Standard & Poor's Index of 400
Industrial Companies by an amount in excess of 20%, (vi) in the case of
any of the foregoing occurrences existing on or at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
or
(b) there shall be pending by any Governmental Entity, or
threatened by the staff of any Governmental Entity, any suit, action or
proceeding, (i) challenging the acquisition by Parent or Acquisition Sub
of any Shares, seeking to restrain or prohibit the making or consummation
of the Offer or the Merger or the performance of any of the other
transactions contemplated by this Agreement (ii) seeking to prohibit or
limit the ownership or operation by the Company, Parent or any of their
respective subsidiaries of a material portion of the business or assets
of the Company or the Subsidiaries, or Parent or its subsidiaries, or to
compel the Company or Parent to dispose of or hold separate any material
portion of the business or assets of the Company or the Subsidiaries, or
Parent or its subsidiaries, as a result of the Offer or any of the other
transactions contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of Parent or Acquisition Sub to acquire or
hold, or exercise full rights of ownership of, any Shares accepted for
payment pursuant to the Offer including, without limitation, the right
to vote the Shares accepted for payment by it on all matters properly
presented to the stockholders of the Company, or (iv) seeking to
prohibit Parent or any of its subsidiaries from effectively controlling
in any material respect the business or operations of the Company or the
Subsidiaries;
(c) there shall be any statute, rule, regulation,
judgment, order or injunction enacted, entered, enforced, promulgated or
deemed applicable to the Offer or the Merger, or any other action shall
be taken by any Governmental Entity or court, other than the application
to the Offer or the Merger of applicable waiting periods under the H-S-R
Act, that is reasonably likely to result, directly or indirectly, in any
of the consequences referred to in clauses (i) though (iv) of paragraph
(b) above;
(d) the Company shall have entered into an agreement
concerning any Superior Proposal, or the Board of Directors of the
Company or any committee thereof shall have resolved to enter into such
an agreement;
(e) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent, Acquisition Sub or any affiliate
thereof) shall have become the beneficial owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of Shares representing a
majority of the total votes represented by all outstanding Shares;
(f) the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) any of the representations and warranties of the
Company set forth in the Merger Agreement were inaccurate in any
material respect when made or become inaccurate in any material respect
at any time thereafter, or the Company shall have failed in any material
respect to perform any obligation or covenant required by the Merger
Agreement to be performed or complied with by it;
which, in the reasonable judgment of Acquisition Sub and regardless of the
circumstances giving rise to any such condition, makes it inadvisable to
proceed with the Offer or with such acceptance for payment, purchase of, or
payment for Shares.
The foregoing conditions are for the sole benefit of Acquisition
Sub and Parent and may be asserted by Acquisition Sub or Parent regardless of
the circumstances giving rise to any such condition and may be waived by
Acquisition Sub or Parent, in whole or in part, at any time and from time to
time, in the sole discretion of Acquisition Sub or Parent. The failure by
Acquisition Sub or Parent at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right and each right will be deemed an
ongoing right which may be asserted at any time and from time to time.
