Exhibit 1.
AMENDED AND RESTATED
AGREEMENT AND
PLAN OF MERGER
by and among
CB XXXXXXX XXXXX SERVICES, INC.,
CBRE HOLDING, INC.
and
XXXX XX CORP.
May 31, 2001
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 1
1.1. Definitions 1
ARTICLE 2 THE MERGER 7
2.1. The Merger 7
2.2. Organizational Documents 7
2.3. Directors and Officers 8
ARTICLE 3 CONVERSION OF SECURITIES AND RELATED MATTERS 8
3.1. Capital Stock of Acquiror 8
3.2. Cancellation of Treasury Stock and Acquiror
Owned Shares 8
3.3. Conversion of Company Shares 8
3.4. Exchange of Certificates 8
3.5. Company Stock Options 10
3.6. Deferred Compensation Plan 10
3.7. Capital Accumulation Plan 11
3.8. Dissenting Shares. 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 12
4.1. Corporate Existence and Power 12
4.2. Corporate Authorization 12
4.3. Governmental Authorization 13
4.4. Non-Contravention 13
4.5. Capitalization 13
4.6. Subsidiaries 14
4.7. Company SEC Documents 15
4.8. Financial Statements; No Material Undisclosed
Liabilities 15
4.9. Absence of Certain Changes 16
4.10. Litigation 16
4.11. Taxes 17
4.12. Employee Benefits 17
4.13. Compliance with Laws; Licenses, Permits
and Registrations 20
4.14. Title to Properties 20
4.15. Intellectual Property 20
4.16. Finders' Fees; Opinions of Financial Advisor 21
4.17. Labor Matters 21
4.18. Material Contract Defaults 21
4.19. Required Vote; Board Approval 22
4.20. Information to Be Supplied 22
4.21. Disclaimer of Other Representations
and Warranties 23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF HOLDING AND
ACQUIROR 23
5.1. Corporate Existence and Power 23
5.2. Corporate Authorization 23
5.3. Governmental Authorization 24
5.4. Non-Contravention 24
5.5. Financing 24
5.6. Information to Be Supplied 25
5.7. No Breach 26
5.8. Disclaimer of Other Representations and
Warranties 26
ARTICLE 6 COVENANTS OF THE COMPANY 26
6.1. Company Interim Operations 26
6.2. Stockholder Meeting 29
6.3. Acquisition Proposals; Board Recommendation 29
ARTICLE 7 COVENANTS OF HOLDING AND ACQUIROR 31
7.1. Director and Officer Liability 31
7.2. Employee Benefits 33
7.3. Severance Plan. 34
7.4. Conduct of Holding and Acquiror 34
7.5. Transfer Taxes 34
7.6. Investment Banking Fee 34
7.7. Financing Arrangements 34
7.8. Contribution and Voting Agreement 35
7.9. Board Member 35
ARTICLE 8 COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY 35
8.1. Efforts and Assistance 35
8.2. Proxy Statement and Schedule 13E-3 37
8.3. Public Announcements 38
8.4. Access to Information; Notification of Certain
Matters 38
8.5. Further Assurances 39
8.6. Registration Statement 39
8.7. Disposition of Litigation 40
8.8. Confidentiality Agreements 40
8.9. Resignation of Directors 40
8.10. Senior Subordinated Notes 40
ARTICLE 9 CONDITIONS TO MERGER 42
9.1. Conditions to the Obligations of Each Party 42
9.2. Conditions to the Obligations of the Company 42
9.3. Conditions to the Obligations of Acquiror 43
ARTICLE 10 TERMINATION 44
10.1. Termination 44
10.2. Effect of Termination 45
10.3. Fees and Expenses 46
ARTICLE 11 MISCELLANEOUS 46
11.1. Notices 46
11.2. Amendment and Restatement; Effectiveness
of Representations and Warranties and Agreements 47
11.3. Survival of Representations, Warranties and
Covenants after the Effective Time 47
11.4. Amendments; No Waivers 47
11.5. Successors and Assigns 47
11.6. Counterparts; Effectiveness; Third
Party Beneficiaries 48
11.7. Governing Law 48
11.8. Jurisdiction 48
11.9. Enforcement 48
11.10.Entire Agreement 48
11.11.Authorship 48
11.12.Severability 48
11.13.Waiver of Jury Trial 49
11.14.Headings; Construction 49
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (the
"Agreement") is made and entered into this 31st day of May 2001,
by and among CB Xxxxxxx Xxxxx Services, Inc., a Delaware
corporation (the "Company"), CBRE Holding, Inc. a Delaware
corporation formerly known as XXXX XX Holding Corp. ("Holding"),
and XXXX XX Corp., a Delaware corporation wholly owned by Holding
("Acquiror").
WHEREAS, a Special Committee of the Board of Directors of
the Company has (i) determined that the Merger (as defined
herein) is advisable and in the best interest of the Company's
stockholders (other than the members of the Buying Group (as
defined herein)), and (ii) approved the Merger and recommended
approval of the Merger by the Board of Directors of the Company;
WHEREAS, the Board of Directors of the Company, subsequent
to the recommendation of the Special Committee, has (i)
determined that the Merger is advisable and in the best interest
of the Company's stockholders (other than the members of the
Buying Group), and (ii) approved the Merger;
WHEREAS, the Board of Directors of each of Holding and
Acquiror has determined that the Merger is advisable and in the
best interest of its stockholders;
WHEREAS, Holding, Acquiror and certain stockholders of the
Company (the "Buying Group") have entered into an amended and
restated contribution and voting agreement, a copy of which is
attached hereto as Exhibit A (the "Contribution and Voting
Agreement"), pursuant to which, among other things, those
stockholders have agreed to vote their Company Shares in favor
of adopting and approving this Agreement and the Merger;
WHEREAS, by resolutions duly adopted, the respective Boards
of Directors of the Company, Holding and Acquiror have approved
and adopted this Agreement and the transactions and other
agreements contemplated hereby; and
WHEREAS, the parties to this Agreement previously entered
into an Agreement and Plan of Merger, dated as of February 23,
2001 (the "Original Agreement"), and an Amended and Restated Plan
and Agreement of Merger, dated as of April 24, 2001 (the "First
Amended and Restated Agreement"), and this Agreement constitutes
an amendment and restatement of the First Amended and Restated
Agreement.
NOW, THEREFORE, in consideration of the premises and
promises contained herein, and intending to be legally bound,
the parties hereto agree as set forth below.
ARTICLE 1
DEFINITIONS
1.1. Definitions. (a) As used herein, the following terms
have the meanings set forth below:
"Acquiror Common Share" means one share of Common Stock of
Acquiror, $0.01 par value per share.
"Acquiror Preferred Share" means one share of Participating
Preferred Stock of Acquiror, $0.01 par value per share.
"Acquisition Proposal" means any offer or proposal (whether
or not in writing) from any Third Party regarding any of the
following: (a) a transaction pursuant to which a Third Party
acquires or would acquire beneficial ownership of more than
fifteen percent (15%) of the outstanding shares of any class of
Equity Interests of the Company, whether from the Company or
pursuant to a tender offer or exchange offer or otherwise, (b) a
merger, consolidation, business combination, reorganization, sale
of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company, or (c)
any transaction which would result in a Third Party acquiring 15%
or more of the fair market value on a consolidated basis of the
assets (including, without limitation, the capital stock of
Subsidiaries) of the Company and its Subsidiaries immediately
prior to such transaction (whether by purchase of assets,
acquisition of stock of a Subsidiary or otherwise).
"Affiliate" means, with respect to any Person, any other
Person, directly or indirectly, controlling, controlled by, or
under common control with, such Person. For purposes of this
definition, the term "control" (including the correlative terms
"controlling", "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise.
"Business Day" means any day, other than a Saturday, Sunday
or one on which banks are authorized by Law to close in New York,
New York.
"Capital Accumulation Plan" means the Capital Accumulation
Plan of the Company as amended through the date of this
Agreement.
"Code" means the U.S. Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated
thereunder.
"Company Balance Sheet" means the Company's consolidated
balance sheet included in the Company 10-K relating to its year
ended on December 31, 1999.
"Company Material Adverse Effect" means any material adverse
effect on (a) the business, assets, liabilities, financial
condition or results of operations of the Company and its
Subsidiaries, taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement or the other
agreements and transactions contemplated hereby; provided,
however, that this definition shall exclude any material adverse
effect arising out of any change or development resulting from
(v) U.S. or global general economic or political conditions, (w)
conditions generally affecting the industry in which the Company
and its Subsidiaries operate, (x) changes in U.S. or global
financial markets or conditions, (y) any generally applicable
change in Law or GAAP or interpretation of any thereof and/or
(z) the announcement of this Agreement or the transactions
contemplated hereby or the Company's performance of its
obligations under this Agreement and compliance with the
covenants set forth herein.
"Company Share" means one share of common stock of the
Company, $0.01 par value per share.
"Company SEC Documents" means (a) the annual report on Form
10-K of the Company (the "Company 10-K"), for the years ended
December 31, 1998 and 1999, (b) the quarterly reports on
Form 10-Q of the Company for the quarters ended March 31, June 30
and September 30, 1999 and 2000, (c) the Company's proxy statements
relating to meetings of, or actions taken without a meeting by,
the Company Stockholders, since January 1, 1999, and (d) all
other reports, filings, registration statements and other
documents filed by the Company with the SEC since January 1,
1999; in each case including all exhibits, appendices and
attachments thereto, whether filed therewith or incorporated by
reference therein.
"Company Stockholders" or "Stockholders" means the
stockholders of the Company as of the date hereof, as of the
record date for the Company Stockholder Meeting and as of the
Closing Date, as applicable.
"Deferred Compensation Plan" means the Deferred Compensation
Plan of the Company, as amended and restated as of November 1,
1999, and as further amended through the date of this Agreement.
"Equity Interest" means with respect to any Person, any and
all shares, interests, participations, rights in, or other
equivalents (however designated and whether voting or non-voting)
of, such Person's capital stock or other equity interests
(including, without limitation, partnership or membership
interests in a partnership or limited liability company or any
other interest or participation that confers on a Person the
right to receive a share of the profits and losses, or
distributions of assets, of the issuing Person) whether
outstanding on the date hereof or issued after the date hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Governmental Entity" means any federal, state or local
governmental authority, any transgovernmental authority or any
court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign.
"Holding Material Adverse Effect" means any change or effect
that would prevent or materially impair the ability of Holding or
Acquiror to consummate the Merger and the other transactions
contemplated by this Agreement.
"Joint Venture" means, with respect to any Person, any
corporation or other entity (including a division or line of
business of such corporation or other entity) (a) of which such
Person and/or any of its Subsidiaries beneficially owns a portion
of the Equity Interests that is insufficient to make such
corporation or other entity a Subsidiary of such Person, and (b)
that is engaged in the same business as such Person or its
Subsidiaries or in a related or complementary business. "Company
Joint Venture" means a Joint Venture of the Company.
"Knowledge" means, with respect to the matter in question,
if any of the executive officers of the Company listed in Section
1.1 of the Company Disclosure Schedule has actual knowledge of
the matter.
"Law" means any federal, state, local or foreign law, rule,
regulation, judgment, code, ruling, statute, order, decree,
injunction or ordinance or other legal requirement.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of an asset; provided, however, that the term "Lien"
shall not include (a) liens for utilities and current Taxes not
yet due and payable, (b) mechanics', carriers', workers',
repairers', materialmen's, warehousemen's and other similar liens
arising or incurred in the ordinary course of business or (c)
liens for Taxes being contested in good faith.
"Material Joint Venture" means a Company Joint Venture in
which the Company and the Company Subsidiaries, collectively,
have invested, or committed to invest, at least $3.0 million.
"Material Subsidiary" means a Company Subsidiary with more
than $25.0 million in consolidated revenue during the Company's
fiscal year ended December 31, 2000.
"Non-U.S. Competition Laws" means all (a) non-U.S. Laws
intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade, (b)
antitrust Laws by antitrust authorities outside of the United
States and (c) takeover Laws of jurisdictions outside of the
United States.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or any other entity or
organization, including any Governmental Entity.
"Prospectus" means the prospectus included in the
Registration Statement, together with any amendments or
supplements thereto.
"Proxy Statement" means the proxy statement relating to the
Company Stockholder Meeting, together with any amendments or
supplements thereto.
"RCBA" means RCBA Strategic Partners, L.P., a Delaware
limited partnership and the sole stockholder of Holding as of
the date hereof.
"Registration Statement" means the Registration Statement
on Form S-1 or comparable form, together with any supplements
thereto, registering shares of common stock of Holding for
issuance to employees of the Company under the Securities Act.
"Schedule 13E-3" means the Statement on Schedule 13E-3 to be
filed by the Company and Holding concurrently with the filing of
the Proxy Statement pursuant to the Exchange Act, together with
any amendments or supplements thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Special Committee" means the Special Committee of the Board
of Directors appointed by resolution of the Company's Board of
Directors adopted on November 10, 2000.
"Subsidiary" means, with respect to any Person, any
corporation or other entity (including joint ventures) of which
securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
Persons performing similar functions are directly or indirectly
owned, by such Person. "Company Subsidiary" means a Subsidiary
of the Company.
"Superior Proposal" means any of the transactions described
in the definition of Acquisition Proposal (with all of the
percentages included in the definition of Acquisition Proposal
increased to 51% for purposes of this definition) that is on
terms which a majority of the disinterested members of the
Company's Board of Directors or the Special Committee determines
in good faith, after considering the advice of outside legal
counsel and financial advisors (a) represents a financially
superior transaction for the Company's Stockholders (other than
Holding, Acquiror and the members of the Buying Group and each of
their respective Affiliates) to the transactions contemplated
hereby; (b) would result in a transaction, if consummated, that
would be more favorable to the Company's Stockholders (other than
Holding, Acquiror and the members of the Buying Group and each of
their respective Affiliates) (taking into account all facts and
circumstances, including all legal, financial, regulatory and
other aspects of the proposal and the identity of the offeror)
than the transactions contemplated hereby; and (c) is reasonably
capable of being consummated (including, without limitation, the
availability of committed financing).
"Taxes" means all United States federal, state, local or
foreign income, profits, estimated gross receipts, windfall
profits, environmental (including taxes under Section 59A of the
Code), severance, property, intangible property, occupation,
production, sales, use, license, excise, emergency excise,
franchise, capital gains, capital stock, employment, withholding,
social security (or similar), disability, transfer, registration,
stamp, payroll, goods and services, value added, alternative or
add-on minimum tax, estimated, or any other tax, custom, duty or
governmental fee, or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, fines, related
liabilities or additions to tax that may become payable in
respect therefore imposed by any Governmental Entity, whether
disputed or not.
"Third Party" means a Person (or group of Persons) other
than Holding, Acquiror or any of their Affiliates (excluding the
Company and its controlled Affiliates).
(b) Each of the following terms is defined in the Section
set forth opposite such term:
Terms Section
Acquiror Preamble
Acquiror Senior Subordinated Notes 5.5(b)
Agreement Preamble
Buying Group Preamble
Certificate of Merger 2.1(b)
Certificates 3.4(a)
Claim 7.1(b)
Closing 2.1(d)
Closing Date 2.1(d)
Commitment Letter Financing 5.5(a)
Commitment Letters 5.5(a)
Company Preamble
Company Employee Plans 4.12(a)
Company Intellectual Property 4.15
Company Option 3.5(a)
Company Preferred Stock 4.5(a)
Company Recommendation 6.2
Company Returns 4.11
Company Securities 4.5(b)
Company Stockholder Approval 4.19(a)
Company Stockholder Meeting 6.2
Confidentiality Agreement 8.4(a)
Contribution and Voting Agreement Preamble
CSFB 5.5(a)
Debt Offer 8.10(a)
DGCL 2.1(a)
DLJ 5.5(a)
Dissenting Shares 3.8(a)
Effective Time 2.1(b)
End Date 10.1(b)(i)
ERISA 4.12(a)
ERISA Affiliate 4.12(a)
Exchange Agent 3.4(a)
Exchange Fund 3.4(a)
Financing 5.5(b)
Financing Agreements 7.7(a)
Foreign Plan 4.12(i)
GAAP 4.8(a)
Holding Preamble
Holding Shares 3.7(a)
HSR Act 4.3
Indemnified Parties 7.1(b)
Indenture 8.10(a)
Letter of Transmittal 8.10(c)
Loan Shares 4.5(a)
Material Contracts 4.18
Merger 2.1(a)
Merger Consideration 3.3
Multiemployer Plan 4.12(b)
Note Purchase Agreement 5.5(b)
Notes 8.10(a)
Offer Documents 8.10(c)
Offer to Purchase 8.10(c)
Permits 4.13(b)
Permitted Actions 6.3(a)
Phantom Shares 4.5(a)
Plan Proceeds 3.7(a)
Purchase Agreement Financing 5.5(b)
Retirement Plan 4.12(b)
Secretary of State 2.1(b)
Senior Subordinated Notes Proceeds 5.5(b)
Share Limit 3.7(a)
Stock Fund Participant 3.7(a)
Surviving Corporation 2.1(a)
Termination Fee 10.2(b)
Transfer Taxes 7.5
Vested CBRE Stock Fund Units 3.6(a)
ARTICLE 2
THE MERGER
2.1. The Merger.
(a) At the Effective Time, Acquiror shall be merged
with and into the Company (the "Merger") in accordance with the
terms and conditions of this Agreement and the Delaware General
Corporation Law (the "DGCL"), at which time the separate
corporate existence of Acquiror shall cease and the Company
shall continue its existence. In its capacity as the corporation
surviving the Merger, this Agreement sometimes refers to the
Company as the "Surviving Corporation".
(b) As soon as practicable on or after the Closing Date,
the Company and Acquiror will file a certificate of merger or
other appropriate documents (the "Certificate of Merger") with
the Delaware Secretary of State (the "Secretary of State") and
make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at
the time when the Certificate of Merger is duly filed with and
accepted by the Secretary of State, or at such later time as is
agreed upon by the parties and specified in the Certificate of
Merger (such time as the Merger becomes effective is referred to
herein as the "Effective Time").
(c) From and after the Effective Time, the Merger shall
have the effects set forth in Section 259 of the DGCL.
(d) The closing of the Merger (the "Closing") shall be
held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 (or such other place as
agreed by the parties) on the later of (a) the date of the
Company Stockholder Meeting, or (b) the day on which all of the
conditions set forth in Article 9 are satisfied or waived, unless
the parties hereto agree to another date. The date upon which
the Closing occurs is hereinafter referred to as the "Closing
Date".
2.2. Organizational Documents. The Certificate of Merger
shall provide that at the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any Company
Share, (a) the Company's certificate of incorporation in effect
immediately prior to the Effective Time shall be the Surviving
Corporation's certificate of incorporation and Article FOURTH of
the Surviving Corporation's certificate of incorporation shall be
amended and restated as set forth in Exhibit B hereto, and (b)
the Company's by-laws in effect immediately prior to the
Effective Time shall be the Surviving Corporation's by-laws, in
each case until amended in accordance with applicable Law. .
2.3. Directors and Officers. From and after the Effective
Time (until successors are duly elected or appointed and
qualified), (a) Acquiror's directors at the Effective Time shall
be the Surviving Corporation's directors and (b) the Company's
officers immediately prior to the Effective Time shall be the
Surviving Corporation's officers
ARTICLE 3
CONVERSION OF SECURITIES AND RELATED MATTERS
3.1. Capital Stock of Acquiror. As of the Effective Time,
by virtue of the Merger and without any action on the part of the
holder of any Company Share or Acquiror Common Share or Acquiror
Preferred Share:
(a) each Acquiror Common Share issued and outstanding
immediately prior to the Effective Time shall be converted into
one share of Common Stock, $0.01 par value per share, of the
Surviving Corporation; and
(b) each Acquiror Preferred Share issued and outstanding
immediately prior to the Effective Time shall be converted into
one share of Series A Convertible Participating Preferred Stock,
$0.01 par value per share, of the Surviving Corporation.
3.2. Cancellation of Treasury Stock and Acquiror Owned
Shares. As of the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any Company Share
or Acquiror Share, each Company Share held by the Company as
treasury stock or owned by Holding, Acquiror or any Company
Subsidiary immediately prior to the Effective Time shall be
canceled and retired, and no payment shall be made or
consideration delivered in respect thereof.
3.3. Conversion of Company Shares. As of the Effective
Time, by virtue of the Merger and without any action on the part
of the holder of any Company Share or Acquiror Share, each
Company Share issued and outstanding immediately prior to the
Effective Time (other than (a) shares to be cancelled in
accordance with Section 3.2 and (b) Dissenting Shares) shall be
converted into the right to receive in cash from Acquiror,
without interest, an amount equal to $16.00 (the "Merger
Consideration").
3.4. Exchange of Certificates.
(a) Exchange Agent. Promptly after the date hereof,
Acquiror shall appoint a bank or trust company reasonably
acceptable to the Company as an agent (the "Exchange Agent") for
the benefit of holders of Company Shares for the purpose of
exchanging, pursuant to this Article 3, certificates representing
the Company Shares (the "Certificates"). Acquiror will make
available to the Exchange Agent, as needed, the Merger
Consideration to be paid in respect of Company Shares pursuant to
this Article 3 (the "Exchange Fund"), and except as contemplated
by Section 3.4(f) or Section 3.4(g) hereof, the Exchange Fund
shall not be used for any other purpose. The Exchange Agent
shall invest the Merger Consideration as directed by the Acquiror
or the Surviving Corporation, as the case may be, on a daily
basis. Any interest and other income resulting from such
investments shall be paid to the Surviving Corporation.
(b) Exchange Procedures. As promptly as practicable after
the Effective Time, the Surviving Corporation shall send, or
shall cause the Exchange Agent to send, to each record holder of
Certificates a letter of transmittal and instructions (which
shall be in customary form and specify that delivery shall be
effected, and risk of loss and title shall pass, only upon
delivery of the Certificates to the Exchange Agent), for use in
the exchange contemplated by this Section 3.4. Upon surrender of
a Certificate to the Exchange Agent, together with a duly
executed letter of transmittal, the holder shall be entitled to
receive in exchange therefor the Merger Consideration as provided
in this Article 3 in respect of the Company Shares represented by
the Certificate (after giving effect to any required withholding
Tax). Until surrendered as contemplated by this Section 3.4,
each Certificate shall be deemed after the Effective Time to
represent only the right to receive the Merger Consideration.
(c) No Further Rights in Company Shares. All cash paid
upon surrender of Certificates in accordance with the terms
hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to Company Shares represented thereby.
From and after the Effective Time, the holders of Certificates
shall cease to have any rights with respect to Company Shares,
except as otherwise provided herein or by Law. As of the
Effective Time, the stock transfer books of the Company shall be
closed and there shall be no further registration of transfers on
the Company's stock transfer books of any Company Shares, other
than transfers that occurred before the Effective Time. If,
after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Section 3.4.
(d) Alternate Endorsement. If payment of the Merger
Consideration in respect of Company Shares is to be made to a
Person other than the Person in whose name a surrendered
Certificate is registered, it shall be a condition to such
payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and
that the Person requesting such payment shall have paid any
transfer and other Taxes required by reason of such payment in a
name other than that of the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the
Surviving Corporation or the Exchange Agent that such Tax either
has been paid or is not payable.
(e) Return of Merger Consideration. Upon demand by the
Surviving Corporation, the Exchange Agent shall deliver to the
Surviving Corporation any portion of the Merger Consideration
made available to the Exchange Agent pursuant to this Section 3.4
that remains undistributed to holders of Company Shares six (6)
months after the Effective Time. Holders of Certificates who
have not complied with this Section 3.4 prior to the demand by
the Surviving Corporation shall thereafter look only to the
Surviving Corporation for payment of any claim to the Merger
Consideration.
(f) No Liability. None of Holding, the Surviving
Corporation or the Exchange Agent shall be liable to any Person
in respect of any Company Shares (or dividends or distributions
with respect thereto) for any amounts paid to a public official
pursuant to any applicable abandoned property, escheat or similar
Law.
(g) Withholding Rights. Each of the Surviving Corporation
and Acquiror shall be entitled to deduct and withhold from the
Merger Consideration otherwise payable hereunder to any Person
any amounts which it is required to deduct and withhold with
respect to payment under any provision of federal, state or local
income tax Law. To the extent that the Surviving Corporation or
Acquiror withholds those amounts, the withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of Company Shares in respect of which deduction and
withholding was made by the Surviving Corporation or Acquiror, as
the case may be.
(h) Lost Certificates. If any Certificate has been or is
claimed to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming that a
Certificate has been lost, stolen or destroyed and, if required
by the Surviving Corporation, the posting by such Person of a
bond, in such reasonable amount as the Surviving Corporation may
direct, as indemnity against any claim that may be made against
it with respect to that Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed
Certificate, the proper amount of the Merger Consideration.
3.5. Company Stock Options.
(a) At the Effective Time, each option to purchase Company
Shares (each, a "Company Option") outstanding under any stock
option or compensation plan or arrangement of the Company,
whether or not vested, shall be canceled and in consideration of
such cancellation, the Surviving Corporation shall pay to each
holder of a canceled Company Option, as soon as practicable
following the Effective Time, an amount per Company Share subject
to such canceled Company Option equal to the greater of (i) the
excess, if any, of (A) the Merger Consideration over (B) the
exercise price per Company Share subject to such canceled Company
Option and (ii) $1.00.
(b) Prior to the Effective Time, the Company, Holding and
Acquiror shall take all commercially reasonable actions to (i)
obtain all necessary consents from the holders of Company Options
and (ii) take such other actions (including, without limitation,
amending the terms of any Company stock option or compensation
plan or arrangement), necessary to give effect to the
transactions contemplated by Section 3.5(a).
3.6. Deferred Compensation Plan.
(a) At the Effective Time, the Deferred Compensation Plan
shall be amended so that each CBRE Stock Fund Unit (as defined in
the Deferred Compensation Plan) shall thereafter represent the
right to receive a share of the common stock of Holding in
accordance with the terms and conditions set forth in the
Deferred Compensation Plan. Each participant in the Deferred
Compensation Plan who has CBRE Stock Fund Units that are vested
as of the Effective Time and are credited to his or her account
as of the Effective Time ("Vested CBRE Stock Fund Units") will be
required, prior to the Effective Time, to make one of the
following elections with respect to such Vested CBRE Stock Fund
Units: (i) convert the value of his or her Vested CBRE Stock
Fund Units (based upon the Merger Consideration) into any of the
insurance mutual fund or interest index fund alternatives
provided under the Deferred Compensation Plan as of the Effective
Time, or (ii) continue to hold the Vested CBRE Stock Fund Units
in his or her account under the Deferred Compensation Plan;
provided, however, that the election set forth in the foregoing
clause (ii) shall only be available to participants in the
Deferred Compensation Plan who have Vested CBRE Stock Fund Units
and are United States employees of the Company or any of its
Subsidiaries or independent contractors of the Company or its
Subsidiaries in the states of California, New York, Illinois or
Washington, in each of the foregoing cases as of the Effective
Time.
(b) Prior to the Effective Time, the Company, Holding and
Acquiror shall take all commercially reasonable actions
(including, without limitation, amending the terms of the
Deferred Compensation Plan) necessary to give effect to the
transactions contemplated by Section 3.6(a).
3.7. Capital Accumulation Plan.
(a) In accordance with Section 3.3, at the Effective Time,
each participant in the Company's Capital Accumulation Plan with
an account balance invested in the Company Stock Fund (as defined
in the Company's Capital Accumulation Plan) (a "Stock Fund
Participant") shall receive, in consideration for such
participant's Company Shares in the Company Stock Fund, the
product of (i) the number of Company Shares held in the Company
Stock Fund at such time multiplied by (ii) the Merger
Consideration (the "Plan Proceeds"). As of the Effective Time,
provided that the Registration Statement shall have been declared
effective by the SEC prior thereto, each participant in the
Company's Capital Accumulation Plan who is a United States
employee of the Company or any of its Subsidiaries as of the
Effective Time (the "Eligible Participants"), may invest,
pursuant to the terms of the Capital Accumulation Plan, in shares
of the Class A Common Stock of Holding, par value $0.01 per share
(the "Holding Shares"), based on a per share price equal to the
Merger Consideration; provided, however, that the aggregate
number of Holding Shares that all Eligible Participants will be
entitled to purchase shall not exceed fifty percent of the total
number of Company Shares held in the Company Stock Fund by all
Stock Fund Participants as of April 1, 2001 (the "Share Limit");
provided, further, that Holding may increase the Share Limit in
its sole discretion. In the event that the Eligible Participants
request to purchase an aggregate number of Holding Shares in
excess of the Share Limit, the amount subscribed to by each
Eligible Participant shall be reduced pro rata based on the
number of shares of Holding each Eligible Participant initially
requested to purchase. Notwithstanding anything to the contrary
stated herein, no Eligible Participant will be entitled to have
greater than 50% of his or her total account balance in the
Capital Accumulation Plan invested in Holding Shares as of the
Effective Time (with all other investments in the Capital
Accumulation Plan account of such Eligible Participant being
valued as of the month end immediately preceding the
effectiveness of the Registration Statement).
(b) Prior to the Effective Time, the Company and Holding
shall take all commercially reasonable actions (including,
without limitation, amending the terms of the Capital
Accumulation Plan) necessary to give effect to the transactions
contemplated by Section 3.7(a).
3.8. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, Company Shares that are outstanding immediately prior
to the Effective Time and which are held by Persons who shall
have properly demanded in writing appraisal for such shares in
accordance with Section 262 (or any successor provision) of the
DGCL (the "Dissenting Shares") shall not be converted into or
represent the right to receive the Merger Consideration as
provided hereunder and shall only be entitled to such rights and
consideration as are granted by Section 262 (or any successor
provision) of the DGCL. Such Persons shall be entitled to
receive payment of the appraised value of such Company Shares in
accordance with the provisions of Section 262 (or any successor
provision) of the DGCL, except that all Dissenting Shares held by
Persons who shall have failed to perfect or who effectively shall
have withdrawn or lost their right to appraisal of such shares
under Section 262 (or any successor provision) of the DGCL shall
thereupon be deemed to have been converted into the Merger
Consideration pursuant to Section 3.3 hereto as of the Effective
Time or the occurrence of such event, whichever occurs later.
(b) The Company shall give Acquiror (i) prompt notice of
any demands for appraisal received by the Company, withdrawals of
such demands and any other instruments served pursuant to the
DGCL and received by the Company and (ii) the opportunity to
participate in all negotiations and proceedings with respect to
demands for appraisal or the payment of the fair cash value of
any such shares under the DGCL. The Company shall not, except
with the prior written consent of Acquiror, make any payment with
respect to any demands for appraisal or the payment of the fair
cash value of any such shares or offer to settle or settle any
such demands.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in (i) the Company Disclosure Schedule
attached hereto or (ii) the Company SEC Documents filed prior to
the date hereof or except as specifically contemplated by this
Agreement, the Company represents and warrants to Acquiror as set
forth below.
4.1. Corporate Existence and Power. The Company is a
corporation, duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware, and has all
corporate powers and authority required to own, lease and operate
its properties and to carry on its business as now conducted.
The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where
the character of the property owned, leased or operated by it or
the nature of its activities makes qualification necessary,
except where the failure to be qualified would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
4.2. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation
by the Company of the Merger and the other transactions
contemplated hereby are within the Company's corporate powers
and, except for the Company Stockholder Approval, have been duly
and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than the Company
Stockholder Approval and the filing and recordation of the
appropriate documents with respect to the Merger in accordance
with the DGCL). The Board of Directors of the Company has
approved this Agreement and has resolved to recommend that its
stockholders vote their shares in favor of the adoption of this
Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the
Company, and assuming that this Agreement constitutes the valid
and binding obligation of Holding and Acquiror, constitutes the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
4.3. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated
hereby will not require any consent, approval, action, order,
authorization, or permit of, or registration or filing with, any
Governmental Entity, other than (a) the filing of (i) the
Certificate of Merger in accordance with the DGCL and (ii) the
appropriate documents with respect to the Company's qualification
to do business with the relevant authorities of other states or
jurisdictions in which the Company is qualified to do business;
(b) compliance with any applicable requirements of the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx") and any
Non-U.S. Competition Laws; (c) compliance with any applicable
requirements of the Securities Act and the Exchange Act; (d) such
as may be required under any applicable state securities or blue
sky Laws; and (e) other consents, approvals, actions, orders,
authorizations, registrations, declarations, filings and permits
which, if not obtained or made, would not be reasonably likely to
have, individually or in the aggregate, a Company Material
Adverse Effect. The consummation of the Merger and the other
transactions contemplated hereby will not result in the lapse of
any Permit of the Company or its Subsidiaries or the breach of
any authorization or right to use any Permit of the Company or
its Subsidiaries or other right that the Company or any of its
Subsidiaries has from a Third Party, except where such lapses or
breaches would not be reasonably likely to have, individually or
in the aggregate, a Company Material Adverse Effect.
4.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation
by the Company of the Merger and the other transactions
contemplated hereby do not and will not (a) contravene or
conflict with the Company's certificate of incorporation or by-
laws, (b) assuming compliance with the matters referred to in
Section 4.3, contravene or conflict with or constitute a
violation of any provision of any Law binding upon or applicable
to the Company or its Subsidiaries or by which any of their
respective properties is bound or affected, (c) constitute a
default under (or an event that with notice or lapse of time or
both could reasonably be expected to become a default) or give
rise (with or without notice or lapse of time or both) to a right
of termination, amendment, cancellation or acceleration under any
agreement, contract, note, bond, mortgage, indenture, lease,
franchise, Permit or other similar authorization or joint
venture, limited liability or partnership agreement or other
instrument binding upon the Company or any Company Subsidiary, or
(d) result in the creation or imposition of any Lien on any asset
of the Company or any Company Subsidiary, other than, in the case
of clauses (b), (c) and (d), any items that would not be
reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.5. Capitalization.
(a) The authorized capital stock of the Company consists
of 100,000,000 Company Shares and 8,000,000 shares of preferred
stock, $0.01 par value per share ("Company Preferred Stock"). As
of February 19, 2001, (i) 21,678,125 Company Shares were issued
and outstanding (1,380,094 Company Shares were held in treasury),
all of which have been duly authorized and validly issued and are
fully paid and nonassessable and were issued free of preemptive
or similar rights, including (x) 804,911 shares issued pursuant
to the Company's 1999 Equity Incentive Plan and 1996 Equity
Incentive Plan (the "Loan Shares") and (y) 1,781,837 shares held
by the Company's Capital Accumulation Plan, (ii) no Company
Shares were held by Subsidiaries of the Company, (iii) 2,679,893
Company Shares were issuable upon the exercise of Company Options
then outstanding, (iv) 1,841,233 Company Shares were issuable as
a result of elections made under the Company's Deferred
Compensation Plan (the "Phantom Shares"), of which 996,338 were
vested, (v) 598,147 Company Shares were issuable upon the
exercise of Company Warrants then outstanding and (vi) no shares
of Company Preferred Stock were issued and outstanding. Since
September 30, 2000, the Company has not declared or paid any
dividend or distribution in respect of any of its Equity
Interests and has not repurchased or redeemed any shares of its
Equity Interests, and its Board of Directors has not resolved to
do any of the foregoing.
(b) As of the date hereof, except (i) as set forth in
this Section 4.5 and (ii) for changes since February 19, 2001,
resulting from the exercise of stock options outstanding on that
date, the Company has not issued, or reserved for issuance, any
(x) Equity Interests of the Company, (y) securities of the
Company convertible into or exchangeable for Equity Interests of
the Company or (z) options, warrants or other rights to acquire
from the Company, or obligations of the Company to issue, any
Equity Interests of the Company or securities convertible into or
exchangeable for Equity Interests of the Company (the items in
clauses (x), (y) and (z) being referred to collectively as the
"Company Securities"). There are no outstanding agreements or
other obligations of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any Company Securities.
(c) Section 4.5(c) of the Company Disclosure Schedule
sets forth a complete and accurate list of all outstanding Company
Options, Company Warrants and Loan Shares as of February 19,
2001, which list sets forth the name of the holders thereof and,
to the extent applicable, the exercise price or purchase price
thereof, the number of Company Shares subject thereto, the
governing Company Employee Plan with respect thereto and the
expiration date thereof.
4.6. Subsidiaries.
(a) Each Subsidiary of the Company (i) is a corporation
duly incorporated or an entity duly organized, and is validly
existing and in good standing under the Laws of its jurisdiction
of incorporation or organization, and has all powers and
authority required to own, lease or operate its properties and
to carry on its business as now conducted, and (ii) has all
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and is duly
qualified to do business as a foreign corporation or entity and
is in good standing in each jurisdiction where the character of
the property owned, leased or operated by it or the nature of its
activities makes such qualification necessary, in each case with
exceptions which would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect.
(b) All of the outstanding Equity Interests in each
Material Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable and free of preemptive or
similar rights. All of the Equity Interests in each of its
Material Subsidiaries are beneficially owned, directly or
indirectly, by the Company. Such Equity Interests are owned
free and clear of any Lien and free of any other limitation or
restriction (including any limitation or restriction on the right
to vote, sell or otherwise dispose of the stock or other
ownership interests) and were issued in compliance with Federal
and state securities laws, in each case with exceptions which
would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect. There are no
outstanding (i) securities of the Company or any of its Material
Subsidiaries convertible into or exchangeable or exercisable for
Equity Interests in any of its Material Subsidiaries, (ii)
options, warrants or other rights to acquire from the Company or
any of its Material Subsidiaries, or obligations of the Company
or any of its Material Subsidiaries to issue, any Equity
Interests in, or any securities convertible into or exchangeable
or exercisable for any Equity Interests in, any of its Material
Subsidiaries or (iii) agreements, obligations or arrangements of
the Company or any of its Material Subsidiaries to issue, sell,
repurchase, redeem or otherwise acquire any Equity Interests of
any of its Material Subsidiaries.
(c) Neither the Company, any of its Material Subsidiaries
nor, to the Knowledge of the Company, any Material Joint Venture
is in violation of any provision of its articles or certificate
of incorporation or bylaws or equivalent organizational
documents, in each case with exceptions which would not be
reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.7. Company SEC Documents.
(a) The Company has made available to Acquiror the
Company SEC Documents. The Company has filed all reports, filings,
registration statements and other documents required to be filed
by it with the SEC since January 1, 1999. No Company Subsidiary
is required to file any form, report, registration statement or
prospectus or other document with the SEC.
(b) As of its filing date, each Company SEC Document
complied as to form in all material respects with the applicable
requirements of the Securities Act and/or the Exchange Act, as
the case may be.
(c) No Company SEC Document filed since January 1, 1999
pursuant to the Exchange Act contained, as of its filing date,
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were
made, not misleading. No Company SEC Document, as amended or
supplemented, if applicable, filed since January 1, 1999 pursuant
to the Securities Act contained, as of the date on which the
document or amendment became effective, any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
4.8. Financial Statements; No Material Undisclosed
Liabilities.
(a) Each of the audited consolidated financial statements
and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents were prepared in
conformity with generally accepted accounting principles applied
on a consistent basis ("GAAP") (except as may be indicated in the
notes thereto) throughout the periods involved, and each fairly
presents, in all material respects, the consolidated financial
position of the Company and its consolidated Subsidiaries as of
the dates thereof and their consolidated results of operations
and changes in financial position for the periods then ended
(subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
(b) There are no liabilities or obligations of the
Company or any Company Subsidiary, which, individually or in the
aggregate, would be material to the Company and its Subsidiaries,
taken as a whole, of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise and,
in each case, that are required by GAAP to be set forth on a
consolidated balance sheet of the Company, other than:
(i) liabilities or obligations disclosed or provided for
(A) in the Company Balance Sheet or disclosed in the notes
thereto or (B) in the Company's consolidated balance sheet or
disclosed in the notes thereto included in the Company's
quarterly report on Form 10-Q for the quarter ended September 30,
2000;
(ii) liabilities or obligations incurred after
September 30, 2000 in the ordinary course of business consistent
with past practice; and
(iii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby.
4.9. Absence of Certain Changes. Since September 30, 2000,
except as otherwise expressly contemplated by this Agreement, the
Company and each of its Subsidiaries have conducted their
business in the ordinary course consistent with past practice and
there has not been (a) any damage, destruction or other casualty
loss (whether or not covered by insurance) affecting the business
or assets of the Company or any of its Subsidiaries that has had
or would be reasonably likely to have a Company Material Adverse
Effect; (b) any amendment or change in the Company's certificate
of incorporation or by-laws; (c) any material change by the
Company in its accounting methods, principles or practices (other
than changes required by GAAP after the date of this Agreement);
(d) other than in the ordinary course of business, any sale of a
material amount of assets of the Company and its Subsidiaries;
(e) any material Tax election, any material change in method of
accounting with respect to Taxes or any compromise or settlement
of any proceeding with respect to any material Tax liability or
(f) any action, event, occurrence, development or state of
circumstances or facts that has had or would be reasonably likely
to have, individually or in the aggregate, a Company Material
Adverse Effect.
4.10. Litigation. There is no action, suit, claim,
investigation, arbitration or proceeding pending, or to the
Knowledge of the Company threatened, against the Company or any
of its Subsidiaries or any of their respective assets or
properties before any arbitrator or Governmental Entity that
would be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect (it being understood
that the mere filing of litigation, or mere existence of
litigation, by or on behalf of Company Stockholders or any other
Person, that challenges or otherwise seeks damages with respect
to the transactions contemplated hereby shall not in and of
itself be deemed to have such effect). Neither the Company nor
any of its Subsidiaries nor any of their respective properties is
or are subject to any order, writ, judgment, injunction, decree,
determination or award having, or which would be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
4.11. Taxes. Except for matters which would not have or
would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect, (a) all material
Tax returns, statements, reports and forms (collectively, the
"Company Returns") required to be filed with any taxing authority
by, or with respect to, the Company and the Company Subsidiaries
have been filed in accordance with all applicable Laws; (b) the
Company and the Company Subsidiaries have timely paid all Taxes
due and payable whether or not shown as being due on any Company
Return (other than Taxes which are being contested in good faith
and for which reserves are reflected on the Company Balance
Sheet), and, as of the time of filing, the Company Returns
correctly reflected the facts regarding the income, business,
assets, operations, activities and status of the Company and the
Company Subsidiaries; (c) the charges, accruals and reserves for
Taxes with respect to the Company and the Company Subsidiaries
reflected on the Company Balance Sheet are adequate under GAAP to
cover the Tax liabilities accruing through the date thereof; (d)
there is no action, suit, proceeding, audit or claim now proposed
or pending against the Company or any Company Subsidiary in
respect of any Taxes; (e) neither the Company nor the Company
Subsidiaries are party to, bound by or have any obligation under,
any tax sharing agreement or similar contract or arrangement or
any agreement that obligates them to make any payment computed by
reference to the Taxes, taxable income or taxable losses of any
other Person; (f) there are no Liens with respect to Taxes on any
of the assets or properties of the Company or the Company
Subsidiaries other than with respect to Taxes not due and
payable; (g) neither the Company nor any of the Company
Subsidiaries (i) is, or has been a member of an affiliated,
consolidated, combined or unitary group, other than one of which
the Company was the common parent and (ii) has any liability for
the Taxes of any Person (other than the Company and the Company
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign Law), or as a
transferee or successor, by contract or otherwise; (h) no consent
under Section 341(f) of the Code has been filed with respect to
the Company or any of the Company Subsidiaries; (i) neither the
Company nor any of the Company Subsidiaries has ever entered into
a closing agreement pursuant to Section 7121 of the Code; and (j)
neither the Company nor the Company Subsidiaries has agreed to
make or is required to make any adjustment under Section 481(a)
of the Code by reason of a change in accounting method or
otherwise.
4.12. Employee Benefits.
(a) Except as set forth on the Company Disclosure Schedule
and except for any Foreign Plans, neither the Company nor any
ERISA Affiliate (as defined below) maintains, administers or
contributes to any material "employee benefit plan", as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974 ("ERISA"), or any material employment, severance or similar
contract, plan, arrangement or policy or any other material plan
or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life
insurance benefits) which covers any employee or former employee
or director of the Company or any Company Subsidiary. The
Company has delivered or made available (i) current, accurate and
complete copies (or to the extent no such copy exists, an
accurate description) of each Company Employee Plan (as defined
below and, if applicable, related trust agreements), (ii) all
amendments thereto and written interpretations and (iii) for the
two most recent years (A) the Form 5500 and attached schedules,
(B) audited financial statements and (C) actuarial valuation
reports. The material plans (other than the Foreign Plans)
listed on Section 4.12 of the Company Disclosure Schedule are
referred to collectively herein as the "Company Employee Plans."
An "ERISA Affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer
under Section 414 of the Code.
(b) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, (i) with respect to each Company
Employee Plan (other than a plan that constitutes a
"multiemployer plan", as defined in Section 3(37) of ERISA (a
"Multiemployer Plan")), subject to Title IV of ERISA (a
"Retirement Plan"), no "accumulated funding deficiency", as
defined in Section 412 of the Code (whether or not waived and no
"reportable event", as defined in Section 4043 of ERISA, has been
incurred with respect to any Company Employee Plan which is a
Retirement Plan, whether or not waived, (ii) no condition exists
and no event has occurred that would constitute grounds for
termination of any Company Employee Plan which is a Retirement
Plan or, with respect to any Company Employee Plan which is a
Multiemployer Plan, presents a risk of a complete or partial
withdrawal under Title IV of ERISA, (iii) neither the Company nor
any of its ERISA Affiliates has incurred any liability under
Title IV of ERISA arising in connection with the termination of,
or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA and neither the Company
nor any ERISA Affiliate would be subject to any withdrawal
liability if, as of the Effective Time, the Company, the Company
Subsidiaries or any ERISA Affiliate were to engage in a complete
withdrawal (as defined in ERISA section 4203) or partial
withdrawal (as defined in ERISA section 4205) from any such
Multiemployer Plan, (iv) nothing has been done or omitted to be
done and no transaction or holding of any asset under or in
connection with any Company Employee Plan has occurred that will
make the Company or any Subsidiary, or any officer or director of
the Company or any Subsidiary, subject to any liability under
Title I of ERISA or liable for any Tax pursuant to Section 4975
of the Code (assuming the taxable period of any such transaction
expired as of the date hereof) and (v) neither the Company nor
any ERISA Affiliate has engaged in, or is a successor or parent
corporation to an entity that has engaged in, a transaction
described in Section 4069 or 4212(c) of ERISA.
(c) Each Company Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified and
has been so qualified during the period from its adoption to
date, and each trust forming a part thereof is exempt from Tax
pursuant to Section 501(a) of the Code, except as would not have
or would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company has
furnished to Acquiror copies of the most recent Internal Revenue
Service determination letters with respect to each Company
Employee Plan. Each Company Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including
ERISA and the Code, which are applicable to such Company Employee
Plan, except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material
Adverse Effect.
(d) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, (i) no Company Employee Plan exists
that could result in the payment to any present or former employee
of the Company Subsidiaries of any money or other property or
accelerate or provide any other rights or benefits to any present
or former employee of the Company or any Company Subsidiaries as
a result of the transaction contemplated by this Agreement and
(ii) there is no contract, agreement, plan or arrangement
covering any employee or former employee of the Company that,
individually or collectively, would be reasonably likely to give
rise to the payment of any amount that would not be deductible
pursuant to the terms of Sections 162(m) or 280G of the Code.
(e) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, there has been no amendment to, written
interpretation or announcement (whether or not written) relating
to, or change in employee participation or coverage under, any
Company Employee Plan which would increase the expense of
maintaining such Company Employee Plan above the level of the
expense incurred in respect thereof for the year ended December
31, 1999.
(f) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, neither the Company nor any Company
Subsidiary has any obligations to provide retiree health and life
insurance or other retiree death benefits under any Company
Employee Plan, other than benefits mandated by Section 4980B of
the Code or under applicable Law, and each such Company Employee
Plan may be amended or terminated without incurring any material
liability thereunder.
(g) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, (i) no Company Employee Plan is under
audit or is the subject of an audit or investigation by the
Internal Revenue Service, the Department of Labor, the Pension
Benefit Guaranty Corporation or any other Governmental Entity,
nor, to the Knowledge of the Company, is any such audit or
investigation threatened or pending and (ii) with respect to any
Company Employee Plan, (A) no actions, suits or claims (other
than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of the Company, threatened and (B)
no facts or circumstances exist that could reasonably be expected
to give rise to any such actions, suits or claims.
(h) Except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect, with respect to each Retirement Plan, as
of the Effective Time, the assets of each such Retirement Plan
are at least equal in value to the present value of the accrued
benefits (vested and unvested) of the participants in such
Retirement Plan on a termination and projected benefit obligation
basis, based on the actuarial methods and assumptions indicated
in the most recent actuarial valuation reports.
(i) Except as would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect, (i) all contributions required to be made by the Company
or any Material Subsidiary with respect to a Foreign Plan have
been timely made, (ii) each Foreign Plan has been maintained in
substantial compliance with its terms and with the requirements
of any and all applicable Laws and has been maintained, where
required, in good standing with the applicable Governmental
Entity and (iii) neither the Company nor any Material Subsidiary
has incurred any obligation in connection with the termination or
withdrawal from any Foreign Plan. For purposes hereof, the term
"Foreign Plan" shall mean any plan, program, policy, arrangement
or agreement maintained or contributed to by, or entered into
with, the Company or any Material Subsidiary with respect to
employees (or former employees) employed outside the United
States.
4.13. Compliance with Laws; Licenses, Permits and
Registrations.
(a) Neither the Company nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any
Laws, except for violations which would not be reasonably likely
to have, individually or in the aggregate, a Company Material
Adverse Effect.
(b) The Company and each of its Subsidiaries has all
permits, licenses, easements, variances, exemptions, consents,
certificates, approvals, authorizations of and registrations
(collectively, "Permits") with and under all federal, state,
local and foreign Laws, and from all Governmental Entities
required by the Company and each of its Material Subsidiaries to
carry on their respective businesses as currently conducted,
except where the failure to have the Permits would not be
reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.14. Title to Properties.
(a) The Company and each of its Subsidiaries have good
title to, or valid leasehold interests in, all their properties
and assets, except for (i) those which are no longer used or
useful in the conduct of their businesses and (ii) defects in
title, easements, restrictive covenants and similar Liens,
encumbrances or impediments that, in the aggregate, would not be
reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect. All of these assets and
properties, other than assets and properties in which the Company
or any of its Subsidiaries has leasehold interests, are free and
clear of all Liens, except for Liens that would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except as would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect, (i) the Company and each of its Material Subsidiaries are
in substantial compliance with the terms of all leases of their
properties or assets to which they are a party, and all such
leases are in full force and effect and (ii) the Company and each
of its Material Subsidiaries enjoy peaceful and undisturbed
possession under all such leases.
4.15. Intellectual Property. Except as would not be
reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect, the Company and each of its
Subsidiaries own or have a valid license or other right to use
each trademark, service xxxx, trade name, domain name, mask work,
invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual
property right (collectively, the "Company Intellectual
Property") necessary to carry on the business of the Company and
its Subsidiaries, taken as a whole, as currently conducted. To
the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has received any written notice of infringement of
or challenge to, and there are no claims pending with respect to
the rights of others to the use of, any Company Intellectual
Property that, in any such case would be reasonably likely to
have, individually or in the aggregate, a Company Material
Adverse Effect.
4.16. Finders' Fees; Opinions of Financial Advisor.
(a) Except for Xxxxxx Xxxxxxx & Co. Incorporated, whose
fees and expenses will be borne by the Company, there is no
investment banker, financial advisor, broker, finder or other
intermediary which has been retained by, or is authorized to act
on behalf of, the Company or any of its Subsidiaries which might
be entitled to any fee or commission from the Company, Holding,
Acquiror or any of their respective Affiliates upon consummation
of the Merger or the other transactions contemplated by this
Agreement. The Company has heretofore furnished to the Acquiror
complete and correct copies of all agreements between the Company
or its Subsidiaries and Xxxxxx Xxxxxxx & Co. Incorporated
pursuant to which such firm would be entitled to any payment
relating to the Merger and the other transactions contemplated by
this Agreement.
(b) The Special Committee has received the opinion of
Xxxxxx Xxxxxxx & Co. Incorporated, dated as of the date hereof,
to the effect that, as of such date, and subject to the
qualifications stated therein, the Merger Consideration is fair
to the holders of Company Shares (other than Acquiror and the
members of the Buying Group and each of their respective
Affiliates) from a financial point of view.
4.17. Labor Matters. There are no strikes, slowdowns, work
stoppages, lockouts or other material labor controversies pending
or, to the Knowledge of the Company, threatened by or between the
Company or any of its Material Subsidiaries and any of their
respective employees that would be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a
party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union
or labor organization. The Company and each of its Material
Subsidiaries is in compliance with all applicable Laws,
agreements, contracts, and policies relating to employment,
employment practices, wages, hours, and terms and conditions of
employment except for failures so to comply, if any, that would
not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
4.18. Material Contract Defaults. To the Knowledge of the
Company, neither the Company nor any of its Material Subsidiaries
is, or has received any notice that any other party is, in
default or unable to perform in any respect under any material
contracts, agreements, commitments, arrangements, leases,
licenses, policies or other instruments to which it or any of its
Material Subsidiaries is a party or by which it or any of its
Material Subsidiaries is bound ("Material Contracts"), except for
those defaults which would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect, and there has not occurred any event that with the lapse
of time or the giving of notice or both would constitute such a
default, except for those defaults which would not be reasonably
likely to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company has not received written
notice of the termination of, or intent to terminate any Material
Contract, except for such notices or terminations which would not
be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.19. Required Vote; Board Approval.
(a) Under the DGCL (including, without limitation, Section
203 thereof), the Company's certificate of incorporation and by-
laws and any other applicable Law or stock exchange rules, the
only votes required of the holders of any class or series of the
Company's Equity Interests necessary to adopt this Agreement and
to approve the Merger and the other transactions contemplated
hereby are the following: (i) the approval, assuming a quorum is
present, of a majority of the Company Shares voting in person or
by proxy at such meeting, and (ii) the approval, and not the
written consent, of at least 66 2/3% of the outstanding Company
Shares which are not owned by any "interested stockholder" (as
defined in Section 203 of the DGCL) (collectively, "Company
Stockholder Approval").
(b) The Special Committee and the Company's Board of
Directors has (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are in
the best interests of the Company and its Stockholders (other
than Holding, Acquiror and the members of the Buying Group and
each of their respective Affiliates), (ii) approved this
Agreement and the transactions contemplated hereby, including the
Merger and (iii) resolved to recommend to the Company
Stockholders that they vote in favor of adopting and approving
this Agreement and the Merger in accordance with the terms
hereof.
4.20. Information to Be Supplied.
(a) The information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration
Statement is filed with the SEC and at the time it becomes
effective under the Securities Act, 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 not misleading and (ii) the Schedule 13E-3
will, at the time it is first filed with the SEC and at any time
it is amended or supplemented, 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 not misleading.
(b) The Proxy Statement will, at the time of the
mailing thereof and at the time of the Company Stockholder Meeting,
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 are made, not misleading or omit
to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of
proxies for the Company Stockholder Meeting which has become
untrue or misleading.
(c) The Registration Statement and the Schedule 13E-3 (in
each case with respect to information provided by or incorporated
by reference from, the Company) and the Proxy Statement will
comply as to form in all material respects with the provisions of
the Securities Act and the Exchange Act.
(d) Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any statements made or
incorporated by reference in the Registration Statement, the
Proxy Statement or the Schedule 13E-3 based on information
supplied by Holding or Acquiror for inclusion or incorporation by
reference therein.
4.21. Disclaimer of Other Representations and Warranties.
The Company does not make, and has not made, any representations
or warranties in connection with the Merger and the transactions
contemplated hereby other than those expressly set forth herein.
It is understood that any data, any financial information or any
memoranda or other materials or presentations are not and shall
not be deemed to be or to include representations and warranties
of the Company. Except as expressly set forth herein, no Person
has been authorized by the Company to make any representation or
warranty relating to the Company or any Company Subsidiary or
their respective businesses, or otherwise in connection with the
Merger and the transactions contemplated hereby and, if made,
such representation or warranty may not be relied upon as having
been authorized by the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF HOLDING AND ACQUIROR
Except as disclosed in the Holding and Acquiror Disclosure
Schedule attached hereto, Holding and Acquiror, jointly and
severally, represent and warrant to the Company that:
5.1. Corporate Existence and Power. Each of Holding
and Acquiror is a corporation duly incorporated, validly existing
and in good standing under the Laws of its jurisdiction of
incorporation and has all corporate powers and authority required
to own, lease and operate its properties and carry on its
business as now conducted. Each of Holding and Acquiror is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property
owned, leased or operated by it or the nature of its activities
makes qualification necessary, except where the failure to be
qualified would not be reasonably likely to have, individually
or in the aggregate, a Holding Material Adverse Effect. Each of
Holding and Acquiror has heretofore made available to the Company
true and complete copies of its certificate of incorporation and
by-laws as currently in effect. Since the date of its
incorporation, each of Holding and Acquiror has not engaged in
any activities other than in connection with or as contemplated
by this Agreement.
5.2. Corporate Authorization.
(a) The execution, delivery and performance by each of
Holding and Acquiror of this Agreement and the consummation by
each of Holding and Acquiror of the Merger and the other
transactions contemplated hereby are within the corporate powers
of each of Holding and Acquiror and have been duly and validly
authorized by all necessary corporate action and no other
corporate proceedings on the part of Holding or Acquiror are
necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by each of Holding and
Acquiror and assuming that this Agreement constitutes the valid
and binding obligation of the Company, this Agreement constitutes
a valid and binding agreement of each of Holding and Acquiror,
enforceable in accordance with its terms.
(b) The Board of Directors of each of Holding and Acquiror
has (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, are in the best
interests of such company and its stockholders, (ii) approved
this Agreement and the transactions contemplated hereby and (iii)
resolved to recommend and recommended to its stockholders that
they vote in favor of adopting and approving this Agreement and
the Merger in accordance with the terms hereof. Holding, in its
capacity as the sole stockholder of Acquiror, has approved and
adopted this Agreement and the transactions contemplated hereby,
including the Merger. The stockholders of Holding have
unanimously approved and adopted this Agreement and the
transactions contemplated hereby, including the Merger.
5.3. Governmental Authorization. The execution, delivery
and performance by each of Holding and Acquiror of this Agreement
and the consummation by Holding and Acquiror of the transactions
contemplated hereby will not require any consent, approval,
action, order, authorization, or permit of, or regulation or
filing with, any Governmental Entity by Holding or Acquiror other
than (a) those set forth in clauses (a) through (d) of Section
4.3 and (b) other consents, approvals, actions, orders,
authorizations, registrations, declarations, filings and permits
which, if not obtained or made, would not prevent or materially
impair the ability of Holding or Acquiror to consummate the
Merger or the other transactions contemplated by this Agreement.
5.4. Non-Contravention. The execution, delivery and
performance by Holding and Acquiror of this Agreement and the
consummation by Holding and Acquiror of the Merger and the other
transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or
by-laws of either of Holding or Acquiror, (b) assuming compliance
with the matters referred to in Section 5.3, contravene or
conflict with any provision of Law, binding upon or applicable to
either of Holding and Acquiror or by which any of their
respective properties is bound or affected, (c) constitute a
default under (or an event that with notice or lapse of time or
both could reasonably become a default) or give rise (with or
without notice or lapse of time or both) to a right of
termination, amendment, cancellation or acceleration under any
agreement, contract, note, bond, mortgage, indenture, lease,
license, franchise, joint venture, limited liability or
partnership agreement or other instrument binding upon, either of
Holding or Acquiror, or (d) result in the creation or imposition
of any Lien on any asset of either of Holding or Acquiror other
than, in the case of clauses (b), (c) and (d), any such items
that would not prevent or materially impair the ability of
Holding or Acquiror to consummate the Merger or the other
transactions contemplated by this Agreement.
5.5. Financing.
(a) Acquiror has received and executed commitment letters
dated February 23, 2001 from Credit Suisse First Boston ("CSFB")
and DLJ Investment Funding, Inc. ("DLJ") as amended on May 31,
2001 (collectively, the "Commitment Letters"), pursuant to which
CSFB and DLJ have committed, subject to the terms and conditions
set forth therein, to provide to the Company the amount of
financing set forth in the Commitment Letters (the "Commitment
Letter Financing"), to complete the transactions contemplated
hereby and for working capital and general corporate purposes
following the Effective Time. A true and complete copy of each
of the Commitment Letters is attached hereto as Exhibit C. The
Commitment Letters have not been amended or modified since the
amendments of May 31, 2001. Acquiror has fully paid any and all
commitment fees or other fees required by such Commitment Letters
to be paid as of the date hereof (and will duly pay any such fees
after the date hereof). The Commitment Letters are valid and in
full force and effect and no event has occurred which (with or
without notice, lapse of time or both) would constitute a default
thereunder on the part of Holding or Acquiror.
(b) Acquiror has entered into a purchase agreement,
dated as of May 31, 2001 (the "Note Purchase Agreement") with a
group of initial purchasers, including CSFB, providing for
Acquiror to issue and sell, and such initial purchasers to
purchase, $229,000,000 aggregate principal amount of 11 1/4%
Senior Subordinated Notes due 2011 of Acquiror (the "Acquiror
Senior Subordinated Notes"), subject to the terms and conditions
set forth in the Note Purchase Agreement (the "Purchase Agreement
Financing" and, together with the Commitment Letter Financing,
the "Financing"). The proceeds of the Acquiror Senior
Subordinated Notes are referred to herein as the "Senior
Subordinated Notes Proceeds." A true and complete copy of the
Note Purchase Agreement is attached hereto as Exhibit D.
Acquiror has fully paid all commitment fees or other fees
required by the Note Purchase Agreement to be paid as of the date
hereof (and will duly pay any such fees after the date hereof).
The Note Purchase Agreement is valid and in full force and effect
and no event of default has occurred which (with or without
notice, lapse of time or both) would constitute a default
thereunder on the part of Acquiror (other than any matter
relating to the Company or any of its Subsidiaries).
(c) The Commitment Letters have been obtained and the
Note Purchase Agreement has been entered into, subject to the
terms and conditions thereof, to pay in part the aggregate Merger
Consideration pursuant to the Merger, to refinance in part any
indebtedness of the Company and its Subsidiaries that will become
due as a result of the transactions contemplated by this
Agreement, to pay all related fees and expenses, and to provide
additional financing for future working capital and general
corporate needs of the Company and its Subsidiaries. The
obligations to fund the commitments under the Commitment Letters
and the Note Purchase Agreement are not subject to any conditions
other than as set forth in the Commitment Letters and the Note
Purchase Agreement, respectively. It is the good faith belief of
Holding and Acquiror, as of the date hereof, that the Financing
will be obtained. Each of Holding and Acquiror will use its
reasonable best efforts to cause the Financing to be completed on
the terms set forth in the Commitment Letters and the Note
Purchase Agreement.
(d) The Financing, together with the other funds
available to Acquiror, will provide sufficient funds to consummate
the Merger and the other transactions contemplated hereby on the
terms set forth in this Agreement.
(e) Immediately after the consummation of the Merger, the
Surviving Corporation (i) will not be insolvent, (ii) will not be
left with unreasonably small capital, and (iii) will not have
debts beyond its ability to pay such debts as they mature.
5.6. Information to Be Supplied.
(a) The Registration Statement will, at the time the
Registration Statement is filed with the SEC and at the time it
becomes effective under the Securities Act, 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 not misleading.
(b) The information supplied or to be supplied by Holding
and Acquiror for inclusion or incorporation by reference in (i)
the Schedule 13E-3 will, at the time it is first filed with the
SEC and at any time it is amended or supplemented, 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 not misleading, and (ii) the Proxy
Statement will, at the time of the mailing thereof and at the
time of the Company Stockholder Meeting, 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 are made, not misleading or omit to state any material fact
necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Company
Stockholder Meeting which has become untrue or misleading.
(c) The Proxy Statement and the Schedule 13E-3 (in
each case with respect to information relating to Holding and
Acquiror) and the Registration Statement will comply as to form
in all material respects with the provisions of the Securities
Act and the Exchange Act.
(d) Notwithstanding the foregoing, neither Holding nor
Acquiror makes any representation or warranty with respect to any
statements made or incorporated by reference in the Proxy
Statement, the Registration Statement or the Schedule 13E-3 based
on information supplied by the Company for inclusion or
incorporation by reference therein.
5.7. No Breach. Each Person affiliated with the Buying
Group listed on Section 5.7 of the Holding and Acquiror
Disclosure Schedule has reviewed Article 4 of this Agreement and
has no actual knowledge as of the date hereof of any breaches of
the representations or warranties contained therein such that the
condition in Section 9.3(a)(ii) would not be satisfied.
5.8. Disclaimer of Other Representations and Warranties.
Holding and Acquiror do not make, and have not made, any
representations or warranties in connection with the Merger and
the transactions contemplated hereby other than those expressly
set forth herein. It is understood that any data, any financial
information or any memoranda or other materials or presentations
are not and shall not be deemed to be or to include
representations and warranties of Holding and Acquiror. Except
as expressly set forth herein, no Person has been authorized by
Holding or Acquiror to make any representation or warranty
relating to Holding or Acquiror or their respective businesses,
or otherwise in connection with the Merger and the transactions
contemplated hereby and, if made, such representation or warranty
may not be relied upon as having been authorized by Holding or
Acquiror.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees as set forth below.
6.1. Company Interim Operations. Except as set forth
in the Company Disclosure Schedule or as otherwise expressly
contemplated hereby, without the prior consent of Acquiror (which
consent shall not be unreasonably withheld or delayed), from the
date hereof until the Effective Time, the Company shall, and
shall cause each of its Material Subsidiaries to, conduct their
business in all material respects in the ordinary course
consistent with past practice (with such changes as the Company
determines in good faith are necessary or advisable with respect
to (w) changes in U.S. or global economic, industry or political
conditions, (x) changes in U.S. or global financial markets or
conditions, (y) any generally applicable change in Law or
interpretation of any thereof and/or (z) the announcement of
this Agreement or the transactions contemplated hereby or the
Company's performance of its obligations under this Agreement
and compliance with the covenants set forth herein), and shall
use commercially reasonable efforts to (i) preserve intact its
present business organization, (ii) maintain in effect all
material Permits that are required for the Company or such
Material Subsidiary to carry on its business, (iii) keep available
the services of its present key officers and employees, and (iv)
preserve existing relationships with its material customers,
lenders, suppliers and others having material business
relationships with it. Without limiting the generality of the
foregoing, except as set forth in the Company Disclosure Schedule
or as otherwise expressly contemplated by this Agreement, from
the date hereof until the Effective Time, without the prior
consent of Acquiror, the Company shall not, nor shall it permit
any of its Subsidiaries, directly or indirectly, to:
(a) amend the Company's or any Subsidiary's certificate
of incorporation or by-laws (or equivalent organizational
documents);
(b) (i) split, combine or reclassify any shares of capital
stock of the Company or amend the terms of any rights, warrants
or options to acquire its securities, (ii) declare, set aside or
pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its Equity
Interests, or (iii) redeem, repurchase or otherwise acquire or
offer to redeem, repurchase, or otherwise acquire any of its
securities or any rights, warrants or options to acquire its
securities, except for ordinary course dividends by Company
Subsidiaries or, with respect to clause (iii) only, pursuant to
the existing terms of any Company Employee Plan or Foreign Plan
or any agreement executed pursuant thereto;
(c) issue, deliver, sell, or authorize the issuance,
delivery or sale of, its Equity Interests or any securities
convertible into or exercisable for, or any rights, warrants or
options to acquire, its Equity Interests, other than, (i) in
connection with directors' qualifying shares, (ii) the issuance
of Company Shares upon the exercise of stock options granted
prior to the date hereof or in accordance with their present
terms, and (iii) the issuance of Company Shares in exchange for
CBRE Stock Fund Units allocated under the Deferred Compensation
Plan prior to the date hereof, in accordance with the terms of
the Deferred Compensation Plan;
(d) acquire (whether pursuant to merger, stock or asset
purchase or otherwise) in one transaction or series of related
transactions any Person, any Equity Interests of any Person, any
division or business of any Person or all or substantially all of
the assets of any Person for consideration having a fair market
value in excess of $5.0 million in any single or series of
related transactions or $15.0 million in the aggregate;
(e) sell, lease, encumber or otherwise dispose of any
assets which are material to the Company and its Subsidiaries,
taken as a whole, other than (i) sales in the ordinary course of
business consistent with past practice, (ii) equipment and
property no longer used in the operation of the Company's
business, (iii) assets related to discontinued operations, and
(iv) contributions or other transfers of assets to any Joint
Venture permitted by Section 6.1(d) hereof; provided, however,
that the consent of Acquiror to do any of the foregoing shall not
be unreasonably withheld;
(f) (i) (A) incur any indebtedness for borrowed money,
except to fund working capital in the ordinary course consistent
with past practice under the Company's existing credit
facilities, (B) issue or sell any debt securities (except
intercompany debt securities) or warrants or other rights to
acquire any debt securities of the Company or any of its
Subsidiaries, (C) make any loans, advances (other than to
employees of and consultants to the Company in the ordinary
course of business) or capital contributions to, or, except as
permitted by 6.1(d), investments in, any other Person, other than
to the Company or any Subsidiary of the Company or (D) assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person (other than
obligations of Subsidiaries and the endorsements of negotiable
instruments for collection in the ordinary course of business
consistent with past practice), or (ii) enter into or materially
amend any contract, agreement, commitment or arrangements to
effect any of the transactions prohibited by this Section 6.1(f);
(g) except in the ordinary course of business consistent
with past practice, (i) materially amend, modify or terminate any
material contract, agreement or arrangement of the Company or any
of its Material Subsidiaries or (ii) otherwise waive, release or
assign any material rights, claims or benefits of the Company or
any of its Material Subsidiaries thereunder; provided, however,
that the consent of Acquiror to do any of the forgoing shall not
be unreasonably withheld;
(h) (i) except as required by Law or any existing
agreement, increase the amount of compensation of any director or
executive officer of the Company, (ii) except as required by Law,
an agreement existing on the date hereof or pursuant to a Company
severance policy existing on the date hereof, grant any severance
or termination pay to any director or senior officer of the
Company or any Material Subsidiary, (iii) adopt any additional
material employee benefit plan or (iv) except as may be required
by Law or as necessary to comply with the terms of this
Agreement, amend in any material respect any Company Employee
Plan or Foreign Plan; provided, however, that the consent of
Acquiror to do any of the forgoing shall not be unreasonably
withheld;
(i) materially change the Company's methods of accounting
in effect at September 30, 2000, except as required by changes in
GAAP or by Regulation S-X of the Exchange Act, as concurred in by
its independent public accountants; provided, however, that the
consent of Acquiror to do any of the forgoing shall not be
unreasonably withheld;
(j) (i) settle, pay or discharge, any litigation,
investigation, arbitration, proceeding or other claim that is
material to the business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole
or (ii) settle, pay or discharge any Claim against the Company
with respect to or arising out of the transactions contemplated
by this Agreement;
(k) other than in the ordinary course of business
consistent with past practice, (i) make any material Tax election
or take any position on any Company Return filed on or after the
date of this Agreement or adopt any method therein that is
materially inconsistent with elections made, positions taken or
methods used in preparing or filing similar returns in prior
periods, (ii) enter into any settlement or compromise of any
material Tax liability that in either case is material to the
business of the Company and its Subsidiaries, taken as a whole,
(iii) file any amended Company Return with respect to any
material Tax, (iv) change any annual Tax accounting period, (v)
enter into any closing agreement relating to any material Tax or
(vi) surrender any right to claim a material Tax refund;
(l) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of
its Subsidiaries (other than the Merger); and
(m) agree or commit to do any of the foregoing; provided
that the limitations set forth in Sections 6.1(b) through 6.1(g)
and Section 6.1(l) shall not apply to any action, transaction or
event occurring exclusively between the Company and any Company
Subsidiary or exclusively between any Company Subsidiaries.
6.2. Stockholder Meeting. Subject to Section 6.3, the
Company shall cause a meeting of its Stockholders (the "Company
Stockholder Meeting") to be duly called and held as promptly as
reasonably practicable after the date hereof for the purpose of
obtaining the Company Stockholder Approval. Subject to Section
6.3 hereto, (i) the Company's Board of Directors shall recommend
approval and adoption by its Stockholders of this Agreement and
the transactions contemplated hereby, including the Merger (the
"Company Recommendation") and (ii) the Company shall take all
other reasonable lawful action to solicit and secure the Company
Stockholder Approval. The Company Recommendation, together with
a copy of the opinion referred to in Section 4.16(b), shall be
included in the Proxy Statement. Holding and Acquiror or their
agents shall have the right to solicit from the Company
Stockholders proxies in favor of adoption of this Agreement and
the transactions contemplated hereby.
6.3. Acquisition Proposals; Board Recommendation.
(a) The Company agrees that it shall not, nor shall it
permit any Company Subsidiary to, nor shall it authorize or
knowingly permit any officer, director, employee, investment
banker, attorney, accountant, agent or other advisor or
representative of the Company or any Company Subsidiary, directly
or indirectly, to (i) solicit or initiate the submission of any
Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information
with respect to, or take any other action knowingly to facilitate
any inquiries or the making of any proposal that constitutes or
that would reasonably be expected to lead to any Acquisition
Proposal, (iii) grant any waiver or release under any standstill
or similar agreement with respect to any class of the Company's
equity securities or (iv) enter into any agreement with respect
to any Acquisition Proposal; provided, however, that if the
Company receives an unsolicited Acquisition Proposal from a Third
Party that the Company's Board of Directors or the Special
Committee determines in good faith is or could reasonably be
expected to lead to the delivery of a Superior Proposal from that
Third Party, the Company may, subject to compliance with the
other provisions of this Section 6.3, furnish information to, and
engage in discussions and negotiations with, such Third Party
with respect to its Acquisition Proposal ("Permitted Actions").
Notwithstanding the foregoing, the Board of Directors shall not
take any Permitted Actions unless the Company provides Acquiror
with reasonable advance notice thereof.
(b) Except as permitted by this Section 6.3(b), neither
the Board of Directors of the Company, the Special Committee nor
any committee thereof shall amend, withdraw, modify, change,
condition or qualify in any manner adverse to Acquiror, the
Company Recommendation (it being understood and agreed that a
communication by the Board of Directors of the Company or the
Special Committee to the Company Stockholders pursuant to Rule
14d-9(f) of the Exchange Act, or any similar communication to the
Company Stockholders in connection with the making or amendment
of a tender offer or exchange offer, shall not be deemed to
constitute a withdrawal, modification, amendment, condition or
qualification of the Company Recommendation for all purposes of
this Agreement, including this Section 6.3 and Section 10.1(e)).
Notwithstanding the foregoing, in the event that the Board of
Directors of the Company or the Special Committee takes the
actions set forth in Section 6.3(e), the Board of Directors of
the Company or the Special Committee may (i) withdraw or modify
in any manner adverse to Acquiror, the Company Recommendation and
(ii) approve or recommend, or propose to approve or recommend,
any Acquisition Proposal.
(c) Unless the Company's Board of Directors or the Special
Committee has previously withdrawn, or is concurrently therewith
withdrawing, the Company Recommendation in accordance with this
Section 6.3, neither the Company's Board of Directors nor any
committee thereof shall recommend any Acquisition Proposal to the
Company Stockholders. Notwithstanding the foregoing, nothing
contained in this Section 6.3(c) or elsewhere in this Agreement
shall prevent the Company's Board of Directors or the Special
Committee from complying with Rule 14e-2 under the Exchange Act
with respect to any Acquisition Proposal or making any disclosure
required by or otherwise complying with applicable Law.
(d) The Company shall notify Acquiror promptly (but in
no event later than the next Business Day) after receipt by the
Company of any Acquisition Proposal or any request for
information relating to the Company or any of its Subsidiaries
in connection with an Acquisition Proposal or for access to the
properties, books or records of the Company or any of its
Subsidiaries or any request for a waiver or release under any
standstill or similar agreement, by any Person that informs the
Board of Directors of the Company or such Subsidiary that it is
considering making, or has made an Acquisition Proposal;
provided, however, that prior to participating in any discussions
or negotiations or furnishing any such information, the Company
shall receive from such Person an executed confidentiality
agreement on terms that are not materially less favorable to the
Company than the Confidentiality Agreement. The notice shall
indicate the terms and conditions of the proposal or request and
the identity of the Person making it, and the Company will
promptly notify Acquiror of any material modification of or
material amendment to any Acquisition Proposal (and the terms of
such modification or amendment); provided, however, that, without
limiting what changes may be material, any change in the
consideration to be paid with respect to the Acquisition Proposal
shall be deemed to be a material modification or a material
amendment. The Company shall keep Acquiror informed, on a
reasonably current basis, of the status of any negotiations,
discussions and documents with respect to such Acquisition
Proposal or request.
(e) Holding, Acquiror or the Company may terminate this
Agreement, if the Company's Board of Directors or the Special
Committee, after consultation with its financial and legal
advisors, shall have determined (i) to approve or recommend an
Acquisition Proposal after concluding that the Acquisition
Proposal constitutes a Superior Proposal and (ii) to enter into a
binding agreement concerning the Acquisition Proposal; provided,
however, that the Company may not exercise its right to terminate
under this Section 6.3(e), unless (1) the Company shall have
provided to Acquiror at least three (3) Business Days' prior
written notice that its Board of Directors or the Special
Committee has authorized the termination and intends to terminate
this Agreement pursuant to this Section 6.3(e), specifying the
material terms and conditions of the Acquisition Proposal, and
(2) Acquiror does not make, within three (3) Business Days of
delivery of the notice, an offer such that a majority of the
disinterested members of the Company's Board of Directors or the
Special Committee determines that the foregoing Acquisition
Proposal no longer constitutes a Superior Proposal. In
connection with the forgoing, the Company agrees that it will
not enter into an agreement which binds the Company with
respect to such an Acquisition Proposal unless (x) the Company
simultaneously delivers to Acquiror the notice contemplated by
the foregoing proviso, (y) such agreement is not binding on the
Company until three (3) Business Days after delivery of the
notice set forth in this Section 6.3(e) and (z) the Company has
the right under such agreement to unilaterally terminate such
agreement prior to the termination of this Agreement without any
payment or other liability or obligation of any kind.
(f) The Company shall immediately cease, and shall
cause any party acting on its behalf to cease, and cause to be
terminated any existing discussions or negotiations with any
Third Party conducted heretofore with respect to any of the
foregoing and shall request any such parties in possession of
confidential information about the Company or its Subsidiaries
that was furnished by or on behalf of the Company or its
Subsidiaries to return or destroy all such information in the
possession of any such party or the agent or advisor of any such
party.
ARTICLE 7
COVENANTS OF HOLDING AND ACQUIROR
Each of Holding and Acquiror agrees as set forth below.
7.1. Director and Officer Liability.
(a) Holding, Acquiror and the Surviving Corporation agree
that the Surviving Corporation shall adopt on or prior to the
Effective Time, in its certificate of incorporation and by-laws,
the same indemnification, limitation of or exculpation from
liability and expense advancement provisions as those set forth
in the Company's certificate of incorporation and by-laws, in
each case as of the date of this Agreement, and that such
provisions shall not be amended, repealed, revoked or otherwise
modified for a period of six (6) years after the Effective Time
in any manner that would adversely affect the rights thereunder
of the individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company or the
Company Subsidiaries or are otherwise entitled to the benefit of
such provisions, unless such modification is required after the
Effective Time by applicable Law.
(b) To the fullest extent permitted under applicable Law,
commencing at the Effective Time and continuing for six (6) years
thereafter, Holding shall, and Holding shall cause the Surviving
Corporation to, indemnify, defend and hold harmless, each present
and former director, officer or employee of the Company and each
Company Subsidiary and their respective estates, heirs, personal
representatives, successors and assigns (collectively, the
"Indemnified Parties") against all costs and expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and settlement amounts paid in connection
with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time) (each, a
"Claim"), arising out of or pertaining to any action or omission
in their capacity as director or officer of the Company or any
Subsidiary of the Company or their serving at the request of the
Company or any Subsidiary of the Company as director, officer,
trustee, partner or fiduciary of another Person, pension or other
employee benefit plan or enterprise in each case occurring on or
before the Effective Time (including the transactions
contemplated by this Agreement); provided, however, that in the
event any Claim or Claims for indemnification are made within
such six year period, all rights to indemnification in respect of
any such Claim or Claims shall continue until the final
disposition of any and all such Claims. Without limiting the
foregoing, in the event of any Claim, (i) Holding and the
Surviving Corporation shall (x) periodically advance reasonable
fees and expenses (including attorneys fees) with respect to the
foregoing, (y) pay the reasonable fees and expenses of counsel
selected by each Indemnified Party, promptly after statements
therefor are received and (z) vigorously assist each Indemnified
Party in such defense, and (ii) Holding and the Surviving
Corporation, as applicable, shall cooperate in the defense of any
matter; provided, however, that Holding and the Surviving
Corporation shall not be liable for any settlement effected
without its prior written consent (which consent shall not be
unreasonably withheld or delayed).
(c) For six (6) years from the Effective Time, the
Surviving Corporation shall, and Holding shall cause the
Surviving Corporation to, provide to the Company's and each
Company Subsidiary's directors and officers liability and
fiduciary liability insurance protection with the same coverage
and in the same amount, and on terms no less favorable to the
directors and officers than that provided by the Company's
directors' and officers' liability insurance policies in effect
on the date hereof; provided, however, that the Surviving
Corporation shall not be obligated to make premium payments for
such insurance to the extent such annual premiums exceed 250% of
the annual premiums paid as of the date hereof by the Company for
such insurance; and provided, further, that if the premiums with
respect to such insurance exceed 250% of the annual premiums paid
as of the date hereof by the Company for such insurance, the
Surviving Corporation shall be obligated to obtain such insurance
with the maximum coverage as can be obtained at an annual premium
equal to the sum of (i) 250% of the annual premiums paid by the
Company as of the date hereof plus (ii) the cumulative amount by
which the premiums paid after the Effective Time are less than
the product of 250% of the annual premiums paid by the Company as
of the date hereof and the number of years that have expired
since the Effective Time.
(d) All rights to indemnification and/or advancement of
expenses contained in any agreement with any Indemnified Parties
as in effect on the date hereof with respect to matters occurring
on or prior to the Effective Time (including the transactions
contemplated hereby) shall survive the Merger and continue in
full force and effect.
(e) This Section 7.1 shall survive the consummation of
the Merger and is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties referred to herein, their
heirs and personal representatives and shall be binding on the
Surviving Corporation and its successors and assigns and the
covenants and agreements contained herein shall not be deemed
exclusive of any other rights to which an Indemnified Party is
entitled, whether pursuant to Law, contract or otherwise.
(f) If the Surviving Corporation or any of it successors or
assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person,
then, and in each case, to the extent necessary, proper provision
shall be made so that the successors and assigns of the Surviving
Corporation shall assume the obligations set forth in this
Section 7.1.
(g) Nothing in this Agreement is intended to, shall be
construed to or shall release, waive or impair any rights to
directors' and officers' insurance claims under any policy that
is or has been in existence with respect to the Company or any of
its officers, directors or employees, it being understood and
agreed that the indemnification provided for in this Section 7.1
is not prior to or in substitution for any such claims under such
policies.
7.2. Employee Benefits.
(a) For twelve (12) months from the Effective Time,
Holding shall provide (or shall cause the Surviving Corporation
to provide) employees of the Company and the Company Subsidiaries
with benefits under employee benefit plans (other than equity
based compensation) that are no less favorable in the aggregate
than those currently provided by the Company and the Company
Subsidiaries to its employees. For purposes of any employee
benefit plan or arrangement maintained by Holding or the
Surviving Corporation, Holding and the Surviving Corporation
shall recognize (or cause to be recognized) service with the
Company and its Subsidiaries and any predecessor entities (and
any other service credited by the Company under similar benefit
plans) for all purposes (including for vesting, eligibility to
participate, severance, and benefit accrual; provided, however,
that solely to the extent necessary to avoid duplication of
benefits, amounts payable under employee benefit plans provided
by Holding or the Surviving Corporation may be reduced by amounts
payable under similar employee benefit plans of the Company and
its Subsidiaries with respect to the same periods of service).
Any benefits accrued by employees of the Company or any Company
Subsidiary prior to the Effective Time under any defined benefit
pension plan of the Company or any Company Subsidiary that
employs a final average pay formula shall be calculated based on
the terms of such plan. From and after the Effective Time,
Holding and the Surviving Corporation shall waive any pre-
existing condition limitations and credit any flexible spending
account balances, deductibles and out-of-pocket expenses that are
applicable and/or covered under the Company's and its
Subsidiaries' employee benefit plans, and are incurred by the
employees and their beneficiaries during the portion of the plan
year prior to participation in the benefit plans provided by
Holding and the Surviving Corporation. The provisions of this
Section 7.2 shall not create in any employee or former employee
of the Company or any Company Subsidiary any rights to employment
or continued employment with Holding, Acquiror, the Surviving
Corporation or the Company or any of their respective
Subsidiaries, successors or Affiliates. The provisions of this
Section 7.2 shall apply to employees of the Company or any
Company Subsidiary who are on disability or leave of absence.
(b) Participants in the Company's 401(k) plan and non-
qualified retirement plans will receive all Company contributions
for the partial year ending on the Closing Date without regard to
any last day of the plan year requirement or service requirement.
7.3. Severance Plan. For one (1) year from the Effective
Time, Holding shall provide (or shall cause the Surviving
Corporation to provide) employees of the Company and the
Company's Subsidiaries with a severance plan that is no less
favorable than the plan currently applicable to the Company's
employees. Holding and the Surviving Corporation shall recognize
(or cause to be recognized) service with the Company and its
Subsidiaries or any predecessor entities (and any other services
credited by the Company under similar severance plans) for all
purposes; provided, however, that solely to the extent necessary
to avoid duplication of benefits, amounts payable under other
severance plans provided by Holding or the Surviving Corporation
may be reduced by the amounts payable under the Company's
severance plan.
7.4. Conduct of Holding and Acquiror. Holding will and
will take all action necessary to cause Acquiror to perform its
obligations under this Agreement to consummate the Merger on the
terms and subject to conditions set forth in this Agreement.
7.5. Transfer Taxes. All state, local or foreign sales,
use, real property transfer, stock transfer or similar Taxes
(including any interest or penalties with respect thereto)
attributable to the Merger (collectively, the "Transfer Taxes")
shall be timely paid by Holding, Acquiror or the Surviving
Corporation.
7.6. Investment Banking Fee. If the Closing shall occur,
Holding, Acquiror and the Surviving Corporation shall pay or
cause to be paid all fees and expenses due to Xxxxxx Xxxxxxx &
Co. Incorporated from the Company pursuant to the agreement
referred to in Section 4.16(a).
7.7. Financing Arrangements.
(a) Holding and Acquiror shall use their reasonable
best efforts to obtain the Financing on the terms set forth in
Commitment Letters and the Note Purchase Agreement and in an
amount at least equal to the Financing on or prior to the date of
the Company Stockholders Meeting. The Commitment Letters, the
definitive agreements contemplated thereby and the Note Purchase
Agreement (along with any other document pursuant to which
Holding and Acquiror intends to obtain financing of all or a
portion of the Financing) are referred to herein collectively
as the "Financing Agreements". The Company will be afforded a
reasonable opportunity to review and comment on the
representations and warranties contained in the Financing
Agreements. Holding and Acquiror shall use reasonable best
efforts to ensure that the representations and warranties
contained in the Financing Agreements shall be consistent with
the Commitment Letters and the Note Purchase Agreement.
(b) Holding or Acquiror shall provide prompt written
notice to the Company of RCBA's, DLJ's or CSFB's refusal or
unwillingness to provide the financing described in the
Contribution and Voting Agreement, the Commitment Letters or the
Note Purchase Agreement, as the case may be, and, in each case,
the stated reasons therefor (to the extent known).
(c) In the event that any portion of the Financing
becomes unavailable in the manner or from the sources originally
contemplated, Holding and Acquiror will use their reasonable best
efforts to obtain any such portion from alternative sources on
substantially comparable terms, if available. Holding and
Acquiror acknowledge and agree that the condition set forth in
Section 9.3(c) would be satisfied if they were able to obtain
financing on terms substantially comparable to those set forth
in the draft commitment letter of CSFB dated November 9, 2000
previously delivered to the Company.
(d) The Company acknowledges and agrees that Holding
and Acquiror shall have the right to seek to obtain alternative
debt financing that they believe to be on more favorable terms
than the terms of the Commitment Letters so long as they
simultaneously continue to use their reasonable best efforts to
obtain the Financing on the terms set forth in the Commitment
Letters.
7.8. Contribution and Voting Agreement. Holding and
Acquiror shall enforce to the fullest extent permitted by
applicable Laws Sections 3.1 and 4.4 of the Contribution and
Voting Agreement. Sections 3.1 and 4.4 of the Contribution and
Voting Agreement shall not be amended, modified, terminated or
waived without the prior written approval of the Company and the
Special Committee or a majority of the disinterested members of
the Board of Directors.
7.9. Board Member. Holding and Acquiror agree to cause
the initial Board of Directors of Holding after the Effective Time
to include one person who is currently employed by the Company
(other than Messrs. Xxxxx and White) as an active broker of the
Company.
ARTICLE 8
COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY
The parties hereto agree as set forth below.
8.1. Efforts and Assistance.
(a) Subject to the terms and conditions hereof, each
party will use commercially reasonable best efforts to take, or
cause to be taken, all actions, to file, or caused to be filed,
all documents and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the
transactions contemplated by this Agreement as promptly as
practicable, including, without limitation, obtaining all
necessary consents, waivers, approvals, authorizations, Permits
or orders from all Governmental Entities or other Third Parties.
The Company, Holding and Acquiror shall furnish all information
required to be included in the Proxy Statement, the Schedule
13E-3, the Registration Statement or for any application or other
filing to be made pursuant to the rules and regulations of any
Governmental Entity in connection with the transactions
contemplated by this Agreement. Holding, Acquiror and the
Company shall have the right to review in advance, and to the
extent reasonably practicable each will consult the other on,
all the information relating to the other and each of their
respective Subsidiaries, that appear in any filing made with,
or written materials submitted to, any third party or any
Governmental Entity in connection with the Merger. Holding
and Acquiror shall act reasonably and as promptly as reasonably
practicable.
(b) Each of the Company and Holding shall make an
appropriate filing of a notification and report form pursuant to
the HSR Act with respect to the transactions contemplated hereby
promptly and shall promptly respond to any request for additional
information pursuant to the HSR Act and supply such information.
In addition, the Company and Holding shall each promptly make
any other filing that is required under any Non-U.S. Competition
Law. Holding, Acquiror and the Company shall each use their
commercially reasonable efforts to resolve objections, if any,
as may be asserted by any Governmental Entity with respect to
the Merger under any antitrust or trade or regulatory Laws or
regulations of any Governmental Entity, and neither the Company
nor any of the Company Subsidiaries shall agree to do any of the
actions set forth in the foregoing clause without the prior
written consent of Acquiror. Holding and Acquiror shall
reasonably consult with the Company and, subject to being
permitted by the Governmental Entity to do so, the Company shall
have the right to attend and participate in any telephone calls
or meetings that Holding or Acquiror has with any Person with
regard to this Agreement and the transactions contemplated
hereby.
(c) The Company agrees to provide, and will cause its
Subsidiaries and its and their respective officers, employees and
advisers to provide, such cooperation as is reasonably necessary
in connection with the arrangement of any financing to be
consummated contemporaneously with or at or after the Closing in
respect of the transactions contemplated by this Agreement,
including (i) participation in meetings, due diligence sessions
and road shows, (ii) the preparation of offering memoranda,
private placement memoranda, prospectuses and similar documents,
(iii) the execution and delivery of any commitment or financing
letters, underwriting , purchase or placement agreements, pledge
and security documents, other definitive financing documents, or
other requested certificates or documents and comfort letters and
consents of accountants as may be reasonably requested by Holding
and Acquiror and taking such other actions as are reasonably
required to be taken by the Company in the Commitment Letters or
any other financing arrangements contemplated by Section 7.7
hereof; provided, however, that (A) the terms and conditions of
any of the agreements and other documents referred to in clause
(iii) shall be consistent with the terms and conditions of the
financing required to satisfy the condition precedent set forth
in Section 9.3(d), (B) the Company shall be given a reasonable
amount of time to review and comment on the terms and conditions
of any of the agreements and other documents set forth in clause
(iii) prior to the execution of those documents, (C) the terms
and conditions of such financing may not require the payment of
any commitment or other fees by the Company or any of its
Subsidiaries, or the incurrence of any liabilities by the Company
or any of its Subsidiaries, prior to the Effective Time and the
obligation to make any such payment shall be subject to the
occurrence of the Closing and (D) the Company shall not be
required to provide any such assistance which would interfere
unreasonably with the business or operations of the Company or
its Subsidiaries. In addition, in conjunction with the obtaining
of any such financing, the Company agrees, at the reasonable
request of Holding and Acquiror, to call for prepayment or
redemption, or to prepay, redeem and/or renegotiate, as the case
may be, any then existing indebtedness of the Company; provided
that no such prepayment or redemption shall themselves actually
be made until contemporaneously with or after the Effective Time
of the Merger.
8.2. Proxy Statement and Schedule 13E-3.
(a) Reasonably promptly after execution of this Agreement,
the Company shall prepare the Proxy Statement, file the Proxy
Statement with the SEC under the Exchange Act, and use
commercially reasonable efforts to have the Proxy Statement
cleared by the SEC. Holding, Acquiror and the Company shall
cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Acquiror of the receipt
of any comments of the SEC with respect to the Proxy Statement
and of any requests by the SEC for any amendment or supplement
thereto or for additional information and shall provide to
Acquiror reasonably promptly copies of all correspondence between
the Company or any representative of the Company and the SEC.
The Company shall give Acquiror and its counsel the opportunity
to review and comment on the Proxy Statement and any other
documents filed with the SEC or mailed to the Company
Stockholders prior to their being filed with, or sent to, the
SEC or mailed to its Stockholders and shall give Acquiror and its
counsel the opportunity to review and comment on all amendments
and supplements to the Proxy Statement and any other documents
filed with, or sent to, the SEC or mailed to the Company
Stockholders and all responses to requests for additional
information and replies to comments prior to their being filed
with, or sent to, the SEC or mailed to its Stockholders. Each of
the Company, Holding and Acquiror agrees to use its commercially
reasonable efforts, after consultation with the other parties
hereto, to respond promptly to all such comments of and requests
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. Prior to the date of approval of
the Merger by the Stockholders, each of the Company, Holding and
Acquiror shall correct promptly any information provided by it
and used in the Proxy Statement that shall have become false or
misleading in any material respect, and the Company shall take
all steps necessary to file with the SEC and have cleared by the
SEC any amendment or supplement to the Proxy Statement as to
correct the same and to cause the Proxy Statement as so corrected
to be disseminated to the Stockholders, in each case to the
extent required by applicable Law.
(b) Promptly following the date of this Agreement, Holding,
Acquiror and the Company shall file with the SEC, and shall use
all commercially reasonable efforts to cause any of their
respective Affiliates engaging in this transaction to file with
the SEC, a Schedule 13E-3 with respect to the Merger. Each of
the parties hereto agrees to use all commercially reasonable
efforts to cooperate and to provide each other with such
information as any of such parties may reasonably request in
connection with the preparation of the Proxy Statement and the
Schedule 13E-3. The Schedule 13E-3 shall be filed with the SEC
concurrently with the filing of the Proxy Statement. Each of the
Company, Holding and Acquiror agrees to use its commercially
reasonable efforts, after consultation with the other parties
hereto, to respond promptly to all such comments of and requests
by the SEC. Each party hereto agrees promptly to supplement,
update and correct any information provided by it for use in the
Schedule 13E-3 if and to the extent that such information is or
shall have become incomplete, false or misleading.
8.3. Public Announcements. The parties shall consult
with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and shall not issue any such press release or
make any such public statement without the prior consent of the
other parties, which shall not be unreasonably withheld or
delayed, except as may be required by applicable Law or any
listing agreement with any national securities exchange.
8.4. Access to Information; Notification of Certain Matters.
(a) From the date hereof until the Effective Time and
subject to applicable Law, the Company shall (i) give to Holding
and Acquiror, their counsel, financial advisors, auditors and
other authorized representatives reasonable access to its
offices, properties, books and records; (ii) furnish or make
available to Holding and Acquiror, their counsel, financial
advisors, auditors and other authorized representatives any
financial and operating data and other information as those
Persons may reasonably request; and (iii) instruct its employees,
counsel, financial advisors, auditors and other authorized
representatives to cooperate with the reasonable requests of
Holding and Acquiror in their investigation. Any investigation
pursuant to this Section shall be conducted in a manner which
will not interfere unreasonably with the conduct of the business
of the Company and its Subsidiaries and shall be in accordance
with any other existing agreements or obligations binding on the
Company or any of its Subsidiaries. Unless otherwise required by
Law, each of Holding and Acquiror will hold, and will cause its
respective officers, employees, counsel, financial advisors,
auditors and other authorized representatives to hold any
nonpublic information obtained in any investigation in confidence
in accordance with and agrees to be bound by, the terms of the
confidentiality letter, dated December 15, 2000, as amended as of
the date hereof (the "Confidentiality Agreement"), among the
Company and the members of the Buying Group. No investigations
pursuant to this Section 8.4(a) shall affect any representations
or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
(b) The Company shall give prompt notice to Holding and
Acquiror, and Holding and Acquiror shall give prompt notice to
the Company, of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would reasonably be
expected to cause any representation or warranty of such party
contained in this Agreement to be untrue or inaccurate in any
material respect; (ii) any failure of the Company or Holding and
Acquiror, as the case may be, to materially comply with or
satisfy, or the occurrence or nonoccurrence of any event, the
occurrence or nonoccurrence of which would reasonably be expected
to cause the failure by such party to materially comply with or
satisfy , any covenant, condition or agreement to be complied
with or satisfied by it hereunder; (iii) any notice or other
communication from any Third Party alleging that the consent of
such Third Party is or may be required in connection with the
transactions contemplated by this Agreement; and (iv) the
occurrence of any event, development or circumstance which has
had or would be reasonably likely to result in a Company or
Holding Material Adverse Effect; provided, however, that the
delivery of any notice pursuant to this Section 8.4(b) shall not
limit or otherwise affect the remedies available hereunder to the
party giving or receiving such notice.
8.5. Further Assurances. Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto shall
use their respective reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and otherwise to satisfy or
cause to be satisfied all conditions precedent to its obligations
under this Agreement. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of
the Company or Acquiror, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the
Company or Acquiror, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger.
8.6. Registration Statement.
(a) Reasonably promptly after execution of this Agreement,
Holding shall prepare and file with the SEC the Registration
Statement; provided, however, that Holding and Acquiror shall use
their commercially reasonable efforts to file the Registration
Statement simultaneously with the filings of the Schedule 13E-3
and the Proxy Statement. Holding and the Company agree to
cooperate in coordinating such simultaneous filings. Holding
shall use commercially reasonable efforts to have the
Registration Statement declared effective under the Securities
Act as promptly as practicable after the filing and to keep the
Registration Statement effective as long as is necessary to offer
and sell shares of common stock of Holding to employees of the
Company. Holding and the Company shall also take any action
required to be taken under any applicable state securities or
blue sky Laws in connection with the issuance of shares of common
stock of Holding.
(b) Holding and the Company shall cooperate with each
other in the preparation of the Registration Statement, and Holding
shall notify the Company of the receipt of any comments of the
SEC with respect to the Registration Statement and of any
requests by the SEC for any amendment thereto or for additional
information and shall provide to the Company reasonably promptly
copies of all correspondence between Holding or any
representative of the Holding and the SEC. Holding shall give
the Company and its counsel the opportunity to review the
Registration Statement prior to its being filed with the SEC and
shall give the Company and its counsel the opportunity to review
all amendments to the Registration Statement and all responses to
requests for additional information and replies to comments prior
to their being filed with, or sent to, the SEC. Holding will
advise the Company, promptly after it receives notice thereof, of
the time when the Registration Statement has become effective or
any supplement or amendment has been filed, the issuance of any
stop order, or any request by the SEC for amendment of the
Registration Statement or comments thereon and responses thereto
or requests by the SEC for additional information. If at any
time prior to the Effective Time, the Company or Holding
discovers any information relating to either party, or any of
their respective Affiliates, officers or directors, that should
be set forth in an amendment to the Registration Statement, so
that the document will not include any misstatement of a material
fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, the party that discovers any
misleading information shall promptly notify the other parties
hereto and an appropriate amendment describing the information
shall be promptly filed with the SEC and, to the extent required
by Law, disseminated to the recipients of the Prospectus.
(c) Subject to compliance with applicable securities
Laws, Holding and Acquiror will use their commercially reasonable
efforts to provide adequate information and communications to the
employees of the Company concerning the proposed capitalization
of Holding and any proposals of Holding or Acquiror to allow
employees of the Company to purchase shares of common stock of
Holding pursuant to the Registration Statement or to otherwise
acquire equity securities of Holding.
8.7. Disposition of Litigation. The Company will consult
with Holding with respect to any Action by any Third Party to
restrain or prohibit or otherwise oppose the Merger or the other
transactions contemplated by this Agreement and, subject to
Section 6.3, will resist any such effort to restrain or prohibit
or otherwise oppose the Merger or the other transactions
contemplated by this Agreement. Holding may participate in (but
not control) the defense of any stockholder litigation against
the Company and its directors relating to the transactions
contemplated by this Agreement at Holding's sole cost and
expense. In addition, subject to Section 6.3, the Company will
not voluntarily cooperate with any Third Party which has sought
or may hereafter seek to restrain or prohibit or otherwise oppose
the Debt Offer, the Merger or the other transactions contemplated
by this Agreement and will cooperate with Holding to resist any
such effort to restrain or prohibit or otherwise oppose the Debt
Offer, the Merger or the other transactions contemplated by this
Agreement.
8.8. Confidentiality Agreements. The parties acknowledge
that the Company and the members of the Buying Group entered into
the Confidentiality Agreement, which Confidentiality Agreement
shall continue in full force and effect in accordance with its
terms until the earlier of (a) the Effective Time or (b) the
expiration of the Confidentiality Agreement according to its
terms. Without the prior written consent of Acquiror, neither
the Company nor any Subsidiary of the Company will waive or fail
to enforce any provision of any confidentiality or similar
agreement which the Company has entered into since November 10,
2000 in connection with a business combination relating to the
Company.
8.9. Resignation of Directors. Prior to the Effective
Time, the Company shall use its commercially reasonable efforts
to deliver to Acquiror evidence satisfactory to Acquiror of the
resignation of all directors of the Company (other than
Xxxxxxx X. Xxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxx and W.
Xxxxx Xxxxx), effective at the Effective Time.
8.10. Senior Subordinated Notes.
(a) At or prior to the Effective Time, the Company, Holding
and Acquiror will take all actions as may be necessary to (i)
repurchase the aggregate principal amount of the Company's 8-7/8%
Senior Subordinated Notes due 2006 (hereinafter referred to as
the "Notes") that are tendered to the Company on the terms set
forth in Section 8.10 of the Company Disclosure Schedule and such
other customary terms and conditions as are reasonably acceptable
to Acquiror and (ii) obtain the consent of holders of such
principal amount of the Notes outstanding required pursuant to
terms of the First Supplemental Indenture dated as of May 26,
1998 between the Company and State Street Bank and Trust Company
of California, National Association, as Trustee (the
"Indenture"), to amend the terms of the Indenture in the manner
set forth in Section 8.10 of the Company Disclosure Schedule (the
foregoing clauses (i) and (ii), together the "Debt Offer").
Notwithstanding the foregoing, in no event shall the Company be
required to take any action that could obligate the Company to
repurchase any Notes or incur any additional obligations to the
holders of Notes prior to the Effective Time.
(b) The Company shall waive any of the conditions to the
Debt Offer and make any other changes in the terms and conditions
of the Debt Offer as reasonably requested by the Acquiror, and
the Company shall not, without Acquiror's prior consent, waive
any material condition to the Debt Offer, make any changes to the
terms and conditions of the Debt Offer set forth in Section 8.10
of the Company Disclosure Schedule or make any other material
changes in the terms and conditions of the Debt Offer.
Notwithstanding the immediately preceding sentence, Acquiror
shall not request that the Company make any change to the terms
and conditions of the Debt Offer which decreases the price per
Note payable in the Debt Offer, changes the form of consideration
payable in the Debt Offer (other than by adding consideration) or
imposes conditions to the Debt Offer in addition to those set
forth in Section 8.10 of the Company Disclosure Schedule which
are materially adverse to holders of the Notes (it being agreed
that a request by Acquiror that the Company waive any condition
in whole or in part at any time and from time to time in its sole
discretion shall not be deemed to be materially adverse to any
holder of Notes), unless such change was previously approved in
writing by the Special Committee or a majority of the
disinterested members of the Board of Directors of the Company.
(c) Promptly following the date of this Agreement, Holding,
Acquiror and the Company shall prepare an offer to purchase the
Notes (or portions thereof) and forms of the related letter of
transmittal (the "Letter of Transmittal") (collectively, the
"Offer to Purchase") and summary advertisement, as well as other
information and exhibits (collectively, the "Offer Documents").
Holding, Acquiror and the Company shall cooperate with each other
in the preparation of the Offer Documents. All mailings to the
holders of Notes in connection with the Debt Offer shall be
subject to the prior review, comment and reasonable approval of
Acquiror. Provided that this Agreement shall not have been
terminated in accordance with Section 10.1 , the Company shall,
promptly after request of Acquiror (but in no event earlier than
twenty calendar days after the date hereof), commence the Debt
Offer and cause the Offer Documents to be mailed to the holders
of the Notes as promptly as practicable following execution of
this Agreement. The Company, Holding and Acquiror agree promptly
to correct any information in the Offer Documents that shall be
or have become false or misleading in any material respect.
(d) In connection with the Debt Offer, if requested by
Acquiror, the Company shall promptly furnish Acquiror with
security position listings, any non-objecting beneficial owner
lists and any available listings or computer files containing
the names and addresses of the beneficial owners and/or record
holders of Notes, each as of a recent date, and shall promptly
furnish Acquiror with such additional information (including but
not limited to updated lists of Noteholders, mailing labels,
security position listings and non-objecting beneficial owners
lists) and such other assistance as Acquiror or its agents may
reasonably require in communicating the Debt Offer to the record
and beneficial holders of Notes.
ARTICLE 9
CONDITIONS TO MERGER
9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Holding and Acquiror to consummate
the Merger are subject to the satisfaction of the following
conditions:
(a) the Company Stockholder Approval shall have been
obtained;
(b) any applicable waiting period or required approval
under the HSR Act, Non-U.S. Competition Law or any other similar
applicable Law required prior to the completion of the Merger
shall have expired or been earlier terminated or received;
(c) no Governmental Entity of competent authority or
jurisdiction shall have issued any Law or taken any other action
then in effect, which restrains, enjoins or otherwise prohibits
or makes illegal the consummation of the Merger; provided,
however, that the parties hereto shall use their commercially
reasonable efforts to have any such Law or other legal restraint
vacated; and
(d) the Registration Statement shall have been declared by
the SEC and continue to be effective.
9.2. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject
to the satisfaction of the following further conditions:
(a) (i) each of Holding and Acquiror shall have performed
in all material respects all of its obligations hereunder
required to be performed by it at or prior to the Effective Time,
(ii) (A) the representations and warranties of Holding and
Acquiror contained in this Agreement that are qualified by
reference to a Holding Material Adverse Effect shall be true and
correct when made and at and as of the Effective Time, as if made
at and as of such time, and (B) all other representations and
warranties of Holding and Acquiror shall have been true and
correct in all material respects when made and at and as of the
Effective Time as if made at and as of such time, and (iii) the
Company shall have received a certificate signed by the Chief
Executive Officer or President of each of Holding and Acquiror to
the foregoing effect;
(b) each of Holding and Acquiror shall have obtained or
made all consents, approvals, actions, orders, authorizations,
registrations, declarations, announcements and filings
contemplated by Section 5.3, which if not obtained or made (i)
would render consummation of the Merger illegal or (ii) (assuming
the Effective Time had occurred) would be reasonably likely to
have, individually or in the aggregate, a Holding Material
Adverse Effect or a Company Material Adverse Effect; and
(c) Holding and Acquiror shall have caused the valuation
firm which has delivered a solvency letter to the financial
institutions providing the Financing (or, if no such letter has
been provided thereto, a valuation firm reasonably acceptable to
the Company) to have delivered to the Company a letter addressed
to the Special Committee and the Board of Directors in form and
substance reasonably satisfactory to the Special Committee as to
the solvency of the Company and its Subsidiaries after giving
effect to the Merger, the financing arrangements contemplated by
Acquiror with respect to the Merger and the other transactions
contemplated hereby.
9.3. Conditions to the Obligations of Acquiror . The
obligations of Acquiror to consummate the Merger are subject to
the satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material
respects all of its obligations hereunder required to be
performed by it at or prior to the Effective Time, (ii) (A) the
representations and warranties of the Company contained in this
Agreement that are qualified by reference to a Company Material
Adverse Effect shall be true and correct when made and at and as
of the Effective Time, as if made at and as of such time, and (B)
all other representations and warranties of the Company shall
have been true and correct in all material respects when made and
at and as of the time of the Effective Time, as if made as of
such time, and (iii) Acquiror shall have received a certificate
signed by the Chief Executive Officer or Chief Financial Officer
of the Company to the foregoing effect;
(b) the Company shall have obtained or made all consents,
approvals, actions, orders, authorizations, registrations,
declarations, announcements and filings contemplated by Section
4.3 which if not obtained or made (i) would render consummation
of the Merger illegal or (ii) would be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse
Effect; provided, however, that this condition shall be deemed
satisfied if the failure of this condition is due to willful
breach by Holding or Acquiror of any covenant or willful failure
to perform any agreement or a willful breach by Holding or
Acquiror of any representation or warranty contained in any of
the agreements related to the Financing;
(c) (i) the Senior Subordinated Notes Proceeds shall have
been released to the Acquiror from the escrow account into which
they were deposited in connection with the closing of the
offering of the Acquiror Senior Subordinated Notes, and (ii) the
funding contemplated by the Commitment Letters shall have been
obtained on substantially the terms set forth in the Commitment
Letters or the funding of the alternative financing contemplated
by Section 7.7 shall have been obtained; and
(d) the consents of the holders of the Notes required by
Section 8.10(a) shall have been obtained.
ARTICLE 10
TERMINATION
10.1. Termination. This Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time by
written notice, whether before or after the Company Stockholder
Approval shall have been obtained:
(a) by mutual written agreement of Holding, Acquiror
and the Company, in each case duly authorized by the Boards of
Directors or a duly authorized committee thereof;
(b) by either Acquiror or the Company, if
(i) the Merger shall not have been consummated by July 20,
2001 (the "End Date"); provided, however, that the right to
terminate this Agreement under this Section 10.1(b)(i) shall not
be available to any party whose breach of any provision of this
Agreement has resulted in the failure of the Merger to occur on
or before the End Date;
(ii) there shall be any Law that makes consummation of
the Merger illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Entity having
competent jurisdiction enjoining the Company or Acquiror from
consummating the Merger is entered and the judgment, injunction,
judgment, order or decree shall have become final and
nonappealable and, prior to that termination, the parties shall
have used reasonable best efforts to resist, resolve or lift, as
applicable, the Law, judgment, injunction, order or decree; or
(iii) at the Company Stockholder Meeting (including any
adjournment or postponement thereof), the Company Stockholder
Approval shall not have been obtained;
(c) by the Company, (i) if a breach of any representation,
warranty, covenant or agreement on the part of Holding or
Acquiror set forth in this Agreement shall have occurred which
would cause any of the conditions set forth in Section 9.2(a) not
to be satisfied, and such condition shall be incapable of being
satisfied by the End Date; or (ii) as contemplated by Section
6.3(e); provided, however, that termination of this Agreement
pursuant to this clause (ii) shall not be effective until the
Termination Fee has been paid to Acquiror in accordance with
Section 10.2(b);
(d) by Acquiror if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of
the Company set forth in this Agreement shall have occurred which
would cause any of the conditions set forth in Section 9.3(a) not
to be satisfied, and such condition is incapable of being
satisfied by the End Date; or
(e) by Acquiror if the Board of Directors of the Company
or the Special Committee shall (i) (A) amend, withdraw, modify,
change, condition or qualify the Company Recommendation in a
manner adverse to Holding and Acquiror; (B) approve or recommend
to the Company Stockholders an Acquisition Proposal (other than
by Holding, Acquiror or their Affiliates); or (C) approve or
recommend that the Company Stockholders tender their Company
Shares in any tender or exchange offer that is an Acquisition
Proposal (other than by Holding, Acquiror or their Affiliates);
(ii) deliver any notice pursuant to Section 6.3(e) that it
intends to terminate this Agreement and such notice is not
unconditionally withdrawn prior to the third Business Day
following such delivery; (iii) in the case of the Board of
Directors, the Special Committee or any other duly authorized
committee thereof, approve a resolution or agree to do any of the
foregoing (it being understood and agreed that the delivery of
notice pursuant to Section 6.3(e) and any subsequent public
announcement of such notice shall not entitle Acquiror to
terminate this Agreement pursuant to this Section 10.1(e),
provided such notice is unconditionally withdrawn prior to the
third Business Day following delivery and the Company has
previously unconditionally terminated any agreement entered into
in connection with the related Acquisition Proposal); or (iv) any
Person or group (other than Holding, Acquiror or their
Affiliates) acquires beneficial ownership of a majority of the
outstanding Company Shares.
10.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section
10.1 (including any termination by way of Section 6.3), there
shall be no liability or obligation on the part of Holding,
Acquiror, the Company or any of their respective officers,
directors, Stockholders, agents or Affiliates, except no such
termination shall relieve any party hereto of any liability or
damages resulting from any willful breach of this Agreement;
provided that the provisions of Sections 8.3, 8.8, 10.2 and 10.3
and Article 11 of this Agreement, shall remain in full force and
effect and survive any termination of this Agreement.
(b) In the event that this Agreement is terminated by
Acquiror pursuant to Section 10.1(e) or by the Company pursuant
to Section 10.1(c)(ii), the Company shall pay to RCBA by wire
transfer of immediately available funds to an account designated
by RCBA on the next Business Day following such termination a
cash amount equal to the sum of $7,500,000 plus all reasonable
and documented out-of-pocket expenses and fees incurred by
Holding and its stockholders on or prior to the termination of
this Agreement in connection with the transactions contemplated
by this Agreement; provided, however, that the aggregate amount
of expenses and fees to be paid by the Company shall not exceed
$3,000,000 (collectively, the "Termination Fee"). This Section
10.2(b) is intended to be for the benefit of, and shall be
enforceable by, RCBA.
(c) In the event that (i) this Agreement is terminated
pursuant to Sections 10.1(b)(iii) or 10.1(d), (ii) an Acquisition
Proposal (with all percentages included in the definition of
Acquisition Proposal increased to 51% for purposes of this
definition) has been made prior to the Company Stockholder
Meeting or such termination (and, in the case of Section 10.1(d),
prior to the breach giving rise to termination) and (iii) a
transaction contemplated by an Acquisition Proposal (with all
percentages included in the definition of Acquisition Proposal
increased to 51% for purposes of this definition) is completed or
a definitive agreement is executed by the parties thereto with
respect to an Acquisition Proposal (with all percentages included
in the definition of Acquisition Proposal increased to 51% for
purposes of this definition) within twelve (12) months from the
date this Agreement is terminated, the Company shall pay to RCBA
by wire transfer of immediately available funds to an account
designated by RCBA on the next Business Day following the closing
of the transaction contemplated by such Acquisition Proposal, a
cash amount equal to the Termination Fee.
10.3. Fees and Expenses. Except as otherwise specifically
provided herein, all fees and expenses incurred in connection
herewith and the transactions contemplated hereby shall be paid
by the party incurring expenses, whether or not the Merger is
consummated.
ARTICLE 11
MISCELLANEOUS
11.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing
(including facsimile or similar writing) and shall be given,
if to Holding or Acquiror, to:
x/x XXXX Xxxxxxx Xxxxxxxx, X.X.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
if to the Company, to:
CB Xxxxxxx Xxxxx Services, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, P.C.
Facsimile: (000) 000-0000
or such other address or facsimile number as a party may
hereafter specify for the purpose by notice to the other parties
hereto. Each notice, request or other communication shall be
effective only (a) if given by facsimile, when the facsimile is
transmitted to the facsimile number specified in this Section and
the appropriate facsimile confirmation is received or (b) if
given by overnight courier or personal delivery when delivered
at the address specified in this Section.
11.2. Effectiveness of Amendment and Restatement;
Effectiveness of Representations and Warranties and Agreements.
(a) This Agreement amends certain provisions of the
First Amended and Restated Agreement and restates the terms of
the First Amended and Restated Agreement in their entirety so
as to reflect and give effect to such amendments. All amendments
to the First Amended and Restated Agreement effected by this
Agreement, and all other covenants, agreements, terms and
provisions of this Agreement, shall have effect from the date
of the Original Agreement.
(b) Each of the representations and warranties of each
party hereto made in this Agreement shall be deemed (i) to be
made on the date of the Original Agreement and as of the Closing
Date and (ii) not made on the date hereof (except that the
representations and warranties of Acquiror in Section 5.5 shall
be deemed to be made on the date hereof and as of the Closing
Date).
11.3. Survival of Representations, Warranties and
Covenants after the Effective Time. The representations and
warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective
Time or the termination of this Agreement. The covenants contained
in Articles 2, 3, 7 and 11 shall survive the Effective Time.
11.4. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended
or waived prior to the Effective Time, if, and only if, the
amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Holding and Acquiror or in the case
of a waiver, by the party against whom the waiver is to be
effective; provided, however, that after the Company Stockholder
Approval, no such amendment or waiver shall, without the further
approval of the Company Stockholders, be made that would require
such approval under any applicable Law. Notwithstanding the
foregoing, any amendment or waiver agreed to by the Company shall
be effective only if authorized or approved in writing by the
Special Committee or a majority of the members of the Board of
Directors not affiliated with the Buying Group.
(b) At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend
the time for the performance of any of the obligations or other
acts of such party and (b) waive any inaccuracies in the
representations and warranties of such party contained herein or
in any document delivered pursuant hereto; provided, however,
that any extension or waiver agreed to by the Company shall be
effective only if authorized or approved in writing by the
Special Committee or a majority of the members of the Board of
Directors not affiliated with the Buying Group. No such
extension or waiver shall be deemed or construed as a continuing
extension or waiver on any occasion other than the one on which
such extension or waiver was granted or as an extension or waiver
with respect to any provision of this Agreement not expressly
identified in such extension or waiver on the same or any other
occasion. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by Law.
11.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that all or any of the rights or obligations
of Holding or Acquiror may be assigned to any direct or indirect
wholly-owned Subsidiary of such party (which assignment shall not
relieve such assigning party of its obligations hereunder);
provided, further, that other than with respect to the foregoing
proviso, no party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the
consent of the other parties hereto. Any purported assignment in
violation hereof shall be null and void.
11.6. Counterparts; Effectiveness; Third Party Beneficiaries.
This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other
parties hereto. Except as set forth in Section 7.1 and Section
10.2(b), no provision of this Agreement is intended to confer
upon any Person other than the parties hereto any rights or
remedies hereunder.
11.7. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal Laws of the State of
Delaware applicable to contracts executed and fully performed
within the state of Delaware.
11.8. Jurisdiction. Except as otherwise expressly provided
in this Agreement, the parties hereto agree that 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 shall be brought in the
United States District Court for the District of Delaware or, if
such court does not have jurisdiction over the subject matter of
such proceeding or if such jurisdiction is not available, in the
Court of Chancery of the State of Delaware, County of New Castle,
and each of the parties hereby consents to the exclusive
jurisdiction of those courts (and of the appropriate appellate
courts therefrom) in any suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by Law, any
objection which it may now or hereafter have to the laying of the
venue of any suit, action or proceeding in any of those courts or
that any suit, action or proceeding which is brought in any of
those courts has been brought in an inconvenient forum. Process
in any suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction
of any of the named courts. Without limiting the foregoing, each
party agrees that service of process on it by notice as provided
in Section 11.1 shall be deemed effective service of process.
11.9. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof, this being
in addition to any other remedy to which they are entitled at Law
or in equity.
11.10. Entire Agreement. This Agreement (together with the
exhibits and schedules hereto) and the Confidentiality Agreement
constitute the entire agreement between the parties with respect
to the subject matter hereof and supersede all prior agreements
and understandings, both oral and written, between the parties
with respect to the subject matter hereof.
11.11. Authorship. The parties agree that the terms
and language of this Agreement were the result of negotiations
between the parties and, as a result, there shall be no
presumption that any ambiguities in this Agreement shall be
resolved against any party. Any controversy over construction
of this Agreement shall be decided without regard to events of
authorship or negotiation.
11.12. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other terms and provisions
of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
adverse to any party. Upon a determination that any term or
other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent
possible.
11.13. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.14. Headings; Construction. The headings contained in
this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. In
this Agreement (a) words denoting the singular include the plural
and vice versa, (b) "it" or "its" or words denoting any gender
include all genders, (c) the word "including" shall mean
"including without limitation," whether or not expressed, (d) any
reference herein to a Section, Article, Paragraph, Clause or
Schedule refers to a Section, Article, Paragraph or Clause of or
a Schedule to this Agreement, unless otherwise stated, and (e)
when calculating the period of time within or following which any
act is to be done or steps taken, the date which is the reference
day in calculating such period shall be excluded and if the last
day of such period is not a Business Day, then the period shall
end on the next day which is a Business Day.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
CBRE HOLDING, INC. CB XXXXXXX XXXXX SERVICES, INC.
By: /s/ Claus X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------ ------------------------
Its: President Its: Senior Executive
Vice President
XXXX XX CORP.
By: /s/ Claus X. Xxxxxx
------------------------
Its: President
Exhibit B
Amended and Restated Article FOURTH
FOURTH:
A. The total number of shares of all classes of
capital stock that the corporation is authorized to issue is
108,000,000, of which (1) 8,000,000 shall be Preferred Stock
("Preferred Stock"), 6,250,000 of which shall be designated
Series A Convertible Participating Preferred Stock ("Series A
Preferred Stock") and (2) 100,000,000 shall be Common Stock
("Common Stock"). Both the Preferred Stock and Common Stock
shall have a par value of $.01 per share.
B. The Common Stock shall consist of a single class
of 100,000,000 shares, each of which shall be identical. There
shall be no cumulative voting.
C. The Preferred Stock shall consist of a single
class of 8,000,000 shares and may be issued from time to time in
one or more series. The Board of Directors of the corporation
(the "Board of Directors") is expressly authorized to provide for
the issue of all or any of the Preferred Stock in one or more
series, to fix the designation and number of shares thereof and
to determine or alter for each such series, such voting powers,
full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors
providing for the issuance of such stock and as may be permitted
by the General Corporation Law of the State of Delaware. The
Board of Directors is also expressly authorized to increase or
decrease (but not below the number of shares of such series then
outstanding, plus the number of shares of such series issuable
upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the corporation)
the number of shares of any series. If the number of shares of
any such series shall be so decreased, the shares constituting
such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares
of such series.
The relative rights, preferences, privileges, limitations
and restrictions granted to or imposed on the Series A Preferred
Stock or the holders thereof are as follows:
1. Dividends.
a. Preference. The holders of the Series A
Preferred Stock shall be entitled to receive a
dividend, prior and in preference to any declaration or
payment of any dividend (payable other than in Common
Stock or other securities and rights convertible into
or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock of the
corporation), payable out of funds legally available
therefore when, as and if declared by the board of
directors of the corporation, at the rate of sixteen
percent (16%) per annum (compounded quarterly
calculated on the basis of a 360 day year of twelve
30-day months) of the Original Purchase Price.
All such dividends shall be cumulative. To the
extent the dividend provided by this Section 1.a. is
not paid, such dividends shall cumulate and must be
paid prior to any other dividend may be paid by the
corporation. Dividends that are declared and paid in
an amount less than the full amount of dividends
accumulated on the Series A Preferred Stock shall be
applied to the earliest dividend which has not
theretofore been paid. The "Original Purchase Price"
for each share of Series A Preferred Stock shall be
deemed to be $16.00 per share of Series A Preferred
Stock (as adjusted for stock splits, stock dividends,
combinations or similar events with respect to such
shares).
b. Participation. In addition to the preference
set forth in subsection a. above, the holders of Series
A Preferred Stock shall be entitled to participate on
an as-converted to Common Stock basis in any dividends
paid to the holders of Common Stock.
2. Liquidation Preference.
In the event of any liquidation, dissolution or winding
up of the corporation, either voluntary or involuntary,
distributions to the stockholders of the corporation shall
be made in the following manner:
a. Series A Preferred Stock Liquidation
Preference. The holders of Series A Preferred Stock
shall be entitled to receive, prior and in preference
to any distribution of any of the assets or surplus
funds of the corporation to the holders of Common Stock
of the corporation, an amount per share of Series A
Preferred Stock equal to the Original Purchase Price
plus any accrued but unpaid dividends per share,
whether or not declared and including compounding
(as adjusted for stock splits, stock dividends,
combinations or similar events with respect to such
shares) (the "Series A Liquidation Preference"). If,
upon such liquidation, dissolution or winding up of
the corporation, the assets and funds distributed are
insufficient to permit the payment of the Series A
Liquidation Preference, the entire assets and funds
legally available for distribution shall be distributed
ratably among the holders of the Series A Preferred
Stock.
b. Remaining Assets. After payment or setting
apart of payment of the Series A Liquidation
Preference, the holders of the Series A Preferred Stock
and the holders of the Common Stock shall be entitled
to receive the remaining assets of the corporation pro
rata based on the number of shares of Common Stock held
by each such holder (assuming full conversion of all
the Series A Preferred Stock).
c. Reorganization or Merger.
(1) For the purposes of this Section 2,
a liquidation, dissolution or winding up of the
corporation shall be deemed to include (i) the
acquisition of the corporation by another entity
by means of any transaction or series of related
transactions (including, without limitation, any
sale of capital stock, reorganization,
recapitalization, merger or consolidation but,
excluding any merger effected exclusively for the
purpose of changing the domicile of the
corporation) unless the Corporation's stockholders
of record as constituted immediately prior to such
acquisition or sale will, immediately after such
acquisition or sale (by virtue or securities
issued as consideration for the corporation's
acquisition or sale or otherwise) hold at least
50% of the voting power of the surviving or
acquiring entity or (y) a sale of all or
substantially all of the assets of the
corporation. No stockholder of the corporation
shall enter into any transaction or series of
related transactions described above unless the
terms of such transaction or transactions provide
that the consideration to be paid to the
stockholders of the corporation is to be allocated
in accordance with the preferences and priorities
set forth in this Section 2.
(2) In any of such events, if the
consideration received by the corporation is other
than cash, its value will be deemed its fair
market value. Any securities shall be valued as
follows:
(A) for securities not subject to
investment letter or other similar
restrictions on free marketability,
(B) if traded on a securities
exchange or the Nasdaq Stock Market, the
value shall be deemed to be the average of
the closing prices of the securities on such
exchange or market over the 30-day period
ending three (3) days prior to the closing of
such transaction;
(C) if actively traded over-the-
counter, the value shall be deemed to be the
average of the closing bid prices over the
30-day period ending three (3) days prior
to the closing of such transaction; and
(D) if there is no active public
market, the value shall be the fair market
value thereof, as determined in good faith by
the board of directors of the corporation.
(3) The method of valuation of
securities subject to investment letter or other
restrictions on free marketability shall take into
account an appropriate discount (as determined in
good faith by the board of directors of the
corporation) from the market value determined as
pursuant to (2)(A), (B) or (C) above so as to
reflect the approximate fair market value thereof.
3. Voting.
Except as otherwise required by law or contract, the
holder of each share of Common Stock issued and outstanding
shall have one vote and the holder of each share of
Preferred Stock shall be entitled to the number of votes
equal to the number of shares of Common Stock into which
such share of Preferred Stock could be converted at the
record date for determination of the stockholders entitled
to vote on such matters, or, if no such record date is
established, at the date such vote is taken or any written
consent of stockholders is solicited, such votes to be
counted together with all other shares of the corporation
having general voting power and not separately as a class.
Fractional votes by the holders of Preferred Stock shall
not, however, be permitted and any fractional voting rights
shall (after aggregating all shares into which shares of
Preferred Stock held by each holder could be converted) be
rounded to the nearest whole number.
4. Conversion.
The holders of the Series A Preferred Stock have
conversion rights as follows:
a. Right to Convert. Each share of Series A
Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the date of
issuance of such share at the office of the corporation
or any transfer agent for the Series A Preferred Stock,
into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing the
Original Purchase Price by the Conversion Price,
determined as hereinafter provided, in effect at the
time of the conversion (the "Conversion Rate"). The
Conversion Price for the Series A Series A Preferred
Stock shall initially be $16.00 per share. Such
initial Conversion Price shall be subject to adjustment
as hereinafter provided.
b. Mechanics of Conversion. Before any holder
of Series A Preferred Stock shall be entitled to
convert the same into full shares of Common Stock and
to receive certificates therefor, such holder shall
surrender the certificate or certificates therefor,
duly endorsed, at the office of the corporation or of
any transfer agent for the Series A Preferred Stock,
and shall give written notice to the corporation at
such office that such holder elects to convert the
same; provided, however, that the holder may notify
the corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and,
in lieu of the surrender of such certificate or
certificates, execute an agreement satisfactory to the
corporation to indemnify the corporation from any loss
incurred by it in connection with such certificates.
The corporation shall, as soon as practicable after
such delivery, or such agreement and indemnification in
the case of a lost certificate, issue and deliver at
such office to such holder of Series A Preferred Stock,
a certificate or certificates for the number of shares
of Common Stock to which the holder shall be entitled
as aforesaid and a check payable to the holder in the
amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock.
Such conversion shall be deemed to have been made
immediately prior to the close of business on the date
of such surrender of the shares of Series A Preferred
Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of
Common Stock on such date.
c. Fractional Shares. In lieu of any fractional
shares to which the holder of Series A Preferred Stock
would otherwise be entitled, the corporation shall pay
cash equal to such fraction multiplied by the then
effective Conversion Price. Whether or not fractional
shares are issuable upon such conversion shall be
determined on the basis of the total number of shares
of Series A Preferred Stock of each holder at the time
converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate
conversion.
d. Adjustment of Conversion Price. The
Conversion Price of Series A Preferred Stock shall be
subject to adjustment from time to time as follows:
(1) If the number of shares of Common Stock
outstanding at any time after the date hereof is
increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of
shares of Common Stock, then, on the date such
payment is made or such change is effective, the
Conversion Price of Series A Preferred Stock shall
be appropriately decreased so that the number of
shares of Common Stock issuable on conversion of
any shares of Series A Preferred Stock shall be
increased in proportion to such increase of
outstanding shares.
(2) If the number of shares of Common Stock
outstanding at any time after the date hereof is
decreased by a combination of the outstanding
shares of Common Stock, then, on the effective
date of such combination, the Conversion Price of
Series A Preferred Stock shall be appropriately
increased so that the number of shares of Common
Stock issuable on conversion of any shares of
Series A Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.
(3) In case, at any time after the date
hereof, of any capital reorganization, or any
reclassification of the stock of the corporation
(other than as a result of a stock dividend or
subdivision, split-up or combination of shares),
or the consolidation or merger of the corporation
with or into another person (other than a
consolidation or merger in which the corporation
is the continuing entity and which does not result
in any change in the Common Stock), the shares of
Series A Preferred Stock shall, after such
reorganization, reclassification, consolidation,
merger, sale or other disposition, be convertible
into the kind and number of shares of stock or
other securities or property of the corporation
or otherwise to which such holder would have
been entitled if immediately prior to such
reorganization, reclassification, consolidation,
merger, sale or other disposition such holder had
converted its shares of Series A Preferred Stock
into Common Stock. The provisions of this clause
(3) shall similarly apply to successive
reorganizations, reclassifications,
consolidations, mergers, sales or other
dispositions.
e. Minimal Adjustments. All calculations under
this Section 4 shall be made to the nearest cent or to
the nearest one hundredth (1/100) of a share, as the
case may be. No adjustment in the Conversion Price for
Series A Preferred Stock need be made if such
adjustment would result in a change in the Conversion
Price of less than $0.01.
f. No Impairment. The corporation will not
through any reorganization, recapitalization, transfer
of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by
the corporation, but will at all times in good faith
assist in the carrying out of all the provisions
hereunder and in the taking of all such action as may
be necessary or appropriate in order to protect the
rights of the holders of Series A Preferred Stock set
forth hereunder against impairment. This provision
shall not restrict the corporation's right to amend its
Certificate of Incorporation with the requisite
stockholder consent.
h. Reservation of Stock Issuable Upon
Conversion. The corporation shall at all times reserve
and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of
effecting the conversion of the shares of Series A
Preferred Stock such number of its shares of Common
Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of
Series A Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then
outstanding shares of Series A Preferred Stock, the
corporation will take such corporate action as may, in
the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such
purpose.
i. Reissuance of Converted Shares. No shares of
Series A Preferred Stock which have been converted into
Common Stock after the original issuance thereof shall
ever again be reissued and all such shares so converted
shall upon such conversion cease to be a part of the
authorized shares of the corporation.
5. Redemption.
The Series A Preferred Stock is not redeemable.
