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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 26, 1999
AMONG
AUTOGRILL, S.p.A.
AUTOGRILL ACQUISITION CO.,
AND
HOST MARRIOTT SERVICES CORPORATION
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TABLE OF CONTENTS
ARTICLE I. THE TENDER OFFER....................................................................1
1.1. THE OFFER.................................................................................1
1.2. SEC FILINGS...............................................................................3
1.3. COMPANY ACTION............................................................................4
1.4. COMPOSITION OF THE COMPANY BOARD..........................................................4
ARTICLE II. THE MERGER.........................................................................6
2.1. THE MERGER................................................................................6
2.2. CLOSING...................................................................................6
2.3. EFFECTIVE TIME............................................................................6
2.4. EFFECTS OF THE MERGER.....................................................................6
2.5. CERTIFICATE OF INCORPORATION..............................................................6
2.6. BYLAWS....................................................................................6
2.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATION...........................................7
2.8. EFFECT ON CAPITAL STOCK...................................................................7
2.9. SURRENDER AND PAYMENT.....................................................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES...................................................10
3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................10
3.2. REPRESENTATIONS AND WARRANTIES OF PARENT.................................................19
3.3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..................................21
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS.........................................22
4.1. COVENANTS OF THE COMPANY.................................................................22
4.2. COVENANTS OF PARENT AND MERGER SUB.......................................................24
4.3. ADVICE OF CHANGES; GOVERNMENT FILINGS....................................................24
ARTICLE V. ADDITIONAL AGREEMENTS..............................................................25
5.1. PREPARATION OF PROXY STATEMENT; THE COMPANY STOCKHOLDERS MEETING.........................25
5.2. ACCESS TO INFORMATION....................................................................25
5.3. APPROVALS AND CONSENTS; COOPERATION......................................................26
5.4. ACQUISITION PROPOSALS....................................................................27
5.5. EMPLOYEE BENEFITS........................................................................28
5.6. FEES AND EXPENSES........................................................................28
5.7. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE......................................29
5.8. PUBLIC ANNOUNCEMENTS.....................................................................29
5.9. TAKEOVER STATUTES........................................................................30
5.10. EMPLOYEE STOCK OPTIONS..................................................................30
5.11. RIGHTS AGREEMENT........................................................................30
5.12. CREDIT AGREEMENT........................................................................30
5.13. DEBT TENDER.............................................................................30
5.14. LICENSE AGREEMENT.......................................................................30
5.15. FURTHER ASSURANCES......................................................................31
ARTICLE VI. CONDITIONS PRECEDENT..............................................................31
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...............................31
ARTICLE VII. TERMINATION AND AMENDMENT........................................................31
7.1. TERMINATION..............................................................................31
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7.2. EFFECT OF TERMINATION....................................................................33
7.3. AMENDMENT................................................................................33
7.4. EXTENSION; WAIVER........................................................................34
ARTICLE VIII. GENERAL PROVISIONS..............................................................34
8.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
NO OTHER REPRESENTATIONS AND WARRANTIES..................................................34
8.2. NOTICES..................................................................................34
8.3. INTERPRETATION...........................................................................35
8.4. COUNTERPARTS.............................................................................35
8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES...........................................36
8.6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL........................................36
8.7. SEVERABILITY.............................................................................37
8.8. ASSIGNMENT...............................................................................37
8.9. ENFORCEMENT..............................................................................37
8.10. DEFINITIONS.............................................................................37
8.11. PERFORMANCE BY MERGER SUB...............................................................39
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GLOSSARY OF DEFINED TERMS
LOCATION OF
DEFINITION DEFINED TERM
Acquisition Proposal...............................................................Section 5.4(a)
Agreement................................................................................Preamble
Board of Directors...................................................................Section 8.10
Business Day.........................................................................Section 8.10
Certificate of Merger.................................................................Section 2.3
Certificates.......................................................................Section 2.9(b)
Closing...............................................................................Section 2.2
Closing Date..........................................................................Section 2.2
Code...............................................................................Section 3.1(h)
Company..................................................................................Preamble
Company Benefit Plans...........................................................Section 3.1(l)(i)
Company Board......................................................................Section 1.2(b)
Company Common Stock.....................................................................Recitals
Company Disclosure Schedule...........................................................Section 3.1
Company Material Contracts.........................................................Section 3.1(k)
Company Permits....................................................................Section 3.1(f)
Company Purchase Plan................................................................Section 8.10
Company Representatives............................................................Section 5.4(a)
Company Rights Agreement........................................................Section 3.1(b)(i)
Company SEC Reports.............................................................Section 3.1(d)(i)
Company Stock Plan...................................................................Section 8.10
Company Stock Purchase Plan..........................................................Section 8.10
Company Stockholders Meeting.......................................................Section 5.1(a)
Company Voting Debt...........................................................Section 3.1(b)(iii)
Confidential Information Agreement ...................................................Section 5.2
Continuing Directors...............................................................Section 1.4(c)
DGCL.....................................................................................Recitals
Dissenting Shares..................................................................Section 2.9(j)
Effective Time........................................................................Section 2.3
Employee Option......................................................................Section 5.10
Environmental Laws...................................................................Section 8.10
ERISA...........................................................................Section 3.1(l)(i)
Exchange Act..................................................................Section 3.1(c)(iii)
Exchange Agent.....................................................................Section 2.9(a)
Expenses..............................................................................Section 5.6
GAAP............................................................................Section 3.1(d)(i)
Governmental Entity...........................................................Section 3.1(c)(iii)
HSR Act.......................................................................Section 3.1(c)(iii)
Indemnified Party.....................................................................Section 5.7
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Injunction................................................................................Annex A
Intellectual Property................................................................Section 8.10
Interim Financial Statements.......................................................Section 3.1(d)
Liens..........................................................................Section 3.1(b)(ii)
Material Adverse Effect..............................................................Section 8.10
Material Subsidiaries................................................................Section 8.10
Merger...................................................................................Recitals
Merger Consideration...............................................................Section 2.8(c)
Merger Sub...............................................................................Preamble
Minimum Condition..................................................................Section 1.1(a)
Minimum Shares.....................................................................Section 1.1(a)
Offer....................................................................................Recitals
Offer Documents....................................................................Section 1.2(a)
Operational Contracts................................................................Section 8.10
Order.....................................................................................Annex A
Organizational Documents.............................................................Section 8.10
Outside Date.......................................................................Section 7.1(b)
Parent...................................................................................Preamble
Parent Disclosure Schedule............................................................Section 3.2
Parent Representatives................................................................Section 5.2
Payment Fund.......................................................................Section 2.9(a)
Person...............................................................................Section 8.10
Price Per Share..........................................................................Recitals
Proxy Statement.................................................................Section 3.1(e)(i)
Required Company Votes.............................................................Section 3.1(j)
Schedule 14D-1.....................................................................Section 1.2(a)
Schedule 14D-9.....................................................................Section 1.2(b)
SEC................................................................................Section 1.2(a)
Securities Act................................................................Section 3.1(c)(iii)
Subsidiary...........................................................................Section 8.10
Superior Proposal..................................................................Section 5.4(b)
Surviving Corporation.................................................................Section 2.1
Takeover Statute......................................................................Section 5.9
Tax..................................................................................Section 8.10
Taxable..............................................................................Section 8.10
Taxes................................................................................Section 8.10
Tax Return...........................................................................Section 8.10
Violation..................................................................... Section 3.1(c)(ii)
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This AGREEMENT AND PLAN OF MERGER, dated as of July 26, 1999 (this
"Agreement"), by and among Autogrill, S.p.A., a corporation organized under the
laws of the Republic of Italy ("Parent"), Autogrill Acquisition Co., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Host
Marriott Services Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have each approved the acquisition of the Company by Parent upon the
terms and subject to the conditions of this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Merger Sub to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all of the issued and
outstanding shares of the Common Stock, no par value, of the Company ("Company
Common Stock") at a price per share of Company Common Stock of $15.75 net to the
seller in cash (such price, as it may be increased in accordance with the terms
of this Agreement, the "Price Per Share") upon the terms and conditions set
forth in his Agreement, including Annex A hereto;
WHEREAS, in order to complete such acquisition, the respective Boards of
Directors of Parent, Merger Sub and the Company have approved the merger of
Merger Sub with and into the Company (the "Merger"), upon the terms and subject
to the conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), whereby each issued and outstanding share of
Company Common Stock not owned directly or indirectly by Parent or the Company
will be converted into the right to receive the Price Per Share in cash;
WHEREAS, the Board of Directors of the Company has unanimously approved
this Agreement, the Offer and the Merger, has determined that the Offer and the
Merger are fair and in the best interests of the Company's stockholders and is
recommending that the Company's stockholders accept the Offer, tender their
shares of Company Common Stock thereunder and adopt and approve the Merger and
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER
1.1. THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VII, Merger Sub shall, and Parent shall cause Merger Sub
to, as soon as practicable, but in no event later than the fifth Business Day
after the date the execution of this Agreement is announced, commence (within
the meaning of Rule 14d-2(a) of the Exchange Act)
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the Offer to purchase all of the outstanding shares of Company Common Stock at
the Price Per Share net to the seller in cash. The initial expiration date of
the Offer shall be the twentieth Business Day from and after the date the Offer
is commenced, including the date of commencement as the first Business Day in
accordance with Rule 14d-2 under the Exchange Act. The Offer shall be made
pursuant to an Offer to Purchase and related Letter of Transmittal in form
reasonably satisfactory to the Company and containing the terms and conditions
set forth in this Agreement. The obligation of Merger Sub to accept for payment,
purchase and pay for shares of Company Common Stock tendered pursuant to the
Offer shall be subject only to the satisfaction of the conditions set forth in
Annex A hereto, including the condition that a number of shares of Company
Common Stock representing not less than two-thirds of the total issued and
outstanding shares of Company Common Stock on a fully diluted basis on the date
such shares are purchased pursuant to the Offer (the "Minimum Shares") have been
validly tendered and not withdrawn prior to the expiration of the Offer (the
"Minimum Condition"), any of which conditions may be waived by Merger Sub in its
sole discretion; provided, however, that Merger Sub shall not waive the Minimum
Condition without the prior written consent of the Company. The Company agrees
that no shares of Company Common Stock held by the Company or any of its
Subsidiaries will be tendered to Merger Sub pursuant to the Offer.
(b) Without the prior written consent of the Company, neither
Parent nor Merger Sub will (i) decrease the Price Per Share payable in the
Offer, (ii) decrease the number of shares of Company Common Stock sought
pursuant to the Offer or change the form of consideration payable in the Offer,
(iii) change or amend the conditions to the Offer or impose additional
conditions to the Offer, (iv) change the expiration date of the Offer or (v)
otherwise amend, add or waive any term or condition of the Offer in any manner
adverse to the holders of shares of Company Common Stock; provided, however,
that if on any scheduled expiration date of the Offer the conditions set forth
in Annex A hereto have not been satisfied or waived, Merger Sub may (and at the
request of the Company Merger Sub shall), from time to time, extend the
expiration date of the Offer for up to ten additional Business Days (but in no
event shall Merger Sub be required to extend the expiration date of the Offer
beyond the Outside Date); and provided further that (x) Merger Sub may, without
the consent of the Company, extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC applicable to the Offer
and (y) if (i) all conditions to the Offer are satisfied or waived and (ii) the
shares of Company Common Stock validly tendered and not withdrawn pursuant to
the Offer represent more than two thirds but less than 90% of the total issued
and outstanding shares of Company Common Stock on a fully diluted basis, Merger
Sub may extend the Offer for a period not to exceed 10 business days. Assuming
the prior satisfaction or waiver (which is restricted as set forth above) of all
the conditions to the Offer set forth in Annex A as of any expiration date, and
subject to the terms and conditions of this Agreement, Merger Sub shall, and
Parent shall cause Merger Sub to, accept for payment, purchase and pay for, in
accordance with the terms of the Offer, all shares of Company Common Stock
validly tendered and not withdrawn pursuant to the Offer as soon as possible
after such expiration date of the Offer. Parent shall provide, or cause to be
provided, to Merger Sub, on a timely basis, the funds necessary to purchase any
shares of Company Common Stock that Merger Sub becomes obligated to purchase
pursuant to the Offer.
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1.2. SEC FILINGS.
(a) As soon as reasonably practicable on the commencement date of
the Offer, Parent and Merger Sub shall file with the Securities and Exchange
Commission (the "SEC"), with respect to the Offer, a Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1"). The Schedule 14D-1 will comply as to form
and content in all material respects with the applicable provisions of the
federal securities laws and will contain or incorporate by reference the Offer
to Purchase, the related Letter of Transmittal and other ancillary documents and
agreements pursuant to which the Offer will be made (the Schedule 14D-1, the
Offer to Purchase, the Letter of Transmittal and such other documents being
collectively referred to herein as the "Offer Documents"). The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents and any amendment or supplement thereto prior to the filing thereof
with the SEC, and Parent and Merger Sub shall consider such comments in good
faith. Parent and Merger Sub agree to provide to the Company and its counsel any
comments which Parent, Merger Sub or their counsel may receive from the Staff of
the SEC with respect to the Offer Documents promptly after receipt thereof.
Parent, Merger Sub and the Company agree to correct promptly any information
provided by any of them for use in the Offer Documents which shall have become
false or misleading in any material respect, and Parent and Merger Sub further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by the applicable provisions of the federal
and state securities laws.
(b) The Company shall promptly file with the SEC and mail to its
stockholders a Solicitation/Recommendation Statement on Schedule 14D-9 (as
amended from time to time, the "Schedule 14D-9") which will comply as to form
and content in all material respects with the applicable provisions of the
federal and state securities laws. The Schedule 14D-9 will set forth, and the
Company hereby represents, that the Board of Directors of the Company (the
"Company Board"), at a meeting duly called and held, has unanimously (i)
determined that the Offer and the Merger, taken together, are fair to and in the
best interests of the Company's stockholders, (ii) approved and declared
advisable this Agreement and the transactions contemplated hereby, and such
approval constitutes approval for purposes of Section 203 of the DGCL and
Article 15 of the Company's Certificate of Incorporation, and (iii) recommends
that the Company's stockholders accept the Offer, tender their shares of Company
Common Stock thereunder and approve and adopt the Merger and this Agreement;
provided, however, that, subject to Section 7.1(e), such recommendation may be
withdrawn, modified or amended to the extent that the Company Board determines
to do so in the exercise of its fiduciary duties, and such withdrawal,
modification or amendment shall not constitute a breach of this Agreement. The
Company further represents that it has received the written opinion of Deutsche
Bank Securities Inc., the Company's independent financial advisor, dated the
date hereof, to the effect that, as of the date hereof, the consideration to be
received by the Company's stockholders pursuant to the Offer and the Merger,
taken together, is fair from a financial point of view to the holders of shares
of Company Common Stock, a true and complete copy of which opinion has been
delivered to Parent prior to the execution of this Agreement. The Company will
use its reasonable efforts to cause the Schedule 14D-9 to be filed on the same
date that the Schedule 14D-1 is filed; provided, however, that in any event the
Schedule 14D-9 will be filed no later than ten Business Days following the
commencement date of the Offer. The Company will cooperate
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with Parent and Merger Sub in mailing or otherwise disseminating the Schedule
14D-9 with the appropriate Offer Documents to the stockholders of the Company as
and to the extent required by the applicable provisions of the federal and state
securities laws. Parent and its counsel shall be given an opportunity to review
and comment upon the Schedule 14D-9 and any amendment or supplement thereto
prior to the filing thereof with the SEC, and the Company shall consider such
comments in good faith. The Company agrees to provide to Parent and Merger Sub
and their counsel any comments which the Company or its counsel may receive from
the Staff of the SEC with respect to the Schedule 14D-9 promptly after receipt
thereof. The Company, Parent and Merger Sub agree to correct promptly any
information provided by any of them for use in the Schedule 14D-9 which shall
have become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause such Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by the applicable provisions of the federal
and state securities laws. Parent, Merger Sub and the Company each hereby agree
to provide promptly such information necessary to the preparation of the
exhibits and schedules to the Schedule 14D-9 and the Offer Documents which the
respective party responsible therefor shall reasonably request. The Company has
been advised by each of its directors and by each executive officer who as of
the date hereof is actually aware (to the knowledge of the Company) of the
transaction contemplated hereby, that they intend either to tender all shares of
Company Common Stock beneficially owned by them to Merger Sub pursuant to the
Offer or to vote such shares of Company Common Stock in favor of the approval
and adoption of the Merger, unless the recommendation of the Company Board shall
have been withdrawn or materially modified as permitted by Section 5.4.
1.3. COMPANY ACTION. Promptly upon execution of this Agreement and in connection
with the Offer, the Company shall furnish Merger Sub with such information
(including a list of the stockholders of the Company, mailing labels and a list
of securities positions, each as of a recent date), and shall thereafter render
such other assistance, as Parent, Merger Sub or its agents may reasonably
request in communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable law and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer or the Merger, Parent and Merger Sub and each of their respective
affiliates and associates shall (a) hold in confidence the information contained
in any of such labels and lists, (b) use such information only in connection
with the Offer and the Merger and (c) if this Agreement is terminated, promptly
deliver to the Company upon its request all copies of such information then in
their possession.
1.4. COMPOSITION OF THE COMPANY BOARD.
(a) Promptly upon the acceptance for payment of, and payment by
Merger Sub in accordance with the Offer for, not less than two-thirds of the
outstanding shares of Company Common Stock on a fully diluted basis pursuant to
the Offer, Merger Sub shall be entitled to designate such number of members of
the Company Board, rounded up to the next whole number, equal to that number of
directors which equals the product of the total number of directors on the
Company's Board (giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that such number of shares of Company
Common Stock owned in the aggregate by Merger Sub or Parent, upon such
acceptance for payment, bears to the number of shares of Company Common Stock
outstanding; provided, however, that until the
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Effective Time there shall be at least three Continuing Directors. Upon the
written request of Merger Sub, the Company shall, on the date of such request
take all actions necessary to (i) either increase the size of the Company Board
or secure the resignations of such number of its incumbent directors as is
necessary to enable Merger Sub's designees to be so elected to the Company Board
and (ii) cause Merger Sub's designees to be so elected, in each case as may be
necessary to comply with the foregoing provisions of this Section 1.4(a). At
such time, the Company shall also use its reasonable best efforts to cause
Merger Sub's designees to constitute no less than the same percentage as persons
designated by Merger Sub shall constitute of the Company Board of each committee
of the Company Board, each board of directors of each Subsidiary and each
committee of each such board, in each case only to the extent permitted by
applicable law. Notwithstanding the foregoing, until the earlier of the time
Merger Sub acquires two-thirds of the then outstanding shares of Company Common
Stock and the Effective Time, the Company shall use its reasonable best efforts
to ensure that all the members of the Company Board as of the date hereof who
are not employees of the Company shall remain members of the Company Board.
(b) The Company's obligation to cause designees of Merger Sub to
be elected or appointed to the Company's Board shall be subject to Section 14(f)
of the Exchange Act and Rule l4f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule l4f-1 in
order to fulfill its obligations under this Section 1.4, and shall include in
the Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1. Parent and
Merger Sub will supply to the Company in writing and be solely responsible for
any information with respect to any of them and their nominees, officers,
directors and affiliates required by Section 14(f) and Rule l4f-1 and applicable
rules and regulations.
(c) After the time that Merger Sub's designees constitute at least
a majority of the Company Board and until the Effective Time, any (i) amendment
or termination of this Agreement, (ii) amendment to the Certificate of
Incorporation or material amendment to the bylaws of the Company, (iii)
extension of time for the performance or waiver of the obligations or other acts
of Parent or Merger Sub or waiver of the Company's rights hereunder, or (iv)
action by the Company with respect to this Agreement and the transactions
contemplated hereby which materially and adversely affects the interests of the
stockholders of the Company, shall require, in addition to any other affirmative
vote required under the DGCL, the approval of a majority of the then serving
directors who are directors as of the date hereof (the "Continuing Directors");
provided, however, that if the foregoing provisions of this subsection (c)
relating to the concurrence of a majority of Continuing Directors are invalid or
incapable of being enforced under applicable law, then neither Parent nor Merger
Sub shall approve (either in its capacity as a stockholder or as a party to this
Agreement, as applicable), and Parent and Merger Sub shall use their reasonable
best efforts to prevent the occurrence of, any of the actions referred to in
clauses (i) to (iv) above unless such actions shall have received the unanimous
approval of the entire Company Board. If there is more than one Continuing
Director and, prior to the Effective Time, the number of Continuing Directors is
reduced for any reason, the remaining Continuing Director or Directors shall be
entitled to designate persons to fill such vacancies who shall be deemed
Continuing Directors for purposes of this Agreement. In the event there is only
one Continuing Director and he or she resigns or is removed or if all Continuing
Directors resign or are removed,
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he, she or they, as applicable, shall be entitled to designate his, her or their
successors, as the case may be, each of whom shall be deemed a Continuing
Director for purposes of this Agreement. The Company Board shall not delegate
any matter set forth in this Section 1.4 to any committee of the Company Board.
ARTICLE II.
THE MERGER
2.1. THE MERGER. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub
shall be merged with and into the Company. Following the Merger, the separate
corporate existence of Merger Sub shall cease and the Company shall continue as
the surviving corporation (the "Surviving Corporation") in accordance with the
DGCL.
2.2. CLOSING. The closing of the Merger (the "Closing") will take place as soon
as practicable after satisfaction or waiver (as permitted by this Agreement and
applicable law) of the conditions (excluding conditions that, by their terms,
cannot be satisfied until the Closing Date) set forth in Article VI (the
"Closing Date"), unless another time or date is agreed to in writing by the
parties hereto. The Closing shall be held at the offices of Xxxxxx & Xxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, unless another place is agreed to in
writing by the parties hereto.
2.3. EFFECTIVE TIME. At the Closing, the parties shall file with the Secretary
of State of the State of Delaware either (i) a certificate of merger, in form
and substance satisfactory to the Company and Parent, or (ii) in the event
Merger Sub shall have acquired 90% or more of the outstanding shares of Company
Common Stock, a certificate of ownership and merger (in either such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings, recordings or publications required
under the DGCL in connection with the Merger. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such other time as the parties may agree and specify
in the Certificate of Merger (the time the Merger becomes effective being the
"Effective Time").
2.4. EFFECTS OF THE MERGER. At and after the Effective Time, the Merger will
have the effects set forth in Section 259 of the DGCL.
2.5. CERTIFICATE OF INCORPORATION. At the Effective Time and without any
further action on the part of the Company and Merger Sub, the certificate of
incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
2.6. BYLAWS. At the Effective Time, the bylaws of the Company shall be amended
in their entirety to read as the bylaws of Merger Sub read as in effect at the
Effective Time and, as so amended, shall be the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
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2.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The directors of Merger
Sub immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be a director or until their respective successors are duly
elected and qualified, as the case may be. The officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be.
2.8. EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, the Company or the
holder of any shares of Company Common Stock or any shares of capital stock of
Merger Sub:
(a) Capital Stock of Merger Sub. Each issued and outstanding share
of capital stock of Merger Sub shall be converted into and become one fully paid
and nonassessable share of common stock, no par value, of the Surviving
Corporation, which shall constitute the only issued and outstanding shares of
capital stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of Company Common Stock that is owned by the Company or by a wholly owned
Subsidiary of the Company and each share of Company Common Stock that is owned
by Parent, Merger Sub or any other wholly owned Subsidiary of Parent shall
automatically be canceled and retired and shall cease to exist, and no Merger
Consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 2.9(h),
each issued and outstanding share of Company Common stock (other than shares to
be canceled in accordance with Section 2.8(b)) shall be converted into the right
to receive the Price Per Share in cash, without interest (the "Merger
Consideration"). As of the Effective Time, all such shares of Company Common
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any such shares of Company Common Stock shall cease to have any rights with
respect thereto, except the right to receive, upon the surrender of such
certificates, the Merger Consideration.
2.9. SURRENDER AND PAYMENT.
(a) Exchange Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company reasonably acceptable to the Company to act as
agent for the holders of shares of Company Common Stock in connection with the
Merger (the "Exchange Agent") to receive the Merger Consideration to which
holders of shares of Company Common Stock shall become entitled pursuant to
Section 2.8. Upon the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, Parent or Merger Sub shall deposit with the
Exchange Agent cash in an aggregate amount equal to the product of (i) the
number of shares of Company Common Stock outstanding (and not to be canceled
pursuant to Section 2.8(b)) immediately prior to the Effective Time, multiplied
by (ii) the Price Per Share. The deposit made by Parent or Merger Sub pursuant
to the preceding sentence is hereinafter referred to as the "Payment Fund." For
purposes of determining the Payment Fund, Parent shall assume that no
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holder of shares of Company Common Stock will perfect its right to appraisal of
its shares. The Paying Agent shall cause the Payment Fund to be (i) held for the
benefit of the holders of Company Common Stock, and (ii) promptly applied to
making the payments provided or in Section 2.8(c). The Payment Fund shall not be
used for any purpose that is not provided for herein.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock, other
than shares to be canceled or retired in accordance with Section 2.8(b), (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the Exchange Agent shall pay the holder of such
Certificate the Merger Consideration in respect of such Certificate, and the
Certificate so surrendered shall forthwith be canceled. In no event shall the
holder of any Certificate be entitled to receive interest on any Merger
Consideration received. If any portion of the Merger Consideration is to paid to
a Person other than the registered holder of the shares represented by the
Certificate or Certificates surrendered in exchange therefor, it shall be a
condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. Until surrendered
as contemplated by this Section 2.9, each Certificate (other than Certificates
representing Dissenting Shares or shares of Company Common Stock to be canceled
pursuant to Section 2.8(b)) shall be deemed at any time after the Effective Time
to represent only the right to receive, upon the surrender of such Certificate,
the Merger Consideration.
(c) No Further Ownership Rights in Company Common Stock. All
Merger Consideration paid upon the surrender for exchange of Certificates in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificates. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. From and after the Effective Time, the
holders of Certificates evidencing ownership of the shares of Company Common
Stock outstanding immediately prior to the Effective time shall cease to have
rights with respect to such shares, except as otherwise provided for herein or
by applicable law. If, after the Effective Time, Certificates are presented to
the Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged for the Merger Consideration as provided in this Article
II, except as otherwise provided by law.
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(d) Unclaimed Funds. Subject to applicable escheat, abandoned
property or similar laws, any portion of the Payment Fund made available to the
Exchange Agent pursuant to Section 2.9(a) that remains unclaimed by holders of
the Certificates for six months after the Effective Time of the Merger shall be
delivered to Parent, upon demand, and any holders of Certificates who have not
theretofore complied with this Article II shall thereafter look only to Parent
for payment of their claim for Merger Consideration.
(e) No Liability. None of Parent, Merger Sub, the Company or the
Exchange Agent shall be liable to any Person in respect of any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f) Withholding Taxes. Parent and Merger Sub shall be entitled to
deduct and withhold and pay to the applicable taxing authority, or cause the
Exchange Agent to deduct and withhold and pay to the applicable taxing
authority, from the Merger Consideration payable to a holder of shares of
Company Common Stock pursuant to the Offer or the Merger any amounts as are
required to be withheld therefrom under the Code or any applicable provision of
state, local or foreign tax law; provided, however, that (x) Merger Sub shall
take appropriate steps to minimize such withholding and (y) Merger Sub shall pay
(and not withhold) any applicable transfer taxes, except to the extent provided
in Section 2.9(b). To the extent that amounts are properly withheld by Parent or
Merger Sub and paid to the applicable taxing authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such
withholding was made by Parent or Merger Sub.
(g) Investment of Funds. The Payment Fund shall be invested by the
Exchange Agent as directed by Parent in obligations of, or guaranteed by, the
United States of America, in commercial paper obligations rated A-1 or P-1 or
better by Xxxxx'x Investor Services or Standard & Poor's Corporation,
respectively, in each case with maturities not exceeding seven days. All
earnings thereon shall inure to the benefit of Parent.
(h) Lost Certificates. In the event that any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent, the posting by such Person of a bond in such
reasonable amount as Parent may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will pay
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration with respect to such Certificate.
(i) Return of Funds Relating to Dissenting Shares. Any portion of
the Merger Consideration made available to the Exchange Agent to pay for shares
of outstanding Company Common Stock for which appraisal rights have been
perfected shall be returned to the Parent, upon demand.
(j) Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
in accordance with the DGCL
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("Dissenting Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses its right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses its right to appraisal, such shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration, without any interest thereon. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of shares of Company Common Stock, attempted withdrawals of such
demands and any other instruments served pursuant to applicable law and received
by the Company relating to stockholders' rights of appraisal, and Parent shall
have the right to direct all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to, or settle or offer to settle, any such
demands.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as otherwise set
forth in the Company Disclosure Schedule delivered by the Company to Parent at
or prior to the execution of this Agreement (the "Company Disclosure Schedule")
or the Company SEC Reports (as defined below), the Company represents and
warrants to Parent and Merger Sub as follows:
(a) Organization, Standing and Power. Each of the Company and its
Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and has full
corporate power and authority to conduct its business as and to the extent now
conducted and to own, use and lease its assets and properties, except (in the
case of any Subsidiary of the Company) for such failures to be in good standing
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company. Each of the Company and its
Subsidiaries is qualified and in good standing or otherwise authorized to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The copies of the
Organizational Documents of the Company which were previously furnished or made
available to Parent are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
(b) Capital Structure.
(i) As of the date of this Agreement, the authorized capital
stock of the Company consists of (A) 100,000,000 shares of Company
Common Stock, of which 35,886,200 shares are outstanding or held in
treasury, and (B) 1,000,000 shares of preferred stock, no par value, of
which no shares are outstanding. All issued and outstanding shares of
the capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, and no class of capital stock is entitled
to preemptive rights. As of the date of this Agreement, there are no
outstanding options, warrants or other rights to acquire capital stock
from the Company other than (x) options representing in the aggregate
the right to purchase 4,089,631 shares of Company Common Stock under the
Company Stock Plan and (y) rights issued pursuant to the Rights
Agreement dated as of
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December 22, 1995 between the Company and First Chicago Trust Company of
New York (the "Company Rights Agreement"). Section 3.1(b)(i) of the
Company Disclosure Schedule sets forth information regarding the
exercise price, date of grant and number granted of stock options for
each holder thereof.
(ii) All of the issued and outstanding shares of capital stock
of each of the Material Subsidiaries of the Company are duly authorized,
validly issued, fully paid and nonassessable and are owned by the
Company, free and clear of any liens, claims, encumbrances,
restrictions, preemptive rights or any other claims of any third party
("Liens").
(iii) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of the Company having the right to vote on
any matters on which stockholders may vote ("Company Voting Debt") are
issued or outstanding.
(iv) Except as otherwise set forth in this Section 3.1(b), as of
the date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of
any kind to which the Company or its Subsidiaries is a party or by which
any of them is bound obligating the Company or any Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or any
Subsidiary or obligating the Company or any Subsidiary to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the date of
this Agreement, there are no outstanding obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Subsidiary.
(v) Except as otherwise set forth in this Section 3.1(b), as of
the date of this Agreement, there are no stockholder agreements, voting
trusts, proxies or other commitments, understandings, restrictions or
arrangements in favor of any person other than the Company or a
Subsidiary of the Company with respect to the voting of or the right to
participate in dividends or other earnings on any capital stock of any
Subsidiary of the Company.
(c) Authority; No Conflicts.
(i) The Company has all requisite corporate power and corporate
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject, in the case of the Merger, to
the adoption of this Agreement and approval of the Merger by the holders
of shares representing not less than two-thirds of the voting power of
the outstanding Company Common Stock. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of the Company, subject in the case of the consummation of the Merger to
the adoption of this Agreement and approval of the Merger by the holders
of shares representing not less than two-thirds of the voting power of
the outstanding Company Common Stock. The Company Board
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has unanimously duly and validly authorized the execution and delivery
of this Agreement and approved the consummation of the transactions
contemplated hereby, including the Offer and the Merger, and has
unanimously (i) determined that the Offer and the Merger, taken
together, are fair to and in the best interest of the Company's
stockholders, (ii) approved and declared advisable this Agreement and
the transactions contemplated hereby, and (iii) recommended that the
Company's stockholders accept the Offer, tender their shares of Company
Common Stock pursuant to the Offer and approve and adopt the Merger and
this Agreement. This Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally and by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or constitute a default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, amendment, cancellation or acceleration of
any right or obligation or the loss of a material benefit under, or the
creation of a lien, pledge, security interest, charge or other
encumbrance on any assets (any such conflict, violation, default, right
of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
Organizational Documents of the Company, (B) any provision of the
Organizational Documents of any Subsidiary or (C) subject to obtaining
or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii)
below, any loan or credit agreement, note, mortgage, bond, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company, the
Subsidiaries or their respective properties or assets, except, in the
case of the representations set forth in clauses (B) and (C) above, any
Violation that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal or local government, any instrumentality, subdivision,
court, administrative agency or commission or other authority thereof,
or any quasi-governmental or private body exercising any regulatory,
taxing, or other governmental or quasi-governmental authority (a
"Governmental Entity"), is required by or with respect to the Company or
any Subsidiary in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (x) those required under or
in relation to (A) the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (B) the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (C) the DGCL with respect to the
filing and recordation of appropriate merger or other documents, (D)
antitrust or other competition laws of United States and foreign
jurisdictions, (E) the Operational Contracts and (y) such consents,
approvals, orders, authorizations, registrations, declarations and
filings the
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failure of which to make or obtain would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
(d) Reports and Financial Statements.
(i) The Company has filed all required reports, schedules,
forms, statements and other documents required to be filed by it with
the SEC since January 1, 1998 (collectively, including all exhibits
thereto, the "Company SEC Reports"). None of the Company SEC Reports, as
of their respective dates (and, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing),
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements
(including the related notes) included in the Company SEC Reports and
the unaudited interim financial statements as of and for the twenty four
weeks ended June 18, 1999 previously provided to Parent (the "Interim
Financial Statements") present fairly, in all material respects, the
consolidated financial position and consolidated results of operations
and cash flows of the Company and its Subsidiaries as of the respective
dates or for the respective periods set forth therein, all in conformity
with U.S. generally accepted accounting principles ("GAAP") consistently
applied during the periods involved except as otherwise noted therein,
and subject, in the case of the unaudited interim financial statements,
to normal year-end adjustments that have not been and are not expected
to be material in amount and the absence of notes thereto. Such Company
SEC Reports, as of their respective dates (and as of the date of any
amendment to the respective Company SEC Report), complied as to form in
all material respects with the applicable requirements of the Securities
Act and the Exchange Act and the rules and regulations promulgated
thereunder.
(ii) Except as set forth in the Company SEC Reports filed prior
to the date of this Agreement or in the Interim Financial Statements,
and except for liabilities and obligations incurred in the ordinary
course of the Company's business since June 18, 1999, the Company does
not have any liabilities or obligations required by GAAP to be set forth
on a consolidated balance sheet of the Company which would, individually
or in the aggregate, have a Material Adverse Effect on the Company.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (A) the proxy
statement related to the Company Stockholders Meeting (the "Proxy
Statement"), (B) the Schedule 14D-9 or (C) the Offer Documents will, at
the respective times such documents are filed, and, with respect to the
Offer Documents and the Proxy Statement, if any, when first published,
sent or given to the stockholders of the Company, contain an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not false or
misleading or, in the case of the Offer Documents and the Proxy
Statement, if any, or
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any amendment thereof or supplement thereto, at the time of the Company
Stockholders Meeting (as defined below), if any, and at the Effective
Time, contain an 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 made therein, in light of the circumstances under
which they are made, not false or misleading or necessary to correct any
statement in any earlier communication with respect to the offer or the
solicitation of proxies for the Company Stockholders Meeting, if any,
which shall have become false or misleading. The Proxy Statement and
Schedule 14D-9 will comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and the rules
and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by the Company with
respect to statements made or incorporated by reference in the Proxy
Statement and Schedule 14D-9 based on information supplied in writing by
Parent or Merger Sub for inclusion or incorporation by reference
therein.
(f) Compliance with Applicable Laws; Regulatory Matters. The
Company and its Subsidiaries hold all permits, licenses, certificates,
franchises, registrations, variances, exemptions, orders and approvals of all
Governmental Entities which are necessary to the operation of the Company's
businesses (the "Company Permits"), except for any Company Permits the failure
of which to obtain or hold would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure so
to comply would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Except as disclosed in the Company SEC Reports, the
businesses of the Company and its Subsidiaries are not being and have not been
conducted in violation of any law, ordinance, regulation, judgment, decree,
injunction, rule or order of any Governmental Entity, except for violations
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. As of the date of this Agreement, to the knowledge of
the Company, no investigation by any Governmental Entity with respect to the
Company or any of its Subsidiaries is pending or threatened, other than
investigations which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(g) Litigation. There is no litigation, arbitration, claim, suit,
action, investigation or proceeding pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company, nor is there any judgment, award,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any Material Subsidiary which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
(h) Taxes. (i) The Company and the Material Subsidiaries have duly
and timely filed (taking into account any extension of time within which to
file) all Tax Returns required to be filed by them and all such filed Tax
Returns are complete and accurate in all material respects; (ii) the Company and
the Subsidiaries have paid all Taxes that are shown as due
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on such filed Tax Returns or that the Company or any Subsidiary is obligated to
withhold from amounts owing to any employee, creditor or third party, except
with respect to matters contested in good faith or for such amounts that would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company; (iii) as of the date of this Agreement, there are no pending or, to the
knowledge of the Company, threatened audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters relating to the Company or
any Subsidiary which, if determined adversely to the Company or such Subsidiary,
would, individually or in the aggregate, have a Material Adverse Effect on the
Company; (iv) there are no deficiencies or claims for any Taxes that have been
proposed, asserted or assessed against the Company or any Subsidiary which, if
such deficiencies or claims were finally resolved against the Company or such
Subsidiary, would, individually or in the aggregate, have a Material Adverse
Effect on the Company; (v) there are no material Liens for Taxes upon the assets
of the Company or any Subsidiary, other than Liens for current Taxes not yet due
and payable and Liens for Taxes that are being contested in good faith by
appropriate proceedings; (vi) neither of the Company nor any Subsidiary has made
an election under Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code"); and (vii) neither the Company nor any of its Subsidiaries
has waived any statute of limitations or agreed to any extension of time with
respect to a material Tax assessment or deficiency.
(i) Absence of Certain Changes or Events. Since December 31, 1998
through the date of this Agreement, (A) the Company and its Subsidiaries have
conducted their business in the ordinary course and have not incurred any
material liability, except in the ordinary course of their respective
businesses, and (B) there has not been:
(1) any declaration or setting aside for payment of any
dividend or other distribution with respect to any shares of capital stock of
the Company, or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries of any outstanding shares of capital stock or other
equity securities of, or other ownership interests in, the Company;
(2) any amendment of any term of any outstanding security of the
Company or any of its Subsidiaries that would materially increase the
obligations of the Company or such Subsidiary under such security;
(3) any incurrence, assumption or guarantee by the Company or
any its Subsidiaries of any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practices;
(4) any creation or assumption by the Company or any of its
Subsidiaries of any Lien on any asset material to the Company and its
Subsidiaries, taken together, other than in the ordinary course of business
consistent with past practices;
(5) the making of any (i) material loan, advance or capital
contribution to or investment in any Person (other than a Subsidiary of the
Company) by the Company or any of its Subsidiaries or (ii) material loans or
advances to
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employees of the Company or any of its Subsidiaries, in each case, other than
have been made in the ordinary course of business consistent with past
practices;
(6) any contract or agreement entered into by the Company or any
of its Subsidiaries relating to any acquisition or disposition of any assets
material to the Company and its Subsidiaries, taken together, or any material
portion of the Company's business, other than transactions, commitments,
contracts or agreements in the ordinary course of business consistent with past
practices and those contemplated by this Agreement;
(7) any material change in any method of accounting or
accounting practices by the Company or any of its Subsidiaries, except for any
such change required by reason of a change in GAAP;
(8) any (i) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any director or officer
of the Company (or any amendment to any such existing agreement), (ii) grant of
any severance or termination pay to any director or officer of the Company, or
(iii) material change in benefits payable to any director, officer or employee
of the Company pursuant to any severance, retirement or welfare plans or
policies thereof, in each case other than in the ordinary course of business
consistent with past practices; or
(9) any agreement or commitment by the Company or its
Subsidiaries to do any of its foregoing.
(j) Vote Required. The affirmative vote of the holders of shares
representing no less than two-thirds of the voting power of the outstanding
shares of Company Common Stock (the "Required Company Votes") is the only vote
of the holders of any class or series of the Company capital stock necessary to
approve the Merger.
(k) Certain Agreements. Each of (i) the contracts listed as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 1999 under the rules and regulations of the SEC relating to the
business of the Company and its Subsidiaries and (ii) the Operational Agreements
(x) to which the Company or any of its Subsidiaries is a party and that is
material to the Company's business and (y) that are the 40 largest in terms of
revenues recorded by the Company and its Subsidiaries for the most recent fiscal
year of the Company (the "Company Material Contracts") are valid and in full
force and effect except to the extent they have previously been terminated or
expired in accordance with their terms, and neither the Company nor its
Subsidiaries has violated any provision of, or committed or failed to perform
any act which, with or without notice, lapse of time, or both, would constitute
a default under the provisions of any such Company Material Contract, except for
such defaults which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. To the knowledge of the Company, no counterparty
to any such Company Material Contract has violated any provision of, or
committed or failed to perform any act which, with or without notice, lapse of
time, or both, would constitute a default under the provisions of such Company
Material
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Contract, except for defaults which would not, individually or in the aggregate,
have a Material Adverse Effect on the Company.
(l) Employee Benefit Plans; Labor Matters.
(i) With respect to each employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and any bonus, deferred
compensation, stock bonus, stock purchase, restricted stock, stock
option, employment, termination, change in control and severance plan,
program, arrangement and contract) to which the Company or any Material
Subsidiary is a party, which is maintained or contributed to by the
Company or any Material Subsidiary, or with respect to which the Company
or any Material Subsidiary could incur material liability under ERISA
(the "Company Benefit Plans"), the Company has made available to Parent
and Merger Sub a true and complete copy of such Company Benefit Plan.
(ii) Each of the Company Benefit Plans that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the IRS, and the Company
is not aware of any circumstances which would reasonably be expected to
result in the revocation of any such favorable determination letter.
(iii) With respect to the Company Benefit Plans, no event has
occurred and, to the knowledge of the Company, there exists no condition
or set of circumstances in connection with which the Company or any
Material Subsidiary would be subject to any liability under the terms of
such Company Benefit Plans, ERISA, the Code or any other applicable law
(but giving no effect to the actions contemplated by this Agreement)
which would, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(m) There is no pending labor dispute, strike or work stoppage
against the Company or any Material Subsidiary which would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. There is no pending charge or complaint against the Company or any
Material Subsidiary by the National Labor Relations Board or any comparable
state agency, except where such unfair labor practice, charge or complaint would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(n) Environmental Matters. Except to the extent that failure to
satisfy the following representations would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, the Company and each
of its Subsidiaries: (i) have obtained all permits, licenses and other
authorizations which are required to be obtained under all applicable
Environmental Laws by the Company or the Subsidiaries; (ii) are in substantial
compliance with the terms and conditions of such required permits, licenses and
authorizations, and also are in
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substantial compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements and obligations contained in applicable
Environmental Laws; (iii) have not received any Order or complaint, or notice of
any assessed penalty or investigation or review pending or threatened by any
Governmental Entity, with respect to any alleged failure by the Company or any
of its Subsidiaries to have any license, permit, authorization, approval or
consent from Governmental Entities required under any applicable Environmental
Law in connection with the conduct of the business or operations of the Company
or any of its Subsidiaries and (iv) have not received notice of any past or
present violations of Environmental Laws, or of any event, incident or action
which is reasonably likely to prevent continued substantial compliance with such
Environmental Laws, or which would give rise to any common law environmental
liability, or which would otherwise form the basis of any claim, action, suit or
proceeding against the Company or any Subsidiary based on, or resulting from,
the manufacture, processing, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge or release into the environment, of any
toxic or hazardous substance or waste.
(o) Intellectual Property. Except as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company, (i) the Company
and each Subsidiary owns, has the right to acquire or is licensed or otherwise
has the right to use (in each case, clear of any liens or encumbrances of any
kind), all Intellectual Property, (ii) no claims are pending or, to the
knowledge of the Company, threatened that the Company or any Subsidiary is
infringing on or otherwise violating the rights of any person with regard to any
Intellectual Property and (iii) to the knowledge of the Company, no person is
infringing on or otherwise violating any right of the Company or any of its
Subsidiaries with respect to any Intellectual Property owned by and/or licensed
to the Company or any of its Subsidiaries.
(p) Insurance. The Company has made available to Parent prior to the
execution of this Agreement a true and complete list of all liability, property,
workers' compensation, directors' and officers' liability and other insurance
policies currently in effect that insure the business, operations, properties,
assets or employees of the Company or any of its Subsidiaries. Such insurance
policies are placed with financially sound and reputable insurers and, in light
of the respective business, operations, assets and properties of the Company and
its Subsidiaries, are in amounts and have coverages that are reasonable and
customary for persons engaged in such businesses and operations and having such
assets and properties.
(q) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company, except fees payable to Deutsche Bank Securities
Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation.
(r) Opinion of Financial Advisor. The Company has received the
written opinion of Deutsche Bank Securities Inc., the Company's independent
financial advisor, dated the date hereof, to the effect that, as of the date
hereof, the consideration to be received by the Company's stockholders pursuant
to the Offer and the Merger, taken together, is fair, from a financial point of
view, to the holders of Company Common Stock.
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(s) Inapplicability of Certain Provisions. The Company Board has
approved the Merger and this Agreement, and assuming that Parent's
representation set forth in Section 3.2(f) below is true and correct, taken all
other actions necessary to render inapplicable to the Merger, this Agreement and
the transactions contemplated by this Agreement, the provisions of Section 203
of the DGCL or Article 15 of the Company's certificate of incorporation.
(t) Real Property. Except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, (i) the Company has
not received notice of any pending or threatened annexation or condemnation
proceedings affecting any of the Company's properties, and (ii) the personal
property fixtures and equipment material to the conduct of the operations of the
business of the Company are owned free and clear of all Liens.
(u) Year 2000. The Company has reviewed the areas within its
businesses and operations which could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Company and
its Subsidiaries may be unable to recognize and perform properly date-sensitive
functions on and after December 31, 1999). The Company's current assessment of
the potential effect on the Company of the Year 2000 Problem set forth in the
Company SEC Reports is accurate in all material respects.
(v) Debt Tender. Except customary transaction expenses incurred in
connection with the debt tender offer referred to in the Offer to Purchase and
Consent Solicitation Statement of the Company dated July 2, 1999, as amended,
the Company has not incurred any other costs in connection with such debt tender
offer and, to the knowledge of the Company, there is no litigation, arbitration,
claim, suit, action, investigation or proceeding threatened against or affecting
the Company or any of its Subsidiaries in respect of a proposed withdrawal or
termination of such debt tender offer that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company.
3.2. REPRESENTATIONS AND WARRANTIES OF PARENT. Except as otherwise set forth in
the Parent Disclosure Schedule delivered by Parent to the Company at or prior to
the execution of this Agreement (the "Parent Disclosure Schedule"), Parent
represents and warrants to the Company as follows:
(a) Organization, Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the law of the Republic
of Italy, is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, except where the failure so
to qualify would not, individually or in the aggregate, have a Material Adverse
Effect on Parent.
(b) Authority; No Conflicts.
(i) Parent has all requisite corporate power and corporate
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate
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action on the part of Parent. This Agreement has been duly executed and
delivered by Parent and constitutes a valid and binding agreement of
Parent, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally, or by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(ii) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, result
in any Violation of: (A) any provision of the Organizational Documents of
Parent or any of its Subsidiaries or (B) except as would not,
individually or in the aggregate, have a Material Adverse Effect on
Parent or impair or delay the ability of Parent to consummate the
transactions contemplated hereby, and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (iii) below, any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent, any of its Subsidiaries or their
respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent in connection with the execution
and delivery of this Agreement by Parent or the consummation by Parent of
the transactions contemplated hereby, except for (A) the consents,
approvals, orders, authorizations, registrations, declarations and
filings required under or in relation to clause (x) of Section
3.1(c)(iii) and (B) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain would not, individually or in the aggregate, have a Material
Adverse Effect on Parent or impair or delay the ability of Parent to
consummate the transactions contemplated hereby and (C) any consents,
approvals, orders, authorizations, registrations, declarations or filings
not required to be obtained or made until after the Effective Time.
(c) Information Supplied.
(i) None of (A) the Offer Documents, (B) the Schedule 14D-1 or
(C) the information supplied or to be supplied by Parent or Merger Sub
for inclusion or incorporation by reference in the Proxy Statement, the
Schedule 14D-9 and any other documents to be filed with the SEC in
connection with the transactions contemplated hereby, including any
amendment or supplement to such documents, will, at the respective times
such documents are filed, and, with respect to the Proxy Statement and
the Offer Documents, when first published, sent or given to stockholders
of the Company, 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 made therein, in light of the circumstances
under which they are made, not false or misleading or, in the case of the
Proxy Statement, or any amendment thereof or supplement thereto, at the
time of the Company Stockholders Meeting, and at the Effective Time,
contain any untrue statement
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of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to made the statements made therein,
in light of the circumstances under which they are made, not false or
misleading or necessary to correct any statement in any earlier
communication with respect to the Offer or the solicitation of proxies
for the Company Stockholders Meeting, which shall have become false or
misleading.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(e), no representation or warranty is made by Parent or Merger Sub
with respect to statements made or incorporated by reference in the Offer
Documents or Schedule 14D-1 based on information supplied by the Company
for inclusion or incorporation by reference therein.
(d) Financing. Parent has available, and will make available to
Merger Sub, the funds necessary to consummate the Offer and the Merger and the
transactions contemplated hereby on a timely basis and to otherwise satisfy the
obligations of the Company and to conduct the Company's business.
(e) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent on Merger Sub, except Xxxxxxx Sachs & Co. or certain of
its affiliated entities.
(f) Ownership of Company Capital Stock. As of the date of this
Agreement, neither Parent nor any of its affiliates or associates (as such terms
are defined under Section 203 of the DGCL and the Exchange Act) (x) beneficially
owns, directly or indirectly or (y) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
case of either clause (x) or (y), shares of capital stock of the Company.
(g) No Vote Required. No vote of the holders of any securities of
Parent is necessary to approve this Agreement or the transactions contemplated
hereby.
3.3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent and Merger
Sub represent and warrant to the Company as follows:
(a) Organization and Corporate Power. Merger Sub is a wholly owned
Subsidiary of Parent and a corporation duly incorporated, validly existing and
in good standing under the laws of Delaware. The copies of the Organizational
Documents of Merger Sub which were previously furnished or made available to the
Company are true, complete and correct copies of such documents as in effect on
the date of this Agreement.
(b) Corporate Authorization. Merger Sub has all requisite corporate
power and corporate authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been
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duly executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict with
the Organizational Documents of Merger Sub or any agreements by which Merger Sub
is bound.
(d) No Business Activities. Merger Sub is not a party to any
material agreements (other than this Agreement) and has not conducted any
activities other than in connection with its organization, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. COVENANTS OF THE COMPANY. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or to the extent that Parent shall
otherwise consent in writing, which consent shall not be unreasonably withheld
or delayed:
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course consistent
with past practice, and shall use their reasonable best efforts to preserve
intact their present business organizations and preserve their relationships
with customers, suppliers and others having business dealings with them.
(b) Dividends; Changes in Share Capital. The Company shall not, and
shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, (iii) repurchase, redeem or otherwise acquire
any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock, except as otherwise permitted
under certain option agreements to effect cashless option exercises or (iv)
adopt a plan of complete or partial liquidation or resolutions providing for or
authorizing such liquidation or a dissolution, or (except as permitted under
Section 5.4) any merger, consolidation, restructuring, recapitalization or other
reorganization.
(c) Issuance of Securities. The Company shall not and shall cause
its Material Subsidiaries not to issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock of any class,
any Company Voting Debt or any securities convertible into or exercisable for,
or any rights, warrants or options to acquire, any such shares or Company Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
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than the issuance of Company Common Stock upon the exercise of stock options
pursuant to the Company Stock Plan, and the issuance of shares pursuant to the
Company Stock Plan and the Company Purchase Plan, in each case as in effect on
the date of this Agreement.
(d) Organizational Documents. Except to the extent required to
comply with their respective obligations hereunder or required by law, the
Company and its Material Subsidiaries shall not amend or propose to amend their
respective Organizational Documents.
(e) Indebtedness; Investments. The Company shall not, and shall
cause its Subsidiaries not to, directly or indirectly, except pursuant to the
Company's Refinancing Plan set forth on Schedule 4.1(e) to this Agreement, (i)
incur or assume any long-term or short-term debt or issue any debt securities,
except for borrowings under existing lines of credit in the ordinary and usual
course of business consistent with past practice and borrowings in amounts not
material to the Company and its Subsidiaries taken as a whole; (ii) pledge or
otherwise encumber shares of capital stock of the Company or its Subsidiaries,
or mortgage or pledge any of their material assets, tangible or intangible,
except to secure existing debt and except for such of the foregoing as is not
material to the Company and its Subsidiaries taken as a whole; or (iii) except
in an aggregate amount not to exceed $8 million, (A) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except in the ordinary and
usual course of business consistent with past practice and guarantees in amounts
not material to the Company and its Subsidiaries, taken as a whole, and except
for obligations of the wholly owned Subsidiaries of the Company; or (B) make any
loans, advances or capital contributions to, or investments in, any other Person
(other than Subsidiaries of the Company, or customary loans or advances to
employees in the ordinary and usual course of business consistent with past
practice and in amounts not material to the Company and its Subsidiaries taken
as a whole).
(f) Benefit Plans. The Company shall not, and shall not permit the
Material Subsidiaries to, (i) increase the compensation payable or to become
payable to any of its executive officers or employees or (ii) take any action
with respect to the grant of any severance or termination pay, or stay, bonus or
other incentive arrangement (other than pursuant to benefit plans and policies
in effect on the date of this Agreement), except (A) any such increases or
grants made in the ordinary and usual course of business consistent with past
practice or (B) as provided in Section 5.5; provided, however, that nothing in
this Section 4.1(f) shall reduce, modify, change or diminish the rights of any
executive officer or employee of the Company to receive, now or in the future,
stock, cash compensation or other benefits pursuant to any existing Company
Benefit Plan.
(g) Accounting and Tax Practice or Policy. Except to the extent
required by applicable law or GAAP, the Company will not, and will not permit
any of its Subsidiaries to (i) make any material change in any method of
accounting or accounting practice or policy, or (ii) make any material Tax
election or settle or compromise any material income Tax liability with any
Governmental Entity.
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(h) Capital Expenditures. The Company will not, and will not permit
any of its Subsidiaries to, make, in the aggregate, any capital expenditures in
excess of $40 million.
(i) Line of Business. The Company and its Subsidiaries will not make
any material change in the lines of business in which they participate or are
engaged.
(j) Operational Contracts; Company Permits. The Company will not,
and will not permit any of the Subsidiaries to, amend or modify any Company
Permit or any Operational Contract for which revenues were recorded during the
Company's most recent fiscal year in excess of $15 million (other than the
entering into, amendment or modification of any Operational Contract in respect
of the New Jersey Turnpike, which shall not be prohibited), except for any
extensions or renewals thereof or otherwise in the ordinary and usual course of
business, consistent with past practice.
(k) Other Actions. The Company shall not, and shall not permit its
Subsidiaries to, take any action that would reasonably be expected to result in
(i) any of the representations or warranties of the Company becoming untrue in
any material respect or (ii) except as otherwise permitted by Section 5.4, any
of the conditions to the Merger set forth in Article VI not being satisfied.
4.2. COVENANTS OF PARENT AND MERGER SUB. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or to the extent that the Company
shall otherwise consent in writing, which consent shall not be unreasonably
withheld or delayed; Parent shall not, and shall not permit any of its
Subsidiaries to, take any action that would reasonably be expected to result in
(i) any of the representations or warranties of Parent becoming untrue in any
material respect or (ii) any of the conditions to the Merger set forth in
Article VI not being satisfied.
4.3. ADVICE OF CHANGES; GOVERNMENT FILINGS. Each party shall promptly advise
the other orally and in writing of (i) any representation or warranty becoming
inaccurate, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement required to be complied with or
satisfied by it under this Agreement or (iii) any change, event or circumstance
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on such party or materially adversely affect its ability
to consummate the transactions contemplated hereby in a timely manner; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement or constitute a waiver thereunder. Each party
agrees that, to the extent practicable, it will consult with the other party
with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other party apprised of the status of matters relating to
completion of the transactions contemplated hereby.
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ARTICLE V.
ADDITIONAL AGREEMENTS
5.1. PREPARATION OF PROXY STATEMENT; THE COMPANY STOCKHOLDERS MEETING.
(a) If required by the DGCL or the Company's Organizational
Documents in order to consummate the Merger, the Company shall, as soon as
practicable following the acquisition by Merger Sub of shares of Company Common
Stock pursuant to the Offer, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Company Stockholders Meeting") for the purpose
of obtaining the Required Company Votes, and, the Company shall, through its
Board of Directors, recommend to its stockholders that they vote in favor of the
approval of the Merger and the adoption of this Agreement; provided, however,
that the Company Board may withdraw, modify or change such recommendation to the
extent that the Company Board, after consultation with and based upon the advice
of independent legal counsel, determines in good faith that such action is
necessary for the Company Board to comply with its fiduciary duties under
applicable law. Parent and Merger Sub shall vote or cause to be voted all the
shares of Company Common Stock owned of record by Parent, Merger Sub or any of
Parent's other Subsidiaries in favor of the approval of the Merger and the
adoption of the Agreement. After the date hereof and prior to the expiration of
the Offer, Parent shall not purchase, offer to purchase, or enter into any
contract, agreement or understanding regarding the purchase of shares of Company
Common Stock, except pursuant to the terms of the Offer and the Merger.
(b) Notwithstanding the preceding paragraph or any other provision
of this Agreement, in the event Parent, Merger Sub or any other Subsidiary of
Parent shall beneficially own, in the aggregate, at least 90% of the outstanding
shares of the Company Common Stock, the Company shall not be required to call
the Company Stockholders Meeting or to file or mail the Proxy Statement, and the
parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the acceptance for
payment of and payment for shares of Company Common Stock by Merger Sub pursuant
to the Offer without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
(c) In connection with any stockholder meeting, the Company shall
promptly prepare and file with the SEC the Proxy Statement. The Company shall
use reasonable best efforts to cause the Proxy Statement to be cleared with the
SEC and mailed to the Company's stockholders, as promptly as practicable, and,
thereafter, to obtain approval of the Merger by its stockholders.
5.2. ACCESS TO INFORMATION. Subject to the Confidential Information Agreement
dated March 15, 1999 between Parent and the Company (the "Confidential
Information Agreement"), from the date hereof until the earlier of the Effective
Time or the termination of this Agreement, upon reasonable notice, the Company
shall, and shall cause its Subsidiaries to, (a) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives of
Parent ("Parent Representatives") reasonable access during normal business hours
to all of its and its Subsidiaries' properties, books, contracts, commitments
and records and its officers, management employees,
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accountants and representatives and (b) furnish promptly to such persons upon
request (i) a copy of each report, statement, schedule and other document filed
or received by the Company or any of the Subsidiaries pursuant to the
requirements of federal or state securities laws, and (ii) all other information
and data (including, without limitation, copies of Operational Contracts,
Company Benefit Plans and other books and records) concerning the business and
operations of the Company and its Subsidiaries as Parent or any of such other
Persons reasonably may request (subject, however, to confidentiality and similar
non-disclosure obligations and the preservation of attorney client and work
product privileges). Notwithstanding the foregoing, neither Parent nor any
Parent Representatives shall perform any environmental testing at any of the
Company's or its Subsidiaries' properties or facilities.
5.3. APPROVALS AND CONSENTS; COOPERATION
(a) Each of the Company and Parent shall cooperate with each other
and use (and shall cause their respective Subsidiaries to use) its reasonable
best efforts to take or cause to be taken all actions, and do or cause to be
done all things, necessary, proper or advisable on their part under this
Agreement and applicable laws to consummate and make effective the Merger and
the other transactions contemplated by this Agreement as soon as practicable,
including (i) preparing and filing as promptly as practicable all documentation
to effect all applications, notices, petitions, filings, tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations as are necessary or advisable to be obtained from any third party
and/or any Governmental Entity in connection with the Merger or any of the other
transactions contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals.
(b) In furtherance and not in limitation of the foregoing, each of
the Company and Parent shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any United States or foreign
Governmental Entity. Any party hereto shall promptly inform the others of any
material communication from the United States Federal Trade Commission, the
Department of Justice or any other United States or foreign Governmental Entity
regarding the transactions contemplated by this Agreement. If any party or any
affiliate thereof receives a request for additional information from any such
Governmental Entity with respect to the Transactions contemplated by this
Agreement, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request (a copy of such
response to be provided to the other party hereto).
(c) The Company and Parent each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may reasonably be
necessary or advisable in connection with the Offer Documents, Schedule 14D-9,
Proxy Statement or any other statement, filing, tax ruling request, notice or
application made by or on behalf of the Company, Parent or any of their
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respective Subsidiaries to any third party and/or any Governmental Entity in
connection with the Merger or the other transactions contemplated by this
Agreement.
5.4. ACQUISITION PROPOSALS.
(a) The Company shall, and shall cause its Subsidiaries to, cause
their respective officers, directors, employees and representatives and agents
(the "Company Representatives") to immediately cease any existing discussions or
negotiations, if any, with any Person conducted heretofore with respect to an
Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal.
Unless and until this Agreement shall have been terminated pursuant to Article
VII hereof, except as otherwise expressly provided in Section 5.4(b), neither
the Company nor the Company Representatives shall (i) solicit or initiate the
making of any Acquisition Proposal, (ii) participate in negotiations with any
person or group (other than Parent, Merger Sub and their respective designees)
concerning an Acquisition Proposal, or (iii) disclose or furnish, in connection
with an Acquisition Proposal, any material non-public information or provide
access to its properties, books or records, or otherwise take action that would
facilitate or lead to any Acquisition Proposal, except as required by law or
pursuant to a governmental request for information. As used herein "Acquisition
Proposal" shall mean any proposal to acquire in any manner, directly or
indirectly, in one or a series of transactions, all or more than 20% of the
Company's business, assets or capital shares whether by merger, consolidation,
other business combination, purchase of assets, tender or exchange offer or
otherwise.
(b) Notwithstanding anything to the contrary contained in Section
5.4(a) or elsewhere in this Agreement, prior to acceptance for payment of, and
payment by Merger Sub for, shares of Company Common Stock pursuant to the Offer,
the Company and the Company Representatives may, to the extent the Company
Board, after consultation with and based upon the advice of independent legal
counsel, determines in good faith that such action is necessary for the Company
Board to comply with its fiduciary duties under applicable law, participate in
discussions or negotiations with, and furnish non-public information to, and
afford access to the properties, books, records, officers, employees and
representatives of the Company to any Person, entity or group after such Person,
entity or group has delivered to the Company, in writing, an Acquisition
Proposal not solicited after the date hereof which the Company Board determines
in good faith is, if accepted, reasonably likely to be consummated (taking into
account all legal, financial, regulatory and other aspects of the proposal and
the Person making the proposal) and believes in good faith, after consultation
with its financial advisors, if consummated would be more favorable to the
Company or its stockholders from a financial point of view than the transactions
contemplated by this Agreement (a "Superior Proposal"); provided, however, that
prior to taking such action, the Company shall (to the extent practicable)
provide notice to Parent to the effect that it is taking such action. Subject to
Section 7.2(b), in the event the Company receives a Superior Proposal, nothing
contained in this Agreement shall prevent the Board of Directors of the Company
from executing or entering into an agreement relating to such Superior Proposal
and recommending such Superior Proposal to its stockholders, if the Board
determines in good faith that it is appropriate to do so; in such case, the
Board of Directors of the Company may withdraw, modify or refrain from making
its recommendation of the Offer, the Merger and this Agreement; provided however
that the Company shall (i) provide Parent at least
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24 hours prior written notice of the Company's intention to execute or enter
into an agreement relating to such Superior Proposal to enable Parent to match
such Superior Proposal, in which case, the Company Board shall recommend to the
Company's stockholders to accept the proposal of Parent; and (ii) where Parent
does not match such Superior Proposal, terminate this Agreement by written
notice to Parent given no sooner than 48 hours after Parent's receipt of a copy
of such Superior Proposal (or a description of the significant terms and
conditions thereof). Notwithstanding anything to the contrary contained in
Section 5.4 or elsewhere in this Agreement, prior to the acceptance for payment
of, and payment by Merger Sub for, shares of Company Common Stock pursuant to
the Offer, the Company may, in connection with a possible Acquisition Proposal,
refer any Person to this Section 5.4 and Article VII and make a copy of this
Section 5.4 and Article VII available to any Person. Nothing contained in this
Section 5.4 shall prohibit the Company Board from complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer.
5.5. EMPLOYEE BENEFITS.
(a) Subject to subparagraph 5.5(c) below, for the period from the
Closing Date until two years from the January 1 next following the Closing Date,
Parent shall or shall cause the Surviving Corporation to maintain in effect
benefit plans which in the aggregate provide benefits that are at least as
favorable to employees as the arrangements (other than equity-related benefit
plans) currently provided by the Company Benefit Plans.
(b) For purposes of determining eligibility to participate, vesting
and accrual or entitlement to benefits where length of service is relevant under
any employee benefit plan or arrangement of Parent, the Surviving Corporation or
any of their respective Subsidiaries, employees of the Company and its
Subsidiaries as of the Effective Time shall receive service credit for service
with the Company and its Subsidiaries and their respective predecessors to the
same extent such service credit was granted under the Company Benefit Plans,
subject to offsets for previously accrued benefits and without duplication of
benefits.
(c) Except as any employee may otherwise agree, Parent shall cause
the Surviving Corporation to assume and honor in accordance with their terms all
written employment, change in control, severance and termination plans and
agreements of employees of the Company and its Subsidiaries and the severance
pay policies identified in Section 5.5(c) of the Company Disclosure Schedule.
5.6. FEES AND EXPENSES. Whether or not the transactions contemplated hereby are
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except as provided in Section 7.2. As used in this Agreement,
"Expenses" includes all out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Offer Documents and the Proxy Statement and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated
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hereby. Without limiting the generality of the foregoing, in connection with the
consummation of the Offer and the Merger, the parties will take all actions
necessary to ensure prompt payment of all expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
5.7. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Surviving Corporation
shall, and Parent shall cause Surviving Corporation to, maintain in effect (i)
for a period of six years after the Effective Time, the current provisions
regarding indemnification of current or former officers or directors (each an
"Indemnified Party") contained in the Organizational Documents of the Company
and its Subsidiaries and in any agreements between an Indemnified Party and the
Company or any of its Subsidiaries, provided that in the event any claim or
claims are asserted or made within such six year period, all rights to
indemnification in respect of any claim or claims shall continue until final
disposition of any and all such claims, and (ii) for a period of six years, the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by the Company (provided that Parent or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured and provided that such
substitution shall not result in any gaps or lapses in coverage with respect to
matters occurring at or prior to the Effective Time) with respect to claims
arising from facts or events that occurred at or before the Effective Time;
provided, that if such insurance cannot be so maintained or obtained at a
premium not greater than 150% of the premium for the Company's current
directors' and officers' liability insurance, Parent may maintain or obtain as
much of such insurance as can be maintained or obtained at a cost equal to 150%
of the current annual premiums of the Company for such insurance. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any action, proceeding or investigation in connection with
any matter occurring prior to or at the Effective Time, including (without
limitation) the transactions contemplated hereby, the Surviving Corporation will
pay as incurred the reasonable fees and expenses of counsel selected by the
Indemnified Party and reasonably acceptable to the Surviving Corporation
(including the cost of any investigation and preparation and the cost of any
appeal) incurred in connection therewith. In the event a claim is asserted
against an Indemnified Party more than six years after the Effective Date, and
if such claim is not barred by the applicable statute of limitations, the
Surviving Corporation shall defend, indemnify and hold harmless the Indemnified
Party in accordance with the foregoing. This covenant shall survive the closing
of the transactions contemplated hereby and is intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties and their
respective heirs and legal representatives.
5.8. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the Company
and Parent shall use all reasonable efforts to develop a joint communications
plan and each party shall use all reasonable efforts (i) to ensure that all
press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan, and
(ii) unless otherwise required by applicable law or by obligations pursuant to
any listing agreement with or rules of any United States national securities
exchange or the Milan Stock Exchange, to consult with each other before issuing
any press release or otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
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5.9. TAKEOVER STATUTES. If Section 203 of the DGCL or any other takeover
statute ("Takeover Statute") shall become applicable to the transactions
contemplated hereby, the Company and the members of the Board of Directors of
the Company, shall grant such approvals and take such actions as are necessary
so that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to eliminate or
minimize the effects of such Takeover Statute on the transactions contemplated
hereby.
5.10. EMPLOYEE STOCK OPTIONS.
The holder of each employee stock option outstanding immediately
prior to the Effective Time (an "Employee Option") which is unexercised and
vested or which would vest on or prior to January 2, 2000 pursuant to the
applicable vesting schedule in effect as of the date hereof which is terminated
immediately prior to the Effective Time, shall be entitled to receive at the
Effective Time from the Company or as soon as practicable thereafter from the
Surviving Corporation, in consideration for such termination, an amount in cash
equal to (i) the product of (A) the number of shares of Company Common Stock
subject to such Employee Option (whether or not vested or exercisable) and (B)
the excess, if any, of the Price Per Share over the exercise price per share of
Company Common Stock subject to such Employee Option, (ii) less any required
withholding taxes. The Company shall take any action reasonably requested by
Parent in connection with the foregoing.
5.11. RIGHTS AGREEMENT. The Company shall take all action necessary to cause
the provisions of the Company Rights Agreement to be inapplicable to the
transactions contemplated by this Agreement, without any payment to holders of
rights issued pursuant to such rights agreement.
5.12. CREDIT AGREEMENT. The Company shall use its reasonable best efforts to
obtain all necessary waivers and consents prior to the consummation of the Offer
so that the transactions contemplated hereby will not result in or constitute a
default under that certain Amended and Restated Credit Agreement dated as of
April 18, 1997 by and among the Company, the Lenders named therein and the First
Bank of Chicago, as Agent.
5.13. DEBT TENDER. Promptly upon execution of this Agreement, the Company will
withdraw and terminate the debt tender offer referred to in the Offer to
Purchase and Consent Solicitation Statement of the Company dated July 2, 1999,
as amended.
5.14. LICENSE AGREEMENT. The Company will use its reasonable best efforts to
ensure that the license to use the name "Marriott" granted in the License
Agreement dated December 29, 1995, between the Company and Marriott
International, Inc. shall be extended for a period equivalent to the period
Marriott International has granted to Sodexho Marriott a license to use the name
"Marriott" in the agreement dated March 1998, and that such license to the
Company, shall, at its option, be further extended for a period equivalent to
any subsequent extension granted to Sodexho Marriott or any of its successors or
assigns.
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5.15. FURTHER ASSURANCES. In case at any time after the Effective Time any
further action is reasonably necessary to carry out the purposes of this
Agreement, the proper officers of the Company, Parent and Merger Sub shall take
any such reasonably necessary action.
ARTICLE VI.
CONDITIONS PRECEDENT
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligations of the Company, Parent and Merger Sub to effect the Merger are
subject solely to the satisfaction or waiver (subject to Section 1.4(c) and
where legally permissible) on or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. The Company shall have obtained all
approvals of holders of shares of capital stock of the Company necessary to
approve the Merger, to the extent required by law.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(c) No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
a court or other Governmental Entity of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(d) Purchase of Shares. Merger Sub shall have commenced the Offer
pursuant to Article I hereof and purchased, pursuant to the terms and conditions
of such Offer, all shares of Company Common Stock duly tendered and not
withdrawn.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1. TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, by action taken or authorized by the Board of Directors of the
terminating party or parties, whether before or after approval of this Agreement
and the matters contemplated herein, including the Merger, by the stockholders
of the Company:
(a) By mutual written consent of Parent and the Company, by action
of their respective Boards of Directors;
(b) By the Company, if it is not in material breach of its
obligations hereunder and (i) Merger Sub fails to commence the Offer as provided
in Section 1.01 hereof, (ii) Merger Sub shall not have accepted for payment and
paid for all shares of Company Common Stock tendered pursuant to the Offer in
accordance with the terms thereof on or before October 30, 1999 (the "Outside
Date") or (iii) Merger Sub fails to purchase validly tendered shares of Company
Common Stock in violation of the terms of the Offer or this Agreement;
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(c) By the Company or Parent if the Offer is terminated or withdrawn
pursuant to its terms without any shares of Company Common Stock being purchased
thereunder; provided that Parent may terminate this Agreement pursuant to this
Section 7.1(c) only if Parent's or Merger Sub's termination or withdrawal of the
Offer is not in violation of the terms of this Agreement or the Offer;
(d) By the Company or Parent if any Governmental Entity of competent
jurisdiction shall have issued, entered, enacted, promulgated or enforced any
order, decree, judgment, statute, regulation or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, judgment, statute,
regulation, ruling or other action shall have become final and nonappealable;
(e) By Parent, prior to purchase by Merger Sub of shares of Company
Common Stock pursuant to the Offer, if (i) the Company Board shall have
withdrawn or materially and adversely modified its recommendation of the Offer,
the Merger or this Agreement (it being understood, however, that for all
purposes of this Agreement, the fact that the Company has supplied any Person
with information regarding the Company or has entered into discussions or
negotiations with such Person as permitted by this Agreement, or the disclosure
of such facts, shall not be deemed a withdrawal or modification of the Company
Board's recommendation of the Offer, the Merger or this Agreement); (ii) the
Company Board shall have recommended to the stockholders of the Company that
they approve a Superior Proposal other than that contemplated by this Agreement
and at least two Business Days have elapsed since the recommendation; or (iii) a
tender offer or exchange offer that, if successful, would result in any Person
or "group" becoming a "beneficial owner" (such terms having the meaning in this
Agreement as is ascribed under Regulation 13D under the Exchange Act) of 20% or
more of the issued and outstanding shares of Company Common Stock on a fully
diluted basis is commenced (other than by Parent or an affiliate of Parent) and
the Company Board recommends that the stockholders of the Company tender their
shares in such tender or exchange offer or the Company Board announces a neutral
position or fails to make a recommendation with respect to such offer within the
shorter of the ten Business Days after such tender offer or exchange offer is
commenced or the period remaining until the Outside Date;
(f) By the Company, prior to the purchase by Merger Sub of shares of
Company Common Stock pursuant to the Offer, if the Company enters into a
definitive agreement with respect to a Superior Proposal;
(g) By Parent, prior to the purchase by Merger Sub of shares of
Company Common Stock pursuant to the Offer, upon a material breach of any
covenant or agreement on the part of the Company set forth in this Agreement, or
if any representation or warranty of the Company in this Agreement shall at such
time be inaccurate and such inaccuracy would be reasonably likely to have a
Material Adverse Effect on the Company, in either case which breach or
inaccuracy is not reasonably capable of being cured without expenditures in
excess of $6 million by the Company or, if capable of such cure, has not been
cured without expenditures in excess of $6 million by the Company within ten
Business Days after the Company has knowledge thereof;
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(h) By the Company, prior to the purchase by Merger Sub of any
shares of Company Common Stock pursuant to the Offer, upon a material breach of
any covenant or agreement on the part of Parent or Merger Sub set forth in this
Agreement, or if any representation or warranty of Parent or Merger Sub shall,
at such time, be inaccurate and such inaccuracy would be reasonably likely to
materially and adversely affect the ability of Parent and Merger Sub to perform
their obligations hereunder, in either case which breach or inaccuracy is not
reasonably capable of being cured by Parent or Merger Sub or, if capable of
cure, has not been cured within ten Business Days after either Parent or Merger
Sub has knowledge thereof; or
(i) By Parent, if it is not in material breach of its obligations
hereunder or under the Offer and no shares of Company Common Stock shall have
been purchased pursuant to the Offer by the Outside Date.
7.2. EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either the
Company or Parent as provided in Section 7.1, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of any
party hereto or their respective officers, directors, employees or stockholders
except (i) pursuant to the last sentence of Section 5.2, Section 5.6, this
Section 7.2 and Article VIII, (ii) with respect to any liabilities or damages
incurred or suffered by a party hereto as a result of the willful breach by
another party hereto of any of its covenants or other agreements set forth in
this Agreement and (iii) with respect to any liabilities or damages incurred or
suffered by the Company as a result of the failure of Parent or Merger Sub to
consummate the Offer or the Merger as required under the terms of this
Agreement, including, without limitation, by reason of an inability to obtain
the requisite financing to do so. Any damages or liabilities referenced in
clauses (ii) and (iii) above shall be recoverable in full from the party or
parties whose breach or failure to consummate caused such damages or liabilities
to be incurred.
(b) In the event that this Agreement is terminated pursuant to
Section 7.1(e) or 7.1(f), then the Company shall pay to Parent a cash fee of $20
million, which amount shall be payable by wire transfer of immediately available
funds no later than two Business Days after such termination. The Company
acknowledges that the agreements contained in this Section 7.2(b) are an
integral part of the transactions contemplated in this Agreement, and that,
without these agreements, the Parent and Merger Sub would not enter into this
Agreement.
7.3. AMENDMENT. Subject to Section 1.4(c), this Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company, but, after any
such approval, no amendment shall be made which by law or in accordance with the
rules of the New York Stock Exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto which expressly states that the parties intend to amend this Agreement.
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7.4. EXTENSION; WAIVER. Subject to Section 1.4(c), at any time prior to the
Effective Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements of any other party or with any
condition to its own obligations. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. No delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. Unless
otherwise provided, the rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VIII.
GENERAL PROVISIONS
8.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS; NO OTHER
REPRESENTATIONS AND WARRANTIES. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such representations, warranties, covenants and other agreements, shall survive
the Effective Time, except for those covenants and agreements contained herein
and therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article VIII. Each party hereto agrees that,
except for the representations and warranties contained in this Agreement, (i)
none of the Company, Parent or Merger Sub or any of their respective officers,
directors, employees, affiliates, agents, financial or legal advisors or other
representatives makes any other representations or warranties, whatsoever, oral
or written, express or implied, and each hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, affiliates, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing, and (ii)
none of the parties hereto is relying on any disclosure, statement,
representation or warranty, oral or written, express or implied, made by any
other party hereto or such party's officers, directors, employees, affiliates,
agents, financial or legal advisors or other representatives.
8.2. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the first Business Day following the date of dispatch if
delivered by a nationally recognized next-day courier service, (c) on the fifth
Business Day following the date of mailing if delivered by registered or
certified mail,
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return receipt requested, postage prepaid or (d) if sent by facsimile
transmission, with a copy mailed on the same day in the manner provided in (a)
or (b) above, when transmitted (receipt confirmed). All notices hereunder shall
be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice in the manner set
forth above:
(a) if to Parent or Merger Sub, to Autogrill S.p.A. Xxx Xxxxxxx, 00
00000 Xxxxx, Xxxxx (Attention: Xxxxxxx Xxxxx) Facsimile: x00-00-0000-0000) with
copies to with copies to Xxxxxx & Xxxxx LLP, City Tower, 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx (Attention: Xxxxxxx X. Xxxxxxxxx), Facsimile
x00-000-000-0000, and to Xxxxxxx Erede Xxxxxxxxxx, Xxx Xxxxxxxxxx, 00, 00000
Xxxxx, Xxxxx (Attention: Xxxxxx Erede), Facsimile x00-00-00-00-00-00
(b) if to the Company, to Host Marriott Services Corporation, 0000
Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Facsimile (000) 000-0000, Attention:
Xxx X. Xxxxxx, General Counsel, with a copy to Xxxxxx & Xxxxxxx, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Facsimile (000) 000-0000, Attention:
Xxxxx X. Xxxxxxxxx.
8.3. INTERPRETATION. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents,
glossary of defined terms and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden or proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statue or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the content requires otherwise. It is understood
and agreed that neither the specifications of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits is
intended to imply that such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and neither party shall use
the fact or setting or such amounts or the fact of the inclusion of such item in
the Schedules or Exhibits in any dispute or controversy between the parties as
to whether any obligation, item or matter is or is not material for purposes
hereof. References in this Agreement to the "knowledge" of a party shall mean
the actual knowledge of the executive officers of such party after due inquiry.
8.4. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that both parties need not
sign the same counterpart.
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8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
(a) This Agreement (including the Schedules and Exhibits)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidential Information Agreement, which
shall survive the execution and delivery of this Agreement.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Article II and Sections 1.4(c), 5.5, 5.7 and 8.1 (which are intended to be for
the benefit of the Persons covered thereby and may be enforced by such Persons).
8.6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to the laws that might be
applicable under conflicts of laws principles.
(b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any Delaware State court, or Federal court of the United States
of America sitting in Delaware, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby or for recognition or enforcement of any judgment relating
thereto, and each of the parties hereby irrevocably and unconditionally (i)
agrees not to commence any such action or proceeding except in such courts, (ii)
agrees that any claim in respect of any such action or proceeding may be heard
and determined in such Delaware State court or, to the extent permitted by law,
in such Federal court, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (iv) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such Delaware State or Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 8.2. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
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AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv)
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6(c).
8.7. SEVERABILITY. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any 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 materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible. Any provision of this Agreement held invalid or
unenforceable only in part, degree or certain jurisdictions will remain in full
force and effect to the extent not held invalid or unenforceable. To the extent
permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.
8.8. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective permitted successors and assigns.
8.9. 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 or otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent such breaches and specific performance of the terms hereof, this being
in addition to any other remedy to which they are entitled at law or in equity.
8.10. DEFINITIONS. As used in this Agreement:
"Board of Directors" means the Board of Directors of any specified
Person and any properly serving and acting committees thereof.
"Business Day" means any day on which banks are not required or
authorized to close in the City of New York or Milan, Italy.
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"Company Stock Plan" means the Host Marriott Services Corporation
Comprehensive Stock Plan.
"Company Stock Purchase Plan" means the Host Marriott Services
Corporation Stock Purchase Plan.
"Environmental Laws" shall mean any federal, state or local law,
statute, ordinance, order, decree, rule or regulation relating to releases,
discharges, emissions or disposals to air, water, land or groundwater of toxic
or hazardous substance or waste; to the use, handling or disposal or any toxic
or hazardous substance or waste; to the treatment, storage, disposal or
management of toxic or hazardous substance or waste; to exposure to toxic or
hazardous substance or waste; and to the transportation, release or other
movement of toxic or hazardous substance or waste.
"Intellectual Property" shall mean patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, copyrights
and copyright rights and other proprietary intellectual property rights, and all
pending applications for and registrations of any of the foregoing, that are
material to the business of the Company and its subsidiaries (taken as a whole).
"Material Adverse Effect" means with respect to any Person a
material adverse effect on the business, assets, financial condition or results
of operation of such Person and its Subsidiaries taken as a whole, provided,
however, that with respect to the Company the term Material Adverse Effect shall
not include (i) any change, circumstance, event or effect that relates to or
results primarily from the announcement or other disclosure or consummation of
the transactions contemplated by this Agreement, (ii) changes in general
economic conditions, financial markets (including fluctuations in the price of
shares of Company Common Stock or shares of capital stock of Parent) or
conditions in the business sectors in which the Company and its Subsidiaries
operate not disproportionately affecting the Company and its Subsidiaries, or
(iii) the failure to obtain any consents or approvals under any Operational
Contracts in connection with the transactions contemplated hereby.
"Material Subsidiaries" shall mean Host International, Inc. and any
other subsidiary of the Company which constitutes a "significant subsidiary" as
defined under Regulation S-X promulgated by the SEC.
"Operational Contracts" means agreements pertaining to the conduct
of the business operations of the Company and its Subsidiaries, including
(without limitation) leases, operating agreements, concession agreements,
franchise agreements, licensing agreements, joint venture agreements,
noncompetition agreements and other agreements or contractual arrangements.
"Organizational Documents" means, with respect to any entity, the
certificate of incorporation, bylaws or other governing documents of such
entity.
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"Person" means an individual, corporation, partnership, limited
liability company association, trust, unincorporated organization, entity or
group (as defined in the Exchange Act).
"Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such Person or any other Subsidiary of such Person is a general partner
(excluding partnerships, the general partnership interests of which held by such
Person or any Subsidiary of such Person do not have a majority of the voting and
economic interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries.
(i) "Tax" (including, with correlative meaning, the terms "Taxes"
and "Taxable") means all federal, state, local and foreign income, profits,
franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties, fines and additions to tax imposed with respect to such
amounts and any interest in respect of such penalties and additions to tax, and
(ii) "Tax Return" means all returns and reports (including elections, claims,
declarations, disclosures, schedules, estimates, computations and information
returns) required to be supplied to a Tax authority in any jurisdiction relating
to Taxes.
8.11. PERFORMANCE BY MERGER SUB. Parent hereby agrees to cause Merger Sub to
comply with its obligations hereunder and under the Offer and to cause Merger
Sub to consummate the Merger as contemplated herein, and whenever this Agreement
requires Merger Sub to take any action, such requirement shall be deemed to
include an undertaking of Parent to cause Merger Sub to take such action.
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IN WITNESS WHEREOF, Parent, the Company and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first set forth above.
AUTOGRILL S.p.A.,
a corporation organized under the laws of the
Republic of Italy
By: /s/ Paolo Prota Xxxxxxx
--------------------------------
Name: Paolo Prota Xxxxxxx
Title: Chief Executive Officer
AUTOGRILL ACQUISITION CO.,
a Delaware corporation
By: /s/ Paolo Prota Xxxxxxx
--------------------------------
Name: Paolo Prota Xxxxxxx
Title: President
HOST MARRIOTT SERVICES CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. XxXxxxxx
--------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President and Chief Executive Officer
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ANNEX A
Conditions To The Offer
The Offer shall be conditioned upon the Minimum Shares being validly
tendered and not withdrawn prior to the date which is 20 Business Days following
the commencement of the Offer or such later expiration date to which the Offer
has been extended in accordance with the provisions of the Agreement. Moreover,
notwithstanding any other provision of the Offer, and subject to the terms and
conditions of the Agreement, Merger Sub shall not be obligated to accept for
payment any shares of Company Common Stock until expiration of all applicable
waiting periods (and extensions thereof) under the HSR Act, and Merger Sub shall
not be required to accept for payment, purchase or pay for, and may delay the
acceptance for payment of or payment for, any shares of Company Common Stock
tendered in the Offer, or if the Minimum Shares shall not have been validly
tendered pursuant to the Offer and not withdrawn, may terminate or amend the
Offer, subject to the terms and conditions of the Agreement and Merger Sub's
obligation to extend the Offer pursuant to Section 1.1(b), if, prior to the time
of acceptance for payment of any such shares of Company Common Stock, any of the
following shall occur and remain in effect:
(a) an order shall have been entered in any action or proceeding
before any United States federal or state Governmental Entity (an "Order"), or a
preliminary or permanent injunction by a United States federal or state court of
competent jurisdiction shall have been issued and remain in effect (an
"Injunction"), which (1) prohibits, or imposes any material limitations on,
Parent's or Merger Sub's ownership or operation of all or a material portion of
their or the Company's businesses or assets, or compels Parent or Merger Sub (or
their respective Subsidiaries and affiliates) to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and their
respective Subsidiaries, in each case taken as a whole, (2) prohibits or makes
illegal the acceptance for payment, payment for or purchase of shares of Company
Common Stock pursuant to the Offer or the consummation of the Offer or the
Merger, (3) results in a material delay in or materially restricts the ability
of Merger Sub, or renders Merger Sub unable, to accept for payment, pay for or
purchase any significant portion of the shares of Company Common Stock tendered
pursuant to the Offer, (4) imposes or confirms material limitations on the
ability of Merger Sub or Parent (or any of their respective Subsidiaries or
affiliates) effectively to exercise full rights of ownership of the shares of
Company Common Stock purchased pursuant to the Offer, including, without
limitation, the right to vote such shares of Company Common Stock on all matters
properly presented to the Company's stockholders, or (5) otherwise results in a
Material Adverse Effect with respect to the Company; provided, however, that in
order to invoke this condition, Parent and Merger Sub shall in good faith have
used their reasonable best efforts to prevent such Order or Injunction or
ameliorate the effects thereof; and provided, further, that, if the Order or
Injunction is a temporary restraining order or preliminary injunction of a court
of competent jurisdiction, Merger Sub may not, by virtue of this condition
alone, amend or terminate the Offer, but may only extend the Offer and thereby
postpone acceptance for payment or purchase of Shares; or
(b) there shall be instituted or pending any action, proceeding or
counterclaim brought by a Governmental Entity that would reasonably be expected
to result,
47
directly or indirectly, in any of the consequences referred to in clauses (1)
through (5) of paragraph (a) above;
(c) Parent shall be entitled to terminate the Agreement pursuant to
Section 7.1(e) or Section 7.1(g) thereof; or
(d) any consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or Merger Sub with or from any Governmental Entity in connection
with the execution, delivery and performance of the Agreement, the Offer and the
consummation of the transactions contemplated by the Agreement (other than any
consent or approval required under Operational Contracts) shall not have been
made or obtained and such failure would reasonably be expected to have a Company
Material Adverse Effect with respect to the Company; or
(e) the Agreement shall have been terminated by the Company or
Parent pursuant to its terms.
The foregoing conditions are for the sole benefit of Parent and
Merger Sub and may be asserted by Parent and Merger Sub in their sole discretion
regardless of the circumstances giving rise to such condition or, except for the
Minimum Condition (which may not be waived without the written consent of the
Company), may be waived by Parent and Merger Sub in whole or in part at any time
and from time to time. The failure by Parent or Merger Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
The capitalized terms used in this Annex A shall have the meanings
set forth in the Agreement to which it is annexed, except that the term
Agreement shall be deemed to refer to the Agreement to which this Annex A is
appended.
