AGREEMENT AND PLAN OF MERGER
dated as of
JUNE 28, 2000
by and among
XXXXX INDUSTRIAL SERVICES, L.L.C.,
CANISCO ACQUISITION, INC.,
and
CANISCO RESOURCES, INC.
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE OFFER AND MERGER..................................................................1
Section 1.1. The Offer.............................................................................1
Section 1.2. Voting Agreement......................................................................3
Section 1.3. Company Actions.......................................................................3
Section 1.4. Directors.............................................................................4
Section 1.5. The Merger............................................................................4
Section 1.6. Effective Time........................................................................5
Section 1.7. Closing...............................................................................5
Section 1.8. Directors and Officers of the Surviving Corporation...................................5
Section 1.9. Subsequent Actions....................................................................5
Section 1.10. Stockholders' Meeting.................................................................6
Section 1.11. Merger Without Meeting of Stockholders................................................6
ARTICLE 2 CONVERSION OF SECURITIES..............................................................6
Section 2.1. Conversion of Capital Stock...........................................................6
Section 2.2. Exchange of Certificates..............................................................7
Section 2.3. Dissenting Shares.....................................................................8
Section 2.4. Company Option Plans..................................................................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................9
Section 3.1. Corporate Existence and Power.........................................................9
Section 3.2. Corporate Authorization..............................................................10
Section 3.3. Governmental Authorization...........................................................10
Section 3.4. Non-Contravention....................................................................10
Section 3.5. Capitalization.......................................................................11
Section 3.6. Subsidiaries.........................................................................11
Section 3.7. Commission Filings...................................................................12
Section 3.8. Financial Statements.................................................................13
Section 3.9. Health and Safety Matters............................................................13
Section 3.10. Absence of Certain Changes...........................................................13
Section 3.11. No Undisclosed Liabilities...........................................................14
-i-
Section 3.12. Litigation...........................................................................14
Section 3.13. Taxes................................................................................14
Section 3.14. Employee Benefit Plans...............................................................15
Section 3.15. Compliance with Laws.................................................................17
Section 3.16. Finders' or Advisors' Fees...........................................................17
Section 3.17. Environmental Matters................................................................17
Section 3.18. Permits..............................................................................18
Section 3.19. Material Contracts...................................................................19
Section 3.20. Opinion of Financial Advisor.........................................................20
Section 3.21. Takeover Statutes and Charter Provisions.............................................20
Section 3.22. Intellectual Property Matters........................................................20
Section 3.23. Insurance............................................................................20
Section 3.24. Title to Assets; Liens...............................................................20
Section 3.25. Material Information.................................................................21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT.............................................21
Section 4.1. Corporate Existence and Power........................................................21
Section 4.2. Corporate Authorization..............................................................21
Section 4.3. Governmental Authorization...........................................................22
Section 4.4. Non-Contravention....................................................................22
Section 4.5. Finders' or Advisors' Fees...........................................................22
ARTICLE 5 COVENANTS............................................................................22
Section 5.1. Conduct of the Company...............................................................22
Section 5.2. HSR Act..............................................................................24
Section 5.3. Access to Information................................................................24
Section 5.4. Reasonable Best Efforts; Consents and Approvals......................................24
Section 5.5. No Solicitation......................................................................25
Section 5.6. Additional Agreements................................................................26
Section 5.7. Publicity............................................................................26
Section 5.8. Notification of Certain Matters......................................................26
Section 5.9. State Takeover Laws..................................................................26
-ii-
Section 5.10. Resignations.........................................................................26
Section 5.11. Interim Directors....................................................................26
Section 5.12. Disclosure Documents.................................................................26
ARTICLE 6 CONDITIONS TO THE MERGER.............................................................27
Section 6.1. Conditions to the Obligations of Each Party..........................................27
ARTICLE 7 TERMINATION..........................................................................27
Section 7.1. Termination..........................................................................27
Section 7.2. Effect of Termination................................................................29
Section 7.3. Fees and Expenses....................................................................29
ARTICLE 8 MISCELLANEOUS........................................................................30
Section 8.1. Notices..............................................................................30
Section 8.2. Non-Survival of Representations and Warranties.......................................31
Section 8.3. Amendments; No Waivers...............................................................31
Section 8.4. Successors and Assigns...............................................................31
Section 8.5. Governing Law........................................................................31
Section 8.6. Jurisdiction.........................................................................32
Section 8.7. Counterparts; Effectiveness..........................................................32
Section 8.8. Entire Agreement.....................................................................32
Section 8.9. Captions.............................................................................32
Section 8.10. Severability.........................................................................32
Section 8.11. No Prejudice.........................................................................32
Section 8.12. Words in Singular and Plural Form; Gender............................................32
-iii-
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of June 28,
2000, by and among XXXXX INDUSTRIAL SERVICES, L.L.C., a Delaware limited
liability company ("Parent"), CANISCO ACQUISITION, INC., a Delaware corporation
("Merger Subsidiary"), and CANISCO RESOURCES, INC., a Delaware corporation (the
"Company").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Merger Subsidiary and the
Company and the Operating Board of Parent have approved this Agreement, and deem
it advisable and in the best interests of their respective stockholders or
interest holders, as applicable, to consummate the Merger (as defined below) of
Merger Subsidiary with and into the Company following the Offer (as defined
below) in accordance with the General Corporation Law of the State of Delaware
(the "DGCL") and on the terms and conditions set forth in this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that Merger Subsidiary make
the Offer (as defined below) to acquire all shares of the issued and outstanding
common stock, par value $0.0025 per share, of the Company ("Shares" or "Company
Common Stock") for $1.00 per Share in cash; and
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of Shares and has resolved to recommend that the holders of Shares
accept the Offer and approve this Agreement and each of the transactions
contemplated by this Agreement, including the Offer and the Merger (the
"Transactions"), on the terms and conditions set forth in this Agreement; and
WHEREAS, Parent, Merger Subsidiary and the Company desire to make certain
representations, warranties, covenants, and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
THE OFFER AND MERGER
Section 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 and none of the events set forth in Annex A hereto
shall have occurred and be continuing, as promptly as practicable and in any
event no later than July 10, 2000, Merger Subsidiary shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) an offer (the "Offer") to purchase for cash all Shares at a
price of $1.00 per Share (such price or any higher price as shall be paid in
respect of the Shares in the Offer being referred to herein as the "Offer
Price"), subject to there being validly tendered and not withdrawn prior to the
expiration of the Offer that number of Shares which, together with the Shares
beneficially owned by Parent or Merger Subsidiary, represents at least a
majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and the other conditions set forth in Annex A hereto. Subject to the
prior satisfaction or waiver (except that the Minimum Condition may not be
waived) of the Minimum Condition and the other conditions of the Offer set forth
in Annex A hereto, Merger Subsidiary shall consummate the Offer in accordance
with its terms and accept for payment and pay for all Shares tendered pursuant
to the Offer as soon as it is legally permitted to do so under applicable law.
The obligations of Merger Subsidiary to commence the Offer and to accept for
payment and to pay for any Shares validly tendered on or prior to the expiration
of the Offer and not withdrawn shall be subject only to the Minimum Condition
and the other conditions set forth in Annex A hereto. The Offer shall be made by
means of an offer to purchase (the "Offer to Purchase") containing the terms set
forth in this Agreement, the Minimum Condition, and the other conditions set
forth in Annex A hereto. The initial expiration date of the Offer shall be the
20th business day following the commencement of the Offer (determined using Rule
14d-2 under the Exchange Act). Without the prior written consent of the Company,
neither Parent nor Merger Subsidiary shall (i) decrease the Offer Price, (ii)
decrease the number of Shares to be purchased in the Offer, (iii) change the
form of consideration payable in the Offer, (iv) add to or change the conditions
to the Offer set forth in Annex A, (v) waive the Minimum Condition or (vi) make
any other change in the terms or conditions of the Offer. Notwithstanding the
foregoing, Merger Subsidiary may, without the consent of the Company, (i) extend
the Offer in increments of not more than five business days each, if at the
scheduled expiration date of the Offer any of the conditions to Merger
Subsidiary's obligation to purchase Shares are not satisfied, until such time as
such conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer and (iii) make available a subsequent
offering period (within the meaning of Rule 14d-11 under the Exchange Act)
("Subsequent Offering Period"). Without limiting the right of Merger Subsidiary
to extend the Offer, provided that this Agreement shall not have been terminated
in accordance with Article 7 hereof, if any applicable waiting period under the
HSR Act has not expired or terminated, then, at the request of the Company,
Merger Subsidiary will extend the Offer from time to time until the earlier of
the consummation of the Offer or the date which is sixty (60) days from the date
of this Agreement. Merger Subsidiary shall, subject to the terms and conditions
of the Offer, accept for payment Shares tendered as soon as it is legally
permitted to do so under applicable law.
(b) As soon as practicable, on the date the Offer is commenced, Parent and
Merger Subsidiary shall file with the Securities and Exchange Commission (the
"SEC") a Tender Offer Statement on Schedule TO with respect to the Offer
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule TO"). The Schedule TO will include the summary term sheet
required thereby and, as exhibits, the Offer to Purchase and a form of letter of
transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). Parent and Merger
Subsidiary further agree to take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Parent and Merger Subsidiary, on the one hand, and the Company, on the
other hand, agree to correct promptly any information provided by it for use in
the Offer Documents if and to the extent that it shall have become false and
misleading in any material respect and Merger Subsidiary further agrees to take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. The Company and its
counsel shall be given the opportunity to
-2-
review the Schedule TO before it is filed with the SEC. In addition, Parent and
Merger Subsidiary agree to provide the Company and its counsel in writing with
any comments, whether written or oral, Parent, Merger Subsidiary or their
counsel may receive from time to time from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments, and any written
responses thereto.
(c) In the event that, following a Subsequent Offering Period, if any,
Merger Subsidiary has acquired Shares purchased in the Offer and such Shares
represent less than 90% of the Shares outstanding on a fully-diluted basis, the
parties agree that they shall enter into a stock option agreement, on customary
terms, pursuant to which the Company shall grant to Merger Subsidiary an option
to purchase that number of Shares equal to the number of Shares that, when added
to the number Shares owned by the Merger Subsidiary and its affiliates
immediately following expiration of the Subsequent Offering Period, shall
constitute 90% of the Shares then outstanding on a fully diluted basis.
Section 1.2. VOTING AGREEMENT. Concurrently herewith, Xxxxxxx X. Xxxxx,
Xxxxx Xxxxxxxxx, Xxxxx X. Xxxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. XxXxxxx, and W.
Xxxxxxxx Xxxxxxxx shall execute a voting agreement (the "Voting Agreement"), a
copy of which Voting Agreement is attached hereto as Exhibit A.
Section 1.3. COMPANY ACTIONS.
(a) Concurrently with the commencement of the Offer, the Company shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule 14D-9") which shall contain the recommendation referred
to in clause (iii) of Section 3.2(b) hereof unless such recommendation has been
withdrawn or modified in accordance with Section 5.5. The Company further agrees
to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company, on the one hand,
and Parent and Merger Subsidiary, on the other hand, agree to correct promptly
any information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false and misleading in any material respect
and the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to holders
of the Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, Merger Subsidiary and their counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent, Merger Subsidiary and their
counsel in writing with any comments, whether written or oral, the Company or
its counsel may receive from time to time from the SEC or its staff with respect
to the Schedule 14D-9 promptly after the receipt of such comments, and any
written or oral responses thereto.
(b) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Merger Subsidiary mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
furnish Merger Subsidiary with such information and assistance as Merger
Subsidiary or its agents may reasonably request in communicating the Offer to
the record and beneficial holders of the Shares.
-3-
Section 1.4. DIRECTORS.
(a) Promptly upon the purchase of and payment for any Shares by Parent or
any of its Subsidiaries which represents at least a majority of the outstanding
Shares (on a fully diluted basis), Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as is equal to the product of the total number of
directors on such Board (giving effect to the directors designated by Parent
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by the Parent and Merger Subsidiary bears to
the total number of Shares then outstanding. The Company shall, upon request of
Parent, use its reasonable best efforts promptly either to increase the size of
its Board of Directors, including by amending the By-laws of the Company if
necessary to so increase the size of such Board of Directors, or secure the
resignations of such number of its incumbent directors, or both, as is necessary
to enable Parent's designees to be so elected or appointed to the Company's
Board of Directors, and shall use its best efforts to cause Parent's designees
to be so elected or appointed at such time. At such time, the Company shall,
upon the request of Parent, also cause persons designated by Parent to
constitute the same percentage (rounded up to the next whole number) as is on
the Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company, and (iii) each committee (or similar body) of each such board.
(b) In the event that Parent's designees are elected to the Company's
Board of Directors, until the Effective Time (as defined below), the Company
shall cause its Board of Directors to have at least three directors who are
directors on the date hereof and are neither officers nor employees of the
Company (the "Independent Directors"), provided that if any Independent
Directors may not serve due to death or disability, the remaining Independent
Directors (or Independent Director, if there is only one remaining) shall be
entitled to designate another person or persons who served as a director on the
date hereof to fill such vacancies who shall be deemed to be Independent
Directors for purposes of this Agreement or, if no Independent Director then
remains, the other directors shall designate three persons to fill such
vacancies and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees constitute a majority of the
Company's Board of Directors, after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights, benefits or remedies hereunder, (iii) amend the Certificate of
Incorporation or By-laws of the Company or (iv) take any other action of the
Company's Board of Directors under or in connection with this Agreement;
provided, that if there shall be no Independent Directors as a result of such
persons' deaths, disabilities or refusal to serve, such actions may be effected
by majority vote of the entire Board of Directors of the Company.
Section 1.5. THE MERGER.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company and Merger Subsidiary shall consummate a merger (the
"Merger") pursuant to which (i) Merger Subsidiary shall be merged with and into
the Company and the separate corporate existence of Merger Subsidiary shall
thereupon cease, (ii) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Delaware,
-4-
and (iii) the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger. The corporation surviving the Merger is sometimes hereinafter referred
to as the "Surviving Corporation." The Merger shall have the effects set forth
in the DGCL.
(b) The Certificate of Incorporation of Merger Subsidiary, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, except as to the name of the
Surviving Corporation, until thereafter amended as provided by law and such
Certificate of Incorporation.
(c) The By-laws of Merger Subsidiary, as in effect immediately prior to
the Effective Time, shall be the By-laws of the Surviving Corporation, except as
to the name of the Surviving Corporation, until thereafter amended as provided
by law, the Certificate of Incorporation of the Surviving Corporation and such
By-laws.
Section 1.6. EFFECTIVE TIME. Parent, Merger Subsidiary, and the
Company will cause an appropriate Certificate of Merger (the "Certificate of
Merger") to be executed and filed on the date of the Closing (as defined below)
(or on such other date as Parent and the Company may agree) with the Secretary
of State of the State of Delaware as provided in the DGCL. The Merger shall
become effective on the date on which the Certificate of Merger has been duly
filed with the Secretary of State of the State of Delaware or such time as is
agreed upon by the parties and specified in the Certificate of Merger, and such
time is hereinafter referred to as the "Effective Time."
Section 1.7. CLOSING. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., Eastern Time, on a date to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of all of the conditions set forth in Article 6 hereof (the "Closing
Date"), at the offices of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, Philadelphia,
Pennsylvania, unless another date or place is agreed to in writing by the
parties hereto.
Section 1.8. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of Merger Subsidiary immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall, from and after the Effective Time, be the officers of the Surviving
Corporation, in each case until their respective successors shall have been duly
elected or appointed or qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-laws.
Section 1.9. SUBSEQUENT ACTIONS. If at any time after the Effective
Time the Surviving Corporation will consider or be advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Merger Subsidiary acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Merger Subsidiary,
all such deeds, bills of sale, instruments of conveyance, assignments and
assurances and to take and do, in the name and on behalf of each of such
corporations or otherwise, all such other actions and things as may be
-5-
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
Section 1.10. STOCKHOLDERS' MEETING.
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as reasonably practicable
following the acceptance for payment and purchase of Shares by Merger
Subsidiary pursuant to the Offer for the purpose of considering and taking
action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and use its reasonable
best efforts to obtain and furnish the information required to be included
by the SEC in the Proxy Statement (as defined below) and, after
consultation with Parent, to respond promptly to any comments made by the
SEC with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement (the "Proxy Statement")
to be mailed to its stockholders;
(iii) subject to the applicable provisions of this Agreement, include
in the Proxy Statement the recommendation of the Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger and
the adoption of this Agreement; and
(iv) use its reasonable best efforts to solicit from holders of Shares
proxies in favor of the Merger and shall take all other action reasonably
necessary or advisable to secure the approval of stockholders required by
the DGCL to effect the Merger.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, Merger Subsidiary or any of its other Subsidiaries and
affiliates in favor of the approval of the Merger and the adoption of this
Agreement.
Section 1.11. MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding
Section 1.10 hereof, in the event that Parent, Merger Subsidiary or any other
Subsidiary of Parent shall acquire at least 90% of the outstanding shares of
each class of capital stock of the Company, pursuant to the Offer or otherwise,
the parties hereto agree, at the request of Parent and subject to Article 6
hereof, to take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.1. CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock
-6-
or common stock, par value $0.01 per share, of Merger Subsidiary (the "Merger
Subsidiary Common Stock"):
(a) MERGER SUBSIDIARY COMMON STOCK. Each issued and outstanding share of
the Merger Subsidiary Common Stock shall be converted into and become one fully
paid and nonassessable share of common stock of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. All shares of
Company Common Stock that are owned by the Company as treasury stock and any
shares of Company Common Stock owned by Parent, Merger Subsidiary or any other
wholly owned Subsidiary of Parent shall be cancelled and retired and shall cease
to exist and no consideration shall be delivered in exchange therefor.
(c) CONVERSION OF SHARES. Each issued and outstanding share of Company
Common Stock (other than shares to be cancelled in accordance with Section
2.1(b) hereof and other than Dissenting Shares (as defined in Section 2.3
hereof)) shall be converted into the right to receive the Offer Price, payable
to the holder thereof in cash, without interest (the "Merger Consideration").
From and after the Effective Time, all such shares of Company Common Stock shall
no longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such certificate
in accordance with Section 2.2 hereof, without interest.
Section 2.2. EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Parent shall designate a bank or trust company to act as
agent for the holders of Shares in connection with the Merger (the "Paying
Agent") to receive the funds to which holders of Shares shall become entitled
pursuant to Section 2.1(c) hereof. Prior to the Effective Time, Parent or Merger
Subsidiary shall deposit, or cause to be deposited, with the Paying Agent the
aggregate Merger Consideration. For purposes of determining the amount of Merger
Consideration to be so deposited, Parent and Merger Subsidiary shall assume that
no stockholder of the Company will perfect any right to appraisal of his, her or
its Shares. Such funds shall be invested by the Paying Agent as directed by
Parent or the Surviving Corporation pending payment thereof by the Paying Agent
to the holders of the Shares. Earnings from such investments shall be the sole
and exclusive property of Parent and the Surviving Corporation, and no part of
such earnings shall accrue to the benefit of holders of Shares.
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the Paying
Agent shall mail to each holder of record of a certificate or certificates,
which immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates"), whose shares were converted pursuant
to Section 2.1 hereof into the right to receive the Merger Consideration (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 Paying Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration. The Company and its counsel shall be given the opportunity
to review such letter of transmittal and such instructions. Upon surrender of a
Certificate for cancellation to the Paying
-7-
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each share of Company Common Stock formerly represented by such Certificate and
the Certificate so surrendered shall forthwith be cancelled. If payment of the
Merger Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the person requesting such
payment shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such tax either has been paid or is not payable.
Until surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2,
without interest thereon.
(c) TRANSFER BOOKS; NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.
At the Effective Time, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers of Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior to the
Effective Time shall cease to have any 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 for any
reason, they shall be cancelled and exchanged as provided in this Article 2.
(d) TERMINATION OF FUND; NO LIABILITY. At any time following six months
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed (or of which disbursement is not pending subject
only to the Paying Agent's routine administrative procedures) to holders of
Certificates, and thereafter such holders shall be entitled to look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
laws) for payment of the Merger Consideration in respect of their Certificates,
without any interest thereon. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or other similar law.
Section 2.3. DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the contrary, Shares
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
complied with all of the relevant provisions of Section 262 of the DGCL
("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. A holder of Dissenting Shares shall be entitled to
receive payment of the appraised value of such Shares held by it in accordance
with the provisions of Section 262 of the DGCL, unless, after the Effective
Time, such holder fails to perfect or withdraws or loses its right to appraisal,
in which case such Shares shall be converted into and represent only the right
to receive
-8-
the Merger Consideration, without interest thereon, upon surrender of the
Certificate or Certificates representing such Shares pursuant to Section 2.2.
(b) The Company shall give Parent (i) prompt notice of any written demands
for appraisal of any Shares, attempted withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company relating to
rights of appraisal and (ii) the opportunity to share in the conduct of all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. Except with the prior written consent of Parent, the Company shall not
voluntarily make any payment with respect to any demands for appraisal or settle
or offer to settle any such demands for appraisal.
Section 2.4. COMPANY OPTION PLANS. Parent and the Company shall take
all actions necessary to provide that, effective as of the Effective Time, (i)
each outstanding stock option, stock equivalent right or right to acquire Shares
(an "Option") granted by the Company pursuant to any written or oral plan or
agreement whether or not then exercisable or vested, shall be cancelled and (ii)
in consideration of such cancellation, Parent shall, or shall cause the
Surviving Corporation to, pay to such holders of Options, whether or not then
exercisable or vested, an amount in respect thereof equal to the product of (A)
the excess, if any, of the Offer Price over the exercise price of each such
Option (which, in the case of any stock equivalent right, shall be zero) and (B)
the number of Shares subject thereto (such payment, if any, to be net of
applicable withholding and excise taxes). As of the Effective Time, the Options
and the related plans and agreements shall terminate and all rights under any
provision of any other plan, program or arrangement providing for the issuance
or grant of any other interest in respect of the capital stock of the Company or
any of its Subsidiaries shall be cancelled. The Company shall take all action
necessary to ensure that, after the Effective Time, no person shall have any
right under such plan or agreements or any other plan, program or arrangement
with respect to equity securities of the Surviving Corporation or any Subsidiary
thereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that except as set forth in
the disclosure schedules delivered by the Company to Parent simultaneously with
the execution of this Agreement (the "Company Disclosure Schedules"):
Section 3.1. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except for those the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect (as defined
below) on the Company. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. For purposes of this Agreement, a "Material
Adverse Effect" or "material adverse change" with respect to any Person means
any change, effect, event or occurrence that has a material adverse impact on
the financial condition, business, liabilities, properties, assets, prospects or
results of operations of such Person and its Subsidiaries taken as a whole. The
Company has heretofore
-9-
made available to Parent true and complete copies of the Company's Certificate
of Incorporation and By-laws as currently in effect.
Section 3.2. CORPORATE AUTHORIZATION.
(a) The execution, delivery and performance by the Company of this
Agreement, other agreements contemplated hereby (the "Ancillary Agreements") to
which the Company is a party (the "Company Ancillary Agreements") and the
consummation by the Company of the transactions contemplated hereby and thereby
are within the Company's corporate powers and, except for any required approval
by the Company's stockholders in accordance with DGCL (the "Company Stockholder
Approval") in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate action. The affirmative vote of holders of
the outstanding shares of Company Common Stock having votes representing a
majority of the votes of all such outstanding capital stock, voting together as
a single class, in favor of the approval and adoption of this Agreement and the
Merger is the only vote of the holders of any of the Company's capital stock
necessary in connection with consummation of the Merger. Assuming due
authorization, execution and delivery of this Agreement, the Ancillary
Agreements to which Parent and/or Merger Subsidiary is a party (the "Parent
Ancillary Agreements") by Parent and Merger Subsidiary, as applicable, each of
this Agreement and the Company Ancillary Agreements constitutes a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights, and to general equity principles.
(b) The Company's Board of Directors, at a meeting duly called and held,
has (i) determined that this Agreement and the transactions contemplated hereby
(including the Merger) are advisable, fair to and in the best interests of the
Company's stockholders, (ii) approved and adopted this Agreement and the
transactions contemplated hereby (including the Merger), and (iii) resolved to
recommend that the Company stockholders vote for the approval and adoption of
this Agreement and the Merger.
Section 3.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement, the Company Ancillary Agreements
and the consummation by the Company of the transactions contemplated hereby and
thereby require no action by or in respect of, or filing by the Company with,
any governmental body, agency, official or authority other than (a) the filing
of a certificate of merger in connection with the Merger in accordance with DGCL
and applicable laws of any other state, (b) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act"),
(c) compliance with any applicable requirements of the Exchange Act, (d)
compliance with any applicable requirements of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Securities
Act"), (e) state blue sky laws, and (f) other actions or filings which if not
taken or made would not, individually or in the aggregate, have a Material
Adverse Effect on the Company or prevent or materially delay the Company's
consummation of the Merger.
Section 3.4. NON-CONTRAVENTION. Except as set forth on Schedule 3.4,
the execution, delivery and performance by the Company of this Agreement, the
Company Ancillary Agreements and the consummation by the Company of the
transactions contemplated hereby and thereby do not
-10-
and will not (a) contravene or conflict with the Certificate of Incorporation or
By-laws of the Company, (b) assuming compliance with the matters referred to in
Section 3.3 and subject to receipt of the Company Stockholder Approval,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree known by the Company to
be binding upon or applicable to the Company or any of its Subsidiaries, (c)
subject to receipt of the Company Stockholder Approval, constitute a default
under or give rise to any right of termination, cancellation or acceleration of
any right or obligation of the Company or any of its Subsidiaries or to a loss
of any benefit to which the Company or any of its Subsidiaries is entitled under
any provision of any agreement, contract or other instrument binding upon the
Company or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by the Company or any of its Subsidiaries, or (d)
result in the creation or imposition of any Lien (as defined below) on any asset
of the Company or any of its Subsidiaries, except for such contraventions,
conflicts or violations referred to in clause (b) or defaults, rights of
termination, cancellation or acceleration, or losses or Liens referred to in
clause (c) or (d) that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. Notwithstanding the foregoing, the
termination, cancellation, violation, or breach of any of the agreements
referred to in clauses (x) or (y) of Section 3.19(b) shall be deemed to have a
Material Adverse Effect on the Company. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset other than any such
mortgage, lien, pledge, charge, security interest or encumbrance (i) for Taxes
(as defined in Section 3.13) not yet due or being contested in good faith or
(ii) which is a carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like lien arising in the ordinary course of business.
Neither the Company nor any Subsidiary of the Company is a party to any
agreement that expressly limits the ability of the Company or any Subsidiary of
the Company to compete in or conduct any line of business or compete with any
Person or in any geographic area or during any period of time.
Section 3.5. CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 shares of Company Common Stock. As of the close
of business on June 26, 2000, there were outstanding 2,536,565 shares of Company
Common Stock and no other shares of capital stock or other voting securities of
the Company were then outstanding. All outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.5, there were no outstanding
options, warrants or other rights to acquire from the Company, and no preemptive
or similar rights, subscription or other rights, convertible or exchangeable
securities, agreements, arrangements or commitments of any character, relating
to the capital stock of the Company, obligating the Company to issue, transfer
or sell, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company or obligating
the Company to grant, extend or enter into any such option, warrant,
subscription or other right, convertible or exchangeable security, agreement,
arrangement or commitment. Since the close of business on the date hereof, the
Company has not issued any shares of capital stock or any such securities or
rights to purchase capital stock of the Company. Except as required by the terms
of any Options, there are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company.
Section 3.6. SUBSIDIARIES.
-11-
(a) Each Subsidiary of the Company is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, has all
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except for those the absence
of which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. For purposes of this Agreement,
the word "Subsidiary" when used with respect to any Person means any other
Person, whether incorporated or unincorporated, of which (i) more than 50% of
the securities or other ownership interests or (ii) securities or other
interests having by their terms ordinary voting power to elect more than 50% of
the board of directors or others performing similar functions with respect to
such corporation or other organization, is directly owned or controlled by such
Person or by any one or more of its Subsidiaries. Each Subsidiary of the Company
is duly qualified to do business and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on the Company.
(b) All of the outstanding capital stock of, or other ownership interests
in, each Subsidiary of the Company is, directly or indirectly, owned by the
Company. Except as set forth on Schedule 3.6(b), all shares of capital stock of,
or other ownership interests in, Subsidiaries of the Company, directly or
indirectly, owned by the Company are owned free and clear of any Lien and free
of any other limitation or restriction (including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other ownership
interests). There are no outstanding options, warrants or other rights to
acquire from the Company or any of its Subsidiaries, and, except as may be
required by applicable foreign corporate laws, no preemptive or similar rights,
subscriptions or other rights, convertible or exchangeable securities,
agreements, arrangements or commitments of any character, relating to the
capital stock of any Subsidiary of the Company, obligating the Company or any of
its Subsidiaries to issue, transfer or sell, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, any Subsidiary of the Company or obligating the Company or any Subsidiary of
the Company to grant, extend or enter into any such option, warrant,
subscription or other right, convertible or exchangeable security, agreement,
arrangement or commitment. There are no outstanding obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire from any
Person (other than the Company or a wholly owned Subsidiary of the Company) any
outstanding shares of capital stock of any Subsidiary of the Company or any
rights or securities described in the preceding sentence.
Section 3.7. COMMISSION FILINGS.
(a) The Company has made available to Parent (i) its annual reports on
Form 10-K for its fiscal years ended March 31, 1998 and 1999, (ii) its quarterly
reports on Form 10-Q for the three-month periods ended June 30, 1999, September
30, 1999, and December 31, 1999 (the Form 10-Q for the three-month period ended
December 31, 1999 being the "Form 10-Q") and (iii) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 31, 1999 (the documents referred to in this Section 3.7(a) being
referred to collectively as the "Company Commission Documents").
-12-
(b) As of its filing date, each Company Commission Document complied as to
form in all material respects with the applicable requirements of the Exchange
Act and the Securities Act.
(c) As of its filing date, each Company Commission Document filed pursuant
to the Exchange Act did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
Section 3.8. FINANCIAL STATEMENTS. The unaudited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company (including any related notes and schedules) included in its annual
and quarterly reports on Form 10-K and 10-Q, respectively, referred to in
Section 3.7 present fairly, in all material respects, the financial position of
the Company and its Subsidiaries as of the dates thereof and their results of
operations and cash flows for the periods then ended, in each case in conformity
with GAAP applied on a consistent basis (except as may be indicated in the notes
thereto). For purposes of this Agreement, "Company Balance Sheet" means the
consolidated balance sheet of the Company as of December 31, 1999 set forth in
the Company's Form 10-Q for the three-month period ended December 31, 1999 and
"Company Balance Sheet Date" means December 31, 1999.
Section 3.9. HEALTH AND SAFETY MATTERS. To the knowledge of the
Company, neither the Company nor any of its Subsidiaries is in material
violation of, or has violated, any applicable provisions of any laws, rules and
regulations relating to the protection of the public or an employee's health or
safety, including but not limited to the Occupational Safety and Health Act of
1970, as amended. In addition, to the knowledge of the Company, neither the
Company nor any of its Subsidiaries have received any violations, citations or
similar notices relating to such matters.
Section 3.10. ABSENCE OF CERTAIN CHANGES. Since the Company Balance
Sheet Date, except as set forth on Schedule 3.10, the Company and its
Subsidiaries have conducted their respective businesses in the ordinary course,
consistent with past practice, and there has not been:
(a) any event, occurrence or development which, individually or in the
aggregate, would have, or reasonably be expected to have, a Material Adverse
Effect on the Company;
(b) any declaration, setting aside or 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 their capital stock;
(c) any amendment of any material term of any outstanding security of the
Company or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract, agreement or
settlement entered into, by (or judgment, order or decree affecting) the Company
or any of its Subsidiaries relating to its assets or business (including the
acquisition or disposition of any material amount of assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries taken
as a whole, other than transactions, commitments, contracts, agreements or
settlements (including without limitation settlements of
-13-
litigation and tax proceedings) in the ordinary course of business consistent
with past practice and those contemplated by this Agreement;
(e) any change in any method of accounting or accounting practice by the
Company or any of its Subsidiaries, except for any such change which is required
by reason of a concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or amendment to
any such existing arrangement with) any director, officer or employee of the
Company or any of its Subsidiaries, (ii) entering into of any employment,
deferred compensation, supplemental retirement or other similar agreement (or
any amendment to any such existing agreement) with any director, officer or
employee of the Company or any of its Subsidiaries, (iii) increase in, or
accelerated vesting and/or payment of, benefits under any existing severance or
termination pay policies or employment agreements or (iv) increase in or
enhancement of any rights or features related to compensation, bonus or other
benefits payable to directors, officers or employees of the Company or any of
its Subsidiaries, in each case, other than in the ordinary course of business
consistent with past practice;
(g) any material Tax (as defined below) election made or changed, any
material audit settled or any material amended Tax Returns (as defined below)
filed; or
(h) any action which, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of Section 5.1.
Section 3.11. NO UNDISCLOSED LIABILITIES. Except as set forth on
Schedule 3.11, there are no liabilities of the Company or any Subsidiary of the
Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise (that individually or in the aggregate
exceed $100,000), other than:
(a) liabilities disclosed or provided for in the Company Balance Sheet;
(b) liabilities incurred since the date of the Company Balance Sheet in
the ordinary course of business in excess of $500,000 (excluding customer
contracts); and
(c) liabilities under this Agreement.
Section 3.12. LITIGATION. Except as set forth on Schedule 3.12, there
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Company threatened against or affecting, the Company or any of
its Subsidiaries or any of their respective properties or any of their
respective officers or directors before any court or arbitrator or any
governmental body, agency or official except as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Merger. Neither the Company nor any
Subsidiary is subject to any outstanding order, writ, injunction or decree.
Section 3.13. TAXES.
(a) Except as provided for in the Company Balance Sheet (including the
notes thereto), (i) all Company Tax Returns required to be filed with any taxing
authority by, or with respect to, the Company and its Subsidiaries have been
filed in accordance with all applicable laws; (ii) the
-14-
Company and its Subsidiaries have timely paid all Taxes shown as due and payable
on the Company Tax Returns that have been so filed, and, as of the time of
filing, the Company Tax Returns correctly reflected in all material respects the
facts regarding the income, business, assets, operations, activities and the
status of the Company and its Subsidiaries (other than Taxes which are being
contested in good faith and for which adequate reserves are reflected on the
Company Balance Sheet); (iii) the Company and its Subsidiaries have made
provision for all Taxes payable by the Company and its Subsidiaries for which no
Company Tax Return has yet been filed; (iv) the charges, accruals and reserves
for Taxes with respect to the Company and its Subsidiaries reflected on the
Company Balance Sheet are adequate under GAAP to cover the Tax liabilities
accruing through the date thereof; (v) there is no action, suit, proceeding,
audit or claim now proposed or to the knowledge of the Company, pending against
or with respect to the Company or any of its Subsidiaries in respect of any Tax
where there is a reasonable possibility of an adverse determination; (vi) to the
knowledge of the Company, neither the Company nor any of its Subsidiaries is
liable for any Tax imposed on any entity other than such Person, except as the
result of the application of Treas. Reg. Sections 1.1502-6 (and any comparable
provision of the tax laws of any state, local or foreign jurisdiction) to the
affiliated group of which the Company is the common parent, and (vii) no
deficiency for any Tax has been asserted or assessed by a taxing authority
against the Company or any of its Subsidiaries which deficiency has not been
paid or reserved for (other than deficiencies which are being contested in good
faith and for which adequate reserves are reflected on the Company Balance
Sheet). For purposes of this Agreement, "Taxes" shall mean any and all taxes,
charges, fees, levies or other assessments, including, without limitation, all
net income, gross income, gross receipts, excise, stamp, real or personal
property, AD VALOREM, withholding, social security (or similar), unemployment,
occupation, use, production, service, service use, license, net worth, payroll,
franchise, severance, transfer, recording, employment, premium, windfall
profits, environmental (including taxes under Section 59A of the Internal
Revenue Code of 1986, as amended (the "Code")), customs duties, capital stock,
profits, disability, sales, registration, value added, alternative or add-on
minimum, estimated or other taxes, assessments or charges imposed by any
federal, state, local or foreign governmental entity ("Governmental Entity") and
any interest, penalties, or additions to tax attributable thereto for periods up
to the Effective Date. For purposes of this Agreement, "Tax Returns" shall mean
any return, report, form or similar statement required to be filed with respect
to any Tax (including any attached schedules), including, without limitation,
any information return, claim for refund, amended return or declaration of
estimated Tax.
(b) There are no material disputes pending, or claims asserted in writing
for, Taxes or assessments upon the Company or any of its Subsidiaries, nor has
the Company or any of its Subsidiaries been requested in writing to give any
currently effective waivers extending the statutory period of limitation
applicable to any federal or state income tax return for any period.
(c) There are no Tax liens upon any property or assets of the Company or
any of its Subsidiaries except liens for current Taxes not yet due.
Section 3.14. EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Agreement, the term "Company Employee Plans"
shall mean and include: each management, consulting, non-compete, employment,
severance or similar contract, plan, including, without limitation, all capital
stock plans, arrangement or policy applicable to any
-15-
director, former director, employee or former employee of the Company and each
plan, program, policy, agreement or arrangement (written or oral), providing for
compensation, bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance benefits) or
other employee benefits of any kind, whether funded or unfunded, which is
maintained, administered or contributed to by the Company or any Subsidiary and
covers any employee or director or former employee or director of the Company or
any Subsidiary, or under which the Company has any liability, contingent or
otherwise (including but not limited to each "employee benefit plan," as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")). The Company Disclosure Schedule sets forth a list of each
Company Employee Plan.
(b) To the knowledge of the Company, each Company Employee Plan has been
established and maintained in material compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
(including but not limited to ERISA and the Code) which are applicable to such
Plan. Schedule 3.14(b) sets forth the Company Employee Plans which are
classified as a "multiemployer plan," as defined in Section 3(37) of ERISA.
(c) To the knowledge of the Company, neither the Company nor any affiliate
of the Company has incurred a liability under Title IV of ERISA that has not
been satisfied in full, and, to the knowledge of the Company, no condition
exists that presents a material risk to the Company or any affiliate of the
Company of incurring any such liability. To the knowledge of the Company, all
contributions required to be made under the terms of any Company Employee Plan
maintained in the United States have been made, and, where applicable to a
Company Employee Plan, the Company and its affiliates have complied, to the
knowledge of the Company, with the minimum funding requirements under Section
412 of the Code and Section 302 of ERISA with respect to each such Company
Employee Plan.
(d) To the knowledge of the Company, with respect to each Company Employee
Plan which is subject to Title IV of ERISA, (i) the present value of accrued
benefits under such Company Employee Plan, based upon the actuarial assumptions
used for funding purposes in the most recent actuarial report prepared by such
Company Employee Plan's actuary with respect to such Company Employee Plan, did
not, as of its latest valuation date, exceed the then current value of the
assets of such Company Employee Plan allocable to such accrued benefits, (ii) no
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred
with respect to any Company Employee Plan for which the 30-day notice
requirement has not been waived, and (iii) no condition exists which would
subject the Company or any Company Subsidiary to any fine under Section 4071 of
ERISA.
(e) Each Company Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from federal income tax pursuant to Section 501(a) of the Code and, to
the Company's knowledge, no circumstances exist which will adversely affect such
qualification or exemption.
-16-
(f) Except as set forth on Schedule 3.14(f), no director or officer or
other employee of the Company or any of its Subsidiaries will become entitled to
any retirement, severance or similar benefit or enhanced or accelerated benefit
(including any acceleration of vesting or lapse of repurchase rights or
obligations with respect to any Company stock plans or other benefit under any
compensation plan or arrangement of the Company) solely as a result of the
transactions contemplated hereby; and (ii) no payment made or to be made to any
current or former employee or director of the Company or any of its affiliates
by reason of the transactions contemplated hereby (whether alone or in
connection with any other event) will constitute an "excess parachute payment"
within the meaning of Section 280G of the Code.
(g) Since the Company Balance Sheet Date, there has been no amendment to,
or change in employee participation or coverage under, any Company Employee Plan
which would materially increase the expense of maintaining such Company Employee
Plan above the level of the expense incurred in respect thereof for the 12
months ended on the Company Balance Sheet Date.
(h) To the knowledge of the Company, the Company and its Subsidiaries are
in material compliance with all applicable federal, state, local and foreign
statutes, laws, (including without limitation, common law), judicial decisions,
regulations, ordinances, rules, judgments, orders and codes respecting
employment, employment practices, labor, terms and conditions of employment and
wages and hours, and no work stoppage or labor strike against the Company and
its Subsidiaries are pending or, to the knowledge of the Company, threatened,
nor are the Company and its Subsidiaries involved in or, to the knowledge of the
Company, threatened with any labor dispute, grievance (other than ordinary,
immaterial individual grievances), or litigation relating to labor matters
involving any employees. There are no suits, actions, disputes, claims (other
than routine claims for benefits), investigations or audits pending or, to the
knowledge of the Company, threatened in connection with any Company Employee
Plan.
Section 3.15. COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries is in violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances or regulations except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.
Section 3.16. FINDERS' OR ADVISORS' FEES. There is no investment
banker, broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of the Company or any of its Subsidiaries who might
be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
Section 3.17. ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries (i) are in material compliance with
all, and are not subject to any material liability with respect to, any
applicable Environmental Laws (as defined below), (ii) hold or have applied for
all material Environmental Permits (as defined below) and (iii) are in material
compliance with their respective Environmental Permits.
(b) Neither the Company nor any of its Subsidiaries has received any
written notice, demand, letter, claim or request for information alleging that
the Company or any of its Subsidiaries may be in violation of, or liable under,
any Environmental Law.
-17-
(c) Neither the Company nor any of its Subsidiaries (i) has entered into
or agreed to any consent decree or order or is subject to any judgment, decree
or judicial order relating to compliance with Environmental Laws, Environmental
Permits or the investigation, sampling, monitoring, treatment, remediation,
removal or cleanup of Hazardous Materials (as defined below) and, no
investigation, litigation or other proceeding is pending or, to the knowledge of
the Company, threatened with respect thereto, or (ii) is an indemnitor in
connection with any threatened or asserted claim by any third-party indemnitee
for any liability under any Environmental Law or relating to any Hazardous
Materials; and
(d) None of the real property owned or leased by the Company or any
Company Subsidiary is listed or, to the knowledge of the Company, proposed for
listing on the "National Priorities List" under CERCLA (as defined below), as
updated through the date hereof, or any similar state or foreign list of sites
requiring investigation or cleanup.
(e) For purposes of this Agreement:
(i) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
(ii) "Environmental Laws" means any federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, treaty, writ or order and
any enforceable judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, judgment,
stipulation, injunction, permit, authorization, opinion, or agency
requirement, in each case having the force and effect of law, relating to
the pollution, protection, investigation or restoration of the environment
or natural resources, including, without limitation, those relating to the
use, handling, presence, transportation, treatment, storage, disposal,
release, threatened release or discharge of Hazardous Materials or to
noise, odor, wetlands, contamination or any injury or threat of injury to
persons or property.
(iii) "Environmental Permits" means any permit, approval,
identification number, license and other authorization required under any
applicable Environmental Law.
(iv) "Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b) any
chemical, material or other substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any applicable
Environmental Law.
Section 3.18. PERMITS. Each of the Company and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals, clearances
and orders other than Environmental Permits of any domestic or foreign
governmental, administrative or judicial authority known by the Company to be
necessary for the Company or any of its Subsidiaries to own, lease and operate
its properties or to carry on their respective businesses in the manner as they
are now being conducted (the "Company Permits"), and all such Company Permits
are valid, and in full force and effect, except where the failure to have, or
the suspension or cancellation of, any of the Company Permits would neither,
individually or in the aggregate, (a) have a Material Adverse Effect on the
Company nor (b) prevent or materially delay
-18-
the performance of this Agreement by the Company. No suspension or cancellation
of any of the Company Permits is pending or, to the knowledge of the Company,
threatened, except where the failure to have, or the suspension or cancellation
of, any of the Company Permits would neither, individually or in the aggregate,
(a) have a Material Adverse Effect on the Company nor (b) prevent or materially
delay the performance of this Agreement by the Company.
Section 3.19. MATERIAL CONTRACTS.
(a) The Company Disclosure Schedules set forth a complete and correct list
of all agreements of the following types to which the Company or any of its
Subsidiaries is a party or may be bound (collectively, the "Material
Contracts"): (i) employment, severance, termination, consulting and retirement
agreements that are not terminable "at will"; (ii) agreements which involve
payment by the Company of more than $100,000 or which are not cancelable without
penalty by the Company in less than 60 days, (iii) royalty and licensing
agreements of the Company acting as a licensor; (iv) agreements with any labor
organization or other collective bargaining unit; (v) agreements for the
purchase, sale or lease of any real estate; (vi) agreements for the sale of
assets material to the operation of the Company's business other than in the
ordinary course of business or the grant of any preferential rights to purchase
any such material assets; (vii) agreements which contain provisions requiring
the Company or any Subsidiary to indemnify any person not entered into in the
ordinary course of business consistent with past practice; (viii) joint venture
agreements or other agreements involving the sharing of profits; (ix) agreements
(including, without limitation, agreements not to compete and exclusivity
agreements) that reasonably could be interpreted to impose any restriction on
any business operations of the Company or its Subsidiaries, except for
agreements containing restrictions that would not have a the Material Adverse
Effect on the Company; or (x) any agreements that are material to the conduct of
the business of the Company and its Subsidiaries.
(b) All the Material Contracts (including without limitation (x) the
subordinated promissory notes made by the Company (i) in favor of Xxxxx
Xxxxxxxxx and R. Xxxx Xxxxxxxxx, individually, dated as of December 31, 1997 and
(ii) in favor of Xxxxx Xxxxxxxxx and R. Xxxx Xxxxxxxxx, jointly, dated as of
April 22, 1998, and (y) the credit and security agreement, as amended, by and
among GMAC Commercial Credit (formerly BNY Financial Corporation) and Xxxxxx
Sline, Inc. and Icesolv, Inc., dated as of June 28, 1996, as amended April 17,
1998, are valid and in full force and effect on the date hereof (except to the
extent they have previously expired in accordance with their terms) and
constitute legal, valid and binding obligations of, and are legally enforceable
against, the Company or any of its Subsidiaries which is a party thereto, and to
the knowledge of the Company, the other party or respective parties thereto. To
the knowledge of the Company, there have been no threatened cancellations
thereof and no outstanding disputes thereunder, except such that would not have
a the Material Adverse Effect. Each of the Company and its Subsidiaries has in
all material respects performed all the obligations under the Material Contracts
required to be performed by the Company and its Subsidiaries to date. The
Company is not in default, and to the Company's knowledge, no party is in
default, in any material respect under any of the Material Contracts, and there
has not occurred any event which (whether with or without notice, lapse of time
or the happening or occurrence of any other event) would constitute such a
default, except for defaults which would not in the aggregate reasonably be
expected to have a Material Adverse Effect. True and complete copies of all
Material Contracts have been delivered to Parent or made available for
inspection.
-19-
Section 3.20. OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of Hempstead & Co. to the effect that, as of the date of its
opinion, the Merger Consolidation is fair from a financial point of view to the
holders of shares of Company Common Stock.
Section 3.21. TAKEOVER STATUTES AND CHARTER PROVISIONS. The Board of
Directors of the Company has taken the necessary action to render control share
acquisitions provisions and business combinations provisions of DGCL, and any
other potentially applicable anti-takeover or similar statute or regulation
inapplicable to this Agreement and the transactions contemplated hereby.
Section 3.22. INTELLECTUAL PROPERTY MATTERS.
(a) To the knowledge of the Company, the Company and its Subsidiaries own,
free and clear of all Liens, or have the right to use pursuant to valid license,
sublicense, agreement or permission all items of Intellectual Property (as
defined in Section 3.22(b)) necessary for their operations as presently
conducted. To the knowledge of the Company, the conduct of the Company's and its
Subsidiaries' businesses as currently conducted does not interfere with,
infringe upon, misappropriate or violate any of the Intellectual Property (as
defined below) rights of any third party which would result in a Material
Adverse Effect on the Company. To the knowledge of the Company, no third party
has interfered with, infringed upon, misappropriated, diluted, violated or
otherwise come into conflict with any Intellectual Property rights of the
Company or any of its Subsidiaries which would result in a Material Adverse
Effect on the Company.
(b) The term "Intellectual Property" as used in this Agreement means,
collectively, patents, trademarks, service marks, trade dress, logos, trade
names, Internet domain names, designs, slogans and general intangibles of like
nature, copyrights and all registrations, applications, reissuances,
continuations, continuations-in-part, revisions, extensions, reexaminations and
associated good will with respect to each of the foregoing, computer software
(including source and object codes), computer programs, computer data bases and
related documentation and materials, data, documentation, technology, trade
secrets, confidential business information (including ideas, formulae,
algorithms, models, methodologies, compositions, know-how, manufacturing and
production processes and techniques, research and development information,
drawings, designs, plans, proposals and technical data, financial, marketing and
business data and pricing and cost information) and other intellectual property
rights (in whatever form or medium).
Section 3.23. INSURANCE. The Company maintains insurance coverage with
reputable insurers in such amounts and covering such risks as are in accordance
with normal industry practice for companies engaged in businesses similar to
that of the Company.
Section 3.24. TITLE TO ASSETS; LIENS. The Company and each of its
Subsidiaries has good and marketable title in fee simple to all its real
property and good title to all its leasehold interests and other properties, as
reflected in the Company Balance Sheet, except for properties and assets that
have been disposed of in the ordinary course of business since the date of such
balance sheet, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever, except (i) liens for current taxes,
payments of which are not yet delinquent, (ii) such imperfections in title and
easements and encumbrances, if any, as are not substantial in character, amount
or extent and do not materially detract from the value, or interfere with the
present use of the property subject thereto or affected thereby, or otherwise
materially impair the Company's business operations or (iii)
-20-
as disclosed in the Company Commission Documents or on Schedule 3.24, and except
for such matters, which individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on the Company. All leases under
which the Company leases any real or personal property are in good standing,
valid and effective in accordance with their respective terms, and there is not,
under any of such leases, any existing default or event which with notice or
lapse of time or both would become a default which could reasonably be expected
to have a Material Adverse Effect on the Company. The Company Disclosure
Schedule sets forth all liens and securities interests granted by the Company or
any of its Subsidiaries to third parties.
Section 3.25. MATERIAL INFORMATION. No representations or warranties by
the Company in this Agreement and no statements or information contained in the
Company Disclosure Schedule, or in any certificate furnished or to be furnished
by the Company to Parent pursuant to the provisions of this Agreement, contain
or will contain any untrue statement of a material fact or omit or will omit to
state any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that except as set forth in
the disclosure schedules delivered by Parent to the Company simultaneously with
the execution of this Agreement (the "Parent Disclosure Schedules"):
Section 4.1. CORPORATE EXISTENCE AND POWER. Parent is a limited
liability company and Merger Subsidiary is a corporation in each case duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all corporate or limited liability company
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except for those the absence
of which would not, individually or in the aggregate, have a Material Adverse
Effect on Parent. Parent is duly qualified to do business as a foreign limited
liability company and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. Since the date of its incorporation, Merger
Subsidiary has not engaged in any activities other than in connection with or as
contemplated by this Agreement. Parent has heretofore made available to the
Company true and complete copies of Parent's certificate of formation and
limited liability company operating agreement and Merger Subsidiary's
certificate of incorporation and by-laws as currently in effect.
Section 4.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby and thereby are within the corporate and
limited liability company powers of Parent and Merger Subsidiary and have been
duly authorized by all necessary corporate and limited liability company action.
Assuming due authorization, execution and delivery of this Agreement by the
Company, each of this Agreement and the Parent Ancillary Agreements constitutes
a valid and binding agreement of each of Parent and Merger Subsidiary, in each
case enforceable against such party in accordance with its terms, subject
-21-
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 4.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby and thereby require no action by or in respect
of, or filing by Parent or Merger Subsidiary with, any governmental body,
agency, official or authority other than (a) the filing of the Certificate of
Merger in connection with the Merger in accordance with DGCL and applicable laws
of any other state, (b) compliance with any applicable requirements of the HSR
Act, (c) compliance with any applicable requirements of the Exchange Act, (d)
compliance with any applicable requirements of the Securities Act, and (e) other
actions or filings which if not taken or made would not, individually or in the
aggregate, have a Material Adverse Effect on Parent or prevent or materially
delay Parent's and/or Merger Subsidiary's consummation of the Merger.
Section 4.4. NON-CONTRAVENTION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby and thereby do not and will not (a) contravene
or conflict with the certificate of formation or the limited liability company
operating agreement of Parent or the certificate of incorporation or by-laws of
Merger Subsidiary, (b) assuming compliance with the matters referred to in
Section 4.3, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Parent or any of its Subsidiaries, (c) constitute a
default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Parent or any of its Subsidiaries or
to a loss of any benefit to which Parent or any of its Subsidiaries is entitled
under any provision of any agreement, contract or other instrument binding upon
Parent or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by Parent or any of its Subsidiaries or (d) result in
the creation or imposition of any Lien on any asset of Parent or any of its
Subsidiaries, except for such contraventions, conflicts or violations referred
to in clause (b) or defaults, rights of termination, cancellation or
acceleration, or losses or Liens referred to in clause (c) or (d) that would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
Section 4.5. FINDERS' OR ADVISORS' FEES. There is no investment
banker, broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of Parent or any of its Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
ARTICLE 5
COVENANTS
Section 5.1. CONDUCT OF THE COMPANY. From the date of this Agreement
until the Effective Time, the Company and its Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their reasonable best efforts to preserve intact their business organizations
and relationships with third parties. Without limiting the generality of the
foregoing, from the date of this Agreement until the Effective Time without the
prior written consent of Parent:
-22-
(a) the Company will not, and will not permit any of its Subsidiaries to,
adopt or propose any change in its certificate of incorporation or by-laws;
(b) the Company will not, and will not permit any Subsidiary of the
Company to, adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than
transactions between direct and/or indirect wholly owned Subsidiaries of the
Company);
(c) the Company will not, and will not permit any Subsidiary of the
Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of,
or securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class or series of the Company or any of its Subsidiaries other than issuances
of Company Common Stock pursuant to the exercise of Options that are outstanding
on the date of this Agreement;
(d) the Company will not (i) split, combine, subdivide or reclassify its
outstanding shares of capital stock, or (ii) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock;
(e) the Company will not, and will not permit any Subsidiary of the
Company to, redeem, purchase or otherwise acquire directly or indirectly any of
the Company's or its Subsidiaries' capital stock;
(f) the Company will not amend the terms (including the terms relating to
accelerating the vesting or lapse of repurchase rights or obligations) of any
Options or other stock based awards;
(g) the Company will not, and will not permit any Subsidiary of the
Company to, (i) grant any severance or termination pay to (or amend any such
existing arrangement with) any director, officer or employee of the Company or
any of its Subsidiaries, (ii) enter into any employment, deferred compensation
or other similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Company or any of its
Subsidiaries, (iii) increase any benefits payable under any existing severance
or termination pay policies or employment agreements, (iv) increase, other than
customary periodic increases in the ordinary course of business, (or amend the
terms of) any compensation, bonus or other benefits payable to directors,
officers or employees of the Company or any of its Subsidiaries or (v) permit
any director, officer or employee who is not already a party to an agreement or
a participant in a plan providing benefits upon or following a "change in
control" to become a party to any such agreement or a participant in any such
plan;
(h) the Company will not, and will not permit any of its Subsidiaries to,
acquire a material amount of assets or property of any other Person;
(i) the Company will not, and will not permit any of its Subsidiaries to,
sell, lease, license or otherwise dispose of any material amount of assets or
property except pursuant to existing contracts or commitments or otherwise in
the ordinary course of business;
-23-
(j) except for any such change which is required by reason of a concurrent
change in GAAP, the Company will not, and will not permit any Subsidiary of the
Company to, change any method of accounting or accounting practice used by it;
(k) the Company will not, and will not permit any Subsidiary of the
Company to, enter into any joint venture, partnership or other similar
arrangement;
(l) the Company will not, and will not permit any of its Subsidiaries to,
take any action that would make any representation or warranty of the Company
hereunder inaccurate in any material respect at, or as of any time prior to, the
Effective Time;
(m) the Company will not make or change any Tax election, settle any audit
or file any amended Tax Returns, except in the ordinary course of business
consistent with past practice; and
(n) the Company will not, and will not permit any of its Subsidiaries to,
agree or commit to do any of the foregoing.
Section 5.2. HSR ACT. The Company and Parent shall cooperate with one
another and shall take all reasonable actions necessary to prepare and file as
soon as practicable following the date hereof notifications under the HSR Act
and to respond as promptly as practicable to any inquiries received from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
for additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or any other Governmental Entity in connection with antitrust or
competition matters. The Company and Parent agree that the Parent shall be
responsible for paying the fee in connection with such filing.
Section 5.3. ACCESS TO INFORMATION. Upon reasonable prior notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, investment bankers, financial
advisors and other representatives of Parent, access, during normal business
hours during the period prior to the Effective Time, to all of its offices,
properties, books, contracts, commitments and records and such financial and
operating data as such representatives of Parent may reasonably request. Unless
otherwise required by law and until the Effective Time, Parent and Merger
Subsidiary will hold any such information which is nonpublic in confidence in
accordance with the provisions of the Agreement for Exchange of Confidential
Information Confidentiality Agreement, dated June 9, 2000, between the Company
and Parent (the "Confidentiality Agreement").
Section 5.4. REASONABLE BEST EFFORTS; CONSENTS AND APPROVALS. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to use all reasonable best efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement. Each of the Company, Parent and
Merger Subsidiary will take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on it with respect to this
Agreement and the transactions contemplated hereby (which actions shall include,
without limitation, furnishing all information determined by their respective
counsel to be required under the
-24-
HSR Act and in connection with approvals of or filings with any other
Governmental Entity) and will promptly cooperate with and furnish information to
each other in connection with any such requirements imposed upon any of them or
any of their Subsidiaries in connection with this Agreement and the transactions
contemplated hereby. Each of the Company, Parent and Merger Subsidiary will, and
will cause its Subsidiaries to, take all reasonable actions determined by their
respective counsel to be necessary to obtain (and will cooperate with each other
in obtaining) any consent, authorization, order or approval of, or any exemption
by, or to provide any required notice to, any Governmental Entity or other
public or private third party required to be obtained or made by Parent, Merger
Subsidiary, the Company or any of their Subsidiaries in connection with the
Merger or the taking of any action contemplated thereby or by this Agreement.
Section 5.5. NO SOLICITATION. From the date hereof until the
termination of this Agreement in accordance with its terms, neither the Company
nor any of its Subsidiaries or affiliates shall (and the Company shall use its
reasonable best efforts to cause its and each of its Subsidiaries' officers,
directors, employees, representatives and agents, including, but not limited to,
investment bankers, attorneys and accountants, not to), directly or indirectly,
solicit, participate in, initiate or knowingly encourage discussions or
negotiations with, provide any information to, or enter into any agreement with,
any corporation, partnership, person or other entity or group (other than Parent
or any of its affiliates or representatives) concerning any merger, business
combination, tender offer, exchange offer, sale of all or substantially all of
its business, assets, capital stock or debt securities or any significant equity
or debt investment in the Company or any similar transactions involving the
Company (an "Acquisition Proposal"). The Company further agrees that it will
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
Notwithstanding the foregoing, prior to the time of acceptance of Shares for
payment pursuant to the Offer, the Company may, directly or indirectly, provide
access and furnish information concerning its business, properties or assets to
any corporation, partnership, person or other entity or group pursuant to
customary confidentiality agreements, and may negotiate and participate in
discussions and negotiations with such entity or group if (x) such entity or
group has submitted an unsolicited bona fide written proposal to the Board of
Directors of the Company relating to any such transaction, (y) such proposal
provides for the acquisition for cash or readily marketable securities of all of
the outstanding Shares or all or substantially all of the assets of the Company,
and (z) the Board of Directors of the Company determines in good faith, after
consultation with its independent financial advisor, that such proposal is
financially superior to the Offer and the Merger and fully financed or
reasonably capable of being financed. A proposal meeting all of the criteria in
the preceding sentence is referred to herein as a "Superior Proposal." The
Company will immediately notify Parent of any Superior Proposal, or if an
inquiry is made, will keep Parent fully apprised of all developments with
respect to any Superior Proposal, will immediately provide to Parent copies of
any written materials received by the Company in connection with any Superior
Proposal, discussion, negotiation or inquiry and the identity of the party
making any Superior Proposal or inquiry or engaging in such discussion or
negotiation. The Company will promptly provide to Parent any non-public
information concerning the Company provided to any other party which was not
previously provided to Parent. Notwithstanding anything to the contrary
contained in this Agreement, only in connection with the valid termination of
this Agreement pursuant to Section 7.1(c)(i) hereof, the Board of Directors of
the Company may (i) withdraw, modify or change in a manner adverse to Parent or
Merger Subsidiary, or propose to withdraw, or propose to modify or change in a
manner adverse to Parent or the Merger Subsidiary, the approval or
recommendation by such Board of Directors of the Offer, this Agreement or the
Merger, (ii) approve or recommend,
-25-
or propose to approve or recommend, any Acquisition Proposal or (iii) enter into
any agreement with respect to any Acquisition Proposal.
Section 5.6. ADDITIONAL AGREEMENTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations, or
to remove any injunctions or other impediments or delays, legal or otherwise, to
consummate and make effective the Merger and the other transactions contemplated
by this Agreement. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of the Company and Parent shall use all
reasonable efforts to take, or cause to be taken, all such necessary actions.
Section 5.7. PUBLICITY. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to Parent
and the Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other transactions contemplated hereby without the
prior consultation of the other party, except as may be required by law.
Section 5.8. NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent and Parent shall give prompt notice to the Company, of
(i) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would cause any representation or warranty of any party
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time and (ii) any material failure of the Company
or Parent to comply with or satisfy any covenant, condition or agreement of any
party to be complied with or satisfied by it hereunder; provided, however, that
the delivery of any notice pursuant to this Section 5.8 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice, and provided, further, that the breaching party shall have up to one
business day prior to the then scheduled expiration date of the Offer (or, if
applicable, the offer in any Subsequent Offering Period) in which to cure such
event or failure to the reasonable satisfaction of the non-breaching party.
Section 5.9. STATE TAKEOVER LAWS. If Section 203 of the DGCL or any
other state takeover statute becomes or is deemed to become applicable to the
Company, the Offer, the acquisition of Shares pursuant to the Offer or the
Merger, the Board of Directors of the Company shall take all action necessary to
render such statute inapplicable to all of the foregoing.
Section 5.10. RESIGNATIONS. At or prior to the Effective Time, the
Company shall obtain the resignations as of the Effective Time of each director
of the Company (other than Parents' designees elected or appointed pursuant to
Section 1.4) and, if so requested by Parent, of any director of any Subsidiary
of the Company.
Section 5.11. INTERIM DIRECTORS. Pursuant to Section 1.4(b) hereof, the
Company shall take all action necessary to cause a sufficient number of its
current directors to continue as Independent Directors of the Company until the
Effective Time.
Section 5.12. DISCLOSURE DOCUMENTS. Neither the Schedule 14D-9, any
other document required to be filed by the Company with the SEC in connection
with the Transactions, nor any
-26-
information supplied by the Company for inclusion in the Offer Documents will,
at the respective times the Schedule 14D-9, any such other filings by the
Company, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first mailed to Company stockholders, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement (or any amendment thereof or supplement
thereto), if any, will not, at the date mailed to Company stockholders and at
the time of the Special Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9, any such other filings by the
Company and the Proxy Statement, if any, will comply as to form in all material
respects with the provisions of the applicable federal securities laws and the
rules and regulations thereunder.
ARTICLE 6
CONDITIONS TO THE MERGER
Section 6.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction (or, to the extent legally permissible,
waiver) of the following conditions:
(a) this Agreement and the Merger shall have been approved and adopted by
the stockholders of the Company if required by and in accordance with DGCL;
(b) no statute, rule, order, decree, regulation, executive order, ruling
or temporary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity of competent jurisdiction
which, as of the Effective Time, prohibits the consummation of the Merger or
otherwise limits or restricts ownership or operation of the business of the
Surviving Corporation and all foreign or domestic governmental consents, orders
and approvals, including but not limited to approval under the HSR Act required
for the consummation of the Merger shall have been obtained and shall be in
effect at the Effective Time and shall not limit or restrict ownership or the
operation of the business of the Surviving Corporation; and
(c) Merger Subsidiary or any of its affiliates shall have purchased shares
of Company Common Stock pursuant to the Offer.
ARTICLE 7
TERMINATION
Section 7.1. TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) By the mutual consent of the Operating Board of Parent and the Board
of Directors of the Company.
(b) By either of the Board of Directors of the Company or the Operating
Board of Parent:
-27-
(i) if shares of Company Common Stock shall not have been purchased
pursuant to the Offer on or prior to September 30, 2000; provided, however,
that the right to terminate this Agreement under this Section 7.1(b)(i)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of
Merger Subsidiary to purchase shares of Company Common Stock pursuant to
the Offer on or prior to such date; or
(ii) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other
action the parties hereto shall use their reasonable efforts to lift), in
each case, permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company Common Stock
pursuant to the Offer, the Board of Directors of the Company shall have
withdrawn, or modified or changed in a manner adverse to Parent or Merger
Subsidiary, its approval or recommendation of the Offer, this Agreement, or
the Merger in order to approve and permit the Company to execute a
definitive agreement providing for a Superior Proposal; provided that (A)
at least three business days prior to terminating this Agreement pursuant
to this Section 7.1(c)(i) the Company has provided Parent with written
notice advising Parent that the Board of Directors of the Company has
received a Superior Proposal that it intends to accept, specifying the
material terms and conditions of such Superior Proposal, and identifying
the person making such Superior Proposal and (B) the Company shall have
caused its financial and legal advisors to negotiate in good faith with
Parent to make such adjustments in the financial terms of a revised
Agreement that are equal or superior to the financial terms of such
Superior Proposal; and further provided that simultaneously with any
termination of this Agreement pursuant to this Section 7.1(c)(i), the
Company shall pay to Parent the Termination Fee (as defined below); and
further provided that the Company may not terminate this Agreement pursuant
to this Section 7.1(c)(i) if the Company is in material breach of this
Agreement; or
(ii) if, prior to the purchase of shares of Company Common Stock
pursuant to the Offer, Parent or Merger Subsidiary breaches or fails in any
material respect to perform or comply with any of its material covenants
and agreements contained herein or breaches its representations and
warranties in any material respect; or
(iii) if Parent or Merger Subsidiary, as the case may be, shall have
terminated the Offer, or the Offer shall have expired, without Parent or
Merger Subsidiary, as the case may be, purchasing any shares of Company
Common Stock pursuant thereto; provided that the Company may not terminate
this Agreement pursuant to this Section 7.1(c)(iii) if the Company is in
material breach of this Agreement.
(d) By the Operating Board of Parent:
-28-
(i) if, until July 19, 2000, during which period Parent shall conduct
its financial, operating, environmental, tax, accounting, business, and
legal due diligence review of the Company, Parent shall have discovered any
information which would result in a breach of any of the Company's
representations or warranties contained in this Agreement; or
(ii) if, prior to the purchase of shares of Company Common Stock
pursuant to the Offer, the Board of Directors of the Company shall have
withdrawn, or modified or changed in a manner adverse to Parent or Merger
Subsidiary, its approval or recommendation of the Offer, this Agreement, or
the Merger or shall have recommended an Acquisition Proposal or offer, or
shall have executed an agreement in principle (or similar agreement) or
definitive agreement providing for a tender offer or exchange offer for any
shares of capital stock of the Company, or a merger, consolidation or other
business combination with a person or entity other than Parent, Merger
Subsidiary or their affiliates (or the Board of Directors of the Company
resolves to do any of the foregoing); provided that Parent may not
terminate this Agreement pursuant to this Section 7.1(d)(ii) if Parent or
Merger Subsidiary is in material breach of this Agreement; or
(iii) if Parent or Merger Subsidiary, as the case may be, shall have
terminated the Offer, or the Offer shall have expired, without Parent or
Merger Subsidiary, as the case may be, purchasing any shares of Company
Common Stock thereunder; provided that Parent may not terminate this
Agreement pursuant to this Section 7.1(d)(iii) if it or Merger Subsidiary
is in material breach of this Agreement.
Section 7.2. EFFECT OF TERMINATION. In the event of the termination of
this Agreement as provided in Section 7.1 hereof, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void, except for Article 8 which shall survive such termination,
and there shall be no liability on the part of the Parent, Merger Subsidiary or
the Company except (a) for fraud or for breach of this Agreement, with damages
to be limited to out-of-pocket costs and (b) as set forth in this Section 7.2
and Section 7.3.
Section 7.3. FEES AND EXPENSES.
(a) Except as contemplated by this Agreement, including Sections 7.3(b)
and 7.3(c) hereof, all costs and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such expenses.
(b) If (w) the Board of Directors of the Company shall terminate this
Agreement pursuant to Section 7.1(c)(i) hereof, (x) the Operating Board of
Parent shall terminate this Agreement pursuant to Section 7.1(d)(ii) hereof, or
(y) (I) the Board of Directors of the Company shall terminate this Agreement
pursuant to Section 7.1(b)(i) or Section 7.1(c)(iii) and prior thereto there
shall have been publicly announced another Acquisition Proposal or (II) the
Operating Board of Parent shall terminate this Agreement pursuant to Section
7.1(b)(i) or Section 7.1(d)(iii) due to a failure to satisfy the Minimum
Condition or the conditions contained in paragraphs (h) or (i) of Annex A and
Parent shall have reasonably determined that such failure is attributable to
there having been publicly announced another Acquisition Proposal, then in any
such case as described in clause (w), (x) or (y) (each such case of termination
being referred to as a "Trigger Event"), the Company shall (not later
-29-
than two business days after such termination of this Agreement or, in the case
of any termination by the Company pursuant to Section 7.1(c)(i) hereof,
simultaneously with such termination pay to Parent an amount in cash equal to
the sum of (i) Parent's documented out-of-pocket expenses, incurred in
connection with this Agreement and the transactions contemplated hereby not to
exceed $1,000,000; and (ii) $500,000 (together, the "Termination Fee"). Parent
and the Company agree that the agreement contained in this Section 7.3(b) is an
integral part of the transactions contemplated by this Agreement and constitutes
liquidated damages and not a penalty.
(c) In the event that this Agreement is terminated pursuant to Section
7.1(b)(i) due to a failure to satisfy the Minimum Condition or the Operating
Board of Parent shall terminate this Agreement pursuant to Section 7.1(d)(iii)
due to a failure to satisfy the Minimum Condition, the Company shall (not later
than 2 business days after such termination of this Agreement) pay to Parent an
amount equal to $1,000,000 in cash; provided, however, that no payment shall be
required pursuant to this Section 7.3(c) if payment is made by the Company to
Parent pursuant to Section 7.3(b). Parent and the Company agree that the
agreement contained in this Section 7.3(c) is an integral part of the
transactions contemplated by this Agreement and constitutes liquidated damages
and not a penalty.
ARTICLE 8
MISCELLANEOUS
Section 8.1. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to Parent or Merger Subsidiary, to:
Xxxxx Industrial Services, L.L.C.
000 X. Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X.X. Xxxxxx
Facsimile No.: (000) 000-0000
if to the Company, to:
Canisco Resources, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
-30-
with a copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties. Each such notice, request or
other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section and
the appropriate facsimile confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
Section 8.2. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time.
Section 8.3. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement (including the Exhibits and Schedules
hereto) may be amended or waived prior to the Effective Time at any time, if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company, Parent and Merger Subsidiary, or in the case of a
waiver, by the party against whom the waiver is to be effective; PROVIDED that
after the receipt of any such approval, if any such amendment or waiver shall by
applicable law requires further approval of stockholders, the effectiveness of
such amendment or waiver shall be subject to the necessary stockholder approval.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 8.4. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto except that Merger Subsidiary
may transfer or assign, in whole or from time to time in part, to one or more of
its affiliates, its rights under this Agreement, but any such transfer or
assignment will not relieve Merger Subsidiary of its obligations hereunder.
Section 8.5. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without regard
to principles of conflicts of law.
-31-
Section 8.6. JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement, or the transactions contemplated hereby or thereby may be
brought in any federal or state court located in the State of Delaware, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.1 shall be deemed
effective service of process on such party.
Section 8.7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
Section 8.8. ENTIRE AGREEMENT. This Agreement (including the Exhibits
and Schedules) constitutes the entire agreement between the parties with respect
to the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof. No provision of this Agreement or any other
agreement contemplated hereby is intended to confer on any Person other than the
parties hereto any rights or remedies.
Section 8.9. CAPTIONS. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 8.10. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
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
a determination, the parties 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 be consummated as originally contemplated to the fullest extent possible.
Section 8.11. NO PREJUDICE. This Agreement has been jointly prepared by
the parties hereto and the terms hereof shall not be construed in favor of or
against any party on account of its participation in such preparation.
Section 8.12. WORDS IN SINGULAR AND PLURAL FORM; GENDER. Words used in
the singular form in this Agreement shall be deemed to import the plural, and
vice versa, as the sense may require and words importing one gender shall
include the other two.
* * *
-32-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXX INDUSTRIAL SERVICES, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
CANISCO ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: President
----------------------------------
CANISCO RESOURCES, INC.
By: /s/ Xxx Xxxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
DEFINED TERMS CROSS-REFERENCES
TERM SECTION
---- -------
Acquisition Proposal Section 5.5
Agreement Preamble
Ancillary Agreements Section 3.2(a)
CERCLA Section 3.17(e)(i)
Certificates Section 2.2(b)
Certificate of Merger Section 1.6
Closing Section 1.7
Closing Date Section 1.7
Code Section 3.13(a)
Company Preamble
Company Ancillary Agreements Section 3.2(a)
Company Balance Sheet Section 3.8
Company Balance Sheet Date Section 3.8
Company Breakup Fee Section 7.2(a)
Company Commission Documents Section 3.7
Company Common Stock Recitals
Company Disclosure Schedules Article 3
Company Employee Plans Section 3.14
Company Permits Section 3.18
Company Stockholder Approval Section 3.2(a)
Confidentiality Agreement Section 5.3
DGCL Recitals
Dissenting Shares Section 2.3(a)
Effective Time Section 1.6
Environmental Laws Section 3.17(e)(ii)
Environmental Permits Section 3.17(e)(iii)
ERISA Section 3.14(a)
Exchange Act Section 1.1(a)
Governmental Entity Section 3.13(a)
Hazardous Materials Section 3.17(e)(iv)
HSR Act Section 3.3
Independent Directors Section 1.4(b)
Intellectual Property Section 3.22(b)
Lien Section 3.4
Material Adverse Effect Section 3.1
material adverse change Section 3.1
Material Contracts Section 3.19(a)
Merger Section 1.5
Merger Consideration Section 2.1(c)
Merger Subsidiary Preamble
Merger Subsidiary Common Stock Section 2.1
Minimum Condition Section 1.1(a)
National Priorities List Section 3.17(d)
Offer Section 1.1(a)
Offer Documents Section 1.1(b)
Offer Price Section 1.1(a)
Offer to Purchase Section 1.1(a)
Option Section 2.4
Parent Preamble
Parent Ancillary Agreements Section 3.2(a)
Parent Disclosure Schedules Article 4
Paying Agent Section 2.2(a)
Proxy Statement Section 1.10(a)(ii)
SEC Section 1.1(b)
Securities Act Section 3.3
Shares Recitals
Schedule 14D-9 Section 1.3
Schedule TO Section 1.1(b)
Special Meeting Section 1.10(a)(i)
-2-
Subsequent Offering Period Section 1.1
Subsidiary Section 3.6
Superior Proposal Section 5.5
Surviving Corporation Section 1.5(d)
Taxes Section 3.13(a)
Tax Returns Section 3.3(a)
Transactions Recitals
Trigger Event Section 7.3(b)
Voting Agreement Section 1.2
-3-
ANNEX A
CONDITIONS TO THE TENDER OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Merger Subsidiary's rights to extend and amend the
Offer at any time in its sole discretion (subject to the provisions of the
Merger Agreement), the Merger Subsidiary shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the Merger
Subsidiary's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate the Offer as to any Shares not then
paid for, if (i) the Minimum Condition shall not have been satisfied; (ii) any
applicable waiting period under the HSR Act has not expired or terminated; or
(iii) at any time on or after the date of this Agreement and before the time of
payment for any such Shares, any of the following events shall occur:
(a) there shall be threatened or pending any suit, action or proceeding by
any Governmental Entity (i) seeking to prohibit or impose any limitations on
Parent's or Merger Subsidiary's ownership or operation (or that of any of their
respective Subsidiaries or affiliates) of all or a material portion of their or
the Company's businesses or assets, or to compel Parent or Merger Subsidiary or
their respective Subsidiaries and affiliates to dispose of or hold separate any
portion of the business or assets of the Company or Parent and their respective
Subsidiaries, in each case taken as a whole, (ii) challenging the acquisition by
Parent or Merger Subsidiary of any Shares under the Offer, seeking to restrain
or prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by this Agreement, or
seeking to obtain from the Company, Parent or Merger Subsidiary any damages,
(iii) seeking to impose limitations on the ability of Merger Subsidiary, or
rendering Merger Subsidiary unable, to accept for payment, pay for or purchase
some or all of the Shares pursuant to the Offer and the Merger, or (iv) seeking
to impose limitations on the ability of Merger Subsidiary or Parent effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters properly
presented to the Company's stockholders;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, or any other action shall be taken by any Governmental
Entity, that is reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred and continue to exist (i) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange for a period in excess of three hours (excluding suspensions
or limitations resulting solely from physical damage or interference with such
exchanges not related to market conditions) or (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory);
A-1
(d) any of the representations and warranties of the Company set forth in
this Agreement shall not be true and correct, as if such representations and
warranties were made at the time of such determination (except as to any such
representation and warranty which speaks as of a specific date, which must be
untrue or incorrect as of such specific date), except where the failure to be so
true and correct would not, individually or in the aggregate, reasonably be
likely to have a Material Adverse Effect;
(e) the Company shall have breached or failed to perform any material
obligation or to comply with any material agreement or covenant of the Company
to be performed or complied with by it under this Agreement;
(f) there shall have occurred any events or changes which have had or
which are reasonably likely to have or constitute, individually or in the
aggregate, a Material Adverse Effect on the Company;
(g) the Merger Agreement shall have been terminated in accordance with its
terms;
(h) (i) any person, entity or "group" (as defined in Section 13(d)(3) of
the Exchange Act), other than Parent or its affiliates or any group of which any
of them is a member, shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of 10% or more of any
class or series of capital stock of the Company (including the Shares) (or any
person beneficially owning 5% or more of any class or series of capital stock of
the Company (including the Shares) on the date of this Agreement shall increase
such person's beneficial ownership by 1% or more in excess of such beneficial
ownership as reported in an SEC filing publicly filed prior to the date of this
Agreement), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted an option, right or warrant, conditional
or otherwise, to acquire beneficial ownership of 10% or more of any class or
series of capital stock of the Company (including the Shares); and (ii) any
person or group shall have entered into a definitive agreement or agreement in
principle with the Company with respect to a merger, consolidation or other
business combination with the Company; or
(i) the Company's Board of Directors or any committee thereof (i) shall
have withdrawn, or modified or changed in a manner adverse to Parent or Merger
Subsidiary (including by amendment of the Schedule 14D-9), its recommendation of
the Offer, this Agreement, or the Merger, (ii) shall have recommended another
proposal or offer, (iii) shall have resolved to do any of the foregoing and (iv)
shall have taken a neutral position or made no recommendation with respect to
the Transactions; and
which in the sole judgment of Parent or Merger Subsidiary, in any such case,
makes it inadvisable to proceed with the Offer or with such acceptance for
payment or payments.
The foregoing conditions are for the sole benefit of Merger Subsidiary and
Parent and, subject to Section 1.1(a) of the Merger Agreement, may be waived by
Parent or Merger Subsidiary, in whole or in part at any time and from time to
time in the sole discretion of Parent or Merger Subsidiary. The failure by
Parent or Merger Subsidiary at any time to
A-2
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
A-3
AMENDMENT NO. 1 TO THE
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 (the "Amendment") dated as of July 10, 2000, to the
Agreement and Plan of Merger (the "Agreement"), by and among Xxxxx Industrial
Services, L.L.C., a Delaware limited liability company ("Parent"), Canisco
Acquisition, Inc., a Delaware corporation ("Merger Subsidiary"), and Canisco
Resources, Inc., a Delaware corporation (the "Company").
WHEREAS, Parent, Merger Subsidiary, and the Company entered into the
Agreement on June 28, 2000; and
WHEREAS, Parent, Merger Subsidiary, and the Company desire to amend the
Agreement as more specifically set forth herein.
NOW, THEREFORE, in consideration of the premises and agreements hereinafter
contained and in consideration of each of the parties hereto entering into this
Amendment, and intending to be legally bound hereby, the parties agree as
follows:
1. Section 1.1(a) of the Agreement is amended and restated in its
entirety as follows:
Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 and none of the events set forth in Annex A
hereto shall have occurred and be continuing, as promptly as practicable
and in any event no later than July 17, 2000, Merger Subsidiary shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) an offer (the "Offer") to
purchase for cash all Shares at a price of $1.00 per Share (such price or
any higher price as shall be paid in respect of the Shares in the Offer
being referred to herein as the "Offer Price"), subject to there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares which, together with the Shares beneficially owned by
Parent or Merger Subsidiary, represents at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition") and the
other conditions set forth in Annex A hereto. Subject to the prior
satisfaction or waiver (except that the Minimum Condition may not be
waived) of the Minimum Condition and the other conditions of the Offer set
forth in Annex A hereto, Merger Subsidiary shall consummate the Offer in
accordance with its terms and accept for payment and pay for all Shares
tendered pursuant to the Offer as soon as it is legally permitted to do so
under applicable law. The obligations of Merger Subsidiary to commence the
Offer and to accept for payment and to pay for any Shares validly tendered
on or prior to the expiration of the Offer and not withdrawn shall be
subject only to the Minimum Condition and the other conditions set forth in
Annex A hereto. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") containing the terms set forth in this Agreement,
the Minimum Condition, and the other conditions set forth in Annex A
hereto. The initial expiration date of the Offer shall be the 20th business
day following the
commencement of the Offer (determined using Rule 14d-2 under the Exchange
Act). Without the prior written consent of the Company, neither Parent nor
Merger Subsidiary shall (i) decrease the Offer Price, (ii) decrease the
number of Shares to be purchased in the Offer, (iii) change the form of
consideration payable in the Offer, (iv) add to or change the conditions to
the Offer set forth in Annex A, (v) waive the Minimum Condition or (vi)
make any other change in the terms or conditions of the Offer.
Notwithstanding the foregoing, Merger Subsidiary may, without the consent
of the Company, (i) extend the Offer in increments of not more than five
business days each, if at the scheduled expiration date of the Offer any of
the conditions to Merger Subsidiary's obligation to purchase Shares are not
satisfied, until such time as such conditions are satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to
the Offer and (iii) make available a subsequent offering period (within the
meaning of Rule 14d-11 under the Exchange Act) ("Subsequent Offering
Period"). Without limiting the right of Merger Subsidiary to extend the
Offer, provided that this Agreement shall not have been terminated in
accordance with Article 7 hereof, if any applicable waiting period under
the HSR Act has not expired or terminated, then, at the request of the
Company, Merger Subsidiary will extend the Offer from time to time until
the earlier of the consummation of the Offer or the date which is sixty
(60) days from the date of this Agreement. Merger Subsidiary shall, subject
to the terms and conditions of the Offer, accept for payment Shares
tendered as soon as it is legally permitted to do so under applicable law.
2. MISCELLANEOUS.
(a) The Agreement shall remain in full force and effect except as
expressly set forth herein.
(b) This Amendment shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to the conflicts of law rules
of such state.
(c) This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, together, shall constitute
one and the same instrument.
(d) Capitalized terms used herein, but not otherwise defined, shall have
the meaning ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXX INDUSTRIAL SERVICES, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: CEO
----------------------------------
CANISCO ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: President
----------------------------------
CANISCO RESOURCES, INC.
By: /s/ Xxx Xxxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxxx
-----------------------------------
Title: CEO
----------------------------------
