EXHIBIT 2
---------
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of
August 3, 2000
among
HAVAS ADVERTISING,
HAS ACQUISITION CORP.
AND
XXXXXX COMMUNICATIONS, INC.
ARTICLE I The Merger........................................................................2
Section 1.01. The Merger...................................................................2
Section 1.02. Certificate of Incorporation.................................................2
Section 1.03. Bylaws.......................................................................2
Section 1.04. Directors and Officers.......................................................2
ARTICLE II Conversion of Securities..........................................................3
Section 2.01. Conversion of Securities.....................................................3
Section 2.02. Surrender of Certificates....................................................4
Section 2.03. No Further Ownership Rights in SNC Common Stock..............................6
Section 2.04. Lost, Stolen or Destroyed Certificates.......................................6
Section 2.05. Withholding Rights...........................................................6
Section 2.06. Stock Option and Other Stock Plans...........................................6
ARTICLE III Representations and Warranties of the Company.....................................8
Section 3.01. Organization and Power.......................................................8
Section 3.02. Corporate Authorization......................................................8
Section 3.03. Governmental Authorization...................................................9
Section 3.04. Non-Contravention............................................................9
Section 3.05. Capitalization of the Company...............................................10
Section 3.06. Capitalization of Subsidiaries..............................................10
Section 3.07. SEC Filings.................................................................11
Section 3.08. Financial Statements........................................................11
Section 3.09. Disclosure Documents........................................................11
Section 3.10. Information Supplied........................................................11
Section 3.11. Absence of Certain Changes..................................................12
Section 3.12. No Undisclosed Material Liabilities.........................................13
Section 3.13. Litigation..................................................................13
Section 3.14. Taxes.......................................................................13
Section 3.15. Employee Benefit Plans; ERISA...............................................14
Section 3.16. Compliance with Laws; No Default............................................15
Section 3.17. No Default..................................................................15
Section 3.18. Finders' Fees...............................................................16
Section 3.19. Environmental Matters.......................................................16
Section 3.20. Labor Matters...............................................................17
Section 3.21. Intellectual Property.......................................................17
Section 3.22. Opinion of Financial Advisor................................................18
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Section 3.23. Takeover Statutes...........................................................18
Section 3.24. Affiliates..................................................................18
Section 3.25. The Company's Certificate of Incorporation..................................18
ARTICLE IV Representations and Warranties of Parent.........................................18
Section 4.01. Organization and Power......................................................18
Section 4.02. Corporate Authorization.....................................................18
Section 4.03. Governmental Authorization..................................................19
Section 4.04. Non-Contravention...........................................................19
Section 4.05. Capitalization of Parent....................................................20
Section 4.06. COB Filings.................................................................20
Section 4.07. Financial Statements........................................................20
Section 4.08. Disclosure Documents........................................................21
Section 4.09. Information Supplied........................................................21
Section 4.10. Absence of Certain Changes..................................................21
Section 4.11. No Undisclosed Material Liabilities.........................................22
Section 4.12. Litigation..................................................................22
Section 4.13. Compliance with Laws........................................................22
Section 4.14. No Default..................................................................22
Section 4.15. Finders' Fees...............................................................22
Section 4.16. Merger Subsidiary...........................................................22
ARTICLE V Covenants........................................................................23
Section 5.01. Conduct of the Company......................................................23
Section 5.02. Conduct of Parent...........................................................25
Section 5.03. Shareholder Meetings; Proxy Materials; Registration Statement...............26
Section 5.04. Access to Information.......................................................27
Section 5.05. No Solicitation.............................................................27
Section 5.06. Notice of Certain Events....................................................28
Section 5.07. Reasonable Best Efforts.....................................................29
Section 5.08. Cooperation.................................................................30
Section 5.09. Public Announcements........................................................30
Section 5.10. Further Assurances..........................................................30
Section 5.11. Affiliates..................................................................31
Section 5.12. Director and Officer Liability..............................................31
Section 5.13. Obligations of Merger Subsidiary............................................32
Section 5.14. Listing.....................................................................32
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Section 5.15. Antitakeover Statutes.......................................................32
Section 5.16. Tax Treatment...............................................................32
Section 5.17. Employee Benefits...........................................................32
Section 5.18. Rule 144 Reporting..........................................................33
Section 5.19. Comfort Letters.............................................................33
Section 5.20. Third Party Consents........................................................33
Section 5.21. Certain Contributions.......................................................33
ARTICLE VI Conditions to the Merger.........................................................34
Section 6.01. Conditions to the Obligations of Each Party.................................34
Section 6.02. Conditions to the Obligations of Parent and Merger Subsidiary...............34
Section 6.03. Conditions to the Obligations of the Company................................35
ARTICLE VII Termination......................................................................36
Section 7.01. Termination.................................................................36
Section 7.02. Effect of Termination.......................................................37
Section 7.03. Payments....................................................................37
ARTICLE VIII Miscellaneous....................................................................38
Section 8.01. Certain Definitions.........................................................38
Section 8.02. Notices.....................................................................38
Section 8.03. Entire Agreement; Non-Survival of Representations
and Warranties; Third Party Beneficiaries ..................................39
Section 8.04. Amendments; No Waivers......................................................39
Section 8.05. Successors and Assigns......................................................39
Section 8.06. Governing Law...............................................................39
Section 8.07. Jurisdiction................................................................40
Section 8.08. Counterparts; Effectiveness.................................................40
Section 8.09. Interpretation..............................................................40
Section 8.10. Severability................................................................40
Section 8.11. Specific Performance........................................................40
Section 8.12. Joint and Several Liability.................................................41
Section 1. Agreement to Vote............................................................1
Section 2. Restriction on Transfer, Proxies and Non-Interference........................2
Section 3. Restriction on Transfer of Shares Parent ADSs................................2
Section 4. Non-Solicitation.............................................................3
Section 5. Further Assurances...........................................................3
Section 6. Representations and Warranties of Parent.....................................3
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Section 7. Representations and Warranties of the Stockholders...........................3
Section 8. Effectiveness and Termination................................................4
Section 9. Miscellaneous................................................................4
SCHEDULE
EXHIBIT A COMPANY VOTING AGREEMENT.
EXHIBIT B PARENT VOTING AGREEMENT
EXHIBIT C AFFILIATE AGREEMENT
EXHIBIT D TAX REPRESENTATIONS
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated
as of August 3, 2000 and effective as of February 20, 2000 (this "Agreement"),
among HAVAS ADVERTISING, a societe anonyme organized under the laws of the
French Republic ("Parent"), HAS ACQUISITION CORP., a Delaware corporation and a
direct, wholly owned subsidiary of Parent ("Merger Subsidiary"), and XXXXXX
COMMUNICATIONS, INC., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent and the
Company have approved, and deem it advisable and in the best interests of their
respective shareholders to consummate, the business combination of the Company
and Parent on the terms and conditions set forth herein;
WHEREAS, the combination of the Company and Parent shall be
effected by the terms of this Agreement through the Merger (as defined in
Section 1.01(a));
WHEREAS, in furtherance thereof, the Board of Directors of
each of the Company and Parent have approved the Merger, upon the terms and
subject to the conditions set forth in this Agreement, pursuant to which each
share of SNC Common Stock (as defined in Section 2.01(a)) of the Company will be
converted into the right to receive Parent ADSs (as defined in Section 2.01(a));
WHEREAS, as a condition and inducement to Parent's willingness
to enter into this Agreement, Parent and certain shareholders of the Company
(the "Designated Company Stockholders") entered into an agreement dated as of
February 20, 2000 (the "Company Stockholder Voting Agreement") pursuant to which
the Designated Company Stockholders have agreed, among other things, to vote
their shares of the Company in favor of the approval and adoption of this
Agreement and the transactions contemplated hereby;
WHEREAS, as a condition and inducement to the Company's
willingness to enter into this Agreement, the Company and a shareholder of
Parent (the "Designated Parent Stockholder") entered into an agreement dated as
of February 20, 2000 (the "Parent Stockholder Voting Agreement") pursuant to
which the Designated Parent Stockholder has agreed, among other things, to vote
its shares in favor of the Capital Increase (as defined in Section 4.02(a));
WHEREAS, for United States federal income tax purposes, it is
intended that the Merger contemplated by this Agreement qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the rules and regulations promulgated
thereunder; and
WHEREAS, the Parent, Merger Subsidiary and the Company desire
to amend and restate this Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the
respective representations, warranties, covenants, and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
The Merger
Section 1.01. The Merger.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, Merger Subsidiary shall be merged (the
"Merger") with and into the Company in accordance with the Delaware General
Corporation Law (the "DGCL"), whereupon the separate existence of Merger
Subsidiary shall cease, and the Company shall continue as the surviving
corporation (the "Surviving Corporation").
(b) Upon the terms and subject to the conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at 10:00
a.m. on a date (the "Closing Date") which shall be the second business day after
satisfaction or waiver of the conditions set forth in Article 6, other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions, at the offices of
Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other time, date or place as agreed to in writing by the parties hereto.
(c) Subject to the conditions of this Agreement, Parent and
the Company shall cause the Merger to be consummated by filing a certificate of
merger complying with the DGCL with the Secretary of State of the State of
Delaware (the "Certificate of Merger"), as soon as practicable on or after the
Closing Date. The Merger shall become effective upon filing of the Certificate
of Merger with the Secretary of State of the State of Delaware or at such later
time as is agreed by Parent and the Company and specified in the Certificate of
Merger (the "Effective Time").
(d) The Merger shall have the effects set forth in the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, immunities, powers and
franchises of the Company and Merger Subsidiary shall vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of the Company
and Merger Subsidiary shall become the debts, liabilities, obligations and
duties of the Surviving Corporation.
Section 1.02. Certificate of Incorporation.
The certificate of incorporation of the Company shall be the
certificate of incorporation of the Surviving Corporation.
Section 1.03. Bylaws.
The bylaws of Merger Subsidiary in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with such bylaws, the certificate of incorporation of the Surviving
Corporation and the DGCL.
Section 1.04. Directors and Officers.
From and after the Effective Time, until successors are duly
elected or appointed and qualified in accordance with the DGCL, the certificate
of incorporation and bylaws of the Surviving Corporation, (a) the directors of
Merger Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (b) the officers of Merger Subsidiary at the Effective Time
shall be the officers of the Surviving Corporation.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.01. Conversion of Securities.
As of the Effective Time, by virtue of the Merger and without
any action on the part of any holder of any capital stock of Parent, Merger
Subsidiary or the Company:
(a) SNC Common Stock. Each share of common stock, par
value $0.001 per share, of the Company designated as "Xxxxxx
Communications, Inc. Common Stock" in the certificate of
incorporation of the Company (the "SNC Common Stock") issued
and outstanding immediately prior to the Effective Time (other
than any shares of SNC Common Stock to be cancelled pursuant
to Section 2.01(c)) automatically will be converted into the
right to receive at the Effective Time a number of fully paid
and non-assessable American Depositary Shares of Parent (each
a "Parent ADS", and collectively the "Parent ADSs", with each
Parent ADS representing a fraction of a Parent Share (as
defined in Section 4.05(a)) to be determined by Parent as soon
as practicable following the date hereof (such fraction of a
Parent Share represented by each Parent ADS, the "ADS Ratio"))
evidenced by American Depositary Receipts of Parent ("Parent
ADRs") equal to the Exchange Ratio (as defined below).
For purposes of this Agreement, the "Exchange Ratio" shall be calculated as
follows:
(A) If the Average Parent Trading Price (as
defined below) in Euros is at least equal to (Euro)493 (the
"Lower Collar Amount") but not greater than (Euro)667 (the
"Upper Collar Amount"), the Exchange Ratio shall equal the
quotient (rounded to the nearest ten thousandth) of (1) $29.50
divided by (2) the product of (x) the Average Parent Trading
Price in U.S. Dollars multiplied by (y) the ADS Ratio.
(B) If the Average Parent Trading Price in Euros
is greater than the Upper Collar Amount, then the Exchange
Ratio shall equal the quotient (rounded to the nearest ten
thousandth) of (1) $29.50 divided by (2) the product of (x)
(Euro)667 multiplied by (y) the Average Exchange Rate (as
defined below) multiplied by (z) the ADS Ratio.
(C) If the Average Parent Trading Price in Euros
is less than the Lower Collar Amount, then the Exchange Ratio
shall equal the quotient (rounded to the nearest ten
thousandth) of (1) $29.50 divided by (2) the product of (x)
(Euro)493 multiplied by (y) the Average Exchange Rate
multiplied by (z) the ADS Ratio.
(i) For purposes of this Agreement, (A) the term
"Average Parent Trading Price" in Euros shall mean the average of the Closing
Sale Prices for the twenty (20) days of trading ending on the day immediately
prior to the Closing Date, (B) the term "Closing Sale Price" shall mean the
closing sale price of the Parent Shares reported on the Premier Marche of the
Bourse de Paris on the applicable trading date and (C) the term "Average
Exchange Rate" shall mean the average of the Exchange Rates for the twenty (20)
days of trading ending on the date immediately prior to the Closing Date. For
purposes of determining the Average Parent Trading Price in U.S. Dollars, the
Closing Sale Price for each applicable trading date shall be multiplied by the
exchange rate for such trading date for converting Euros to U.S. Dollars, as
published in The Wall Street Journal (such rate, for any given day, the
"Exchange Rate").
(b) xxxxxx.xxx Common Stock. Each share of common
stock, par value $0.001 per share, of the Company designated
as "Xxxxxx Communications, Inc.-- xxxxxx.xxx Common Stock" in
the certificate of incorporation of the Company (the
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"xxxxxx.xxx Common Stock", and together with the SNC Common
Stock, the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time shall remain
outstanding in the Merger as one share of xxxxxx.xxx Common
Stock of the Surviving Corporation.
(c) Cancellation of Certain Shares. Each share of SNC
Common Stock held in the treasury of the Company or owned by
Parent, Merger Subsidiary or any other Subsidiary (as defined
in Section 8.01) of the Parent immediately prior to the
Effective Time shall be cancelled and extinguished without any
conversion thereof.
(d) Capital Stock of Merger Subsidiary. The shares of
common stock, $0.01 par value, of Merger Subsidiary issued and
outstanding immediately prior to the Effective Time
automatically will be converted into the number of fully-paid
and non-assessable shares of common stock designated as "SNC
Common Stock", $0.001 par value per share, of the Surviving
Corporation equal to the number of shares of SNC Common Stock
of the Company outstanding immediately prior to the Effective
Time (other than any shares of SNC Common Stock to be
cancelled pursuant to Section 2.01(c)).
(e) Adjustment. The Exchange Ratio shall be adjusted
to reflect fully the effect of any stock split, reverse split,
stock dividend (including any dividend or distribution of
securities convertible into Parent Shares or Parent ADSs),
reorganization, recapitalization or other like change with
respect to Parent Shares or Parent ADSs occurring after the
date hereof and having a record or effective date prior to the
Effective Time.
(f) Fractional Shares. No certificates, scrip or
receipt representing any fraction of a Parent ADS will be
issued by virtue of the Merger, but in lieu thereof each
holder of shares of SNC Common Stock who would otherwise be
entitled to a fraction of a Parent ADS (after aggregating all
fractional Parent ADSs to be received by such holder) shall
receive from Parent an amount of cash (rounded down to the
nearest whole cent), without interest thereon, equal to the
product of (i) such fraction multiplied by (ii) the Average
Parent Trading Price in U.S. Dollars multiplied by (iii) the
ADS Ratio.
Section 2.02. Surrender of Certificates.
(a) Exchange Agent. Parent shall select a bank or trust
company reasonably acceptable to the Company, which may be Parent's transfer
agent, to act as the exchange agent (the "Exchange Agent") in the Merger.
(b) Parent to Provide Merger Consideration. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent for exchange
in accordance with this Article 2 certificates for the Parent ADRs representing
the Parent ADSs issuable pursuant to Section 2.01(a) in exchange for outstanding
shares of SNC Common Stock and cash in an amount sufficient for payment in lieu
of fractional shares pursuant to Section 2.01(f) and any dividends or
distributions to which holders of shares of SNC Common Stock may be entitled
pursuant to Section 2.02(e). The Parent ADSs issuable pursuant to Section
2.01(a) and the cash payable pursuant to Section 2.01(f) are referred to
collectively as the "Merger Consideration."
(c) Exchange Procedures for SNC Common Stock. Promptly after
the Effective Time, Parent shall cause the Exchange Agent to mail to each holder
of record of a certificate or certificates (the "SNC Certificates") that
immediately prior to the Effective Time represented outstanding shares of SNC
Common Stock whose shares were converted into the right to receive a pro rata
portion of the Merger Consideration (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the SNC
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Certificates shall pass, only upon delivery of the SNC Certificates to the
Exchange Agent and shall be in such form and have such other provisions as
Parent shall reasonably specify) and (ii) instructions for effecting the
exchange of the SNC Certificates for a pro rata portion of the Merger
Consideration. Upon surrender of an SNC Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal duly completed and validly executed in
accordance with the instructions thereto, the holder of such SNC Certificate
shall be entitled to receive in exchange therefor the Merger Consideration to
which such holder is entitled pursuant to Section 2.01, and the SNC Certificate
so surrendered shall forthwith be cancelled. Until so surrendered, each
outstanding SNC Certificate will be deemed from and after the Effective Time,
for all corporate purposes to evidence only the ownership of the Parent ADRs
representing the number of full Parent ADSs into which the shares of SNC Common
Stock evidenced by such SNC Certificate shall have been so converted and the
right to receive an amount in cash in lieu of the issuance of any fractional
Parent ADSs in accordance with Section 2.01(f) and any dividends or
distributions payable pursuant to Section 2.02(e).
(d) Certificates for xxxxxx.xxx Common Stock. Certificates
representing shares held of record by holders of xxxxxx.xxx Common Stock (the
"xxxxxx.xxx Certificates") shall remain outstanding and shall not be exchanged,
but shall represent the equivalent number of shares of xxxxxx.xxx Common Stock
of the Surviving Corporation.
(e) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent ADSs with a record date after the Effective
Time will be paid to the holder of any unsurrendered SNC Certificate with
respect to the Parent ADSs represented thereby until the holder of record of
such SNC Certificate shall surrender such SNC Certificate. Subject to the effect
of applicable abandoned property, escheat or similar laws, following surrender
of any such SNC Certificate, there shall be delivered to the record holder of
Parent ADRs representing such Parent ADSs (i) a certificate representing whole
Parent ADSs issuable and payable in exchange for such SNC Certificate, without
interest, (ii) payments of the amount of dividends or other distributions with a
record date after the Effective Time then payable with respect to such whole
Parent ADSs and (iii) cash in lieu of any fractional shares in accordance with
Section 2.01(f).
(f) Transfers of Ownership. If any certificate for Parent ADRs
representing Parent ADSs is to be issued in a name other than that in which the
SNC Certificate surrendered in exchange therefor is registered or if any other
portion of the Merger Consideration is to be payable to a person other than the
person to whom such SNC Certificate is registered, it will be a condition of the
issuance and payment thereof that the SNC Certificate so surrendered will be
properly endorsed, accompanied by any documents required to evidence and effect
such transfer and otherwise be in proper form for transfer and that the person
requesting such exchange will have paid to Parent or any agent designated by it
any applicable transfer taxes required by reason of the issuance of a
certificate for Parent ADRs representing Parent ADSs in any name, or the payment
of any other portion of the Merger Consideration to any person, other than that
of the registered holder of the SNC Certificate surrendered, or shall provide
evidence that any applicable transfer taxes have been paid.
(g) No Liability. Notwithstanding anything to the contrary in
this Section 2.02, none of the Exchange Agent, Parent, the Surviving Corporation
nor any other party hereto shall be liable to any person in respect of any
Merger Consideration for any amount properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) Termination of Exchange Agent. Any Merger Consideration
made available to the Exchange Agent pursuant to Section 2.02(b) and not
exchanged within twelve (12) months after the Effective Time pursuant to this
Section 2.02 shall be returned by the Exchange Agent to Parent, which shall
thereafter act as Exchange Agent, and thereafter any holder of unsurrendered SNC
Certificates shall look as a general creditor only to Parent for payment of any
funds to which such holder may be due, subject to applicable law.
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Section 2.03. No Further Ownership Rights in SNC Common Stock.
The Merger Consideration issued and paid in exchange of shares
of SNC Common Stock in accordance with the terms hereof shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to such
shares of SNC Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of SNC Common
Stock that were outstanding immediately prior to the Effective Time. If after
the Effective Time, SNC Certificates are presented to the Surviving Corporation
for any reason, they shall be cancelled and exchanged as provided in this
Article 2.
Section 2.04. Lost, Stolen or Destroyed Certificates.
In the event any SNC Certificates shall have been lost, stolen
or destroyed, the Exchange Agent shall deliver in exchange for such lost, stolen
or destroyed SNC Certificates, upon the making of an affidavit of that fact by
the holder thereof, the Merger Consideration; provided, however, that Parent
may, in its discretion and as a condition precedent to such delivery, require
the owner of such lost, stolen or destroyed SNC Certificates to deliver a bond
in such sum as it may reasonably direct as indemnity against any claim that may
be made against Parent or the Exchange Agent with respect to the SNC
Certificates alleged to have been lost, stolen or destroyed.
Section 2.05. Withholding Rights.
Each of the Surviving Corporation and Parent shall be
entitled, or shall be entitled to cause the Exchange Agent, to deduct and
withhold from the Merger Consideration otherwise payable pursuant to this
Agreement to any holder of shares of SNC Common Stock such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code and the rules and regulations promulgated thereunder, or any provision
of a Tax (as defined in Section 3.14(h)) law. To the extent that amounts are so
withheld by the Surviving Corporation, Parent or the Exchange Agent, as the case
may be, such amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of SNC Common Stock in respect to
which such deduction and withholding was made by the Surviving Corporation or
Parent, as the case may be.
Section 2.06. Stock Option and Other Stock Plans.
(a) As soon as practicable following the date of this
Agreement, Parent and the Company shall take such action with respect to Xxxxxx
Communications Inc. Second Amended and Restated 1996 Stock Incentive Plan and
other assumed stock option plans of the Company (the "Company Option Plans") and
any other actions as may be required to effect the following provisions of this
Section 2.06(a). At the Effective Time, Parent shall assume each option to
purchase shares of SNC Common Stock pursuant to the Company Option Plans that is
then outstanding, whether vested or unvested (each a "SNC Stock Option"), and
each such SNC Stock Option shall be converted into an option (or a new
substitute option shall be granted) (each an "Adjusted Option") to purchase the
number of Parent ADSs (rounded up to the nearest whole share) equal to (x) the
number of shares of SNC Common Stock subject to such option multiplied by (y)
the Exchange Ratio, at an exercise price per Parent ADS (rounded down to the
nearest whole cent) equal to the aggregate exercise price for the shares of SNC
Common Stock subject to such SNC Stock Option divided by the number of Parent
ADSs purchasable pursuant to the corresponding Adjusted Option; provided,
however, that in the case of any SNC Stock Option to which Section 421 of the
Code applies by reason of its qualification under Section 422 of the Code, the
conversion formula shall be adjusted, if necessary, to comply with Section
424(a) of the Code. Except as provided above, the Adjusted Options shall be
subject to the same terms and conditions (including, subject to any contractual
acceleration of vesting as a consequence of the Merger pursuant to the terms of
the applicable option agreement, with respect to vesting) as were applicable to
the converted option immediately prior to the Effective Time.
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(b) At the Effective Time, each option to purchase shares of
xxxxxx.xxx Common Stock pursuant to the Company Option Plans that is then
outstanding, whether vested or unvested (each a "xxxxxx.xxx Stock Option", and
together with the SNC Stock Options, the "Company Stock Options"), shall by
virtue of the Merger, and without any further action on the part of any holder
thereof, be subject to the same terms and conditions as were applicable to the
original option to purchase xxxxxx.xxx Common Stock immediately prior to the
Effective Time and be assumed by the Surviving Corporation and converted into an
option to purchase the number of shares of xxxxxx.xxx Common Stock in the
Surviving Corporation equal to the number of shares of xxxxxx.xxx Common Stock
of the Company subject to such option, at an exercise price per share of
xxxxxx.xxx Common Stock in the Surviving Corporation equal to the former
exercise price per share of xxxxxx.xxx Common Stock of the Company under such
option immediately prior to the Effective Time.
(c) Notwithstanding the foregoing provisions of Sections
2.06(a) and 2.06(b), at the Effective Time each of the Holding Company Persons
(as defined below) who hold SNC Stock Options identified in Section 2.06(c) of
the Company Disclosure Schedule (as defined in Section 3.01(a)) the terms of
which provide for the acceleration of vesting as a consequence of the Merger
(the "Accelerated Options") shall have the right, exercisable by written notice
to Parent (the "Purchase Notice") on or prior to the Closing Date, to cause
Parent to purchase the Accelerated Options held by such Holding Company Person
for cash in an amount (the "Purchase Amount") equal to the difference of (i) the
product of (A) the Average Parent Trading Price in U.S. Dollars multiplied by
(B) the ADS Ratio multiplied by (C) the number of Parent ADSs issuable upon
exercise of such option, giving effect to the adjustment provisions in Section
2.06(a), less (ii) the aggregate exercise price for the Parent ADSs subject to
such Accelerated Options. The Purchase Amount for all Accelerated Options with
respect to which a Purchase Notice is furnished in accordance with this Section
2.06(c) shall be payable on or prior to the third business day following the
Closing Date. For purposes hereof, the "Holding Company Persons" shall mean
those employees and directors of the Company set forth in Section 2.06(c) of the
Company Disclosure Schedule.
(d) As soon as practicable after the Effective Time (but in no
event more than thirty (30) days thereafter), Parent shall deliver to the
holders of SNC Stock Options other than for the Holding Company Persons
appropriate notices setting forth such holders' rights pursuant to the Company
Option Plans and the agreements evidencing the grants of such SNC Stock Options
and that such SNC Stock Options and agreements shall be assumed by Parent and
shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 2.06 after giving effect to the Merger).
Parent and the Surviving Corporation shall comply with the terms of the Company
Option Plans and ensure, to the extent required by, and subject to the
provisions of, the Company Option Plans, that the Company Stock Options that
qualified as incentive stock options under Section 422 of the Code prior to the
Effective Time continue to so qualify as incentive stock options after the
Effective Time.
(e) Parent and the Surviving Corporation shall take such
actions as are reasonably necessary for the assumption (or substitution) of the
Company Stock Options by Parent pursuant to this Section 2.06, including the
reservation, issuance and listing of Parent ADSs and xxxxxx.xxx Common Stock of
the Surviving Corporation, as applicable, as is necessary to effectuate the
transactions contemplated by this Section 2.06. Parent shall, and shall cause
the Surviving Corporation to, prepare and file with the SEC (as hereinafter
defined) a registration statement on Form S-8 or other appropriate form with
respect to (i) Parent ADSs subject to Adjusted Options issued under the Company
Option Plan and (ii) shares of xxxxxx.xxx Common Stock of the Surviving
Corporation subject to Company Stock Options, and shall use its reasonable best
efforts to have such registration statement(s) declared effective immediately
following the Effective Time and to maintain the effectiveness of such
registration statement covering such Adjusted Options (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
Adjusted Options remain outstanding.
7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that:
Section 3.01. Organization and Power.
(a) Each of the Company and its Significant Subsidiaries (as
defined below) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and has the requisite corporate or other power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Each of the Company and its Significant
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.
For purposes of this Agreement, a "Material Adverse Effect"
with respect to the Company or Parent, as the case may be, means any change,
circumstance or effect that, individually or in the aggregate with all other
changes, circumstances or effects, is or is reasonably likely to be materially
adverse to (i) the assets, properties, condition (financial or otherwise), or
results of operations of such person and its Subsidiaries, taken as a whole, or
(ii) the ability of such person to perform its obligations under or to
consummate the transactions contemplated by this Agreement, provided that none
of the following shall constitute a Material Adverse Effect: (i) occurrences
affecting the Company's or Parent's or any of their respective Subsidiaries'
businesses as a result of the announcement of the execution of this Agreement;
(ii) general economic conditions; (iii) any changes generally affecting the
industries in which the Company and its Subsidiaries or Parent and its
Subsidiaries operate; or (iv) changes in the Company's business after the date
hereof attributable solely to actions taken by Parent.
(b) Section 3.01 of the disclosure schedule delivered by the
Company to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule") sets forth a complete list of the Company's Subsidiaries.
The Company has heretofore delivered to Parent true and complete copies of the
certificate of incorporation and bylaws of the Company and the organizational
documents of the subsidiaries of the Company that are "significant
subsidiaries", as such term is defined in Section 1-02 of Regulation S-X under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "1934 Act") but excluding therefrom holding
companies that have no significant subsidiaries (each, a "Significant
Subsidiary"), as currently in effect.
Section 3.02. Corporate Authorization.
(a) The execution, delivery and performance by the Company of
this Agreement, and the consummation by the Company of the transactions
contemplated hereby are within the Company's corporate powers and, except as set
forth in the next succeeding sentence of this Section 3.02, have been duly
authorized by all necessary corporate action. The affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock entitled
to vote on this Agreement, voting together as one class (the "Company Requisite
Vote"), is the only vote of any class or series of the Company's capital stock
necessary to approve and adopt this Agreement and the transactions contemplated
by this Agreement. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
in a proceeding at equity or at law).
8
(b) The Board of Directors of the Company (the "Company
Board") has by unanimous vote of those present (who constituted 100% of the
directors then in office), duly and validly authorized the execution and
delivery of this Agreement and approved the consummation of the transactions
contemplated hereby, and taken all corporate actions required to be taken by the
Company Board for the consummation of the transactions, including the Merger,
contemplated hereby and thereby, and has resolved to (i) deem this Agreement and
the transactions contemplated hereby, including the Merger, taken together,
advisable and fair to, and in the best interests of, the Company and its
shareholders and (ii) recommend that the shareholders of the Company approve and
adopt this Agreement. The Company Board has directed that this Agreement be
submitted to the shareholders of the Company for their approval.
Section 3.03. Governmental Authorization.
The execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby, require no action by or in respect of, or filing with, any federal,
state, local, foreign or multinational (including the European Union) government
or any court, administrative agency or commission or other governmental agency
or authority (a "Governmental Authority") other than: (a) the filing of
Certificate of Merger with respect to the Merger with the Secretary of State of
the State of Delaware; (b) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and the Council Regulation (EEC) No. 4064/89 of December 21, 1989 on the Control
of Concentrations Between Undertaking, OJ (1989) L/395/1 (as amended) and the
regulations and decisions of the Commission of the European Community or other
organs of the European Union or European Community implementing such regulations
(the "EU Merger Regulations") or any foreign laws governing competition,
antitrust, investment or exchange control; (c) compliance with any applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "1933 Act"); (d) compliance with any
applicable requirements of the 1934 Act; (e) compliance with any other
applicable securities or takeover laws; (f) those that may be required solely by
reason of Parent's or Merger Subsidiary's (as opposed to any other third
party's) participation in the transactions contemplated by this Agreement; (g)
actions or filings which, if not taken or made, and consents, authorizations or
orders which, if not obtained, would not, individually or in the aggregate, have
a Material Adverse Effect on the Company; and (h) filings and notices not
required to be made or given until after the Effective Time.
Section 3.04. Non-Contravention.
Except as set forth on Section 3.04 of the Company Disclosure
Schedule, the execution, delivery and performance by the Company of this
Agreement do not, and the consummation by the Company of the transactions
contemplated hereby will not: (a) assuming receipt of the approval of
shareholders referred to in Section 3.02 with respect to this Agreement,
contravene or conflict with the certificate of incorporation, bylaws or similar
organizational documents of the Company or any of its Significant Subsidiaries;
(b) assuming compliance with the matters referred to in Section 3.03 with
respect to this Agreement, 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 the Company or its Subsidiaries; (c) constitute a
default (or an event which with notice, the lapse of time or both would become a
default) under or give rise to a 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 and which (i) has
a term of more than one year, (ii) involves the payment or receipt of money in
excess of $1,000,000, or (iii) involves the issuance of capital stock of the
Company or any of its Subsidiaries (a "Company Agreement") 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 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, losses or Liens referred to in clause
(c) or (d) that would not, individually or in the aggregate, have a Material
9
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.
Section 3.05. Capitalization of the Company.
(a) The authorized capital stock of the Company consists of
405,000,000 shares, comprised of 320,000,000 shares of SNC Common Stock,
80,000,000 shares of xxxxxx.xxx Common Stock and 5,000,000 shares of preferred
stock, $0.001 par value per share (the "Preferred Stock"). As of the close of
business on February 15, 2000, 71,233,429 shares of SNC Common Stock were issued
and outstanding, 22,422,885 shares of xxxxxx.xxx Common Stock were issued and
outstanding, and no shares of Preferred Stock were issued and outstanding. The
strike prices, vesting information, grantees and number of shares with respect
to options previously granted pursuant to the Company Option Plans and the
number of shares purchased and rights to acquire shares under the Company's
Amended and Restated Employee Stock Purchase Plan set forth in Section 3.05 of
the Company Disclosure Schedule are accurate in all material respects. All the
outstanding shares of the Company's capital stock are, and all shares which may
be issued pursuant to the Company Option Plans will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and non-assessable. Except (i) as set forth in this Section 3.05 or
in Section 5.01 of the Company Disclosure Schedule, (ii) for the transactions
contemplated by this Agreement, including those permitted in accordance with
Section 5.01(f) and (iii) for changes since February 15, 2000 resulting from the
exercise of employee and director stock options outstanding on such date, there
are outstanding (x) no shares of capital stock or other voting securities of the
Company, (y) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company, and (z) no options,
warrants or other rights to acquire from the Company, and no preemptive or
similar rights, subscriptions or other rights, convertible 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 security, agreement, arrangement or
commitment (including equity equivalents or stock appreciation rights) (the
items in clauses (x), (y) and (z) being referred to collectively as the "Company
Securities"). None of the Company or its Subsidiaries has any contractual
obligation to redeem, repurchase or otherwise acquire any Company Securities or
any Company Subsidiary Securities (as hereinafter defined), including as a
result of the transactions contemplated by this Agreement.
(b) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of its
Subsidiaries.
Section 3.06. Capitalization of Subsidiaries.
Except as set forth in Section 3.06 of the Company Disclosure
Schedule, all of the outstanding shares of capital stock of, or other ownership
interests in, each Subsidiary of the Company, is owned by the Company, directly
or indirectly, free and clear of any consensual Lien (including any restriction
on the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). There are no outstanding (i) securities of the Company or
any of its Subsidiaries convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any Subsidiary of the
Company, or (ii) options or other rights to acquire from the Company or any of
its Subsidiaries, and no other obligation of the Company or any of its
Subsidiaries to issue, 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 (the items in clauses (i) and (ii) being referred to collectively as
the "Company Subsidiary Securities").
10
Section 3.07. SEC Filings.
(a) The Company has filed all required reports, schedules,
forms, statements and other documents with the Securities and Exchange
Commission (the "SEC") since September 30, 1998 (the "Company SEC Documents").
(b) As of its filing date, each Company SEC Document filed
pursuant to the 1934 Act (i) did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent that such statements have been
modified or superseded by a later filed Company SEC Document and (ii) complied
in all material respects with the 1934 Act.
(c) Each Company SEC Document that is a registration
statement, as amended or supplemented, if applicable, filed pursuant to the 1933
Act as of the date such registration statement or amendment became effective (i)
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except to the extent that such statements have been
modified or superseded by a later filed Company SEC Document and (ii) complied
in all material respects with the 1933 Act.
Section 3.08. Financial Statements.
The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included in the
Company's Proxy Statement and Prospectus dated October 7, 1999 (the
"Recapitalization Proxy Statement") and its Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1999 (the "Company 10-Q") have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of the unaudited interim financial statements). For
purposes of this Agreement, "Company Balance Sheet" means the consolidated
balance sheet of the Company as of September 30, 1999 set forth in the Company
10-Q and "Company Balance Sheet Date" means September 30, 1999.
Section 3.09. Disclosure Documents.
Neither the Company Proxy Statement (as defined in Section
5.03(c)), nor any amendment or supplement thereto, will, at the date the Company
Proxy Statement or any such amendment or supplement is first mailed to
shareholders of the Company, or at the time such shareholders vote on the
adoption and approval of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company Proxy Statement will, when the Form F-4 (as defined
in Section 4.08(a)) is first filed with the SEC and when the Form F-4 becomes
effective, comply as to form in all material respects with the requirements of
the 1933 Act and the 1934 Act. No representation or warranty is made by the
Company in this Section 3.09 with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Merger Subsidiary
for inclusion or incorporation by reference in the Company Proxy Statement.
Section 3.10. Information Supplied.
None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in the Form F-4 or any
amendment or supplement thereto will, at the time the Form F-4 or any such
amendment or supplement becomes effective under the 1933 Act or at the Effective
11
Time, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Section 3.11. Absence of Certain Changes.
Except as disclosed in the Company SEC Documents filed prior
to the date of this Agreement, as disclosed in Section 3.11 of the Company
Disclosure Schedule or with respect to the period from and after the date of
this Agreement as permitted pursuant to Section 5.01, since September 30, 1999,
the Company and its Subsidiaries have conducted their business in the ordinary
course consistent with past practice and there has not been:
(a) any event, occurrence, development change or
circumstance which has had, or would reasonably be expected to
have, individually or in the aggregate, 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 amount of outstanding shares of capital stock or other
equity securities of, or other ownership interests in, the
Company or any of its Subsidiaries;
(c) any amendment of any term of any outstanding
security of the Company or any of its Subsidiaries that would
materially increase the obligations of the Company or such
Subsidiary under such security; (d) (x) any incurrence or
assumption by the Company or any of its Subsidiaries of any
indebtedness for borrowed money other than under existing
credit facilities (or any renewals, replacements or extensions
that do not increase the aggregate commitments thereunder) (A)
in the ordinary course of business consistent with past
practice (it being understood that any indebtedness incurred
prior to the date hereof in respect of capital expenditures
shall be considered to have been in the ordinary course of
business consistent with past practice) or (B) in connection
with any acquisition or capital expenditure permitted by
Section 5.01 or (y) any guarantee, endorsement or other
incurrence or assumption of liability (whether directly,
contingently or otherwise) by the Company or any of its
Subsidiaries for the obligations of any other person (other
than any wholly owned Subsidiary of the Company), other than
in the ordinary course of business consistent with past
practice;
(e) any creation or assumption by the Company or any
of its Subsidiaries of any consensual Lien on any material
asset of the Company or any of its Subsidiaries other than in
the ordinary course of business consistent with past practice;
(f) any making of any loan, advance or capital
contribution to or investment in any person by the Company or
any of its Subsidiaries other than (i) loans, advances or
capital contributions to or investments in wholly-owned
Subsidiaries of the Company or (ii) loans or advances to
employees of the Company or any of its Subsidiaries made in
the ordinary course of business consistent with past practice;
(g) (i) any contract or agreement entered into by the
Company or any of its Subsidiaries on or prior to the date
hereof relating to any material acquisition or disposition of
any assets or business or (ii) any modification, amendment,
assignment, termination or relinquishment by the Company or
any of its Subsidiaries of any contract, license or other
right (including any insurance policy naming it as a
beneficiary or a loss payable payee) that, individually or in
the aggregate, would have a Material Adverse Effect on the
12
Company, other than, in the case of (i) and (ii),
transactions, commitments, contracts or agreements in the
ordinary course of business consistent with past practice and
those contemplated by this Agreement;
(h) any material change in any method of accounting
or accounting principles or practice by the Company or any of
its Subsidiaries, except for any such change required by
reason of a change in GAAP; or
(i) any (i) grant of any severance or termination pay
to any director, officer or employee of the Company or any of
its Subsidiaries, (ii) entering into of 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 in benefits payable under any existing
severance or termination pay policies or employment agreements
or (iv) increase in compensation, bonus or other benefits
payable to directors, officers or employees of the Company or
any of its Subsidiaries other than, in the case of clause (iv)
only, increases prior to the date hereof in compensation,
bonus or other benefits payable to employees of the Company or
any of its Subsidiaries in the ordinary course of business
consistent with past practice or merit increases in salaries
of employees at regularly scheduled times in customary amounts
consistent with past practices.
Section 3.12. No Undisclosed Material Liabilities.
There have been no liabilities or obligations (whether
pursuant to contracts or otherwise) of any kind whatsoever incurred by the
Company or any of its Subsidiaries since September 30, 1999, whether accrued,
contingent, absolute, determined, determinable or otherwise, other than:
(a) liabilities or obligations disclosed or provided
for in the Company Balance Sheet or in the notes thereto or in
the Company SEC Documents filed prior to the date hereof;
(b) liabilities or obligations which, individually
and in the aggregate, have not had and would not have a
Material Adverse Effect on the Company; or
(c) liabilities or obligations under this Agreement.
Section 3.13. Litigation.
Except as disclosed in the Company SEC Documents filed prior
to the date hereof or in Section 3.13 of the Company Disclosure Schedule, 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 which, individually or in
the aggregate, would have a Material Adverse Effect on the Company.
Section 3.14. Taxes.
Except as set forth on Section 3.14 of the Company Disclosure
Schedule:
(a) The Company and each of its Subsidiaries, and
each affiliated group (within the meaning of Section 1504 of
the Code) of which the Company or any of its Subsidiaries is
or has been a member, has timely filed (or has had timely
filed on its behalf) all material Tax Returns required by
applicable law to be filed by it prior to the date hereof, and
all such material Tax Returns were true, correct and complete
in all material respects;
13
(b) The Company and each of its material Subsidiaries
has paid (or has had paid on its behalf) all Taxes shown due
with respect to Tax Returns filed prior to the date hereof;
(c) The federal income Tax Returns of the Company
have been examined and settled with the Internal Revenue
Service (the "Service") (or the applicable statutes of
limitation for the assessment of federal income Taxes for such
periods have expired) for all years through 1997;
(d) There are no material Liens or encumbrances for
Taxes on any of the assets of the Company or its Subsidiaries
(other than for current Taxes not yet due and payable);
(e) The Company and its Subsidiaries have complied in
all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes;
(f) None of the Company or its Subsidiaries is a
party to any tax allocation, tax sharing, tax indemnity or
similar agreement (whether or not in writing), arrangement or
practice with respect to Taxes (including any adverse pricing
agreement, closing agreement or other agreement relating to
Taxes with any Taxing Authority), except among themselves;
(g) No federal, state, local or foreign audits or
administrative proceedings are presently pending with regard
to any material Taxes or Tax Return of the Company or its
Subsidiaries and none of them has received a written notice of
any proposed audit or proceeding regarding any pending audit
or proceeding; and
(h) "Taxes" (including the term "Tax") shall mean any
and all taxes, charges, fees, levies or other similar
assessments imposed by the Service or any other taxing
authority (whether domestic or foreign) (a "Taxing
Authority"), and such term shall include any interest,
penalties or additional amounts with respect to any such
taxes, charges, fees, levies or other assessments. "Tax
Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any
Taxing Authority (foreign or domestic) with respect to Taxes.
Section 3.15. Employee Benefit Plans; ERISA.
(a) Except as set forth in Section 3.15(a) of the Company
Disclosure Schedule, there are no material employee benefit plans (including any
plans for the benefit of directors or former directors), arrangements,
practices, contracts or agreements (including employment agreements and
severance agreements, incentive compensation, bonus, stock option, stock
appreciation rights and stock purchase plans) of any type (including plans
described in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), maintained by the Company, any of its Subsidiaries
or any trade or business, whether or not incorporated (an "ERISA Affiliate"),
that together with the Company would be deemed a "controlled group" within the
meaning of Section 4001(a)(14) of ERISA, or with respect to which the Company or
any of its Subsidiaries has or may have a liability (the "Company Benefit
Plans"). Except as disclosed in Section 3.15(a) of the Company Disclosure
Schedule (or as otherwise permitted by this Agreement): (1) neither the Company
nor any ERISA Affiliate has any formal plan or commitment, whether legally
binding or not, to create any additional Company Benefit Plan or modify or
change any existing Company Benefit Plan that would affect any employee or
terminated employee of the Company or any ERISA Affiliate; and (2) since
September 30, 1999, there has been no change, amendment, modification to, or
adoption of, any Company Benefit Plan, in each case, that has had, or would
have, a Material Adverse Effect on the Company.
14
(b) With respect to each Company Benefit Plan, except as
disclosed in Section 3.15(b) of the Company Disclosure Schedule or as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company:
(i) if intended to qualify under Section 401(a), 401(k) or 403(a) of the Code,
such plan so qualifies, and its trust is exempt from taxation under Section
501(a) of the Code; (ii) such plan has been administered in accordance with its
terms and applicable law; (iii) no breaches of fiduciary duty have occurred;
(iv) no prohibited transaction within the meaning of Section 406 of ERISA has
occurred; (v) as of the date of this Agreement, no lien imposed under the Code
or ERISA exists; and (vi) all contributions and premiums due (including any
extensions for such contributions and premiums) have been made in full.
(c) None of the Company Benefit Plans has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of the
Code, whether or not waived.
(d) Except as disclosed in Section 3.15(d) of the Company
Disclosure Schedule, neither the Company nor any ERISA Affiliate has incurred
any liability under Title IV of ERISA (including Sections 4063-4064 and 4069 of
ERISA) that has not been satisfied in full except as, individually or in the
aggregate, would not have a Material Adverse Effect on the Company or that has
not been reflected on the Company's consolidated financial statements.
(e) With respect to each Company Benefit Plan that is a
"welfare plan" (as defined in Section 3(1) of ERISA), except as specifically
disclosed in Section 3.15(e) of the Company Disclosure Schedule, no such plan
provides medical or death benefits with respect to current or former employees
of the Company or any of its Subsidiaries beyond their termination of
employment, other than as may be required under Part 6 of Title I of ERISA and
at the expense of the participant or the participant's beneficiary and except as
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
(f) Except with respect to payments under the agreements and
programs specified in Section 3.15(f) of the Company Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not entitle
any individual to severance pay or any tax "gross-up" payments with respect to
the imposition of any tax pursuant to Section 4999 of the Code or accelerate the
time of payment or vesting, or increase the amount, of compensation or benefits
due to any individual with respect to any Company Benefit Plan.
(g) Except as disclosed in Section 3.15(a) of the Company
Disclosure Schedule, there is no Company Benefit Plan that is a "multiemployer
plan", as such term is defined in Section 3(37) of ERISA, or which is covered by
Section 4063 or 4064 of ERISA.
Section 3.16. Compliance with Laws; No Default.
Neither the Company nor any of its Subsidiaries is in
violation of any statute, law, ordinance, regulation, rule, judgment, decree,
order, writ, injunction, permit or license or other authorization or approval of
any Governmental Authority applicable to its business or operations, except for
violations and failures to comply that have not had and would not, individually
or in the aggregate, result in a Material Adverse Effect on the Company.
Section 3.17. No Default.
Each Company Agreement is a valid, binding and enforceable
obligation of the Company and in full force and effect, except where the failure
to be valid, binding and enforceable and in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
None of the Company or any of its Subsidiaries is in default or violation of any
term, condition or provision of (i) its respective certificate of incorporation
or by-laws or similar organizational documents or (ii) except as disclosed in
Section 3.17 of the Company Disclosure Schedule, any Company Agreement, except,
15
in the case of clause (i) (with respect to organizational documents that are
partnership, joint venture or similar documents) and (ii), for defaults or
violations that, individually or in the aggregate, have not had and would not
have a Material Adverse Effect on the Company. The Company has all permits and
licenses necessary to carry on the business conducted by it as of the date
hereof, except where the failure to have such permit or license would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
Section 3.18. Finders' Fees.
Except for Deutsche Banc Alex. Xxxxx, a copy of whose
engagement agreement has been provided to Parent, no investment banker, broker,
finder, other intermediary or similar person is entitled to any fee or
commission from the Company or any of its Subsidiaries in connection with the
transactions contemplated by this Agreement.
Section 3.19. Environmental Matters.
(a) Except as disclosed in the Company SEC Documents filed
prior to the date hereof, to the knowledge of the Company:
(i) no notice, notification, demand, request for
information, citation, summons or order has been received by, no complaint has
been filed against, no penalty has been assessed against, and no investigation,
action, claim, suit, proceeding or review is pending or threatened by any person
against, the Company or any of its Subsidiaries with respect to any matters
relating to or arising out of any Environmental Law which, individually or in
the aggregate, would have a Material Adverse Effect on the Company;
(ii) no Hazardous Substance has been discharged,
disposed of, dumped, injected, pumped, deposited, spilled, leaked, emitted or
released at, on or under any property now or, to the knowledge of the Company,
previously owned, leased or operated by the Company or any of its Subsidiaries,
which circumstance, individually or in the aggregate, would have a Material
Adverse Effect on the Company; and
(iii) there are no Environmental Liabilities that,
individually or in the aggregate, have had or would have a Material Adverse
Effect on the Company.
(b) For purposes of this Section, the following terms shall
have the meanings set forth below:
(i) "Company" and its "Subsidiaries" shall include any
entity which is, in whole or in part, a predecessor of the Company or any of its
Subsidiaries;
(ii) "Environmental Laws" means any and all federal,
state, local and foreign law (including common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit, or governmental
restrictions or any agreement with any governmental authority or other third
party, relating to human health and safety, the environment or to pollutants,
contaminants, wastes or chemicals or toxic, radioactive, ignitable, corrosive,
reactive or otherwise hazardous substances, wastes or materials;
(iii) "Environmental Liabilities" means any and all
liabilities of or relating to the Company or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, which (A) arise under or relate to matters covered by Environmental
Laws and (B) arise from actions occurring or conditions existing on or prior to
the Effective Time; and
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(iv) "Hazardous Substances" means any pollutant,
contaminant, waste or chemical or any toxic, radioactive, corrosive, reactive or
otherwise hazardous substance, waste or material, or any substance having any
constituent elements displaying any of the foregoing characteristics, including,
without limitation, petroleum, its derivatives, by-products and other
hydrocarbons, or any substance, waste or material regulated under any
Environmental Laws.
Section 3.20. Labor Matters.
Except as set forth in Section 3.20 of the Company Disclosure
Schedule, (i) there is no labor strike, dispute, slowdown, stoppage or lockout
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries; (ii) to the knowledge of the Company, no union
organizing campaign with respect to the Company's or any of its Subsidiaries'
employees is underway; (iii) there is no unfair labor practice charge or
complaint against the Company or any of its Subsidiaries pending or, to the
knowledge of the Company, threatened before the National Labor Relations Board
or any similar state or foreign agency; (iv) there is no written grievance
pending relating to any collective bargaining agreement or other grievance
procedure; (v) to the knowledge of the Company, no charges with respect to or
relating to the Company or any of its Subsidiaries are pending before the Equal
Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices; and (vi) the are no collective
bargaining agreements with any union covering employees of the Company or any of
its Subsidiaries, except for such exceptions to the foregoing clauses (i)
through (vi) which, individually or in the aggregate, would not have a Material
Adverse Effect on the Company.
Section 3.21. Intellectual Property.
(a) The Company and its Subsidiaries own or have the right to
use all material Intellectual Property (as defined hereafter) reasonably
necessary for the Company and its Subsidiaries to conduct their business as it
is currently conducted, except for such exceptions which, individually or in the
aggregate, would not have a Material Adverse Effect on the Company.
(b) Except as set forth in Schedule 3.21 of the Company
Disclosure Schedule, to the knowledge of the Company: (i) all of the
registrations relating to material Intellectual Property owned by the Company
and its Subsidiaries are subsisting and unexpired, free of all Liens and have
not been abandoned, except for such exceptions which, individually or in the
aggregate, would not have a Material Adverse Effect on the Company; (ii) the
Company does not infringe the intellectual property rights of any third party in
any respect that would have, individually or in the aggregate, a Material
Adverse Effect on the Company; (iii) no judgment, decree, injunction, rule or
order has been rendered by any Governmental Authority which would limit, cancel
or question the validity of, or the Company's or its Subsidiaries' rights in and
to, any Intellectual Property owned by the Company or any such Subsidiary in any
respect that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company; and (iv) neither the
Company nor any of its Subsidiaries has received notice of any pending or
threatened suit, action or adversarial proceeding that seeks to limit, cancel or
question the validity of, or the Company's or any such Subsidiary's rights in
and to, any Intellectual Property, which would have, individually or in the
aggregate, a Material Adverse Effect on the Company.
(c) For purposes of this Agreement "Intellectual Property"
shall mean all rights, privileges and priorities provided under federal, state
and foreign law relating to intellectual property, including without limitation
all (x) (1) proprietary inventions, discoveries, processes, formulae, designs,
methods, techniques, procedures, concepts, developments, technology, new and
useful improvements thereof and proprietary know-how relating thereto, whether
or not patented or eligible for patent protection; (2) copyrights and
copyrightable works, including computer applications, programs, software,
databases and related items; (3) trademarks, service marks, trade names, and
trade dress, the goodwill of any business symbolized thereby, and all common-law
rights relating thereto; (4) trade secrets and other confidential information;
(y) registrations, applications and recordings for any of the foregoing and (z)
licenses or other similar agreements granting the rights to use any of the
foregoing.
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Section 3.22. Opinion of Financial Advisor.
The Company has received the opinion of Deutsche Banc Alex.
Xxxxx to the effect that, as of the date of such opinion, the Merger
Consideration to be received by the holders of shares of the Company Common
Stock in connection with the Merger is fair to such holders from a financial
point of view.
Section 3.23. Takeover Statutes.
The Company Board has approved, for purposes of Section 203 of
the DGCL, the Merger and this Agreement. No other "fair price", "moratorium",
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States (each, a "Takeover
Statute") applicable to the Company or any of its Subsidiaries is applicable to
the Merger or the other transactions contemplated hereby.
Section 3.24. Affiliates.
Section 3.24 of the Company Disclosure Schedule sets forth
each person who, as of the date hereof, is, to the best of the Company's
knowledge, deemed to be an Affiliate (as defined in Section 5.11) of the
Company.
Section 3.25. The Company's Certificate of Incorporation.
The provisions of the Company's certificate of incorporation
regarding transactions with controlling persons do not and will not apply to
this Agreement, the Merger or to the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
Section 4.01. Organization and Power.
(a) Each of Parent and its Significant Subsidiaries is a
corporation, partnership or other entity duly organized, validly existing and is
in good standing under the laws of the jurisdiction of its incorporation or
organization, and has the requisite corporate or other power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted. Each of Parent and its Significant Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on Parent.
(b) Section 4.01 of the disclosure schedule delivered by
Parent to the Company prior to the execution of this Agreement (the "Parent
Disclosure Schedule") sets forth a complete list of Parent's Significant
Subsidiaries. Parent has delivered to the Company true and complete copies of
Parent's statuts and Merger Subsidiary's certificate of incorporation and bylaws
as currently in effect.
Section 4.02. Corporate Authorization.
(a) The execution, delivery and performance by Parent of this
Agreement and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby are within the corporate powers of Parent and,
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except as set forth in the next succeeding sentence of this Section 4.02, have
been duly authorized by all necessary corporate action, including by resolution
of the Board of Directors of Parent (the "Parent Board"). The affirmative vote
of at least 66 2/3% of the outstanding voting rights of shareholders present in
person or represented by proxy at the Parent Shareholder Meeting (as hereinafter
defined) (the "Parent Requisite Vote") is the only vote of any class or series
of Parent's capital stock necessary to authorize the capital increase, or
authorize the Parent Board to effect the capital increase and related issuance
of shares in connection with the consummation of the Merger (the "Capital
Increase"); provided that a quorum of at least 33 1/3% (on the first call) or at
least 25% (on the second call) of the outstanding Parent Shares having voting
power is required at the Parent Shareholder Meeting. This Agreement has been
duly executed and delivered by Parent and constitutes a valid and binding
agreement of Parent, enforceable against Parent, in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether in a proceeding at equity or at law). The Parent Shares to be
represented by the Parent ADSs to be issued pursuant to the Merger, when issued
in accordance with the terms hereof, will be duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
(b) The Parent Board has, by unanimous vote of those present,
duly and validly authorized the execution and delivery of this Agreement and
approved the consummation of the transactions contemplated hereby, and taken all
corporate actions required to be taken by the Parent Board for the consummation
of the transactions, including the Merger, contemplated hereby and has resolved
to (i) deem this Agreement and the transactions contemplated hereby, including
the Merger, taken together, advisable and fair to, and in the best interests of,
the Parent and its shareholders and (ii) recommend that the shareholders of
Parent approve the Capital Increase. The Parent Board has directed that the
Capital Increase be submitted to the shareholders of Parent for their approval.
Section 4.03. Governmental Authorization.
The execution, delivery and performance by Parent of this
Agreement, and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby require no action, by or in respect of, or
filing with, any Governmental Authority other than: (a) the filing of the
Certificate of Merger with respect to the Merger with the Secretary of State of
the State of Delaware and appropriate documents with the relevant authorities of
other states in which Merger Subsidiary is qualified to do business; (b)
compliance with any applicable requirements of the HSR Act and the EU Merger
Regulations or any foreign laws governing competition, antitrust, investment or
exchange control; (c) compliance with any applicable requirements of the 1933
Act; (d) compliance with any applicable requirements of the 1934 Act; (e)
compliance with applicable requirements of the Conseil des Marches Financiers
(the "CMF") and the Commission des Operations de Bourse (the "COB") relating to
the Parent Shares to be issued in connection with the issuance of Parent ADSs
pursuant to this Agreement and compliance with any other applicable French
securities or takeover laws and regulations; (f) those that may be required
solely by reason of the Company's (as opposed to any other third party's)
participation in the transactions contemplated by this Agreement; (g) actions or
filings which, if not taken or made, and consents, authorizations or orders
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect on Parent; and (h) filings and notices not required to
be made or given until after the Effective Time.
Section 4.04. Non-Contravention.
Except as set forth on Section 4.04 of the Parent Disclosure
Schedule, the execution, delivery and performance by Parent of this Agreement do
not, and the consummation by Parent and Merger Subsidiary of the transactions
contemplated hereby will not: (a) assuming the Parent Requisite Vote is
obtained, contravene or conflict with the statuts, certificate of incorporation,
bylaws or similar organizational documents of Parent or any of its Significant
Subsidiaries; (b) assuming compliance with the matters referred to in Section
19
4.03, 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 Merger Subsidiary; (c) constitute a default (or an event
which with notice, the lapse of time or both would become a default) under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of Parent or Merger Subsidiary or to a loss of any benefit to
which Parent or Merger Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon Parent or Merger Subsidiary
and which either has a term of more than one year or involves the payment or
receipt of money in excess of $1,000,000 or any license, franchise, permit or
other similar authorization held by Parent or Merger Subsidiary; or (d) result
in the creation or imposition of any Lien on any asset of Parent or Merger
Subsidiary, except for such contraventions, conflicts or violations referred to
in clause (b) or defaults, rights of termination, cancellation or acceleration,
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 4.05. Capitalization of Parent.
(a) As of the close of business on December 31, 1999,
7,294,478 ordinary shares, nominal value 8 Euros per share, of Parent (the
"Parent Shares") were issued and outstanding, and 300,000 Parent Shares were
held in Parent's treasury and reserved for grants under option and other
stock-based plans. All the outstanding shares of Parent's capital stock are, and
all shares which may be issued pursuant to Parent option plans will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and non-assessable. Except (i) as set forth in this Section
4.05, (ii) for 980,415 bonds of Parent convertible or exchangeable for 980,415
Parent Shares, and (iii) for 5,696,261 warrants to purchase an aggregate of
284,813 Parent Shares, as of December 31, 1999 there were outstanding (x) no
shares of capital stock or other voting securities of Parent, (y) no securities
of Parent convertible into or exchangeable for shares of capital stock or voting
securities of Parent, and (z) no options, warrants or other rights to acquire
from Parent, and no preemptive or similar rights, subscriptions or other rights,
convertible securities, agreements, arrangements or commitments of any
character, relating to the capital stock of Parent, obligating Parent to issue,
transfer or sell, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Parent or
obligating Parent to grant, extend or enter into any such option, warrant,
subscription or other right, convertible security, agreement, arrangement or
commitment (including equity equivalents or stock appreciation rights) (the
items in clauses (x), (y) and (z) being referred to collectively as the "Parent
Securities"). None of Parent or its Subsidiaries has any contractual obligation
to redeem, repurchase or otherwise acquire any Parent Securities or any
securities of any Parent Subsidiary, including as a result of the transactions
contemplated by this Agreement.
(b) There are no voting trusts or other agreements or
understandings to which Parent or any of its Subsidiaries is a party with
respect to the voting of the capital stock of Parent or any of its Subsidiaries.
Section 4.06. COB Filings.
As of its filing date, each report, schedule, form, statement
or other document filed by Parent with the COB since September 30, 1998 (the
"Parent COB Documents") (i) did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent that such statements have been
modified or superseded by a later filed Parent COB Document and (ii) complied in
all material respects with applicable French law relating to securities and
stock exchanges and the applicable rules and regulations promulgated thereunder.
Section 4.07. Financial Statements.
The audited consolidated financial statements and consolidated
interim financial statements of Parent included in the Parent COB Documents have
been prepared in accordance with applicable French statutory and regulatory
20
requirements applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the consolidated
financial position of Parent and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended.
Section 4.08. Disclosure Documents.
(a) The Registration Statement on Form F-4 of Parent (the
"Form F-4") to be filed under the 1933 Act relating to the registration of
Parent ADSs (including the Parent Shares underlying such Parent ADSs) in the
Merger required to be filed with the SEC in connection with the issuance of
Parent ADSs pursuant to the Merger and any amendments or supplements thereto,
will, when filed, subject to the last sentence of Section 4.08(b), comply as to
form in all material respects with the applicable requirements of the 1933 Act
and the 0000 Xxx.
(b) The proxy statement or other materials of Parent to be
filed with the applicable regulatory authorities in connection with the Parent
Shareholder Meeting, and any amendment or supplement thereto, (i) will not, at
the date the proxy materials are first distributed or published or at the time
the holders of Parent Shares vote on the Capital Increase, contain any untrue
statement of a material fact necessary in order to make the statements therein,
in light of the circumstances in which they were made, not misleading, and (ii)
will comply in all material respects with applicable French law relating to
securities and stock exchanges and the applicable rules and regulations
thereunder. No representation or warranty is made by Parent in this Section 4.08
with respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
(c) Neither the Form F-4 nor any amendment or supplement
thereto will at the time it becomes effective under the 1933 Act or at the
Effective Time contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. No representation or warranty is made by
Parent in this Section 4.08 with respect to statements made or incorporated by
reference therein based on information supplied by the Company for inclusion or
incorporation by reference therein.
Section 4.09. Information Supplied.
None of the information supplied by Parent or to be supplied
by Parent for inclusion or incorporation by reference in the Company Proxy
Statement or any amendment or supplement thereto will, at the date the Company
Proxy Statement or any amendment or supplement thereto is first mailed to
shareholders of the Company and at the time such shareholders vote on the
adoption and approval of this Agreement and the transactions contemplated
hereby, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 4.10. Absence of Certain Changes. Except as disclosed
in the Parent COB Documents filed prior to the date of this Agreement, as
disclosed in Section 4.10 of the Parent Disclosure Schedule or as would not have
a Material Adverse Effect on Parent, since June 30, 1999, Parent and its
Subsidiaries have conducted their business in the ordinary course consistent
with past practice, and there has not been:
(a) any event, occurrence, development, change or
circumstance which has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect on Parent;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of
capital stock of Parent (other than payment of Parent's
21
regular cash dividend on the Parent Shares) or any repurchase,
redemption or other acquisition by Parent of any amount of
outstanding shares of capital stock or other equity securities
of, or other ownership interests in, Parent, except as
permitted pursuant to Section 5.02(b);
(c) any amendment of any term of any outstanding
security of Parent that would materially increase the
obligations of Parent under such security; or
(d) any material change in any method of accounting
or accounting principles or practice by Parent or any of its
Subsidiaries, except for any such change required by reason of
a change in or reconciliation with GAAP.
Section 4.11. No Undisclosed Material Liabilities. There have
been no liabilities or obligations (whether pursuant to contracts or otherwise)
of any kind whatsoever incurred by Parent or any of its Subsidiaries since June
30, 1999, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities or obligations (i) disclosed in the Parent COB
Documents filed prior to the date hereof or (ii) disclosed in Section 4.11 of
the Parent Disclosure Schedule;
(b) liabilities or obligations which, individually and in the
aggregate, have not had and would not have a Material Adverse Effect on Parent;
or
(c) liabilities or obligations under this Agreement or
incurred directly in connection with the transactions contemplated hereby.
Section 4.12. Litigation. Except as disclosed in the Parent
COB Documents filed prior to the date hereof or in Section 4.12 of the Parent
Disclosure Schedule, there is no action, suit, investigation or proceeding
pending against, or to the knowledge of Parent, threatened against or affecting,
Parent or any of its Subsidiaries or any of their respective properties which,
individually or in the aggregate, would have a Material Adverse Effect on
Parent.
Section 4.13. Compliance with Laws. Neither Parent nor any of
its Subsidiaries is in violation of any statute, law, ordinance, regulation,
rule, judgment, decree, order, writ, injunction, permit or license or other
authorization or approval of any Governmental Authority applicable to its
business or operations, except for violations and failures to comply that would
not, individually or in the aggregate, result in a Material Adverse Effect on
Parent.
Section 4.14. No Default. None of Parent or any of its
Subsidiaries is in default or violation of any term, condition or provision of
its respective certificate of incorporation or by-laws or similar organizational
documents. Parent has all permits and licenses necessary to carry on the
business conducted by it as of the date hereof, except where the failure to have
such permit or license would not, individually or in the aggregate, have a
Material Adverse Effect on Parent.
Section 4.15. Finders' Fees. Except for X.X. Xxxxxx, no
investment banker, broker, finder, other intermediary or similar person is
entitled to any fee or commission from Parent or any of its Subsidiaries upon
consummation of the transactions contemplated by this Agreement.
Section 4.16. Merger Subsidiary. Merger Subsidiary is a
newly-formed direct wholly-owned Subsidiary of Parent that has engaged in no
business activities other than as specifically contemplated by this Agreement.
22
ARTICLE V
COVENANTS
Section 5.01. Conduct of the Company.
The Company covenants and agrees that, from the date hereof
until the Effective Time, except as expressly provided otherwise in this
Agreement, including Section 5.01 of the Company Disclosure Schedule hereto, 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 customers,
suppliers, creditors and business partners and shall use their reasonable best
efforts to keep available the services of their present officers and employees.
Without limiting the generality of the foregoing, from the date hereof until the
Effective Time, without the prior written approval of Parent (which approval
shall not be unreasonably withheld):
(a) The Company will not adopt or propose any change
in its certificate of incorporation or any material change in
its bylaws;
(b) The Company will not, and will not permit any of
its Subsidiaries to, adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other material
reorganization of the Company or any of its Subsidiaries
(other than a liquidation or dissolution of any Subsidiary or
a merger or consolidation between wholly owned Subsidiaries);
(c) The Company will not, and will not permit any of
its Subsidiaries to, make any investment in or acquisition of
any business of any person or any material amount of assets
(other than inventory), except for (i) acquisitions for cash
not to exceed $500,000 per acquisition or $5,000,000 in the
aggregate and (ii) any capital expenditure permitted by
Section 5.01(i);
(d) The Company will not, and will not permit any of
its Subsidiaries to, sell, lease, license, close, shut down or
otherwise dispose of any assets (other than inventory), except
(i) pursuant to existing contracts or commitments listed on
Section 5.01 of the Company Disclosure Schedule or (ii) sales,
leases, licenses, closings, shutdowns or other dispositions of
assets in the ordinary course of business consistent with past
practice;
(e) The Company will not, and will not permit any of
its Subsidiaries to, split, combine or reclassify any shares
of its capital stock, declare, set aside or pay any dividend
or other distribution payable in cash, stock or property with
respect to its capital stock (or otherwise make any payments
to stockholders in their capacity as such) other than
dividends paid by any Subsidiary of the Company to the Company
or any other Subsidiary of the Company;
(f) The Company will not, and will not permit any of
its Subsidiaries to, issue, sell, transfer, pledge, dispose of
or encumber any additional 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 its
Subsidiaries (or any equity equivalents), other than (i)
issuances pursuant to the exercise of stock-based awards or
options under the plans described in Section 3.05(a)
outstanding on the date hereof, (ii) issuances by any
Subsidiary of the Company to the Company or any other
Subsidiary of the Company and (iii) issuances of options to
purchase shares of Common Stock granted to newly hired
employees in accordance with the Company's past practice
covering the issuance of not more than an aggregate of 300,000
23
shares of Company Common Stock and not more than 75,000 shares
of Company Common Stock to any single individual;
(g) The Company will not, and will not permit any of
its Subsidiaries to, redeem, purchase or otherwise acquire
directly or indirectly any of the Company's capital stock;
(h) Except in connection with investments or
acquisitions permitted by Section 5.01(c), the Company will
not, and will not permit any of its Subsidiaries to, (i) enter
into (or commit to enter into) any new lease (except pursuant
to commitments for such lease existing as of the date hereof
and leases in the ordinary course of business provided for in
the budgets adopted by the Company and its Subsidiaries and
furnished to Parent prior to the date of this Agreement) or
(ii) purchase or acquire or enter into any agreement to
purchase or acquire any real estate (except pursuant to
commitments existing as of the date hereof);
(i) The Company will not, and will not permit any of
its Subsidiaries to, make or commit to make any capital
expenditure (including for information systems) except for
capital expenditure projects or items not exceeding $150,000
per project or item or $1,200,000 in the aggregate and those
projects or items committed to or set forth in the capital
budgets adopted by the Company and its Subsidiaries and
furnished to Parent prior to the date of this Agreement;
(j) The Company will not, and will not permit any of
its Subsidiaries to, enter into, adopt, amend or terminate any
bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement,
pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan,
fund, award or other arrangement for the benefit or welfare of
any director, officer or employee in any manner, or (except
for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not
result in a material increase in benefits or compensation
expense to the Company or any of its Subsidiaries) increase in
any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required
by any plan and arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock
appreciation rights or performance units);
(k) The Company will not, and will not permit any of
its Subsidiaries to, (i) incur or assume any indebtedness for
borrowed money or issue any debt securities, except for
borrowings (A) under lines of credit existing on the date
hereof and (B) in the ordinary course of business consistent
with past practice not in excess of $5,000,000 in the
aggregate; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person, except for
obligations incurred in the ordinary course of business
consistent with past practice not in excess of $500,000 in the
aggregate, and except for obligations of wholly owned
Subsidiaries of the Company; (iii) make any loans, advances or
capital contributions to, or investments in, any other person
(other than to wholly owned Subsidiaries of the Company or
customary loans or advances to employees in the ordinary
course of business consistent with past practice and in
amounts not material to the maker of such loan or advance);
(iv) pledge or otherwise encumber shares of capital stock of
the Company or its Subsidiaries, except pursuant to the terms
of credit facilities existing on the date hereof; or (v)
mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material lien or
encumbrance thereupon, except pursuant to the terms of credit
facilities existing on the date hereof;
24
(l) The Company will not, and will not permit any of
its Subsidiaries to, change any of the accounting principles
or practices used by it, except as may be required as a result
of a change in law or in generally accepted accounting
principles;
(m) The Company will not, and will not permit any of
its Subsidiaries to, revalue in any material respect any of
its assets, including, without limitation, writing down the
value of inventory or writing-off notes or accounts
receivable, other than in the ordinary course of business;
(n) The Company will not, and will not permit any of
its Subsidiaries to, make or revoke any tax election or settle
or compromise any tax liability material to the Company or any
of its Subsidiaries taken as a whole or change (or make a
request to any taxing authority to change) any material aspect
of its method of accounting for tax purposes;
(o) The Company will not, and will not permit any of
its Subsidiaries to, pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course
of business consistent with past practice of liabilities
reflected or reserved against in, or contemplated by, the
Company Balance Sheet (or the notes thereof) of the Company or
its Subsidiaries or incurred in the ordinary course of
business consistent with past practice and the payment,
discharge and satisfaction of all obligations under the
Company's existing bank credit facility prior to or
concurrently with the Effective Time;
(p) The Company will not, and will not permit any of
its Subsidiaries to, settle or compromise any pending or
threatened suit, action or claim relating to the transactions
contemplated hereby;
(q) The Company will not, and will not permit any of
its Subsidiaries to, agree or commit to do any of the
foregoing; and
(r) The Company will not, and will not permit any of
its Subsidiaries to take or agree or commit to take any action
that would make any representation and warranty of the Company
hereunder inaccurate in any material respect at, or as of any
time prior to, the Effective Time.
Section 5.02. Conduct of Parent.
(a) From the date hereof until the Effective Time, except as
expressly provided otherwise in this Agreement, Parent will not, and will not
permit any of its Subsidiaries to, take or agree or commit to take any action
that would make any representation and warranty of Parent hereunder inaccurate
in any material respect at, or as of any time prior to, the Effective Time.
(b) Notwithstanding anything to the contrary contained herein,
prior to the date the Company Proxy Statement (as defined in Section 5.03(c)) is
first mailed to the shareholders of the Company, Parent shall be permitted, in
accordance with applicable law, to repurchase, redeem or otherwise acquire
outstanding shares of capital stock, or other equity securities of, or other
ownership interests in, Parent. Parent shall, upon notice from the Company,
suspend any such repurchase, redemption or other acquisition, for a period of up
to two trading days following each such notice, in the event that the Company
determines that such repurchase, redemption or other acquisition could
reasonably be expected to have an adverse effect on the Exchange Ratio from the
standpoint of a holder of shares of SNC Common Stock.
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Section 5.03. Shareholder Meetings; Proxy Materials;
Registration Statement.
(a) The Company shall cause a meeting of its shareholders (the
"Company Shareholder Meeting") to be duly called and held as soon as reasonably
practicable after the date of this Agreement for the purpose of voting on the
approval and adoption of this Agreement (the "Company Shareholder Approval").
Except as provided in Section 5.05(c), the Company Board shall recommend
approval and adoption of this Agreement by the Company's shareholders. In
connection with the Company Shareholder Meeting, the Company will use its
reasonable best efforts, subject to the immediately preceding sentence, to
obtain the Company Shareholder Approval and otherwise comply with all legal
requirements applicable to such meeting.
(b) Parent shall cause a meeting of its shareholders (the
"Parent Shareholder Meeting") to be duly called and held as soon as reasonably
practicable after the date of this Agreement for the purpose of voting on the
Capital Increase (the "Parent Shareholder Approval"). The Parent Board shall
recommend approval and adoption of the Capital Increase. In connection with the
Parent Shareholder Meeting, Parent will (x) promptly prepare and file with the
applicable regulatory authorities any proxy statement or other materials
necessary for such meeting, (y) use its reasonable best efforts to obtain the
Parent Shareholder Approval and (z) otherwise comply with all legal requirements
applicable to such meeting.
(c) Parent shall promptly prepare and file with the SEC the
Form F-4, containing a proxy statement (such proxy statement being the "Company
Proxy Statement") as part of a prospectus, in connection with (i) the
registration under the 1933 Act of the Parent ADSs (including the Parent Shares
underlying the Parent ADSs) issuable in connection with the Merger, (ii) the
vote of the shareholders of the Company with respect to the Merger, and (iii)
the other transactions contemplated by this Agreement. Parent agrees to provide
the Company with an opportunity to review and comment on the Form F-4 and the
Company Proxy Statement before filing. Parent agrees promptly to provide the
Company with copies of all correspondence from and all responsive correspondence
to the SEC regarding the Form F-4 and the Company Proxy Statement. Parent agrees
promptly to notify the Company of all stop orders or threatened stop orders of
which it becomes aware with respect to the Form F-4 and of the occurrence of any
event prior to the Effective Time relating to Parent or its affiliates or any of
its or their respective officers or directors discovered by Parent which should
be set forth in an amendment to the Form F-4 or a supplement to the Company
Proxy Statement. Subject to the terms and conditions of this Agreement, each of
Parent and the Company shall use its reasonable best efforts to have or cause
the Form F-4 to become effective under the 1933 Act as promptly as practicable
after the Form F-4 is filed, and shall take any action required to be taken
under any applicable federal or state securities laws in connection with the
issuance of Parent ADSs in the Merger. Each of Parent and the Company shall
furnish all information concerning it and the holders of its capital stock as
the other may reasonably request in connection with such actions. As promptly as
practicable after the Form F-4 shall have become effective, the Company shall
mail the Company Proxy Statement to its shareholders, and the Company shall
comply with the proxy solicitation rules and regulations under the 1934 Act in
connection with the solicitation of such shareholders. If at any time prior to
the Effective Time any event or circumstance relating to the Company or any of
its affiliates, or its or their respective officers or directors, should be
discovered by the Company which should be set forth in an amendment to the Form
F-4 or a supplement to the Company Proxy Statement, the Company shall promptly
inform Parent.
(d) Parent shall promptly prepare and cause the depositary to
file with the SEC a registration statement on Form F-6 (the "Form F-6") with
respect to the registration of the Parent ADSs under the 1933 Act and use its
reasonable best efforts to have the Form F-6 declared effective as promptly as
practicable.
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Section 5.04. Access to Information.
(a) To the extent permitted by applicable law, from the date
hereof until the Effective Time, the Company will give Parent, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access during normal business hours to the offices, properties, books and
records of the Company and its Subsidiaries, will furnish to Parent, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such persons may
reasonably request and will instruct the Company's employees, auditors, counsel
and financial advisors to cooperate with Parent in its investigation of the
business of the Company and its Subsidiaries; provided that no investigation
pursuant to this Section shall affect any representation or warranty given by
the Company to Parent hereunder. The foregoing information shall be held in
confidence to the extent required by, and in accordance with, the provisions of
the letter agreement dated January 4, 2000, executed by Parent and the Company
(the "Parent Confidentiality Agreement").
(b) To the extent permitted by applicable law, from the date
hereof until the Effective Time, Parent will furnish to the Company such
financial and other data that the Company may reasonably request; provided that
no investigation pursuant to this Section shall affect any representation or
warranty given by Parent to the Company hereunder. Such information shall be
held in confidence to the extent required by, and in accordance with, the letter
agreement dated February 17, 2000 executed by the Company and Parent (the
"Company Confidentiality Agreement").
Section 5.05. No Solicitation.
(a) From the date hereof until the termination hereof, the
Company agrees that neither it nor any of its Subsidiaries nor any of the
officers or directors of it or any of its Subsidiaries shall, and that it shall
direct and use its best reasonable efforts to cause its and its Subsidiaries'
officers, directors, employees, investment bankers, consultants and other agents
not to, directly or indirectly, take any action to solicit, initiate, encourage
or facilitate the making of any Acquisition Proposal or any inquiry with respect
thereto or engage in discussions or negotiations with any person with respect
thereto, or disclose any non-public information relating to the Company or any
of its Subsidiaries, as the case may be, or afford access to the properties,
books or records of the Company or any of its Subsidiaries to any person that
has made any Acquisition Proposal; provided, that nothing contained in this
Section 5.05 shall prevent the Company, after providing prior notice thereof to
Buyer that it is taking such action, from furnishing non-public information to,
or entering into discussions or negotiations with, any person in connection with
an unsolicited bona fide Acquisition Proposal received from such person that the
Company Board determines in good faith could lead to a Superior Proposal, so
long as (i) the Company has received prior to the date hereof an executed
confidentiality agreement or prior to furnishing non-public information to, or
entering into discussions or negotiations with, such person, the Company
receives from such person an executed confidentiality agreement with terms no
less favorable to the Company than those contained in the Parent Confidentiality
Agreement and (ii) the Company Board determines in good faith, based on such
matters that it deems relevant, including the advice of independent legal
counsel, that such action is necessary for the Company Board to comply with its
fiduciary duties to the Company's shareholders under applicable law; provided,
further, that nothing contained in this Agreement shall prevent the Company or
its board of directors from complying with Rule 14e-2 or 14d-9 under the 1934
Act with regard to an Acquisition Proposal.
(b) The Company will (i) promptly (and in no event later than
48 hours after the receipt of any Acquisition Proposal) notify (which notice
shall be provided orally and in writing and shall identify the person making
such Acquisition Proposal and set forth the material terms thereof) Parent after
receipt of any Acquisition Proposal or any request for nonpublic information
relating to the Company or any of its Subsidiaries or for access to the
properties, books or records of the Company or any of its Subsidiaries by any
person that may be considering making, or has made, an Acquisition Proposal, and
(ii) keep Parent informed on a current basis of the status and content of any
discussions or negotiations with any third party regarding any Acquisition
Proposal. The Company will, and will cause the other applicable persons listed
27
in the first sentence of Section 5.05(a) to, immediately cease and cause to be
terminated all discussions and negotiations, if any, that have taken place prior
to the date hereof with any parties with respect to any Acquisition Proposal.
(c) Except as set forth in this Section 5.05(c), the Company
Board shall not (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent, its approval or recommendation of this
Agreement, or any of the transactions contemplated hereby, including the Merger,
(ii) approve or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal, or (iii) cause the Company to enter into any agreement
(including, without limitation, any letter of intent but excluding any
confidentiality agreement) with respect to any Acquisition Proposal.
Notwithstanding the foregoing, if the Company Board, after consultation with and
based upon the advice of independent legal counsel, determines in good faith
that it is necessary to do so in order to comply with its fiduciary duties under
applicable law, it may (i) withdraw or modify, or propose publicly to withdraw
or modify, in a manner adverse to Parent, its approval and recommendation of
this Agreement, or any of the transactions contemplated hereby, including the
Merger, (ii) approve or recommend, or propose publicly to approve or recommend,
a Superior Proposal or (iii) cause the Company to enter into an agreement with
respect to a Superior Proposal, but in the case of clause (iii) only after the
expiration of three (3) business days after the date on which the Company
provides written notice (a "Notice of Superior Proposal") to Parent advising
that the Company Board has received a Superior Proposal, specifying the terms
and conditions of such Superior Proposal and identifying the person making such
Superior Proposal; provided, that prior to or concurrently with entering into an
agreement (including a letter of intent) with respect to a Superior Proposal,
the Company shall terminate this Agreement pursuant to Section 7.01(d)(i).
For purposes of this Agreement, "Acquisition Proposal" means
any offer or proposal for, or any indication of interest in, a merger or other
business combination involving the Company or any of its Subsidiaries, or the
acquisition of any equity interest in, or a substantial portion of the assets
of, or any tender offer or exchange offer that, if consummated, would result in
any person beneficially owning 20% or more of any class of equity securities of,
the Company or any of its Subsidiaries, other than the transactions contemplated
by this Agreement and other than an offer for a bona fide de minimis equity
interest, or for an amount of assets not material to the Company and its
Subsidiaries taken as a whole, that the Company has no reason to believe would
lead to a Change of Control of the Company (or to the acquisition of a
substantial portion of the assets of the Company and its Subsidiaries). For
purposes of this Agreement, "Superior Proposal" means any bona fide Acquisition
Proposal (i) on terms that the Company Board determines in its good faith
judgment (based on the advice of a financial advisor of nationally recognized
reputation, taking into account all the terms and conditions of the Acquisition
Proposal, including any break-up fees, expense reimbursement provisions and
conditions to consummation) are more favorable to the Company's shareholders
than this Agreement and the Merger taken as a whole, (ii) for which financing,
to the extent required, is then fully committed or reasonably determined to be
available by the Company Board, and (iii) pursuant to which no less than 100% of
the SNC Common Stock (or a corresponding amount of the assets of the Company and
its Subsidiaries) is proposed to be acquired. For purposes of this Agreement,
"Change of Control" means any event or occurrence, or series of related events
or occurrences, pursuant to which 20% or more of the voting power of the Company
is acquired by a third party or group acting in concert in connection with the
transactions contemplated by any Acquisition Proposal.
Section 5.06. Notice of Certain Events.
(a) The Company and Parent shall promptly notify each other
of:
(i) any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any
Governmental Authority in connection with the transactions contemplated by this
Agreement.
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(b) The Company shall promptly notify Parent of any actions,
suits, claims, investigations or proceedings commenced or, to its knowledge,
threatened against, relating to or involving or otherwise affecting the Company
or any of its Subsidiaries which, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to Section 3.13 or
which relate to the consummation of the transactions contemplated by this
Agreement.
(c) Parent shall promptly notify the Company of any actions,
suits, claims, investigations or proceedings commenced or, to its knowledge,
threatened against, relating to or involving or otherwise affecting Parent or
any Subsidiary of Parent which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 4.12 or which
relate to the consummation of the transactions contemplated by this Agreement.
Section 5.07. Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement,
each party will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the Merger and the
other transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, each party hereto agrees to (i) make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act with respect to
the transactions contemplated hereby as promptly as practicable and in any event
within ten (10) business days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and to take all other actions reasonably
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable and (ii) make appropriate
filings required under any other applicable Antitrust Laws (as defined below) as
promptly as practicable and in any event within fifteen (15) business days of
the date hereof.
(b) Each of Parent and the Company shall, in connection with
the efforts referenced in Section 5.07(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Antitrust Law, use its reasonable best efforts to (i) cooperate
in all respects with each other in connection with any filing or submission and
in connection with any investigation or other inquiry, including any proceeding
initiated by a private party; (ii) keep the other party informed in all material
respects of any material communication received by such party from, or given by
such party to, the Federal Trade Commission (the "FTC"), the Antitrust Division
of the Department of Justice (the "DOJ") or any other Governmental Authority and
of any material communication received or given in connection with any
proceeding by a private party, in each case regarding any of the transactions
contemplated hereby; and (iii) permit the other party to review any material
communication given by it to, and consult with each other in advance of any
meeting or conference with, the FTC, the DOJ or any such other Governmental
Authority or, in connection with any proceeding by a private party, with any
other person, and to the extent permitted by the FTC, the DOJ or such other
applicable Governmental Authority or other person, give the other party the
opportunity to attend and participate in such meetings and conferences. For
purposes of this Agreement, "Antitrust Law" means the Xxxxxxx Act, as amended,
the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, the EU Merger Regulations and all other federal, state and foreign, if
any, statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.
(c) In furtherance and not in limitation of the covenants of
the parties contained in Sections 5.07(a) and (b), each of Parent and the
Company shall use its reasonable best efforts to resolve such objections if any,
as may be asserted with respect to the transactions contemplated hereby under
any Antitrust Law. In connection with the foregoing, if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Antitrust Law, each of Parent
and the Company shall cooperate in all respects with each other and use its
29
respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
5.07 shall limit a party's right to terminate this Agreement pursuant to Section
7.01(b)(i) or 7.01(c) so long as such party has up to then complied in all
material respects with its obligations under this Section 5.07.
(d) If any objections are asserted with respect to the
transactions contemplated hereby under any Antitrust Law or if any suit is
instituted by any Governmental Authority or any private party challenging any of
the transactions contemplated hereby as violative of any Antitrust Law, each of
Parent and the Company shall use its reasonable best efforts to resolve any such
objections or challenge as such Governmental Authority or private party may have
to such transactions under such Antitrust Law so as to permit consummation of
the transactions contemplated by this Agreement; provided, however, that in no
event shall Parent be required to hold separate (including by establishing a
trust or otherwise) or to sell or otherwise dispose of operations of Parent (and
its Subsidiaries) and/or the Surviving Corporation (and its Subsidiaries).
(e) In the event any of the conditions set forth in Section
6.01(f), 6.02(b) or 6.03(b) are not capable of fulfillment prior to the End
Date, the parties shall, if requested by the Company, waive any such conditions
and effect such modifications to the relevant security holder disclosure and
solicitation materials as may reasonably be requested by the Company to reflect
the Merger as a taxable transaction to the Company's shareholders.
Section 5.08. Cooperation.
Without limiting the generality of Section 5.07, Parent and
the Company shall together, or pursuant to an allocation of responsibility to be
agreed between them, coordinate and cooperate (i) in connection with the
preparation of the Company Proxy Statement and the Form F-4, (ii) in determining
whether any action by or in respect of, or filing with, any Governmental
Authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement, and
(iii) in seeking any such actions, consents, approvals or waivers or making any
such filings, furnishing information required in connection therewith or with
the Company Proxy Statement or the Form F-4 and seeking timely to obtain any
such actions, consents, approvals or waivers.
Section 5.09. Public Announcements.
So long as this Agreement is in effect, Parent and the Company
will consult with each other before issuing any press release or making any SEC
or COB filing or other public statement with respect to this Agreement or the
transactions contemplated hereby and, except as may be required by applicable
law or the requirements of any securities exchange, will not issue any such
press release or make any such SEC filing or other public statement prior to
such consultation and providing the other party with a reasonable opportunity to
comment thereon.
Section 5.10. Further Assurances.
At and after the Effective Time, the officers and directors of
the Surviving Corporation will be authorized to execute and deliver, in the name
and on behalf of the Company or Merger Subsidiary, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Merger Subsidiary, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets of
the Company acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
30
Section 5.11. Affiliates.
Prior to the Closing Date, the Company shall cause to be
delivered to Parent a letter identifying, to the best of the Company's
knowledge, all persons who are, at the time of the Company Shareholder Meeting
described in Section 5.03(a), deemed to be "affiliates" for purposes of Rule 145
under the 1933 Act (the "Affiliates"). The Company shall use its reasonable best
efforts to cause each person who is so identified as an Affiliate to deliver to
Parent on or prior to the Closing Date a letter agreement substantially in the
form of Exhibit C to this Agreement.
Section 5.12. Director and Officer Liability.
From and after the Effective Time, Parent shall, or shall
cause the Surviving Corporation to, indemnify each person who is now, or has
been at any time prior to the date hereof, an employee, agent, director or
officer of the Company or of any of its Subsidiaries, its successors and assigns
(individually an "Indemnified Party" and collectively the "Indemnified
Parties"), to the fullest extent such persons can be indemnified by the Company
under applicable law with respect to any claim, liability, loss, damage,
judgment, fine, penalty, amount paid in settlement or compromise, cost or
expense (including reasonable fees and expenses of legal counsel), against any
Indemnified Party in his or her capacity as an employee, agent, officer or
director of the Company or its Subsidiaries, whenever asserted or claimed, based
in whole or in part on, or arising in whole or in part out of, any facts or
circumstances occurring at or prior to the Effective Time whether commenced,
asserted or claimed before or after the Effective Time, including, without
limitation, liability arising under the 1933 Act, the 1934 Act or state law;
provided, however, that the Surviving Corporation shall not be liable for any
settlement or compromise effected without its written consent (which shall not
be unreasonably withheld). In the event of any claim, liability, loss, damage,
judgment, fine, penalty, amount paid in settlement or compromise, cost or
expense indemnified pursuant to the preceding sentence, Parent shall pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties
promptly after statements are received and otherwise advance to such Indemnified
Party upon request reimbursement of documented expenses reasonably incurred. The
Indemnified Parties as a group may retain only one law firm with respect to each
matter except to the extent there is, in the opinion of counsel to an
Indemnified Party, under applicable standards of professional conduct, a
conflict on any significant issue between positions of any two or more
Indemnified Parties.
Parent shall, or shall cause the Surviving Corporation to,
maintain in effect for not less than six (6) years after the Effective Time the
current policies of directors' and officers' liability insurance maintained by
the Company and its Subsidiaries on the date hereof (provided that Parent may
substitute therefor policies with reputable and financially sound carriers
having at least the same coverage and amounts thereof and containing terms and
conditions which are no less advantageous to the persons currently covered by
such policies as insured) with respect to facts or circumstances occurring at or
prior to the Effective Time; provided that if the aggregate annual premiums for
such insurance during such six-year period shall exceed 300% of the per annum
rate of the aggregate premium currently paid by the Company and its Subsidiaries
for such insurance on the date of this Agreement, then Parent shall cause the
Surviving Corporation to, and the Surviving Corporation shall, provide the most
advantageous coverage that shall then be available at an annual premium equal to
300% of such rate. Parent agrees to pay all expenses (including fees and
expenses of counsel) that may be incurred by any Indemnified Party in
successfully enforcing the indemnity or other obligations under this Section
5.12. The rights under this Section 5.12 are in addition to rights that an
Indemnified Party may have under the certificate of incorporation, bylaws, or
other similar organizational documents of the Company or any of its Subsidiaries
or the DGCL. The rights under this Section 5.12 shall survive consummation of
the Merger and are expressly intended to benefit each Indemnified Party. Parent
agrees to cause the Surviving Corporation and any of its Subsidiaries (or their
successors) to maintain in effect for a period of six (6) years the provisions
of its articles of incorporation or bylaws or similar organizational documents
providing for indemnification of Indemnified Parties, with respect to facts or
circumstances occurring at or prior to the Effective Time, to the fullest extent
provided by law.
31
Section 5.13. Obligations of Merger Subsidiary.
Parent will take all action necessary to cause Merger
Subsidiary to perform its obligations under this Agreement and to consummate the
Merger on the terms and conditions set forth in this Agreement.
Section 5.14. Listing.
Parent shall use its reasonable best efforts to cause the
Parent ADSs to be issued in connection with the Merger to be approved for
listing, subject to official notice of issuance, on the New York Stock Exchange
or the Nasdaq Stock Market's National Market System, as reasonably determined by
Parent in its sole discretion, on or prior to the day immediately preceding the
Closing Date.
Section 5.15. Antitakeover Statutes.
If any Takeover Statute is or may become applicable to the
Merger, each of Parent and the Company shall take such actions as are necessary
so that the transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of any Takeover Statute on the Merger.
Section 5.16. Tax Treatment.
Each of Parent and the Company shall not take any action and
shall not fail to take any action which action or failure to act would prevent,
or would be reasonably likely to prevent, the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
Section 5.17. Employee Benefits.
(a) Following the Effective Time, Parent shall cause the
Surviving Corporation to (i) honor all obligations under employment or severance
agreements of the Company or its Subsidiaries and (ii) pay all benefits accrued
through the Effective Time under employee benefit plans, programs, policies and
arrangements of the Company or its Subsidiaries in accordance with the terms
thereof. In furtherance and not in limitation of the foregoing, Parent shall
cause the Surviving Corporation to provide, employees of the Company who
continue to be employed by the Surviving Corporation or its Subsidiaries as of
the Effective Time ("Continuing Employees") for a period of not less than two
(2) years following the Effective Time with (A) annual compensation not less
favorable than the annual compensation which they were receiving immediately
prior to the Effective Time, and (B) benefits which, in the aggregate, are no
less favorable than the benefits provided to similarly situated Parent
employees. In addition to the foregoing, for a period of two (2) years following
the Effective Time, Parent shall cause the Surviving Corporation or its
Subsidiaries to establish and maintain a plan to provide severance and
termination benefits to all non-union employees of the Company and its
Subsidiaries which are no less favorable than the severance and termination
benefits provided under the Company's plans and arrangements in effect as of the
date of this Agreement. If Continuing Employees are included in any benefit plan
(including without limitation, provision for vacation) of Parent or its
Subsidiaries, the Continuing Employees shall receive credit as employees of the
Company and its Subsidiaries for service prior to the Effective Time with the
Company and its Subsidiaries to the same extent such service was counted under
similar Company Benefit Plans for purposes of eligibility, vesting, eligibility
for retirement and, for any Company Benefit Plan that is not a pension benefit
plan, benefit accrual. If Continuing Employees are included in any medical,
dental or health plan other than the plan or plans they participated in as of
the Effective Time, any such plans shall not include pre-existing condition
exclusions, except to the extent such exclusions were applicable under the
similar Company Benefit Plan as of the Effective Time, and shall provide credit
for any deductibles and co-payments applied or made with respect to each
Continuing Employee in the calendar year of the change. The rights under this
Section 5.17 shall survive consummation of the Merger and are expressly intended
to benefit each Continuing Employee. Notwithstanding anything contained herein
to the contrary, nothing in this Section 5.17 shall be deemed to be a commitment
32
on the part of Parent or the Surviving Corporation to provide employment to any
person for any period of time and, except as otherwise provided in this Section
5.17, nothing herein shall be deemed to prevent Parent or the Surviving
Corporation from amending or terminating any Company Benefit Plan in accordance
with its terms.
(b) Upon the Effective Time, the Company's Employee Stock
Purchase Plan shall be terminated with the effect that the then current offering
period under such plan will be terminated effective as of the Effective Time.
Section 5.18. Rule 144 Reporting.
From and after the Effective Time, unless and until each
"affiliate" of the Company (as such term is defined for purposes of paragraphs
(c) and (d) of Rule 145 under the Securities Act) has disposed of all Parent
ADSs received by it as Merger Consideration, such shares are permitted to be
resold pursuant to Rule 145(d)(3) under the 1933 Act or such shares are covered
by an effective registration statement under Section 5 of the 1933 Act, Parent
shall make and keep "available adequate current public information" (as those
terms are understood and defined in Rule 144 under the 0000 Xxx) with respect to
Parent and, upon any reasonable request by such an affiliate, provide a
statement as to such availability.
Section 5.19. Comfort Letters.
(a) The Company shall use its reasonable best efforts to cause
to be delivered to Parent "comfort" letters of Xxxxxx Xxxxxxxx LLP, the
Company's independent public accountants, dated the date on which the F-4 shall
become effective and as of the Effective Time, and addressed to Parent and the
Company, in form and substance reasonably satisfactory to Parent and reasonably
customary in scope and substance for letters delivered by independent public
accountants in connection with transactions such as those contemplated by this
Agreement.
(b) Parent shall use its reasonable best efforts to cause to
be delivered to the Company "comfort" letters of Xxxxxx Xxxxxxxx LLP, Parent's
independent public accountants, dated the date on which the F-4 shall become
effective and as of the Effective Time, and addressed to the Company and Parent,
in form and substance reasonably satisfactory to the Company and reasonably
customary in scope and substance for letters delivered by independent public
accountants in connection with transactions such as those contemplated by this
Agreement.
Section 5.20. Third Party Consents.
(a) The Company and Parent shall give (or shall cause their
respective Subsidiaries to give) any notices to third parties, and use, and
cause their respective Subsidiaries to use, their reasonable best efforts to
obtain any third party consents, approvals or waivers (i) necessary, proper or
advisable to consummate the transactions contemplated in this Agreement, or (ii)
required to prevent a Material Adverse Effect on the Company from occurring
prior to or after the Effective Time or a Material Adverse Effect on Parent from
occurring prior to or after the Effective Time.
(b) In the event that any party shall fail to obtain any third
party consent, approval or waiver described in subsection (a) above, such party
shall use its reasonable best efforts, and shall take any such actions
reasonably requested by the other parties hereto, to minimize any adverse effect
upon the Company and Parent, their respective Subsidiaries, and their respective
businesses resulting, or which could reasonably be expected to result after the
Effective Time, from the failure to obtain such consent, approval or waiver.
Section 5.21. Certain Contributions. Promptly following the
Effective Time Parent will (i) transfer all of the SNC Common Stock of the
Surviving Corporation to Havas Advertising International ("International") and
cause International to transfer all of such stock to EWDB North America, Inc.
33
("US Parent"), in each case as a contribution to capital and (ii) cause US
Parent to contribute to the SNC Group (as such term is defined in the Surviving
Corporation's certificate of incorporation) a note receivable from US Parent in
the principal amount of not less than $500,000,000.
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.01. Conditions to the Obligations of Each Party.
The obligations of the Company and Parent to consummate the
Merger are subject to the satisfaction (or waiver by the party for whose benefit
the applicable condition exists) of the following conditions:
(a) (i) this Agreement and the transactions
contemplated hereby, including the Merger, shall have been
approved and adopted by the shareholders of the Company by the
Company Requisite Vote and (ii) the Capital Increase shall
have been approved by the shareholders of Parent by the Parent
Requisite Vote;
(b) any applicable waiting period under the HSR Act
and the EU Merger Regulations relating to the transactions
contemplated by this Agreement shall have expired, and all
consents, waivers, approvals and authorizations required to be
obtained, and all filings or notices required to be, made by
the Company, Parent or any of their Subsidiaries under any
other applicable Antitrust Law in connection with the
transactions contemplated in this Agreement shall have been
obtained from or made with all required Governmental
Authorities, except for such consents, waivers, approvals or
authorizations which the failure to obtain, or such filings or
notices which the failure to make, would not have a Material
Adverse Effect on the Company, Parent or the Surviving
Corporation.
(c) no provision of any applicable law or regulation
and no judgment, injunction, order or decree shall prohibit or
enjoin the consummation of the Merger;
(d) (i) the Form F-4 and Form F-6 shall have been
declared effective under the 1933 Act and no stop order
suspending the effectiveness of the Form F-4 and Form F-6
shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the SEC and (ii) Parent
shall have received appropriate decisions and visas from the
CMF and the COB;
(e) the Parent ADSs to be issued in the Merger shall
have been approved for listing on the New York Stock Exchange
or the Nasdaq Stock Market's National Market System, subject
to official notice of issuance; and
(f) the SNC Common Stock shall represent control of
the Company within the meaning of Section 368(c) of the Code.
Section 6.02. Conditions to the Obligations of Parent and
Merger Subsidiary.
The obligations of Parent and Merger Subsidiary to consummate
the Merger are subject to the satisfaction (or waiver by Parent) of the
following further conditions:
(a) (i) the Company shall have performed in all
material respects all of its obligations and complied in all
material respects with all of its covenants hereunder required
to be performed or complied with by it at or prior to the
Effective Time and (ii) the representations and warranties of
the Company contained in this Agreement (which representations
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and warranties shall be deemed, for purposes of this
condition, to include any qualifications with respect to
materiality, including references to Material Adverse Effect)
shall be true and correct at and as of the Effective Time, as
if made at and as of such time (other than representations and
warranties that address matters only as of a particular date,
which shall be true and correct as of such date), with only
such exceptions as, individually or in the aggregate, have not
had and would not have a Material Adverse Effect on the
Company; and Parent shall have received a certificate signed
by an executive officer of the Company to the effect set forth
in clauses (i) and (ii);
(b) Parent shall have received an opinion from Xxxxx
& Xxxxxxx L.L.P., counsel to Parent, in form and substance
reasonably satisfactory to Parent, dated as of the Effective
Time, substantially to the effect that the Merger should
constitute a reorganization for United States federal income
tax purposes within the meaning of Section 368(a) of the Code.
In rendering such opinion, Xxxxx & Xxxxxxx L.L.P. may rely
upon representations contained in certificates of officers of
Parent, Merger Subsidiary and the Company substantially in the
forms annexed as Exhibit D to this Agreement; or
(c) there shall not have been a material breach of
the Company Stockholder Voting Agreement by the Designated
Company Stockholders.
Section 6.03. Conditions to the Obligations of the Company.
The obligations of the Company to consummate the Merger are
subject to the satisfaction (or waiver by the Company) of the following further
conditions:
(a) (i) Parent shall have performed in all material
respects all of its obligations and complied in all material
respects with all of its covenants hereunder required to be
performed or complied with by it at or prior to the Effective
Time and (ii) the representations and warranties of Parent
contained in this Agreement (which representations and
warranties shall be deemed, for purposes of this condition,
not to include any qualifications with respect to materiality,
including references to Material Adverse Effect) shall be true
and correct at and as of the Effective Time, as if made at and
as of such time (other than representations and warranties
that address matters only as of a particular date which shall
be true and correct as of such date), with only such
exceptions as, individually or in the aggregate, have not had
and would not have a Material Adverse Effect on Parent; and
the Company shall have received a certificate signed by an
executive officer of Parent to the effect set forth in clauses
(i) and (ii);
(b) The Company shall have received an opinion from
Weil, Gotshal & Xxxxxx LLP, counsel to the Company, in form
and substance reasonably satisfactory to the Company, dated as
of the Effective Time, substantially to the effect that the
Merger should constitute a reorganization for United States
federal income tax purposes within the meaning of Section
368(a) of the Code. In rendering such opinion, Weil, Gotshal &
Xxxxxx LLP may rely upon representations contained in
certificates of officers of Parent, Merger Subsidiary and the
Company substantially in the forms thereof annexed as Exhibit
D to this Agreement; or
(c) there shall not have been a material breach of
the Parent Stockholder Voting Agreement by the Designated
Parent Stockholder.
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ARTICLE VII
Termination
Section 7.01. Termination.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time (notwithstanding any approval
of this Agreement by the shareholders of the Company or Parent):
(a) by mutual written consent of the Company and
Parent;
(b) by either the Company or Parent:
(i) if the Merger has not been consummated by
December 31, 2000 (the "End Date"); provided that the right to terminate this
Agreement under this Section 8.01(b)(i) shall not be available to any party
whose failure to fulfill its obligations or to comply with its covenants under
this Agreement in all material respects has been the cause of, or resulted in,
the failure of the Merger to be consummated by the End Date.
(ii) if the Company Shareholder Approval shall not
have been obtained by reason of the failure to obtain the Company Requisite Vote
at a duly held meeting of shareholders or any adjournment thereof; or
(iii) if the Parent Shareholder Approval shall not
have been obtained by reason of the failure to obtain the Parent Requisite Vote
at a duly held meeting of shareholders or any adjournment thereof; or
(c) by either the Company or Parent (so long as such
party has complied in all material respects with its
obligations under Section 5.07), if consummation of the Merger
would be prohibited by any law or regulation or if any
injunction, judgment, order or decree enjoining the Company or
Parent from consummating the Merger is entered and such
injunction, judgment, order or decree shall become final and
nonappealable; or
(d) by the Company:
(i) if the Company Board shall have received an
Acquisition Proposal which the Company Board has determined in good faith is a
Superior Proposal and the Company promptly following such termination enters
into an agreement (including a letter of intent) providing for the transactions
contemplated by such Superior Proposal after complying with Section 5.05(c)
(including, without limitation, the expiration of the three (3) business day
period set forth therein); provided that it shall be a condition to the
effectiveness of such termination that the Company shall have made the payment
referred to in Section 7.03(b) hereof;
(ii) upon a breach of any representation, warranty,
covenant or agreement of Parent, or if any representation or warranty of Parent
shall become untrue, in either case which breach or misrepresentation or
warranty shall not have been cured within 30 days following written notice from
the Company such that the conditions set forth in Section 6.03(a) would be
incapable of being satisfied by the End Date; or
(iii) if the Parent Board shall have withdrawn or
modified, or publicly proposed to withdraw or modify, in a manner adverse to the
Company, its approval or recommendation of the Merger and this Agreement; or
36
(e) by Parent:
(i) if the Company Board shall have (A) withdrawn or
modified, or publicly proposed to withdraw or modify, in a manner adverse to
Parent, its approval or recommendation of the Merger and this Agreement or (B)
approved or recommended, or publicly proposed to approve or recommend, any
Acquisition Proposal; or
(ii) upon a breach of any representation, warranty,
covenant or agreement of the Company, or if any representation or warranty of
the Company shall become untrue, in either case which breach or
misrepresentation or warranty shall not have been cured within 30 days following
written notice from Parent such that the conditions set forth in Section 6.02(a)
would be incapable of being satisfied by the End Date.
The party desiring to terminate this Agreement pursuant to
clauses (b), (c), (d) or (e) of this Section 7.01 shall give written notice of
such termination to the other party in accordance with Section 8.02, specifying
the provision hereof pursuant to which such termination is effected.
Section 7.02. Effect of Termination.
If this Agreement is terminated pursuant to Section 7.01, this
Agreement shall become void and of no effect with no liability on the part of
any party hereto, except that (a) the agreements contained in this Section 7.02
and in Section 7.03 and in the Parent Confidentiality Agreement and the Company
Confidentiality Agreement shall survive the termination hereof and (b) no such
termination shall relieve any party of any liability or damages resulting from
any material breach by that party of this Agreement; provided that the maximum
aggregate liability of any party for any material breach of its representations,
warranties, covenants or agreements in this Agreement shall be limited to
$85,000,000; provided, further, that such limitation shall not apply to any such
material breach that is willful (as contemplated by Section 7.03).
Section 7.03. Payments.
(a) Except as otherwise specified in this Section 7.03 or
agreed in writing by the parties, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such cost or expense.
(b) If (i) the Company shall terminate this Agreement pursuant
to Section 7.01(d)(i) hereof, (ii) Parent shall terminate this Agreement
pursuant to Section 7.01(e)(i) hereof, or (iii) the Company or Parent shall
terminate this Agreement pursuant to Section 7.01(b)(ii) hereof, the Company
shall pay to Parent (by wire transfer of immediately available funds not later
than the date of termination of this Agreement) an amount equal to $85,000,000
(inclusive of value added tax, if any). If Parent shall terminate this Agreement
pursuant to Section 7.01(e)(ii) (solely with respect to a willful breach of a
representation, warranty, covenant or agreement of the Company contained in this
Agreement), the Company shall pay to Parent (by wire transfer of immediately
available funds not later than the date of termination of this Agreement) an
amount equal to the greater of (i) $85,000,000 (inclusive of value added tax, if
any), or (ii) the actual damages resulting from any such breach. Acceptance by
Parent of the payment referred to in the foregoing sentences shall constitute
conclusive evidence that this Agreement has been validly terminated and upon
payment of such amount the Company shall be fully released and discharged from
any liability or obligation resulting from or under this Agreement.
(c) If (i) the Company or Parent shall terminate this
Agreement pursuant to Section 7.01(b)(iii), or (ii) the Company shall terminate
this Agreement pursuant to Section 7.01(d)(iii) hereof, Parent shall pay to the
Company (by wire transfer of immediately available funds not later than the date
of termination of this Agreement) an amount equal to $85,000,000 (inclusive of
value added tax, if any). If the Company shall terminate this Agreement pursuant
to Section 7.01(d)(ii) (solely with respect to a willful breach of a
37
representation, warranty, covenant or agreement of Parent contained in this
Agreement), Parent shall pay to the Company (by wire transfer of immediately
available funds not later than the date of termination of this Agreement) an
amount equal to the greater of (i) $85,000,000 (inclusive of value added tax, if
any), or (ii) the actual damages resulting from any such breach. Acceptance by
the Company of the payment referred to in the foregoing sentences shall
constitute conclusive evidence that this Agreement has been validly terminated
and upon payment of such amount Parent shall be fully released and discharged
from any liability or obligation resulting from or under this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Certain Definitions.
For purposes of this Agreement, the following terms shall have
the meanings specified in this Section 8.01:
(a) "know" or "knowledge" means, with respect to the
Company, the actual knowledge of the Company's executive
officers, and with respect to Parent and Merger Subsidiary,
the actual knowledge Parent's executive directors.
(b) "person" means an individual, corporation,
limited liability company, partnership, association, trust,
unincorporated organization, other entity or group (as defined
in the 1934 Act).
(c) "Subsidiary" means, when used with reference to
any entity, any corporation or other organization, whether
incorporated or unincorporated, (i) of which such party or any
other subsidiary of such party is a general or managing
partner or (ii) the outstanding voting securities or interests
of which, having by their terms ordinary voting power to elect
a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other
organization, is directly or indirectly owned or controlled by
such party or by any one or more of its subsidiaries.
Section 8.02. Notices.
All notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar writing) and shall
be given:
if to Parent, to:
Havas Advertising 00, xxx xx Xxxxxxxx 00000 Xxxxxxxxx-Xxxxxx
Xxxxx Xxxxxx Attention: Chief Financial Officer
with a copy to:
Xxxxx & Xxxxxxx L.L.P. 000 00xx Xxxxxx, X.X. Xxxxxxxxxx, X.X.
00000 Attention: Xxxxx X. Xxxxxxxxx J. Xxxxxx Xxxxxxx, Xx.
if to the Company, to:
Xxxxxx Communications, Inc. Two Democracy Center 0000
Xxxxxxxxx Xxxxx Xxxxxxxx, Xxxxxxxx 00000 Attention: Chief Financial Officer
with a copy to:
38
Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx Xxx Xxxx, XX
00000 Attention: Xxxxxx X. Xxxxxxx
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section 8.02
and the appropriate telecopy confirmation is received or (b) if given by any
other means, when delivered at the address specified in this Section 8.02.
Section 8.03. Entire Agreement; Non-Survival of
Representations and Warranties; Third Party Beneficiaries.
(a) This Agreement (including any exhibits hereto), the other
agreements referred to in this Agreement and the Parent Confidentiality
Agreement and the Company Confidentiality Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to such subject matter.
None of this Agreement, the Parent Confidentiality Agreement, the Company
Confidentiality Agreement or any other agreement contemplated hereby or thereby
(or any provision hereof or thereof) is intended to confer on any person other
than the parties hereto or thereto any rights or remedies (except that Article 1
and Sections 5.12, 5.17, 5.18 and 5.21 are intended to confer rights and
remedies on the persons specified therein).
(b) The representations and warranties contained herein or in
any schedule, instrument or other writing delivered pursuant hereto shall not
survive the Effective Time.
Section 8.04. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company and Parent or,
in the case of a waiver, by the party against whom the waiver is to be
effective; provided that after the adoption of this Agreement by the
shareholders of the Company, there shall be made no amendment that by law
requires further approval by shareholders without the further approval of such
shareholders.
(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 8.05. Successors and Assigns.
The provisions of this Agreement shall be binding upon, inure
to the benefit of and be enforceable by 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
written consent of the other parties hereto.
Section 8.06. Governing Law.
This Agreement shall be construed in accordance with and
governed by the law of the State of Delaware, without regard to the choice of
law principles thereof.
39
Section 8.07. 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 by this Agreement may be brought
against any of the parties in any Federal court located in the State of Delaware
or any Delaware state court, and each of the parties hereto hereby consents to
the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and waives any
objection to venue laid therein. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
State of Delaware. Without limiting the generality of the foregoing, each party
hereto agrees that service of process upon such party at the address referred to
in Section 8.02, together with written notice of such service to such party,
shall be deemed effective service of process upon such party.
Section 8.08. 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 8.09. Interpretation.
When a reference is made in this Agreement to a Section or
Disclosure Schedule, such reference shall be to a Section of this Agreement or
to the Company Disclosure Schedule or Parent Disclosure Schedule as applicable,
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed to be
followed by the words "without limitation". Whenever the words "the date
hereof", "the date of this Agreement" or words of similar import are used in
this Agreement, such words shall be deemed to mean February 20, 2000.
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, unenforceable or against its regulatory policy, 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. Upon such determination that any term, provision, covenant or
restriction of this Agreement is invalid, void, unenforceable or against
regulatory policy, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
Section 8.11. Specific Performance.
The parties hereto agree that irreparable damage would occur
in the event any provision of this Agreement was not performed in accordance
with the terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or any Delaware state court, in addition to any other remedy
to which they are entitled at law or in equity.
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Section 8.12. Joint and Several Liability.
Parent and Merger Subsidiary hereby agree that they will be
jointly and severally liable for all covenants, agreements, obligations and
representations and warranties made by either of them in this Agreement.
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.
HAVAS ADVERTISING
/s/ Xxxxxxx Xxxxxx
By: ______________________________
Name: Xxxxxxx Xxxxxx
Title: Director-General
HAS ACQUISITION CORP.
/s/ Xxxxxxx Xxxxxx
By: ______________________________
Name: Xxxxxxx Xxxxxx
Title: Vice President and
Treasurer
XXXXXX COMMUNICATIONS, INC.
/s/ A. Xxxxxxx Xxxxxxx
By: ______________________________
Name: A. Xxxxxxx Xxxxxxx
Title: Director and Chief
Financial Officer
41
