EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
STEELCASE INC.,
PV ACQUISITION, INC.
and
POLYVISION CORPORATION
dated
August 24, 2001
(Comformed as per Amendment No. 1
dated October 15, 2001)
TABLE OF CONTENTS
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Page
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Index of Defined Terms ..................................................... Index - i
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING ........................................ 2
Section 1.1 The Merger ............................................ 2
Section 1.2 Effective Time ........................................ 2
Section 1.3 Closing ............................................... 2
Section 1.4 Effects of the Merger ................................. 2
ARTICLE II
THE SURVIVING CORPORATION .................................................. 3
Section 2.1 Certificate of Incorporation .......................... 3
Section 2.2 By-laws ............................................... 3
Section 2.3 Directors and Officers of the Surviving Corporation ... 3
ARTICLE III
CONVERSION OF SECURITIES ................................................... 3
Section 3.1 Conversion of Shares .................................. 3
Section 3.2 Appraisal Rights ...................................... 5
Section 3.3 Exchange of Certificates .............................. 5
Section 3.4 Adjustment of Merger Consideration .................... 7
Section 3.5 Stock Options ......................................... 8
Section 3.6 Warrants .............................................. 8
Section 3.7 Convertible Note ...................................... 9
Section 3.8 Withholding Rights .................................... 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .............................. 9
Section 4.1 Organization .......................................... 10
Section 4.2 Subsidiaries and Affiliates ........................... 11
Section 4.3 Capitalization ........................................ 12
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Section 4.4 Authorization; Validity of Agreement; Company Action ...... 14
Section 4.5 Special Committee and Board Approvals ..................... 14
Section 4.6 Consents and Approvals; No Violations ..................... 15
Section 4.7 Company SEC Documents and Financial Statements ............ 16
Section 4.8 Absence of Certain Changes ................................ 17
Section 4.9 No Undisclosed Liabilities; Indebtedness .................. 19
Section 4.10 Litigation ................................................ 20
Section 4.11 Employee Benefit Plans; ERISA ............................. 21
Section 4.12 Taxes ..................................................... 27
Section 4.13 Contracts ................................................. 29
Section 4.14 Real and Personal Property ................................ 31
Section 4.15 Intellectual Property ..................................... 32
Section 4.16 Related Party Transactions ................................ 35
Section 4.17 Labor Matters ............................................. 36
Section 4.18 Compliance with Laws ...................................... 37
Section 4.19 Assets .................................................... 37
Section 4.20 Customers and Suppliers ................................... 37
Section 4.21 Environmental Matters ..................................... 38
Section 4.22 Insurance ................................................. 41
Section 4.23 Proxy Statement ........................................... 42
Section 4.24 Opinion of Financial Advisor .............................. 42
Section 4.25 Brokers ................................................... 42
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB ........................ 42
Section 5.1 Organization .............................................. 42
Section 5.2 Authorization; Validity of Agreement; Necessary Action .... 43
Section 5.3 Consents and Approvals; No Violations ..................... 43
Section 5.4 Information in the Proxy Statement ........................ 44
Section 5.5 Brokers ................................................... 44
Section 5.6 Financing ................................................. 44
Section 5.7 Interim Operations of Merger Sub .......................... 44
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ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS ..................................................... 45
Section 6.1 Conduct of Business of the Company ....................................... 45
Section 6.2 Notification of Acquisition Proposals .................................... 49
Section 6.3 No Solicitation .......................................................... 50
ARTICLE VII
ADDITIONAL AGREEMENTS ......................................................................... 51
Section 7.1 Special Meeting; Proxy Statement; Adoption of Agreement .................. 51
Section 7.2 Reasonable Best Efforts; Consents and Approvals .......................... 53
Section 7.3 Notification of Certain Matters .......................................... 54
Section 7.4 Access; Confidentiality .................................................. 54
Section 7.5 Publicity ................................................................ 55
Section 7.6 Insurance and Indemnification ............................................ 55
Section 7.7 Determination Letters; Multiemployer Plans ............................... 56
Section 7.8 Employment and Benefit Arrangements ...................................... 56
Section 7.9 Transfer of Certain Intellectual Property ................................ 57
Section 7.10 Third Party Standstill Agreements ........................................ 58
Section 7.11 Takeover Laws ............................................................ 58
ARTICLE VIII
CONDITIONS .................................................................................... 58
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger ............... 58
Section 8.2 Conditions to the Company's Obligation to Effect the Merger .............. 59
Section 8.3 Conditions to Parent's and Merger Sub's Obligations to Effect the Merger.. 59
ARTICLE IX
TERMINATION ................................................................................... 61
Section 9.1 Termination .............................................................. 61
Section 9.2 Effect of Termination .................................................... 63
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ARTICLE X
MISCELLANEOUS ........................................................ 64
Section 10.1 Amendment and Modification ........................ 64
Section 10.2 Non-survival of Representations and Warranties .... 64
Section 10.3 Expenses .......................................... 64
Section 10.4 Notices ........................................... 64
Section 10.5 Interpretation .................................... 66
Section 10.6 Jurisdiction ...................................... 67
Section 10.7 Service of Process ................................ 68
Section 10.8 Specific Performance .............................. 68
Section 10.9 Counterparts ...................................... 68
Section 10.10 Entire Agreement; No Third-Party Beneficiaries .... 68
Section 10.11 Severability ...................................... 68
Section 10.12 Governing Law ..................................... 69
Section 10.13 Assignment ........................................ 69
Section 10.14 Special Committee Enforcement ..................... 69
Annex A ......................................................... A-1
iv
Index of Defined Terms
Defined Term Section No.
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Acquisition Proposal ..................................... 6.2
Acquisition Proposal Interest ............................ 6.2
Agreement ................................................ Recitals
Average Premium .......................................... 7.6(b)
Balance Sheet Date ....................................... 4.8
BCL ...................................................... Recitals
Business Intellectual Property ........................... 4.15(a)
CERCLIS .................................................. 4.21(b)(ix)
Certificate of Merger .................................... 1.2
Certificates ............................................. 3.3(b)
Closing .................................................. 1.3
Code ..................................................... 4.11(b)(ii)
Common Stock Merger Consideration ........................ 3.1(a)
Company................................................... Recitals
Company Agreement......................................... 4.6
Company Board of Directors................................ Recitals
Company Common Stock ..................................... 3.1(a)
Company Disclosure Schedule .............................. Article IV
Company Form 10-K......................................... 4.13
Company Material Adverse Change .......................... 4.1(a)
Company Material Adverse Effect .......................... 4.1(a)
Company Organizational Documents ......................... 4.1(c)
Company Preferred Stock .................................. 3.1(b)
Company Recommendation ................................... 7.1(a)(iii)
Company SEC Documents .................................... 4.7
Company Subsidiary ....................................... 4.2(a)
Confidentiality Agreement ................................ 7.4
Convertible Note ......................................... 3.7
Copyrights ............................................... 4.15(a)
D&O Insurance ............................................ 7.6(b)
Dissenting Shares......................................... 3.2
Effective Time ........................................... 1.2
Employees ................................................ 7.8(a)
Encumbrance .............................................. 4.8(n)
Environmental Claim ...................................... 4.21(a)(ii)
Index - i
Environmental Laws ..................................... 4.21(a)(i)
ERISA .................................................. 4.11(a)
ERISA Affiliate ........................................ 4.11(a)
ERISA Plans ............................................ 4.11(a)
Exchange Act ........................................... 3.5(b)
Financial Advisor....................................... 4.24
Financial Statements ................................... 4.7
FIRPTA Certificate ..................................... 8.3(h)
Foreign Benefit Plan ................................... 4.11(u)
GAAP ................................................... 4.7
Governmental Entity .................................... 4.6
Hazardous Substances ................................... 4.21(a)(iii)
HSR Act ................................................ 4.6
Indemnified Party....................................... 7.6(a)
Intellectual Property .................................. 4.15(a)
IP License Agreements .................................. 4.15(d)
IRS .................................................... 4.11(b)(ii)
Listed Company Agreements .............................. 4.13
Merger ................................................. Recitals
Merger Consideration ................................... 3.3(a)
Merger Sub ............................................. Recitals
New York Courts ........................................ 10.6
NPL .................................................... 4.21(b)(ix)
Option ................................................. 3.5(a)
Option Plans ........................................... 3.5(a)
Parent ................................................. Recitals
Parent Material Adverse Effect ......................... 5.1
Patents ................................................ 4.15(a)
Paying Agent ........................................... 3.3(a)
PBGC ................................................... 4.11(c)
Person ................................................. 4.2(a)
Plans .................................................. 4.11(a)
Proprietary Software ................................... 4.15(c)
Proxy Statement ........................................ 4.6
Real Property .......................................... 4.14(b)
Record Date ............................................ 7.1(a)(i)
Representatives ........................................ 6.3(a)
SEC .................................................... 4.7
Securities Act ......................................... 4.7
Index - ii
Series B Preferred Stock .................................... 3.1(b)
Series B Preferred Stock Merger Consideration ............... 3.1(b)
Series C Preferred Stock .................................... 3.1(c)
Series C Preferred Stock Merger Consideration ............... 3.1(c)
Series D Preferred Stock .................................... 3.1(d)
Series D Preferred Stock Merger Consideration ............... 3.1(d)
Shareholder ................................................. Recitals
Shareholder's Agreement ..................................... Recitals
Shares ...................................................... 3.3(a)
Software..................................................... 4.15(a)
Special Committee............................................ Recitals
Special Meeting ............................................. 7.1(a)(i)
Subsidiary .................................................. 4.2(a)
Subsidiary Organizational Documents ........................ 4.2(c)
Surviving Corporation ....................................... 1.1
Tax ......................................................... 4.12
Taxes ....................................................... 4.12
Tax Return .................................................. 4.12
Termination Date ............................................ 9.1(b)(ii)
Title IV Plan ............................................... 4.11(d)
Trade Secrets ............................................... 4.15(a)
Trademarks .................................................. 4.15(a)
Transactions ................................................ Recitals
Voting Debt ................................................. 4.3(b)
WARN Act..................................................... 4.17(f)
Warrants..................................................... 3.6
Index - iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated August
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24, 2001, by and among Steelcase Inc., a Michigan corporation ("Parent"), PV
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Acquisition, Inc., a New York corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and PolyVision Corporation, a New York corporation formed
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under the name RT Acquisition Associates, Inc. (the "Company").
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WHEREAS, it is the intention of the parties that, in accordance with
the New York Business Corporation Law, as amended (the "BCL"), and upon the
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terms and subject to the conditions set forth herein, Merger Sub shall merge
with and into the Company, with the Company being the surviving corporation of
such merger (the "Merger");
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WHEREAS, each of the board of directors of the Company (the "Company
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Board of Directors") and a special committee of the Company Board of Directors
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(the "Special Committee") composed entirely of directors who have no material
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ownership interest in, or any employment or consulting relationship with, the
principal shareholder of the Company, The Alpine Group, Inc., a Delaware
corporation (the "Shareholder"), and who are not officers of the Company has
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unanimously determined that this Agreement and the Merger are advisable, fair to
and in the best interests of the Company and its shareholders (other than the
Shareholder), and the Company Board of Directors has unanimously adopted this
Agreement;
WHEREAS, the board of directors of Merger Sub and Parent, as the sole
shareholder of Merger Sub, have each approved and adopted this Agreement and
have approved the Merger and the other transactions contemplated hereby
(collectively, including the Merger, the "Transactions");
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WHEREAS, as a condition and inducement to Parent's and Merger Sub's
entering into this Agreement and incurring the obligations set forth herein, the
Shareholder is entering into a shareholder's agreement, dated as of the date
hereof (the "Shareholder's Agreement"), with Parent and Merger Sub substantially
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in the form of Exhibit A hereto; and
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WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with, and
also to prescribe certain conditions to, the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein,
the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
Section 1.1 The Merger. Subject to the terms and conditions of
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this Agreement and in accordance with the BCL, at the Effective Time (as defined
in Section 1.2), the Company and Merger Sub shall consummate the Merger pursuant
to which (i) Merger Sub shall be merged with and into the Company and the
separate corporate existence of Merger Sub shall thereupon cease and (ii) the
Company shall be the surviving corporation in the Merger and shall continue to
be governed by the laws of the State of New York. The corporation surviving the
Merger is sometimes hereinafter referred to as the "Surviving Corporation."
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Section 1.2 Effective Time. Parent, Merger Sub and the Company
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shall cause an appropriate certificate of merger (the "Certificate of Merger")
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to be executed and filed on the date of the Closing (as defined in Section 1.3)
with the Secretary of State of the State of New York as provided in Section 904
of the BCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secretary of State of the
State of New York, or such later date as agreed upon by the parties, such date
being hereinafter referred to as the "Effective Time."
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Section 1.3 Closing. The closing of the Merger (the "Closing")
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will take place (a) at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., Eastern time, on the second
business day after satisfaction or waiver of all of the conditions set forth in
Article VIII or (b) at such other place, time and date as Parent and the Company
may agree.
Section 1.4 Effects of the Merger. The Merger shall have the
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effects set forth in the BCL and in this Agreement.
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ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation. The certificate of
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incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation,
except as to the name of the Surviving Corporation, which shall be PolyVision
Corporation, until thereafter amended in accordance with the BCL.
Section 2.2 By-laws. The by-laws of Merger Sub, as in effect
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immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation, except as to the name of the Surviving Corporation, which shall be
PolyVision Corporation, until thereafter amended in accordance with the BCL and
the certificate of incorporation of the Surviving Corporation.
Section 2.3 Directors and Officers of the Surviving Corporation.
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The directors of Merger Sub immediately prior to the Effective Time shall, from
and after the Effective Time, be the directors of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall, from
and after the Effective Time, be the officers of the Surviving Corporation,
until their respective successors shall have been duly elected, designated and
qualified, or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's certificate of incorporation and by-laws.
ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 Conversion of Shares. At the Effective Time, by
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virtue of the Merger and without any action on the part of the shareholders of
the Company or Merger Sub or any of the parties hereto:
(a) Each share of Common Stock, par value $.001 per
share, of the Company (the "Company Common Stock") issued and outstanding
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immediately prior to the Effective Time (other than any shares of Company Common
Stock to be canceled pursuant to Section 3.1(e)) shall be canceled and shall be
converted automatically into the right to receive $2.25 in cash (the "Common
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Stock Merger Consideration") payable, without interest, to the holder of such
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share of Company
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Common Stock, upon surrender, in the manner provided in Section 3.3, of
the certificate that formerly evidenced such share of Company Common Stock.
(b) Each share of Preferred Stock, par value $.01 per share, of
the Company (the"Company Preferred Stock") designated as Series B Preferred (the
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"Series B Preferred Stock") issued and outstanding immediately prior to the
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Effective Time (other than any shares of Series B Preferred Stock to be canceled
pursuant to Section 3.1(e) and any Dissenting Shares (as hereinafter defined))
shall be canceled and shall be converted automatically into the right to receive
an amount in cash equal to the sum of (x) the liquidation preference associated
with such share of Series B Preferred Stock (i.e., $50) plus (y) the accrued and
unpaid dividends on such share of Series B Preferred Stock (the "Series B
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Preferred Stock Merger Consideration"), payable, without interest, to the holder
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of such share of Series B Preferred Stock, upon surrender, in the manner
provided in Section 3.3, of the certificate that formerly evidenced such share
of Series B Preferred Stock.
(c) Each share of Company Preferred Stock designated as Series C
Preferred (the "Series C Preferred Stock") issued and outstanding immediately
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prior to the Effective Time (other than any shares of Series C Preferred Stock
to be canceled pursuant to Section 3.1(e) and any Dissenting Shares) shall be
canceled and shall be converted automatically into the right to receive an
amount in cash equal to the product of (x) the Common Stock Merger Consideration
multiplied by (y) the number of shares of Company Common Stock into which such
share of Series C Preferred Stock is convertible immediately prior to the
Effective Time (the "Series C Preferred Stock Merger Consideration"), payable,
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without interest, to the holder of such share of Series C Preferred Stock, upon
surrender, in the manner provided in Section 3.3, of the certificate that
formerly evidenced such share of Series C Preferred Stock.
(d) Each share of Company Preferred Stock designated as Series D
Preferred (the "Series D Preferred Stock") issued and outstanding immediately
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prior to the Effective Time (other than any shares of Series D Preferred Stock
to be canceled pursuant to Section 3.1(e) and any Dissenting Shares) shall be
canceled and shall be converted automatically into the right to receive an
amount in cash equal to the sum of (x) the liquidation preference associated
with such share of Series D Preferred Stock (i.e., $50) plus (y) the accrued and
unpaid dividends on such share of Series D Preferred Stock (the "Series D
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Preferred Stock Merger Consideration"), payable, without interest, to the holder
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of such share of Series D Preferred Stock, upon surrender, in the manner
provided in Section 3.3, of the certificate that formerly evidenced such share
of Series D Preferred Stock.
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(e) Each share of Company Common Stock and Company Preferred
Stock held in the treasury of the Company immediately prior to the Effective
Time and each share of Company Common Stock and Company Preferred Stock owned by
Parent or any of its Subsidiaries immediately prior to the Effective Time shall
be canceled without any conversion thereof, and no payment or distribution shall
be made with respect thereto.
(f) Each share of common stock of Merger Sub that is issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation with the same rights, powers and privileges as the
share so converted, and all such shares of Surviving Corporation common stock
shall constitute the only outstanding shares of the Surviving Corporation
immediately after the Effective Time.
Section 3.2 Appraisal Rights. Notwithstanding any provision of this
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Agreement to the contrary, shares of Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock outstanding immediately prior to
the Effective Time and held by a holder that has the right to receive payment of
the fair value of such holder's shares pursuant to Section 910 of the BCL and
has complied with the provisions of Section 623 of the BCL ("Dissenting Shares")
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shall not be converted into the right to receive the Series B Preferred Stock
Merger Consideration, Series C Preferred Stock Merger Consideration or Series D
Preferred Stock Merger Consideration, as applicable, unless such holder fails to
perfect or withdraws or otherwise loses such holder's right to appraisal. If
after the Effective Time such holder fails to perfect or withdraws or loses such
holder's right to appraisal, such shares shall be treated as if they had been
converted as of the Effective Time into the right to receive the Series B
Preferred Stock Merger Consideration, Series C Preferred Stock Merger
Consideration or Series D Preferred Stock Merger Consideration, as applicable.
The Company shall give Parent prompt notice of any demands received by the
Company for appraisal of shares, and Parent shall have the right to participate
in and to control all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
Section 3.3 Exchange of Certificates.
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(a) Paying Agent. Prior to the Effective Time, Parent shall
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designate an agent, which shall be reasonably satisfactory to the Company (the
"Paying Agent"), for the holders of shares of Company Common Stock, Series B
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Preferred
5
Stock, Series C Preferred Stock and Series D Preferred Stock (the "Shares") in
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connection with the Merger and to receive the funds to which holders of Shares
shall become entitled pursuant to Section 3.1. Prior to the Effective Time,
Parent or Merger Sub shall make available to the Paying Agent the aggregate of
the Common Stock Merger Consideration, Series B Preferred Stock Merger
Consideration, Series C Preferred Stock Merger Consideration and Series D
Preferred Stock Merger Consideration payable with respect to Shares to be
converted pursuant to Section 3.1 ("Merger Consideration"). Such funds shall be
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held by the Paying Agent in a separate account established for the benefit of
holders of Shares and may be invested by the Paying Agent in obligations of or
guaranteed by the United States government or in other investment-grade debt
instruments pending payment thereof by the Paying Agent to the holders of the
Shares. Earnings on such funds shall be the sole and exclusive property of
Parent and the Surviving Corporation, and no part of such earnings shall accrue
to the benefit of holders of Shares.
(b) Exchange Procedures. Promptly after the Effective Time,
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Parent shall instruct the Paying Agent to mail to each holder of record of
Shares that were converted pursuant to Section 3.1 into the right to receive
Merger Consideration (i) a letter of transmittal, which shall specify that
delivery shall be effected, and risk of loss and title to the Shares shall pass,
only upon delivery to the Paying Agent of the certificates evidencing ownership
thereof (the "Certificates") and (ii) instructions for effecting the surrender
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of the Certificates in exchange for payment of the applicable Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the applicable Merger
Consideration for each Share formerly represented by such Certificate, and the
Certificate so surrendered shall forthwith be cancelled. If payment of the
Merger Consideration is to be made to a Person (as hereinafter defined) other
than the Person in whose name the surrendered Certificate is registered, it
shall be a condition precedent to the making of such payment that (x) the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and (y) the Person requesting such payment shall have
paid any transfer and other Taxes (as hereinafter defined) required by reason of
the payment of the Merger Consideration to a Person other than the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such Tax either has been paid or
is not required to be paid. Until surrendered as contemplated by this Section
3.3, each Certificate shall be deemed from and after the Effective Time to
represent only the right to receive the applicable Merger Consideration, without
any interest thereon.
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(c) Transfer Books; No Further Ownership Rights in Shares. At the
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Effective Time, the share records of the Company shall be closed and thereafter
there shall be no further registration of transfers of shares of Company Common
Stock or Company Preferred Stock on the records of the Company. From and after
the Effective Time, the holders of Certificates evidencing ownership of shares
of Company Common Stock or Company Preferred Stock outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such
shares, except as otherwise provided for in this Agreement or by applicable law.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article III.
(d) Termination of Fund; No Liability. At any time following six
---------------------------------
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) made available to the Paying Agent and not
disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look only to the Surviving Corporation (subject to applicable
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
Section 3.4 Adjustment of Merger Consideration. The parties understand
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and agree that the per-share Merger Consideration has been calculated based upon
the accuracy of the representation and warranty set forth in Section 4.3 and
that, in the event the number of outstanding Company shares or Company shares
issuable upon the conversion of securities or the exercise of options or other
agreements exceeds the amounts specifically set forth in Section 4.3 (including
as a result of any stock split, reverse stock split, stock dividend, including
any dividend or distribution of securities convertible into stock or stock
equivalent of the Company, recapitalization, or other like change occurring
after the date of this Agreement), the per-share Merger Consideration shall be
appropriately adjusted downward. The provisions of this Section 3.4 shall not,
however, affect the representation and warranty set forth in Section 4.3.
Section 3.5 Stock Options.
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(a) Prior to the Effective Time, the Company shall take all
action, including obtaining consents from holders of Options (as defined below),
7
necessary to cause each unexpired and unexercised stock option under the
PolyVision 2000 Nonemployee Director Stock Option Plan, the PolyVision 1999
Stock Option Plan, the PolyVision 1994 Stock Option Plan and the Company's 1995
Directors Stock Option Plan (collectively, the "Option Plans") or otherwise
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granted by the Company other than pursuant to any of the Option Plans (each an
"Option"), whether vested or unvested, to be canceled immediately prior to the
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Effective Time. In consideration for such cancellation, the holder of each such
Option shall receive at or as soon as reasonably practicable after the Effective
Time a cash payment from the Company equal to the product of (i) the total
number of shares of Company Common Stock subject to such Option immediately
prior to the Effective Time and (ii) the excess (if any) of (x) the Common Stock
Merger Consideration over (y) the exercise price per share subject to such
Option as in effect immediately prior to the Effective Time.
(b) The Company shall take all such steps as may be required to
cause any dispositions of Company Common Stock (including derivative securities
with respect to the Company Common Stock) resulting from the Transactions by
each officer or director of the Company who is subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to shares of Company Common Stock to be
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exempt under Rule 16b-3 promulgated under the Exchange Act. By adopting or
approving this Agreement, the Company Board of Directors shall be deemed to have
approved and authorized, and the shareholders of the Company shall be deemed to
have approved and ratified, each and every amendment to (and such other actions
in respect of) the Option Plans (and any other plan) and the agreements
evidencing awards under the Option Plans (and any other plan) as the officers of
the Company may deem necessary or appropriate to give effect to the provisions
of this Section 3.5.
Section 3.6 Warrants. From and after the Effective Time, each of the
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warrants of the Company to purchase Company Common Stock governed by the Warrant
Agreement, dated as of December 30, 1998, among the Company, Xxxx Xxxxxxx Mutual
Life Insurance Company, Xxxx Xxxxxxx Variable Life Insurance Company and Xxxxxxx
Mezzanine Partners, L.P. (collectively, the "Warrants") issued and outstanding
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immediately prior to the Effective Time shall, in accordance with the terms of
such Warrant, represent the right, upon exercise thereof and payment of the
aggregate Exercise Price (as defined in such Warrant), to receive in cash,
without interest, a payment equal to the product of (i) the number of shares of
Company Common Stock that would have been subject to issuance upon the exercise
of such Warrant, had such exercise occurred immediately prior to the Effective
Time and (ii) the Common Stock Merger Consideration, such cash payment to be
reduced by any required withholding of Taxes.
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Section 3.7 Convertible Note. From and after the Effective Time, the
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Company's $8,000,000 10% convertible subordinated promissory note, dated
November 20, 1998, payable to Wind Point Partners III, L.P. (the "Convertible
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Note") shall, in accordance with the terms of the Convertible Note, represent
----
the right, upon conversion thereof in accordance with its terms, to receive in
cash, without interest, a single lump sum cash payment equal to the product of
(i) the number of shares of Company Common Stock issuable upon the conversion of
such Convertible Note in accordance with its terms immediately prior to the
Effective Time and (ii) the Common Stock Merger Consideration, such cash payment
to be reduced by any required withholding of Taxes.
Section 3.8 Withholding Rights. Each of the Surviving Corporation and
------------------
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to this Article III such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares in respect of which the Surviving Corporation or Parent, as
the case may be, made such deduction and withholding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in a schedule prepared and signed by the Company
and delivered to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule"), the Company represents and warrants to Parent and Merger
-------------------
Sub as set forth below. Each exception set forth in the Company Disclosure
Schedule and each other response to this Agreement set forth in the Company
Disclosure Schedule shall be identified by reference to, or be grouped under a
heading referring to, a specific individual section, subsection, paragraph or
subparagraph of this Agreement and shall relate only to such section,
subsection, paragraph or subparagraph, as applicable, except to the extent that
one portion of the Company Disclosure Schedule specifically refers to another
portion thereof by specific cross reference.
Section 4.1 Organization. (a) The Company is a corporation duly
------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority and
all necessary governmental
9
licenses, authorizations, permits, consents and approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such licenses, authorizations,
permits, consents or approvals would not, individually or in the aggregate, have
a Company Material Adverse Effect. As used in this Agreement, "Company Material
----------------
Adverse Change" or "Company Material Adverse Effect" means any change, event or
-------------- -------------------------------
effect, as the case may be, that, individually or together with any other
change, event or effect, is or would reasonably be expected to be materially
adverse to (y) the business, operations, properties (including intangible
properties), condition (financial or otherwise), results of operations or assets
of the Company and the Company Subsidiaries, taken as a whole, or (z) the
Company's ability to consummate the Transactions; provided, however, that in
--------
determining whether there has occurred a Company Material Adverse Change or
Company Material Adverse Effect, any adverse change or effect principally
attributable to the breach by Parent or Merger Sub of any of their respective
representations, warranties, covenants or obligations under this Agreement shall
be disregarded.
(b) Except as set forth in Section 4.1(b) of the Company
Disclosure Schedule, the Company is duly qualified or licensed to do business
and in good standing in each jurisdiction where the Company's ownership or
leasing of property or the conduct of its business makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed to
do business and in good standing would not, individually or in the aggregate,
have a Company Material Adverse Effect. Each such jurisdiction is listed in
Section 4.1(b) of the Company Disclosure Schedule.
(c) Complete and correct copies of the certificate of
incorporation and by-laws of the Company, as amended to date (together, the
"Company Organizational Documents"), have been delivered to Parent prior to the
--------------------------------
date hereof. Such copies are complete and correct copies of such documents as in
effect on the date hereof. The Company is not in violation of any provision of
the Company Organizational Documents.
Section 4.2 Subsidiaries and Affiliates. (a) Section 4.2(a) of the
---------------------------
Company Disclosure Schedule sets forth the name, jurisdiction of incorporation
or organization and authorized and, as of the date of this Agreement, the
outstanding capital of each Company Subsidiary (as defined below). Other than
with respect to the Company Subsidiaries, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any Person or have
any direct or indirect equity or ownership interest in any business. All of the
outstanding capital stock (or similar equity interests) of each Company
Subsidiary is (or are) owned directly or indirectly by
10
the Company free and clear of any material liens, charges, security interests,
options, claims, mortgages, pledges, or other encumbrances and restrictions of
any nature whatsoever, and is (or are) validly issued, fully paid and
nonassessable, and there are no outstanding options, rights or agreements of any
kind relating to the issuance, sale or transfer of any capital stock (or similar
equity interests) of any such Company Subsidiary to any person except the
Company or another wholly-owned Company Subsidiary. As used in this Agreement,
the term "Company Subsidiary" means each Person which is a Subsidiary of the
------------------
Company; the term "Subsidiary" means, with respect to any party, any
----------
corporation, partnership, limited liability company or other organization or
entity, whether incorporated or unincorporated, of which (i) at least a majority
of the securities or other interests 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 organization or entity is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries or (ii) such party or any
other Subsidiary of such party is a general partner (excluding any such
partnership where such party or any Subsidiary of such party does not have a
majority of the voting interests in such partnership); and the term "Person"
means a natural person, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Entity (as defined below) or other entity or organization.
(b) Each Company Subsidiary (i) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (ii) has full power and authority and all
necessary governmental licenses, authorizations, permits, consents and approvals
to own, lease and operate its properties and to carry on its business as it is
now being conducted, and (iii) is duly qualified or licensed to do business as a
foreign Person and in good standing in each jurisdiction where such Company
Subsidiary's ownership or leasing of property or the conduct of its business
makes such qualification or license necessary, except where the failure to have
such licenses, authorizations, permits, consents or approvals, and the failure
to be so duly qualified or licensed and in good standing would not, individually
or in the aggregate, have a Company Material Adverse Effect. Each such
jurisdiction is listed in Section 4.2(b) of the Company Disclosure Schedule.
(c) Copies of the certificate of incorporation and by-laws or
similar organizational documents of each Company Subsidiary, as amended to date
(collectively, the "Subsidiary Organizational Documents"), have been delivered
-----------------------------------
or made available to Parent prior to the date hereof. Such copies are complete
and correct copies of such documents as in effect on the date hereof. No Company
Subsidiary is in material violation of any provision of its Subsidiary
Organizational Documents.
11
Section 4.3 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
40,000,000 shares of Company Common Stock and 1,500,000 shares of Company
Preferred Stock, of which, as the date hereof, (i) 14,168,527 shares of Company
Common Stock are issued and outstanding, (ii) no shares of Company Common Stock
are held in the treasury of the Company, (iii) 255,000 shares of Series B
Preferred Stock are issued and outstanding, all of which are owned of record by
the Shareholder, (iv) 140,000 shares of Series C Preferred Stock are issued and
outstanding, all of which are owned of record by the Shareholder, (v) 120,000
shares of Series D Preferred Stock are issued and outstanding, all of which are
owned of record in equal number by Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, the Xxxxx
Family Trust and Xxxxxxx X. Xxxxx, (vi) no shares of Company Preferred Stock are
held in the treasury of the Company, (vii) an aggregate of 2,519,372 shares of
Company Common Stock are reserved for future issuance pursuant to, or upon
exercise of the Options, (viii) 5,317,813 shares of Company Common Stock are
reserved for issuance upon conversion of the Series B Preferred Stock and
accrued dividends thereon, (ix) 4,311,375 shares of Common Stock are reserved
for issuance upon conversion of the Series C Preferred Stock and accrued
dividends thereon, (x) 1,744,333 shares of Company Common Stock are reserved for
issuance upon conversion of the Series D Preferred Stock and accrued dividends
thereon, (xi) 2,986,467 shares of Company Common Stock are reserved for issuance
pursuant to, or upon exercise of the Warrants, (xii) 3,499,988 shares of Company
Common Stock are reserved for issuance upon conversion of the Convertible Note
and (xiii) no shares of Company Common Stock are reserved for issuance under the
Company's 1995 Directors Stock Grant Plan. Section 4.3(a) of the Company
Disclosure Schedule sets forth (A) for each series of Company Preferred Stock,
(1) the number of shares outstanding, the per-share conversion price, the
aggregate dollar amount of accrued dividends with respect to such shares and the
number of shares of Company Common Stock into which such shares and accrued
dividends are convertible, in each case as of August 23, 2001 and (2) the name
and address of each record holder of shares and the number of shares owned of
record by each such holder as of August 23, 2001 (B) the number of shares of
Company Common Stock issuable upon conversion of the Convertible Note as of
August 23, 2001, (C) the number of shares of Company Common Stock issuable upon
exercise of the Warrants and (D) the number of shares issuable upon exercise of
all outstanding Options as of August 23, 2001.
(b) All of the outstanding shares of the Company's capital
stock are, and all shares which may be issued upon conversion of Company
Preferred Stock or the Convertible Note or upon the exercise of the Warrants or
the Options, when
12
issued in accordance with the terms of the applicable security, will be, duly
authorized, validly issued, fully paid and non-assessable. No indebtedness of
the Company or any Company Subsidiary having general voting rights (or
convertible into securities having such rights) ("Voting Debt") has been issued
-----------
or is outstanding. Except as disclosed in this Section 4.3 or as set forth in
Section 4.3(b) of the Company Disclosure Schedule, (i) there are no existing
options, warrants, calls, pre-emptive rights, subscriptions or other rights,
agreements, arrangements or commitments of any kind relating to the issued or
unissued capital stock of or other equity interests in the Company or any
Company Subsidiary obligating the Company or any Company Subsidiary to issue,
transfer, register or sell or cause to be issued, transferred, registered or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any Company Subsidiary or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any Company Subsidiary to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, and
(ii) there are no outstanding contractual obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
Company Common Stock or Company Preferred Stock or any of the capital stock of
or other equity interests in any Company Subsidiary or any affiliate of the
Company or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any Company Subsidiary or any other
entity.
(c) Section 4.3(c) of the Company Disclosure Schedule sets
forth, with respect to each existing Option, the name of the holder and the
number of shares issuable, and the per-share purchase price payable therefor,
upon the exercise of such Option. Each such Option has been granted to an
employee or director of the Company in the ordinary course of business
consistent with past practice and has been granted under one of the Option Plans
pursuant to an option award agreement substantially in the form attached to
Section 4.3(c) of the Company Disclosure Schedule.
(d) Except for the Shareholder's Agreement, there are no voting
trusts or other agreements or understandings to which the Company or any Company
Subsidiary is a party, or of which the Company is otherwise aware, with respect
to the voting of the capital stock of or other equity interests in the Company
or any of the Company Subsidiaries.
(e) Except as set forth in Section 4.3(e) of the Company
Disclosure Schedule, all dividends or distributions in respect of capital stock
of the Company or any Company Subsidiary that have been declared or authorized
have been paid in full.
13
Section 4.4 Authorization; Validity of Agreement; Company Action. The
----------------------------------------------------
Company has the requisite corporate power and authority to execute and deliver
this Agreement, and has the requisite corporate power and authority to perform
the Transactions. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, and the
consummation by the Company of the Transactions, have been duly and validly
authorized by the Company Board of Directors, and no other corporate action on
the part of the Company is necessary to authorize the execution and delivery by
the Company of this Agreement and the consummation by the Company of the
Transactions, other than the adoption of this Agreement by (i) the holders of
not less than 66-2/3% of the outstanding shares of Company Common Stock, Series
B Preferred Stock and Series C Preferred Stock, as of the Record Date, voting
together as a single class, (ii) holders of a majority of the outstanding shares
of Series B Preferred Stock, as of the Record Date, voting as a separate class,
and (iii) holders of a majority of the outstanding shares of Series C Preferred
Stock, as of the Record Date, voting as a separate class, in each case in
accordance with the Company Organizational Documents and Section 903 of the BCL.
This Agreement has been duly executed and delivered by the Company and, assuming
the due and valid authorization, execution and delivery hereof by Parent and
Merger Sub, is the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 4.5 Special Committee and Board Approvals. The Special
-------------------------------------
Committee, at a meeting duly called and held, has unanimously (a) determined
that this Agreement and the Merger are advisable, fair to and in the best
interests of the shareholders of the Company (other than the Shareholder) and
(b) voted to recommend to the Company Board of Directors that it adopt this
Agreement, approve the Shareholder's Agreement and the acquisition thereunder of
shares of the Company by Parent or Merger Sub, approve the Merger, approve the
other Transactions and submit this Agreement to a vote of the shareholders of
the Company, and none of the aforesaid actions by the Special Committee has been
amended, rescinded or modified, except to the extent contemplated by Section 6.3
after the date of this Agreement. The Company Board of Directors, at a meeting
duly called and held, has unanimously (x) determined that this Agreement and the
Merger are advisable, fair to and in the best interests of the shareholders of
the Company (other than the Shareholder), (y) duly and validly adopted this
Agreement, approved the Shareholder's Agreement and the acquisition thereunder
14
of shares of the Company by Parent or Merger Sub, approved the Merger and the
other Transactions and taken all corporate action required to be taken by the
Company Board of Directors to authorize the consummation of the Transactions and
(z) resolved to submit this Agreement to a vote of the shareholders of the
Company and recommend that the shareholders of the Company adopt this Agreement,
and none of the aforesaid actions by the Company Board of Directors has been
amended, rescinded or modified, except to the extent contemplated by Section 6.3
after the date of this Agreement. Such action taken by the Company Board of
Directors constitutes approval by the Company Board of Directors of the Merger
and the other Transactions, including the acquisition under the Shareholder's
Agreement of shares of the Company by Parent or Merger Sub and the other
transactions contemplated by the Shareholder's Agreement, for purposes of
Section 912 of the BCL, and, to the Company's knowledge, no other state takeover
statute or similar statute or regulation in any jurisdiction in which the
Company does business is applicable to the Transactions.
Section 4.6 Consents and Approvals; No Violations. Except as
-------------------------------------
disclosed in Section 4.6 of the Company Disclosure Schedule, none of the
execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement, or the consummation by the Company of the
Transactions or compliance by the Company with any of the provisions hereof will
(i) conflict with or result in any breach of any provision of the Company
Organizational Documents or Subsidiary Organizational Documents, state
securities or blue sky laws or the BCL, (ii) require any material filing by the
Company or any Company Subsidiary with, or permit, authorization, consent or
approval of, any court, arbitral tribunal, administrative agency or commission
or other governmental or other regulatory authority or agency, foreign or
domestic (a "Governmental Entity") (except for (A) the filing with the SEC of
-------------------
the proxy statement relating to the Special Meeting (as defined in Section
7.1(a)(i)) (such proxy statement, as amended or supplemented from time to time,
the "Proxy Statement") and such other statements and reports under the Exchange
---------------
Act as may be required in connection with this Agreement and the Transactions,
(B) any filings as may be required under the BCL in connection with the Merger,
(C) any filings as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and any applicable foreign
-------
competition, antitrust or investment laws, (D) any filings as may be required
with the American Stock Exchange in connection with this Agreement and the
Transactions and (E) any filings as may be required under state securities or
"blue sky" laws in connection with this Agreement and the Transactions), (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any material Company Agreement (as defined below) or (iv) violate
any
15
material order, writ, injunction, decree, statute, rule or regulation applicable
to the Company, any Company Subsidiary or any of their respective properties or
assets, except in the case of clauses (ii), (iii) and (iv), for any failures to
make such filings and failures to obtain such permits, authorizations, consents
or approvals and any such violations, breaches or defaults which would not,
individually or in the aggregate, impair in any material respect the ability of
the Company to perform its obligations under this Agreement or prevent or
materially delay the consummation by the Company of the Transactions. As used in
this Agreement, "Company Agreement" means any note, bond, mortgage, lien,
-----------------
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which any of
them or any of their respective properties or assets may be bound.
Section 4.7 Company SEC Documents and Financial Statements. The
----------------------------------------------
Company has filed with the Securities and Exchange Commission (the "SEC") all
---
forms, reports, schedules, statements, exhibits and other documents required to
be filed by it since December 31, 1997 under the Exchange Act or the Securities
Act of 1933, as amended (the "Securities Act") (collectively, the "Company SEC
-------------- -----------
Documents"). As of its filing date or, if amended, as of the date of the last
---------
such amendment, each Company SEC Document complied in all material respects with
the applicable requirements of the Exchange Act or the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC thereunder. As
of its filing date or, if amended, as of the date of the last such amendment,
each Company SEC Document filed pursuant to the Exchange Act did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Each Company SEC Document that is a
registration statement, as amended or supplemented, if applicable, filed
pursuant to the Securities Act, as of the date such registration statement or
amendment became effective and as of the date of any such supplement, 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. None of the Company Subsidiaries is required to file any forms,
reports or other documents with the SEC. All of the audited financial statements
and unaudited consolidated interim financial statements of the Company included
in the Company SEC Documents (collectively, the "Financial Statements") (i) have
--------------------
been prepared from, are in accordance with and accurately reflect the books and
records of the Company and its consolidated Subsidiaries, (ii) comply in all
material respects with the applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, (iii) have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the
----
16
periods involved (except as may be indicated therein or in the notes thereto and
except, in the case of the unaudited interim statements, as may be permitted
under Form 10-Q of the Exchange Act) and (iv) fairly present in all material
respects the consolidated financial position and the consolidated results of
operations and cash flows (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and any other adjustments
described therein which were not and are not expected, individually or in the
aggregate, to be material in amount) of the Company and its consolidated
Subsidiaries as of the times and for the periods referred to therein.
Section 4.8 Absence of Certain Changes. Except as (i) contemplated by
--------------------------
this Agreement or (ii) set forth in Section 4.8 of the Company Disclosure
Schedule, since December 31, 2000 (the "Balance Sheet Date"), each of the
------------------
Company and each Company Subsidiary has conducted its respective business only
in the ordinary course of business and in a manner consistent with past practice
in all material respects. Without limiting the generality of the foregoing, from
the Balance Sheet Date through the date of this Agreement, neither the Company
nor any Company Subsidiary has:
(a) suffered any Company Material Adverse Change;
(b) incurred any material liabilities or obligations
(absolute, accrued, contingent or otherwise) or increased (except for
non-material increases in the ordinary course of business and consistent with
past practice), or experienced any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves;
(c) paid, discharged or satisfied any material claim,
liability or obligation (whether absolute, accrued, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business consistent with past practice of liabilities and obligations reflected
or reserved against in the Company's audited balance sheet as of the Balance
Sheet Date or incurred in the ordinary course of business consistent with past
practice since the Balance Sheet Date;
(d) permitted or allowed any of its material properties or
assets (real, personal or mixed, tangible or intangible) to be subjected to any
Encumbrance (as defined below);
(e) written down the value of any inventory (including
write-downs by reason of shrinkage or xxxx-down) or written off as uncollectible
any notes or accounts receivable, except for write-downs and write-offs in the
ordinary course of business consistent with past practice;
17
(f) cancelled any material debts or waived any claims or
rights of substantial value;
(g) sold, transferred, or otherwise disposed of any of its
material properties or assets (real, personal or mixed, tangible or intangible),
except in the ordinary course of business consistent with past practice;
(h) disposed of or permitted to lapse any rights to the use
of any material Intellectual Property, or disposed of or disclosed to any person
other than representatives of Parent any material trade secret, formula,
process, know-how or other material Business Intellectual Property not
theretofore a matter of public knowledge;
(i) granted any general increase in the compensation or
benefits of officers or employees (including any such increase pursuant to any
bonus, pension, severance, profitsharing or other plan, agreement or commitment)
or any increase in the compensation or benefits payable or to become payable to
any officer or employee, except in the ordinary course of business consistent
with past practice;
(j) made any single capital expenditure or commitment in
excess of $100,000 for additions to property, plant, equipment or intangible
capital assets or made aggregate capital expenditures and commitments in excess
of $500,000 (on a consolidated basis) for additions to property, plant,
equipment or intangible capital assets;
(k) declared, paid or set aside for payment any dividend or
other distribution in respect of its capital stock, except, in the case of the
Company, for quarterly dividends (including any accrued and unpaid quarterly
dividends) to the extent provided for in, and in an amount not to exceed that
required by, the Company's certificate of incorporation with respect to the
Company Preferred Stock, provided that in no event shall any such dividend have
--------
accrued or become payable at a rate in excess of (A) $4.00 per share at an
annual rate in the case of the Series D Preferred Stock and (B) $4.50 per share
at an annual rate in the case of the Series B Preferred Stock and the Series C
Preferred Stock, and provided further that the record date for any such dividend
shall in no event be earlier than 10 days prior to the date on which such
dividend is payable, or redeemed, purchased or otherwise acquired, directly or
indirectly, any shares of capital stock or other securities of the Company or
any Company Subsidiary;
(l) made any change in any of the accounting methods used by
it materially affecting its assets, liabilities or business, except for such
changes
18
required by GAAP, or made or changed any express or deemed election for Tax (as
defined below) purposes or any offer to settle or compromise or any settlement
or compromise of any liability with respect to Taxes (as defined below);
(m) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement with,
any of its officers or directors or any affiliate or associate of any of its
officers or directors except for directors' fees, and compensation to officers
at rates not exceeding the rates of compensation paid during the year 2001; or
(n) agreed, whether in writing or otherwise, to take any
action described in this Section 4.8.
As used in this Agreement, the term "Encumbrance" means any lien, charge,
-----------
security interest, option, claim, mortgage, pledge, or other encumbrance or
restriction of any nature whatsoever, provided, however, that the term
Encumbrance shall not include any lien for Taxes not then due and payable,
statutory lien or lien not materially interfering with the use or value of the
property subject to such lien.
Section 4.9 No Undisclosed Liabilities; Indebtedness. Except (i) as
----------------------------------------
disclosed in the Financial Statements as of the Balance Sheet Date, (ii) as
disclosed in any Company SEC Documents dated or filed with the SEC since the
Balance Sheet Date or (iii) as disclosed in Section 4.9(a) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has any
material liabilities or obligations of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise. As of the date of
this Agreement, the Company had outstanding indebtedness, comprising all
liabilities of the Company and the Company Subsidiaries on a consolidated basis,
whether primary or secondary or absolute or contingent (including indebtedness
for borrowed money; indebtedness evidenced by notes, bonds, debentures or
similar instruments; capital lease obligations; and indebtedness secured by
liens on any assets of the Company or any Company Subsidiary), of $103,700,000.
Section 4.9(b) of the Company Disclosure Schedule sets forth, as of the date
hereof, the amount of the principal and unpaid interest outstanding under each
instrument evidencing any indebtedness which will accelerate or become due or
which provides for a right of redemption or repurchase on the part of the holder
of such indebtedness (with or without due notice or lapse of time) as a result
of this Agreement or the Transactions, except for any such instruments which
individually and in the aggregate, evidence an immaterial amount of such
indebtedness.
19
Section 4.10 Litigation. Except as set forth in Section 4.10 of the
----------
Company Disclosure Schedule:
(a) (i) there is no material action, suit, claim (including
any worker's compensation claim), litigation or other proceeding (including
arbitration proceeding or alternative dispute resolution proceeding) or
investigation pending or, to the knowledge of the Company, threatened against or
naming as a party thereto, and there is no action, suit, claim (including
arbitration proceeding or alternative dispute resolution proceeding) or
investigation materially affecting, (A) the Company or any Company Subsidiary or
(B) to the knowledge of the Company, any of the Company's or any Company
Subsidiary's current or former directors or officers, in such capacities, or any
other Person who may be entitled to indemnification by the Company or any
Company Subsidiary in connection therewith, and (ii) the Company does not know
or have any reason to know of any valid basis for any such suit, claim, action
or proceeding; and
(b) there is no outstanding or, to the knowledge of the
Company, threatened material order, judgment, injunction, award or decree of any
Governmental Entity against (i) the Company, any Company Subsidiary or any of
their respective properties, assets or businesses or (ii) to the knowledge of
the Company, any of the Company's or any Company Subsidiary's current or former
directors or officers, in such capacities, or any other Person who may be
entitled to indemnification by the Company or any Company Subsidiary in
connection therewith.
Section 4.11 Employee Benefit Plans; ERISA.
-----------------------------
(a) Section 4.11(a) of the Company Disclosure Schedule
contains a true and complete list of each employment, bonus, deferred
compensation, incentive compensation, restricted stock, performance unit,
phantom stock, dental, health, accident, life, accidental death and
dismemberment, fringe, cafeteria, scholarship, flexible spending arrangement or
reimbursement, group legal services, long term care, dependent care, vacation,
paid time off, sick leave, educational assistance, wellness, employee assistance
program, adoption assistance, vision, voluntary employees beneficiary
association, other insurance, stock purchase, stock option, stock appreciation
right or other stock-based incentive, severance, change-in-control, or
termination pay, hospitalization or other medical, disability, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement and each other employee
benefit plan, program, agreement or arrangement, sponsored, maintained or
contributed to or required to be contributed to by the Company or any Company
Subsidiary, or by any trade or business,
20
whether or not incorporated (an "ERISA Affiliate"), that together with the
---------------
Company or any Company Subsidiary would be deemed a "single employer" within the
meaning of section 4001(b)(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), for the benefit of any current or former employee or
-----
director of the Company, or any Company Subsidiary or any ERISA Affiliate,
whether formal or informal and with respect to which the Company or any ERISA
Affiliate may have any liabilities or obligations (the "Plans"). Section 4.11(a)
-----
of the Company Disclosure Schedule separately identifies each of the Plans that
is an "employee welfare benefit plan," or "employee pension benefit plan" as
such terms are defined, respectively, in sections 3(1) and 3(2) of ERISA (such
plans being hereinafter referred to collectively as the "ERISA Plans").
-----------
(b) Except as disclosed in Section 4.11(b) of the Company
Disclosure Schedule, with respect to each of the Plans, the Company has
heretofore delivered to Parent true and complete copies of each of the following
documents, as applicable:
(i) the Plan (including all amendments thereto) for
each written Plan or a written description of any Plan that is not
otherwise in writing;
(ii) the annual report on Internal Revenue Service
("IRS") Form 5500 Series, if required under ERISA or the Internal
---
Revenue Code of 1986, as amended (the "Code"), with respect to each
----
Plan for the last three plan years ending prior to the date of this
Agreement for which such a report was filed;
(iii) the actuarial report, if required under ERISA,
with respect to each ERISA Plan for the last three plan years ending
prior to the date of this Agreement;
(iv) the most recent Summary Plan Description,
together with all Summary of Material Modifications issued with respect
to such Summary Plan Description, if required under ERISA, with respect
to each ERISA Plan, and all other material employee communications
relating to each ERISA Plan;
(v) if the Plan is funded through a trust or any
other funding vehicle, the trust or other funding agreement (including
all amendments thereto) and the latest financial statements thereof, if
any;
21
(vi) all contracts relating to the Plans with respect to
which the Company, any Company Subsidiary or any ERISA Affiliate may
have any liability, including insurance contracts, investment
management agreements, subscription and participation agreements and
record keeping agreements; and
(vii) the most recent determination letter received from the
IRS with respect to each Plan that is intended to be qualified under
section 401(a) of the Code.
(c) No liability under Title IV of ERISA has been incurred by the
Company, any Company Subsidiary or any ERISA Affiliate since the effective date
of ERISA that has not been satisfied in full, and, to the Company's knowledge,
no condition exists that presents a material risk to the Company, any Company
Subsidiary or any ERISA Affiliate of incurring any liability under such Title,
other than liability for premiums due to the Pension Benefit Guaranty
Corporation ("PBGC"), which payments have been or will be made when due. Insofar
----
as the representation made in this Section 4.11(c) applies to section 4064, 4069
or 4204 of ERISA, it is made with respect to any employee benefit plan, program,
agreement or arrangement subject to Title IV of ERISA to which the Company, any
Company Subsidiary or any ERISA Affiliate made, or was required to make,
contributions during the six-year period ending on the last day of the most
recent plan year ended before the date of this Agreement. The PBGC has not
instituted proceedings to terminate any Plan and no condition exists that
presents a material risk that such proceedings will be instituted.
(d) With respect to each of the ERISA Plans that is subject to
Title IV of ERISA (a "Title IV Plan"), the present value of projected benefit
-------------
obligations under such Plan, as determined by the Plan's actuary based upon the
actuarial assumptions used for funding purposes in the most recent actuarial
report prepared by such Plan's actuary with respect to such Plan, did not, as of
its latest valuation date, exceed the then current value of the assets of such
Plan allocable to such projected benefit obligations.
(e) None of the Company, any Company Subsidiary, any ERISA
Affiliate, any of the Plans, any trust created thereunder, nor to the Company's
knowledge, any trustee or administrator thereof has engaged in a transaction or
has taken or failed to take any action in connection with which the Company, any
Company Subsidiary or any ERISA Affiliate could be subject to any material
liability for either a civil penalty assessed pursuant to section 409 or 502(i)
of ERISA or a tax imposed pursuant to section 4975, 4976 or 4980B of the Code.
22
(f) All contributions and premiums required to be paid under the
terms of each of the ERISA Plans and section 302 of ERISA and section 412 of the
Code, have, to the extent due, been paid in full or properly recorded on the
financial statements or records of the Company or a Company Subsidiary. No Plan
or any trust established thereunder has incurred any "accumulated funding
deficiency" (as defined in section 302 of ERISA or section 412 of the Code),
whether or not waived.
(g) With respect to any Title IV Plan that is a "multiemployer
pension plan," as such term is defined in section 3(37) of ERISA, (i) neither
the Company nor any ERISA Affiliate has, since May 11, 1987, made or suffered a
"complete withdrawal" or a "partial withdrawal," as such terms are respectively
defined in sections 4203 and 4205 of ERISA, (ii) no event has occurred that
presents a material risk of such a complete or partial withdrawal, and neither
Company nor any ERISA Affiliate has been assessed any withdrawal liability,
(iii) neither the Company nor any ERISA Affiliate has any contingent liability
under section 4204 of ERISA, (iv) no circumstances exist that present a material
risk that any such Plan will go into reorganization and (v) to the knowledge of
the Company, there is no unfunded liability with respect to the Company's
participation in any such Plan. The Company has no liability or other obligation
under any such Plan other than the liability to make contributions in respect of
benefit liabilities arising in the ordinary and ongoing course of business. If
any Title IV Plan is a "multiemployer pension plan," neither the Company nor any
ERISA Affiliate would have any aggregate withdrawal liability if a complete
withdrawal by the Company and the ERISA Affiliates were to occur under each such
Plan on the date hereof.
(h) No Plan is described in section 4063(a) of ERISA.
(i) Except as disclosed in Section 4.11(i) of the Company Disclosure
Schedule, each of the Plans has been operated and administered in all material
respects in accordance with applicable laws, including but not limited to ERISA
and the Code.
(j) Each of the ERISA Plans that is intended to be "qualified" within
the meaning of section 401(a) of the Code is so qualified or may be
retroactively amended within the remedial amendment period under Section 401(b)
of the Code to be so qualified. Except as disclosed in Section 4.11(j) of the
Company Disclosure Schedule, the Company has applied for and received a
currently effective determination letter from the IRS stating that it is so
qualified, and no event has occurred which would affect such qualified status.
With respect to each ERISA Plan set forth in Section 4.11(j)
23
of the Company Disclosure Schedule, the Company has set forth in Section 4.11(j)
of the Company Disclosure Schedule the reasons for any potential failure of such
ERISA Plan to be so qualified.
(k) Any Plan that is intended to satisfy the requirements of section
501(c)(9) of the Code has so satisfied such requirements.
(l) Except as disclosed in Section 4.11(l) of the Company Disclosure
Schedule, no amounts payable (individually or collectively and whether in cash,
capital stock of the Company or other property) under any of the Plans or any
other contract, agreement or arrangement with respect to which the Company or
any Company Subsidiary may have any liability will, as a direct or indirect
result of the Transactions, fail to be deductible for federal income tax
purposes by virtue of section 162(m) or section 280G of the Code or, to the
knowledge of the Company, section 162(a) of the Code.
(m) No Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees after retirement or other termination of service (other than (i)
coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, (ii) death benefits or retirement benefits under any "employee
pension plan," as that term is defined in section 3(2) of ERISA, (iii) benefits
the full cost of which is borne by the current or former employee (or his or her
beneficiary) or (iv) deferred compensation benefits accrued as liabilities on
the books of the Company or a Company Subsidiary).
(n) Except as disclosed in Section 4.11(n) of the Company Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not, either alone or in combination with any other event, (i) entitle any
current or former employee, officer, director or consultant of the Company, any
Company Subsidiary or any ERISA Affiliate to severance pay, unemployment
compensation or any other similar termination payment, or (ii) accelerate the
time of payment or vesting, or increase the amount of, or otherwise enhance, any
benefit due to any such employee, officer, director or consultant.
(o) There are no pending or, to the Company's knowledge, threatened
or anticipated claims by or on behalf of any Plan, by any employee or
beneficiary under any such Plan or otherwise involving any such Plan (other than
routine claims for benefits).
24
(p) Except as disclosed in Section 4.11(p) of the Company Disclosure
Schedule or as expressly permitted by this Agreement, since December 31, 2000,
there has not been (i) any acceleration, amendment or change of the period of
exercisability or vesting of any options or restricted stock, stock bonus or
other awards under any Option Plan (including any discretionary acceleration of
the exercise periods or vesting by the Company Board of Directors or any
committee thereof or any other persons administering an Option Plan) or
authorization of cash payments in exchange for any Options, restricted stock,
stock bonus or other awards granted under any of such Option Plans or (ii) any
adoption or amendment by the Company or any Company Subsidiary of any collective
bargaining agreement or Plan. None of the Company, any Company Subsidiary nor
any ERISA Affiliate has any formal plan or commitment to create any additional
Plan or modify or change any existing Plan that would affect any current or
former employee or director of the Company, any Company Subsidiary or any ERISA
Affiliate.
(q) Except with respect to changes required by law, there has been no
adoption of, amendment to, written interpretation or announcement (whether or
not written) by the Company or any Company Subsidiary relating to, or change in
employee participation or coverage under, any Plan which would increase
materially the expense of maintaining such Plan above the level of the expense
incurred in respect thereof for the fiscal year ended on December 31, 2000.
(r) Neither the Company nor any ERISA Affiliate is a party to any
agreement or understanding, whether written or unwritten, with the PBGC, the
IRS, the Department of Labor or the Health Care Financing Administration.
(s) No representations or communications, oral or written, with
respect to the participation, eligibility for benefits, vesting, benefit accrual
or coverage under any Plan have been made to employees, directors or agents (or
any of their representatives or beneficiaries) of the Company which are not in
accordance with the terms and conditions of the Plans.
(t) No "leased employee," as that term is defined in section 414(n)
of the Code, performs services for the Company or any ERISA Affiliate. Neither
the Company nor any ERISA Affiliate has (i) used the services or workers
provided by third party contract labor suppliers, temporary employees, "leased
employees," or individuals who have provided services as independent
contractors, and who may have become eligible to participate in the Plans or
(ii) used the services of individuals to an extent that would reasonably be
expected to result in the disqualification of any of the
25
Plans or the imposition of penalties or excise taxes with respect to the Plans
by the IRS, the Department of Labor, the PBGC, or any other Governmental Entity.
(u) With respect to each Plan established or maintained outside
of the United States of America primarily for benefit of employees of the
Company or any Company Subsidiary residing outside the United States of America
(a "Foreign Benefit Plan"): (i) all employer and employee contributions to each
--------------------
Foreign Benefit Plan required by law or by the terms of such Foreign Benefit
Plan have been made, or, if applicable, accrued, in accordance with normal
accounting practices; (ii) the fair market value of the assets of each funded
Foreign Benefit Plan, the liability of each insurer for any Foreign Benefit Plan
funded through insurance or the book reserve established for any Foreign Benefit
Plan, together with any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations, as of the Effective Time, with
respect to all current and former participants in such plan according to the
actuarial assumptions and valuations most recently used to determine employer
contributions to such Foreign Benefit Plan and no transaction contemplated by
this Agreement shall cause such assets or insurance obligations to be less than
such benefit obligations; and (iii) each Foreign Benefit Plan required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities.
Section 4.12 Taxes. Except as set forth in Section 4.12 of the Company
-----
Disclosure Schedule:
(a) the Company and each Company Subsidiary has duly and timely
filed (or there has been duly and timely filed on its behalf), or a valid
extension of time to file has been obtained, with the appropriate governmental
authorities all Tax Returns (as hereinafter defined) required to be filed by it
and all such Tax Returns are true, correct and complete in all material
respects, and (ii) all Taxes for which the Company or any Subsidiary is or may
be liable (whether or not shown on any Tax Return) in respect of periods (or
portions thereof) ending on or before the Effective Time have been timely paid,
or will be timely paid, or have been provided for on the Financial Statements in
accordance with GAAP. With respect to any period (or portion thereof) through
the Effective Time for which Taxes are not yet due or owing, the Company and
each Company Subsidiary has established due and sufficient reserves for the
payments of such Taxes in accordance with generally accepted accounting
principles, and such current reserves through the Effective Time are duly and
fully provided for in the Financial Statements;
26
(b) no deficiencies for Taxes have been claimed, proposed or
assessed by any taxing or other governmental authority against the Company or
any Company Subsidiary, and none of the Company or any Company Subsidiary has
received any notice, or otherwise has any knowledge, of any potential claim,
proposal or assessment against the Company or any Company Subsidiary for any
such deficiency for Taxes. There are no pending, or to the best of the Company's
or any Company Subsidiary's knowledge, threatened audits, investigations or
claims for or relating to any liability in respect of Taxes, and there are no
matters under discussion with respect to Taxes between the Company or any
Company Subsidiary on the one hand, and any governmental authority on the other
hand, that are likely to result in a material additional liability of the
Company or any Company Subsidiary for Taxes;
(c) there are no liens for Taxes upon any property or assets of
the Company or any Company Subsidiary, except for liens for Taxes not yet due
and payable, and for which adequate reserves have been provided for on the
Financial Statements in accordance with GAAP;
(d) the Company and each Company Subsidiary has duly and timely
withheld, collected, deposited and paid to the proper governmental authority all
Taxes required to have been withheld, collected, deposited or paid;
(e) no claim has ever been made to the Company or any Company
Subsidiary by an authority in a jurisdiction where the Company or Company
Subsidiary has not filed Tax Returns that the Company or such Company Subsidiary
is or may be subject to taxation by that jurisdiction;
(f) there are no consents, agreements, grants or requests for the
extension or waiver of any statutes of limitations applicable to any Taxes for
which the Company or any Company Subsidiary is or may be liable;
(g) there is no contract, plan or arrangement (written or
otherwise) covering any current or former employee or independent contractor of
the Company or any Company Subsidiary that, individually or in the aggregate,
could give rise to the payment of any amount that will not be deductible by the
Company or any Company Subsidiary under Sections 162(m) or 280G of the Code;
(h) other than an affiliated group (as defined under Section 1504
of the Code) of which the common parent was the Company, none of the Company or
any Company Subsidiary has (i) been a member of an affiliated group or (ii) any
liability for Taxes of any person (other than the Company or a Company
27
Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract or
otherwise;
(i) no power of attorney that is currently in force has been
granted with respect to the Company or any Company Subsidiary with respect to
any matters relating to Taxes;
(j) there are no written or oral tax sharing agreements,
contracts or other similar arrangements with respect to or involving the Company
or any Company Subsidiary;
(k) neither the Company nor any Company Subsidiary is, and during
the five-year period ending at the Effective Time has been, a "United States
Real Property Holding Corporation," as such term is defined in Section 897(c) of
the Code or the Treasury Regulations thereunder; and
(l) there are no deferred "intercompany items" (within the
meaning of Treasury Regulation Section 1.1502-13 with respect to transactions
among members of the affiliated group of corporations of which Company is the
parent, and no member of such affiliated group has an "excess loss account"
within the meaning of Treasury Regulation Section 1.1502-19 with respect to the
stock of another member of such affiliated group.
"Tax" or "Taxes" shall mean any and all taxes, charges, fees, duties,
--- -----
levies or other assessments, including all net income, gross income, gross
receipts, excise, stamp, real or personal property, ad valorem, sales,
withholding, estimated, social security, employment, unemployment, occupation,
use, service, service use, license, net worth, payroll, franchise,
environmental, severance, transfer, recording, escheat, or other taxes, duties,
assessments, or charges, whether computed on a separate, consolidated, unitary,
combined or any other basis, imposed by any governmental authority and any
interest, penalties, or additions to tax attributable thereto. "Tax Return"
----------
shall mean any report, return, document, declaration, information, return or
filing (including any related or supporting information and any amendments to
any of the foregoing) filed or required to be filed with respect to Taxes.
Section 4.13 Contracts. Section 4.13 of the Company Disclosure
---------
Schedule contains a true and complete list of all the following Company
Agreements which were not included or incorporated by reference as exhibits to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, filed with the SEC on April 2, 2001 (the "Company Form 10-K") (such
-----------------
Company Agreements,
28
together with any Company Agreements included or incorporated by reference as
exhibits to the Company Form 10-K, being referred to hereinafter as the "Listed
------
Company Agreements"):
------------------
(a) any lease of, or agreement to purchase or sell, any capital
assets accounted for as such by the Company or any Company Subsidiary and having
a book value of greater than $50,000;
(b) any union labor contract;
(c) any management, consulting, employment, personal service,
agency or other contracts or contracts providing for employment or rendition of
personal services and which (i) are in writing or oral and create other than an
at will employment relationship; or (ii) provide for any commission, bonus,
profit sharing, incentive, severance, retirement or similar compensation for
personal services;
(d) any agreement or note evidencing any indebtedness or any
guaranty of performance of another Person;
(e) any agreement with a dealer, distributor, sales agent,
supplier or representative or franchisee;
(f) any agreement for the storage, transportation, treatment or
disposal of any Hazardous Substances;
(g) any power of attorney (whether revocable or irrevocable)
given to any Person by the Company or any Company Subsidiary that is in force;
(h) any agreement in effect at the date hereof which purports to
limit in any respect the manner in which, or the localities in which, the
Company, any Company Subsidiary or any other entity is entitled to conduct all
or any portion of its business;
(i) any agreement restricting the right of the Company or any
Company Subsidiary to use or disclose any material information in its
possession;
(j) any partnership, joint venture or similar arrangement;
(k) any material agreement which cannot be terminated without a
penalty or requiring more than 60 days prior notice;
29
(l) any agreement or arrangement with any affiliate of the
Company or any Company Subsidiary (other than an employment agreement) which
involves annual payments to or from the Company or any Company Subsidiary in
excess of $10,000;
(m) any material agreement by which the Company or any Company
Subsidiary indemnifies or holds harmless any other Person;
(n) any material agreement pursuant to which a rebate, discount,
bonus, commission or other payment with respect to the sale of any product of
the Company or any Company Subsidiary is not shown in the Financial Statements
and will be payable after the Effective Time;
(o) any material agreement containing "change in control,"
"antitakeover" or similar provisions;
(p) any lease of real property or material personal property;
(q) any other agreement (other than purchase and sales orders in
the ordinary course of business in accordance with past practice) which involves
annual payments to or from the Company and the Company Subsidiaries of an amount
in excess of $200,000; and
(r) any other material Company Agreement.
True and complete copies of the written Listed Company Agreements and
descriptions of oral Listed Company Agreements, if any, including in each case
any amendment or supplement thereto, have previously been delivered to or made
available for review by Parent. Each of the Listed Company Agreements is in full
force and effect and constitutes the legal and binding obligation of the Company
and/or the Company Subsidiaries party thereto and, to the knowledge of the
Company, constitutes the legal and binding obligation of the other parties
thereto, except to the extent that any such Listed Company Agreement has
previously expired in accordance with its terms or the failure of any such
Listed Company Agreements to be binding and in full force and effect would not,
individually or in the aggregate, have a Company Material Adverse Effect. Except
for such breaches and defaults as would not, individually or in the aggregate,
have a Company Material Adverse Effect, there are no existing breaches or
defaults by the Company or any Company Subsidiary or, to the knowledge of the
Company, any other party to a Listed Company Agreement under any Listed Company
30
Agreement and, to the knowledge of the Company, no event has occurred which,
with the passage of time or the giving of notice or both, would reasonably be
expected to constitute such a breach or default.
Section 4.14 Real and Personal Property. (a) Except as disclosed in
--------------------------
Section 4.14(a) of the Company Disclosure Schedule, each of the Company and the
Company Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material properties and assets, free and clear of all
Encumbrances.
(b) Section 4.14(b) of the Company Disclosure Schedule sets forth
(i) a true and complete list of all real property owned by the Company or any
Company Subsidiary and (ii) a true and complete list of all real property leased
by the Company or any Company Subsidiary (collectively, the "Real Property").
-------------
Neither the Company nor any Company Subsidiary is a party to any lease,
assignment or similar arrangement under which the Company or any Company
Subsidiary is a lessor, assignor or otherwise makes available for use by any
third party any portion of the Real Property.
(c) Each of the Company and the Company Subsidiaries is in
compliance in all material respects with the terms of all Real Property leases
to which it is a party.
(d) Since December 31, 1997, neither the Company nor any Company
Subsidiary has received written notice of any material proceedings, claims or
disputes affecting any Real Property, and neither the Company nor any Company
Subsidiary has received written notice in the past three years, or any written
notice which is currently unresolved, from any Governmental Entity having
jurisdiction over any Real Property of any threatened suspension, modification
or cancellation of certificates of occupancy or permits required under
applicable law to occupy and use any material Real Property assets as presently
occupied or used, the basis of which has not been cured.
(e) To the knowledge of the Company, the Company's and/or the
Company Subsidiaries' use and operation of the Real Property as presently
conducted is not dependent on a nonconforming use or other waiver from a
Governmental Entity, the absence of which would materially limit the use of the
Real Property or the operations thereon as presently conducted (unless such
waiver has in fact been granted).
Section 4.15 Intellectual Property. (a) As used herein, the term
---------------------
"Intellectual Property" means all: (i) trademarks, service marks, trade names,
---------------------
trade
31
dress, Internet domain names, designs, logos, slogans and general intangibles of
like nature, together with goodwill, registrations and applications for any of
the foregoing (collectively, "Trademarks"); (ii) issued patents and pending
----------
patent applications, patent disclosures and any divisions, continuations,
continuations-in-part, reissues, re-examinations and extensions thereof, and any
counterparts claiming priority therefrom for any designs, inventions, processes,
machines, manufacture or composition of matter, models and methodologies
(collectively, "Patents"); (iii) any issued registrations and pending
-------
applications for mask works or for copyrights, including copyrights in drawings,
plans, specifications, designs, and content contained on any Internet web site
operated by the Company or a Company Subsidiary (collectively, "Copyrights");
----------
(iv) computer programs, including any and all software implementations of
algorithms, models and methodologies whether in source code or object code form,
databases and compilations, including any and all data and collections of data,
all documentation, including user manuals and training materials, related to any
of the foregoing and the content and information contained on any Internet web
site (collectively, "Software"); (v) trade secrets and confidential information,
--------
which may include know-how, formulae, algorithms, methodologies and customer
and/or vendor data (such confidential items, collectively "Trade Secrets"); and
-------------
(vi) any licenses to use any of the foregoing. "Business Intellectual Property"
------------------------------
means the Intellectual Property used, or held for use, in the business of the
Company or any Company Subsidiary as currently conducted, or as presently
contemplated to be conducted.
(b) Section 4.15(b) of the Company Disclosure Schedule sets
forth, for all Business Intellectual Property owned by the Company or any
Company Subsidiary, a complete and accurate list of all U.S., state and foreign:
(i) Patents; (ii) Trademarks and material unregistered trademarks and service
marks; and (iii) registered Copyrights and material unregistered Copyrights.
Except as otherwise disclosed in Section 4.15(b) of the Company Disclosure
Schedule, the Company or a Company Subsidiary currently is listed in the records
of the appropriate U.S., state or foreign agency as the record owner for each
application and registration listed on Section 4.15(b) of the Company Disclosure
Schedule.
(c) Section 4.15(c) of the Company Disclosure Schedule sets forth
a complete and accurate list of all material Software which is licensed, leased
or otherwise used by the Company or any Company Subsidiary, and all material
Software which is owned by the Company or any Company Subsidiary ("Proprietary
-----------
Software"), and identifies which material Software is owned, licensed, leased,
--------
or otherwise used, as the case may be.
32
(d) Section 4.15(d) of the Company Disclosure Schedule sets forth
a complete and accurate list of all material agreements granting or obtaining
any right to use or practice any rights under any Business Intellectual
Property, to which the Company or any Company Subsidiary is a party or otherwise
bound, as licensee or licensor thereunder, including license agreements,
settlement agreements and covenants not to xxx (collectively, the "IP License
----------
Agreements").
----------
(e) Except as set forth in Section 4.15(e) of the Company
Disclosure Schedule:
(i) the Company or a Company Subsidiary owns, or possesses
adequate licenses or other legally enforceable rights to use, all Business
Intellectual Property, free and clear of all Encumbrances;
(ii) the Business Intellectual Property constitutes all the
Intellectual Property necessary to conduct the business of the Company and
the Company Subsidiaries as currently conducted on the date hereof,
including any research and development work on products or Software
started prior to the date hereof;
(iii) any Trademarks, Patents and Copyrights owned by the
Company or any Company Subsidiary and which are the subject of national
registrations have been duly maintained, are valid and subsisting, in full
force and effect and have not been cancelled, expired or abandoned;
(iv) no claims have been asserted, or, to the knowledge of
the Company, threatened, by any Person against the Company or any Company
Subsidiary related to the use of any Business Intellectual Property in the
conduct of the business of Company or a Company Subsidiary or challenging
or questioning the ownership, validity or enforceability of such Business
Intellectual Property;
(v) to the Company's knowledge, the use of the Business
Intellectual Property in the conduct of the business of Company and the
Company Subsidiaries, as such business is currently conducted, does not
infringe, misappropriate or otherwise violate any Intellectual Property
rights of any Person;
33
(vi) to the Company's knowledge, no third party is
infringing, misappropriating or otherwise violating any Business
Intellectual Property owned by the Company or any Company Subsidiary;
(vii) neither the Company nor any Company Subsidiary has
licensed or sublicensed its rights in any Business Intellectual Property,
or received or been granted any such rights, other than pursuant to the IP
License Agreements;
(viii) the IP License Agreements are binding obligations of
the Company or a Company Subsidiary, and there exists no event or
condition which will result in a violation or breach of, or constitute a
default by the Company or, to the knowledge of the Company, the other
party thereto, under any such IP License Agreement;
(ix) the Company and the Company Subsidiaries take all
reasonable measures to protect the confidentiality of their respective
Trade Secrets, including requiring third parties having access thereto to
execute written nondisclosure agreements. To the Company's knowledge, no
Trade Secret of the Company or any Company Subsidiary has been disclosed
or authorized to be disclosed to any third party, except pursuant to a
written non-disclosure agreement;
(x) the consummation of the Transactions will not result
in the loss or impairment of the Company's or any Company Subsidiary's
rights to own or use any of the Business Intellectual Property, nor will
such consummation require the consent of any third party in respect of any
Intellectual Property; and
(xi) all Proprietary Software set forth in Section 4.15(c)
of the Company Disclosure Schedule, was either developed (a) by employees
of the Company or a Company Subsidiary within the scope of their
employment; (b) by independent contractors as "works-made-for-hire," as
that term is defined under Section 101 of the United States Copyright Act,
17 U.S.C. ss. 101, pursuant to written agreement; or (c) by third parties
who have assigned all of their rights therein to the Company pursuant to
written agreement. No former or present employees, officers or directors
of the Company retain any rights of ownership or use of the Proprietary
Software, and no employees or third parties who have developed or
participated in the development of the Proprietary Software have any
claims to any rights therein.
34
Section 4.16 Related Party Transactions. Since December 31, 2000 there
--------------------------
have been no transactions, agreements, arrangements or understandings between
the Company or any Company Subsidiary, on the one hand, and their respective
affiliates, on the other hand, that would be required to be disclosed under Item
404 of Regulation S-K under the Securities Act (except for amounts due as normal
salaries and bonuses and in reimbursements of ordinary expenses). Except as set
forth in Section 4.16 of the Company Disclosure Schedule, no officer or director
of the Company or of any Company Subsidiary, no beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of Company Preferred Stock and, to
the Company's knowledge, no beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of more than 5% of the outstanding shares of Company
Common Stock (i) owns, directly or indirectly, in whole or in part, any Business
Intellectual Property or (ii) is a party to any Listed Company Agreement.
Section 4.17 Labor Matters. Except as set forth in Section 4.17 of the
-------------
Company Disclosure Schedule:
(a) There are no material disputes or any grievances or
arbitrations pending or, to the knowledge of the Company, threatened between the
Company or any Company Subsidiary, on the one hand, and any of their respective
employees or labor organizations representing such employees, on the other hand.
Since December 31, 2000, to the knowledge of the Company, there has been no
labor union or other employee organization organizing any employees of the
Company or any Company Subsidiary into one or more collective bargaining units.
Neither the Company nor any Company Subsidiary is a party to or bound by any
collective bargaining agreements or any other agreements with a labor union,
organization or works council.
(b) The Company and all Company Subsidiaries are in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment, health and safety, and wages and
hours.
(c) To the Company's knowledge, neither the Company nor any
Company Subsidiary has engaged in an unfair labor practice as defined in the
National Labor Relations Act, and there is no unfair labor practice complaint or
other allegation of labor law violation against the Company or any Company
Subsidiary pending before the National Labor Relations Board or any other
Governmental Entity.
35
(d) Since December 31, 2000, there has been no and there is no
actual or, to the knowledge of the Company, threatened labor dispute, strike,
slowdown or work stoppage against the Company or any Company Subsidiary.
(e) Since December 31, 2000, neither the Company nor any Company
Subsidiary has received notice of any actual or threatened investigation, charge
or complaint against the Company or any Company Subsidiary with respect to
employees pending before the Equal Employment Opportunity Commission or any
other Governmental Entity regarding an unlawful employment practice.
(f) Since December 31, 2000, (i) neither the Company nor any
Company Subsidiary has effectuated a "plant closing," as defined in the Worker
Adjustment and Retraining Notification Act (the "WARN Act"), affecting any site
--------
of employment or one or more facilities or operating units within any site of
employment or facility, (ii) there has not occurred a "mass layoff" (as defined
in the WARN Act) affecting any site of employment or facility of either the
Company or any Company Subsidiary and (iii) neither the Company nor any Company
Subsidiary has engaged in layoffs or employment terminations sufficient in
number to trigger application of the WARN Act or any similar state, local or
foreign law or regulation.
Section 4.18 Compliance with Laws. Except as set forth in Section 4.18
--------------------
of the Company Disclosure Schedule, since December 31, 1997, the Company and the
Company Subsidiaries have complied in a timely manner and in all material
respects with all laws, rules and regulations, ordinances, judgments, decrees,
orders, writs and injunctions of all Governmental Entities which materially
affect the business, properties or assets of the Company and the Company
Subsidiaries. Since December 31, 1997, no notice, charge, claim, action or
assertion has been received by the Company or any Company Subsidiary or has been
filed, commenced or, to the knowledge of the Company, threatened against the
Company or any Company Subsidiary alleging any violation of any of the
foregoing. All material licenses, permits and approvals required to be held or
obtained by the Company or any Company Subsidiary under such laws, rules and
regulations are in full force and effect.
Section 4.19 Assets. The assets and properties of the Company and the
------
Company Subsidiaries, considered as a whole, constitute all of the material
assets and properties which are reasonably required for the business and
operations of the Company and the Company Subsidiaries as presently conducted.
All of the material property, plant and equipment of the Company and each
Company Subsidiary has in all material respects been maintained in reasonable
operating condition and repair, ordinary wear and tear excepted, and is in all
material respects sufficient to permit the Company
36
and each Company Subsidiary to conduct their operations in the ordinary course
of business in a manner consistent with past practice.
Section 4.20 Customers and Suppliers. Since December 31, 2000, there
-----------------------
has been no termination, cancellation or material curtailment of the business
relationship of the Company or any Company Subsidiary with any customer or
supplier or group of affiliated customers or suppliers which, individually or in
the aggregate, represents in excess of 10% of the Company's consolidated
revenues or gross purchase orders, as appropriate, nor has the Company or any
Company Subsidiary received any notice of intent to so terminate, cancel or
materially curtail.
Section 4.21 Environmental Matters. (a) The following terms shall have
---------------------
the following meanings for the purposes of this Agreement:
(i) "Environmental Laws" shall mean all foreign,
------------------
Federal, interstate, state and local laws, regulations, rules and
ordinances relating to pollution or protection of the environment or human
health and safety, including laws, regulations, rules and ordinances
relating to emissions, discharges, releases or threatened releases of
Hazardous Substances into the environment or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, release,
transport or handling of Hazardous Substances; all laws and regulations
with regard to record-keeping, notification, disclosure and reporting
requirements respecting Hazardous Substances; all laws relating to
endangered or threatened species of fish, wildlife and plants and the
management or use of natural resources; and common law to the extent it
relates to or applies to exposure to or impact of Hazardous Substances on
persons or property.
(ii) "Environmental Claim" shall mean any claim, action,
-------------------
cause of action, investigation or notice (written or oral) by any person or
entity alleging potential liability (including potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damages, personal injuries or penalties) arising
out of, based on or resulting from (a) the presence, or release into the
environment, of an Hazardous Substance at any location, whether or not
owned or operated by the Company or any Company Subsidiary or (b)
circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
(iii) "Hazardous Substances" shall mean chemicals,
--------------------
pollutants, contaminants, wastes, toxic substances, hazardous substances,
radioactive materials, asbestos, petroleum and petroleum products.
37
(b) Except as set forth in Section 4.21 of the Company Disclosure
Schedule:
(i) The Company and each Company Subsidiary is in full
compliance with all applicable Environmental Laws, which compliance
includes, but is not limited to, the possession by the Company and each
Company Subsidiary of all permits and governmental authorizations required
under applicable Environmental Laws, and compliance with the terms and
conditions thereof. Neither the Company nor any Company Subsidiary has
received any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the
Company or any Company Subsidiary is not in such full compliance, and, to
the best knowledge of the Company and each Company Subsidiary after due
inquiry, there are no circumstances that may prevent or interfere with such
full compliance in the future. All permits and other governmental
authorizations currently held by the Company or any Company Subsidiary
pursuant to the Environmental Laws are identified in Section 4.21 of the
Company Disclosure Schedule.
(ii) There is no Environmental Claim pending or
threatened against the Company or any of the Company Subsidiaries or, to
the best knowledge of the Company and the Company Subsidiaries after due
inquiry, against any person or entity whose liability for any Environmental
Claim the Company or any of the Company Subsidiaries has or may have
retained or assumed either contractually or by operation of law.
(iii) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including the release,
emission, discharge, presence or disposal of any Hazardous Substance that
could form the basis of any Environmental Claim against the Company or any
of the Company Subsidiaries or, to the best knowledge of the Company and
the Company Subsidiaries after due inquiry, against any person or entity
whose liability for any Environmental Claim the Company or any of the
Company Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(iv) Without in any way limiting the generality of the
foregoing, (A) all on-site and off-site locations where the Company or any
of the Company Subsidiaries has stored, disposed or arranged for the
disposal of Hazardous Substances are identified in Section 4.21 of the
Company Disclosure
38
Schedule, (B) all underground storage tanks, and the capacity and contents
of such tanks, located on property owned, operated, or leased by the
Company or any of the Company Subsidiaries are identified in Section 4.21
of the Company Disclosure Schedule, (C) except as set forth in Section 4.21
of the Company Disclosure Schedule, there is no asbestos contained in or
forming part of any building, building component, structure or office space
owned or leased by the Company or any of the Company Subsidiaries, (D)
except as set forth in Section 4.21 of the Company Disclosure Schedule, no
polychlorinated biphenyls (PCB's) are used or stored at any property owned
or leased by the Company or any of the Company Subsidiaries, (E) except as
set forth in Section 4.21 of the Company Disclosure Schedule, all
underground storage tanks owned, operated, or leased by the Company or any
of the Company Subsidiaries and which are subject to regulation under the
federal Resource Conservation and Recovery Act (or equivalent state or
local law regulating underground storage tanks) meet the technical
standards prescribed at Title 40 Code of Federal Regulations Part 280 which
became effective December 22, 1998 (or any applicable state or local law
requirements which are more stringent than such technical standards or
which became effective before such date), and (F) all properties formerly
owned or operated by the Company or any of the Company Subsidiaries, or any
subsidiary, affiliate, or predecessor thereof, are identified in Section
4.21 of the Company Disclosure Schedule.
(v) Neither the Company nor any Company Subsidiary has
received any request for information from any Person, including but not
limited to any Governmental Entity, related to liability under or
compliance with any applicable Environmental Law, except for such matters
as would not, if they matured into a claim against the Company or any
Company Subsidiary, individually or in the aggregate, have a Company
Material Adverse Effect.
(vi) With respect to the real property that is currently
owned, leased or operated by the Company or any Company Subsidiary, there
have been no spills, discharges or releases (as such term is defined by the
Comprehensive Environmental Response, Compensation and Liability Act, 42,
U.S.C. 9601, et seq.) of Hazardous Substances or any other contaminant or
pollutant on or underneath any of such real property that would,
individually or in the aggregate, have a Company Material Adverse Effect.
(vii) With respect to real property that was formerly
owned, leased or operated by the Company or any Company Subsidiary or any
of their predecessors in interest, there were no spills, discharges or
releases (as
39
such term is defined by the Comprehensive Environmental Response,
Compensation and Liability Act, 42, U.S.C. 9601, et seq.) of Hazardous
Substances or any other contaminant or pollutant on or underneath any of
such real property during or prior to the Company's or any Company
Subsidiary's ownership or operation of such real property that would,
individually or in the aggregate, result in a Company Material Adverse
Effect.
(viii) Neither the Company nor any Company Subsidiary has
entered into any written agreement or incurred any material legal or
monetary obligation to pay to, reimburse, guarantee, pledge, defend,
indemnify or hold harmless any Person from or against any liabilities or
costs arising out of or related to the generation, manufacture, use,
transportation or disposal of Hazardous Substances, or otherwise arising in
connection with or under Environmental Laws, other than in each case
exceptions which would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(ix) Neither the Company nor any Company Subsidiary has
disposed or arranged for the disposal of Hazardous Substances (or any waste
or substance containing Hazardous Substances) at any location that is: (i)
listed on the Federal National Priorities List ("NPL") or identified on the
---
Comprehensive Environmental Response, Compensation, and Liability
Information System ("CERCLIS"), each established pursuant to the
-------
Comprehensive Environmental Response, Compensation and Liability Act, 42,
U.S.C. 9601, et seq.; (ii) listed on any state or foreign list of hazardous
waste sites that is analogous to the NPL or CERCLIS; or (iii) has been
subject to environmental investigation or remediation, other than, in each
case, exceptions which would not, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 4.22 Insurance. All material policies of fire, liability,
---------
workmen's compensation and other forms of insurance owned or held by the Company
and the Company Subsidiaries are with reputable insurance carriers, provide full
and adequate coverage for all normal risks incident to the business of the
Company and the Company Subsidiaries and their respective businesses and assets,
and are in character and amount at least substantially equivalent to that
carried by Persons engaged in similar businesses and subject to the same or
similar perils or hazards. The Company and the Company Subsidiaries have made
all payments required to maintain such policies in full force and effect.
Neither the Company nor any Company Subsidiary has received notice of default
under any such policies or received notice of any pending or threatened
40
termination, cancellation, material coverage limitation or reduction or material
increase in premium with respect to any such policies.
Section 4.23 Proxy Statement. The Proxy Statement will comply in all
---------------
material respects with the provisions of applicable federal securities laws and,
on the date first published or sent or given to the Company's shareholders and
at the time of any meeting of the Company's shareholders to be held in
connection with the Merger, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, except that the
Company makes no representation or warranty with respect to information
furnished by Parent or Merger Sub in writing for inclusion in the Proxy
Statement.
Section 4.24 Opinion of Financial Advisor. The Special Committee and
----------------------------
the Company Board of Directors have received the written opinion, dated August
23, 2001, of Deutsche Banc Alex. Xxxxx Inc., financial advisor to the Special
Committee (the "Financial Advisor"), to the effect that, as of such date, the
-----------------
consideration to be received in the Merger by the Company's shareholders other
than the Shareholder is fair to such shareholders from a financial point of
view, and a copy of such opinion shall be delivered to Parent and Merger Sub
promptly after the date hereof. The Company has been authorized by the Financial
Advisor to include such opinion in its entirety in the Proxy Statement.
Section 4.25 Brokers. No broker, investment banker, financial advisor
-------
or other person, other than the Financial Advisor, the fees and expenses of
which will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Company. True
and correct copies of all agreements between the Company and the Financial
Advisor, including any fee arrangements, are included in Section 4.25 of the
Company Disclosure Schedule.
41
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
Section 5.1 Organization. Each of Parent and Merger Sub is a
------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority and all necessary governmental licenses, authorizations, permits,
consents and approvals to own, lease and operate its properties and to carry on
its business as is now being conducted, except where the failure to be so
organized and existing or to have such power, authority, and governmental
licenses, authorizations, permits, consents and approvals would not reasonably
be expected to, individually or in the aggregate, impair in any material respect
the ability of each of Parent and Merger Sub, as the case may be, to perform its
obligations under this Agreement, or prevent or materially delay the
consummation by Parent or Merger Sub of any of the Transactions (a "Parent
------
Material Adverse Affect").
-----------------------
Section 5.2 Authorization; Validity of Agreement; Necessary Action.
------------------------------------------------------
Each of Parent and Merger Sub has full corporate power and authority to execute
and deliver this Agreement and to consummate the Transactions. The execution,
delivery and performance by Parent and Merger Sub of this Agreement and the
consummation of the Transactions have been duly authorized by the boards of
directors of each of Parent and Merger Sub and by Parent as the sole shareholder
of Merger Sub, and no other corporate authority or approval on the part of
Parent or Merger Sub is necessary to authorize the execution and delivery by
Parent and Merger Sub of this Agreement and the consummation of the
Transactions. This Agreement has been duly executed and delivered by Parent and
Merger Sub and, assuming due and valid authorization, execution and delivery
hereof by the Company, is the valid and binding obligation of each of Parent and
Merger Sub enforceable against each of them in accordance with its terms, except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 5.3 Consents and Approvals; No Violations. None of the
-------------------------------------
execution, delivery or performance of this Agreement by Parent or Merger Sub,
the
42
consummation by Parent or Merger Sub of the Transactions, or compliance by
Parent or Merger Sub with any of the provisions hereof will (a) conflict with or
result in any breach of any provision of the articles of incorporation or bylaws
of Parent or the certificate of incorporation or by-laws of Merger Sub, (b)
require any material filing by Parent or Merger Sub with, or permit,
authorization, consent or approval of, any Governmental Entity (except for (i)
compliance with any applicable requirements of the Exchange Act, (ii) any
filings as may be required under the BCL in connection with the Transactions,
(iii) any filings, permits, authorizations, consents and approvals as may be
required under the HSR Act and any applicable competition, antitrust or
investment laws of foreign jurisdictions, (iv) any filings with and notices to
The New York Stock Exchange, Inc. as may be required in connection with this
Agreement and the Transactions and (v) such filings and approvals as may be
required by any applicable state securities, blue sky or takeover laws in
connection with this Agreement and the Transactions), (c) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any material note, bond, mortgage, lien, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent or Merger Sub is a
party or by which either of them or any of their respective properties or assets
may be bound or (d) violate any material order, writ, injunction, decree,
statute, rule or regulation applicable to Parent, any of its Subsidiaries, or
any of their respective properties or assets, except in the case of clauses (b),
(c) and (d) for any failures to make such filings and failures to obtain such
permits, authorizations, consents or approvals and any such violations, breaches
or defaults which would not reasonably be expected to, individually or in the
aggregate, impair in any material respect the ability of each of Parent and
Merger Sub, as the case may be, to perform its obligations under this Agreement,
or prevent or materially delay the consummation by Parent or Merger Sub of the
Transactions.
Section 5.4 Information in the Proxy Statement. None of the
----------------------------------
information supplied by Parent or Merger Sub in writing (including
electronically) expressly for inclusion in the Proxy Statement will, at the date
mailed to shareholders and at the time of the Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Section 5.5 Brokers. No broker, investment banker, financial advisor
-------
or other Person, other than Xxxxxxx Sachs & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar
43
fee or commission in connection with the Transactions based upon arrangements
made by or on behalf of Parent or Merger Sub.
Section 5.6 Financing. Either Parent or Merger Sub has available and
---------
has reserved, or has received written commitments from third-party lenders to
obtain, sufficient funds to consummate the Transactions, including the payment
in full of (a) the Merger Consideration, (b) the amounts payable under Sections
3.5, 3.6 and 3.7 hereof and (c) all indebtedness (including principal, accrued
interest, prepayment fees and other charges) of the Company outstanding on the
date of this Agreement.
Section 5.7 Interim Operations of Merger Sub. Merger Sub was formed
--------------------------------
solely for the purpose of engaging in the Merger and the other Transactions and
has engaged in no business other than in connection with the Merger and the
other Transactions. Merger Sub is a wholly-owned Subsidiary of Parent.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business of the Company. The Company covenants
----------------------------------
and agrees that, except (i) as expressly contemplated by this Agreement or (ii)
as Parent may consent in writing during the period from the date of this
Agreement to the Effective Time:
(a) the business of the Company and the Company Subsidiaries
shall be conducted only in the ordinary course of business and in a manner
consistent with past practice, and each of the Company and the Company
Subsidiaries shall use its reasonable efforts to preserve its present business
organization intact and maintain good relations with customers, suppliers,
employees, independent contractors, dealers, distributors and other Persons with
whom the Company or any Company Subsidiary has significant business relations,
in each case consistent with past practice;
(b) the Company shall not, directly or indirectly, (i) except
(A) upon exercise of the Options pursuant to the Option Plans outstanding on the
date hereof, (B) for the issuance of shares of Company Common Stock upon
exercise of any Warrant pursuant to the terms of such Warrant, (C) for the
issuance of shares of Company Common Stock upon conversion of the Convertible
Note in accordance with the terms thereof and (D) for the issuance of shares of
Company Common Stock upon conversion of Company Preferred Stock outstanding on
the date hereof pursuant to the
44
Company Organizational Documents, issue, sell, transfer or pledge or agree to
sell, transfer or pledge any treasury shares of the Company or any capital stock
of any Company Subsidiary beneficially owned by it, (ii) amend its certificate
of incorporation or by-laws or permit the amendment of any Subsidiary
Organizational Documents or (iii) split, combine or reclassify any outstanding
shares of the Company;
(c) neither the Company nor any Company Subsidiary shall: (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock, except, in the case of the
Company, for quarterly dividends (including any accrued and unpaid quarterly
dividends) to the extent provided for in, and in an amount not to exceed that
required by, the Company's certificate of incorporation with respect to the
Company Preferred Stock, provided that in no event shall any such dividend
--------
accrue or have accrued or become payable at a rate in excess of (A) $4.00 per
share at an annual rate in the case of the Series D Preferred Stock and (B)
$4.50 per share at an annual rate in the case of the Series B Preferred Stock
and the Series C Preferred Stock, and provided further that the record date for
----------------
any such dividend shall in no event be earlier than 10 days prior to the date on
which such dividend is payable; (ii) issue, sell, pledge, dispose of or encumber
any additional shares of, or securities convertible into or exchangeable for, or
options, warrants or rights of any kind to acquire, any shares of capital stock
of, the Company or any Company Subsidiary, other than shares of Company Common
Stock reserved for issuance on the date hereof pursuant to (A) the exercise of
the Warrants and Options outstanding on the date hereof and (B) conversion of
the Convertible Note and shares of Company Preferred Stock outstanding on the
date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of,
or encumber any of its material assets, or incur or modify any material
indebtedness or other liability, other than in the ordinary course of business
consistent with past practice; or (iv) redeem, purchase or otherwise acquire any
shares of its capital stock, or any instrument which includes a right to acquire
such shares, except for purchases, redemptions and acquisitions in connection
with and in accordance with the Option Plans;
(d) except as set forth in Section 6.1(d) of the Company
Disclosure Schedule (or as required by applicable law with respect to an
employee benefit plan), neither the Company nor any Company Subsidiary shall
change the compensation or benefits payable or to become payable to any of its
officers, directors or employees (other than increases in wages to employees who
are not directors or affiliates, in the ordinary course of business consistent
with past practice), enter into or amend any employment, severance, consulting,
termination or other agreement or employee benefit plan or make any loans to any
of its officers, directors, employees or affiliates or change its existing
borrowing or lending arrangements for or on behalf of
45
any of such persons pursuant to an employee benefit plan or otherwise, other
than such actions taken in the ordinary course of business consistent with past
practice;
(e) neither the Company nor any Company Subsidiary shall pay or
arrange for payment of any pension, retirement allowance or other employee
benefit pursuant to any existing plan, agreement or arrangement to any officer,
director, employee or affiliate or pay or make any arrangement for payment to
any officers, directors, employees or affiliates of the Company of any amount
relating to unused vacation days, except for payments and accruals made in the
ordinary course of business consistent with past practice; adopt or pay, grant,
issue, accelerate or accrue salary or other payments or benefits pursuant to any
pension, profit-sharing, bonus, extra compensation, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other employee benefit plan, agreement
or arrangement, or any employment or consulting agreement with or for the
benefit of any Company director, officer or employee, whether past or present;
or, except as required by applicable law, amend in any material respect any such
existing plan, agreement or arrangement in a manner inconsistent with the
foregoing;
(f) the Company will not modify, amend or terminate any of the
Listed Company Agreements in any material respect, and neither the Company nor
any Company Subsidiary shall waive, release or assign any material rights or
claims under any of the Listed Company Agreements;
(g) neither the Company nor any Company Subsidiary will fail to
promptly notify Parent if the Company or any Company Subsidiary receives notice
that any material insurance policy naming the Company or any Company Subsidiary
as a beneficiary or a loss payee is to be cancelled or terminated;
(h) neither the Company nor any Company Subsidiary will (i)
incur or assume any long-term indebtedness or any short-term indebtedness (which
shall not include trade payables), except for (A) short-term indebtedness for
working capital in the ordinary course of business not to exceed $100,000 in the
aggregate and (B) indebtedness incurred under credit facilities existing on the
date hereof and included in the Listed Company Agreements, not exceeding
$500,000 in the aggregate and entered into in the ordinary course of business
consistent with past practice; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other Person, other than in an immaterial amount; (iii)
make any loans, advances or capital contributions to, or investments in, any
other Person other than in an immaterial amount; (iv) acquire (by merger,
consolidation or acquisition of stock or assets) any corporation, partnership or
46
other business organization or division thereof or any equity interest therein;
or (v) enter into any material commitment or transaction (including, but not
limited to, any borrowing, capital expenditure or purchase, sale or lease of
assets or real estate);
(i) except as required by law or any such agreement neither the
Company nor any Company Subsidiary shall enter into or modify any collective
bargaining agreement or similar agreement or any successor collective bargaining
agreement to any collective bargaining agreement;
(j) neither the Company nor any Company Subsidiary shall fail to
timely and properly file, or timely and properly file requests for extensions to
file, all federal, state, local and foreign Tax returns which are required to be
filed, and pay or make provision for the payment of all Taxes owed by them;
(k) neither the Company nor any Company Subsidiary will (i)
change any of the accounting methods used by it except for such changes required
by GAAP or (ii) make any Tax election or change any Tax election already made,
adopt any Tax accounting method, change any Tax accounting method, enter into
any closing agreement or settle any material claim or assessment relating to
Taxes or consent to any material claim or assessment relating to Taxes or any
waiver of the statute of limitations for any such material claim or assessment;
(l) neither the Company nor any Company Subsidiary will pay,
discharge or satisfy any material claims, liabilities or obligations (whether
absolute, accrued, contingent or otherwise), other than the payment, discharge
or satisfaction of any such material claims, liabilities or obligations in the
ordinary course of business consistent with past practice, or of material
claims, liabilities or obligations reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes thereto) of
the Company;
(m) neither the Company nor any Company Subsidiary will adopt a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
Company Subsidiary (other than the Merger);
(n) neither the Company nor any Company Subsidiary will take, or
agree in writing or otherwise to take, any action that would or is reasonably
likely to result in any of the conditions set forth in Article VIII not being
satisfied, or would make any representation or warranty of the Company contained
herein inaccurate in any material respect at or prior to the Effective Time, or
that would materially impair
47
the ability of the Company to consummate the Merger in accordance with the terms
hereof or materially delay such consummation;
(o) neither the Company nor any Company Subsidiary shall make
any capital expenditure which is not in all material respects in accordance with
the annual budget for the fiscal year 2001, a true and correct copy of which has
been delivered to Parent; and
(p) neither the Company nor any Company Subsidiary will enter
into any agreement, contract, binding commitment or binding arrangement to do
any of the foregoing, or authorize, recommend, propose in writing or announce an
intention to do any of the foregoing; provided, that this subsection (p) shall
--------
not be construed to prohibit the Company from seeking on a confidential basis
and in good faith Parent's consent in writing as contemplated by the exception
set forth in clause (ii) of this Section 6.1.
Notwithstanding the foregoing, nothing in this Section 6.1 or any other
provision of this Agreement shall prohibit any wholly-owned Company Subsidiary
from paying cash dividends or making other cash distributions to the Company or
any wholly-owned Company Subsidiary in the ordinary course of business
consistent with the Company's cash management procedures.
Section 6.2 Notification of Acquisition Proposals. The Company shall
-------------------------------------
promptly notify Parent if any proposals are received by, any information is
requested from, or any negotiations or discussions are sought to be initiated or
continued with the Company or its officers, directors, employees, investment
bankers, attorneys, accountants or other agents, in each case, in connection
with an Acquisition Proposal (an "Acquisition Proposal Interest"), which notice
-----------------------------
shall identify the name of the Person indicating such Acquisition Proposal
Interest and, to the extent then known, the material terms and conditions of any
Acquisition Proposal. As used in this Agreement, "Acquisition Proposal" means
--------------------
(a) any tender or exchange offer involving the Company, (b) any proposal for a
merger, consolidation or other business combination involving the Company, (c)
any proposal or offer to acquire in any manner any equity or voting debt
securities of the Company which, if consummated, would result in any Person
acquiring "beneficial ownership" (within the meaning of Rule 13d-3 under the
Exchange Act) of securities representing 10% or more of the outstanding combined
voting power of the Company, (d) any proposal or offer to acquire in any manner
10% or more of the Company's consolidated assets (including shares of capital
stock of the Company Subsidiaries), (e) any proposal or offer with respect to
any recapitalization or restructuring with respect to the Company or (f) any
proposal or offer
48
with respect to any other transaction similar to any of the foregoing with
respect to the Company, other than the Transactions.
Section 6.3 No Solicitation.
---------------
(a) The Company agrees that it shall immediately cease and
cause to be terminated all existing discussions, negotiations and communications
with any Persons with respect to any Acquisition Proposal and request the return
of all information provided to any third party pursuant to a confidentiality
agreement or otherwise in connection with such discussions, negotiations or
communications. From the date of this Agreement until the earlier of termination
of this Agreement or the Effective Time, the Company shall not and shall not
authorize or permit its officers, directors, employees, investment bankers,
attorneys, accountants, affiliates or other agents (collectively,
"Representatives") to directly or indirectly (i) initiate, solicit, encourage,
---------------
or take any action to facilitate the making of, any offer or proposal which
constitutes or which may be reasonably likely to lead to an Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition
Proposal, or (iii) in the event of an unsolicited Acquisition Proposal for the
Company, engage in any negotiations or discussions with, or provide any
information or data to, any Person (other than Parent or any of its affiliates
or representatives) relating to any Acquisition Proposal.
(b) Notwithstanding the foregoing, nothing contained in this
Section 6.3 or elsewhere in this Agreement shall prohibit the Company or the
Company Board of Directors (or the Special Committee) from (1) in the event of
an unsolicited Acquisition Proposal, requesting all such information from and
having such discussions with any Person in connection therewith as may be
necessary for the Company Board of Directors (and the Special Committee) to
inform themselves fully as to all material terms and conditions (including the
price, structure, intended accounting and tax treatment, closing conditions,
anticipated closing date, likelihood of consummation, creditworthiness of the
intended purchaser and requisite regulatory approvals) of such Acquisition
Proposal and providing all such material, non-public information or data with
respect to the Company to such Person if (A) prior to providing such information
or data and having any such discussions, the Company Board of Directors receives
from such Person an executed confidentiality agreement having provisions that
are customary in such agreements relative to proposed transactions such as the
Acquisition Proposal, as advised by outside legal counsel, and otherwise
containing terms and provisions no less restrictive than those contained in the
Confidentiality Agreement and (B) the Company Board of Directors (and the
Special Committee) shall have determined, in good faith after consultation with
outside legal counsel, that the failure to take such action, provide such
information or data or have discussions for the purpose of becoming
49
so fully informed would be inconsistent with its fiduciary duties under
applicable law; provided that, after having determined in good faith, after
--------
consultation with outside legal counsel, that each of the Company Board of
Directors and the Special Committee is fully informed with respect to the
material terms and conditions of such Acquisition Proposal and the proponent
thereof, neither the Company nor any of its Representatives shall be permitted
to engage in any discussions with such Person that would violate this Section
6.3, or (2) (i) withdrawing, modifying, or qualifying (or publicly proposing to
withdraw, modify, or qualify) the recommendation by the Company Board of
Directors (and the Special Committee) to the Company's shareholders to vote in
favor of the adoption of this Agreement; provided that the Company Board of
--------
Directors (and the Special Committee) shall have determined in good faith, after
consultation with outside legal counsel, that the failure to take such action
would be inconsistent with its fiduciary duties under applicable law, or (ii)
making such other disclosure to the Company's shareholders as in the good faith
judgment of the Company Board of Directors (and the Special Committee), after
consultation with outside legal counsel, is necessary under applicable law.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Special Meeting; Proxy Statement; Adoption of
---------------------------------------------
Agreement.
---------
(a) The Company shall:
(i) as promptly as practicable following the execution
and delivery of this Agreement, establish a record date in accordance
with the Company Organizational Documents and the BCL (the "Record
------
Date") and duly call, give notice of, convene and hold a special
----
meeting of the Company's shareholders (together with all adjournments
or postponements thereof, the "Special Meeting") as soon as practicable
---------------
after the date hereof for the purpose of considering and taking action
upon this Agreement and the Merger;
(ii) as promptly as practicable following the date
hereof, prepare and cause to be filed with the SEC a preliminary Proxy
Statement relating to the matters to be submitted to the Company's
shareholders at the Special Meeting. The Company shall use its
reasonable best efforts to have the Proxy Statement "cleared" by the
SEC's staff and, as promptly as practicable
50
thereafter, cause the Proxy Statement, in definitive form, to be mailed to
the Company's shareholders in accordance with Regulation 14A under the
Exchange Act, the Company Organizational Documents and the BCL. As promptly
as practicable after receipt thereof, the Company shall provide Parent with
copies of all written comments and advise Parent of any oral comments with
respect to the Proxy Statement received from the SEC's staff. The Company
shall provide Parent with a reasonable opportunity to review and comment on
all proposed amendments and supplements to the Proxy Statement prior to
filing the same with the SEC, and will provide Parent with a true and
complete copy of all such filings made with the SEC;
(iii) include in the Proxy Statement (A) the opinion of
the Financial Advisor referred to in Section 4.24 and (B) the
recommendation of the Company Board of Directors (and the Special
Committee) that shareholders of the Company vote in favor of the adoption
of this Agreement (the "Company Recommendation"), unless, in the case of
----------------------
the foregoing clause (B), in the good-faith judgment of the Company Board
of Directors (and the Special Committee), after consultation with outside
legal counsel, the inclusion of the Company Recommendation would be
inconsistent with its fiduciary duties under applicable law; and
(iv) use all reasonable efforts to solicit from
shareholders proxies in favor of the adoption of this Agreement and take
all actions reasonably necessary or, in the reasonable opinion of Parent,
advisable to secure the approval of shareholders required by the BCL, the
Company Organizational Documents and any other applicable law to effect the
Merger.
(b) Parent shall furnish all information concerning it as may
reasonably be requested by the Company in connection with the actions required
to be taken by the Company under Section 7.1(a)(ii) and the preparation and
filing of the Proxy Statement and shall use its reasonable best efforts to have
the Proxy Statement "cleared" by the SEC's staff. Parent shall vote any shares
of the Company beneficially owned by it, or with respect to which it has the
power (by agreement, proxy or otherwise) to vote or cause to be voted, in favor
of the adoption of this Agreement and approval of the Merger at the Special
Meeting.
Section 7.2 Reasonable Best Efforts; Consents and Approvals.
-----------------------------------------------
(a) Each of the parties hereto agrees to use all reasonable
best efforts to obtain in a timely manner all necessary waivers, consents and
approvals and
51
to effect all necessary registrations and filings, and to use all reasonable
best efforts to take, or cause to be taken, all other actions and to do, or
cause to be done, all other things necessary, proper or advisable to consummate
and make effective as promptly as practicable the Transactions; provided that
--------
nothing contained in this Section 7.2 shall require any party to waive or
exercise any right hereunder which is waivable or exercisable in the sole
discretion of such party.
(b) Each of Parent, Merger Sub and the Company shall take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to this Agreement and the Transactions
(which actions shall include, without limitation, furnishing all information
required under the HSR Act or any comparable laws of foreign jurisdictions and
in connection with approvals of, filings with and inquiries or requests from any
Governmental Entity); shall promptly cooperate with and, subject to such
confidentiality agreements as may be reasonably necessary or requested, furnish
information to each other or their counsel in connection with any such
requirements imposed upon any of them or any of their Subsidiaries in connection
with this Agreement and the Transactions; and shall not take any action that
would reasonably be expected to materially delay the obtaining of, or result in
not obtaining, any permission, approval or consent from any Governmental Entity
necessary to be obtained prior to Closing. Each of the Company, Parent and
Merger Sub shall, and shall cause respective Subsidiaries to, take all
reasonable actions necessary to obtain (and shall cooperate with each other in
obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party required to
be obtained or made by Parent, Merger Sub, the Company or any of their
respective Subsidiaries in connection with the Transactions or the taking of any
action contemplated thereby or by this Agreement. Notwithstanding the foregoing,
or any other covenant herein contained, in connection with the receipt of any
necessary approvals under the HSR Act or any comparable laws of foreign
jurisdictions, neither Parent nor the Company shall be required to divest or
hold separate or otherwise take or commit to take any action that limits
Parent's or the Company's freedom of action with respect to, or their ability to
retain, the Company or any portions thereof or any of the businesses, product
lines, properties or assets of the Company or Parent.
(c) Prior to the Closing, each party shall promptly consult with
the other parties hereto with respect to, provide any necessary information with
respect to, and provide the other (or its counsel) copies of, all filings made
by such party with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this Agreement and the
Transactions. Each party hereto shall promptly inform the other of any
communication from any Governmental Entity regarding any of the Transactions
unless otherwise prohibited by
52
law. If any party hereto or affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with
respect to the Transactions, then such party shall endeavor in good faith to
make, or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate response in compliance with
such request. To the extent that transfers, amendments or modifications of
permits (including environmental permits) are required as a result of the
execution of this Agreement or consummation of the Transactions, the Company
shall use its commercially reasonable efforts to effect such transfers.
Section 7.3 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Parent and Parent shall give prompt notice to the Company of
any material failure of the Company, Merger Sub or Parent, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 7.3 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice or the
representations or warranties of the parties or the conditions to the
obligations of the parties hereto.
Section 7.4 Access; Confidentiality. From the date hereof until the
-----------------------
Effective Time, upon reasonable notice and subject to the terms of the Mutual
Confidentiality Agreement, dated August 8, 2000, between Parent and the Company
(the "Confidentiality Agreement"), the Company shall (and shall cause each
-------------------------
Company Subsidiary to) afford the officers, employees, accountants, counsel,
financing sources and other representatives of Parent and Merger Sub reasonable
access, during normal business hours, to all of its properties, books,
contracts, commitments and records (including but not limited to Tax Returns).
Without limitation as to the foregoing, until the Effective Time, the Company
shall (and shall cause each Company subsidiary to) afford Parent, Merger Sub and
their respective representatives such access to any site located on the Real
Property as may reasonably be requested by Parent or Merger Sub for the purpose
of conducting Phase I environmental assessments. During the period from the date
hereof until the Effective Time, the Company shall (and shall cause each of the
Company Subsidiaries to) furnish promptly to Parent and Merger Sub all
information concerning its business, properties and personnel as Parent or
Merger Sub may reasonably request, including a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws.
Section 7.5 Publicity. Each of Parent and the Company shall consult
---------
with the other and agree upon the initial press release with respect to the
execution of this Agreement. Thereafter, so long as this Agreement is in effect,
neither the Company nor
53
Parent, nor any of their respective affiliates, shall issue any press release or
other announcement with respect to any of the Transactions or this Agreement
(including pursuant to Rule 14a-12 under the Exchange Act) without the prior
consultation of the other party, except as such party believes, after
consultation with outside counsel, may be required by law, by any listing
agreement with or listing rules of a national securities exchange or by the
rules of the Nasdaq Stock Market or any U.S. inter-dealer quotation system of a
registered national securities association, provided, however, that each party
-------- -------
shall provide, to the extent practicable, notice to and shall consult with the
other party prior to issuing any such press release or other announcement.
Section 7.6 Insurance and Indemnification. (a) Parent agrees that all
-----------------------------
rights to indemnification and advancement of expenses for acts or omissions
occurring prior to the Effective Time (including for acts or omissions of
directors occurring prior to the Effective Time in connection with the adoption
of this Agreement and the approval of the Transactions) now existing in favor of
the current or former directors or officers of the Company and the Company
Subsidiaries, and their respective heirs and representatives (each an
"Indemnified Party"), provided in the Company Organizational Documents or
-----------------
Subsidiary Organizational Documents and any indemnification agreements or
arrangements of the Company and the Company Subsidiaries or as to the fullest
extent permitted by law shall survive the Merger and shall continue in full
force and effect in accordance with their terms for a period of six years
following the Effective Time. Parent shall cause to be included and to be
maintained in effect in the Surviving Corporation's (or any successor's)
certificate of incorporation and by-laws, during such six-year period following
the Effective Time, provisions regarding elimination of liability of directors,
indemnification of officers and directors and advancement of expenses which are,
in the aggregate, no less advantageous to the Indemnified Parties than the
corresponding provisions contained in the Company Organizational Documents.
(b) Parent or the Surviving Corporation shall maintain the
Company's existing officers' and directors' liability insurance ("D&O
---
Insurance") for a period of not less than three years after the Effective Time;
---------
provided, however, that Parent may substitute therefor policies of substantially
-------- -------
equivalent coverage and amounts containing terms no less favorable to such
former directors or officers; provided further, that if the existing D&O
-------- -------
Insurance expires or is terminated or cancelled during such period, then Parent
or the Surviving Corporation shall use reasonable best efforts to obtain
substantially similar D&O Insurance or, if not obtainable, Parent shall obtain
as much D&O Insurance as can be obtained for an annual premium not in excess of
200% of the average of the premiums paid by the Company in 1998, 1999 and 2000
for D&O Insurance (the "Average Premium"); provided further, however, that in no
--------------- -------- -------
event shall Parent be required to pay annual premiums for insurance under this
Section 7.6(b) in
54
excess of 200% of the Average Premium; and provided, further, that if Parent or
-------
the Surviving Corporation is unable to obtain the amount of insurance required
by this Section 7.6(b) for such annual premium, Parent or the Surviving
Corporation shall obtain as much insurance as can be obtained for an annual
premium not in excess of 200% of the Average Premium. The premium for D&O
Insurance for the 12-month period ending May 2002 is set forth on Section 7.6(b)
of the Company Disclosure Schedule.
Section 7.7 Determination Letters; Multiemployer Plans.
------------------------------------------
(a) As promptly as practicable following the execution and
delivery of this Agreement, with respect to each ERISA Plan set forth on
Schedule 4.11(j) of the Company Disclosure Schedule, the Company shall apply
(but in no event later than the expiration of the remedial amendment period for
such ERISA Plan under Section 401(b) of the Code) for a determination letter
from the IRS stating that such ERISA Plan is qualified within the meaning of
Section 401(a) of the Code.
(b) Prior to the Effective Time, the Company shall deliver to
Parent a letter from the board of trustees of each Plan that is a multiemployer
plan within the meaning of Section 3(37) of ERISA, dated not more than thirty
(30) days before the date of this Agreement, to the effect that there is no
unfunded liability with respect to the Company's participation in such Plan and
stating that neither the Company nor any Company Subsidiary would have any
withdrawal liability upon a "complete withdrawal" from such plan (within the
meaning of Section 4203 of ERISA) if such withdrawal occurred as of the date of
such letter.
Section 7.8 Employment and Benefit Arrangements.
-----------------------------------
(a) For a one-year period following the Effective Time,
Parent shall cause the Surviving Corporation to continue to provide those
employees of the Surviving Corporation at the Effective Time (the "Employees"),
---------
so long as they remain employees of the Surviving Corporation, with benefits
that are, in the aggregate, no less favorable to such Employees as are the
benefits of the Company provided to such Employees immediately prior to the
Effective Time. The foregoing sentence shall not apply to severance benefits,
and the Surviving Corporation shall not be required to maintain any particular
level of severance benefits.
(b) For purposes of vesting and eligibility, Parent and the
Surviving Corporation shall, with respect to each benefit required to be
provided under the terms of this Section 7.8, credit each Employee with all
service credited to such
55
Employee under the Company's corresponding plan, policy, program or arrangement
applicable to such Employee as of the Effective Time.
(c) Parent and the Surviving Corporation shall credit
each Employee with any vacation and sick days accrued as of the Effective Time
in accordance with the terms of the Company's vacation and sick day policies in
effect as of such date.
(d) From and after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, waive any pre-existing condition
limitations and credit any deductibles and out-of-pocket expenses that are
applicable and/or covered under the Benefit Plans providing health and dental
and similar benefits and are incurred by the Employees and their beneficiaries
during the portion of the calendar year prior to participation (if applicable)
in the benefit plans provided by Parent or the Subsidiaries of Parent (other
than the Surviving Corporation).
(e) The provisions of this Section 7.8 are not intended
to create rights of third party beneficiaries.
(f) Notwithstanding anything contained herein to the
contrary, nothing in this Section 7.8 shall be deemed to be a commitment 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 7.8,
nothing herein shall be deemed to prevent Parent or the Surviving Corporation
from amending or terminating any benefit plan or arrangement in accordance with
its terms.
Section 7.9 Transfer of Certain Intellectual Property. The
-----------------------------------------
Company shall use its best efforts to cause all right, title and interest to any
Intellectual Property listed in Section 4.15(b) of the Company Disclosure
Schedule for which the Company or a Company Subsidiary is not listed as the
record owner or which is subject to an Encumbrance (other than an Encumbrance
pursuant to an agreement referenced in Section 4.14(a) of the Company Disclosure
Schedule) to be assigned, transferred, conveyed and delivered, free and clear of
such Encumbrances, to Parent, a wholly-owned Subsidiary of Parent, the Company
or a Company Subsidiary and to cause such right, title and interest to be vested
in Parent, the Company or such Subsidiary, as the case may be, at the Effective
Time.
Section 7.10 Third Party Standstill Agreements. During the period
---------------------------------
from the date of this Agreement through the Effective Time, the Company shall
enforce and shall not terminate, amend, modify or waive any standstill provision
of any
56
confidentiality or standstill agreement between the Company and other parties
entered into prior to the date hereof.
Section 7.11 Takeover Laws. If any "fair price," "moratorium,"
-------------
"control share acquisition" or other form of anti-takeover statute or regulation
shall become applicable to any of the Transactions or to the Company, then the
Company and the Company Board of Directors shall use all reasonable best efforts
to ensure that the Merger may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Transactions.
ARTICLE VIII
CONDITIONS
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
-----------------------------------------------------------
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction or waiver, to the extent permitted by applicable law, at or
prior to the Effective Time, of each of the following conditions:
(a) This Agreement shall have been adopted by the
requisite vote of the shareholders of the Company in accordance with the Company
Organizational Documents and the BCL;
(b) No statute, law, rule or regulation shall be in
effect or have been enacted or promulgated by any Governmental Entity which
prohibits the consummation of the Merger, and there shall be no order or
injunction of a court of competent jurisdiction in effect prohibiting
consummation of the Merger; and
(c) The applicable waiting period (and any extension
thereof) under the HSR Act shall have expired or been terminated.
Section 8.2 Conditions to the Company's Obligation to Effect the
----------------------------------------------------
Merger. The obligation of the Company to effect the Merger is subject to
------
satisfaction or waiver (to the extent permitted by applicable law) at or prior
to the Effective Time of each of the following conditions:
(a) Each of the representations and warranties of Parent
and Merger Sub set forth in this Agreement, disregarding all qualifications and
exceptions
57
contained therein relating to materiality, shall be true and correct as of the
date of this Agreement and as of the Effective Time, as if made at and as of
such time (except to the extent that such representations and warranties speak
as of another date, in which case such representations and warranties shall be
true and correct as of such other date), except where the failure of such
representations and warranties to be true and correct would not, individually or
in the aggregate, have a Parent Material Adverse Effect.
(b) Each of Parent and Merger Sub shall have performed in
all material respects all obligations required to be performed by it at or prior
to the Effective Time under this Agreement.
(c) The Company shall have received a certificate, dated
as of the Effective Time, signed by a senior executive officer or senior
financial officer of Parent, to the effect that the conditions set forth in
Section 8.2(a) and Section 8.2(b) have been satisfied.
Section 8.3 Conditions to Parent's and Merger Sub's Obligations
---------------------------------------------------
to Effect the Merger. The obligation of each of Parent and Merger Sub to effect
--------------------
the Merger is subject to satisfaction or waiver (to the extent permitted by
applicable law) at or prior to the Effective Time of each of the following
conditions:
(a) Each of the representations and warranties of the
Company set forth in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality, shall be true and correct
both as of the date of this Agreement and as of the Effective Time, as if made
at and as of such time (except to the extent that such representations and
warranties speak as of another date, in which case such representations and
warranties shall be true and correct as of such other date), except where the
failure of such representations and warranties to be true and correct would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(b) The Company shall have performed in all material
respects all obligations required to be performed by it at or prior to the
Effective Time under this Agreement.
(c) Parent shall have received a certificate, dated as of
the Effective Time, signed by the chief executive officer or chief financial
officer of the Company, to the effect that the conditions set forth in Section
8.3(a), Section 8.3(b) and Section 8.3(i) have been satisfied.
58
(d) There shall not be pending any action or proceeding
by any Governmental Entity that has reasonable likelihood of success seeking (x)
to make illegal or to prohibit the consummation of the Merger, (y) to restrain
or prohibit Parent's (including its affiliates') ownership or operation of all
or any material portion of the business or assets of the Surviving Corporation
or the Company, or to compel Parent or any of its affiliates to dispose of or
hold separate all or any material portion of the business or assets of the
Surviving Corporation or the Company or (z) to impose or confirm material
limitations on the ability of Parent or any of its affiliates to effectively
control the business or operations of the Surviving Corporation or the Company,
and no court, arbitrator or Governmental Entity shall have issued any judgment,
order, decree or injunction, and there shall not be any statute, rule or
regulation, that is likely, directly or indirectly, to result in any of the
consequences referred to in the preceding clauses (x) through (z); provided,
however, that Parent and the Company shall use their reasonable efforts to have
any such judgment, order, decree or injunction vacated.
(e) The Shareholder's Agreement shall be in full force
and effect and the Shareholder shall be in compliance with the terms thereof.
(f) The employment agreement between Xxxxxxx X. Xxxx and
Parent, executed and delivered on the date hereof, shall be in full force and
effect, with effect as of the Effective Time; Xx. Xxxx shall be serving as the
Company's chief executive officer; and Xx. Xxxx shall not be subject to any
disability or other condition that would materially impair the fulfillment of
his responsibilities as chief executive officer of the Surviving Corporation in
a manner and to an extent consistent with the performance of his duties as chief
executive officer of the Company prior to the date of this Agreement and after
December 31, 2000.
(g) Each of the employment agreements listed in Section
8.3(g) of the Company Disclosure Schedule, as amended on the date hereof, shall
be in full force and effect.
(h) The Company shall have provided (or caused to be
provided) to Parent a duly executed certificate, in form and substance
reasonably satisfactory to Parent, to the effect that Parent is not required to
withhold from any of the Merger Consideration under section 1445 of the Code (a
"FIRPTA Certificate"). Notwithstanding any provision of this Agreement to the
------------------
contrary, if Parent does not receive a FIRPTA Certificate prior to the Closing,
Parent may waive the condition set forth in this Section 8.3(h) and withhold
from the Merger Consideration in accordance with the requirements of section
1445 of the Code.
59
(i) All material authorizations, consents and approvals
required to be made or obtained prior to the Effective Time by each party hereto
from any Governmental Entity or other Person in connection with the execution
and delivery of this Agreement and the consummation of the Transactions shall
have been made or obtained.
(j) Since the date of this Agreement, there shall not
have occurred any change, event, occurrence, development or circumstance which,
individually or in the aggregate, has had, or would reasonably be expected to
have, a Company Material Adverse Effect.
ARTICLE IX
TERMINATION
Section 9.1 Termination. This Agreement may be terminated and the
-----------
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any adoption of this Agreement by holders of shares of the Company):
(a) by the mutual written consent of Parent and the
Company;
(b) by either Parent or the Company if:
(i) any statute, law, rule or regulation shall have
been enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Merger, or there shall be an order or injunction of a
court of competent jurisdiction in effect prohibiting consummation of the
Merger, and such order or injunction shall have become final and
nonappealable;
(ii) the Merger shall not have been consummated by
5:30 p.m., Eastern time on January 3, 2002 (the "Termination Date"),
----------------
provided that the right to terminate this Agreement pursuant to this
--------
Section 9.1(b)(ii) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in the failure
of the Merger to occur on or before the Termination Date; or
(iii) this Agreement shall not have been adopted by
the requisite vote of the Company's shareholders at the Special Meeting;
60
(c) by Parent if:
(i) the representations and warranties of the
Company contained in this Agreement shall not be true and correct such
that the condition set forth in Section 8.3(a) cannot be satisfied on
or before the Termination Date;
(ii) the Company shall have failed to perform in any
material respect any obligation required to be performed by it at or
prior to the Effective Time under this Agreement, which failure to
perform has not been cured within 30 days following receipt by the
Company of notice of such failure to perform from Parent or Merger Sub;
or
(iii) the Company Board of Directors (or the Special
Committee) at any time after the date of this Agreement shall have
publicly announced that it has withdrawn, or modified or changed in a
manner adverse to Parent or Merger Sub, the Company Recommendation (or
shall have resolved to do so), irrespective of whether permitted by the
express terms of this Agreement; or
(d) by the Company if:
(i) the representations and warranties of Parent or
Merger Sub contained in this Agreement shall not be true and correct
such that the condition set forth in Section 8.2(a) cannot be satisfied
on or before the Termination Date; or
(ii) Parent or Merger Sub shall have failed to
perform in any material respect any obligation required to be performed
by it at or prior to the Effective Time under this Agreement, which
failure to perform has not been cured within 30 days following receipt
by Parent of notice of such failure to perform from the Company.
Section 9.2 Effect of Termination. (a) In the event of the
---------------------
termination of this Agreement as provided in Section 9.1, notice thereof shall
forthwith be given to the other party or parties in accordance with Section
10.4, and this Agreement shall forthwith become null and void (except for this
Section 9.2 and Sections 10.3, 10.4, 10.5, 10.6, 10.8, 10.11 and 10.12, which
shall survive such termination) and there shall be no liability on the part of
Parent, Merger Sub or the Company, except (i) as set forth in this Section 9.2,
and (ii) nothing herein shall relieve any party from liability for any willful
61
breach of this Agreement. The Confidentiality Agreement shall survive any
termination of this Agreement.
(b) Provided that neither Parent nor Merger Sub is then in
material breach of this Agreement, if
(i) (A) the Company shall have terminated this Agreement
pursuant to Section 9.1(b)(ii) without the Special Meeting having
occurred or pursuant to Section 9.1(b)(iii) or (B) Parent shall have
terminated this Agreement pursuant to Section 9.1(b)(iii) or
9.1(c)(iii); and
(ii) (A) prior to the time of any such termination there
shall have been received by the Company, and there shall continue to be
outstanding at the time of termination, an Acquisition Proposal which
has been publicly announced and (B) within 12 months following such
termination, a definitive agreement with respect to an Acquisition
Proposal shall have been entered into by the Company,
then the Company shall pay to Parent (by wire transfer of immediately available
funds to such account as Parent may designate in writing to the Company), on the
second business day next following the date such definitive agreement is
executed and delivered, $2,650,000 in cash. It is expressly agreed that the
amounts to be paid pursuant to this Section 9.2(b), if any, constitute
liquidated damages negotiated at arm's length and do not constitute, and are not
intended by the parties to operate as, a penalty.
ARTICLE X
MISCELLANEOUS
Section 10.1 Amendment and Modification. Subject to the provisions of
--------------------------
Section 10.14, this Agreement may be amended, modified and supplemented by the
parties hereto, whether before or after any approval by the shareholders of the
Company of the matters presented in connection with this Agreement and the
Merger, provided, however, that after any such approval and the adoption of this
Agreement by the shareholders, no amendment shall be made which by law or in
accordance with the rules of any national securities exchange or U.S.
inter-dealer quotation system of a registered national securities association
requires further approval by such shareholders without obtaining such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
62
Section 10.2 Non-survival of Representations and Warranties. None of the
----------------------------------------------
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time; provided, that this Section 10.2 shall not limit any covenant or
--------
agreement of the parties hereto which by its terms contemplates performance
after the Effective Time.
Section 10.3 Expenses. All fees, costs and expenses incurred in
--------
connection with this Agreement, the Merger and the other Transactions shall be
paid by the party incurring such fees, costs and expenses except that any
transfer, stamp or similar taxes shall be borne by Parent.
Section 10.4 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally, upon
confirmation of receipt if telecopied or transmitted via facsimile machine, on
the first business day following the date of dispatch if sent by a nationally
recognized overnight courier service, such as Federal Express or on the fifth
business day next following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Steelcase Inc.
000 - 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Legal Officer
with a copy (which shall not constitute notice pursuant to
this Section 10.4) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
63
(b) if to the Special Committee of the Company Board
of Directors, to:
Xxxxxxxxx Traurig, LLP
The Met Life Building
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(c) if to the Company, to:
PolyVision Corporation
0000 X. Xxx Xxxxxxxxx Xx.
Xxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile. (000) 000-0000
Attention: Xxxxxxx X. Xxxx,
President and Chief Executive Officer
with a copy (which shall not constitute notice
pursuant to this Section 10.4) to:
Xxxxxxxxx Traurig, LLP
The Met Life Building
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx, Esq.
and
(d) if to the Shareholder, to:
The Alpine Group, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
64
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Secretary
with a copy (which shall not constitute notice
pursuant to this Section 10.4) to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
All notices to the Company pursuant to this Agreement simultaneously shall be
delivered to the Special Committee and the Shareholder in the manner provided
above.
Section 10.5 Interpretation. All terms defined in this
--------------
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless specifically otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neutral genders of such term. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including in the case of agreements or
instruments by waiver or consent, and in the case of statutes, by comparable
successor statutes, and references to all attachments thereto and instruments
incorporated therein. Each of the parties hereto has participated in the
drafting and negotiation of this Agreement such that if any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if it was drafted by all of the parties hereto, collectively, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. When a
reference is made in this Agreement to Articles, Sections, Exhibits or Schedules
such reference shall be to an Article or Section of or Exhibit or Schedule to
this Agreement unless otherwise indicated. The table of contents, index of
defined terms and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the intended 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." As used in this
65
Agreement, the term "affiliates" shall have the meaning set forth in Rule 12b-2
of the Exchange Act.
Section 10.6 Jurisdiction. Each of Parent, Merger Sub and the Company
------------
hereby expressly and irrevocably submits, with respect to any legal action or
proceeding arising out of or in connection with this Agreement or the
Transactions, to the non-exclusive personal jurisdiction of the United States
District Court for the Southern District of New York and to the jurisdiction of
any other competent court of the State of New York (collectively, the "New York
--------
Courts"), preserving, however, all rights of removal to such federal court under
------
28 U.S.C. Section 1441, in connection with all disputes arising out of or in
connection with this Agreement or the Transactions and agrees not to commence
any litigation relating to the foregoing except in such courts. Each such party
hereby waives the right to any other jurisdiction or venue for any litigation
arising out of or in connection with this Agreement or the Transactions to which
any of them may be entitled by reason of its present or future domicile.
Notwithstanding the foregoing, each such party agrees that each of the other
parties shall have the right to bring any action or proceeding for enforcement
of a judgment entered by the New York Courts in any other court or jurisdiction.
Section 10.7 Service of Process. Each of Parent, Merger Sub and the
------------------
Company irrevocably consents to the service of process outside the territorial
jurisdiction of the courts referred to in Section 10.6 hereof in any legal
action or proceeding arising out of or in connection with this Agreement or the
Transactions by mailing copies thereof by registered or certified U.S. mail,
postage prepaid, return receipt requested, to its address as specified in or
pursuant to Section 10.4 hereof. However, the foregoing shall not limit the
right of a party to effect service of process on the other party by any other
legally available method.
Section 10.8 Specific Performance. Each of Parent, Merger Sub and the
--------------------
Company acknowledges and agrees that in the event of any breach of this
Agreement, each non-breaching party would be irreparably and immediately harmed
and could not be made whole by monetary damages. It is accordingly agreed that
the parties hereto (a) will waive, in any action for specific performance, the
defense of adequacy of a remedy at law and (b) shall be entitled, in addition to
any other remedy to which they may be entitled at law or in equity, to compel
specific performance of this Agreement in any action instituted in accordance
with Section 10.6 hereof.
Section 10.9 Counterparts. This Agreement may be executed manually or by
------------
facsimile by the parties hereto, in any number of counterparts, each of which
shall be considered one and the same agreement and shall become effective when a
66
counterpart hereof shall have been signed by each of the parties and delivered
to the other parties.
Section 10.10 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, the Shareholder's Agreement and the Confidentiality Agreement:
(a) constitute the entire agreement and understanding among
the parties with respect to the subject matter hereof and thereof and supersede
all other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof and thereof
(provided that the provisions of this Agreement shall supersede any conflicting
provisions of the Confidentiality Agreement), and
(b) except as provided in Section 7.6, are not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
Section 10.11 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
Transactions are fulfilled to the extent possible.
Section 10.12 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal (procedural and substantive) laws of
the State of New York without giving effect to the principles of conflicts of
law thereof.
Section 10.13 Assignment. This Agreement shall not be assigned by any of
----------
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Merger Sub may assign any or
all of its rights, interests and obligations hereunder to Parent, one or more
direct or indirect wholly-owned Subsidiaries of Parent, or a combination
thereof. This Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and permitted assigns.
67
Section 10.14 Special Committee Enforcement. Until the Effective Time,
-----------------------------
all action to be taken by the Company to enforce, waive compliance with or amend
or modify the terms and conditions of this Agreement shall require the approval
of the Special Committee.
[Signature page follows.]
68
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
STEELCASE INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name:
Title:
PV ACQUISITION, INC.
By /s/ Xxxxx X. Xxxxx
------------------------------------
Name:
Title:
POLYVISION CORPORATION
By /s/ X. X. Xxxx
-------------------------------------
Name: X.X. Xxxx
Title: President and CEO
69
ANNEX A
---------------------------------------------------------------------------------------------
Designation and
number of shares in Class or series of
Name of constituent each class or series Class or series of shares entitled to
corporation in the outstanding as of shares entitled to vote as a class or
Merger August 24, 2001 vote series
---------------------------------------------------------------------------------------------
PolyVision Common Stock, par Common Stock
Corporation value $.001 per share;
14,168,527/1/
Series B Preferred, Series B Preferred Series B Preferred
par value $.01 per
share; 255,000 /2/
Series C Preferred, Series C Preferred Series C Preferred
par value $.01 per
share; 140,000 /2/
Series D Preferred,
par value $.01 per
share; 120,000 /2/
---------------------------------------------------------------------------------------------
PV Acquisition, Inc. Common Stock, par Common Stock
value $.01 per share,
100 /3/
---------------------------------------------------------------------------------------------
/1/ Subject to change prior to the Effective Time in the event of the
conversion or exercise of securities convertible into or exercisable for
Common Stock and otherwise in accordance with the Merger Agreement, the
certificate of incorporation and by-laws of PolyVision Corporation and the
BCL.
/2/ Subject to change prior to the Effective Time in the event of conversion
into Common Stock and otherwise in accordance with the Merger Agreement,
the certificate of incorporation and by-laws of PolyVision Corporation and
the BCL.
/3/ Subject to change prior to the Effective Time in accordance with the
certificate of incorporation and by-laws of PV Acquisition, Inc. and the
BCL.
A-1
