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EXHIBIT 4.1
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AGREEMENT AND PLAN OF MERGER
AMONG
XXXX X. XXXXXXX COMPANY,
JH ACQUISITION CORP.
AND
CONCENTREX INCORPORATED
DATED AS OF JULY 17, 2000
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AGREEMENT AND PLAN OF MERGER
Table of Contents
THE OFFER AND MERGER
Section 1.1. The Offer
Section 1.2. Consent to Offer; Schedule 14D-9
Section 1.3. The Merger
Section 1.4. Effective Time; Closing
Section 1.5. Effect of the Merge
Section 1.6. Conversion of Company Common Stock
Section 1.7. Dissenting Shares
Section 1.8. Stock Option Plans
Section 1.9. Surrender of Shares of Company Common Stock; Stock Transfer Books
THE SURVIVING CORPORATION
Section 2.1. Articles of Incorporation
Section 2.2. Bylaws
Section 2.3. Directors and Officers
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1. Organization and Standing
Section 3.2. Capitalization
Section 3.3. Authority for Agreement
Section 3.4. No Conflict
Section 3.5. Required Filings and Consents
Section 3.6. Compliance
Section 3.7. SEC Filings, Financial Statements
Section 3.8. Absence of Certain Changes or Events
Section 3.9. Taxes
Section 3.10. Assets
Section 3.11. Change of Control Agreements
Section 3.12. Litigation
Section 3.13. Contracts and Commitments
Section 3.14. Information Supplied
Section 3.15. Employee Benefit Plans
Section 3.16. Labor and Employment Matters
Section 3.17. Environmental Compliance and Disclosure
Section 3.18. Intellectual Property
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Section 3.19. Brokers
Section 3.20. Insurance Policies
Section 3.21. Notes and Accounts Receivable
Section 3.22. Transactions with Affiliates
Section 3.24. Stockholders' Rights Agreement
Section 3.25. Major Suppliers and Customers
Section 3.26. Disclosure
Section 3.27. Company Warrants
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 4.1. Organization and Standing
Section 4.2. Authority for Agreement
Section 4.3. No Conflict
Section 4.4. Required Filings and Consents
Section 4.5. Information Supplied
Section 4.6. Brokers
ARTICLE V COVENANTS
Section 5.1. Conduct of the Business Pending the Merger
Section 5.2. Access to Information; Confidentiality
Section 5.3. Notification of Certain Matters
Section 5.4. Reasonable Best Efforts; Further Assurances
Section 5.5. Board Recommendations
Section 5.6. Stockholder Litigation
Section 5.7. Indemnification
Section 5.8. Public Announcements
Section 5.9. Acquisition Proposals
Section 5.10. Company Stockholders' Meeting
Section 5.11. Proxy Statement
Section 5.12. Stockholder Lists
Section 5.13. Shares Held by Company Subsidiaries
Section 5.14. Directors
Section 5.15. Undertakings of Parent
Section 5.16. Director Resignations
Section 5.17. Company Options
ARTICLE VI CONDITIONS
Section 6.1. Conditions to the Obligation of Each Party
Section 6.2. Conditions to Obligations of Parent and Sub to Effect the Merger
Section 6.3. Conditions to Obligations of the Company to Effect the Merger
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination
Section 7.2. Effect of Termination
Section 7.3. Amendments
Section 7.4. Waiver
ARTICLE VIII GENERAL PROVISIONS
Section 8.1. No Third Party Beneficiaries
Section 8.2. Entire Agreement
Section 8.3. Succession and Assignment
Section 8.4. Counterparts
Section 8.5. Headings
Section 8.6. Governing Law
Section 8.7. Severability
Section 8.8. Specific Performance
Section 8.9. Construction
Section 8.10. Non-Survival of Representations and Warranties and Agreements
Section 8.11. Certain Definitions
Section 8.12. Fees and Expenses
Section 8.13. Notices
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July
17, 2000 by and among Xxxx X. Xxxxxxx Company, a Georgia corporation ("Parent"),
JH Acquisition Corp., an Oregon corporation ("Sub") and wholly owned subsidiary
of Parent, and Concentrex Incorporated, an Oregon corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the parties to this Agreement desire to effect the acquisition
of the Company by Sub;
WHEREAS, in furtherance of the foregoing, upon the terms and subject to
the conditions of this Agreement and in accordance with the Oregon Business
Corporation Act of the State of Oregon (the "OBCA"), Sub will make a cash tender
offer described in Section 1.1 and thereafter Sub will merge with and into the
Company (the "Merger") in accordance with the provisions of the OBCA, with the
Company as the surviving corporation;
WHEREAS, as of the date hereof, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx
and Xxxxxx X. Xxxx (collectively, the "Tendering Stockholders") are the record
owners and beneficially own or have the power to vote shares of Company Common
Stock (as hereinafter defined), representing approximately 8.47% of the
outstanding Company Common Stock;
WHEREAS, concurrently with the execution and delivery of this Agreement,
and as a condition and inducement to Parent entering into this Agreement, the
Tendering Stockholders have entered into a stockholder's agreement, dated as of
the date hereof (the "Stockholder's Agreement"), pursuant to which, among other
things, the Tendering Stockholders have agreed to tender their shares of Company
Common Stock in the Initial Offer (as hereinafter defined);
WHEREAS, the Board of Directors of the Company has determined that the
Initial Offer, the Subsequent Offer (as hereinafter defined), the Merger and
this Agreement are fair to, and in the best interests of, the Company and the
holders of Company Common Stock;
WHEREAS, the Board of Directors of Parent and Sub have each approved this
Agreement, the Initial Offer, the Subsequent Offer and the Merger, upon the
terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has approved this
Agreement, the Initial Offer, the Subsequent Offer and the Merger, and the
transactions contemplated hereby, which approval was based in part on the
opinion of Xxxxx & Company (the "Independent Advisor"), independent financial
advisor to the Board of Directors of the Company, that, as of the date of such
opinion and based on the assumptions, qualifications and limitations contained
therein, the consideration to be received by the Company's stockholders for
their shares of Company Common Stock in the Initial Offer, the Subsequent Offer
and in the Merger is fair, from a financial point of view, to these
stockholders;
WHEREAS, the Board of Directors of the Company has resolved to recommend
that the holders of the Company Common Stock accept the Initial Offer and the
Subsequent Offer, as applicable, and approve the Merger, this Agreement and the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1. The Offer.
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(a) Provided that this Agreement shall not have been terminated
in accordance with Section 7.1 hereof and nothing shall have occurred that would
result in a failure to satisfy any of the conditions set forth in Annex I
hereto, as promptly as practicable after the date hereof, Parent shall cause Sub
to commence and Sub shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) an offer to
purchase all of the issued and outstanding shares of the Company Common Stock at
a price of $7.00 per share (the "Offer Price") net to the seller in cash, but
subject to any withholding required by law (the "Initial Offer").
(b) The Initial Offer shall be subject to the conditions set
forth in Annex I hereto. Sub shall not except as expressly contemplated hereby,
without the prior written consent of the Company, make any change in the terms
or conditions of the Initial Offer that is adverse to the holders of the Company
Common Stock in any material respect, decrease the Offer Price or impose
material conditions to the Initial Offer other than those set forth in Annex I
hereto (it being agreed that a waiver by Sub of any condition, in its sole
discretion, shall not be deemed to be adverse to the holders of the Company
Common Stock); provided that:
(i) if on any scheduled expiration date of the Initial
Offer all conditions to the Initial Offer shall not have been satisfied or
waived, the Initial Offer may, but need not, be extended from time to time
without the consent of the Company for such period of time as is reasonably
expected by Sub to be necessary to satisfy the unsatisfied conditions;
(ii) the Initial Offer may be extended by Sub without the
consent of the Company for any period required by any rule, regulation,
interpretation or position of the United States Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Initial Offer; and
(iii) if at any scheduled expiration date of the Initial
Offer all conditions to the Initial Offer shall have been satisfied but less
than a number of shares of Company Common Stock that, together with the number
of shares of Company Common Stock owned by Parent and Sub, represents ninety
percent (90%) of the outstanding shares of Company Common Stock, on a
fully-diluted basis, shall have been tendered into the Initial Offer, Sub shall
be entitled to (but not required to) extend the Initial Offer from time to time
without the consent of the Company (but in no event beyond one week after the
date on which all of the conditions set forth in Annex I have been satisfied) in
order to permit Sub to solicit additional shares to be tendered into the Initial
Offer.
Notwithstanding the foregoing, Sub may not, without the consent of the Company,
extend the scheduled expiration date of the Initial Offer beyond September 28,
2000; provided, however, Sub may extend the scheduled expiration date of the
Initial Offer beyond such date for such period of time as is reasonably expected
by Sub to be necessary to satisfy the unsatisfied conditions if Sub has not
purchased shares of Company Common Stock pursuant to the Initial Offer due to a
delay in the consummation of the Initial Offer resulting from (i) review of the
Offer Documents (as hereinafter defined) by the SEC, (ii) receipt of regulatory
approvals required under applicable Law (as hereinafter defined), including, but
not limited to approvals under the HSR Act (as hereinafter defined) or (iii) the
existence of any of the conditions contained in Sections (i) or (ii) of Annex I
hereto. Sub shall, unless Sub shall have in its sole discretion exercised its
right to extend the termination date of the Initial Offer pursuant to this
Section 1.1(b), on the terms and subject to the prior satisfaction or waiver of
the conditions of the Initial Offer, accept for payment and purchase, as soon as
permitted under the terms of the Initial Offer, all shares of the Company Common
Stock validly tendered and not withdrawn prior to the expiration date of the
Initial Offer. It is agreed that the conditions to the Initial Offer are solely
for the benefit of Sub and may be asserted by Sub regardless of the
circumstances giving rise to any such condition (including any action or
inaction by Sub) or may, but need not, be waived by Sub, in whole or in part at
any time and from time to time, in its sole discretion.
(c) The Initial Offer shall be made by means of an offer to
purchase (the "Offer to Purchase") that is subject to the conditions set forth
in Annex I hereto. As soon as practicable on the date of commencement of the
Initial
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Offer, Sub (and, to the extent required by law, Parent) shall file with the SEC
a Tender Offer Statement on Schedule TO (together with all supplements and
amendments thereto, the "Schedule TO" or the "Offer Documents"). The Offer to
Purchase shall provide for an initial expiration date of twenty (20) business
days (as defined in Rule 14d-1 under the Exchange Act) from the date of
commencement, subject to Sub's right to extend the expiration date of the
Initial Offer pursuant to Section 1.1(b).
(d) Notwithstanding anything herein to the contrary, Sub may,
at its sole option, after the date the Shares of Company Common Stock are
purchased by Sub pursuant to the Initial Offer (the "Purchase Date"), commence a
subsequent offer for shares of Company Common Stock pursuant to Rule 14d-11
under the Exchange Act on economic terms identical to the Initial Offer for such
period as Sub may determine (the "Subsequent Offer") which Subsequent Offer
shall comply in all material respects with the provisions of all applicable
United States securities laws.
(e) The Offer Documents (and any documents filed with the SEC
pursuant to a Subsequent Offer) shall comply in all material respects with the
provisions of all applicable United States federal securities laws. Each party
hereto shall promptly supplement, update and correct any information provided by
it for use in the Offer Documents (and any documents filed with the SEC pursuant
to a Subsequent Offer) if, and to the extent that, it is or shall have become
incomplete, false or misleading. In any such event, Sub shall take all steps
necessary to cause the Offer Documents (and any documents filed with the SEC
pursuant to a Subsequent Offer) as so supplemented, updated or corrected to be
filed with the SEC and to be disseminated to the Company Stockholders as and to
the extent required by applicable United States federal securities laws. The
Company and its counsel, with respect to the Schedule TO (or any documents to be
filed with the SEC pursuant to a Subsequent Offer), shall be given an
opportunity to review and comment on such filing and each supplement, amendment
or response to comments with respect thereto prior to being filed with or
delivered to the SEC.
Section 1.2. Consent to Offer; Schedule 14D-9. The Company hereby
approves of and consents to the Initial Offer and the Subsequent Offer and to
the inclusion in the Initial Offer and Subsequent Offer and the related
documents thereto the recommendations of the Board of Directors of the Company
set forth in Section 3.3(b) hereof. Simultaneously with or as soon as
practicable on the day of filing of the Schedule TO by Sub, the Company shall
file with the SEC a Tender Offer Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all supplements and amendments thereto, the
"Schedule 14D-9") that will comply in all material respects with the provisions
of all applicable United States federal securities laws which shall reflect the
recommendations of the Board of Directors of the Company set forth in Section
3.3(b) hereof. Each party shall promptly supplement, update and correct any
information provided by it for use in the Schedule 14D-9 if, and to the extent
that, it is or shall have become incomplete, false or misleading. In any such
event, the Company shall take all steps necessary to cause the Schedule 14D-9 as
so supplemented, updated or corrected to be filed with the SEC and to be
disseminated to the Company Stockholders, in each case, as and to the extent
required by applicable United States federal securities laws. Each other party
hereto and its respective counsel shall be given an opportunity to review and
comment on the Schedule 14D-9 and each supplement, amendment or response to
comments with respect thereto prior to being filed with or delivered to the SEC.
The Company shall cooperate with Sub with respect to the Subsequent Offer, if
applicable, and shall provide to Sub all documentation that Sub may reasonably
request in connection with respect to such Subsequent Offer.
Section 1.3. The Merger. Upon the terms and subject to the conditions of
this Agreement, and in accordance with the OBCA, at the Effective Time (as
hereinafter defined), Sub shall be merged with and into the Company. As a result
of the Merger, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation following the Merger (the
"Surviving Corporation"). The corporate existence of the Company, with all its
purposes, rights, privileges, franchises, powers and objects, shall continue
unaffected and unimpaired by the Merger and, as the Surviving Corporation, it
shall be governed by the laws of the State of Oregon.
Section 1.4. Effective Time; Closing. As promptly as practicable (and in
any event within five (5) business days) after the satisfaction or waiver of the
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conditions set forth in Article VI hereof, the parties hereto shall cause the
Merger to be consummated by filing articles of merger or plan of merger, if
applicable (the "Articles of Merger"), with the Secretary of State of the State
of Oregon and by making all other filings or recordings required under the OBCA
in connection with the Merger, in such form as is required by, and executed in
accordance with the relevant provisions of, the OBCA. The Merger shall become
effective at such time as the Articles of Merger are duly filed with the
Secretary of State of the State of Oregon, or at such other time as the parties
hereto agree shall be specified in the Articles of Merger (the date and time the
Merger becomes effective, the "Effective Time"). On the date of such filing, a
closing (the "Closing") shall be held at 10:00 a.m., Pacific Time, at the
offices of King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at
such other time and location as the parties hereto shall otherwise agree.
Section 1.5. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the OBCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of the Company
and Sub shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
Section 1.6. Conversion of Company Common Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of Sub, the Company
or the holders of any of the following securities:
(a) Each share of common stock of the Company, no par value
(the "Company Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than shares canceled pursuant to Section 1.6(c), if any)
shall be canceled and shall by virtue of the Merger and without any action on
the part of the holder thereof be converted automatically into the right to
receive an amount in cash equal to $7.00 payable, without interest, to the
holder of such share of Company Common Stock, upon surrender of the certificate
that formerly evidenced such share of Company Common Stock in the manner
provided in Section 1.9 (the "Merger Consideration");
(b) [INTENTIONALLY LEFT BLANK.]
(c) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time that is owned by Parent or Sub (or a
wholly owned subsidiary of Parent) and each share of Company Common Stock and
Preferred Stock (collectively, the "Company Stock") that is owned by the Company
as treasury stock or owned by a Subsidiary of the Company shall be canceled and
retired and cease to exist and no payment or distribution shall be made with
respect thereto;
(d) At the Effective Time, all shares of the Company Common
Stock converted pursuant to Section 1.6(a) shall no longer be outstanding and
shall automatically be canceled and retired and cease to exist, and each holder
of a certificate ("Certificate") representing any such shares of Company Common
Stock shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration in accordance with Section 1.6(a); and
(e) Each share of common stock, no par value per share, of Sub
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, no par value per share, of the Surviving Corporation and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
Section 1.7. [INTENTIONALLY LEFT BLANK.]
Section 1.8. Stock Options. The Company shall, by written notice to each
holder of an option to purchase shares of Company Common Stock (the "Company
Options"), offer to pay such holder upon consummation of the Merger, in exchange
for the cancellation of all of such holder's Company Options (regardless of
exercise price) upon the consummation of the Merger, an amount in cash
determined by multiplying (A) the excess, if any, of the per share Merger
Consideration over the
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applicable exercise price per share of the Company Options owned by such holder
by (B) the number of shares of Company Common Stock such holder could have
purchased had such holder exercised such Company Options (with an exercise price
less than the per share Merger Consideration) in full immediately prior to the
consummation of the Merger (such amount is hereinafter referred to as the
"Option Consideration"), and all Company Options of such holder shall thereafter
be canceled.
Section 1.9. Surrender of Shares of Company Common Stock; Stock Transfer
Books.
(a) Prior to the Effective Time, Parent shall designate a bank
or trust company to act as agent (the "Paying Agent") for the holders of shares
of Company Common Stock to receive the funds necessary to make the payments to
such holders pursuant to Section 1.6 upon surrender of their Certificates.
Parent will, on or prior to the Effective Time, deposit with the Paying Agent
the Merger Consideration to be paid in respect of the shares of Company Common
Stock (the "Fund"). The Fund shall be invested by the Paying Agent as directed
by Parent. Any net profit resulting from, or interest or income produced by,
such investments, shall be payable to the Surviving Corporation. Parent shall
replace any monies lost through any investment made pursuant to this Section
1.9(a). The Paying Agent shall make the payments provided in Section 1.6.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of shares of Company Common Stock entitled to receive
the Merger Consideration pursuant to Section 1.6 a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a Certificate, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly evidenced
by such Certificate, and such Certificate shall then be canceled. Until so
surrendered, each such Certificate shall, at and after the Effective Time,
represent for all purposes, only the right to receive such Merger Consideration.
No interest shall accrue or be paid to any beneficial owner of shares of Company
Common Stock or any holder of any Certificate with respect to the Merger
Consideration payable upon the surrender of any Certificate. If payment of the
Merger Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered on the stock transfer books of
the Company, it shall be a condition of payment that the Certificate so
surrendered shall be endorsed in blank or to the Paying Agent or otherwise be in
proper form for transfer and that the person requesting such payment shall have
paid all transfer and other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such taxes either have been paid or are not
applicable. If any Certificate shall have been lost, stolen or destroyed, upon
making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving Corporation or
Parent, the posting by such person of a bond, in such reasonable amount as the
Surviving Corporation or Parent may direct, as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the applicable
Merger Consideration such holder is entitled to receive pursuant to Section 1.6.
(c) At any time following the sixth (6th) month after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any portion of the Fund which had been made
available to the Paying Agent and not disbursed to holders of shares of Company
Common Stock (including, without limitation, all interest and other income
received by the Paying Agent in respect of all amounts held in the Fund or other
funds made available to it), and thereafter each such holder shall be entitled
to look only to the Surviving Corporation (subject to abandoned property,
escheat and other similar laws), and only as general creditors thereof, with
respect to any Merger Consideration that may be payable upon due surrender of
the Certificates held by such holder. If any
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Certificates representing shares of Company Common Stock shall not have been
surrendered immediately prior to such date on which the Merger Consideration in
respect of such Certificate would otherwise escheat to or become the property of
any Governmental Entity (as hereinafter defined), any such cash, shares,
dividends or distributions payable in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto. Notwithstanding the foregoing, none of the Surviving
Corporation, Parent, Sub or the Paying Agent shall be liable to any holder of a
share of Company Common Stock for any Merger Consideration delivered in respect
of such share of Company Common Stock to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) At the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Common Stock on the records of the Company. From
and after the Effective Time, except for Parent and Sub, the holders of shares
of Company Common Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such shares of Company Common
Stock except as otherwise provided herein or by applicable law, and all cash
paid pursuant to this Article I upon the surrender or exchange of Certificates
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of Company Common Stock theretofore represented by such
Certificate.
(e) Parent, Sub, the Company, the Surviving Corporation and the
Paying Agent, as the case may be, shall be entitled to deduct and withhold from
the Offer Price, Merger Consideration or Option Consideration, as applicable,
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock and Company Options such amounts that Parent, Sub, the Company, the
Surviving Corporation or the Paying Agent is required to deduct and withhold
with respect to the making of such payment under the Internal Revenue Code of
1986, as amended (the "Code"), the rules and regulations promulgated thereunder
or any provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent, Sub, the Company, the Surviving Corporation or the
Paying Agent, such amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Company Common Stock and
Company Options in respect of which such deduction and withholding was made by
Parent, Sub, the Company, the Surviving Corporation or the Paying Agent.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1. Articles of Incorporation. The Articles of Incorporation of
Sub as in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation, until the same shall thereafter
be altered, amended or repealed in accordance with applicable law or such
Articles of Incorporation.
Section 2.2. Bylaws. The Bylaws of the Company as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until the same shall thereafter be altered, amended or repealed in accordance
with applicable law, the Articles of Incorporation of the Surviving Corporation
or such Bylaws.
Section 2.3. Directors and Officers. From and after the Effective Time,
until the earlier of their resignation or removal or until their respective
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Sub at the Effective Time shall be the
directors of the Surviving Corporation, and (ii) the officers of Sub at the
Effective Time shall be the officers of the Surviving Corporation.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except to the extent set forth in the Company Disclosure Letter delivered
by the Company to the other parties hereto concurrently with the execution of
this Agreement (the "Company Disclosure Letter"), the Company represents and
warrants to each of the other parties hereto as follows:
Section 3.1. Organization and Standing. Each of the Company and each
Subsidiary (as defined below) (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has full corporate power and authority and all necessary
government approvals to own, lease and operate its properties and assets and to
conduct its business as presently conducted and (iii) is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary. The Company has furnished or made available to Parent true and
complete copies of its articles of incorporation (including any certificates of
designations attached thereto, the "Company Articles of Incorporation") and
bylaws (the "Company Bylaws") and the articles of incorporation and bylaws (or
equivalent organizational documents) of each Subsidiary, each as amended to
date. Such articles of incorporation, bylaws or equivalent organizational
documents are in full force and effect, and neither the Company nor any
Subsidiary is in violation of any provision of its articles of incorporation,
bylaws or equivalent organizational documents.
Section 3.2. Capitalization. The authorized capital stock of the Company
consists of 10,000,000 shares of Company Common Stock; 10,300 shares of Class A
Preferred Stock, no par value per share (the "Series A Preferred Stock");
566,500 shares of Class C Preferred Stock, par value $10.00 per share (the
"Series C Preferred Stock"); and 5,000,000 shares of Series Preferred Stock, no
par value per share (the "Series Preferred Stock," and together with the Series
A Preferred Stock and Series C Preferred Stock, the "Preferred Stock"). As of
the date hereof, (i) 5,411,212 shares of Company Common Stock are issued and
outstanding, all of which are validly issued, fully paid and nonassessable and
free of preemptive rights, (ii) 1,491,689 Company Options are outstanding and,
except as set forth in Section 3.2 of the Company Disclosure Letter, all are
issued pursuant to the Company's 1995 Consolidated and Restated Stock Option
Plan, the Nonqualified Stock Option Plan dated October 15, 1993, the Amended and
Restated Outside Director Restricted Stock Plan, the Restated Outside Director
Compensation and Stock Option Plan, the Nonqualified Option Agreements dated
January 21, 1999, the Nonqualified Option Agreements dated April 18, 2000 or the
1994 Equity Incentive Plan of ULTRADATA Corporation (collectively, the "Company
Stock Option Plans") each such option entitling the holder thereof to purchase
one share of Company Common Stock, and 290,900 shares of Company Common Stock
are authorized and reserved for future issuance pursuant to the Company Stock
Option Plans, (iii) 127,449 shares of Company Common Stock are obligated to be
issued to employees of the Company pursuant to the Concentrex Employee Savings
and Stock Ownership Plan, (iv) not more than 7,017 shares of Series A Preferred
Stock are issued and outstanding, all of which are validly issued, fully paid
and nonassessable and free of preemptive rights, (v) no shares of Series C
Preferred Stock or Series Preferred Stock are issued or outstanding, and (vi)
556,822 shares of Company Common Stock are reserved for future issuance pursuant
to warrants to purchase shares of Company Common Stock. Section 3.2 of the
Company Disclosure Letter sets forth a true and complete list of the outstanding
Company Options with the exercise price. Except as set forth above or in Section
3.2 of the Company Disclosure Letter, there are no options, warrants,
convertible securities, subscriptions, stock appreciation rights, phantom stock
plans or stock equivalents or other rights, agreements, arrangements or
commitments (contingent or otherwise) of any character issued or authorized by
the Company relating to the issued or unissued capital stock of the Company or
any Subsidiary or obligating the Company or any Subsidiary to issue or sell any
shares of capital stock of, or options, warrants, convertible securities,
subscriptions or other equity interests in, the Company or any Subsidiary. All
shares of Company Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and nonassessable.
Except as set forth in
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Section 3.2 of the Company Disclosure Letter, there are no outstanding
contractual obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any shares of Company Stock or any capital stock of any
Subsidiary or to pay any dividend or make any other distribution in respect
thereof or make any investment (in the form of a loan, capital contribution or
otherwise) in, any person. Section 3.2 of the Company Disclosure Letter sets
forth a correct and complete list of each corporation, association, subsidiary,
partnership, limited liability company or other entity of which the Company
controls, directly or indirectly, 30% or more of the outstanding equity
interests (each a "Subsidiary" and collectively, the "Subsidiaries"). Except as
set forth in Section 3.2 of the Company Disclosure Letter, the Company owns
beneficially and of record all of the issued and outstanding capital stock of
each Subsidiary and does not own an equity interest in any other corporation,
association, partnership, limited liability company or other entity, other than
in the Subsidiaries. Each outstanding share of capital stock of each Subsidiary
is duly authorized, validly issued, fully paid and nonassessable and each such
share owned by the Company or another Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever.
Section 3.3. Authority for Agreement.
(a) The Company has all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and,
subject to obtaining any necessary stockholder approval, to consummate the
Initial Offer, the Subsequent Offer, the Merger and the other transactions
contemplated by this Agreement. The execution, delivery and performance by the
Company of this Agreement, and the approval by the Company of the Initial Offer
and the Subsequent Offer, and the approval and consummation by the Company of
the Merger and the other transactions contemplated by this Agreement, have been
duly authorized by all necessary corporate action (including, without
limitation, the approval of the Board of Directors of the Company) and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the Initial Offer, the Subsequent Offer, the Merger
or the other transactions contemplated by this Agreement (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
affirmative vote of a majority of the voting power of the then outstanding
shares of Company Common Stock and the filing and recordation of appropriate
merger documents as required by the OBCA). This Agreement has been duly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by Parent and Sub, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms. The
affirmative vote of holders of the outstanding shares of Company Common Stock
entitled to vote is the only vote of the Company's Stockholders necessary to
approve this Agreement, the Merger and the other transactions contemplated by
this Agreement.
(b) At a meeting duly called and held on July 14, 2000, the
Board of Directors of the Company (i) determined that this Agreement and the
Stockholder's Agreements and the other transactions contemplated hereby and
thereby, including the Initial Offer, the Subsequent Offer and the Merger, are
fair to and in the best interests of the Company and the Company Stockholders,
(ii) approved, authorized and adopted this Agreement, the Initial Offer, the
Subsequent Offer, the Merger and the other transactions contemplated hereby, and
(iii) resolved to recommend approval and adoption of this Agreement, the Initial
Offer, the Subsequent Offer and the Merger by the Company Stockholders. The
actions taken by the Board of Directors of the Company constitute approval of
the Initial Offer, the Subsequent Offer, the Merger, this Agreement and the
Stockholder's Agreements and the other transactions contemplated hereby and
thereby by the Board of Directors of the Company under the provisions of
Sections 60.825 et seq. and 60.801 et seq. of the OBCA and Article VI of the
Company Articles of Incorporation such that neither Sections 60.825 et seq. nor
60.801 et seq. of the OBCA nor Article VI of the Company Articles of
Incorporation apply to this Agreement, the Stockholder's Agreements or the
transactions contemplated hereby or thereby. Other than Sections 60.825 et seq.
and Articles VI of the Company Articles of Incorporation, no state antitakeover
or similar statute or other provision in the Company's or its Subsidiaries'
governing documents is applicable to Parent or Sub in connection with the
Initial Offer, the Subsequent Offer, the Merger, this Agreement or the
Stockholder's Agreements or any
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of the transactions contemplated hereby or thereby. The Company has amended its
bylaws to provide that the Company, Parent and Sub and the Initial Offer, the
Subsequent Offer, the Merger, this Agreement and the Stockholder's Agreements
and the transactions contemplated hereby and thereby are not subject to the
Oregon control share acquisition statute (OBCA Sections 601.801 et seq.).
(c) The Independent Advisor has delivered to the Board of
Directors of the Company its written opinion, dated as of the date of this
Agreement, that, as of such date and based on the assumptions, qualifications
and limitations contained therein, the consideration to be received by the
Company Stockholders in the Initial Offer, the Subsequent Offer and the Merger
is fair to such holders from a financial point of view. A copy of such opinion
is included in Section 3.3(c) of the Company Disclosure Letter.
Section 3.4. No Conflict. The execution and delivery of this Agreement
by the Company do not, and the performance of this Agreement by the Company and
the consummation of the Initial Offer, the Subsequent Offer and the Merger and
the other transactions contemplated by this Agreement will not, (i) conflict
with or violate the Company Articles of Incorporation or Company Bylaws or
equivalent organizational documents of any of its Subsidiaries, (ii) subject to
Section 3.5, conflict with or violate any United States federal, state or local
or any foreign statute, law, rule, regulation, ordinance, code, order, judgment,
decree or any other requirement or rule of law (a "Law") applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, or (iii) result in a
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, give to others any right of
termination, amendment, acceleration or cancellation of, result in triggering
any payment or other obligations, or result in the creation of a lien or other
encumbrance on any property or asset of the Company or any of its Subsidiaries
in any case that would, or would reasonably be expected to, result in a Company
Material Adverse Effect pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation or Material Contract (as hereinafter defined) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any property or asset of any of them is bound or affected.
Section 3.5. Required Filings and Consents. The execution and delivery
of this Agreement by the Company do not, and the performance of this Agreement
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any United States federal, state or local
or any foreign government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), except (i) for applicable requirements, if any, of the
Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and filing
and recordation of appropriate merger documents as required by the OBCA, (ii)
for those required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and (iii) for filings contemplated by Sections 1.1,
1.2 and 3.14 hereof.
Section 3.6. Compliance. Each of the Company and its Subsidiaries (i)
has been operated at all times in compliance in all material respects with all
Laws applicable to the Company or any of its Subsidiaries or by which any
property, business or asset of the Company or any of its Subsidiaries is bound
or affected and (ii) is not in default or violation in any material respect,
individually or in the aggregate, of any notes, bonds, mortgages, indentures,
leases, licenses, permits, franchises or Material Contract to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any property or asset of the Company or any of its Subsidiaries
is bound or affected.
Section 3.7. SEC Filings, Financial Statements.
(a) The Company and each Subsidiary, as necessary, has filed
all forms, reports, statements and documents required to be filed with the SEC
since January 1, 1997 (the "SEC Reports"), each of which has complied in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
promulgated thereunder, or the Exchange Act, and the rules and regulations
promulgated thereunder. None of the SEC Reports (including, but not limited to,
any financial statements or schedules
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included or incorporated by reference therein) contained when filed any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Except to the extent that information contained
in any SEC Report has been revised or superseded by a later filed SEC Report,
none of the SEC Reports contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) All of the financial statements included in the SEC
Reports, in each case, including any related notes thereto, as filed with the
SEC (collectively referred to as the "Company Financial Statements"), have been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
may be permitted by Form 10-Q of the SEC and subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) and fairly present
the consolidated financial position of the Company and its Subsidiaries at the
respective date thereof and the consolidated results of its operations and
changes in cash flows for the periods indicated.
(c) There are no liabilities of the Company or any of its
Subsidiaries of any kind whatsoever, whether or not accrued and whether or not
contingent or absolute, that are material to the Company and its Subsidiaries,
taken as a whole, other than (i) liabilities disclosed or provided for in the
consolidated balance sheet of the Company and its Subsidiaries at December 31,
1999, including the notes thereto, (ii) liabilities disclosed in the SEC Reports
or in the Company's preliminary June 2000 financial statements attached hereto
on Section 3.7(c) of the Company Disclosure Letter, (iii) liabilities incurred
on behalf of the Company in connection with this Agreement and the contemplated
Merger, and (iv) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1999, none of which liabilities
pursuant to this clause (iv) are, individually or in the aggregate, reasonably
likely to be materially adverse to the Company.
(d) The Company has heretofore furnished or made available to
Parent a complete and correct copy of any amendments or modifications which have
not yet been filed with the SEC to agreements, documents or other instruments
which previously had been filed by the Company with the SEC as exhibits to the
SEC Reports pursuant to the Securities Act and the rules and regulations
promulgated thereunder or the Exchange Act and the rules and regulations
promulgated thereunder.
Section 3.8. Absence of Certain Changes or Events. Except as
contemplated by this Agreement, since December 31, 1999 (and following the date
hereof, other than with respect to events or occurrences that are the result of
the transactions contemplated by this Agreement), the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary
course and consistent with prior practice and there has not been (i) any event
or occurrence of any condition that has had or would reasonably be expected to
have a Company Material Adverse Effect (as hereinafter defined), (ii) any
declaration, setting aside or payment of any dividend or any other distribution
with respect to any of the capital stock of the Company or any Subsidiary, (iii)
any material change in accounting methods, principles or practices employed by
the Company, or (iv) any action of the type described in Sections 5.1(b) or
5.1(c) which had such action been taken after the date of this Agreement would
be in violation of any such Section.
Section 3.9. Taxes. The Company and each of its Subsidiaries have timely
filed all Tax Returns (as hereinafter defined) required to be filed by any of
them. All such Tax Returns are true, correct and complete in all material
respects. All Taxes (as hereinafter defined) of the Company and its Subsidiaries
which are (i) shown as due on such Tax Returns, (ii) otherwise due and payable
or (iii) claimed or asserted by any taxing authority to be due, have been paid,
except for those Taxes being contested in good faith and for which adequate
reserves have been established in the financial statements included in the SEC
Reports in accordance with GAAP. There are no liens for any Taxes upon the
assets of the Company or any of its Subsidiaries, other than statutory liens for
Taxes not yet due and payable and liens for real estate Taxes contested in good
faith. The Company does not know of any
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proposed or threatened Tax claims or assessments which, if upheld, could
individually or in the aggregate have a Company Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has made an election under Section
341(f) of the Code. Neither the Company nor any of its Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency. The Company and each
Subsidiary has withheld and paid over to the relevant taxing authority all Taxes
required to have been withheld and paid in connection with payments to
employees, independent contractors, creditors, Stockholders or other third
parties. The unpaid Taxes of the Company and its Subsidiaries for the current
taxable period (A) did not, as of the most recent Company Financial Statements,
exceed the reserve for Tax liability set forth on the face of the balance sheet
in the most recent Company Financial Statements and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing in accordance
with the past custom and practice of the Company and its Subsidiaries in filing
their Tax Returns. For purposes of this Agreement, (a) "Tax" (and, with
correlative meaning, "Taxes") means any federal, state, local or foreign income,
gross receipts, property, sales, use, license, excise, franchise, employment,
payroll, premium, withholding, alternative or added minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty or addition thereto, whether disputed or not, imposed by any
Governmental Entity, and (b) "Tax Return" means any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 3.9 of the Company Disclosure Letter sets forth with reasonable
specificity: (i) all jurisdictions in which the Company or any Subsidiary
currently has a presence requiring it to pay Taxes (a "Taxable Presence") and
all jurisdictions in which the Company or any Subsidiary has had a Taxable
Presence since January 1, 1993, and (ii) all Tax Returns filed or due to be
filed applicable to the three year period ending on the date hereof. The Company
has previously provided Parent with all correspondence with any Tax authorities
pertaining to pending or completed audits since January 1, 1997.
Section 3.10. Assets.
(a) Except as set forth in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 (the "10-K") or in Section
3.10(a) of the Company Disclosure Letter, the Company and each of its
Subsidiaries have good and marketable title to, or a valid leasehold interest
in, all of their real and personal properties and assets reflected in the 10-K
or acquired after December 31, 1999 (other than assets disposed of since
December 31, 1999 in the ordinary course of business consistent with past
practice), in each case free and clear of all title defects, liens, encumbrances
and restrictions, except for (i) liens, encumbrances or restrictions which
secure indebtedness which are properly reflected in the 10-K; (ii) liens for
Taxes accrued but not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred after December
31, 1999, provided that the obligations secured by such liens are not
delinquent; and (iv) liens that do not individually or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impact the operation of the Company or any Subsidiary. Section 3.10(a) of the
Company Disclosure Letter sets forth a true, correct and complete list of all
real property (i) owned or leased by the Company or a Subsidiary, (ii) as to
which the Company or a Subsidiary has a license, easement or right of way to
use, (iii) as to which the Company or a Subsidiary has the option to purchase,
lease, license or acquire an easement or right of way or (iv) in which the
Company or a Subsidiary has any other interest. Except as set forth in Section
3.10(a) of the Company Disclosure Letter, the Company and each of its
Subsidiaries either own, or have valid leasehold or licensed interests in, all
properties and assets used by them in the conduct of their business.
(b) Except as set forth in Section 3.10(b) of the Company
Disclosure Letter, neither the Company nor any of its Subsidiaries has any legal
obligation, absolute or contingent, to any other person to sell or otherwise
dispose of any of its assets outside of the ordinary course of business
consistent with past
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practice with an individual value of $25,000 or an aggregate value in excess of
$250,000.
(c) The equipment of the Company and its Subsidiaries is in
good operating condition and repair (ordinary wear and tear excepted) and is
adequate for the uses to which it is being put, and none of such equipment is in
need of maintenance or repairs, except for ordinary routine maintenance or
repairs that are not in the aggregate material in nature or cost. The equipment
of the Company and its Subsidiaries is adequate for the continued conduct of the
business of the Company and its Subsidiaries after the Effective Time in the
same manner as conducted prior to the Effective Time.
Section 3.11. Change of Control Agreements. Except as set forth in
Section 3.11 of the Company Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation of the Initial Offer, the
Subsequent Offer, or the Merger or the other transactions contemplated by this
Agreement, will (either alone or in conjunction with any other event) result in,
cause the accelerated vesting or delivery of, or increase the amount or value
of, any payment or benefit to any director, officer or employee of the Company.
Except as set forth in Section 3.11 of the Company Disclosure Letter, without
limiting the generality of the foregoing, no amount paid or payable by the
Company in connection with the Initial Offer, the Subsequent Offer or the Merger
or the other transactions contemplated by this Agreement, including accelerated
vesting of options, (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code.
Section 3.12. Litigation. Except for such matters disclosed in Section
3.12 of the Company Disclosure Letter and such other matters which, in either
case, if adversely determined individually or in the aggregate, are not, and
would not reasonably be expected to be, material to the Company (except as
specifically disclosed in such Section 3.12 of the Company Disclosure Letter),
there are no claims, suits, actions, investigations, indictments or information,
or administrative, arbitration or other proceedings ("Litigation") pending or,
to the knowledge of the Company, threatened against the Company or any of its
Subsidiaries. There are no judgments, orders, injunctions, decrees, stipulations
or awards (whether rendered by a court, administrative agency, or by
arbitration, pursuant to a grievance or other procedure) against or relating to
the Company or any of its Subsidiaries which have not yet been paid or satisfied
in full or which contain ongoing obligations or restrict the Company's or its
Subsidiaries' activities going forward.
Section 3.13. Contracts and Commitments. Section 3.13 of the Company
Disclosure Letter sets forth a true, correct and complete list of the following
contracts to which the Company or a Subsidiary is a party (including every
amendment, modification or supplement to the foregoing): (i) any contracts of
employment and contracts or agreements entered into by the Company or a
Subsidiary, or, to the knowledge of the Company, entered into by any employee
which limit or restrict the Company, any Subsidiary or any employee from
engaging in any business in any jurisdiction, (ii) pending agreements or
arrangements for, or any agreements or arrangements with continuing obligations
relating to, the purchase or sale of any assets (otherwise than in the ordinary
course of business), (iii) all bonds, debentures, notes, loans, credit or loan
agreements or commitments, mortgages, indentures or guarantees or other
agreements or contracts relating to the borrowing of money involving amounts in
excess of $25,000, (iv) agreements with unions, material independent contractor
agreements and material leased or temporary employee agreements, (v) leases of
any real or personal property involving annual rent equal to or in excess of
$25,000 or more, (vi) all other contracts, agreements or commitments (other than
with respect to contracts, agreements or commitments of the type identified in
Section 3.25(b) of the Company Disclosure Letter) involving payments to be made
by or to the Company or a Subsidiary equal to or in excess of $100,000 in any
12-month period, and (vii) all contracts, agreements or commitments with Major
Customers identified in Section 3.25(b) of the Company Disclosure Letter
(individually, a "Material Contract" and collectively, "Material Contracts").
Except for agreements, arrangements or commitments disclosed in Section 3.13 of
the Company Disclosure Letter, neither the Company nor any of its Subsidiaries
is a party to any agreement, arrangement or commitment which is material to the
business
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of the Company or any of its Subsidiaries. The Company has delivered or made
available true, correct and complete copies of all such agreements, arrangements
and commitments to Parent. Neither the Company nor any of its Subsidiaries is in
default under any such agreement, arrangement or commitment which defaults
individually or in the aggregate would reasonably be expected to result in a
Company Material Adverse Effect.
Section 3.14. Information Supplied. None of the information supplied or
to be supplied by the Company in writing to Parent specifically for inclusion or
incorporation by reference in the Schedule TO will, at the date such documents
are first published, sent or delivered to Company Stockholders or, unless
promptly corrected, at any time during the pendency of the Initial Offer or
Subsequent Offer 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. Neither the Schedule 14D-9 at the date such document
is first published, sent or delivered to the Company Stockholders or, unless
promptly corrected, at any time during the pendency of the Initial Offer or
Subsequent Offer, nor the proxy statement to be mailed to the Company
Stockholders in connection with the meeting (the "Stockholder's Meeting") to be
called to consider the Merger (the "Proxy Statement") (if applicable) at the
date such document is first published, sent or delivered to Company Stockholders
or, unless promptly corrected, at any time during the pendency of the
Stockholder's Meeting, will 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. The Schedule 14D-9 and the Proxy Statement
(if applicable) will comply as to form and substance in all material respects
with the requirements of the Exchange Act and the applicable rules and
regulations of the SEC thereunder. Notwithstanding the foregoing, no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub for inclusion or incorporation by reference in any of the
foregoing documents.
Section 3.15. Employee Benefit Plans. All material employee benefit
plans, compensation arrangements and other benefit arrangements covering
employees of the Company or any of its Subsidiaries (the "Company Benefit
Plans") and all employee agreements providing for compensation, severance or
other benefits to any employee or former employee of the Company or any of its
Subsidiaries are listed Section 3.15 in the Company Disclosure Letter. Except as
set forth in Section 3.15 of the Company Disclosure Letter, true, correct and
complete copies of the following documents with respect to each of the Company
Benefit Plans have been provided by the Company to Parent: (i) any plans and
related trust documents and amendments thereto, (ii) summary plan descriptions
and material modifications thereto, (iii) general written communications made
since September 1, 1999 to employees relating to the Company Benefit Plans and
(iv) written descriptions of all non-written agreements relating to the Company
Benefit Plans. To the extent applicable, the Company Benefit Plans comply with
the requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the Code, and any Company Benefit Plan intended to be
qualified under Section 401(a) of the Code has received a determination letter
or is a model prototype plan and continues to satisfy the requirements for such
qualification. Neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate of the Company maintains, contributes to or has maintained or
contributed in the past six (6) years to any benefit plan which is covered by
Title IV of ERISA or Section 412 of the Code that may result in a material
penalty to the Company or any Subsidiary. Neither any Company Benefit Plan, nor
the Company nor any Subsidiary has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA or engaged in any
transaction that is reasonably likely to result in any such liability or
penalty. Each of the Company and its Subsidiaries and any ERISA Affiliate which
maintains a "group health plan" within the meaning of Section 5000(b)(1) of the
Code has complied with the notice and continuation requirements of Section 4980B
of the Code, Part 6 of Subtitle B of Title I of ERISA and the regulations
thereunder (COBRA), and the creditable coverage certification requirements and
limitations on pre-existing condition exclusion requirements of Section 9801 of
the Code, Part 7 of Subtitle B of Title I of ERISA and the regulations
thereunder (HIPAA). Except as set forth in Section 3.15 of the Company
Disclosure Letter, each Company Benefit Plan has been maintained and
administered in compliance with its terms and with ERISA and the Code
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to the extent applicable thereto. There is no pending or, to the knowledge of
the Company, threatened or anticipated Litigation against or otherwise involving
any of the Company Benefit Plans and no Litigation (excluding claims for
benefits incurred in the ordinary course of Company Benefit Plan activities) has
been brought against or with respect to any such Company Benefit Plan. All
contributions required to be made as of the date hereof to the Company Benefit
Plans have been made or provided for. Except as described in the SEC Reports or
as required by Law, neither the Company nor any of its Subsidiaries maintains or
contributes to any plan or arrangement which provides or has any liability to
provide life insurance or medical or other employee welfare benefits to any
employee or former employee upon his retirement or termination of employment,
and neither the Company nor any of its Subsidiaries has ever represented,
promised or contracted (whether in oral or written form) to any employee or
former employee that such benefits would be provided.
Any individual who performs services for the Company or any of its
Subsidiaries (other than through a contract with an organization other than such
individual) and who is not treated as an employee for federal income tax
purposes by the Company or its Subsidiaries is not an employee for such
purposes. Except as set forth in Section 3.15 of the Company Disclosure Letter,
there are no agreements in effect between the Company or any Subsidiary and any
individual retained by the Company or any Subsidiary to provide services as a
consultant or independent contractor.
For purposes of this Agreement "ERISA Affiliate" means any business or
entity which is a member of the same "controlled group of corporations," an
"affiliated service group" or is under "common control" with an entity within
the meanings of Sections 414(b), (c) or (m) of the Code, is required to be
aggregated with the entity under Section 414(o) of the Code, or is under "common
control" with the entity, within the meaning of Section 4001(a)(14) of ERISA, or
any regulations promulgated or proposed under any of the foregoing Sections.
Section 3.16. Labor and Employment Matters. Except as set forth in
Section 3.16 of the Company Disclosure Letter:
(a) There are no agreements or arrangements on behalf of any
officer, director or employee providing for payment or other benefits to such
person contingent upon the execution of this Agreement, the Closing or a
transaction involving a change of control of the Company.
(b) Neither the Company nor any of its Subsidiaries is a party
to, or bound by, any collective bargaining agreement or other contracts,
arrangements, agreements or understandings with a labor union or labor
organization that was certified by the National Labor Relations Board ("NLRB").
There is no existing, pending or, to the knowledge of the Company, threatened
(i) unfair labor practice charge or complaint, labor dispute, labor arbitration
proceeding or any other matter before the NLRB or any other comparable state
agency against or involving the Company or any of its Subsidiaries, (ii)
activity or proceeding by a labor union or representative thereof to organize
any employees of the Company or any of its Subsidiaries, (iii) certification or
decertification question relating to collective bargaining units at the premises
of the Company or any of its Subsidiaries or (iv) lockout, strike, organized
slowdown, work stoppage or work interruption with respect to such employees.
(c) Neither the Company nor any of its Subsidiaries has taken
any action that would constitute a "Mass Layoff" or "Plant Closing" within the
meaning of the Worker Adjustment and Retraining Notification ("WARN") Act or
would otherwise trigger notice requirements or liability under any state or
local plant closing notice law. No agreement, arbitration or court decision or
governmental order in any way limits or restricts any of the Company, any of its
Subsidiaries or Parent from relocating or closing any of the operations of the
Company or any of its Subsidiaries.
(d) Neither the Company nor any of its Subsidiaries has failed
to pay when due any wages (including overtime wages), bonuses, commissions,
benefits, taxes, penalties or assessments or other monies, owed to, or arising
out of the employment of or any relationship or arrangement with, any officer,
director,
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employee, sales representative, contractor, consultant or other agent. The
Company and its Subsidiaries are in compliance in all material respects with all
applicable Laws relating to employment and the payment of wages and benefits.
There are no, and the Company has no reason to believe there would be any,
citations, investigations, administrative proceedings or formal complaints of
violations of any federal or state wage and hour laws pending or, to the
knowledge of the Company, threatened before the Department of Labor or any
federal, state or administrative agency or court against or involving the
Company or any of its Subsidiaries.
(e) The Company and each of its Subsidiaries are in all
material respects in compliance with all immigration laws relating to employment
and have properly completed and maintained all applicable forms (including but
not limited to I-9 forms) and, to the knowledge of the Company, there are no
citations, investigations, administrative proceedings or formal complaints of
violations of the immigration laws pending or threatened before the Immigration
and Naturalization Service or any federal, state or administrative agency or
court against or involving the Company or any of its Subsidiaries.
(f) There are no investigations, administrative proceedings,
charges or formal complaints of discrimination (including discrimination based
upon sex, age, marital status, race, national origin, sexual preference,
disability, handicap or veteran status) pending or threatened before the Equal
Employment Opportunity Commission or any federal, state or local agency or court
against or involving the Company or any of its Subsidiaries. No discrimination,
sexual harassment, retaliation and/or wrongful or tortious conduct claim is
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries under the 1866, 1877, 1964 or 1991 Civil Rights Acts,
the Equal Pay Act, the Age Discrimination in Employment Act, as amended, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Fair
Labor Standards Act, ERISA, or any other federal law relating to employment or
any comparable state or local fair employment practices act regulating
discrimination in the workplace, and no wrongful discharge, libel, slander,
invasion of privacy or other claim (including but not limited to violations of
the Fair Credit Reporting Act, as amended, and any applicable whistleblower
statutes) under any state or federal law is pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries.
(g) If the Company or any of its Subsidiaries is a Federal,
State or local contractor obligated to develop and maintain an affirmative
action plan, no discrimination claim, show-cause notice, conciliation
proceeding, sanctions or debarment proceedings is pending or, to the knowledge
of the Company, has been threatened against the Company or any of its
Subsidiaries with the Office of Federal Contract Compliance Programs or any
other Federal agency or any comparable state or local agency or court and no
desk audit or on-site review is in progress.
(h) There are no citations, investigations, administrative
proceedings or formal complaints of violations of local, state or federal
occupational safety and health laws pending or, to the knowledge of the Company,
threatened before the Occupational Safety and Health Review Commission or any
federal, state or local agency or court against or involving the Company or any
of its Subsidiaries.
(i) No workers' compensation or retaliation claim is pending
against the Company or any of its Subsidiaries in excess of $100,000 in the
aggregate and the Company maintains adequate insurance with respect to workers'
compensation claims pursuant to insurance policies that are currently in force,
or has accrued an adequate liability for such obligations, including, without
limitation, adequate accruals with respect to accrued but unreported claims and
retroactive insurance premiums.
Section 3.17. Environmental Compliance and Disclosure. Except as set
forth in Section 3.17 of the Company Disclosure Letter:
(a) Each of the Company and its Subsidiaries possesses, and is
in compliance in all material respect with, all permits, licenses and
governmental authorizations and has filed all notices that are required under,
all Environmental Laws (as hereinafter defined) applicable to the Company or any
Subsidiary, as
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applicable, and the Company and each of its Subsidiaries is in compliance with
all applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those laws or
contained in any Law, regulation, code, plan, order, decree, judgment, notice,
permit or demand letter issued, entered, promulgated or approved thereunder,
including, but not limited to, with respect to the use, storage, treatment,
manufacture, generation, disposal and handling of Hazardous Materials;
(b) Neither the Company nor any Subsidiary has received notice
of actual or threatened liability under the Federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") or any similar state or
local statute or ordinance from any governmental agency or any third party and,
to the knowledge of the Company, there are no facts or circumstances which could
form the basis for the assertion of any claim against the Company or any
Subsidiary under any Environmental Laws including, without limitation, CERCLA or
any similar local, state or foreign Law with respect to any on-site or off-site
location;
(c) No Hazardous Materials have ever been, are being, or are
threatened to be spilled, released, discharged, disposed, placed or otherwise
caused to become located in buildings or the soil, sub-surface strata, air,
water or ground water under, or upon any plant, facility, site, area or property
currently or previously owned or leased by the Company or any Subsidiary or on
which the Company or any Subsidiary is conducting or has conducted its business
or operations;
(d) Neither the Company nor any Subsidiary has entered into or
agreed to, nor does it contemplate entering into, any consent decree or order,
and neither the Company nor any Subsidiary is subject to any judgment, decree or
judicial or administrative order relating to compliance with, or the cleanup of
Hazardous Materials under, any applicable Environmental Laws;
(e) Neither the Company nor any Subsidiary has been subject to
any administrative or judicial proceeding pursuant to and, to the knowledge of
the Company, has not been alleged to be in violation of, applicable
Environmental Laws or regulations either now or any time during the past five
years;
(f) Neither the Company nor any Subsidiary has received notice
that it is subject to any claim, obligation, liability, loss, damage or expense
of whatever kind or nature, contingent or otherwise, incurred or imposed or
based upon any provision of any Environmental Law and arising out of any act or
omission of the Company or any Subsidiary, its employees, agents or
representatives or, to the knowledge of the Company, arising out of the
ownership, use, control or operation by the Company or any Subsidiary of any
plant, facility, site, area or property (including, without limitation, any
plant, facility, site, area or property currently or previously owned or leased
by the Company or any Subsidiary) or any other area on which the Company or any
Subsidiary is conducting or has conducted its business or operations from which
any Hazardous Materials were released into the environment (the term "release"
meaning any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment, and the term "environment" meaning any surface or ground water,
drinking water supply, soil, surface or subsurface strata or medium, or the
ambient air) and there is no basis for any such notice and, to the knowledge of
the Company, none are threatened or foreseen;
(g) Neither the Company nor any Subsidiary has any files or
documents relating to environmental matters. Neither the Company nor any
Subsidiary has paid any fines, penalties or assessments within the last five
years with respect to environmental matters; and
(h) To the knowledge of the Company, no real property leased by
the Company or any Subsidiary contains any friable asbestos, regulated PCBs or
underground storage tanks.
As used in this Section 3.17, the term "Environmental Laws" means any and
all past, present and future laws (including without limitation statutes,
regulations, and common law) of the United States, any State or political
subdivision thereof, or any other nation or political subdivision, for the
protection of the environment or human health and safety, including without
limitation, judgments, awards, decrees,
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regulations, rules, standards, requirements, orders and permits issued by any
court, administrative agency or commission or other Governmental Entity under
such laws, and shall include without limitation the Comprehensive Environmental
Response Compensation and Liability Act (42 USC 9601 et seq.), the Clean Air Act
(42 USC Section Section 7401 et seq.), the Resource Conservation and Recovery
Act (42 USC Section Section 6901 et seq.), the Clean Water Act (33 USC Section
Section 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
Section 651 et seq.), the Toxic Substance Control Act (15 USC Section Section
2601 et seq.), and the Safe Drinking Water Act (42 USC Section Section 300f et
seq.), as well as any and all state or local laws that relate to pollution,
contamination of the environment, human health, or safety, and all future
amendments to such laws, and all past, present and future regulations, rules,
standards, requirements, orders and permits issued thereunder.
As used in this Section 3.17, the term "Hazardous Materials" means any
waste, pollutant, hazardous substance, toxic, radioactive, ignitable, reactive
or corrosive substance, hazardous waste, special waste, controlled waste,
industrial substance, by-product, process intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical liquids or solids,
liquid or gaseous products, or any constituent of any such substance or waste or
any other material which may be harmful to human health or the environment.
Section 3.18. Intellectual Property.
(a) Section 3.18(a) of the Company Disclosure Letter sets forth
a true and complete list of all of the following items which the Company and/or
its Subsidiaries own in whole or in part and/or have a valid claim of ownership
in whole or in part (such as a contract right of assignment from an employee or
independent contractor) (hereinafter referred to as the "Intellectual Property
Rights"): (i) all United States and foreign patents and applications therefor,
(ii) all United States and foreign trademark, trade name, service xxxx,
collective xxxx, and certification xxxx registrations and applications therefor
at the federal, state or local level, (iii) all material trademarks, trade
names, service marks, collective marks, and certification marks which have been
used by the Company or its Subsidiaries in commerce at any time in the last five
years, and (iv) all United States and foreign and copyright registrations and
applications therefor. Section 3.18(a) of the Company Disclosure Letter also
sets forth a true and complete list of all items described in subsections (i)
through (iii) of the previous sentence in which the Company or any of its
Subsidiaries own a license (the "Licensed Rights"). Section 3.18(a) of the
Company Disclosure Letter sets forth a true and accurate list with respect to
the Company and its Subsidiaries of (i) all unpatented inventions which have
been the subject of a patent application by the Company or any Subsidiary, and
(ii) all material copyrightable software products (excluding derivative works)
which have not been the subject of a copyright registration or application
therefor by the Company or any Subsidiary, including but not limited to software
code, manuals and other text works. Prior to the date hereof, the Company has
provided Parent with reasonable access to all of the Company's and its
Subsidiaries' material trade secrets, proprietary information, databases and
data. The Company represents and warrants that, except as expressly stated in
Section 3.18(a) of the Company Disclosure Letter, (i) the Intellectual Property
Rights are free and clear of any liens, claims or encumbrances, are not subject
to any license (royalty bearing or royalty free) and are not subject to any
other arrangement requiring any payment to any person or the obligation to grant
rights to any person in exchange; (ii) to the knowledge of the Company, the
Licensed Rights are free and clear of any liens, claims, encumbrances, royalties
or other obligations; and (iii) the Intellectual Property Rights and the
Licensed Rights are all those material rights necessary to the conduct of the
business of each of the Company, its Subsidiaries and the Company's affiliates
as presently conducted. To the knowledge of the Company, the validity of the
Intellectual Property Rights and title thereto and validity of the Licensed
Rights, (i) have not been questioned in any prior Litigation; (ii) are not being
questioned in any pending Litigation; and (iii) are not the subject(s) of any
threatened or proposed Litigation. The business of each of the Company and its
Subsidiaries, as presently conducted, does not conflict with and, to the
knowledge of the Company, has not been alleged to conflict with any patents,
trademarks, trade names, service marks, copyrights or other intellectual
property rights of others. The consummation of the transactions contemplated
hereby will not result in the loss or impairment of any of the Intellectual
Property Rights or the Company's or its Subsidiaries' right to use any of the
Licensed Rights. Except as expressly
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authorized by the Company, there are no third parties using any of the
Intellectual Property Rights material to the business of the Company or its
Subsidiaries as presently conducted.
(b) Each of the Company and its Subsidiaries owns, or possesses
sufficiently broad and valid rights to, all computer software programs that are
material to the conduct of the business of the Company and its Subsidiaries.
There are no infringement suits, actions or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary with
respect to any software owned or licensed by the Company or any Subsidiary.
Section 3.19. Brokers. Except pursuant to the Independent Advisor
Engagement Letter (as hereinafter defined), no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement, the Initial Offer, the Subsequent Offer, the
Merger or the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. Section 3.19 of the Company
Disclosure Letter includes a complete and correct copy of all agreements between
the Company and the Independent Advisor pursuant to which such firm would be
entitled to any payment relating to this Agreement, the Initial Offer, the
Subsequent Offer, the Merger or the other transactions contemplated by this
Agreement.
Section 3.20. Insurance Policies. Section 3.20 of the Company Disclosure
Letter contains a complete and accurate list of all insurance policies in force
naming the Company, any of its Subsidiaries or employees thereof as an insured
or beneficiary or as a loss payable payee or for which the Company or any
Subsidiary has paid or is obligated to pay all or part of the premiums. Neither
the Company nor any Subsidiary has received notice of any pending or threatened
cancellation or premium increase (retroactive or otherwise) with respect
thereto, and each of the Company and the Subsidiaries is in compliance in all
material respects with all conditions contained therein. There are no material
pending claims against such insurance policies by the Company or any Subsidiary
as to which insurers are defending under reservation of rights or have denied
liability, and there exists no material claim under such insurance policies that
has not been properly filed by the Company or any Subsidiary. Except for the
self-insurance retentions or deductibles set forth in the policies contained in
the aforementioned list, the policies are adequate in scope and amount to cover
all prudent and reasonably foreseeable risks which may arise in the conduct of
the business of the Company and the Subsidiaries.
Section 3.21. Notes and Accounts Receivable.
(a) Except as disclosed in Section 3.21(a) of the Company
Disclosure Letter, there are no notes receivable of the Company or any
Subsidiary owing by any director, officer, stockholder or employee of the
Company or any Subsidiary ("Affiliate Debt").
(b) Except as disclosed in Section 3.21(b) of the Company
Disclosure Letter, all accounts receivable of the Company and any Subsidiary are
current or covered by adequate reserves for uncollectability, and there are no
material disputes regarding the collectibility of any such accounts receivable.
Section 3.22. Transactions with Affiliates. Except as set forth in
Section 3.22 of the Company Disclosure Letter (other than compensation and
benefits received in the ordinary course of business as an employee or director
of the Company or its Subsidiaries) (collectively, the "Affiliate
Transactions"), no director, officer or other "affiliate" or "associate" (as
hereinafter defined) of the Company or any Subsidiary or any entity in which, to
the knowledge of the Company, any such director, officer or other affiliate or
associate, owns any beneficial interest (other than a publicly held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by any such persons) has any interest in: (i) any contract, arrangement or
understanding with, or relating to the business or operations of Company or any
Subsidiary; (ii) any loan, arrangement, understanding,
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agreement or contract for or relating to indebtedness of the Company or any
Subsidiary; or (iii) any property (real, personal or mixed), tangible, or
intangible, used or currently intended to be used in, the business or operations
of the Company or any Subsidiary.
Section 3.23. No Existing Discussions. As of the date hereof, the Company
is not engaged, directly or indirectly, in any negotiations or discussions with
any other party with respect to an Acquisition Proposal (as hereinafter
defined).
Section 3.24. Stockholders' Rights Agreement. Neither the Company nor any
Subsidiary has adopted, or intends to adopt, a stockholders' rights agreement or
any similar plan or agreement which limits or impairs the ability to purchase,
or become the direct or indirect beneficial owner of, shares of Company Common
Stock or any other equity or debt securities of the Company or any of its
Subsidiaries.
Section 3.25. Major Suppliers and Customers.
(a) Section 3.25(a) of the Company Disclosure Letter sets forth
a list of each supplier of goods or services to Company and the Subsidiaries to
whom the Company and the Subsidiaries paid in the aggregate more than $200,000
during the 12-month period ended March 31, 2000 (each a "Major Supplier" and,
collectively, "Major Suppliers"), together with in each case the amount paid
during such period. Neither the Company nor any Subsidiary is engaged in any
material dispute with any Major Supplier and, to the knowledge of the Company,
no Major Supplier intends to terminate, limit or reduce its business relations
with the Company or any Subsidiary. The Company has no reason to believe that
the consummation of the transactions contemplated hereunder will have any
material adverse effect on the business relationship of the Company or any
Subsidiary with any Major Supplier. Except as set forth in Section 3.25(a) of
the Company Disclosure Letter, none of the officers or directors of the Company
or any Subsidiary, or any "affiliate" or "associate" of any officer or director
of the Company or any Subsidiary, or any company or other organization in which
any officer or director of the Company or any Subsidiary or any "affiliate" or
"associate" of any officer or director of the Company or any Subsidiary has a
direct or indirect or indirect financial interest, has any financial interest in
any supplier of the Company or any Subsidiary (other than a publicly held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by any such persons).
(b) Section 3.25(b) of the Company Disclosure Letter sets forth
a list of each customer which the Company and the Subsidiaries invoiced in the
aggregate more than $250,000 during the 12-month period ended March 31, 2000
(each a "Major Customer" and, collectively, "Major Customers") together with the
amount of the invoices issued during such period. Neither the Company nor any
Subsidiary is engaged in any material dispute with any Major Customer and, to
the knowledge of the Company, no Major Customer intends to terminate, limit or
reduce its business relations with the Company or any Subsidiary. As of the date
hereof, the Company has no reason to believe that the consummation of the
transactions contemplated hereunder will materially adversely affect the
business relationship of the Company or any Subsidiary with any Major Customer.
Except as set forth in Section 3.25(b) of the Company Disclosure Letter, none of
the officers or directors of the Company or any Subsidiary, or any "affiliate"
or "associate" of any officer or director of the Company or any Subsidiary, or
any company or other organization in which any officer or director of the
Company or any Subsidiary or any "affiliate" or "associate" of any officer or
director of the Company or any Subsidiary has a direct or indirect financial
interest, has any financial interest in any customer of the Company or any
Subsidiary (other than a publicly held corporation whose stock is traded on a
national securities exchange or in the over-the-counter market and less than 1%
of the stock of which is beneficially owned by any such persons).
Section 3.26. Liability Assumptions. Section 3.26 of the Company
Disclosure Letter sets forth a true and accurate list of certain assets and
liabilities of the Company (the "Fixed Payments") existing as of June 30, 2000.
Section 3.27. Disclosure. No representation or warranty made by the
Company in this Agreement or in the Company Disclosure Letter contains an untrue
statement of a material fact or omits to state a material fact required to be
stated herein or
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therein or necessary to make the statements contained herein or therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Each of Parent and Sub represents and warrants to the Company as follows:
Section 4.1. Organization and Standing. Such person (a) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) has full corporate power and authority to
own, lease and operate its properties and assets and to conduct its business as
presently conducted and (c) is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not, individually or in the
aggregate, have a material adverse effect on Parent or Sub.
Section 4.2. Authority for Agreement. Such person has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Initial Offer, the Subsequent
Offer, the Merger and the other transactions contemplated by this Agreement. The
execution, delivery and performance by such person of this Agreement, and the
consummation by each such person of the Initial Offer, the Subsequent Offer, the
Merger and the other transactions contemplated by this Agreement, have been duly
authorized by all necessary corporate action and no other corporate proceedings
on the part of such person are necessary to authorize this Agreement or to
consummate the Initial Offer, the Subsequent Offer, the Merger or the other
transactions contemplated by this Agreement (other than, with respect to the
Merger, the filing and recordation of appropriate merger documents as required
by the OBCA). This Agreement has been duly executed and delivered by such person
and, assuming due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of such person
enforceable against such person in accordance with its terms.
Section 4.3. No Conflict. The execution and delivery of this Agreement
by such person do not, and the performance of this Agreement by such person and
the consummation of the Initial Offer, the Subsequent Offer, the Merger and the
other transactions contemplated by this Agreement will not, (i) conflict with or
violate the certificate of incorporation or bylaws of such person, (ii) conflict
with or violate any Law applicable to such person or by which any property or
asset of such person is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of such person pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which such person is a party or
by which such person or any property or asset of either of them is bound or
affected, except in the case of clauses (ii) and (iii) for any such conflicts,
violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent or materially delay the performance by
such person of its respective obligations under this Agreement or the
consummation of the Initial Offer, the Subsequent Offer, the Merger or the other
transactions contemplated by this Agreement.
Section 4.4. Required Filings and Consents. The execution and delivery
of this Agreement by such person do not, and the performance of this Agreement
by such
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person will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws and filing
and recordation of appropriate merger documents as required by the OBCA, (ii)
for those required by the HSR Act, (iii) for filings contemplated by Sections
1.1, 1.2 and 3.14 and (iv) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
individually or in the aggregate, prevent or materially delay the performance by
such person of any of its respective obligations under this Agreement or the
consummation of the Initial Offer, the Subsequent Offer, the Merger or the other
transactions contemplated by this Agreement.
Section 4.5. Information Supplied. None of the information supplied or
to be supplied by such person for inclusion or incorporation by reference in the
Schedule 14D-9 or the Proxy Statement (if applicable) will, at the date such
documents are first published, sent or delivered to Company Stockholders or,
unless promptly corrected, at any time during the pendency of the Initial Offer
or the Subsequent Offer 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. Neither the Schedule TO, at the date such
document is first published, sent or delivered to the Company Stockholders or,
unless promptly corrected, at any time during the pendency of the Initial Offer
or the Subsequent Offer, nor the Proxy Statement (if applicable) at the date
such document is first published, sent or delivered to Company Stockholders or,
unless promptly corrected, at any time during the pendency of the Stockholder's
Meeting, will 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. The Schedule 14D-1 will comply as to form and substance in
all material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the SEC thereunder. Notwithstanding the
foregoing, no representation or warranty is made by such person with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference in any of
the foregoing documents.
Section 4.6. Brokers. Other than UBS Warburg, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission payable by such person in connection with this Agreement, the Initial
Offer, the Subsequent Offer, the Merger or the other transactions contemplated
by this Agreement based upon arrangements made by or on behalf of such person.
ARTICLE V
COVENANTS
Section 5.1. Conduct of the Business Pending the Merger.
(a) The Company covenants and agrees that between the date of
this Agreement and the Effective Time unless Parent shall otherwise agree in
writing, (i) the business of the Company and its Subsidiaries shall be conducted
only in, and the Company and its Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with prior
practice, (ii) the Company and its Subsidiaries shall use reasonable best
efforts to preserve intact their business organizations, to keep available the
services of their current officers and employees and to preserve the current
relationships of the Company and its Subsidiaries with customers, suppliers and
other persons with which the Company or its Subsidiaries has business relations,
and (iii) the Company and its Subsidiaries will comply with all applicable Laws
and regulations wherever its business is conducted, including, without
limitation, the timely filing of all reports, forms or other documents with the
SEC required pursuant to the Securities Act or the Exchange Act. Without
limiting the foregoing, neither the Company nor any of its Subsidiaries shall,
except in the ordinary course of business consistent with past practice as of
December 31, 1999, (i) materially reduce the expenses of the Company or its
Subsidiaries relating to sales or customer service or support, (ii) materially
discount the price or materially alter the terms of any of the
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Company's or its Subsidiaries' products or services, (iii) reduce or discount
any accounts receivable of the Company or any Subsidiary to accelerate
collection of such accounts receivable or sell or factor any accounts receivable
of the Company or any Subsidiary, or (iv) manage the accounts payable of the
Company or any Subsidiary in a manner inconsistent with the Company's past
practice as of December 31, 1999.
(b) The Company covenants and agrees that between the date of
this Agreement and the Effective Time the Company shall not, nor shall the
Company permit any of its Subsidiaries to, (i) declare or pay any dividends on
or make other distributions (whether in cash, stock or property) in respect of
any of its capital stock, except for dividends by a wholly owned Subsidiary of
the Company to the Company or another wholly owned Subsidiary of the Company,
(ii) split, combine or reclassify any of its capital stock or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock; (iii) repurchase or otherwise
acquire any shares of its capital stock; (iv) issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of its
capital stock or any securities convertible into any such shares of its capital
stock, or any rights, warrants or options to acquire any such shares or
convertible securities or any stock appreciation rights, phantom stock plans or
stock equivalents, other than the issuance of shares of Company Common Stock
upon (A) the exercise of Company Options outstanding as of the date of this
Agreement, (B) the exercise of warrants outstanding as of the date of this
Agreement or (C) the conversion of convertible notes outstanding on the date of
this Agreement which notes have been identified in Section 3.2 of the Company
Disclosure Letter; (v) change the exercise price of any warrants or options to
acquire any shares of Company Common Stock; or (vi) take any action that would,
or could reasonably be expected to, result in any of the conditions set forth in
Article VI not being satisfied.
(c) Except as expressly contemplated by this Agreement, the
Company covenants and agrees that between the date of this Agreement and the
Effective Time the Company shall not, nor shall the Company permit any of its
Subsidiaries to, without the prior written consent of Parent, (i) amend its
articles of incorporation (including any certificate of designations attached
thereto) or bylaws or other equivalent organizational documents; (ii) create,
assume or incur any indebtedness for borrowed money or guaranty any such
indebtedness of another person, other than (A) borrowings or payments under
existing lines of credit (or under any refinancing of such existing lines) or
(B) indebtedness owing to, or guaranties of indebtedness owing to, the Company;
(iii) accelerate the timing of payment of any outstanding indebtedness for
borrowed money; (iv) make any loans or advances to any other person other than
loans or advances between any Subsidiaries of the Company or between the Company
and any of its Subsidiaries (other than normal trade terms and loans or advances
less than $25,000 in any case made in the ordinary course of business consistent
with past practice); (v) mortgage or pledge any of its assets or properties;
(vi) merge or consolidate with any other entity in any transaction, or sell any
business or assets in a single transaction or series of transactions in which
the aggregate consideration is $25,000 or greater other than with respect to
transactions in the ordinary course of business consistent with past practice;
(vii) change its accounting policies except as required by GAAP; (viii) make any
change in employment terms for any of its directors or officers; (ix) except as
expressly identified in Section 5.1(c) of the Company Disclosure Letter and
following notice by the Company to Parent, alter, amend or create any
obligations with respect to compensation, severance, benefits, change of control
payments or any other payments to employees, directors or affiliates of the
Company or its Subsidiaries or enter into any new, or amend any existing,
employment agreements other than in the ordinary course of business consistent
with past practice; (xi) make any change to the Company Benefit Plans; (xii)
amend or cancel or agree to the amendment or cancellation of any Material
Contract or enter into a contract that would have been a Material Contract had
such contract been in existence as of the date of this Agreement; (xiii) pay,
loan or advance (other than the payment of compensation, directors' fees or
reimbursement of expenses in the ordinary course of business) any amount to, or
sell, transfer or lease any properties or assets (real, personal or mixed,
tangible or intangible) to, or enter into any agreement with, any of its
officers or directors or any "affiliate" or "associate" of any of its officers
or directors; (xiv) form or commence the operations of any business or any
corporation, partnership, joint venture, business association or other business
organization or division thereof; (xv) make any Tax election (other than in the
ordinary course of
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business consistent with past practice) or settle or compromise any tax
liability involving amounts in excess of $25,000 in the aggregate; (xvi) enter
into any agreements, arrangements or understandings with respect to the
purchase, sale or lease of any real property or amend, cancel or extend any
agreement, arrangement or understanding with respect to the lease of any real
property; or (xvii) pay, discharge, settle or satisfy any claims, litigation,
liabilities or obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise) outside the ordinary course of business consistent with
past practice involving amounts in excess of $25,000 in the aggregate.
Section 5.2. Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time, the Company
shall, and shall cause the officers, directors, employees, auditors, attorneys,
financial advisors, lenders and other agents (collectively, the
"Representatives") of the Company to, afford the Representatives of Parent and
Sub reasonable access at all reasonable times to the officers, employees,
agents, properties, offices and other facilities, books and records of the
Company and its Subsidiaries, and shall furnish Parent and Sub with all
financial, operating and other data and information as Parent or Sub, through
its Representatives, may reasonably request. The Company shall furnish to Parent
and Sub all monthly financial and operating data and information normally
prepared by the Company as promptly as practicable following the end of each
calendar month. Parent and the Company will remain subject to the terms of the
proprietary nondisclosure agreement between Parent and the Company dated June
23, 2000 (the "Confidentiality Agreement").
(b) No investigation pursuant to this Section 5.2 shall affect
any representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.3. Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence, or nonoccurrence, of any event which would be likely to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure by such party (or Sub, in the case of Parent) 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 5.3 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice. If any event or matter
arises after the date of this Agreement which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
the Company Disclosure Letter or which is necessary to correct any information
in the Company Disclosure Letter which has been rendered inaccurate thereby,
then the Company shall promptly supplement, or amend, and deliver to Parent the
Company Disclosure Letter which it has delivered pursuant to this Agreement.
Section 5.4. Reasonable Best Efforts; Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each
of the parties hereto will use its reasonable best efforts to (i) take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Initial Offer, any Subsequent Offer, the Merger and the other transactions
contemplated by this Agreement as soon as practicable after the date hereof and
(ii) obtain and maintain all approvals, consents, waivers, registrations,
permits, authorizations, clearances and other confirmations required to be
obtained from any third party and/or any Governmental Entity that are necessary,
proper or advisable to consummate the Initial Offer, the Subsequent Offer, the
Merger and the transactions contemplated hereby (each a "Required Approval"). In
furtherance and not in limitation of the foregoing, each party hereto agrees to
make as promptly as practicable, to the extent it has not already done so, (i)
an appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the transactions contemplated hereby (which filing shall be made
in any event within ten business days of the date hereof), (ii) all necessary
filings with other Governmental Entities relating to the
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Initial Offer, the Subsequent Offer and the Merger, and, in each case, to supply
as promptly as practicable any additional information and documentary material
that may be requested pursuant to the such laws and to use its best efforts to
cause the expiration or termination of the applicable waiting periods under the
HSR Act and the receipt of Required Approvals under such other laws as soon as
practicable.
(b) Each of the parties hereto shall, in connection with the
efforts referenced in Section 5.4(a) to obtain all Required Approvals, use its
reasonable best efforts to (i) cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, (ii) promptly inform the other party of any communication received by
such party from, or given by such party to, the Antitrust Division of the
Department of Justice (the "DOJ") or any other Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) promptly inform the other party of the timing and content of
any communications with the DOJ or any such other Governmental Entity or, in
connection with any proceeding by a private party, with any other person, and to
the extent permitted by the DOJ or such other applicable Governmental Entity or
other Person, give the other party the opportunity to attend and participate in
such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of
the parties contained in Sections 5.4(a) and 5.4(b), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law (as
hereinafter defined), or if any statute, rule, regulation, executive order,
decree, injunction or administrative order is enacted, entered, promulgated or
enforced by a Governmental Entity which would make the Initial Offer, the
Subsequent Offer, the Merger or the transactions contemplated hereby illegal or
would otherwise prohibit or materially impair or delay the consummation of the
Initial Offer, the Subsequent Offer, the Merger or the transactions contemplated
hereby, each of the parties hereto shall cooperate in all respects with each
other and use its respective commercially reasonable efforts to contest and
resist any such action or proceeding and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other action or order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the Initial Offer, the Subsequent Offer,
the Merger or the transactions contemplated by this Agreement and to have such
statute, rule, regulation, executive order, decree, injunction or administrative
order repealed, rescinded or made inapplicable. Notwithstanding any provision of
this Agreement to the contrary, neither Parent nor the Surviving Corporation
shall be required under the terms of this Agreement to dispose of or hold
separate all or any portion of the businesses or assets of the Company or any of
its Subsidiaries or of Parent or any of its Subsidiaries in order to remedy or
otherwise address the concerns (whether or not formally expressed) of any
Governmental Entity under the HSR Act or any other antitrust statute or
regulation. For purposes of this Agreement, "Regulatory Law" means the Xxxxxxx
Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other Federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to regulate mergers,
acquisitions or other business combinations.
(d) At and after the Effective Time, the officers and directors
of the Surviving Corporation and Parent will be authorized to execute and
deliver, in the name and on behalf of the Company, any deeds, bills of sale,
assignments or assurances and to take any other actions and do any other things,
in the name and on behalf of the Company, reasonably necessary to vest, perfect
or confirm of record or otherwise in the Surviving Corporation any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the applicable Surviving
Corporation as a result of, or in connection with, the Merger.
(e) In connection with, and without limiting the foregoing, the
Company shall (i) take all actions necessary to ensure that no state
antitakeover statute or similar statute or regulation is or becomes operative
with respect to this Agreement, the Initial Offer, the Subsequent Offer, the
Merger or any other
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transactions contemplated by this Agreement or the Stockholder's Agreements and
(ii) if any state antitakeover statute or similar statute or regulation is or
becomes operative with respect to this Agreement, the Stockholder's Agreements,
the Initial Offer, the Subsequent Offer, the Merger or any other transaction
contemplated by this Agreement or the Stockholder's Agreements, take all actions
necessary to ensure that this Agreement, the Stockholder's Agreements, the
Initial Offer, the Subsequent Offer, the Merger and any other transactions
contemplated by this Agreement or the Stockholder's Agreements may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and the Stockholder's Agreements and otherwise to minimize the effect
of such statute or regulation on the Initial Offer, the Subsequent Offer, the
Merger and the other transactions contemplated by this Agreement and the
Stockholder's Agreements.
Section 5.5. Board Recommendations.
(a) In connection with the Initial Offer, the Subsequent Offer,
the Merger and Stockholders' Meeting, the Board of Directors of the Company
shall (i) subject to Section 5.5(b), recommend to the holders of the Company
Common Stock to tender their shares of Company Common Stock in the Initial Offer
and any Subsequent Offer and to vote in favor of the Merger and use its
reasonable best efforts to obtain the necessary approvals by the Company
Stockholders of this Agreement and (ii) otherwise comply with all legal
requirements applicable to such meeting.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall, except as expressly permitted by this Section 5.5(b)
(i) withdraw, qualify or modify, or propose publicly to withdraw, qualify or
modify, in a manner adverse to Parent, the approval or recommendation of such
Board of Directors or such committee of the Initial Offer, the Subsequent Offer,
the Merger or this Agreement, (ii) approve or recommend, or propose publicly to
approve or recommend, any transaction involving an Acquisition Proposal (as
hereinafter defined) from a third party (an "Alternative Transaction"), or (iii)
cause the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") related to any Alternative Transaction. Notwithstanding the
foregoing, if prior to the termination of the Initial Offer, the Board of
Directors of the Company determines in good faith, after it has received a
Superior Proposal (as hereinafter defined) in compliance with Section 5.9 and
after taking into consideration the opinion of outside counsel with respect to
its fiduciary duties to Company Stockholders under applicable Law, that such
action is required for the Board of Directors of the Company to comply with its
fiduciary obligations to the Company Stockholders under applicable Law, the
Board of Directors of the Company may (subject to this and the following
sentences) inform Company Stockholders that it no longer believes that the
Initial Offer, the Subsequent Offer and the Merger are advisable and no longer
recommends approval (a "Subsequent Determination") and enter into an Acquisition
Agreement with respect to a Superior Proposal, but only at a time that is after
the third business day (or the second business day, in the case of a material
amendment to a Superior Proposal) following Parent's receipt of written notice
advising Parent that the Board of Directors of the Company is prepared to accept
a Superior Proposal. Such written notice shall specify the material terms and
conditions of such Superior Proposal (and include a copy thereof with all
accompanying documentation, if in writing), identify the person making such
Superior Proposal and state that the Board of Directors of the Company intends
to make a Subsequent Determination. During such three business day period (or
two business day period in the case of a material amendment), the Company shall
provide an opportunity for Parent to propose such adjustments to the terms and
conditions of this Agreement as would enable the Company to proceed with its
recommendation to its stockholders without a Subsequent Determination. For
purposes of this Agreement, a "Superior Proposal" means any proposal (on its
most recently amended or modified terms, if amended or modified) made by a third
party to enter into an Alternative Transaction which the Board of Directors of
the Company determines in its good faith judgment (based on, among other things,
the written advice of an independent financial advisor) to be more favorable to
the Company Stockholders than the Initial Offer, the Subsequent Offer and the
Merger from a financial point of view (taking into account whether, in the good
faith judgment of the Board of Directors of the Company, after obtaining the
advice of such independent financial advisor, the third party is reasonably able
to finance the transaction, and any proposed changes to this Agreement that may
be proposed by Parent in response to such Alternative Transaction).
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(c) Nothing contained in this Section 5.5 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14(e)-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company Stockholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel,
failure to so disclose would be inconsistent with applicable Law; provided,
however, neither the Company nor its Board of Directors nor any committee
thereof shall, except as specifically permitted by Section 5.5(b), withdraw,
qualify, or modify, or propose to withdraw, qualify or modify, its position with
respect to the Initial Offer, the Subsequent Offer, the Merger or this Agreement
or approve or recommend, or propose to approve or recommend an Alternative
Transaction.
Section 5.6. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
Litigation against the Company and its directors relating to the transactions
contemplated by this Agreement or the Merger; provided, however, for so long as
this Agreement has not been terminated, no such settlement shall be agreed to
without Parent's consent which consent will not be unreasonably withheld.
Section 5.7. Indemnification.
(a) It is understood and agreed that all rights to
indemnification by the Company now existing in favor of each present and former
director and officer of the Company or its Subsidiaries (the "Indemnified
Parties") as provided in the Company Articles of Incorporation or the Company
Bylaws, in each case as in effect on the date of this Agreement, or pursuant to
any other agreements in effect on the date hereof, copies of which have been
provided to Parent, shall survive the Merger and Parent shall (i) cause the
Surviving Corporation to continue in full force and effect for a period of at
least five (5) years from the Effective Time and (ii) perform, or cause the
Surviving Corporation to perform, in a timely manner, the Surviving
Corporation's obligation with respect thereto. Parent and Sub agree that any
claims for indemnification hereunder as to which they have received written
notice prior to the fifth anniversary of the Effective Time shall survive,
whether or not such claims shall have been finally adjudicated or settled.
(b) Parent shall cause the Surviving Corporation to, and the
Surviving Corporation shall, maintain in effect for five (5) years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies ("D&O Insurance") (provided that the Surviving Corporation
may substitute therefor policies of at least the same coverage containing terms
and conditions which are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
the Surviving Corporation be required to expend pursuant to this Section 5.7(b)
more than an amount per year equal to one hundred fifty percent (150%) of
current annual premiums paid by the Company for such insurance. In the event
that, but for the proviso to the immediately preceding sentence, the Surviving
Corporation would be required to expend more than one hundred fifty percent
(150%) of current annual premiums, the Surviving Corporation shall obtain the
maximum amount of such insurance obtainable by payment of annual premiums equal
to one hundred fifty percent (150%) of current annual premiums.
(c) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation shall assume the
obligations set forth in this Section 5.7.
Section 5.8. Public Announcements. Except for the initial press release
of the Company announcing the transactions contemplated by this Agreement
(included in Section 5.8 of the Company Disclosure Letter), which is expressly
approved by Parent, Parent and the Company shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement, the Initial Offer, the Subsequent Offer or the Merger and
shall not issue any such press release or make any such public statement prior
to such consultation,
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except as may be required by Law or any listing agreement with a national
securities exchange or trading system to which Parent or the Company is a party.
Section 5.9. Acquisition Proposals. The Company shall not, nor shall it
authorize or permit any of its Subsidiaries or Representatives to, directly or
indirectly, (a) solicit, initiate or encourage the submission of any Acquisition
Proposal or (b) participate in or encourage any discussion or negotiations
regarding, or furnish to any person any non-public information with respect to,
or take any other action to facilitate any inquiries or the making of, any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; provided, however, that the foregoing shall not prohibit
the Board of Directors of the Company from furnishing information to, or
entering into discussions or negotiations with, any person or entity that makes
an unsolicited Acquisition Proposal prior to the termination of the Initial
offer if, and to the extent that, (A) the Board of Directors of the Company,
after taking into consideration advice of independent outside legal counsel,
determines in good faith that such action is required for the Board of Directors
of the Company to comply with its fiduciary obligations to the Company
Stockholders under applicable Law, (B) prior to taking such action, the Company
receives from such person or entity an executed agreement in reasonably
customary form relating to the confidentiality of information to be provided to
such person or entity and (C) the Board of Directors of the Company concludes in
good faith, based upon written advice from its independent financial advisor,
that the Acquisition Proposal is a Superior Proposal. The Company shall provide
immediate oral and written notice to Parent of (a) the receipt of any such
Acquisition Proposal or any inquiry which could reasonably be expected to lead
to any Acquisition Proposal, (b) the material terms and conditions of such
Acquisition Proposal or inquiry, (c) the identity of such person or entity
making any such Acquisition Proposal or inquiry and (d) the Company's intention
to furnish information to, or enter into discussions or negotiations with, such
person or entity. The Company shall continue to keep Parent informed of the
status and details of any such Acquisition Proposal or inquiry. For purposes of
this Agreement, "Acquisition Proposal" means any bona fide proposal with respect
to a merger, consolidation, share exchange, tender offer or similar transaction
involving the Company, or any purchase or other acquisition of all or any
significant portion of the assets of the Company or any equity interest in the
Company.
Section 5.10. Company Stockholders' Meeting.
(a) The Company shall cause the Stockholders' Meeting (if such
meeting is required) to be duly called and held as soon as practicable following
the consummation of the Initial Offer (or, at Sub's option, the Subsequent
Offer, if applicable) for the purpose of voting on the approval and adoption of
this Agreement and the Merger. The Company shall take all action necessary in
accordance with applicable Law and the Company Articles of Incorporation and
Company Bylaws to duly call, give notice of, and convene the Stockholders'
Meeting, if such meeting is required.
(b) The Company shall, at the direction of Parent, solicit from
holders of shares of Company Stock entitled to vote at the Stockholders' Meeting
proxies in favor of such approval and shall take all other action necessary or,
in the reasonable judgment of Parent, helpful to secure the vote or consent of
such holders required by the OBCA or this Agreement to effect the Merger.
Section 5.11. Proxy Statement.
(a) If required by applicable Law, Parent and the Company will
as promptly as practicable following the consummation of the Initial Offer (or,
at Sub's option, the Subsequent Offer, if applicable) jointly prepare, and the
Company shall file, the Proxy Statement with the SEC and will use all
commercially reasonable efforts to respond to the comments of the SEC and to
cause the Proxy Statement to be mailed to the Company Stockholders at the
earliest practical time. The Company shall furnish all information concerning it
and the holders of its capital stock as Parent may reasonably request in
connection with such actions. Each party to this Agreement will notify the other
parties and the Board of Directors of the Company promptly of the receipt of the
comments of the SEC, if any, and of any request by the SEC for amendments or
supplements to the Proxy Statement or for additional information with respect
thereto, and will supply the other
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parties with copies of all correspondence between such party or its
Representatives, on the one hand, and the SEC or members of its staff, on the
other hand, with respect to the Proxy Statement, the Initial Offer, the
Subsequent Offer or the Merger. If (A) at any time prior to the Stockholders'
Meeting, any event should occur relating to the Company or any of its
Subsidiaries which should be set forth in an amendment of, or a supplement to,
the Proxy Statement, the Company will promptly inform Parent and (B) if at any
time prior to the Stockholders' Meeting, any event should occur relating to
Parent or Sub or any of their respective associates or affiliates, or relating
to the plans of any such persons for the Company after the Effective Time that
should be set forth in an amendment of, or a supplement to, the Proxy Statement,
Parent will promptly inform the Company, and in the case of (A) or (B) the
Company and Parent, will, upon learning of such event, promptly prepare, and the
Company shall file and, if required, mail such amendment or supplement to the
Company Stockholders; provided, prior to such filing or mailing, the Company and
Parent shall consult with each other with respect to such amendment or
supplement and shall incorporate the other's comments thereon. Parent shall
vote, or cause to be voted, in favor of the Merger and this Agreement all shares
of Company Stock directly or indirectly beneficially owned by it.
(b) The Company hereby consents to the inclusion in the Proxy
Statement of the recommendation of the Board of Directors of the Company
described in Section 3.3, subject to any modification, amendment or withdrawal
thereof, and represents that the Independent Advisor has, subject to the terms
of its engagement letter with the Company and the Board of Directors of the
Company (the "Independent Advisor Engagement Letter"), consented to the
inclusion of references to its opinion in the Proxy Statement. The Company and
its counsel shall permit Parent and its counsel to participate in all
communications with the SEC and its staff, including any meetings and telephone
conferences, relating to the Proxy Statement, the Initial Offer, the Subsequent
Offer, the Merger or this Agreement.
(c) Notwithstanding the foregoing, if at any time Sub and/or
any direct or indirect subsidiary of Parent shall acquire at least 90% of the
outstanding shares of Company Common Stock, Sub and the Company shall take all
necessary and appropriate action to cause the Merger to become effective as
promptly as practicable after the expiration of the Initial Offer or Subsequent
Offer, if applicable, and the satisfaction or waiver of the conditions set forth
in Article VI without the Stockholders' Meeting in accordance with Section
60.491 of the OBCA.
Section 5.12. Stockholder Lists. The Company shall promptly upon the
request by Parent, or shall cause its transfer agent to promptly, furnish Parent
and Sub with mailing labels containing the names and addresses of all record
holders of shares of Company Stock and with security position listings of shares
of Company Stock held in stock depositories, each as of the most recent
practicable date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of shares of Company Stock. The Company shall furnish Parent
and Sub with such additional information, including, without limitation, updated
listings and computer files of the Company Stockholders, mailing labels and
security position listings, and such other assistance as Parent, Sub or their
agents may reasonably request.
Section 5.13. Shares Held by Company Subsidiaries. The Company agrees
to cause each of the Subsidiaries of the Company that owns any shares of Company
Stock not to tender any such shares pursuant to the Initial Offer or Subsequent
Offer.
Section 5.14. Directors. Promptly upon the acceptance for payment of,
and payment by Sub for, shares of Company Common Stock pursuant to the Initial
Offer, Sub shall be entitled to designate such number of directors on the Board
of Directors of the Company as will give Sub, subject to compliance with Section
14(f) of the Exchange Act, representation on such Board of Directors equal to at
least that number of directors, rounded up to the next whole number, which is
the percentage that (i) such number of shares of Company Common Stock so
accepted for payment and paid for by Sub in the Initial Offer plus the number of
shares of Company Stock otherwise owned by Parent, Sub or any other subsidiary
of Parent bears to (ii) the total number of shares of Company Common Stock
outstanding, and the Company shall, at such time, cause Sub's designees to be
appointed or elected. Subject to applicable Law, the Company shall take all
action requested by Parent necessary to effect any such appointment or election,
including mailing to its
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stockholders an information statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder (either
separately or combined with the Schedule 14D-9), and the Company agrees to make
such mailing with the mailing of the Schedule 14D-9 (provided that Sub shall
have provided to the Company on a timely basis all information required to be
included in such information statement with respect to Sub's designees). In
connection with the foregoing, the Company will promptly, at the option of Sub,
use its best efforts to either increase the size of the Board of Directors of
the Company or obtain the resignation of such number of its current directors as
is necessary to enable Sub's designee to be elected or appointed to the Board of
Directors of the Company as provided above.
Section 5.15. Undertakings of Parent. Parent shall perform, or cause to
be performed, when due all obligations of Sub under this Agreement.
Section 5.16. Director Resignations. The Company shall cause to be
delivered to Parent resignations of all the directors of the Company's
Subsidiaries to be effective upon the purchase of outstanding shares of Company
Common Stock by Sub pursuant to the Initial Offer. The Company shall cause such
directors, prior to resignation, to appoint new directors nominated by Parent to
fill such vacancies.
Section 5.17. Company Options.
(a) As promptly as practicable following the date hereof, and
in any event prior to the termination date of the Initial Offer, the Company
shall amend the Company Stock Option Plans and any other agreements pursuant to
which Company Options have been granted to provide that (i) all Company Options
with an exercise price less than the per share Merger Consideration shall vest
upon the consummation of the Merger, (ii) upon the consummation of the Merger,
each Company Option shall represent only the right to receive upon payment of
the applicable exercise price, the per share Merger Consideration, in lieu of a
share of Company Common Stock and (iii) other than with respect to the right to
receive the per share Merger Consideration pursuant to clause (ii) of this
sentence, all Company Options shall be terminated upon consummation of the
Merger.
(b) As promptly as practicable following the date hereof, the
Company shall use its best efforts to cause each director of the Company to
agree to terminate and cancel all Company Options owned by such director with
exercise prices equal to or in excess of the per share Merger Consideration upon
consummation of the Merger.
Section 5.18. Series A Preferred Stock. Promptly following the acceptance
for payment of, and payment by Sub for, shares of Company Common Stock pursuant
to the Initial Offer, the Company shall, if requested to do so by Parent, redeem
all of the outstanding shares of Series A Preferred Stock in accordance with its
terms and shall irrevocably deposit funds sufficient to redeem such shares of
Series A Preferred Stock in an account to pay for such redemption. Concurrently
with the acceptance for payment, and payment by Sub for, shares of Company
Common Stock pursuant to the Initial Offer, if Parent requests that the Company
redeem the Series A Preferred Stock, Parent shall by wire transfer of
immediately available funds to an account designated by the Company, advance to
the Company an amount equal to the amount necessary to redeem all outstanding
shares of Series A Preferred Stock.
ARTICLE VI
CONDITIONS
Section 6.1. Conditions to the Obligation of Each Party. The respective
obligations of Parent, Sub and the Company to effect the Merger are subject to
the satisfaction of the following conditions, unless waived in writing by all
parties:
(a) Each of the conditions set forth in Annex I shall have been
satisfied or waived by Sub, and Sub or its permitted assignee shall have
purchased the shares of Company Common Stock validly tendered and not withdrawn
pursuant to the terms of the Initial Offer; provided, however, that this
condition shall not be applicable to the obligations of Parent or Sub if, in
breach of this Agreement or
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the terms of the Initial Offer, Sub or its permitted assignee fails to purchase
any shares of Company Common Stock validly tendered and not withdrawn pursuant
to the Initial Offer;
(b) This Agreement and the Merger shall have been approved and
adopted by the requisite vote of the Company Stockholders, if and to the extent
required by the OBCA, the Company Articles of Incorporation and the Company
Bylaws;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the Merger shall
be in effect; provided, however, that the parties invoking this condition shall
use all commercially reasonable efforts to have any such order or injunction
vacated;
(d) There shall not be overtly threatened, instituted or
pending any action, proceeding, application or counterclaim by any Governmental
Entity before any court or Governmental Entity before any court or governmental
regulatory or administrative agency, authority or tribunal which is reasonably
likely to restrain or prohibit the consummation of the Merger;
(e) All actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger shall have
been obtained or made (including the expiration or termination of any applicable
waiting period under the HSR Act); and
(f) The offering period with respect to the Subsequent Offer,
if applicable, shall have expired.
Section 6.2. Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger are further
subject to satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) (i) The representations and warranties of the Company in
this Agreement that are qualified by materiality shall be true and correct in
all respects as of the date of this Agreement and as of the Effective Time
(unless such representations or warranties refer to a specific date, in which
case such representations or warranties shall be true and correct in all
respects as of such date); (ii) the representations and warranties of the
Company in this Agreement that are not qualified by materiality shall be true
and correct in all material respects as of the date of this Agreement and as of
the Effective Time (unless such representations or warranties refer to a
specific date, in which case such representations or warranties shall be true
and correct in all material respects as of such date); (iii) the Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement; and (iv) the Company shall have delivered to Parent
and Sub a certificate to the effect that each of the conditions specified in
(i), (ii) and (iii) above is satisfied in all respects; and
(b) The Company and its Subsidiaries shall have procured all
third party consents legally required for the consummation of the Merger.
Section 6.3. Conditions to Obligations of the Company to Effect the
Merger. The obligations of the Company to effect the Merger are further subject
to satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Parent and Sub in
this Agreement that are qualified by materiality shall be true and correct in
all respects as of the date of this Agreement and as of the Effective Time;
(b) The representations and warranties of Parent and Sub in
this Agreement that are not qualified by materiality shall be true and correct
in all material respects as of the date of this Agreement and as of the
Effective Time;
(c) Parent and Sub shall have performed in all material
respects all obligations required to be performed by them under this Agreement;
and
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(d) Parent and Sub shall have delivered to the Company a
certificate to the effect that each of the conditions specified in Sections
6.3(a), (b) and (c) is satisfied in all respects.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after approval of matters presented in connection with the Merger by the
Company Stockholders:
(a) By mutual written consent of duly authorized
representatives of Parent and the Company;
(b) By any of Parent, Sub or the Company if any court of
competent jurisdiction or other Governmental Entity shall have issued an order,
decree, ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable; provided however, that the party
terminating this Agreement pursuant to this Section 7.1(b) shall use all
commercially reasonable efforts to have such order, decree, ruling or action
vacated;
(c) By any of Parent, Sub or the Company if the Merger shall
not have been consummated on or before December 31, 2000; provided, however,
that the right to terminate this Agreement under this Section 7.1(c) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement has been the primary cause of, or resulted in, the failure to
consummate the Merger on or before such date;
(d) By Parent or Sub if the Board of Directors of the Company
(i) shall have withdrawn or shall have modified in a manner adverse to Parent or
Sub its approval or recommendation of the Merger or this Agreement, (ii) causes
the Company to enter into an agreement with respect to an Acquisition Proposal,
(iii) shall have endorsed, approved or recommended any Acquisition Proposal or
(iv) shall have announced to do any of the foregoing;
(e) By Parent or Sub, if as a result of the failure of any of
the conditions set forth in Annex I to this Agreement, the Initial Offer shall
have been terminated by Parent or Sub or expired in accordance with its terms
without Sub (or any permitted assignee) having purchased any shares of Company
Common Stock pursuant to the Initial Offer;
(f) By Parent or Sub, if (i) any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment and shall not have been
waived by Parent and Sub, (ii) holders of outstanding debt obligations of the
Company or any of its Subsidiaries under the Financing Agreement dated as of
August 13, 1999 by and among the Company, Foothill Capital Corporation and
Ableco Finance LLC (and the related agreements) shall have exercised any
remedies which result in the transfer, seizure or blockage of any collateral
arising out of a default under such agreement (or related agreements) by the
Company or any of its Subsidiaries or (iii) the Company shall breach in any
material respect any of its representations, warranties, covenants or other
obligations hereunder and, within ten (10) days after written notice of such
breach to the Company from Parent, such breach shall not have been cured in all
material respects or waived by Parent or Sub;
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(g) By the Company, if (i) any of the conditions set forth in
Section 6.3 shall have become incapable of fulfillment and shall not have been
waived by the Company or (ii) Parent or Sub shall breach in any material respect
any of their respective representations, warranties or obligations hereunder
and, within ten (10) days after written notice of such breach to Parent from the
Company, such breach shall not have been cured in all material respects or
waived by the Company; or
(h) By the Company if, in compliance with its obligations
under Sections 5.5 and 5.9, (i) the Board of Directors of the Company shall have
withdrawn or shall have modified in a manner adverse to Parent or Sub its
approval or recommendation of the Initial Offer, the Subsequent Offer, the
Merger or this Agreement and (ii) the Company shall have entered into an
agreement with respect to a Superior Proposal.
Section 7.2. Effect of Termination.
(a) In the event of the termination of this Agreement pursuant
to Section 7.1 hereof, this Agreement shall forthwith be terminated and have no
further effect except as specifically provided herein and, except as provided in
this Section 7.2, there shall be no liability on the part of any party hereto,
provided that nothing herein shall relieve any party from liability for any
willful breach hereof.
(b) If (i) Parent or Sub exercises its right to terminate this
Agreement under Section 7.1(d); (ii) (A) after the date of this Agreement any
Acquisition Proposal involving the Company, which the Company's Board of
Directors has endorsed as a Superior Proposal, shall have been announced, (B)
the Initial Offer shall have remained open until at least the scheduled
expiration date immediately following the date such Acquisition Proposal is
announced, (C) the Minimum Condition shall not have been satisfied at the
expiration of the Initial Offer and (D) this Agreement or the Initial Offer
shall thereafter be terminated, or (iii) the Company exercises its right to
terminate this Agreement under Section 7.1(h), the Company shall pay to Parent
upon demand $3.0 million plus an amount equal to the reasonable costs and
expenses of Parent and Sub (including reasonable legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby (the "Termination Fee"), payable in same-day funds.
(c) If (i) after the date of this Agreement any Acquisition
Proposal involving the Company shall have been announced, (ii) the Initial Offer
shall have remained open until at least the scheduled expiration date
immediately following the date such Acquisition Proposal is announced, (iii) the
Minimum Condition shall not have been satisfied at the expiration of the Initial
Offer and (iv) this Agreement or the Initial Offer shall thereafter be
terminated, the Company shall pay to Parent upon demand an amount equal to the
costs and expenses of Parent and Sub (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby, payable in same-day funds.
(d) If within one year after termination of this Agreement, the
Company shall enter into any agreement relating to, or consummate, an
Acquisition Proposal (i) at a per share purchase price greater than or equal to
85% of the Offer Price with a person other than Parent or Sub or (ii) at any
price with a person other than Parent or Sub who made an Acquisition Proposal
after the date hereof and prior to the expiration date of the Initial Offer,
then immediately prior to, and as a condition of, consummation of such
transaction the Company shall pay to Parent upon demand the Termination Fee,
payable in same-day funds; provided that no such amount shall be payable (A) if
the Termination Fee shall have become payable or have been paid in accordance
with Section 7.2(b) of this Agreement, (B) if the Initial Offer was not
consummated because of the failure of a condition contained in clause (i), (ii)
or (iii) of Annex I or (C) if this Agreement shall have been terminated by the
Company in accordance with clause (ii) of Section 7.1(g).
(e) Notwithstanding anything to the contrary set forth in this
Agreement, if the Company fails promptly to pay to Parent any amounts due under
this Section 7.2, the Company shall pay the costs and expenses (including
reasonable legal fees and expenses) of Parent in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with
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interest on the amount of any unpaid fee or obligation at the publicly announced
prime rate of Citibank, N.A. in effect from time to time from the date such fee
or obligation was required to be paid.
Section 7.3. Amendments. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto; provided,
however, that after approval of the Merger by the Company Stockholders, no
amendment may be made without the further approval of the Company Stockholders
if the effect of such amendment would be to reduce the Merger Consideration or
change the form thereof. Following the election or appointment of Sub's
designees pursuant to Section 5.14 and prior to the Effective Time, the
affirmative vote of the directors of the Company who are not designees of Sub
shall be required by the Company to (i) amend or terminate this Agreement by the
Company, (ii) exercise or waive any of the Company's rights or remedies under
this Agreement, or (iii) extend the time for performance of Parent's and Sub's
respective obligations under this Agreement.
Section 7.4. Waiver. At any time prior to the Effective Time, whether
before or after the Stockholders' Meeting, any party hereto, by action taken by
its board of directors, may (i) extend the time for the performance of any of
the covenants, obligations or other acts of any other party hereto or (ii) waive
any inaccuracy of any representations or warranties or compliance with any of
the agreements, covenants or conditions of any other party or with any
conditions to its own obligations. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party by its duly authorized
officer. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
The waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. No Third Party Beneficiaries. Other than the provisions of
Sections 5.6 and 5.7 hereof, nothing in this Agreement shall confer any rights
or remedies upon any person other than the parties hereto.
Section 8.2. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire Agreement among the parties with respect to the
subject matter hereof and supersede any prior understandings, agreements, or
representations by or among the parties, written or oral, with respect to the
subject matter hereof.
Section 8.3. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties; provided, however, that Sub may freely assign its rights to
another wholly owned subsidiary of Parent without such prior written approval
but no such assignment shall relieve Sub of any of its obligations hereunder.
Section 8.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 8.5. Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law thereof.
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Section 8.7. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
Section 8.8. Specific Performance. Each of the parties acknowledges and
agrees that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other party shall be entitled to seek an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
Section 8.9. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 8.10. Non-Survival of Representations and Warranties and
Agreements. This Agreement shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Section 7.1, as the case may be,
except that (i) the agreements set forth in Articles I and VIII and Sections
5.4, 5.6 and 5.7 shall survive the Effective Time indefinitely and (ii) the
agreements set forth in Sections 5.6, 5.7 and 7.2 and in Article VIII shall
survive the termination of this Agreement indefinitely.
Section 8.11. Certain Definitions.
(a) For purposes of this Agreement, the terms "associate" and
"affiliate" shall have the same meaning as set forth in Rule l2b-2 promulgated
under the Exchange Act, and the term "person" shall mean any individual,
corporation, partnership (general or limited), limited liability company,
limited liability partnership, trust, joint venture, joint-stock company,
syndicate, association, entity, unincorporated organization or government or any
political subdivision, agency or instrumentality thereof.
(b) For purposes of this Agreement, the phrase "Company
Material Adverse Effect" shall mean, with respect to the Company, any change,
event or effect shall have occurred or been threatened that, when taken together
with all other adverse changes, events or effects that have occurred or been
threatened, is or is reasonably likely to (i) be materially adverse to the
business, operations, prospects, properties, condition (financial or otherwise),
assets, liabilities (including, without limitation, contingent liabilities) of
the Company and its Subsidiaries taken as a whole or (ii) prevent or materially
delay the performance by the Company of any of its obligations under this
Agreement or the consummation of the Merger or the other transactions
contemplated by this Agreement.
Section 8.12. Fees and Expenses. Except as provided in Section 7.2, all
costs and expenses incurred by the parties hereto in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
Section 8.13. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed
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to have been duly given upon receipt) by delivery in person, by telecopy or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses, or at such other address for a
party as shall be specified in a notice given in accordance with this Section
8.13:
If to Parent or Sub: Xxxx X. Xxxxxxx Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
with a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
If to the Company: Concentrex Incorporated
000 XX Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
with a copy to: Xxxxxx Xxxx LLP
1600 Pioneer Tower
000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
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IN WITNESS WHEREOF, the Company, Parent and Sub and have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
CONCENTREX INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------------
XXXX X. XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxx
------------------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------------
JH ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
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ANNEX I
CONDITIONS OF THE INITIAL OFFER
Notwithstanding any other provision of the Initial Offer or the
Agreement, and in addition to and not in limitation of Sub's rights to extend or
amend the Initial Offer at any time, in its sole discretion (subject to the
Agreement), Sub shall not be required to accept for payment or, subject to any
applicable rules or regulations of the SEC, pay for any shares of Company Common
Stock, and (subject to such rules and regulations) may delay the acceptance of
payment of or, subject to any restriction referred to above, the payment for,
and may (except as provided in the Agreement) terminate the Initial Offer, if
(a) the shares of Company Common Stock tendered pursuant to the Initial Offer by
the expiration of the Initial Offer and not withdrawn, together with the shares
of Company Common Stock owned by Parent or a wholly owned subsidiary of Parent
represent, on a fully diluted basis, less than a majority of the outstanding
voting power of the Company Common Stock (the "Minimum Condition"), (b) the
waiting periods under the HSR Act applicable to the transactions contemplated by
the Agreement shall not have expired or been terminated, if applicable, or any
other regulatory approvals required under applicable Law have not been obtained,
which if not obtained would prevent the consummation of the Initial Offer, (c)
Xxxxxx Xxxx LLP, legal counsel for the Company, does not deliver an opinion
substantially in the form of Exhibit A hereto, or (d) at any time after the date
of this Agreement and prior to the acceptance for payment of the shares of
Company Common Stock, any of the following conditions exist:
(i) there shall be instituted, pending or threatened any action,
investigation or proceeding by any Governmental Entity, or there shall be
instituted, pending or threatened any action or proceeding by any other person,
domestic or foreign, before any Governmental Entity, which is reasonably likely
to be determined adversely to Sub, (A) challenging or seeking to make illegal,
to delay materially or otherwise, directly or indirectly, to restrain or
prohibit the making of the Initial Offer, the acceptance for payment of or
payment for some of or all the shares of Company Common Stock by Sub or the
consummation of the Merger, seeking to obtain material damages or imposing any
material adverse conditions in connection therewith or otherwise, directly or
indirectly, relating to the transactions contemplated by the Initial Offer or
the Merger, (B) seeking to restrain, prohibit or delay the exercise of full
rights of ownership or operation by Sub or its affiliates of all or any portion
of the business or assets of the Company and its Subsidiaries, taken as a whole,
or of Sub or any of its affiliates, or to compel Sub or any of its affiliates to
dispose of or hold separate all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, or of Sub or any
of its affiliates, (C) seeking to impose or confirm limitations on the ability
of Sub or any of its affiliates effectively to exercise full rights of ownership
of the shares of Company Common Stock, including, without limitation, the right
to vote the shares of Company Common Stock acquired or owned by Sub or any of
its affiliates on all matters properly presented to the Company Stockholders,
(D) seeking to require divestiture by Sub or any of its affiliates of the shares
of Company Common Stock, or (E) that otherwise would reasonably be expected to
have a Company Material Adverse Effect;
(ii) there shall be any action taken, or any statute, rule, regulation,
injunction, order or decree proposed, enacted, enforced, promulgated, issued or
deemed applicable to, or any consent or approval withheld with respect to, the
Initial Offer, the acceptance for payment of or payment for any shares of
Company Common Stock or the Merger, by any Governmental Entity that, in the
reasonable judgment of Sub, may, directly or indirectly, result in any of the
consequences referred to in clauses (A) through (E) of paragraph (i) above;
(iii) there shall have occurred (A) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (B) any decline in either the Dow Xxxxx
Industrial Average or the Standard and Poor's Index of 500 Industrial Companies
by an amount in excess of twenty percent (20%), measured from the date of the
Agreement, (C) the declaration of any banking moratorium or any suspension of
payments in respect of banks or any material limitation (whether or not
mandatory) on the extension of
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credit by lending institutions in the United States, (D) the commencement of a
war, material armed hostilities or other material international or national
calamity directly or indirectly involving the United States that has a
significant adverse effect on the functioning of the financial markets in the
United States, or (E) in the case of any of the foregoing existing at the time
of execution of the Agreement, a material acceleration or worsening thereof;
(iv) (A) the representations and warranties of the Company in the
Agreement that are qualified by materiality shall not be true and correct in all
respects as of the date of the Agreement and as of the Effective Time; (B) the
representations and warranties of the Company in the Agreement that are not
qualified by materiality shall not be true and correct in all material respects
as of the date of the Agreement and as of the Effective Time; (C) the Company
shall not have performed in all material respects all obligations required to be
performed by it under the Agreement; (D) the directors of the Company's
Subsidiaries shall not have resigned and appointed nominees to fill their
vacancies as provided in Section 5.16; (E) the representations and warranties
contained in Section 3.26 are not true and correct in all respects; and (F) an
officer of the Company shall not have delivered to Parent and Sub a certificate
to the effect that each of the foregoing conditions is satisfied in all
respects;
(v) the Company and its Subsidiaries shall not have procured all
necessary third party consents (other than from Governmental Entities) with
respect to matters material to the conduct of business by the Company required
in connection with the execution and delivery of the Agreement and the
consummation of the Merger and the other transactions contemplated hereby; or
(vi) the Agreement shall have been terminated in accordance with its
terms, which, in the reasonable judgment of Sub in any such case, and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and may be
asserted by Sub regardless of the circumstances giving rise to any such
condition (including any action or omission by Sub) or may be waived by Sub in
whole or in part at any time and from time to time, in its sole discretion. The
failure by Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Should the Initial Offer be terminated pursuant to the foregoing provisions, all
tendered shares of Company Common Stock not theretofore accepted for payment
shall be returned forthwith.
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EXHIBIT A
The opinions to be delivered on behalf of the Company will be to the
following effect, with only such assumptions and qualifications as are
reasonably satisfactory to Sub and Parent:
1. Each of the Company and each Subsidiary (i) is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has full power and
authority as a corporation or limited liability company, as applicable, and, to
our knowledge, all necessary government approvals to own, lease and operate its
properties and assets and to conduct its business as presently conducted and
(iii) based on the certificate of the Company and each Subsidiary, is duly
qualified or licensed to do business as a foreign corporation or limited
liability company, as applicable, and is in good standing in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed, individually or in the
aggregate, has not had, or would not reasonably be expected to have, a Company
Material Adverse Effect.
2. The Company has all necessary power and authority to execute and
deliver the Agreement, to perform its obligations thereunder and to consummate
the Offer, the Merger and the other transactions contemplated by the Agreement.
3. The execution, delivery and performance by the Company of the
Agreement, and the consummation by the Company of the Offer, the Merger and the
other transactions contemplated by the Agreement, have been duly authorized by
all necessary corporate action, (including, without limitation, the approval of
the Board of Directors of the Company) and no other corporate proceedings on the
part of the Company are necessary to authorize the Agreement or to consummate
the Offer, the Merger or the other transactions contemplated by the Agreement.
The Company has duly and validly executed and delivered the Agreement.
4. The Agreement and the transactions contemplated thereby constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization and moratorium laws, and general principles of
equity.
5. The execution and delivery of the Agreement by the Company do not,
and the performance of the Agreement by the Company and the consummation of the
Offer and the Merger and the other transactions contemplated by the Agreement
will not (i) conflict with or violate the Company Articles of Incorporation or
Company Bylaws or equivalent organizational documents of any of its
Subsidiaries, (ii) conflict with or violate any Law applicable to the Company or
any of its Subsidiaries by which any material property or asset of the Company
or any of its Subsidiaries is bound or affected or (iii) based on the
certificate of the Company and each Subsidiary, and except as disclosed in the
Agreement or the Company Disclosure Letter, result in a breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, give to others any right of termination, amendment, acceleration
or cancellation of, result in triggering any payment or other obligations, or
result in the creation of any lien or other encumbrance on any property or asset
of the Company or any of its Subsidiaries in any case that would be material to
the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation or Material Contract to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or any property or
asset of any of them is bound or affected.
6. The Company's authorized capitalization consists of 10,000,000
shares of common stock and 5,576,800 shares of preferred stock. Except as
disclosed in the Agreement and the Company Disclosure Letter, to our knowledge,
there are no rights of first refusal, preemptive rights or other rights,
options, calls, warrants or other securities with rights outstanding which are
convertible into, exercisable for, or convertible into, exercisable for, or
related to any shares of capital stock of the Company or any Subsidiary or other
agreement either directly or indirectly
41
42
for the purchase or acquisition from the Company or any Subsidiary of any shares
of its capital stock.
42
