Exhibit 99 (c)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
ABR INFORMATION SERVICES, INC.
CERIDIAN CORPORATION
AND
SPRING ACQUISITION CORP.
DATED AS OF APRIL 30, 1999
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"),
dated as of April 30, 1999, among ABR Information Services, Inc., a Florida
corporation (the "COMPANY"), Ceridian Corporation, a Delaware corporation
("PARENT"), and Spring Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved this Agreement and adopted the plan of merger
set forth herein whereby Merger Sub will merge with and into the Company upon
the terms and subject to the conditions set forth in this Agreement (the
"MERGER");
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE
1.
THE TENDER OFFER
1.1. TENDER OFFER. (a) Provided that this Agreement shall not have been
terminated in accordance with Article IX hereof and none of the events set forth
in paragraphs (a) through (g) of Annex A hereto shall have occurred or be
existing and the other conditions to the Offer specified in Annex A shall have
been satisfied (together with such events, the "Offer Conditions"), as soon as
reasonably practicable, and in any event within five Business Days after public
announcement of this Agreement, Merger Sub will commence a tender offer (the
"OFFER") for all of the outstanding Shares (as defined below) at a price of
$25.50 per Share in cash, net to the seller, and, subject only to and in
accordance with the terms and conditions of the Offer, accept for payment Shares
that are validly tendered and not withdrawn immediately following (unless the
Offer shall have been extended in accordance with the terms hereof) the later of
(i) the date on which the waiting period under the HSR Act has expired or has
been terminated and (ii) the twentieth Business Day after the commencement of
the Offer; PROVIDED, HOWEVER, and notwithstanding anything to the contrary in
the foregoing, it is understood and agreed that (A) if any of the Offer
Conditions specified in paragraphs (a) through (h) of Annex A exists at the time
of the scheduled expiration date of the Offer or if, the applicable waiting
periods under the HSR Act have not expired or been earlier terminated, Merger
Sub may extend and reextend the Offer on one or more occasions for periods of
time (not to exceed ten Business Days for any particular extension) so that the
expiration date of the Offer (as so extended) is as soon as reasonably
practicable or advisable after the date on which the particular Offer Condition
no longer exists, and (B) Merger Sub may extend and reextend the Offer on one or
more occasions for periods of time (not to exceed ten Business Days for any
particular extension) for an aggregate period not to exceed twenty Business Days
if on such expiration date there shall not have been validly tendered and not
withdrawn at least the number of Shares necessary to permit the Merger to be
effected without a meeting of the Company's
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stockholders, and; PROVIDED, FURTHER, that all extensions of the Offer made by
Merger Sub (other than at the request of the Company) shall not extend the Offer
beyond September 5, 1999. Parent and Merger Sub agree that until September 5,
1999 Merger Sub shall from time to time extend the Offer at such times as the
Company may request for five Business Days for each extension, but shall in no
event extend the Offer beyond September 5, 1999. Merger Sub shall not, without
the prior written consent of the Company, decrease the price per Share offered
in the Offer, change the form of consideration offered or payable in the Offer,
decrease the numbers of Shares sought in the Offer, change the conditions to the
Offer, impose additional conditions to the Offer, amend any term of the Offer in
any manner adverse to the holders of Shares or waive the Minimum Conditions (as
defined in Annex A).
(b) As soon as reasonably practicable on the date the Offer is
commenced, Merger Sub shall file a Tender Offer Statement on Schedule 14D-1 (the
"SCHEDULE 14D-1") with the SEC with respect to the Offer. The Schedule 14D-1
shall contain an Offer to Purchase and forms of the related letter of
transmittal and other documents relating to the Merger (which Schedule 14D-1,
Offer to Purchase, letter of transmittal and other documents, together with any
supplements or amendments thereto, are referred to herein collectively as the
"OFFER DOCUMENTS"). Parent and Merger Sub agree that the Company and its counsel
shall be given an opportunity to review the Schedule 14D-1 before it is filed
with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents that shall have
become false or misleading in any material respect, and Parent and Merger Sub
further agree to take all steps necessary to cause the Schedule 14D-1 as so
corrected to be filed with the SEC and the other Offer Documents as so corrected
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and Merger Sub also agree
that the Offer Documents shall comply with the requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations
thereunder.
(c) The Company's Board of Directors shall recommend
acceptance of the Offer to its stockholders in a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "SCHEDULE 14D-9") to be filed with the
Securities and Exchange Commission (the "SEC") substantially contemporaneously
with the filing of the Schedule 14D-1; PROVIDED, HOWEVER, that if the Company's
Board of Directors determines consistent with its fiduciary duties to amend or
withdraw such recommendation, such amendment or withdrawal shall not constitute
a breach of this Agreement. Merger Sub and its counsel shall be given an
opportunity to review the Schedule 14D-9 before it is filed with the SEC.
Parent, Merger Sub and the Company each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 that shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected to be
disseminated to holders of shares, in each case as and to the extent required by
the applicable federal securities laws. The Company also agrees that the
Schedule 14D-9 shall comply with the requirements of the Exchange Act and the
rules and regulations thereunder.
(d) In connection with the Offer, if requested by Parent, the
Company will promptly notify its Transfer Agent to furnish to Merger Sub a list,
as of a recent date, of the names and addresses of the record holders of Shares
and a copy of the names and addresses of participants identified in the most
recent security position listing of any clearing agency which is within the
access of the Company. If Merger Sub needs to disseminate amendments to the
Offer Documents, the Company, if requested by Parent, shall furnish Merger Sub
with updated names and addresses of record holders of Shares not previously
furnished to Merger Sub which is within the access of the Company. For purposes
of this Agreement, the term "Business Day" means any day other than Saturday,
Sunday or a federal holiday.
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ARTICLE
2.
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time, Merger Sub shall be merged with and
into the Company and the separate corporate existence of Merger Sub shall
thereupon cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "SURVIVING CORPORATION"), and the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in Article III. The Merger shall have the effects specified
in the Florida Business Corporation Act (the "FBCA").
2.2. CLOSING. The closing of the Merger (the "CLOSING") shall take
place (i) at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx at 10:00 A.M. on the business day on which the last to be satisfied or
waived of the conditions set forth in Article VIII hereof shall be satisfied or
waived in accordance with this Agreement or (ii) at such other place and time
and/or on such other date as the Company and Parent may agree in writing (the
"CLOSING DATE").
2.3. EFFECTIVE TIME. As soon as practicable following the Closing, the
Company and Parent will cause Articles of Merger reflecting the provisions set
forth in this Agreement (the "ARTICLES OF MERGER") to be executed (by the
Company and Merger Sub) and delivered for filing to the Department of State of
the State of Florida (the "DEPARTMENT") as provided in Section 607.1105 of the
FBCA. The Merger shall become effective at the time when the Articles of Merger
have been duly filed with the Department or at such later time agreed by the
parties in writing and provided in the Articles of Merger (the "EFFECTIVE
TIME").
ARTICLE
3.
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
3.1. THE ARTICLES OF INCORPORATION. The articles of incorporation of
the Company as in effect immediately prior to the Effective Time shall be the
articles of incorporation of the Surviving Corporation (the "ARTICLES"), until
duly amended as provided therein or by applicable law, except that Article III
of the articles of incorporation of the Company shall be amended in its entirety
to read as follows: "The total number of shares of all classes of capital stock
that the Corporation shall have authority to issue shall be 1,000 shares of
Common Stock, par value $.01 per share." and Article IV of the articles of
incorporation of the Company shall be amended in its entirety to read as
follows: "The total number of directors of the Corporation shall be fixed from
time to time pursuant to the by-laws of the Corporation."
3.2. THE BY-LAWS. The by-laws of the Company in effect at the Effective
Time shall be the by-laws of the Surviving Corporation (the "BY-LAWS"), until
thereafter amended as provided therein or by applicable law.
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ARTICLE
4.
OFFICERS AND DIRECTORS OF THE COMPANY
AND THE SURVIVING CORPORATION
4.1. DIRECTORS. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Articles and the By-Laws as in effect from time to time.
4.2. OFFICERS. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Articles and the By-Laws.
4.3. BOARD OF DIRECTORS. If requested by Parent, the Company shall to
the extent permissible, promptly following the purchase by Merger Sub of Shares
pursuant to the Offer in accordance with the terms hereunder, take all actions
necessary (including calling a special meeting of the Board of Directors of the
Company or the stockholders of the Company for this purpose) to cause natural
Persons designated by Parent to become directors of the Company so that the
total number of such natural Persons equals that number of directors, rounded up
to the next whole number, which represents the product of (x) the total number
of directors on the board of directors of the Company multiplied by (y) the
percentage that the number of Shares so accepted for payment plus and shares
beneficially owned by Parent or its affiliates on the date hereof bears to the
number of Shares outstanding at the time of such acceptance for payment. At such
time, the Company shall also cause persons designated by Parent to constitute
the same percentage (rounded up to the next whole number) as is on the Company's
Board of Directors of (i) each committee of the Company's Board of Directors;
(ii) each board of directors (or similar body) of each Subsidiary of the
Company, and (iii) each committee (or similar body) of each such board. In
furtherance thereof, the Company will increase the size of the board of
directors of the Company, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Parent's designees
to be elected to the board of directors of the Company; PROVIDED, HOWEVER, that
prior to the Effective Time, the board of directors of the Company shall always
have at least three members who are neither officers of Parent nor designees,
stockholders or affiliates of Parent ("Parent Insiders"). The Company's
obligations to appoint designees to the board of directors of the Company now
shall be subject to Section 14(f) of the Exchange Act and Rule 14(f)-l
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section 4.3
and shall include in the Schedule 14D-9 such information as is required under
such Section and Schedule. Parent agrees to furnish to the Company all
information concerning Parent's designees which may be necessary to comply with
the foregoing and agrees that such information will comply with the Exchange Act
and the rules and regulations thereunder and other applicable laws.
Notwithstanding anything in this Agreement to the contrary, in the event that
Parent's designees are elected to the Board of Directors of the Company after
the acceptance for payment of Shares pursuant to the Offer and prior to the
Effective Time, the affirmative vote of at least a majority of the directors of
the Company who are not Parent Insiders shall be required to (a) amend or
terminate this Agreement by the Company, (b) exercise or waive any of the
Company's rights, benefits or remedies hereunder, (c) extend the time for
performance of Parent's and Merger Sub's respective obligations hereunder, or
(d) take any other action by the Company's Board of Directors under or in
connection with this Agreement which would adversely affect the ability of the
stockholders of the Company to receive the Merger Consideration.
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ARTICLE
5.
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
5.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
the Company:
(a) MERGER CONSIDERATION. Each share of the voting Common
Stock, par value $0.01 per share, of the Company (a "SHARE" and, collectively,
the "SHARES") issued and outstanding immediately prior to the Effective Time
(other than Shares owned by Parent, Merger Sub or any other direct or indirect
Subsidiary of Parent (collectively, the "PARENT COMPANIES"), Shares that are
owned by the Company or any direct or indirect Subsidiary of the Company and in
each case not held on behalf of third parties or Shares that are owned by
Dissenting Stockholders (collectively, "EXCLUDED SHARES")) shall be cancelled,
extinguished and converted into the right to receive, without an interest, an
amount in cash equal to $25.50 per Share (the "Merger Consideration") or such
greater amount which may be paid pursuant to the Offer. At the Effective Time,
all Shares shall no longer be outstanding and shall be cancelled and retired and
shall cease to exist, and each certificate (a "CERTIFICATE") formerly
representing any of such Shares (other than Excluded Shares) shall thereafter
represent only the right to the Merger Consideration for each Share upon the
surrender of such Certificate in accordance with Section 5.2 or the right, if
any, to receive payment from the Surviving Corporation of the "fair value" of
such Shares as determined in accordance with Section 607.1302 of the FBCA.
(b) CANCELLATION OF SHARES. Each Excluded Share shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be cancelled and retired without payment of any
consideration therefor and shall cease to exist.
(c) MERGER SUB. At the Effective Time, each share of Common
Stock, par value $.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of the Surviving Corporation.
5.2. SURRENDER OF CERTIFICATES. (a) PAYING AGENT. Immediately prior to
the Effective Time, Parent shall deposit, or shall cause to be deposited, with a
paying agent (the "PAYING AGENT"), selected by Parent (within 15 days after the
date hereof) with the Company's prior approval for the benefit of the holders of
Shares, an amount in cash sufficient in the aggregate to provide all funds
necessary for the Paying Agent to make payments of the Merger Consideration to
all holders of Shares, (such cash being hereinafter referred to as the "EXCHANGE
FUND"). To the extent not required within five Business Days for payment with
respect to surrendered Shares, proceeds in the Exchange Fund shall be invested
by the Paying Agent, as directed by Parent (as long as such investments do not
impair the rights of holders of Shares) in direct obligations of the United
States of America, obligations for which the faith and credit of the United
States of America is pledged to provide for the payment of principal and
interest, or certificates of deposit issued by a commercial bank having at least
$10 billion in assets, and any net earnings with respect thereto shall be paid
to Parent as and when requested by the Parent; provided that at no time may the
amount of the Exchange Fund be reduced below an amount necessary to make
payments of the Merger Consideration to all Shares not theretofore submitted.
(b) EXCHANGE PROCEDURES. At the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail to each holder of record of
Shares at the Effective Time (other than holders of Excluded Shares) (i) a
letter of transmittal specifying that delivery of the Certificates shall be
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effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates (or affidavits of loss in lieu thereof) to the
Paying Agent, such letter of transmittal to be in such form and have such other
provisions as Parent and the Company may reasonably agree, and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
amounts of cash payable hereunder to a Person other than the Person in whose
name the surrendered Certificate is registered on the transfer books of the
Company). Subject to Section 5.2(e), upon surrender of a Certificate for
cancellation to the Paying Agent together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a check in an amount equal to (after giving effect to any
required tax withholdings) the Merger Consideration multiplied by the number of
Shares formerly represented by such Certificate and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on
any amount payable upon due surrender of the Certificates. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, a check in the amount payable hereunder, upon due surrender of
the Certificate, may be paid to such a transferee if the Certificate formerly
representing such Shares is presented to the Paying Agent, accompanied by all
documents required to evidence and effect such transfer.
For the purposes of this Agreement, the term "PERSON" shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.
(c) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. From and after the
Effective Time, the holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for herein or by
applicable law.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund that remains unclaimed by the stockholders of the Company for one year
after the Effective Time shall be returned to Parent. Any stockholders of the
Company who have not theretofore complied with this Article V shall thereafter
look only to Parent for payment of the Merger Consideration upon due surrender
of their Certificates (or affidavits of loss in lieu thereof), in each case,
without any interest thereon.
(e) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in customary amount 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 amount of cash such Persons are
entitled to hereunder upon due surrender of the Shares represented by such
Certificate pursuant to this Agreement.
5.3. DISSENTERS' RIGHTS. Notwithstanding anything in this Agreement to
the contrary, if available under the FBCA, Shares that are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders ("Dissenting Stockholders") who have not voted in favor of or
consented to the Merger and in the manner provided in Section 607.1320 of the
FBCA shall have delivered a written notice of intent to demand payment for such
Shares if the Merger is effectuated in the time and manner provided in FBCA and
shall not have failed to perfect or shall not have effectively withdrawn or lost
their rights to appraisal and payment under the FBCA shall not be converted into
the right to receive the Merger Consideration, but shall, in lieu thereof, be
entitled to receive the consideration as shall be determined pursuant to
Sections 607.1301 through 607.1320 of the FBCA;
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PROVIDED, HOWEVER, that any such holder who shall have failed to perfect or
shall have effectively withdrawn or lost his, her or its right to appraisal and
payment under the FBCA, shall thereupon be deemed to have had such Person's
Shares converted, at the Effective Time, into the right to receive the Merger
Consideration set forth herein, without any interest thereon.
5.4. ADJUSTMENTS TO PREVENT DILUTION. In the event that the Company
changes the number of Shares or securities convertible or exchangeable into or
exercisable for Shares, issued and outstanding prior to the Effective Time as a
result of a reclassification, stock split (including a reverse split), stock
dividend or distribution, recapitalization, merger, subdivision, issuer tender
or exchange offer, or other similar transaction, the Merger Consideration shall
be equitably adjusted.
ARTICLE
6.
REPRESENTATIONS AND WARRANTIES
6.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in the disclosure letter delivered to Parent by the Company on or prior to
entering into this Agreement (the "COMPANY DISCLOSURE LETTER"), the Company
hereby represents and warrants to Parent and Merger Sub that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing or of active status, as applicable, under the laws of its
respective jurisdiction of organization and has all requisite corporate or
similar power and authority to own and operate its properties and assets and to
carry on its business as presently conducted and is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its properties or conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing would not have a Company Material Adverse Effect. The Company has made
available to Parent complete and correct copies of the Company's and its
Subsidiaries' articles of incorporation and by-laws (or comparable governing
instruments), as amended to the date hereof. The Company's and its Subsidiaries'
articles of incorporation and by-laws (or comparable governing instruments) so
delivered are in full force and effect.
As used in this Agreement, the term "SUBSIDIARY" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one or more of
its respective Subsidiaries.
As used in this Agreement, the term "COMPANY MATERIAL ADVERSE
EFFECT" means a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its Subsidiaries taken as a
whole; PROVIDED, HOWEVER, that any such effect resulting from any change (i) in
law, rule, regulation or generally accepted accounting principles ("GAAP") or
interpretations thereof, (ii) in economic or business conditions generally which
does not have a disproportionate effect on the Company and its Subsidiaries
taken as a whole or (iii) resulting from the execution and delivery of this
Agreement and the contemplated consummation of the transactions contemplated
hereby shall not be considered when determining if a Company Material Adverse
Effect has occurred.
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(b) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 100,000,000 Shares, of which 28,762,983 Shares were
outstanding as of the close of business on April 29, 1999, 250,000 shares of
nonvoting common stock par value $0.01 per share, of the Company, of which no
shares were outstanding as of the date hereof and 2,000,000 shares of Preferred
Stock, par value $0.01 per share (the "PREFERRED SHARES"), of the Company, of
which no shares were outstanding as of the date hereof. All of the issued and
outstanding Shares have been duly authorized and are validly issued, fully paid
and nonassessable. The Company has no Shares reserved for or subject to
issuance, except that, as of April 29, 1999, there were 3,313,104 Shares
reserved in the aggregate for issuance pursuant to the Company 1997 Stock Option
Plan, the Company 1993 Amended and Restated Stock Option Plan, the Company 1987
Amended and Restated Stock Option Plan, the Company 1995 Non-Employee Director
Stock Option Plan and the Company 1996 Non-Employee Director Stock Option Plan
(collectively, the "STOCK PLANS"). Each of the outstanding shares of capital
stock or other securities of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and owned by the
Company or a direct or indirect wholly-owned Subsidiary of the Company, free and
clear of any lien, pledge, security interest, claim or other encumbrance. Except
as set forth above, there are no preemptive or other outstanding rights,
options, warrants, conversion rights, stock appreciation rights, redemption
rights, repurchase rights, agreements, arrangements or commitments to issue or
to sell any shares of capital stock or other securities of the Company or any of
its Subsidiaries or any securities or obligations convertible or exchangeable
into or exercisable for, or giving any Person a right to subscribe for or
acquire, any securities of the Company or any of its Subsidiaries, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The Company does not have outstanding any bonds, debentures, notes
or other obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the
stockholders of the Company on any matter ("VOTING DEBT").
(c) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS.
(i) The Company has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject only to approval of this Agreement by the holders of a majority of the
outstanding Shares, the Merger. This Agreement has been duly executed and
delivered by the Company, and assuming due authorization, execution and delivery
of this Agreement by Parent and Merger Sub, is a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY
EXCEPTION").
(ii) The Board of Directors of the Company (A) has
approved this Agreement and the Offer and adopted the plan of merger set forth
herein and (B) has received the opinion of its financial advisors, Xxxxxxx,
Sachs & Co., to the effect that the Merger Consideration and the consideration
to be paid pursuant to the Offer pursuant to this Agreement are fair from a
financial point of view to the holders of Shares.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A)
pursuant to the FBCA, (B) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR ACT"), and (C) under the Securities Exchange Act
of 1934 (the "EXCHANGE ACT"), no notices, reports or other filings are required
to be made by the Company with, nor are any consents, registrations, approvals,
permits or
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authorizations required to be obtained by the Company from, any governmental or
regulatory authority, agency, commission, body or other governmental entity
(each a "GOVERNMENTAL ENTITY"), in connection with the execution and delivery of
this Agreement by the Company and the consummation by the Company of the Merger
and the other transactions contemplated hereby, except for those that the
failure to make or obtain would not have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated hereby will not, constitute or
result in (A) a breach or violation of, or a default under, either the articles
of incorporation of the Company or by-laws of the Company or the comparable
governing instruments of any of its Subsidiaries, (B) a breach or violation of,
or a default under, the acceleration of any obligations or the creation of a
lien, pledge, security interest or other encumbrance on the assets of the
Company or any of its Subsidiaries (with or without notice, lapse of time or
both) pursuant to, any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation ("CONTRACTS") or any Law or governmental or
non-governmental permit or license to which the Company or any of its
Subsidiaries is subject or (C) any change in the rights or obligations of any
party under any of the Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, creation or change that
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has
made available to Parent each registration statement, report, proxy statement or
information statement filed by it since July 31, 1997 and prior to the date
hereof, including (i) the Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1998, and (ii) the Company's Quarterly Reports on Form 10-Q
for the quarterly periods ended October 31, 1998, and January 31, 1999, each in
the form (including exhibits, annexes and any amendments thereto) filed with the
Securities and Exchange Commission (the "SEC") (collectively, including
amendments of any such reports as amended, the "COMPANY REPORTS"). Each of the
consolidated balance sheets included in or incorporated by reference into the
Company Reports (including the related notes and schedules) fairly presents the
consolidated financial position of the Company and its Subsidiaries as of its
date and each of the consolidated statements of income and of consolidated
statements of cash flow included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents the
results of operations, retained earnings and changes in financial position, as
the case may be, of the Company and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to the absence of notes
and normal year-end audit adjustments), in each case in accordance with GAAP
consistently applied during the periods involved, except as may be noted
therein. None of the Company Reports (in the case of Company Reports filed
pursuant to the Securities Act), as of their effective dates, contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading and none of the
Company Reports (in the case of Company Reports filed pursuant to the Exchange
Act), as of their respective dates contains any statement which, at the time and
in the light of the circumstances under which it was made, was false or
misleading with respect to any material fact, or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since January 1, 1996,
no Subsidiary of the Company has been required to file any forms, reports or
other documents with the SEC.
9
(f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
Company Reports or as permitted hereunder, since July 31, 1998 (the "Audit
Date"), the Company and its Subsidiaries taken as a whole have conducted their
business only in, and have not engaged in any material transaction other than
according to, the ordinary and usual course of such business and there has not
been (i) any change in the financial condition, properties, business or results
of operations of the Company and its Subsidiaries that has had a Company
Material Adverse Effect; (ii) any material damage, destruction or other casualty
loss with respect to any material asset or material property owned, leased or
otherwise used by the Company or any of its Subsidiaries, not covered by
insurance; (iii) any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the Company; or (iv) any
change by the Company in accounting principles, practices or methods which is
not required or permitted by GAAP. Since the Audit Date and through the date
hereof, except as provided for herein or as disclosed in the Company Reports,
there has not been any material increase in the compensation payable or that
could become payable by the Company or any of its Subsidiaries to officers or
key employees or any material amendment of any of the Compensation and Benefit
Plans other than increases or amendments in the ordinary course which increases
or amendments have not had a Company Material Adverse Effect.
(g) LITIGATION AND LIABILITIES. Except as disclosed in the
Company Reports, there are no civil, criminal or administrative actions, suits,
claims, hearings, investigations or proceedings pending or, to the knowledge of
the executive officers of the Company, threatened against the Company or any of
its Subsidiaries, except for those that would not have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
Neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether absolute, accrued or contingent)which would
have a Company Material Adverse Effect except (i) liabilities or obligations
that are accrued for or reserved against in the Company's consolidated balance
sheet as of January 31, 1999 and (ii) liabilities or obligations arising since
January 31, 1999 in the ordinary course of business and consistent with past
practice.
(h) EMPLOYEE BENEFITS.
(i) A copy of each bonus, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, employment,
termination, severance, compensation, medical, health, life, disability,
cafeteria, paid time off, perquisites, fringe benefits or other plan, agreement,
policy or arrangement that covers employees or former employees of the Company
and/or its Subsidiaries ("EMPLOYEES"), or directors or former directors of the
Company and/or its Subsidiaries (the "COMPENSATION AND BENEFIT PLANS") and any
trust agreement or insurance contract forming a part of such Compensation and
Benefit Plans has been made available or provided to Parent prior to the date
hereof. The Compensation and Benefit Plans are listed in Section 6.1(h) of the
Company Disclosure Letter and any Compensation and Benefit Plans containing
"change of control" or similar provisions therein are specifically identified in
Section 6.1(h) of the Company Disclosure Letter.
(ii) All Compensation and Benefit Plans covering
Employees (the "PLANS") have been operated in all material respects in
accordance with their terms and in substantial compliance with all applicable
Laws. Each Plan that is an "employee pension benefit plan" within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "PENSION PLAN") and that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (the "IRS") with respect to "TRA" (as defined in
Section 1 of Rev. Proc. 93-39), and none of the executive officers of the
Company has knowledge of any circumstances reasonably likely to result in
revocation of any such favorable
10
determination letter. There is no material pending or, to the knowledge of the
executive officers of the Company, threatened litigation relating to the
Compensation and Benefit Plans. Neither the Company nor any of its Subsidiaries
has engaged in a transaction with respect to any Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject the
Company or any of its Subsidiaries to a material tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA.
(iii) No liability under Subtitle C or D of Title IV
of ERISA has been or is expected to be incurred by the Company or any Subsidiary
with respect to any ongoing, frozen or terminated "single-employer plan", within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any of them, or the single-employer plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or Section 414 of the Code
(an "ERISA AFFILIATE"). The Company and its Subsidiaries have not incurred and
do not expect to incur, directly or indirectly, any withdrawal liability with
respect to a multiemployer plan under Subtitle E to Title IV of ERISA. No notice
of a "reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to be
filed for any Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof or will be required to be filed in connection with the
transactions contemplated by this Agreement.
(iv) All contributions and premiums required to be
made under the terms of any Compensation and Benefit Plan as of the date hereof
have been timely made or have been reflected on the most recent consolidated
balance sheet filed or incorporated by reference in the Company Reports. Neither
any Pension Plan nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency," within the meaning of Section 412 of the Code
or Section 302 of ERISA and no ERISA Affiliate has an outstanding funding waiver
(whether or not waived) as of the last day of the most recent plan year ended
prior to the date hereof. Neither the Company nor its Subsidiaries has provided,
or is required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code. No insurance policy or Contract with respect to any Compensation and
Benefit Plans requires or permits retroactive increases in premiums or payments
due thereunder.
(v) Under each Pension Plan which is a single
employer plan, as of the last day of the most recent plan year ended prior to
the date hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined
on the basis of the actuarial assumptions contained in the Pension Plan's most
recent actuarial valuation), did not exceed the then current value of the assets
of such Pension Plan, and there has been no material change in the financial
condition of such Pension Plan since the last day of the most recent plan year.
(vi) Neither the Company nor its Subsidiaries have
any obligations for retiree health and life benefits under any Compensation and
Benefit Plan.
(vii) The consummation of the Merger and the other
transactions contemplated by this Agreement will not (x) entitle any Employees
to severance pay, (y) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Compensation and Benefit Plans or (z) result
in any breach or violation of, or a default under, any of the Compensation and
Benefit Plans. The Company may amend or terminate any Compensation and Benefit
Plan in accordance with its express terms or under applicable Law.
11
(viii) Notwithstanding anything to the contrary
contained in this Section 6.1(h), the representations and warranties contained
in this Section 6.1(h) shall be deemed to be true and correct unless such
failures to be true and correct are reasonably likely to have a Company Material
Adverse Effect.
(i) COMPLIANCE WITH LAWS. The business of the Company and its
Subsidiaries is not being conducted in violation of any federal, state, local or
foreign law, statute, ordinance, rule, regulation, judgment, order, injunction,
decree, arbitration award, agency requirement, license or permit of any
Governmental Entity (collectively, "LAWS"), except for violations that would not
have a Company Material Adverse Effect or prevent or materially burden or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. No investigation or review by any Governmental
Entity with respect to the Company or any of its Subsidiaries is pending or, to
the knowledge of the executive officers of the Company, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for those
the outcome of which would not have a Company Material Adverse Effect or prevent
or materially burden or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement. The Company and its
Subsidiaries each has all permits, licenses, franchises, variances, exemptions,
orders and other governmental authorizations, consents and approvals from
Governmental Entities necessary to conduct its business as presently conducted,
except for those the absence of which would not have a Company Material Adverse
Effect or prevent or materially burden or materially impair the ability of the
Company to consummate the Merger and the other transactions contemplated by this
Agreement.
(j) TAKEOVER STATUTES. No "fair price," "moratorium," "control
share acquisition," "interested stockholder" or other similar anti-takeover
statute or regulation (including, without limitation, Sections 607.0901 and
607.0902 of the FBCA) (each a "TAKEOVER STATUTE") or restrictive provision of
any applicable anti-takeover provision in the articles of incorporation of the
Company or by-laws of the Company is, applicable to the Company, the Shares, the
Offer, the Merger or any of the other transactions contemplated by this
Agreement.
(k) ENVIRONMENTAL MATTERS. Except as disclosed in the Company
Reports and except for such matters that would not have a Company Material
Adverse Effect: the Company and its Subsidiaries (i) are in substantial
compliance with all applicable Environmental Laws; (ii) have not received any
notice from any Governmental Entity or any third party alleging any violation
of, or liability under, any applicable Environmental Laws; (iii) are not subject
to any court order, administrative order or decree arising under any
Environmental Law; (iv) to the knowledge of the executive officers of the
Company do not own or operate any property that has been contaminated with any
Hazardous Substance and (v) are not subject to any claims, demands or
notifications concerning liability for any Hazardous Substance disposal or
contamination.
Parent and Merger Sub acknowledge that the representations and
warranties contained in this Section 6.1(k) are the only representations and
warranties being made by the Company with respect to compliance with, or
liability or claims under, Environmental Laws or with respect to permits issued
or required under Environmental Laws, that no other representation by the
Company contained in this Agreement shall apply to any such matters and that no
other representation or warranty, express or implied, is being made with respect
thereto.
As used herein, the term "ENVIRONMENTAL LAW" means any
federal, state, local or foreign statute, law, regulation, order, decree,
permit, authorization, common law or agency requirement as in effect and as
interpreted relating to: (A) the protection, investigation or restoration of the
environment,
12
health, safety, or natural resources or (B) the handling, use, presence,
disposal, release or threatened release of, or exposure to, any Hazardous
Substance.
As used herein, the term "HAZARDOUS SUBSTANCE" means any
substance that is listed, classified or regulated pursuant to any Environmental
Law including any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
material or radon.
(l) TAXES. The Company and each of its Subsidiaries (i) have
duly and timely filed (taking into account any extension of time within which to
file) all Tax Returns (as defined below) required to be filed by any of them and
all such filed Tax Returns are complete and accurate in all material respects;
(ii) have paid all Taxes (as defined below) that are shown as due on such filed
Tax Returns or that the Company or any of its Subsidiaries are obligated to
withhold from amounts owing to any employee, creditor or third party, except
with respect to matters contested in good faith and would not have a Company
Material Adverse Effect; and (iii) have not waived any statute of limitations
with respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency, except, in each case, for those failures to file or
pay or those waivers that would not have a Company Material Adverse Effect.
There are not pending or, to the knowledge of the executive officers of the
Company, threatened in writing, any audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters.
As used in this Agreement, (i) the term "TAX" (including, with
correlative meaning, the terms "TAXES", and "TAXABLE") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "TAX RETURN" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority relating to
Taxes.
(m) LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is the subject of any proceeding asserting that the Company or any
of its Subsidiaries has committed an unfair labor practice nor is there pending
or, to the knowledge of the executive officers of the Company, threatened, nor
since January 1, 1996 has there been any labor strike, dispute, walk-out, work
stoppage, slow-down or lockout involving the Company or any of its Subsidiaries,
except in each case for those that would not have a Company Material Adverse
Effect or prevent or materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement.
(n) INTELLECTUAL PROPERTY.
(i) The Company and/or one or more of its
Subsidiaries owns, or is licensed or otherwise possesses valid rights to use,
all patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or materials
that are used in the business of the Company and its Subsidiaries, except for
any such failures to own, be licensed or possess that would not have a Company
Material Adverse Effect, and to the knowledge of the executive officers of the
Company all patents, trademarks, trade names, service marks and copyrights owned
by the Company
13
and/or its Subsidiaries are valid and subsisting, except for those that would
not have a Company Material Adverse Effect.
(ii) Except as disclosed in Company Reports or except
as would not have a Company Material Adverse Effect:
(A) the Company is not, nor will it be as a
result of the execution and delivery of this Agreement or the performance of its
obligations hereunder, in violation of any licenses, sublicenses and other
agreements as to which the Company is a party as of the date hereof and pursuant
to which the Company is authorized to use any third-party patents, trademarks,
service marks, copyrights, trade secrets or computer software (collectively,
"THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS");
(B) no claims with respect to (I) the
patents, registered and material unregistered trademarks and service marks,
registered copyrights, trade names, and any applications therefor, trade secrets
or computer software owned by the Company or any of its Subsidiaries
(collectively, the "COMPANY INTELLECTUAL PROPERTY RIGHTS"); or (II) Third-Party
Intellectual Property Rights are currently pending or, to the knowledge of the
executive officers of the Company, are threatened by any Person;
(C) to the knowledge of the executive
officers of the Company there are not any valid grounds for any bona fide claims
(I) to the effect that the sale, licensing or use of any service as used, sold
or licensed by the Company or any of its Subsidiaries, infringes on any
copyright, patent, trademark, service xxxx or trade secret; (II) against the use
by the Company or any of its Subsidiaries of any Company Intellectual Property
Rights or the Third-Party Intellectual Property Rights used in the business of
the Company or any of its Subsidiaries as currently conducted; (III) challenging
the ownership, validity or enforceability of any of the Company Intellectual
Property Rights; or (IV) challenging the license or legally enforceable right to
use of the Third-Party Intellectual Rights by the Company or any of its
Subsidiaries; and
(D) to the knowledge of the executive
officers of the Company, there is no unauthorized use, infringement or
misappropriation of any of the material Intellectual Property Rights by any
third party, including any employee or former employee of the Company or any of
its Subsidiaries.
(o) BROKERS AND FINDERS. Except for Xxxxxxx, Sachs & Co.,
neither the Company nor any of its officers, directors or employees has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Merger or the other
transactions contemplated by this Agreement.
(p) YEAR 2000. The Company has developed a plan which it
reasonably believes is designed to confirm that all computer software and
systems (including hardware, firmware, operating system software, utilities,
embedded processors and application's software) used in and material to the
business of the Company are designed to operate during and after the calendar
year 2000 to accurately process data (including but not limited to calculating,
comparing and sequencing) from, into and between the twentieth and twenty-first
centuries, including leap year calculations and the Company is not aware of any
flaws in any of the computer software and systems owned by it and used in and
material to the business of the Company that would have a Company Material
Adverse Effect.
14
(q) WAIVER OF VESTING. The individuals listed in Schedule
6.1(q) of the Company Disclosure Letter have waived all vesting rights that they
may have pursuant to the terms of Section 7.8 hereof with respect to all options
to purchase shares beneficially owned by them and issued pursuant to the Stock
Plans. The Company has provided Parent with copies of each such waiver.
(r) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Section 6.1, neither the
Company nor any other Person makes any other express or implied representation
or warranty on behalf of the Company or any of its Affiliates.
6.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Except as
set forth in the disclosure letter delivered to the Company by Parent on or
prior to entering into this Agreement (the "PARENT DISCLOSURE LETTER"), Parent
and Merger Sub each hereby represent and warrant to the Company that:
(a) CAPITALIZATION OF MERGER SUB. The authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, par value
$.01 per share, of Merger Sub all of which are validly issued and outstanding.
All of the issued and outstanding capital stock of Merger Sub is, and at the
Effective Time will be, owned by Parent, and there are (i) no other shares of
capital stock or voting securities of Merger Sub authorized, (ii) no securities
of Merger Sub convertible into or exchangeable for shares of capital stock or
voting securities of Merger Sub and (iii) no options or other rights to acquire
from Merger Sub, and no obligations of Merger Sub to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Merger Sub. Merger Sub has not conducted any
business prior to the date hereof and has no, and prior to the Effective Time
will have no, assets, liabilities or obligations of any nature other than those
incident to its formation and pursuant to or in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement.
(b) ORGANIZATION, GOOD STANDING AND QUALIFICATION.
Each of Parent and Merger Sub is a corporation duly organized, validly existing
and in good standing (or active status) under the laws of its respective
jurisdiction of organization and has all requisite corporate or similar power
and authority to own and operate its properties and assets and to carry on its
business as presently conducted and is qualified to do business and is in good
standing (or active status) as a foreign corporation in each jurisdiction where
the ownership or operation of its properties or conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing would not have a Parent Material Adverse Effect. Parent has made
available to the Company a complete and correct copy of Parent's and Merger
Sub's certificates of incorporation and by-laws (or comparable governing
instruments), as amended to the date hereof. Parent's and Merger Sub's
certificates of incorporation and by-laws (or comparable governing instruments)
so delivered are in full force and effect.
As used in this Agreement, the term "PARENT MATERIAL ADVERSE
EFFECT" means a material adverse effect on the financial condition, properties,
business or results of operations of Parent and its Subsidiaries taken as a
whole; PROVIDED, HOWEVER, that any such effect resulting from any change in law,
rule, or regulation or GAAP or interpretations thereof shall not be considered
when determining if a Parent Material Adverse Effect has occurred.
(c) CAPITAL STRUCTURE. As of the most recently filed
Quarterly Report on Form 10-Q of Parent, the authorized, issued and outstanding
capital stock of Parent is as stated therein. Each of the outstanding shares of
capital stock or other securities of each of Parent's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and owned by Parent or
a direct or indirect
15
wholly-owned Subsidiary of Parent, free and clear of any lien, pledge, security
interest, claim or other encumbrance. Except as set forth in the most recently
filed Quarterly Report on Form 10-Q of Parent and in the ordinary course of
business, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements or commitments to issue or to sell
any shares of capital stock or other securities of Parent or any of its
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire,
any securities of Parent or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. Parent
does not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Parent on any
matter ("PARENT VOTING DEBT").
(d) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS.
(i) No vote of holders of capital stock of Parent is
necessary to approve this Agreement, the Offer and the Merger and the other
transactions contemplated hereby. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement, and to consummate the Merger and the transactions contemplated
hereby. The consummation of the transactions contemplated hereby has been duly
authorized by the respective Boards of Directors of Parent and Merger Sub and no
other corporate proceeding on the part of Parent or Merger Sub is necessary to
authorize the execution and delivery of this Agreement by Parent and Merger Sub
and the consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Parent and Merger Sub and, assuming due
authorization, execution and delivery of this Agreement by the Company, is a
valid and legally binding agreement of Parent and Merger Sub, enforceable
against each of Parent and Merger Sub in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(ii) The Board of Directors of Parent has received
the opinion of its financial advisors, Bear Xxxxxxx & Co. Inc., to the effect
that the Merger Consideration and the Consideration to be paid in the Offer are
fair, from a financial point of view, to Parent.
(e) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A)
pursuant to the FBCA, (B) under the HSR Act, and (C) the Exchange Act, no
notices, reports or other filings are required to be made by Parent or Merger
Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent or Merger Sub from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub
of the Merger, the Offer and the other transactions contemplated hereby, except
for those that the failure to make or obtain would not have a Parent Material
Adverse Effect or prevent, materially delay or materially impair the ability of
Parent or Merger Sub to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this
Agreement by Parent and Merger Sub do not, and the consummation by Parent and
Merger Sub of the Offer, the Merger or the other transactions contemplated
hereby will not, constitute or result in (A) a breach or violation of, or a
default under, either the certificate of incorporation or by-laws of Parent and
Merger Sub or the comparable governing instruments of any of Parent's
Subsidiaries, (B) a breach or violation of, or a
16
default under, the acceleration of any obligations or the creation of a lien,
pledge, security interest or other encumbrance on the assets of Parent or any of
its Subsidiaries (with or without notice, lapse of time or both) pursuant to,
any Contracts or any Law or governmental or non-governmental permit or license
to which Parent or any of its Subsidiaries is subject or (C) any change in the
rights or obligations of any party under any of the Contracts, except, in the
case of clause (B) or (C) above, for any breach, violation, default,
acceleration, creation or change that would not have a Parent Material Adverse
Effect or prevent, materially delay or materially impair the ability of Parent
or Merger Sub to consummate the transactions contemplated by this Agreement.
(f) LITIGATION AND LIABILITIES. There are no civil, criminal
or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of the executive officers of Parent,
threatened against Parent or any of its Subsidiaries, which would prevent or
materially burden or materially impair the ability of Parent or Merger Sub to
consummate the Offer, the Merger or any of the other transactions contemplated
by this Agreement.
(g) COMPLIANCE WITH LAWS. The business of Parent and its
Subsidiaries taken as a whole is not being conducted in violation of any Laws,
except for violations that would not materially burden or materially impair the
ability of Parent to consummate the transactions contemplated by this Agreement.
As of the date hereof, no investigation or review by any Governmental Entity
with respect to Parent or any of its Subsidiaries is pending or, to the
knowledge of the executive officers of Parent, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for those
the outcome of which would not prevent or materially burden or materially impair
the ability of Parent to consummate the transactions contemplated by this
Agreement. Parent and its Subsidiaries each has all permits, licenses,
franchises, variances, exemptions, orders and other governmental authorizations,
consents and approvals from Governmental Entities necessary to conduct its
business as presently conducted, except for those the absence of which would not
prevent or materially burden or materially impair the ability of Parent or
Merger Sub to consummate the Merger and the other transactions contemplated by
this Agreement.
(h) TAKEOVER STATUTES. No Takeover Statute or restrictive
provision of any applicable anti-takeover provision in the certificate of
incorporation of Parent or by-laws of Parent is, applicable to Parent, Merger
Sub, the Offer, the Merger or any of the other transactions contemplated by this
Agreement.
(i) BROKERS AND FINDERS. Except for Bear Xxxxxxx & Co. Inc.,
neither Parent nor any of its officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the Offer, the Merger or the other
transactions contemplated by this Agreement.
(j) FUNDS. Parent and Merger Sub will have the funds necessary
to consummate the Offer and the Merger.
(k) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Section 6.2, neither Parent nor
any other Person makes any other express or implied representation or warranty
on behalf of Parent or any of its Affiliates.
17
ARTICLE
7.
COVENANTS
7.1. INTERIM OPERATIONS OF THE COMPANY. From the date hereof through
the Effective Time, the Company covenants and agrees that its business and the
business of its Subsidiaries shall be conducted in the ordinary and usual course
and, to the extent consistent therewith, it and its Subsidiaries shall use their
respective best reasonable efforts to preserve its business organization intact
and maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, employees and business associates. Without
limiting the generality of the foregoing, except as otherwise set forth in
Section 7.1(a) of the Company Disclosure Letter, the Company covenants and
agrees as to itself and its Subsidiaries that, from the date hereof and prior to
the Effective Time (unless Parent shall otherwise approve in writing, which
approval shall not be unreasonably withheld or delayed, and except as otherwise
expressly contemplated by this Agreement or by Law):
(i) it shall not (x) issue, sell, pledge, dispose of
or encumber any capital stock owned by it in any of its Subsidiaries; (y) amend
its articles of incorporation or by-laws or the comparable governing instruments
of any of its Subsidiaries; (z) split, combine or reclassify its outstanding
shares of capital stock; (aa) declare, set aside or pay any dividend payable in
cash, stock or property in respect of any capital stock other than dividends
from its direct or indirect wholly- owned Subsidiaries to it or a wholly-owned
Subsidiary or (bb) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exchangeable or exercisable
for any shares of its capital stock, except, in connection with the Stock Plans,
or permit any of its Subsidiaries to purchase or otherwise acquire, any shares
of its capital stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock;
(ii) neither it nor any of its Subsidiaries shall (x)
issue, sell, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its capital
stock of any class or any Voting Debt or any other property or assets (other
than Shares issuable pursuant to options (whether or not vested) outstanding on
the date hereof under the Stock Plans); (y) other than in the ordinary and usual
course of business, transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of or encumber any other property or assets (including capital stock of
any of its Subsidiaries) or incur or modify any material indebtedness for
borrowed money or guarantee any such indebtedness or (z) by any means, make any
significant acquisition of, or investment in, assets or stock (whether by way of
merger, consolidation, tender offer, share exchange or other activity);
(iii) neither it nor any of its Subsidiaries shall
terminate, establish, adopt, enter into, make any new grants or awards under,
amend or otherwise modify, any Compensation and Benefit Plans, or increase the
salary, wage, bonus or other compensation of any employees except for grants or
awards or increases under existing Compensation and Benefit Plans occurring in
the ordinary and usual course of business (which shall include normal periodic
performance reviews and related compensation and benefit increases), annual
reestablishment of Compensation and Benefit Plans and the provision of
individual compensation or benefit plans and agreements for newly hired or
appointed officers and employees of the Company and its Subsidiaries or except
for actions necessary to satisfy existing contractual obligations under
Compensation and Benefit Plans or agreements existing as of the date hereof; and
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(iv) neither it nor any of its Subsidiaries will
authorize or enter into an agreement to do anything prohibited by the foregoing.
7.2. ACQUISITION PROPOSALS. The Company agrees that neither it nor any
of its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall cause its and its Subsidiaries' employees, agents and
other representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, tender offer, reorganization,
share exchange, consolidation or similar transaction involving, or any purchase
of all or substantially all of the assets or any equity securities of, it or any
of its Subsidiaries (any such proposal or offer being hereinafter referred to as
an "ACQUISITION PROPOSAL"). The Company further agrees that neither it nor any
of its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall cause its and its Subsidiaries' employees, agents and
representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
PROVIDED, HOWEVER, that nothing contained in this Agreement shall prevent either
the Company or any of its representatives or the Board of Directors of the
Company from (A) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal or otherwise complying with the Exchange
Act; (B) providing information in response to a request therefor by a Person who
has made an unsolicited Acquisition Proposal; (C) engaging in any negotiations
or discussions with any Person who has made an unsolicited Acquisition Proposal
or otherwise facilitating any effort or attempt to implement an Acquisition
Proposal; or (D) recommending such an Acquisition Proposal to the stockholders
of the Company, if, and only to the extent that, in each such case referred to
in clause (B), (C) or (D) above, the Board of Directors of the Company
determines either (x) upon advice of outside legal counsel that the failure to
take such action would constitute a breach of the directors' fiduciary duties
under applicable law or (y) that such Acquisition Proposal contains terms such
that if an agreement relating to such Acquisition Proposal were entered into it
would be, in the aggregate, more favorable to the Company, taking into account,
at the sole discretion of the Board of Directors of the Company, any of the
matters described in Section 4.5 of the articles of incorporation of the
Company, than the transactions contemplated by this Agreement (any such more
favorable Acquisition Proposal being referred to as a "SUPERIOR PROPOSAL"). The
Company agrees that it will immediately cease and cause to be terminated any
existing discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal; it being understood that any Acquisition
Proposal made prior to the date hereof may, if made at any time after the date
hereof, be deemed a Superior Proposal, if it would otherwise fulfill the
requirements for being deemed a Superior Proposal hereunder. The Company agrees
that it will take the necessary steps to promptly inform the individuals or
entities referred to in the first sentence hereof of the obligations undertaken
in this Section 7.2. The Company will, within forty-eight hours of receipt of an
Acquisition Proposal that would be reasonably likely to result in a Superior
Proposal, notify Parent of the receipt and terms of such proposal, including the
identity of the offeror, and will keep Parent reasonably informed of the status
of any such Proposal. The Company also agrees that as soon as reasonably
practicable after the date hereof it will request the return of confidential
information from any Person previously receiving such information in connection
with such Person's consideration of a potential Acquisition Proposal.
7.3. MEETINGS OF THE COMPANY'S STOCKHOLDERS. If required following
expiration of the Offer and the purchase of Shares thereunder, the Company will
promptly take, consistent with the FBCA and its articles of incorporation and
By-Laws, all action necessary to convene a meeting of holders of Shares as
promptly as practicable to consider and vote upon the approval of the Merger and
this Agreement.
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Without limiting the generality of the foregoing, if required by applicable law,
the Company and Parent shall immediately following the purchase of Shares
pursuant to the Offer prepare an information or proxy statement (the "PROXY
STATEMENT"), file it with the SEC under the Exchange Act as promptly as
practicable after Merger Sub purchases Shares pursuant to the Offer, and use all
reasonable efforts to have it cleared by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the stockholders of the Company as of the record date for
the stockholders' meeting referred to above. If required under applicable law,
the Company and Parent shall prepare the Schedule 13e-3, file it with the SEC
under the Exchange Act as promptly as practicable after Merger Sub purchases
shares pursuant to the Offer and supplement and amend it as shall be required.
The Company will use its best efforts to obtain and furnish the information
required to be included by it in the Proxy Statement and, after consultation
with Parent, respond promptly to any comments of the SEC relating to the
preliminary proxy or information statement relating to the transactions
contemplated by this Agreement and to cause the definitive Proxy Statement
relating to the transactions contemplated by this Agreement to be mailed to its
stockholders, all at the earliest practical time. Whenever any event occurs
which should be set forth in an amendment or supplement to the Proxy Statement
or any other filing required to be made with the SEC, each party will promptly
inform the other and cooperate in filing with the SEC and/or mailing to
stockholders such amendment or supplement. The Proxy Statement and all
amendments and supplements thereto shall comply with applicable law in all
material respects and be in form and substance satisfactory to Parent. Subject
to fiduciary requirements of applicable Law as advised by outside counsel, the
Board of Directors of the Company shall recommend such approval referral to
which shall be included in the Proxy Statement and the Company shall take all
lawful action to solicit such approval. At any such meeting of the Company all
of the Shares then owned by the Parent Companies will be voted in favor of this
Agreement. The Proxy Statement with respect to such meeting of stockholders, at
the date mailed to stockholders, shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information concerning the Parent Companies
furnished to the Company by Parent for use in the Proxy Statement.
Notwithstanding the foregoing, in the event that Parent or Merger Sub shall
acquire at least 80% of the outstanding shares of each class of capital stock of
the Company pursuant to the Offer, the parties hereto agree, at the request of
Parent, to take all appropriate and necessary action to cause the Merger to
become effective, as soon as practicable after the expiration or termination of
the Offer and the transactions contemplated hereby, without a meeting of
stockholders of the Company, in accordance with the FBCA.
7.4. FILINGS; OTHER ACTIONS; NOTIFICATION. (a) The Company and Parent
shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) their respective best efforts to take or cause to be taken
all actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable Laws to consummate the
Offer and make effective the Merger and the other transactions contemplated by
this Agreement as soon as practicable, including preparing and filing as soon as
practicable all documentation to effect all necessary notices, reports and other
filings and to obtain as soon as practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Entity in order to consummate the Offer,
the Merger or any of the other transactions contemplated by this Agreement.
Subject to applicable Laws relating to the exchange of information, Parent and
the Company shall have the right to review in advance, and to the extent
practicable each will consult the other on, all the information relating to
Parent or the Company, as the case may be, and any of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or
20
any Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement. In exercising the foregoing right, each of the
Company and Parent shall act reasonably and as promptly as practicable.
(b) The Company and Parent each shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with any statement, filing,
notice or application made by or on behalf of Parent, the Company or any of
their respective Subsidiaries to any third party and/or any Governmental Entity
in connection with the Offer, the Merger and the transactions contemplated by
this Agreement.
(c) Subject to any confidentiality obligations and the
preservation of any attorney-client privilege, the Company and Parent each shall
keep the other apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other with
copies of notices or other communications received by Parent or the Company, as
the case may be, or any of its Subsidiaries, from any third party and/or any
Governmental Entity with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement.
(d) Without limiting the generality of the undertakings
pursuant to this Section 7.4, each of the Company and Parent agrees to take or
cause to be taken the following actions: (i) provide promptly to any and all
federal, state, local or foreign courts or Government Entity with jurisdiction
over enforcement of any applicable antitrust laws ("GOVERNMENT ANTITRUST
ENTITY") information and documents requested by any Government Antitrust Entity
or necessary, proper or advisable to permit consummation of the Merger and the
transactions contemplated by this Agreement; and (ii) take promptly, in the
event that any permanent or preliminary injunction or other order is entered or
becomes reasonably foreseeable to be entered in any proceeding that would make
consummation of the Merger in accordance with the terms of this Agreement
unlawful or that would prevent or delay consummation of the Offer, the Merger or
any of the other transactions contemplated by this Agreement, any and all steps
(including the appeal thereof or the posting of a bond necessary to vacate,
modify or suspend such injunction or order so as to permit such consummation on
a schedule as close as possible to that contemplated by this Agreement.
7.5. ACCESS. Upon reasonable notice, and except as may otherwise be
required by applicable Law, the Company shall (and shall cause its Subsidiaries
to) afford the other's officers, employees, counsel, accountants and other
authorized representatives ("REPRESENTATIVES") reasonable access, during normal
business hours throughout the period prior to the Effective Time, to its
properties, books, contracts and records and, during such period, each shall
(and shall cause its Subsidiaries to) furnish promptly to Parent all information
concerning its business, properties and personnel as may reasonably be
requested; PROVIDED, that no investigation pursuant to this Section shall affect
or be deemed to modify any representation or warranty made by the Company and;
PROVIDED, FURTHER, that the foregoing shall not require the Company to permit
any inspection, or to disclose any information, that in the reasonable judgment
of the Company would result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality if the
Company shall have used reasonable efforts to obtain the consent of such third
party to such inspection or disclosure. All requests for information made
pursuant to this Section shall be directed to an executive officer of the
Company or such Person as may be designated by either of its executive officers,
as the case may be. All such information shall be governed by the terms of the
Confidentiality Agreement.
21
7.6. STOCK EXCHANGE DE-LISTING. The Surviving Corporation shall use its
best efforts to cause the Shares to be removed from quotation on the NASDAQ
National Market System and de-registered under the Exchange Act as soon as
practicable following the Effective Time. Unless required by the rules of the
National Association of Securities Dealers, subsequent to Merger Sub's payment
for Shares and prior to the Effective Time, the Company shall not take any
action to cause the Shares to be removed from quotation on the NASDAQ National
Market System and de-registered under the Exchange Act.
7.7. PUBLICITY. The initial press release shall be a joint press
release and thereafter the Company and Parent each shall consult with the other
prior to issuing any press releases or otherwise making public announcements
with respect to the Offer, the Merger and the other transactions contemplated by
this Agreement and prior to making any filings with any third party and/or any
Governmental Entity (including any national securities exchange or national
market systems) with respect thereto, except as may be required by law or by
obligations pursuant to any listing agreement with or rules of any national
securities exchange or national market system.
7.8. BENEFITS. (a) STOCK OPTIONS.
(i) The Company shall take all necessary actions to
cause (including plan amendments) prior to the Effective Time each outstanding
option to purchase Shares which had not vested immediately prior to such time to
become vested and fully exercisable.
(ii) Prior to the Effective Time, the Company shall
use its reasonable best efforts to cause each then outstanding option granted
under the Stock Plans to purchase Shares (a "Company Option"), whether vested or
unvested, to be cancelled, with the holder thereof becoming entitled to receive
an amount of cash equal to the product of (x) the amount, if any, by which the
Merger Consideration exceeds the exercise price per Share subject to such
Company Option (whether vested or unvested) and (y) the number of Shares
issuable pursuant to the unexercised portion of such Option, less any required
withholding of taxes (such amount being hereinafter referred to as the "OPTION
CONSIDERATION"). The Option Consideration shall be paid as soon as practicable
following the Effective Time, but in any event within five (5) days following
the Effective Time. The cancellation of a Company Option in exchange for the
Option Consideration shall be deemed a release of any and all rights the holder
had or may have had in respect of such Company Option, and any required consents
received from Company Option holders shall so provide.
(iii) In the event that any Company Options are not
cancelled in accordance with the provisions of Section 7.8(a)(ii), such Company
Options (the "Remaining Options") shall be subject to the following provisions
of this Section 7.8(a)(iii). Each Remaining Option, shall, at the Effective
Time, in accordance with the terms of the Stock Plan pursuant to which such
Company Option was issued, be deemed to constitute an option to acquire, on the
same terms and conditions as were applicable under such Remaining Option
immediately prior to the Effective Time, (A) a number of shares of Parent Common
Stock equal to the product (rounded up to the nearest whole number) obtained by
multiplying (x) the number of Shares the holder of such Remaining Option would
have been entitled to receive immediately prior to the Effective Time had such
holder exercised such Remaining Option in full immediately prior to the
Effective Time and (y) the quotient obtained by dividing the Merger
Consideration by the average of the closing prices per share of Parent Common
Stock on the NYSE Composite Transactions tape for the five trading days
immediately preceding the date of the Effective Time as reported in the Wall
Street Journal, New York City edition, (B) at a price per share of Parent Common
Stock (rounded down to the nearest whole cent) equal to (A) the aggregate
exercise price for the Shares otherwise purchasable pursuant to such Remaining
Option (assuming for such purposes that
22
such Remaining Option was fully exercisable at such time) divided by (B) the
number of full shares of Parent Common Stock deemed purchasable pursuant to such
Remaining Option in accordance with the foregoing; PROVIDED, HOWEVER, that any
Remaining Option which is intended to be an "incentive stock option" (as defined
in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424 of the Code.
(iv) At or prior to the Effective Time, the Company
shall make all necessary arrangements with respect to the Stock Plans to permit
the assumption of the Remaining Options by Parent. Effective at the Effective
Time, Parent shall assume each Remaining Option in accordance with the terms of
the Stock Plan under which it was issued and the stock option agreement by which
it is evidenced. At or prior to the Effective Time, Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Parent Common Stock for delivery upon exercise of Remaining Options. At the
Effective Time, Parent shall file a registration statement on Form S-8, or, if
unavailable, a registration statement on Form S-3 (or any successor forms), or
another appropriate form with respect to the Parent Common Stock subject to
Remaining Options, and shall use its best efforts to cause such registration
statement to become and remain effective (and maintain the current status of the
prospectus or prospectuses contained therein), as well as comply with any
applicable state securities or "blue sky" laws, for so long as any Remaining
Options remain outstanding.
(v) Prior to the Effective Time, the Board of
Directors of Parent shall use reasonable efforts to take all actions necessary
to ensure that the options to purchase Parent Common Stock (resulting from
Remaining Options) held by the officers and directors of the Company in
accordance with this Section 7.8(a) shall be exempt for purposes of Rule 16b-3
under the Exchange Act (including, with respect to each officer and director of
the Company, having the full Board of Directors of Parent adopt, prior to the
Effective Time, resolutions providing (i) the name of each such officer and
director, (ii) the number of shares of Parent Common Stock to be subject to each
Remaining Option held by each such officer or director, (iii) any other material
terms of such options and (iv) the fact that such approval is for the purpose of
obtaining an exemption under Rule 16b-3 under the Exchange Act).
(b) EMPLOYEE BENEFITS. Parent agrees that, during the period
commencing at the Effective Time and ending on the first anniversary thereof,
the employees of the Company and its Subsidiaries will continue to be provided
with benefits under employee benefit plans that are no less favorable in the
aggregate than the Plans (excluding "change of control" or similar Plans with
respect to any change of control occurring after the Effective Time and
excluding benefits provided pursuant to any Plan covering one or a select group
of current or former employees) currently provided by the Company and its
Subsidiaries to such employees as disclosed in the Company Disclosure Letter.
Following the Effective Time, Parent shall cause service by employees of the
Company and its Subsidiaries (and any predecessor entities) to be taken into
account for all purposes (including, without limitation, eligibility to
participate, eligibility to commence benefits, vesting, benefit accrual and
severance) under any benefit plans of Parent or its Subsidiaries (including the
Surviving Corporation). From and after the Effective Time, Parent shall (i)
cause to be waived any pre-existing condition limitations under benefit plans of
Parent or its Subsidiaries in which employees of the Company or its Subsidiaries
participate and (ii) cause to be credited to any deductible or out of pocket
expense of Parent's plans any deductibles and out-of-pocket expenses incurred by
such employees and their beneficiaries and dependents during the portion of the
calendar year prior to participation in the benefit plans provided by Parent and
its Subsidiaries. Parent shall cause the Surviving Corporation to, honor all
employee benefit obligations to current and former employees under the
Compensation and Benefit Plans and all employee severance plans and all
employment or severance agreements listed on Schedule 7.8(b) of the Company
Disclosure Letter.
23
7.9. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The
Articles of Incorporation and By-laws shall contain the provisions with respect
to indemnification set forth in Section 6.1 of the articles of incorporation of
the Company and Section 10.1 of the by-laws of the Company on the date of this
Agreement and shall provide for indemnification to the fullest extent permitted
by and in accordance with the FBCA, which provisions shall not be amended,
repealed or otherwise modified for a period of six years after the Effective
Time (or, in the case of matters known prior to the Effective Time which have
not been resolved prior to the sixth anniversary of the Effective Time, until
such matters are finally resolved) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement).
(b) Following the Effective Time, Parent shall indemnify and
hold harmless, to the fullest extent permitted under applicable law (and Parent
shall also advance expenses as incurred to the fullest extent permitted under
applicable law), each present and former director, officer and employee of the
Company and its Subsidiaries (collectively, the "INDEMNIFIED PARTIES") against
any costs or expenses (including attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "COSTS") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters existing or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (b) of this Section 7.9, upon receiving written notification of
any such claim, action, suit, proceeding or investigation, shall promptly notify
Parent thereof, but the failure to so notify shall not relieve Parent of any
liability it may have to such Indemnified Party if such failure does not
materially and irreversibly prejudice Parent. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) Parent shall have the right within ten days following the
notification of Parent by the Indemnified Person of such claim, action, suit,
proceeding or investigation to assume the defense thereof and Parent shall not
be liable to such Indemnified Parties for any legal expenses of other counsel
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if Parent elects not to assume such defense, counsel for
the Indemnified Parties advises that there are issues which raise conflicts of
interest between Parent and the Indemnified Parties or the Indemnified Parties
have defenses available to them that are not available to Parent, the
Indemnified Parties may retain counsel satisfactory to them, and Parent shall
pay all fees and expenses of such counsel for the Indemnified Parties. If such
indemnity is not available with respect to any Indemnified Party, then Parent
and the Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect the relative faults and benefits of the
Surviving Corporation (in the case of Parent) and the Indemnified Parties.
(d) The Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance ("D&O INSURANCE") or
coverage on materially similar terms thereof for a period of six years after the
Effective Time so long as the annual premium therefor is not in excess of 250%
of the last annual premium paid prior to the date hereof (the "CURRENT
PREMIUM"); PROVIDED, HOWEVER, that if the existing D&O Insurance is terminated
or cancelled during such six-year period, the Surviving Corporation shall use
its best efforts to obtain as much D&O Insurance as can be obtained for the
remainder of such period for a premium not in excess (on an annualized basis) of
250% of the Current Premium and shall agree to indemnify the directors and
officers for any Costs not covered by such D&O Insurance.
24
(e) If Parent or the Surviving Corporation or any of its
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation or
other entity, then, and in each such case, proper provisions shall be made so
that the successors and assigns of Parent or the Surviving Corporation shall
assume all of the obligations set forth in this Section 7.9.
(f) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
7.10. TAKEOVER STATUTE. If any Takeover Statute is or may become
applicable to the Shares, the Offer, the Merger or the other transactions
contemplated by this Agreement, each of Parent and the Company and their
respective Board of Directors shall grant such approvals and take such actions
as are necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions.
7.11. EXPENSES. Parent shall pay all charges and expenses, including
those of the Paying Agent, in connection with the transactions contemplated in
Article V.
Except as otherwise provided in this Section 7.11, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement shall be paid by the party incurring such expense.
ARTICLE
8.
CONDITIONS
8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(a) STOCKHOLDER APPROVAL. If required by the FBCA, the Merger
this Agreement and the plan of merger shall have been duly approved by holders
of a majority of the outstanding Shares in accordance with applicable law and
the articles of incorporation and by-laws of the Company.
(b) HSR. The waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been earlier terminated.
(c) LITIGATION. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, law, ordinance, rule, regulation, judgment, decree, injunction or other
order that is in effect and permanently enjoins or otherwise prohibits
consummation of the Merger (collectively, an "ORDER").
(d) TENDER OFFER. Merger Sub (or one of the Parent Companies)
shall have purchased Shares in the Offer.
25
ARTICLE
9.
TERMINATION
9.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by stockholders of the Company referred to in
Section 8.1(a), by mutual written consent of the Company, Merger Sub and Parent
by action of their respective Boards of Directors.
9.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either Parent or the Company if any
Order permanently restraining, enjoining or otherwise prohibiting consummation
of the Merger shall become final and non-appealable after the parties have used
their respective best efforts to have such Order removed, repealed or overturned
(whether before or after the approval by the stockholders of the Company).
9.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, by action
of the Board of Directors of the Company (a) if the Board of Directors of the
Company withdraws or adversely modifies its adoption of this Agreement, its
recommendation of the Offer or its recommendation that the stockholders of the
Company approve this Agreement (including, without limitation, taking no
position in response to a tender offer by a Person other than Parent), (b) if
there has been a material breach by Parent or Merger Sub of any material
covenant or agreement contained in this Agreement that is not curable or, if
curable, is not cured prior to the earlier of (i) 30 days after written notice
of such breach is given by the Company to the party committing such breach or
(ii) two Business Days prior to any date on which the Offer is scheduled to
expire; PROVIDED, however that at such time specified in this clause (ii)
neither the Company nor Parent has indicated that it intends to request (and has
the right under this Agreement to have such request honored) that the Offer be
extended in accordance with the terms hereof (provided that Parent shall have
been given notice of such breach at least two Business Days prior to
termination) or (c) Merger Sub (or any of the Parent Companies) shall have (i)
terminated the Offer or (ii) failed to pay for Shares pursuant to the Offer on a
timely basis following the expiration of the Offer, if the Offer has not been
extended in accordance with the terms hereof.
9.4. TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time (a) prior to the Effective Time by action of
the Board of Directors of Parent if due to an occurrence or circumstance which
resulted in a failure to satisfy any of the Offer Conditions, and Merger Sub
shall have terminated the Offer in accordance with the terms hereof (including,
without limitation, taking no position in response to a tender offer by a Person
other than any of the Parent Companies),
(b) prior to the purchase of Shares by Merger Sub pursuant to
the Offer if (i) the Board of Directors of the Company withdraws or adversely
modifies its adoption of this Agreement, its recommendation of the Offer or its
recommendation that the stockholders of the Company approve this Agreement
(including, without limitation, taking no position in response to a tender offer
by a Person other than any of the Parent Companies), (ii) there has been a
material breach by the Company of any material covenant or agreement contained
in this Agreement that is not curable or, if curable, is not cured prior to the
earlier of (A) 30 days after written notice of such breach is given by Parent to
the party committing such breach or (B) two Business Days prior to any date on
which the Offer is scheduled to expire; PROVIDED, however, that and at such time
specified in this clause (ii) neither the Company nor
26
Parent has indicated that it intends to request (and has the right under this
Agreement to have such request honored) that the Offer be extended in accordance
with the terms hereof (provided that the Company shall have been given notice of
such breach at least two Business Days prior to termination) or (iii) the
Minimum Condition shall not have been satisfied by the expiration of the Offer
(as it may have been extended from time to time), and at or prior to such time
any Person (other than Parent or Merger Sub) shall have made a public
announcement with respect to a bona fide Acquisition Proposal that contemplates
a per Share consideration in excess of the Merger Consideration.
9.5. EFFECT OF TERMINATION AND ABANDONMENT. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article IX, this Agreement (other than as set forth in Section 10.1) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, agents, legal and financial
advisors or other representatives); PROVIDED, HOWEVER, that except as otherwise
provided herein, no such termination shall relieve any party hereto of any
liability or damages resulting from any willful breach of this Agreement.
(b) In the event that this Agreement is terminated by Parent
pursuant to Section 9.4(b)(ii), then the Company shall promptly, but in no event
later than two days after the date of such termination, pay Parent a termination
fee (as liquidated damages) of $29,400,000 (the "TERMINATION FEE") by wire
transfer of same day funds to an account previously designated in writing by
Parent to the Company. In the event that (i)(A) an Acquisition Proposal (other
than pursuant to this Agreement) shall have been made to the Company or any
Person (other than Parent or any of its Affiliates) shall have publicly
announced an intention (whether or not conditional) to make an Acquisition
Proposal with respect to the Company and thereafter this Agreement is terminated
by the Company pursuant to Section 9.3(c)(i) or Parent pursuant to Section
9.4(a) under circumstances which would have permitted Parent to terminate
pursuant to Section 9.4(b)(ii) or (B) this Agreement is terminated (x) by the
Company pursuant to Section 9.3(a) or (y) by Parent pursuant to Section
9.4(b)(i) or (iii) and (ii)(A) the Person making the Acquisition Proposal which
was outstanding at the time of the termination (the "ACQUIRING PARTY") has
acquired, by purchase, merger, consolidation, sale, assignment, lease, transfer
or otherwise, in one transaction or any related series of transactions within
twelve months after a termination of this Agreement, a majority of the voting
power of the outstanding securities of the Company or all or substantially all
of the assets of the Company or (B) there has been consummated a merger,
consolidation or similar business combination between the Company or one of its
Subsidiaries and the Acquiring Party within twelve months after the relevant
termination of this Agreement, then the Company shall promptly, but in no event
later than two days after the consummation of the transaction or transactions
with the Acquiring Party, pay Parent the Termination Fee in same day funds to an
account previously designated by Parent to the Company in writing. The Company's
payment of the Termination Fee shall be the sole and exclusive remedy of Parent
and Merger Sub against the Company and any of its Subsidiaries and their
respective directors, officers, employees, agents, advisors or other
representatives in the event this Agreement is terminated and the Termination
Fee is payable whether or not there has been a breach of this Agreement (whether
or not such breach is willful).
ARTICLE
10.
MISCELLANEOUS AND GENERAL
10.1. SURVIVAL. This Article 10 and the agreements of the Company,
Parent and Merger Sub contained in Sections 7.6 (De-listing), 7.8 (Benefits),
7.11 (Expenses) and 7.9 (Indemnification; Directors' and Officers' Insurance)
shall survive the consummation of the Merger. This Article 10, the agreements of
the Company, Parent and Merger Sub contained in Section 7.11 (Expenses), Section
9.5
27
(Effect of Termination and Abandonment) and the Confidentiality Agreement shall
survive the termination of this Agreement. All other representations,
warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
10.2. MODIFICATION OR AMENDMENT. Subject to the provisions of the
applicable law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties; PROVIDED that, in the case
of the Company any such modification or amendment must be approved by a majority
of the directors who are not Parent Insiders.
10.3. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law; PROVIDED, that, in the case of the Company any such waiver must
be approved by a majority of the directors who are not Parent Insiders.
10.4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
10.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF FLORIDA
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby
irrevocably submit to the jurisdiction of the Federal courts of the United
States of America located in the State of Florida or, if unavailable to the
parties, the courts of the State of Florida solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a State of Florida or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in such manner as may be permitted by law shall be valid and
sufficient service thereof.
10.6. NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail or nationally recognized
overnight courier service, postage prepaid, or by facsimile:
IF TO PARENT OR MERGER SUB
Ceridian Corporation
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
28
(with a copy to Ceridian Corporation
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxx
Fax: (000) 000-0000)
IF TO THE COMPANY
ABR Information Services, Inc.
00000 X.X. Xxxxxxx 00 Xxxxx
Xxxx Xxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. O'Drobinak
Fax: (000) 000-0000
(with a copy to
Xxxxxxx X. Xxxxxx
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10.7. ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This Agreement
(including any exhibits hereto), the Company Disclosure Letter, the Parent
Disclosure Letter and the Confidentiality Agreement, dated February 4, 1999,
between Parent and Xxxxxxx, Sachs & Co., on behalf of the Company (the
"CONFIDENTIALITY AGREEMENT") constitute the entire agreement, and supersede all
other prior agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject matter hereof.
EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR
THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH
RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
10.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.9
(Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
10.9. OBLIGATIONS OF PARENT AND OF THE COMPANY. Whenever this Agreement
requires a Subsidiary of Parent to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause such Subsidiary
to take such action. Whenever this Agreement requires a
29
Subsidiary of the Company to take any action, such requirement shall be deemed
to include an undertaking on the part of the Company to cause such Subsidiary to
take such action and, after the Effective Time, on the part of the Surviving
Corporation to cause such Subsidiary to take such action.
10.10. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
10.11. INTERPRETATION. The table of contents and headings herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
10.12. ASSIGNMENT. This Agreement shall not be assignable by operation
of law or otherwise.
30
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
ABR INFORMATION SERVICES, INC.
By: /s/ Xxxxx X. XxxXxxxxxx
----------------------------------
Name: Xxxxx X. XxxXxxxxxx
Title: Chairman, President and CEO
CERIDIAN CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
SPRING ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: President
31
ANNEX A
CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, but subject to the terms of the Merger Agreement, Merger
Sub shall not be required to accept for payment or, subject to any applicable
rules and regulation of the SEC, pay for any Shares, and may terminate the Offer
(i) if by the expiration of the Offer (or, if extended, by the expiration of the
Offer, as so extended) a number of Shares which together with any Shares owned
by Parent, Merger Sub and the Parent Companies, constitutes more than 50% of the
outstanding Shares (on a fully-diluted basis) at the expiration of Offer (the
"Minimum Conditions") shall not have been validly tendered pursuant to the Offer
and not properly withdrawn, (ii) if all applicable waiting periods under the HSR
Act shall not have expired or been terminated or (iii) if on or after April 30,
1999, and at any time prior to acceptance for payment for any such Shares, any
of the following events shall occur; provided that in each such case Merger Sub
shall not be permitted to terminate the Offer (except pursuant to paragraph (g)
below) if prior to the then scheduled expiration of the Offer the Offer shall
have been extended:
(a) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States (whether
or not mandatory), (ii) a formal declaration of war or national or international
calamity directly or indirectly involving the United States (other than any
declaration of war resulting from the current conflict in Yugoslavia), (iii) any
limitation (whether or not mandatory) by any United States governmental
authority on the extension of credit by banks or other financial institutions
that materially affects the extension of credit by banks or other lending
institutions, (iv) any general suspension of, or limitation on prices for,
trading in securities on the Nasdaq National Market or the over the counter
market, or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform any of its
material obligations, covenants or agreements under the Merger Agreement in a
manner permitting Parent to terminate the Merger Agreement, or any
representation or warranty of the Company set forth in the Merger Agreement
shall not be true and correct, provided that such representations and warranties
shall be deemed to be true and correct unless the failure of such
representations and warranties to be so true and correct would have a Company
Material Adverse Effect or would prevent the Company from consummating the
transactions contemplated by the Merger Agreement, in each case as if such
representations and warranties were made at the time of such termination.
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action") before
any court or other Governmental Entity: (i) challenging the acquisition by the
Purchaser or Merger Sub of Shares, seeking to restrain or prohibit the
consummation of the transactions contemplated by the Merger Agreement; (ii)
seeking to prohibit, or impose any limitations on, Parent's or Merger Sub's
ownership or operation of all or any portion of their or the Company's business
or assets (including the business or assets of their respective affiliates and
subsidiaries); (iii) seeking to make the acceptance for payment, purchase of, or
payment for, some or all of the Shares illegal; (iv) seeking to impose
limitations on the ability of Purchaser or Merger Sub effectively to acquire or
hold or to exercise full rights of ownership of the Shares including, without
limitation, the right to vote the Shares purchased by them on an equal basis
with all other shares on all matters properly presented to the stockholders; or
(v) that, in any event, would have a Company Material Adverse Effect;
(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or become applicable to the Offer or the
Merger, or any other action shall have been taken by any court or other
Governmental Entity other than the application to the Offer or the Merger of the
waiting period under the HSR Act, that would result in any of the effects of, or
have any of the consequences sought to be obtained or achieved in, any Action
referred to in clauses (i) through (v) of paragraph (b) above;
(e) any person (as such term is defined in Section 13(d)(3) of the
Exchange Act (other than Parent or any of its affiliates)) commences a tender or
exchange offer for a majority or more of the outstanding Shares at a price per
Share greater than the Merger Consideration or any such person shall have become
the beneficial owner of more than 20% of the outstanding Shares (other than for
bona fide arbitrage purposes), or any such person shall have entered into a
definitive agreement to acquire all or substantially all of the Shares or to
effect a merger, consolidation or other business combination with or involving
the Company;
(f) there shall have occurred an event which has caused a Company
Material Adverse Effect;
(g) the Board of Directors of the Company shall have amended, modified
or withdrawn its recommendation of the Offer or the Merger in a manner adverse
to Parent, or shall have endorsed, approved or recommended any other Acquisition
Proposal, or shall have resolved to do any of the foregoing; or
(h) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such conditions, makes it reasonably
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions other than the Minimum Condition are
for the sole benefit of Parent and may be asserted by Parent or Merger Sub
regardless of the circumstances giving rise to such condition or may be waived
by Parent other than the Minimum Condition, by express and specific action to
that effect, in whole or in part at any time and from time to time in its sole
discretion.
