Exhibit (c)(1)
[CONFORMED COPY]
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADFLEX SOLUTIONS, INC.,
INNOVEX, INC.
AND
INNOVEX ACQUISITION CORP.
JULY 1, 1999
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I. THE TENDER OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Offer, Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.4 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.3 Actions at the Closing. . . . . . . . . . . . . . . . . . . . . . . . .5
2.4 Effect of Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.5 Procedure for Payment . . . . . . . . . . . . . . . . . . . . . . . . .6
2.6 Closing of Transfer Records . . . . . . . . . . . . . . . . . . . . . .7
2.7 Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE III. REPRESENTATIONS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . .8
3.1 Existence; Good Standing; Corporate Authority . . . . . . . . . . . . .8
3.2 Authorization, Validity and Effect of Agreement . . . . . . . . . . . .8
3.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.4 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.5 Other Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.6 No Conflict; Required Filings and Consents. . . . . . . . . . . . . . .9
3.7 Compliance with Laws and Investments. . . . . . . . . . . . . . . . . 10
3.8 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 No Material Undisclosed Liabilities . . . . . . . . . . . . . . . . . 11
3.10 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . 11
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Millennium Compliance . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . 13
3.16 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 State Takeover Statutes; Poison Pill. . . . . . . . . . . . . . . . . 14
3.18 Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 No Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . . . . . 15
3.21 Offer Documents; Proxy Statement. . . . . . . . . . . . . . . . . . . 15
ARTICLE IV. REPRESENTATIONS OF THE PARENT AND THE PURCHASER . . . . . . . . . . . 15
4.1 Existence; Good Standing; Corporate Authority . . . . . . . . . . . . 15
4.2 Authorization, Validity and Effect of Agreement . . . . . . . . . . . 16
4.3 No Conflict; Required Filings and Consents. . . . . . . . . . . . . . 16
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4.4 No Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Offer Documents; Proxy Statement. . . . . . . . . . . . . . . . . . . 17
4.6 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.8 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Filings, Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . 22
5.4 Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.7 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.8 Insurance; Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 24
5.9 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.10. Credit Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Conditions to Each Party's Obligation To Effect the Merger. . . . . . 25
6.2 Conditions to Obligation of Parent and Purchaser to Effect the
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . 26
7.2 Termination by Either Parent or Company . . . . . . . . . . . . . . . 26
7.3 Termination by Company. . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Termination by Parent . . . . . . . . . . . . . . . . . . . . . . . . 26
7.5 Effect of Termination and Abandonment; Termination Fee. . . . . . . . 27
ARTICLE VIII. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Nonsurvival of Representations, Warranties and Agreements . . . . . . 28
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Assignment; Binding Effect. . . . . . . . . . . . . . . . . . . . . . 29
8.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.5 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.8 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.9 Certain Definitions/Interpretations . . . . . . . . . . . . . . . . . 30
8.10 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.11 Incorporation of Annex A. . . . . . . . . . . . . . . . . . . . . . . 31
8.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.13 Enforcement of Agreement. . . . . . . . . . . . . . . . . . . . . . . 31
8.14 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ANNEX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of July 1, 1999,
by and among ADFlex Solutions, Inc., a Delaware corporation (the "Company"),
Innovex, Inc., a Minnesota corporation ("Parent"), and Innovex Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Parent
("Purchaser" and with the Company and Parent, "Parties").
RECITALS
Each of the Boards of Directors of the Company, Parent and Purchaser has
determined that it is in the best interests of its respective stockholders for
Purchaser to acquire the Company on the terms and subject to the conditions set
forth herein (the "Acquisition");
As a first step in the Acquisition, the Company, the Parent and the
Purchaser each desire that Parent cause Purchaser to commence a cash tender
offer (the "Offer") to purchase all of the Company's issued and outstanding
shares, par value $0.01 per share (the "Shares"), for $3.80 per share, or such
higher price as may be paid in the Offer (the "Per Share Amount"), on the terms
and subject to the conditions set forth in this Agreement;
To complete the Acquisition, each of the Boards of Directors of the
Company, the Parent and the Purchaser has approved the merger of the Purchaser
with and into the Company (the "Merger"), wherein any issued and outstanding
Shares other than Shares tendered and purchased by the Purchaser pursuant to the
Offer or owned directly or indirectly by the Company or any Dissenting Shares
(as hereinafter defined) will be converted into the right to receive the Per
Share Amount, on the terms and subject to the conditions of this Agreement and
in accordance with the Delaware General Corporation Law (the "DGCL");
The Board of Directors of the Company (the "Company Board") has
unanimously resolved to recommend that the holders of the Shares accept the
Offer and adopt this Agreement and has determined that the consideration to be
paid for each Share in the Offer and the Merger is fair to the holders of such
Shares;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and covenants herein contained, the Parties agree as follows.
ARTICLE I. THE TENDER OFFER
1.1 THE OFFER.
(a) As promptly as practicable (but in any event not later than three
business days after the public announcement of the execution and delivery of
this Agreement), Parent will cause the Purchaser to commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), the Offer for all of the Shares at the Per Share Amount, net
to the seller in cash (subject to reduction for any applicable federal back-up
withholding or stock transfer taxes payable by the seller). Notwithstanding the
foregoing, if between the date of this Agreement and the Purchase Date (as
hereinafter defined) the outstanding Shares shall have been changed into a
different number of shares or a different class,
by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Per Share
Amount will be correspondingly adjusted on a per-share basis to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of Shares. The obligation of Parent to cause the
Purchaser to commence the Offer and to accept for payment and to pay for
Shares validly tendered in the Offer and not withdrawn in accordance
therewith will be subject only to those conditions set forth in Annex A
hereto (the "Offer Conditions").
(b) Without the prior written consent of the Company, the Purchaser
will not, and Parent will cause the Purchaser not to, (i) decrease or change the
form of the Per Share Amount, (ii) decrease the number of Shares subject to the
Offer, (iii) amend or waive the Minimum Condition (as defined in Annex A hereto)
or impose conditions other than the Offer Conditions on the Offer, (iv) except
as provided in this Section 1.1(b), extend the expiration date of the Offer or
(v) amend any term of the Offer in any manner materially adverse to holders of
Shares. The Purchaser may, without the consent of the Company, (i) extend the
Offer from time to time if at the initial expiration date of the Offer (which
initial expiration date shall be 20 business days following commencement of the
Offer) or any extension thereof any of the Offer Conditions shall not have been
satisfied or waived, until such time as such conditions are satisfied or waived
but not beyond December 31, 1999, and (ii) extend the Offer for any period
required by any rule, regulation, interpretation or positions of the Securities
and Exchange Commission, (the "SEC") or the staff thereof applicable to the
Offer but not beyond December 31, 1999. The Purchaser will, from time to time,
at the request of the Company, extend the Offer if at any scheduled expiration
date of the Offer any of the Offer Conditions has not been satisfied or waived
until such time as such conditions are satisfied or waived; PROVIDED, HOWEVER,
that the Purchaser shall not be required to extend the Offer beyond December 31,
1999. Assuming the satisfaction or waiver of the Offer Conditions, Parent will
cause the Purchaser to accept for payment and pay for, in accordance with the
terms of the Offer, all Shares validly tendered and not withdrawn pursuant to
the Offer as soon as practicable after expiration of the Offer. The date on
which the Purchaser shall purchase and pay for Shares tendered pursuant to the
Offer shall hereinafter be referred to as the "Purchase Date."
1.2 OFFER, DOCUMENTS.
(a) As soon as practicable an the date of commencement of the Offer,
Parent and the Purchaser will file or cause to be filed with the SEC a Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") which will contain an
offer to purchase and related letter of transmittal and other ancillary offer
documents and instruments pursuant to which the Offer will be made (collectively
with any supplements or amendments thereto, the "Offer Documents") and which
Parent and Purchaser represent, warrant and covenant will comply in all material
respects with the Exchange Act and other applicable Laws and will contain (or
will be amended in a timely manner so as to contain) all information which is
required to be included therein in accordance with the Exchange Act and the
rules and regulations thereunder and other applicable Laws; PROVIDED, HOWEVER,
that (i) no agreement or representation hereby is made or will be made by Parent
or the Purchaser with respect to information supplied by the Company in writing
expressly for inclusion in, or information derived from the Company's public SEC
filings (as amended by any subsequent SEC filings) which is incorporated by
reference or included in, the Offer Documents and (ii) no representation,
warranty or covenant is made or will be made herein by
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the Company with respect to information contained in the Offer Documents
other than information supplied by the Company in writing expressly for
inclusion in, or information derived from the certain SEC documents filed by
the Company (as amended by any SEC documents subsequently filed by the
Company) which is incorporated by reference or included in, the Offer
Documents.
(b) Parent, the Purchaser and the Company will each promptly correct
any information provided by them for use in the Offer Documents if and to the
extent that it becomes false or misleading in any material respect and Parent
and the Purchaser will jointly and severally take all lawful action necessary to
cause the Offer Documents as so corrected to be filed promptly with the SEC and
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable Law. In conducting the Offer, Parent and Purchaser will
comply in all material respects with the provisions of the Exchange Act and
other applicable Laws. Parent and the Purchaser will afford the Company and its
counsel a reasonable opportunity to review and comment on the Offer Documents
and any amendments thereto prior to the filing thereof with the SEC.
1.3 COMPANY ACTIONS. The Company hereby consents to the Offer and
represents that (a) the Company Board (at a meeting duly called and held) has
(i) determined that this Agreement, the Offer and the Merger are fair to and
in the best interests of the Company and its stockholders, (ii) approved this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger, and (iii) resolved to recommend acceptance of the Offer and
adoption of this Agreement by the holders of Shares and (b) BancBoston
Xxxxxxxxx Xxxxxxxx, Inc. has delivered to the Company Board the Fairness
Opinion described in Section 3.20. The Company hereby consents to the
inclusion in the Offer Documents of the recommendation of the Board of
Directors referred to in this Section 1.3; PROVIDED HOWEVER, that the Company
Board may withdraw, modify or amend such recommendation in accordance with
Section 5.2(b). The Company will file with the SEC simultaneously with the
filing by Parent and the Purchaser of the Schedule 14D-1 a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, "Schedule 14D-9") containing such
recommendations of the Company Board in favor of the Offer and the Merger.
The Company represents, warrants and covenants that Schedule 14D-9 will
comply in all material respects with the Exchange Act and any other
applicable Laws and will contain (or will be amended in a timely manner so as
to contain) all information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations thereunder and
other applicable Laws. The Company will include in the Schedule 14D-9
information furnished by Parent in writing concerning Parent's Designees (as
hereinafter defined) as required by Section 14(f) of the Exchange Act and
Rule 14f-1 thereunder and will use its reasonable efforts to have the
Schedule 14D-9 available for inclusion to the initial mailing (and any
subsequent mailing) of the Offer Documents to holders of Shares. Each of the
Company and Parent will promptly correct any information provided by them for
use in Schedule 14D-9 if and to the extent that it becomes false or
misleading in any material respect and the Company will further take all
lawful action necessary to cause Schedule 14D-9 as so corrected to be filed
promptly with the SEC and disseminated to the holders of Shares, in each case
as and to the extent required by applicable Law. Parent and its counsel will
be given a reasonable opportunity to review the Schedule 14D-9 and any
amendments thereto prior to the filing thereof with the SEC. In connection
with the Offer, the Company will promptly furnish Parent with mailing labels,
security position listings and all
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available listings or computer files containing the names and addresses of
the record holders of Shares as of the latest practicable date and will
furnish Parent such information and assistance (including updated lists of
stockholders, mailing labels and lists of security positions) as Parent or
its agents may reasonably request in communicating the Offer to the record
and beneficial holders of Shares. Subject to the requirements of applicable
Law, and except for such actions as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Offer and the
Merger, Parent and the Purchaser will, and will instruct each of their
respective Affiliates, associates, partners, employees, agents and advisors
to, hold in confidence the information contained in such labels, lists and
files, will use such information only in connection with the Offer and the
Merger, and, if this Agreement is terminated in accordance with its terms,
will deliver promptly to the Company (or destroy and certify to the Company
the destruction of) all copies of such information (and any copies,
compilations or extracts thereof or based thereon) then in their possession
or under their control.
1.4 DIRECTORS.
(a) Promptly upon the purchase of Shares by Purchaser pursuant to the
Offer, and from time to time thereafter, (i) Parent will be entitled to
designate such number of directors ("Parent's Designees"), rounded up to the
next whole number, as will give Parent, subject to compliance with Section 14(f)
of the Exchange Act, representation on the Company Board equal to the product of
(A) the number of directors on the Company Board (giving effect to any increase
in the number of directors pursuant to this Section 1.4) and (B) the percentage
that such number of Shares so purchased bears to the aggregate number of Shares
outstanding (such number being, the "Board Percentage"); PROVIDED, HOWEVER, that
if the number of Shares purchased pursuant to the Offer equals or exceeds a
majority of the outstanding Shares, the Board Percentage will in all events be
at least a majority of the members of the Company Board and (ii) the Company
will, upon request by Parent, promptly satisfy the Board Percentage by (A)
increasing the size of the Company Board or (B) using reasonable efforts to
secure the resignations of such number of directors as is necessary to enable
Parent's Designees to be elected to the Company Board and will use its
reasonable efforts to cause Parent's Designees promptly to be so elected,
subject in all instances to compliance with Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder. At the request of Parent, the Company
will take all lawful action necessary to effect any such election. Parent will
supply to the Company in writing and be solely responsible for any information
with respect to itself, the Parent's Designees and Parent's officers, directors
and Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder to be included in the Schedule 14D-9. Notwithstanding
the foregoing, at all times prior to the Effective Time, the Company Board will
include at least three Continuing Directors. For purposes of this Agreement,
the term "Continuing Directors" means those directors of the Company who were
directors of the Company as of the date of this Agreement.
(b) Notwithstanding any other provision hereof, of the certificate of
incorporation or bylaws of the Company or of applicable Law to the contrary,
following the election or appointment of Parent's Designees pursuant to this
Section 1.4 and prior to the Effective Time, any amendment or termination of
this Agreement by the Company, extension by the Company for the performance or
waiver of the obligations or other acts of Parent or Purchaser hereunder or
waiver by the Company of the Company's rights hereunder will, in addition to the
approval of
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the Company Board, require the affirmative vote of the majority of members of
a committee comprised of those members of the Company Board who are
Continuing Directors.
ARTICLE II. THE MERGER
2.1 THE MERGER. On and subject to the terms and conditions of this
Agreement, the Purchaser will merge with and into the Company (the "Merger") at
the Effective Time. The Company shall be the corporation surviving the Merger
(the "Surviving Corporation").
2.2 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxxx Xxxxx in
Phoenix, Arizona, commencing at 9:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Parties may mutually determine (the
"Closing Date"); PROVIDED, HOWEVER, that the Closing Date shall be no earlier
than August 3, 1999.
2.3 ACTIONS AT THE CLOSING. At the Closing, (i) the Company and the
Purchaser will file with the Secretary of State of the State of Delaware a
certificate of merger (the "Certificate of Merger") and (ii) the Parent will
cause the Surviving Corporation to deliver the Payment Fund to the Paying Agent
in the manner provided in Section 2.5.
2.4 EFFECT OF MERGER.
(a) The Merger shall become effective at the time (the "Effective
Time") the Company and the Purchaser file the Certificate of Merger with the
Secretary of State of the State of Delaware. The Merger shall have the
effect set forth in the DGCL. The Surviving Corporation may, at any time
after the Effective Time, take any action (including executing and delivering
any document) in the name and on behalf of either the Company or the
Purchaser in order to carry out and effectuate the transactions contemplated
by this Agreement.
(b) The Certificate of Incorporation of the Surviving Corporation
shall be amended and restated at and as of the Effective Time to read as did the
Certificate of Incorporation of the Purchaser immediately prior to the Effective
Time (except that the name of the Surviving Corporation will remain unchanged).
(c) The Bylaws of the Surviving Corporation shall be amended and
restated at and as of the Effective Time to read as did the Bylaws of the
Purchaser immediately prior to the Effective Time (except that the name of the
Surviving Corporation will remain unchanged).
(d) The directors of the Purchaser shall become the directors, and the
officers of the Company shall become the officers, of the Surviving Corporation
at and as of the Effective Time (retaining their respective positions and terms
of office).
(e) At and as of the Effective Time,
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(i) each share of Common Stock, $0.01 par value per share, of
the Purchaser shall be converted into one share of Common Stock, $0.01
par value per share, of the Surviving Corporation;
(ii) each Share held in the treasury of the Company or any
Subsidiary (a "Treasury Share") and each Share owned by Parent, Purchaser
or any other direct or indirect wholly owned subsidiary of the Parent
immediately before the Effective Time other than shares in trust
accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties (a "Parent-Owned Share") will be
automatically canceled and retired and will cease to exist and no payment
or other consideration will be made with respect thereto;
(iii) each Share (other than any Dissenting Share, Treasury Share
or Parent-Owned Share) shall be converted into the right to receive the
Per Share Amount. All such Shares, when so converted, will no longer be
outstanding and will automatically be canceled and retired and will cease
to exist, and each holder of a certificate formerly representing any such
Share will cease to have any rights with respect thereto, except the
right to receive the Merger Consideration therefor upon the surrender of
such certificate in accordance with Section 2.5; and
(iv) each Dissenting Share shall be converted into the right to
receive payment from the Surviving Corporation with respect thereto in
accordance with the provisions of the DGCL.
Any payment made pursuant to this Section 2.4 and Section 2.5 will be
made net of applicable withholding taxes to the extent such withholding is
required by law. Notwithstanding the foregoing, if between the date of this
Agreement and the Effective Time the outstanding Shares shall have been changed
into a different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, split, combination or exchange of
shares, the Per Share Amount will be correspondingly adjusted on a per-share
basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. No Share shall be
deemed to be outstanding or to have any rights other than those set forth above
in this Section 3.4(e) after the Effective Time.
2.5 PROCEDURE FOR PAYMENT.
(a) Immediately after the Effective Time (in any event, within two
business days following the Effective Time), (A) the Parent will cause the
Surviving Corporation to furnish to Boston EquiServe (the "Paying Agent") a
corpus (the "Payment Fund") consisting of cash sufficient in the aggregate
for the Paying Agent to make full payment of the Merger Consideration to the
holders of all of the outstanding Shares (other than any Dissenting Shares,
Treasury Shares and Parent-Owned Shares) and (B) the Parent will cause the
Paying Agent to mail a letter of transmittal (with instructions for its use)
to each record holder of outstanding Company Shares for the holder to use in
surrendering the certificates which represented his, her or its Shares
against payment of the Merger Consideration. No interest will accrue or be
paid to the holder of any outstanding Company Shares.
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(b) The Parent may cause the Paying Agent to invest the cash included
in the Payment Fund in one or more of the investments; PROVIDED, HOWEVER, that
the terms and conditions of the investments shall be such as to permit the
Paying Agent to make prompt payment of the Merger Consideration as necessary.
The Parent may cause the Paying Agent to pay over to the Surviving Corporation
any net earnings with respect to the investments, and the Parent will cause the
Surviving Corporation to replace promptly any portion of the Payment Fund which
the Paying Agent loses through investment.
(c) The Parent may cause the Paying Agent to pay over to the Surviving
Corporation any portion of the Payment Fund (including any earnings thereon)
remaining 180 days after the Effective Time, and thereafter all former
stockholders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat and other similar laws) as general creditors thereof
with respect to the cash payable upon surrender of their certificates.
(d) The Parent shall cause the Surviving Corporation to pay all
charges and expenses of the Paying Agent.
2.6 CLOSING OF TRANSFER RECORDS After the close of business on the
Closing Date, transfers of Shares outstanding prior to the Effective Time shall
not be made on the stock transfer books of the Surviving Corporation.
2.7 STOCK PLANS.
(a) At the Effective Time, each holder of a then-outstanding option to
purchase Shares under Company's 1993 Equity Incentive Plan, 1994 Stock Incentive
Plan and Employee Stock Purchase Plan (collectively, the "Stock Option Plans"),
whether or not then exercisable (the "Options"), will, in settlement thereof,
receive from the Company for each Share subject to such Option an amount
(subject to any applicable withholding tax) in cash equal to the difference
between the Per Share Amount and the per Share exercise price of such Option to
the extent such difference is a positive number (such amount being hereinafter
referred to as, the "Option Consideration"); PROVIDED, HOWEVER, that with
respect to any person subject to Section 16(a) of the Exchange Act, any such
amount will be paid as soon as practicable after the first date payment can be
made without liability to such person under Section 16(b) of the Exchange Act.
At the Effective Time, each Option will be canceled, and any and all rights the
holder had or may have had in respect to such Option shall be released.
(b) Prior to the Effective Time, Company will use reasonable efforts
to obtain all necessary consents or releases from holders of Options under the
Stock Option Plans and take all such other lawful action as may be necessary to
give effect to the transactions contemplated by this Section 2.7. Except as
otherwise agreed to by the parties, (i) the Stock Option Plans shall terminate
as of the Effective Time and the provisions in any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of Company or any Subsidiary thereof shall be canceled as
of the Effective Time and (ii) Company shall use reasonable efforts to assure
that following the Effective Time no participant in the Stock Option Plans or
other plans, programs or arrangements shall have any right thereunder to acquire
any equity securities of Company, the Surviving Corporation or any Subsidiary
thereof.
7
ARTICLE III. REPRESENTATIONS OF THE COMPANY
The Company hereby represents and warrants to each of Parent and
Purchaser that, except as set forth in the letter, dated the date hereof, from
the Company to Parent initialed by those parties (the "Company Disclosure
Letter") as follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware. The Company is duly licensed or qualified to do business as a
foreign corporation and is in good standing under the laws of each other state
of the United States in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified or to be in good standing
would not have a Company Material Adverse Effect. The Company has all requisite
corporate power and authority to own, operate and lease its properties and carry
on its business as now conducted. Each of the Company's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate power
and authority to own its properties and to carry on its business as it is now
being conducted and is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing would not have a Company
Material Adverse Effect. As used in this Agreement, (i) "Company Material
Adverse Effect" means any change, effect, event or condition (other than an
action or suit challenging the transactions contemplated by this Agreement) that
would (A) have a material adverse effect on the business, properties, results of
operations, financial condition or prospects of the Company and its
Subsidiaries, taken as a whole, (B) prevent or materially delay consummation of
any of the transactions contemplated hereby or (C) prevent or materially delay
the Company's ability to consummate the transactions contemplated hereby and
(ii) the term "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, of
which such party directly or indirectly owns or controls at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENT. The Company has
the requisite corporate power and authority to execute and deliver this
Agreement, and all agreements and documents contemplated hereby to be executed
and delivered by it. Subject only to the approval of the Merger by the holders
of a majority of the outstanding Shares, this Agreement, the Offer, the Merger
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all requisite corporate action. This Agreement
constitutes, and all agreements and documents contemplated hereby to be executed
and delivered by the Company will constitute (when executed and delivered
pursuant hereto), the valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
3.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 40,000,000 Shares and 10,000,000 shares of preferred stock. As of
the date hereof, there were (a) 8,984,518 Shares issued and outstanding, each of
which was duly authorized, validly issued, duly paid and nonassessable, (b) no
shares of preferred stock of the Company had been designated or issued, (c) no
Shares were held in treasury of the Company, (d) 181,746 Shares
8
were reserved for issuance under the Stock Option Plans and (e) Options to
purchase 1,093,821 Shares had been granted under the Stock Option Plans.
Since the date hereof, no additional shares of capital stock of the Company
have been issued except pursuant to the exercise of Options or the ESPP (as
hereinafter defined) and no other options, warrants or other rights to
acquire shares of the Company's capital stock (collectively, the "Company
Rights") have been granted. Except as described in the preceding sentence,
the Company has no outstanding bonds, debentures, notes or other securities
or obligations the holders of which have the right to vote or which are
convertible into or exercisable for securities having the right to vote on
any matter on which any stockholder of the Company has a right to vote. All
issued and outstanding Shares are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights. There are not any
existing options, warrants, calls, subscriptions, convertible securities or
other Company Rights that obligate the Company or any of its Subsidiaries to
issue, transfer or sell any shares of capital stock of the Company or any of
its Subsidiaries other than the Options. There are no outstanding
contractual obligations of the Company or any of its Subsidiaries to
repurchase, redeem, exchange or otherwise acquire any shares of capital stock
of the Company or any of its Subsidiaries. There are no outstanding
contractual obligations of the Company to vote or to dispose of any shares of
the capital stock of any of its Subsidiaries.
3.4 SUBSIDIARIES. Exhibit 21 to the Company's Annual Report on Form
10-K for the fiscal year ended December 27, 1998, lists all of the Subsidiaries
of the Company. The Company owns, directly or indirectly, all of the
outstanding shares of capital stock (or other ownership interests having by
their terms ordinary voting power to elect a majority of directors or others
performing similar functions with respect to such Subsidiary) of each of the
Company's Subsidiaries free and clear of all liens, pledges, security interests,
claims or other encumbrances (collectively, "Liens"). Each of the outstanding
shares of capital stock (or such other ownership interests) of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable.
3.5 OTHER INTERESTS. Except for interests in the Company's
Subsidiaries, neither the Company nor any of the Company's Subsidiaries owns,
directly or indirectly, any interest or investment (whether equity or debt) in
any corporation, partnership, joint venture, business, trust or entity (other
than (a) non-controlling investments in the ordinary course of business and
corporate partnering, development, cooperative marketing and similar
undertakings and arrangements entered into in the ordinary course of business
and (b) other investments of less than $1.0 million in the aggregate).
3.6 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the Company do
not, and the consummation by the Company of the transactions contemplated hereby
will not, (i) conflict with or violate the certificate of incorporation or
bylaws or equivalent organizational documents of the Company or any of its
Subsidiaries, (ii) subject to making the filings and obtaining the approvals
identified in Section 3.6(b), conflict with or violate any statute, rule,
regulation or other legal requirement ("Law") or order, judgment or decree
("Order") applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
or (iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, result in the
loss of a material
9
benefit under or give to others any right of purchase or sale, or any right
of termination, amendment, acceleration, increased payments or cancellation
of, or result in the creation of a Lien or other encumbrance on any property
or asset of the Company or any of its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any property or asset of the Company or any of its
Subsidiaries is bound or affected.
(b) The execution and delivery of this Agreement by the Company
does not, and the performance of this Agreement and the consummation by the
Company of the transactions contemplated hereby will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign (each a
"Governmental Entity"), except (i) applicable requirements, if any, of the
Exchange Act, (ii) the pre-merger notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act") and (iii) the filing of a
certificate of merger pursuant to the DGCL.
3.7 COMPLIANCE WITH LAWS AND INVESTMENTS. Neither the Company nor any
of its Subsidiaries is in conflict with, or in default or violation of, (a) any
material Law or Order applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected or (b) any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any property or asset of the Company or
any of its Subsidiaries is bound or affected. The Company and its Subsidiaries
have obtained all material licenses, permits and other authorizations and have
taken all actions required by applicable Law or government regulations in
connection with their business as now conducted.
3.8 SEC DOCUMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed by it with the SEC since January 1, 1996 (collectively, the "Company
Reports"). As of their respective dates, the Company Reports and any such
reports, forms and other documents filed by the Company with the SEC after the
date of this Agreement (i) complied, or will comply, in all material respects
with the applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act and the rules and regulations thereunder and
(ii) did not, or will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The representation in the preceding sentence does
not apply to any misstatement or omission in any Company Report filed prior to
the date of this Agreement which was superseded by a subsequent Company Report
filed prior to the date of this Agreement. No Subsidiary of the Company is
required to file any report, form or other document with the SEC.
(b) Each of the financial statements included in or incorporated by
reference into the Company Reports (including the related notes and schedules)
presents fairly, in all material respects, the consolidated financial position
of the Company and its Subsidiaries as of its date or,
10
if applicable, the results of operations, retained earnings or cash flows, 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 normal
year-end audit adjustments), in each case in accordance with generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein.
3.9 NO MATERIAL UNDISCLOSED LIABILITIES. Neither the Company nor any
of its Subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on, or reserved against in, a balance sheet of the Company or
described or referred to in the notes thereto prepared in accordance with
generally accepted accounting principles consistently applied, except for (i)
liabilities or obligations that were so reserved on, or reflected in (including
the notes to), the consolidated balance sheet of the Company as of December 27,
1998 and (ii) liabilities or obligations arising in the ordinary course of
business (including trade indebtedness) since December 27, 1998.
3.10 LITIGATION. There are no material actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries and there are no Orders of any Governmental
Entity or arbitrator outstanding against the Company or any of its Subsidiaries.
3.11 ABSENCE OF CERTAIN CHANGES. Except as described in the Company
Reports filed and publicly available prior to the date hereof (the "Company
Filed Reports") since December 27, 1998, there has not been (a) any Company
Material Adverse Effect, (b) any declaration, setting aside or payment of any
dividend of other distribution with respect to its capital stock, (c) any split,
combination or reclassification of any of the Company's capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for any shares of the Company's capital stock,
(d) any granting by the Company or any of its Subsidiaries to any director or
executive officer of the Company of any increase in compensation, (e) any
granting by the Company or any of its Subsidiaries to any director or executive
officer of any increase in severance or termination pay, (f) any entry by the
Company or any of its Subsidiaries into any employment, severance or termination
agreement with any director or executive officer or (g) except insofar as may be
required by a change in generally accepted accounting principles, any change in
accounting methods, principles or practices by the Company.
3.12 TAXES.
(a) (i) Each of the Company and its Subsidiaries has (A) duly and
timely filed (including applicable extensions) all material Tax Returns (as
hereinafter defined) required to be filed and (B) paid in full or established
adequate reserves (in accordance with GAAP) for all material Taxes (as
hereinafter defined) shown to be due on such Tax Returns; (ii) as of the date
hereof, neither the Company nor any of its Subsidiaries has requested any
extension of time within which to file any Tax Returns in respect of any fiscal
year which have not since been filed and no request for waivers of the time to
assess any Taxes are pending or outstanding; and (iii) no material (A) audit or
examination or (B) refund litigation with respect to any Tax Return is pending.
11
(b) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Tax" or "Taxes" shall mean all taxes, charges, fees,
duties, levies, penalties or other assessments imposed by any federal,
state, local or foreign governmental authority, including, but not
limited to, income, gross receipts, excise, property, sales, gain, use,
license, custom, duty, unemployment, capital stock, transfer, franchise,
payroll, withholding, social security, minimum estimated, and other
taxes, and shall include interest, penalties or additions attributable
thereto; and
(ii) "Tax Return" shall mean any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
3.13 PROPERTY.
(a) The Company and its Subsidiaries own or have the right to use all
material intellectual property used by them in connection with their business,
including (A) trademarks and service marks (registered or unregistered) and
trade names, and all goodwill associated therewith, (B) patents, patentable
inventions, discoveries, improvements, ideas, know-how, processes and computer
programs, software and databases (including source code), (C) trade secrets and
the right to limit the use or disclosure thereof, (D) copyrights in all works,
including software programs and mask works, and (E) domain names (collectively,
"Intellectual Property").
(b) As of the date of this Agreement, there is no suit, action or
proceeding pending or, to the Company's Knowledge, threatened against or
affecting the Company or any of its Subsidiaries, which challenges the legality,
validity, enforceability of, or the Company's or any of its Subsidiaries' use or
ownership of, any Intellectual Property owned by the Company or any of its
Subsidiaries, or, to the Company's Knowledge, licensed to the Company or to any
of its Subsidiaries.
(c) The conduct of the Company's and its Subsidiaries' business, the
Intellectual Property owned or used by the Company and its Subsidiaries and the
products or services produced, sold or licensed by the Company and its
Subsidiaries do not infringe, violate or misappropriate any Intellectual
Property right or any other proprietary right of any person or give rise to any
obligations to any person as a result of co-authorship, co-inventorship, or any
express or implied contract for any use or transfer.
3.14 MILLENNIUM COMPLIANCE.
(a) In the opinion of the Company, achieving Millennium Compliance for
all proprietary technology used or held for use in the business of the Company,
including without limitation all Intellectual Property so used or held
(collectively, "Technology"), would not, individually or in the aggregate, have
a Company Material Adverse Effect.
(b) For purposes of this Agreement, the Technology will be "Millennium
Compliant" if:
12
(i) No value for a current date will cause any interruption in
operation;
(ii) Date-based functionality must behave consistently for dates
prior to, during and after the year 2000;
(iii) In all interfaces and data storage, the century in any date
must be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
(iv) The year 2000 must be recognized as a leap year.
3.15 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in the Company Filed Reports (i) neither the
Company nor any of its Subsidiaries has violated or is in violation of any
Environmental Law; (ii) none of the real property owned or leased by the Company
or any Subsidiary (including without limitation soils and surface and ground
waters) are contaminated with any Hazardous Substance in quantities which
require investigation or remediation under Environmental Laws; (iii) neither the
Company nor any of its Subsidiaries is liable for any off-site contamination;
(iv) neither the Company nor any of its Subsidiaries has any liability or
remediation obligation under any Environmental Law; (v) no assets of the Company
or any of its Subsidiaries are subject to pending or, to the Knowledge of the
Company, threatened Liens under any Environmental Law; (vi) the Company and its
Subsidiaries have all Permits required under any Environmental Law
("Environmental Permits"); and (vii) the Company and its Subsidiaries are in
compliance with their respective Environmental Permits.
(b) For purposes of this Agreement, the term (i) "Environmental
Laws" means any federal, state or local Law relating to: (A) releases or
threatened releases of Hazardous Substances or materials containing Hazardous
Substances; (B) the manufacture, handling, transport, use, treatment, storage
or disposal of Hazardous substances or materials containing Hazardous
Substances; or (C) otherwise relating to pollution of the environment or the
protection of human health, and (ii) "Hazardous Substances" means: (A) those
materials, pollutants and/or substances defined in or regulated under the
following federal statutes and their state counterparts, as each may be
amended from time to time, and all regulations thereunder: the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide and Rodenticide Act and the Clean Air Act; (B)
petroleum and petroleum products including crude oil and any fractions
thereof; (C) natural gas, synthetic gas and any mixtures thereof; (D) radon;
and (E) any materials, pollutants and/or substance with respect to which any
Governmental Entity requires environmental investigation, monitoring,
reporting or remediation.
3.16 EMPLOYEE BENEFIT PLANS. Except as described in the Company Filed
Reports, (a) all employee benefit plans or programs maintained for the benefit
of the current or former employees or directors of the Company or any of its
Subsidiaries that are sponsored, maintained or contributed to by the Company or
any of its Subsidiaries, or with respect to which the Company or any of its
Subsidiaries has any liability, including without limitation any such plan that
is an "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income
13
Security Act of 1974 ("ERISA"), are in compliance with all applicable
requirements of law, including ERISA and the Code, (b) neither the Company
nor any of its Subsidiaries has any liabilities or obligations with respect
to any such employee benefit plans or programs, whether accrued, contingent
or otherwise, nor to the Knowledge of the Company are any such liabilities or
obligations expected to be incurred and (c) neither the Company nor any of
its Subsidiaries is a party to any contract or other arrangement under which,
after giving effect to the Offer or the Merger, Parent or the Surviving
Corporation would be obligated to make any excess parachute payment within
the meaning of the Code. Except the Stock Option Plans, the execution of,
and performance of the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any benefit plan, program, policy, arrangement or
agreement or any trust, loan or funding arrangement that will or may result
in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee.
3.17 STATE TAKEOVER STATUTES; POISON PILL.
(a) The Company Board has approved the Offer, the Merger, this
Agreement and the transactions contemplated hereby, and such approval is
sufficient to render inapplicable to the Offer, the Merger, this Agreement
and the transactions contemplated hereby, the provisions of Section 203 of
the DGCL. No other state "fair price," "merger moratorium," "control share
acquisition" or other state antitakeover or similar statute or state
regulation applies or purports to apply to the Merger, this Agreement, the
Offer or any of the transactions contemplated hereby.
(b) The Company and its Board of Directors have amended the Rights
Agreement between the Company and First National Bank of Boston, NA dated July
10, 1996 (the "Rights Agreement") (without redeeming the Rights issued
thereunder), which amendment has been provided to Parent, so that neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) cause any Rights issued pursuant to
the Rights Agreement to become exercisable, to be triggered or to separate from
the shares to which they are attached, (ii) cause the Parent or the Purchaser or
any of their affiliates to be an Acquiring Person (as defined in the Rights
Agreement) in connection with the transactions contemplated hereby or (iii)
trigger other provisions of the Rights Agreement, including giving rise to a
Distribution Date (as defined in the Rights Agreement) in connection with the
transactions contemplated hereby, and such amendment shall remain in full force
and effect from and after the date hereof.
3.18 VOTING REQUIREMENTS. The affirmative vote of the holders of a
majority of the issued and outstanding Shares, voting as a single class, at the
Company Stockholders' Meeting (as hereinafter defined) to adopt this Agreement
is the only vote of the holders of any class or series of the Company's capital
stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby.
3.19 NO BROKERS. With the exception of the Company's retention of
BancBoston Xxxxxxxxx Xxxxxxxx, Inc. the Company has not entered into any
contract, arrangement or understanding with any Person or firm which may result
in the obligation of the Company, Parent or Purchaser to pay any finder's fees,
brokerage or agent's commissions or other like payments in
14
connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
3.20 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of BancBoston Xxxxxxxxx Xxxxxxxx, Inc. to the effect that, as of the
date hereof, the consideration to be received by the holders of Shares in the
Offer and the Merger is fair to such holders from a financial point of view.
3.21 OFFER DOCUMENTS; PROXY STATEMENT. (a) The proxy statement to be
sent to the stockholders of the Company in connection with a meeting of the
Company's stockholders to consider the Merger (the "Company Stockholders'
Meeting") or the information statement to be sent to such stockholders, as
appropriate (such proxy statement or information statement, as amended or
supplemented, is herein referred to as the "Proxy Statement"), at the date
mailed to the stockholders of the Company and at the time of the Company
Stockholders' Meeting (i) will comply in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations
thereunder and (ii) will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Schedule 14D-9 will comply in all material
respects with the Exchange Act and the rules and regulations thereunder.
Neither the Schedule 14D-9 nor any of the information relating to the Company or
its Affiliates provided by or on behalf of the Company specifically for
inclusion in the Schedule 14D-1 or the Offer Documents will, at the respective
times the Schedule 14D-9, the Schedule 14D-1 and the Offer Documents or any
amendments or supplements thereto are filed with the SEC and are first
published, sent or given to stockholders of the Company, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. No
representation or warranty is made by the Company with respect to any
information supplied or approved by the Parent or the Purchaser specifically for
inclusion in the Proxy Statement or the Schedule 14D-9.
ARTICLE IV. REPRESENTATIONS OF THE PARENT AND THE PURCHASER
Each of Parent and Purchaser represents and warrants to the Company as of
the date of this Agreement as follows:
4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Parent is a
corporation duly incorporated, validly existing and in good standing under the
laws of Minnesota. Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware. Parent is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, except where the failure to be
so qualified or to be in good standing would not prevent or materially delay
Parent's or Purchaser's ability to consummate the transactions contemplated
hereby (a "Parent Material Adverse Effect"). Parent has all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted.
15
4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENT. Each of Parent
and the Purchaser has the requisite corporate power and authority to execute and
deliver this Agreement and all agreements and documents contemplated hereby to
be executed respectively by it. This Agreement, the Offer, the Merger and the
consummation by Parent and Purchaser of the transactions contemplated hereby
have been duly and validly authorized by the respective Boards of Directors of
Parent and Purchaser and by Parent as sole stockholder of Purchaser, and no
other corporate action on the part of Parent and Purchaser is necessary to
authorize this Agreement, the Offer and the Merger or to consummate the
transactions contemplated hereby or thereby. This Agreement constitutes, and
all agreements and documents contemplated hereby and thereby to be executed and
delivered by Parent or Purchaser will constitute (when executed and delivered
pursuant hereto), the valid and binding obligations of Parent or the Purchaser,
as the case may be, enforceable respectively against them in accordance with
their respective terms.
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Parent and the
Purchaser do not, and the consummation by Parent and Purchaser of the
transactions contemplated hereby will not, (i) conflict with or violate the
articles (certificate) of incorporation or bylaws of Parent or Purchaser, (ii)
subject to making the filings and obtaining the approvals identified in Section
4.3(b), conflict with or violate any Law or Order applicable to Parent or any of
its Subsidiaries or by which any property or asset of Parent or any of its
Subsidiaries is bound or affected or (iii) result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss of a material benefit under or give to others
any right of termination, amendment, acceleration, increased payments or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or any of its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
Subsidiaries is a party or by which Parent or any of its Subsidiaries or any
property or asset of Parent or any of its Subsidiaries is bound or affected,
except, in the case of clauses (ii) and (iii) only, for any such conflicts,
violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, to have a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement and the consummation of
the transactions contemplated hereby by either of them will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except for (i) applicable requirements, if any, of
the Exchange Act, (ii) the pre-merger notification requirements of the HSR Act
and (iii) the filing of a certificate of merger pursuant to the DGCL, and where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
have a Parent Material Adverse Effect.
4.4 NO BROKERS. Neither Parent or the Purchaser has entered into any
contract, arrangement or understanding with any Person or firm which may result
in the obligation of the Company to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
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4.5 OFFER DOCUMENTS; PROXY STATEMENT. None of the information
supplied by the Parent, the Purchaser, their respective officers, directors,
representatives, agents or employees, for inclusion in the Proxy Statement, or
in any amendments thereof or supplements thereto, will, on the date the Proxy
Statement is first mailed to stockholders of the Company or at the time of the
Company Stockholders' Meeting, contain any statement which, at such time and in
light of the circumstances under which it will be made, will be false or
misleading with respect to any material fact, or will omit to state any material
fact necessary in order to make the statements therein not false or misleading
or necessary to correct any statement in any earlier communication with respect
to the solicitation of proxies for the Company Stockholders' Meeting which has
become false or misleading. The Schedule 14D-1 will comply in all material
respects with the Exchange Act and the rules and regulations thereunder.
Neither the Schedule 14D-1 nor any of the information relating to Parent or its
Affiliates provided by or on behalf of Parent specifically for inclusion in the
Schedule 14D-9 will, at the respective times the Schedule 14D-1, the Schedule
14D-9 and the Offer Documents or any amendments or supplements thereto are filed
with the SEC and are first published, sent or given to stockholders of the
Company, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. No representation or warranty is made by Parent with
respect to any information supplied or approved by the Company specifically for
inclusion in the Schedule 14D-1.
4.6 FINANCING. Parent has funds sufficient to consummate the Offer
and the Merger on the terms contemplated by this Agreement, and at the
expiration of the Offer and the Effective Time, Parent and Purchaser shall have
available funds sufficient to perform their respective obligations under this
Agreement, including without limitation payment in full for all Shares validly
tendered in the Offer and all Shares (other than Dissenting Shares, Treasury
Shares and Parent Owned Shares) outstanding at the Effective Time and the pay
off of all outstanding balances under that certain Credit Agreement among the
Company, BankBoston N.A. and BankBoston N.A., as agent for Lenders, as amended
("Credit Agreement").
4.7 LITIGATION. As of the date hereof, there is no suit, action,
arbitration, proceeding, claim or investigation pending or threatened against
the Parent or Purchaser, nor is there any reasonable basis therefor, that
individually or in the aggregate could reasonably be expected to (i), except as
disclosed in the Parent SEC Documents, have a Parent Material Adverse Effect,
(ii) challenge or seek to enjoin or seek damages with respect to the Parent's or
Purchaser's entering into and performing this Agreement or impair the ability of
the Parent or Purchaser to perform their respective obligations under this
Agreement or (iii) prevent the consummation of any of the transactions
contemplated by this Agreement.
4.8 SEC DOCUMENTS.
(a) Parent has filed all forms, reports and documents required to be
filed by it with the SEC since October 1, 1995 (collectively, the "Parent
Reports"). As of their respective dates, the Parent Reports and any such
reports, forms and other documents filed by Parent with the SEC after the date
of this Agreement (i) complied, or will comply, in all material respects with
the applicable requirements of the Securities Act, the Exchange Act and the
rules and regulations thereunder and (ii) did not, or will not, contain any
untrue statement of a material fact or omit to
17
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. The representation in the preceding sentence does
not apply to any misstatement or omission in any Parent Report filed prior to
the date of this Agreement which was superseded by a subsequent Parent Report
filed prior to the date of this Agreement. No Subsidiary of Parent is
required to file any report, form or other document with the SEC.
(b) Each of the financial statements included in or incorporated by
reference into the Parent Reports (including the related notes and schedules)
presents fairly, in all material respects, the consolidated financial position
of Parent and its Subsidiaries as of its date or, if applicable, the results of
operations, retained earnings or cash flows, as the case may be, of Parent and
its Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein.
ARTICLE V. COVENANTS
5.1 CONDUCT OF BUSINESS.
(a) CONDUCT OF BUSINESS BY THE COMPANY. During the period from the
date of this Agreement to the Effective Time, the Company will, and will cause
its Subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted and
in compliance in all material respects with all applicable Laws and, to the
extent consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees and preserve their
relationships with those Persons having business dealings with them to the end
that their goodwill and ongoing businesses will be unimpaired at the Effective
Time. Without limiting the generality or effect of the foregoing, except
pursuant to the terms and conditions of this Agreement or as expressly and
specifically described in Section 5.1 of the Company Disclosure Letter, during
the period from the date of this Agreement to the Effective Time, the Company
will not, and will not permit any of its Subsidiaries to:
(i) other than dividends and distributions (including
liquidating distributions) by a direct or indirect wholly owned
Subsidiary of the Company to its parent, or by a Subsidiary that is
partially owned by the Company or any of its Subsidiaries, provided that
the Company or any such Subsidiary receives its proportionate share
thereof, (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, (B) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries or any other securities thereof or any rights, warrants
or options to acquire any such shares or other securities;
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(ii) except upon exercise of the Options or with respect to the
July 31, 1999 purchase under the 1994 Employee Stock Purchase Plan, as
amended ("ESPP"), issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities;
(iii) amend its certificate of incorporation, bylaws or other
comparable organizational documents;
(iv) acquire by merging or consolidating with, or by purchasing
a substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division
thereof;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets, other than in the ordinary course of business consistent with
past practice;
(vi) (A) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Company or any of its Subsidiaries, guarantee any debt securities of
another Person, enter into any "keep well" or other agreement to maintain
any financial statement condition of another Person or enter into any
arrangement having the economic effect of any of the foregoing, except
for short-term borrowings incurred in the ordinary course of business
consistent with past practice or (B) make any loans, advances or capital
contributions to, or investments in, any other Person, other than to the
Company or any Subsidiary of the Company or to officers and employees of
the Company or any of its Subsidiaries for travel, business or relocation
expenses in the ordinary course of business;
(vii) make or agree to make any capital expenditure or capital
expenditures other than capital expenditures set forth in the capital
budget of the Company;
(viii) make any change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles;
(ix) except as required by Law or contemplated hereby, enter
into, adopt or amend in any material respect or terminate any Stock
Option Plan or any other agreement, plan or policy involving the Company
or any of its Subsidiaries and one or more of their directors, officers
or employees, or materially change any actuarial or other assumption used
to calculate funding obligations with respect to any Company pension
plans, or change the manner in which contributions to any Company pension
plans are made or the basis on which such contributions are determined;
(x) increase the compensation of any director or executive
officer of the Company or pay any benefit or amount not required by a
plan or arrangement as in effect on the date of this Agreement to any
such Person;
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(xi) hire any new domestic employees, or enter into consulting
or similar agreements, other than employees providing direct labor; or
(xii) authorize, or commit or agree to take, any of the foregoing
actions.
(b) MEETING OF STOCKHOLDERS. (i) The Company will take all action
necessary pursuant to applicable Law and its certificate of incorporation and
bylaws to convene a meeting of its Stockholders as promptly as practicable to
consider and vote upon the adoption of this Agreement. The Company Board will
recommend such adoption and the Company will each take all lawful action to
solicit such approval, including without limitation timely mailing any Proxy
Statement; PROVIDED, HOWEVER, if the Company Board determines in good faith,
after taking into account the advice of its legal counsel, that it is necessary
in order to comply with its fiduciary duties to the Company's stockholders under
applicable Law, the Company Board may change such recommendation or solicitation
(but not such action to convene the Company Stockholders' Meeting), including
any withdrawal or change of its recommendation. Without limiting the generality
or effect, the Company's obligations pursuant to the first sentence of this
Section 5.1(b) will not be affected by the commencement, public proposal, public
disclosure or communication to the Company of any Company Takeover Proposal.
(ii) Notwithstanding Section 5.1(b)(i), in the event that Parent, the Purchaser
or any other Subsidiary of Parent acquires at least 90% of the outstanding
shares pursuant to the Offer or otherwise, the Parties agree to take all
necessary and appropriate action to cause the Merger to become effective in
accordance with the DGCL without a meeting of stockholders of the Company as
soon as practicable after the acceptance for payment and purchase of Shares by
the Purchaser pursuant to the Offer. (iii) Purchaser shall vote all shares
owned by it for the Merger.
(c) ESOP. The Company shall discontinue the ESOP effective on the
date hereof; provided that purchases for the current period under the ESOP may
be completed provided that the allowable contributions thereunder are not
increased.
5.2 NO SOLICITATION.
(a) The Company, its Affiliates and their respective officers,
directors, employees, representatives and agents will immediately cease any
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any Company Takeover Proposal. The Company will not, nor will it
permit any of its Subsidiaries, to, nor will it authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage
(including without limitation by way of furnishing information), or take any
other action designed or reasonably likely to facilitate, any inquiries or the
making of any proposal which constitutes or reasonably may give rise to any
Company Takeover Proposal or (ii) participate in any discussions or negotiations
regarding any Company Takeover Proposal; PROVIDED, HOWEVER, that if, at any time
prior to the Purchase Date, the Company Board determines in good faith, after
taking into account the advice of its legal counsel, that it is necessary to do
so in order to comply with its fiduciary duties to the Company's stockholders
under applicable Law, the Company may, in response to a Company Takeover
Proposal that was not solicited by it and did not otherwise result from a breach
of any provision of this Agreement, (A) furnish information with respect to the
Company and each of its
20
Subsidiaries to any Person pursuant to a customary confidentiality agreement
not more favorable to the recipient of such information than the
Confidentiality Agreement and (B) participate in negotiations regarding such
Company Takeover Proposal. For purposes of this Agreement, "Company Takeover
Proposal" means any inquiry, proposal or offer from any Person relating to
any direct or indirect acquisition or purchase of 25% more of the assets of
the Company and its Subsidiaries or 25% or more of any class of equity
securities of the Company or any of its Subsidiaries, any tender offer or
exchange offer for Shares or any class of equity securities of the Company or
any of its Subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement, or any other transaction that is intended or
could reasonably be expected to prevent the completion of the transactions
contemplated hereby.
(b) Except as expressly permitted by this Section 5.2(b), neither the
Company Board nor any committee thereof may (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or the Purchaser,
the approval or recommendation by the Company Board or such committee of the
Offer, the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any Company Takeover Proposal or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Company Takeover
Proposal (each, a "Company Acquisition Agreement"). Notwithstanding the
foregoing, in the event that prior to the Effective Time and not less than two
business days after notice of its intention to do so has been given Parent the
Company Board determines in good faith after receipt of a Superior Proposal and,
after taking into account the advice of its legal counsel, that it is necessary
to do so in order to comply with its fiduciary duties to the Company's
stockholders, the Company Board may withdraw or modify its approval or
recommendation of the Offer, the Merger or this Agreement, approve or recommend
a Company Takeover Proposal, or (iv) terminate this Agreement pursuant to
Section 7.3(c). For purposes of this Agreement, "Superior Proposal" means a
Company Takeover Proposal that (x) involves the direct or indirect acquisition
or purchase of 75% or more of the assets of the Company and its Subsidiaries or
75% or more of any class of equity securities of the Company or any of its
Subsidiaries and (y) which Company Takeover Proposal is otherwise on terms which
the Company Board determines in its good faith judgment (after consultation with
a financial advisor of nationally recognized reputation) to be reasonably
capable of being completed (taking into account all material legal, financial,
regulatory and other aspects of the proposal) and more favorable to the
Company's stockholders from a financial point of view than the Offer and the
Merger, and for which financing, to the extent required, is then committed or
which, in the good faith judgment of the Company Board, is capable of being
obtained by such third party.
(c) In addition to the obligations of the Company set forth in Section
5.2(a) and (b), the Company will (i) immediately advise Parent orally and in
writing of any request for information or of any Company Takeover Proposal, the
material terms and conditions of such request or Company Takeover Proposal and
the identity of the Person making such request or Company Takeover Proposal and
(ii) keep Parent reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or Company Takeover
Proposal.
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(d) Nothing contained in this Section 5.2 will prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act; PROVIDED, HOWEVER, that neither the
Company nor the Company Board nor any committee thereof may, except as expressly
permitted by Section 5.2, withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to the Offer, this Agreement or the Merger or
approve or recommend, or propose publicly to approve or recommend, a Company
Takeover Proposal.
5.3 FILINGS, REASONABLE EFFORTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the Parties will use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other Parties in doing, all things, necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Offer, the Merger and the other transactions contemplated by this Agreement,
including without limitation, (i) seeking to obtain of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and
making of all necessary registrations and filings (including filings with
Governmental Entities) and taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) seeking to obtain of all necessary consents, approvals
or waivers from third parties, (iii) defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any adverse order entered by any court or other Governmental Entity vacated
or reversed and (iv) execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement. Nothing set forth in this Section 5.3 will
limit or affect actions permitted to be taken pursuant to Section 5.2.
(b) In connection with and without limiting the foregoing, the Company
and Parent will, and Parent will cause the Purchaser to, (i) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger or any of the other
transactions contemplated hereby, and (ii) if any state takeover statute or
similar statute or regulation becomes applicable thereto, take all action
necessary to ensure that the Offer and the Merger and such other transactions
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise to minimize the effect of such statute or regulation thereon.
5.4 INSPECTION OF RECORDS.
(a) From the date hereof to the Effective Time, the Company will (i)
allow all designated officers, attorneys, accountants and other representatives
of Parent reasonable access at all reasonable times to the offices, records and
files, correspondence, audits and properties, as well as to all information
relating to commitments, contracts, titles and financial position, or otherwise
pertaining to the business and affairs, of the parties and their respective
Subsidiaries, as the case may be and (ii) furnish to Parent and its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request.
22
(b) Subject to the requirements of applicable Law, and except for such
actions as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer and the Merger, the Parties will,
and will instruct each of their respective Affiliates, associates, partners,
employees, agents and advisors to, hold in confidence all such information as is
confidential or proprietary, will use such information only in connection with
the Offer and the Merger and, if this Agreement is terminated in accordance with
its terms, will deliver promptly to the other (or destroy and certify to the
other the destruction of) all copies of such information (and any copies,
compilations or extracts thereof or based thereon) then in their possession or
under their control.
5.5 PUBLICITY. The initial press release relating to this Agreement
will be a joint press release and thereafter the Company and Parent will,
subject to their respective legal obligations (including requirements of stock
exchanges and other similar regulatory bodies), consult with each other, and use
reasonable efforts to agree upon the text of any press release, before issuing
any such press release or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any Governmental
Entity or with any national securities exchange with respect thereto.
5.6 PROXY STATEMENT. Parent and the Company will cooperate and
promptly prepare, and Company will file with the SEC as soon as practicable the
Proxy Statement and promptly thereafter will mail the Proxy Statement to its
stockholders. The Proxy Statement will contain the recommendation of the
Company Board that stockholders of the Company approve and adopt this Agreement
and approve the Merger and the other transactions contemplated hereby. If at
any time prior to the Company Stockholders Meeting any event or circumstance
relating to the Company or any of its Subsidiaries or Affiliates, or its or
their respective officers or directors, should be discovered by the Company that
is required to be set forth in a supplement to any Proxy Statement, the Company
shall promptly inform Parent and Purchaser to supplement such Proxy Statement
and mail such supplement to its stockholders.
5.7 FURTHER ACTIONS.
(a) Each party hereto will, subject to the fulfillment at or before
the Effective Time of each of the conditions of performance set forth herein or
the waiver thereof, perform such further acts and execute such documents as may
be reasonably required to effect the Merger.
(b) If, at any time after the Effective Time, the Surviving
Corporation considers or is advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights, properties or assets
of Purchaser or the Company or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Purchaser or the Company, all
such deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf of Purchaser or the Company, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Agreement.
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5.8 INSURANCE; INDEMNITY.
(a) All rights to indemnification and exculpation from liabilities for
acts or omissions occurring at or prior to the Effective Time existing in favor
of the current or former directors or officers of the Company or each of its
Subsidiaries as provided in their respective certificate of incorporation or
bylaws (or comparable organizational documents) will be assumed by Parent and
Parent will be directly responsible for such indemnification, without further
action, as of the Effective Time and will continue in full force and effect in
accordance with their respective terms. In addition, from and after the
Effective Time, directors and officers of the Company who become or remain
directors or officers of Parent or the Surviving Corporation will be entitled to
the same indemnity rights and protections (including those provided by
directors' and officers' liability insurance) of Parent. Notwithstanding any
other provision hereof, the provisions of this Section 5.8 (i) are intended to
be for the benefit of, and will be enforceable by, each indemnified party, his
or her heirs and his or her representatives and (ii) are in addition to, and not
in substitution for, any other rights to indemnification or contribution that
any such Person may have by contract or otherwise.
(b) Parent will, and will cause the Surviving Corporation to, maintain
in effect for not less than three years after the Effective Time policies of
directors' and officers' liability insurance equivalent in all material respects
to those maintained by or on behalf of the Company and its Subsidiaries on the
date hereof (and having at least the same coverage and containing terms and
conditions which are no less advantageous to the Persons currently covered by
such policies as insured) with respect to matters existing or occurring at or
prior to the Effective Time; PROVIDED, HOWEVER, that if the aggregate annual
premiums for such insurance at any time during such period exceed per annum rate
of premium currently paid by the Company and its Subsidiaries for such insurance
on the date of this Agreement, then Parent will cause the Surviving Corporation
to, and the Surviving Corporation will, provide the maximum coverage that shall
then be available at an annual premium equal to such rate.
5.9 EMPLOYEE BENEFITS. Employees of the Company or its Subsidiaries
as of the Effective Time shall remain employees of the Company or its
Subsidiaries, as applicable, immediately following the Effective Time. From and
after the Effective Time, the Surviving Corporation will have sole discretion
over the hiring, promotion, retention, firing and other terms and conditions of
the employment of employees of the Surviving Corporation. Subject to the
immediately preceding sentence, Parent will provide, or will cause the Surviving
Corporation to provide, for the benefit of employees of the Surviving
Corporation or its Subsidiaries who were employees of the Company immediately
prior to the Effective Time, at the election of Parent, employee benefit plans
that are either (a) in the aggregate substantially comparable to the employee
benefit plans provided to such individuals by the Company on the date hereof or
(b) in the aggregate substantially comparable to the employee benefit plans
provided to similarly situated employees of Parent or its subsidiaries who were
not employees of the Company immediately prior to the Effective Time; PROVIDED,
HOWEVER, that notwithstanding the foregoing (i) nothing herein will be deemed to
require Parent to modify the benefit formulas under any pension plan of the
Company in a manner that increases the aggregate expenses thereof as of the date
hereof in order to comply with the requirements of ERISA, the Code or the Tax
Reform Act of 1986, (ii) employee stock ownership, stock option and similar
equity-based plans, programs and arrangements of the Company or any of its
Subsidiaries are not encompassed within the
24
meaning of the term employee benefit plans hereunder, (iii) nothing herein
will obligate Parent or the Surviving Corporation to continue any particular
employee benefit plan for any period after the Effective Time and (iv) Parent
may substitute any benefit available to employees whom it determines are
similarly situated in other parts of its business for any employee benefit
under any such plan. Parent will cause the Surviving Corporation to honor
(subject to any withholdings under applicable Law) all employment, consulting
and severance agreements or arrangements to which the Company or any of its
Subsidiaries is presently a party, which are specifically disclosed in the
Company Disclosure Letter.)
5.10. CREDIT AGREEMENT. At and as of the Effective Time, Parent shall
provide all necessary funds and shall cause the Company to pay off all
outstanding balances under the Credit Agreement.
VI. CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each Party to effect the Merger will be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The Purchaser shall have made, or caused to be made, the
Offer and shall have purchased, or caused to be purchased, the Shares
pursuant to the Offer, provided, that this condition shall be deemed to
have been satisfied with respect to the obligation of the Parent and the
Purchaser to effect the Merger if the Purchaser fails to accept for
payment or pay for Shares pursuant to the Offer in violation of the terms
of the Offer or of this Agreement;
(b) This Agreement shall have been approved in the manner
required by applicable Law by the holders of the issued and outstanding
shares of capital stock of the Company; and
(c) No Order or Law enacted, entered, promulgated, enforced or
issued by any court of competent jurisdiction or other Governmental
Entity or other legal restraint or prohibition (collectively,
"Restraints") preventing the consummation of the Merger shall be in
effect.
6.2 CONDITIONS TO OBLIGATION OF PARENT AND PURCHASER TO EFFECT THE
MERGER. The obligation of Parent and Purchaser to effect the Merger will be
subject to the fulfillment at or prior to the Closing Date (or such other date
as may be specified below) of the additional condition that the Company shall
have performed in all material respects its agreements contained in this
Agreement required to be performed on or prior to the Closing Date.
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ARTICLE VII. TERMINATION
7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior to
the Purchase Date, before or after the approval of this Agreement by the
stockholders of the Company, by the mutual consent of Parent and the Company.
7.2 TERMINATION BY EITHER PARENT OR COMPANY. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Purchase Date by action of the Board of Directors of either Parent
or the Company if (a) the Merger shall not have been consummated by December 31,
1999; provided, that no party may terminate this Agreement pursuant to this
Section 7.2(a) if such party's failure to fulfill any of its obligations under
this Agreement shall have been the reason that the Effective Time shall not have
occurred on or before said date, (b) any Governmental Entity shall have issued a
Restraint or taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of the Offer, the Merger (or any of the
other transactions contemplated by this Agreement) and such Restraint or other
action shall have become final and nonappealable or (c) the Offer expires or is
terminated or withdrawn pursuant to its terms without any Shares being purchased
thereunder by the Purchaser as a result of the occurrence of any of the events
set forth in Annex A.
7.3 TERMINATION BY COMPANY. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Purchase Date, before or after the approval of the Agreement by the stockholders
of the Company, by action of the Board of Directors of the Company, if (a) there
has been a material breach by Parent or the Purchaser of any representation or
warranty contained in this Agreement which is not curable or, if curable, is not
cured by December 31, 1999 and such breach would have a Parent Material Adverse
Effect, (b) there has been a material breach of any of the covenants set forth
in this Agreement on the part of Parent or the Purchaser, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by the Company to Parent or (c) in accordance with Section
5.2(b).
7.4 TERMINATION BY PARENT. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to
the Purchase Date, before or after the approval of the Agreement by the
stockholders of the Company, by Parent, if (a) the Board of Directors of the
Company shall have (i) withdrawn or modified in a manner adverse to Parent or
Purchaser its approval or recommendation of this Agreement, the Offer or the
Merger or failed to reconfirm its approval or recommendation within five
business days after a written request to do so, (ii) approved or recommended,
or proposed publicly to approve or recommend, a third-party Company Takeover
Proposal to the Company's stockholders, (iii) caused the Company to take any
action referred to in Section 5.2 that would have constituted a breach
thereof but for the exceptions thereunder, including without limitation
authorizing the Company to enter into a Company Acquisition Agreement, (iv)
approved the breach of the Company's obligation under Section 5.2, or (v)
resolved to take any of the foregoing actions, (b) there has been a material
breach by the Company of any representation or warranty contained in this
Agreement which is not curable or, if curable, is not cured by December 31,
1999 and such breach had or would have a Company Material Adverse Effect, (c)
there has been a material breach of any of the covenants set forth in this
Agreement on the part of the Company, which breach is not curable or, if
curable,
26
is not cured within five days after written notice of such breach is given by
Parent to the Company or (d) any Person or group (as defined in Section
13(d)(3) of the Exchange Act) other than the Parent, Purchaser or any of
their respective Affiliates shall have become the beneficial owner of more
than 10% of the shares.
7.5 EFFECT OF TERMINATION AND ABANDONMENT; TERMINATION FEE.
(a) In the event of termination of this Agreement pursuant to this
Article VII, all obligations of the parties hereto will terminate, except the
obligations of the parties pursuant to Sections 7.5 and 8.14. In the event of
termination of this Agreement, nothing herein will prejudice the ability of the
non-breaching party from seeking damages from any other party for any prior
breach of this Agreement, including without limitation attorneys' fees and the
right to pursue any remedy at law or in equity.
(b) (i) If this Agreement is terminated at such time that this
Agreement is terminable pursuant to Sections 7.2, 7.3(c) or 7.4, then (A) the
Company will not later than two business days after receipt of notice from
Parent pay to Purchaser an amount equal to Parent's documented Expenses, not to
exceed $600,000 and (B) in the event that (x) a Company Takeover Proposal is
made known to the Company or any of its Subsidiaries or has been made directly
to stockholders generally or any Person publicly announces an intention (whether
or not conditional) to make a Company Takeover Proposal and (y) thereafter this
Agreement is terminated (i) by either Parent or the Company pursuant to Section
7.2(a) or (c) or (2) by the Company pursuant to Section 7.3(c) or by Parent
pursuant to Section 7.4(a) or (d) the Company will pay to Purchaser a fee of
$1,500,000 cash; provided, however, that, if this Agreement is terminated by
Parent as a result of a breach by the Company, Parent may pursue any remedies
available to it at law or in equity and will, in addition to its expenses, be
entitled to recover such additional amounts as Purchaser may be entitled to
receive at law or in equity, in the event of termination by the Company
immediately prior to and as a condition of such termination and in the event of
a termination by Parent not later than two business days after termination.
(ii) This Section 7.5(b) will survive any termination of this
Agreement. The term "Expenses" means all out-of-pocket fees, costs and other
expenses incurred or assumed by Parent or Purchaser or incurred on their behalf
in connection with this Agreement or any of the transactions contemplated
hereby, including but not limited to in connection with the negotiation,
preparation, execution and performance of this Agreement, the structuring and
financing of the Merger and the other transactions contemplated hereby, or any
commitment or agreements relating to such financing, including, without
limitation, fees and expenses payable to all banks, investment banking firms,
other financial institutions and other Persons and their respective agents and
counsel for arranging, committing to provide or providing any financing for the
Merger and any other transactions contemplated hereby or structuring,
negotiating or advising with respect to such transactions or financing, and all
fees and expenses of counsel, accountants, experts and environmental, actuarial,
insurance and other consultants to Parent or Purchaser.
(iii) The Company acknowledges that the agreements contained in this
Section 7.5 (b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent and Purchaser would not
enter into this Agreement; accordingly, if the Company fails promptly to pay any
amount due pursuant to this Section 7.5(b), and, in order to
27
obtain such payment, Parent or Purchaser commences a suit which results in a
judgment against the Company for the fee set forth in this Section 7.5(b) ,
the Company will pay to Parent and Purchaser their costs and expenses
(including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee at the prime rate of Xxxxx
Fargo Bank, N.A. in effect on the date such payment was required to be made.
VIII. GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement will terminate at the Effective
Time, except that the covenants set forth in Sections 5.7, 5.8 and 5.9 will
survive the Effective Time indefinitely.
8.2 NOTICES. Any notice required to be given hereunder will be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Parent or Purchaser:
Innovex, Inc.
000 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
President and Chief Operating Officer
Fax: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
If to the Company:
ADFlex Solutions, Inc.
0000 X. Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxx
President and Chief Operating Officer
Fax: (000) 000-0000
28
With copies to:
Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. XxXxxxxxx
Fax: (000) 000-0000
or to such other address as any party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon and will inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 5.8, nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8.4 ENTIRE AGREEMENT. This Agreement, Annex A, any documents
delivered by the parties in connection herewith and the confidentiality
agreement between Parent and the Company (the "Confidentiality Agreement") ,
which will survive the execution and delivery of this Agreement, constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement will
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
8.5 AMENDMENT. This Agreement may be amended by the parties hereto,
by action taken by their respective Board of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of the Company but after any such stockholder approval, no
amendment will be made which by law requires the further approval of such
stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.6 GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware without regard to its rules
of conflict of laws.
8.7 COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
29
8.8 HEADINGS. Readings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
8.9 CERTAIN DEFINITIONS/INTERPRETATIONS.
(a) For purposes of this Agreement:
(i) An "AFFILIATE" of any Person means another Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person;
(ii) "PERSON" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity; and
(iii) "KNOWLEDGE" of any Person which is not an individual means
the knowledge of any of such Person's executive officers after reasonable
inquiry.
(b) When a reference is made in this Agreement to an Article, Section
or Annex, such reference will be to an Article or section of, or an Annex to,
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they will be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
will refer to this Agreement as a whole and not to any particular provision of
this Agreement. All terms used herein with initial capital letters have the
meanings ascribed to them herein and all terms defined in this Agreement will
have such defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and
assigns.
8.10 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
30
8.11 INCORPORATION OF ANNEX A. Annex A attached hereto is hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
8.12 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision will be
interpreted to be only so broad as is enforceable.
8.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties will be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof in any Delaware Court,
this being in addition to any other remedy to which they are entitled at law or
in equity.
8.14 EXPENSES. All fees and expenses incurred in connection with the
Offer, the Merger, this Agreement and the transactions contemplated thereby will
be paid by the party incurring such fees or expenses, whether or not the Merger
is consummated.
******
31
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
ADFLEX SOLUTIONS, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Title: Chairman
----------------------------------
INNOVEX, INC.
By: /s/ Xxxxxxx X. XxXxxxx
----------------------------------
Xxxxxxx X. XxXxxxx
Title: Senior Vice President - Corporate
----------------------------------
INNOVEX ACQUISITION CORP.
By: /s/ Xxxxxxx X. XxXxxxx
----------------------------------
Xxxxxxx X. XxXxxxx
Title: Senior Vice President
----------------------------------
32
ANNEX A
CONDITIONS TO COMPLETION OF THE OFFER
Notwithstanding any other provision of the Offer, the Purchaser will not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
expiration or termination of the Offer), to pay for any Shares, and, subject to
any such rules or regulations, may postpone the acceptance for payment or
payment for any Shares tendered, and, subject to the terms of the Agreement, may
amend or terminate the Offer (whether or not any Shares have theretofore been
purchased or paid for pursuant to the Offer) (i) unless the following conditions
have been satisfied: (a) there have been validly tendered and not withdrawn
prior to the Purchase Date that number of Shares which constitutes a majority of
the total number of the then outstanding Shares (including for purposes of this
calculation all Shares issuable upon exercise of all vested options and all
options that will vest on or before December 31, 1999 and conversion of
convertible securities or other rights to purchase or acquire Shares) sufficient
to approve the Merger (the "Minimum Condition") and (b) any applicable waiting
periods under the HSR Act shall have expired or been terminated or (ii) if at
any time on or after the date of the Merger Agreement and before the Purchase
Date (whether or not any Shares have theretofore been accepted for payment or
paid for pursuant to the Offer), any of the following shall have occurred:
(i) any Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect, or there
shall be initiated, instituted or pending any such action having any
effect, and which (a) restricts, prevents or prohibits consummation of
the transactions contemplated by this Agreement, including the Offer or
the Merger, (b) prohibits, limits or otherwise adversely affects the
ownership or operation by Parent or any of its Subsidiaries of all or any
portion of the business or assets of the Company and its Subsidiaries or
compels the Company, Parent or any of their Subsidiaries to dispose of or
hold separate all or any portion of the business or assets of the Company
and its Subsidiaries, or (c) imposes material limitations on the ability
of the Purchaser to exercise effectively full rights of ownership of any
Shares, including the right to vote any Shares acquired by the Purchaser
pursuant to the Offer or otherwise on all matters properly presented to
the Company's stockholders;
(ii) the representations and warranties of the Company contained
in the Agreement shall not be true and correct in all material respects
as of the Purchase Date as though made anew as of such date;
(iii) the Company shall not have performed or complied in all
material respects with its covenants under the Agreement and such failure
continues until the later of (a) 15 calendar days after actual receipt by
it of written notice from Parent setting forth in detail the nature of
such failure or (b) the Purchase Date;
A-1
(iv) there shall have occurred any change, effect, event or
condition constituting a Company Material Adverse Effect;
(v) the Agreement shall have been terminated in accordance with
its terms;
(vi) the Company Board shall have (a) withdrawn or materially
modified (including by amendment of Schedule 14D-9) in a manner adverse
to the Purchaser or Parent or taken a position inconsistent with its
approval or recommendation of the Offer, the Merger or this Agreement,
(b) approved or recommended any Company Takeover Proposal, (c) taken any
action referred to in Section 5.2 of the Agreement that is prohibited
thereby or would be so prohibited but for the exceptions thereto or (d)
resolved or publicly disclosed any intention to do any of the foregoing;
(vii) there shall have occurred (a) any general suspension of
trading in, or limitation on prices for, securities on the NYSE, (b) a
decline of at least 10% in either the Dow Xxxxx Average of Industrial
Stocks or the Standard & Poor's 500 Index from the date of the Agreement,
(c) the declaration of a banking moratorium or any limitation or
suspension of payments in respect of the extension of credit by banks or
other lending institutions in the United States, (d) any commencement of
war, armed hostilities or other international or national calamity
directly involving the United States or having a significant adverse
effect on the functionality of financial markets in the United States, or
(e) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening thereof;
or
(viii) it shall have been publicly disclosed or Parent shall have
otherwise learned that (a) any Person or "group" (as defined in Section
13(d) (3) of the Exchange Act), other than Parent or its affiliates or
any group of which any of them is a member or any affiliates controlled
by it, shall have acquired beneficial ownership (determined pursuant to
Rule 13d-3 promulgated under the Exchange Act) of more than 20% of the
outstanding Shares or (b) any Person or group shall have entered into a
Company Acquisition Agreement or an agreement in principle with respect
thereto.
Notwithstanding the foregoing the institution of an action or suit that
challenges the transactions contemplated by this Agreement shall not be deemed
the failure of the foregoing conditions except in the circumstances described in
clause (i) above.
The foregoing conditions are for the sole benefit of the Purchaser and
may be waived by the Purchaser or Parent on behalf of Purchaser, in whole or in
part, from time to time in its sole discretion. The failure by the Purchaser at
any time to exercise any of the foregoing rights will not be deemed a waiver of
any such right and each such right will be deemed an ongoing right and may be
asserted at any time and from time to time.
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