============================
AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 1, 1999
AMONG
XXXXX APPAREL GROUP, INC.
XXXX ACQUISITION SUB INC.
and
NINE WEST GROUP INC.
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TABLE OF CONTENTS
ARTICLE I
THE MERGER................................................................2
1.1 The Merger...........................................................2
1.2 Closing..............................................................2
1.3 Effective Time.......................................................2
1.4 Effects of the Merger................................................3
1.5 Certificate of Incorporation.........................................3
1.6 By-Laws..............................................................3
1.7 Officers and Directors of Surviving Corporation......................3
1.8 Effect on Capital Stock..............................................3
1.9 Treatment of Convertible Notes.......................................5
1.10 Treatment of Options.................................................5
ARTICLE II
EXCHANGE OF CERTIFICATES..................................................7
2.1 Exchange Fund........................................................7
2.2 Exchange Procedures..................................................7
2.3 Distributions with Respect to Unexchanged Shares.....................8
2.4 No Further Ownership Rights in Company Common Stock..................8
2.5 No Fractional Shares of Parent Common Stock..........................8
2.6 Termination of Exchange Fund.........................................9
2.7 No Liability.........................................................9
2.8 Investment of the Exchange Fund......................................9
2.9 Lost Certificates....................................................9
2.10 Withholding Rights...................................................9
2.11 Further Assurances..................................................10
2.12 Stock Transfer Books................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES...........................................10
3.1 Representations and Warranties of the Company.......................10
(a) Organization, Standing and Power...............................10
(b) Capital Structure..............................................11
(c) Authority; No Conflicts........................................12
(d) Reports and Financial Statements...............................13
(e) Information Supplied...........................................14
(f) Board Approval.................................................14
(g) Vote Required..................................................15
(h) Rights Agreement...............................................15
(i) Absence of Certain Changes or Events...........................15
(j) Litigation.....................................................15
(k) Compliance with................................................16
(l) Taxes..........................................................16
(m) Employee Benefits..............................................16
(n) Environmental Matters..........................................18
(o) Liabilities....................................................19
(p) Brokers or Finders.............................................19
(q) Opinion of Financial Advisor...................................20
(r) Certain Agreements.............................................20
(s) Intellectual Property..........................................20
(t) Antitrust Matters..............................................21
(u) Year 2000 Compliance...........................................21
3.2 Representations and Warranties of Parent............................21
(a) Organization, Standing and Power...............................21
(b) Capital Structure..............................................22
(c) Authority; No Conflicts........................................23
(d) Reports and Financial Statements...............................23
(e) Information Supplied...........................................24
(f) Vote Required..................................................24
(g) Absence of Certain Changes or Events...........................24
(h) Litigation.....................................................24
(i) Compliance with Laws...........................................25
(j) Taxes..........................................................25
(k) Employee Benefits..............................................25
(l) Liabilities....................................................25
(m) Brokers or Finders.............................................26
(n) No Business Activities.........................................26
(o) Financing......................................................26
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS................................26
4.1 Covenants of the Company............................................26
(a) Ordinary Course................................................26
(b) Dividends; Changes in Share Capital............................27
(c) Issuance of Securities.........................................27
(d) Governing Documents............................................27
(e) No Acquisitions................................................28
(f) No Dispositions................................................28
(g) Investments; Indebtedness......................................28
(h) Accounting Methods; Income Tax Elections.......................28
(i) Company Rights Agreement.......................................29
(j) Compensation...................................................29
(k) Claims.........................................................29
(l) Other Actions..................................................29
(m) No General Authorization.......................................29
4.2 Covenants of Parent.................................................29
(a) Conduct of Business............................................30
(b) Dividends; Changes in Share Capital............................30
(c) Liquidation....................................................30
(d) Governing Documents............................................30
(e) No Acquisitions................................................30
(f) Other Actions..................................................30
(g) No General Authorization.......................................31
4.3 Advice of Changes; Governmental Filings.............................31
4.4 Specified Matters...................................................31
4.5 Notification of Certain Matters.....................................32
ARTICLE V
ADDITIONAL AGREEMENTS....................................................32
5.1 Preparation of Form S-4 and Proxy Statement/Prospectus; Company
Stockholders Meeting ....................................................32
5.2 Access to Information...............................................34
5.3 Reasonable Best Efforts.............................................34
5.4 Acquisition Proposals...............................................36
5.5 Employee Benefits Matters...........................................38
5.6 Fees and Expenses...................................................39
5.7 Directors' and Officers' Insurance..................................40
5.8 Rights Agreement....................................................40
5.9 Public Announcements................................................41
5.10 Accountants' Letters................................................41
5.11 Listing of Shares of Parent Common Stock............................41
5.12 Affiliate Letter....................................................41
5.13 Parent Board of Directors...........................................42
5.14 Stockholder Litigation..............................................42
ARTICLE VI
CONDITIONS PRECEDENT.....................................................42
6.1 Conditions to Each Party's Obligation to Effect the Merger..........42
(a) Stockholder Approval...........................................42
(b) No Injunctions or Restraints, Illegality.......................42
(c) HSR Act........................................................42
(d) NYSE Listing...................................................42
(e) Effectiveness of the Form S-4..................................42
6.2 Additional Conditions to Obligations of Parent and Merger Sub.......43
(a) Representations and Warranties.................................43
(b) Performance of Obligations of the Company......................43
(c) Tax Opinion....................................................43
(d) No Litigation..................................................43
(e) Consents.......................................................44
(f) Material Adverse Effect........................................44
6.3 Additional Conditions to Obligations of the Company.................44
(a) Representations and Warranties.................................44
(b) Performance of Obligations of Parent...........................44
(c) Tax Opinion....................................................45
(d) Material Adverse Effect........................................45
ARTICLE VII
TERMINATION AND AMENDMENT................................................45
7.1 Termination.........................................................45
7.2 Effect of Termination...............................................47
7.3 Amendment...........................................................48
7.4 Extension; Waiver...................................................48
ARTICLE VIII
GENERAL PROVISIONS.......................................................49
8.1 Non-Survival of Representations, Warranties and Agreements..........49
8.2 Notices.............................................................49
8.3 Interpretation......................................................50
8.4 Counterparts........................................................50
8.5 Entire Agreement; No Third Party Beneficiaries......................50
8.6 Governing Law.......................................................51
8.7 Severability........................................................51
8.8 Assignment..........................................................51
8.9 Submission to Jurisdiction; Waivers.................................51
8.10 Enforcement........................................................52
8.11 Definitions........................................................52
8.12 Other Agreements...................................................53
LIST OF EXHIBITS
Exhibit Title
------- -----
5.12 Form of Company Affiliate Letter
6.2(c)(1) Form of tax opinion of Cravath, Swaine & Xxxxx
6.3(c)(1) Form of tax opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
AGREEMENT AND PLAN OF MERGER, dated as of March 1, 1999 (this
"AGREEMENT"), among XXXXX APPAREL GROUP, INC., a Pennsylvania corporation
("PARENT"), XXXX ACQUISITION SUB INC., a Delaware corporation and a direct
wholly-owned subsidiary of Parent ("MERGER SUB"), and NINE WEST GROUP INC., a
Delaware corporation (the "COMPANY").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the respective Boards of Directors of Parent, Merger Sub
and the Company have determined that the merger of the Company with Merger Sub
on the terms set forth in this Agreement (the "MERGER") is in the best
interests of their respective stockholders, and such Boards of Directors have
approved such Merger (and, in the case of the Board of Directors of the
Company, recommended that it be adopted by the Company's stockholders), upon
the terms and subject to the conditions set forth in this Agreement, pursuant
to which each outstanding share of common stock, par value $.01 per share, of
the Company (the "COMPANY COMMON STOCK") issued and outstanding immediately
prior to the Effective Time (as defined in SECTION 1.3) (together with each
associated Right (as defined in SECTION 3.1(b)), other than shares owned or
held directly by Parent, Merger Sub or by the Company and other than
Dissenting Shares (as defined in SECTION 1.8(e)), will be converted into the
right to receive a unit consisting of a fraction of a fully paid and
nonassessable share of common stock, par value $.01 per share, of Parent
("PARENT COMMON STOCK") and an amount in cash;
WHEREAS, as a condition and inducement to Parent's and Merger Sub's
entering into this Agreement and incurring the obligations set forth herein,
contemporaneously with the execution and delivery of this Agreement, Parent is
entering into a stockholder agreement (the "STOCKHOLDER AGREEMENT") with
certain beneficial and record stockholders of the Company pursuant to which,
among other things, such stockholders, severally and not jointly, have agreed
to vote the shares of Company Common Stock then owned by them in favor of the
Merger and to take certain other actions in support of the Merger, and such
Stockholder Agreement and the transactions consummated thereby have been
approved by the Board of Directors of the Company;
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby and also to prescribe various conditions to
the transactions contemplated hereby; and
WHEREAS, Parent, Merger Sub and the Company intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "CODE"), and the regulations promulgated
thereunder (subject to the election provided for in SECTION 1.1).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), the Company shall be merged with and into Merger
Sub at the Effective Time (as defined in SECTION 1.3). Following the Merger,
the separate corporate existence of the Company shall cease and Merger Sub
shall continue as the surviving corporation (the "SURVIVING CORPORATION")
under the name "Nine West Group Inc.". In lieu of the Company being merged
with and into Merger Sub, if all of the conditions set forth in ARTICLE
VI(excluding conditions that, by their terms, cannot be satisfied until the
Closing Date (as defined in SECTION 1.2)) have been satisfied or waived other
than the condition set forth in SECTION 6.2(c) or 6.3(c) (relating to the
receipt of opinions that the Merger is a reorganization under Section 368(a)
of the Code), the Company shall have the right to irrevocably elect (the
"REVERSE MERGER ELECTION") by notice delivered to Parent, and upon the terms
and subject to the conditions set forth in this Agreement, to cause the
"Merger" to be a merger of Merger Sub with and into the Company at the
Effective Time, in which case, following the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
Surviving Corporation.
1.2 CLOSING. The closing of the Merger (the "CLOSING") will take
place on the second Business Day after the satisfaction or, subject to
applicable law, waiver of the conditions (excluding conditions that, by their
terms, cannot be satisfied until the Closing Date) set forth in ARTICLE VI(the
"CLOSING DATE"), unless another time or date is agreed to in writing by the
parties hereto. The Closing shall be held at the offices of Cravath, Swaine &
Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 unless
another place is agreed to in writing by the parties hereto; provided,
however, that if the Parent Common Stock Price is less than $21.00, then the
Closing shall not occur until the fifth Business Day after the Determination
Date (as defined below) unless the Company shall have terminated this
Agreement pursuant to SECTION 7.1(i). The date on which the conditions set
forth in ARTICLE VI have been satisfied or, subject to applicable law, waived
(excluding conditions that, by their terms, cannot be satisfied until the
Closing Date) is hereinafter referred to as the "DETERMINATION DATE".
1.3 EFFECTIVE TIME. As soon as practicable following the Closing,
the parties shall (i) file a certificate of merger (the "CERTIFICATE OF
MERGER") in such form as is required by and executed and acknowledged in
accordance with the relevant provisions of the DGCL and (ii) make all other
filings or recordings required under the DGCL to effect the Merger. The
Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Delaware Secretary of State or at such subsequent time as
Parent and the Company shall agree and be specified in the Certificate of
Merger (the date and time the Merger becomes effective being the "EFFECTIVE
TIME").
1.4 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of the Company and
Merger Sub shall be vested in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.5 CERTIFICATE OF INCORPORATION. Unless the Reverse Merger
Election is made, the certificate of incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law, except that Article I of the
certificate of incorporation of the Surviving Corporation shall be amended to
read in its entirety as follows: "The name of this Corporation is 'Nine West
Group Inc.'". If the Reverse Merger Election is made, the certificate of
incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable law.
1.6 BY-LAWS. The by-laws of Merger Sub as in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
1.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The officers
of the Company as of the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or otherwise
ceasing to be an officer or until their respective successors are duly elected
and qualified, as the case may be. The directors of Merger Sub as of the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their resignation or removal or otherwise ceasing to be a director
or until their respective successors are duly elected and qualified.
1.8 EFFECT ON CAPITAL STOCK. At the Effective Time by virtue of
the Merger and without any action on the part of the holder thereof,
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of Company Common
Stock owned by Parent or Merger Sub or held by the Company, all of which shall
be canceled as provided in SECTION 1.8(c), and other than any Dissenting
Shares (as defined in SECTION 1.8(e)) shall be converted into the right to
receive (i) cash in an amount equal to $13.00; and (ii) a fraction of a
fully paid and nonassessable share of Parent Common Stock equal to the
Exchange Ratio (as defined below) (collectively, the "MERGER CONSIDERATION").
For purposes of this Agreement, "EXCHANGE RATIO" means .5011 shares of Parent
Common Stock; provided that if the Parent Common Stock Price (as defined
below) is (1) less than $24.00, the Exchange Ratio shall be equal to $12.00
divided by the Parent Common Stock Price, rounded to the nearest 1/10,000 or
(2) more than $34.00, the Exchange Ratio shall be equal to $17.00 divided by
the Parent Common Stock Price, rounded to the nearest 1/10,000; PROVIDED,
FURTHER, that if the Parent Common Stock Price is less than $21.00, the
Exchange Ratio shall be .5714 and if the Parent Common Stock Price is greater
than $36.00, the Exchange Ratio shall be .4722. "PARENT COMMON STOCK PRICE"
means the average of the closing sales prices of Parent Common Stock on the
New York Stock Exchange ("NYSE") Composite Transactions Tape (as reported in
THE WALL STREET JOURNAL or, if not reported therein, in another authoritative
source mutually selected by Parent and the Company) on each of the 15
consecutive NYSE trading days immediately preceding the Determination Date.
(b) As a result of the Merger and without any action on the part of
the holders thereof, at the Effective Time, all shares of Company Common Stock
(other than shares referred to in SECTIONS 1.8(c) and (e)) shall cease to be
outstanding and shall be canceled and retired and shall cease to exist, and
each holder of a certificate which immediately prior to the Effective Time
represented any such shares of Company Common Stock (a "CERTIFICATE") shall
thereafter cease to have any rights with respect to such shares of Company
Common Stock, except the right to receive the applicable Merger Consideration
and any cash in lieu of fractional shares of Parent Common Stock to be issued
or paid in consideration therefor and any dividends or other distributions to
which holders become entitled all in accordance with ARTICLE II upon the
surrender of such certificate.
(c) Each share of Company Common Stock issued and owned or held by
Parent, Merger Sub or the Company at the Effective Time shall, by virtue of
the Merger, cease to be outstanding and shall be canceled and retired and no
stock of Parent or other consideration shall be delivered in exchange
therefor.
(d) Each share of common stock, par value $.01 per share, of Merger
Sub issued and outstanding immediately prior to the Effective Time, shall
remain issued, outstanding and unchanged as a validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation as of the Effective Time.
(e) Notwithstanding anything in this Agreement to the contrary,
shares of Company Common Stock issued and outstanding immediately prior to the
Effective Time held by a holder (if any) who has the right to demand payment
for and an appraisal of such shares in accordance with Section 262 of the DGCL
(or any successor provision) ("DISSENTING SHARES") shall not be converted into
a right to receive Merger Consideration or any cash in lieu of fractional
shares of Parent Common Stock (but shall have the rights set forth in Section
262 of the DGCL (or any successor provision)) unless such holder fails to
perfect or otherwise loses such holder's right to such payment or appraisal,
if any. If, after the Effective Time, such holder fails to perfect or loses
any such right to appraisal, each such share of such holder shall be treated
as a share of Company Common Stock that had been converted as of the
Effective Time into the right to receive Merger Consideration in accordance
with this SECTION 1.8. The Company shall give prompt notice to Parent of any
demands received by the Company for appraisal of shares of Company Common
Stock, withdrawals of such demands and any other instruments served pursuant
to the DGCL received by the Company, and Parent shall have the right to
participate in and direct all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any
such demands or agree to do or commit to do any of the foregoing.
(f) If prior to the Effective Time, Parent or the Company, as the
case may be, should (after obtaining the consent required by SECTION 4.1 or
4.2, as the case may be, hereof) split, combine or otherwise reclassify the
Parent Common Stock or the Company Common Stock, or pay a stock dividend or
other stock distribution in Parent Common Stock or Company Common Stock, or
otherwise change the Parent Common Stock or Company Common Stock into any
other securities, or make any other such stock dividend or distribution in
capital stock of Parent or the Company in respect of the Parent Common Stock
or the Company Common Stock, respectively, then any number or amount contained
herein which is based upon the Parent Common Stock Price or the number of
shares of Company Common Stock or Parent Common Stock, as the case may be,
will be appropriately adjusted to reflect such split, combination, dividend or
other distribution or change.
1.9 TREATMENT OF CONVERTIBLE NOTES. (a) Pursuant to Section 14.6
of the Indenture, dated as of June 26, 1996 (the "CONVERTIBLE NOTES
INDENTURE"), between the Company and Chemical Bank, as trustee, relating to
the Company's 5-1/2% Convertible Subordinated Notes Due 2003 (the "CONVERTIBLE
NOTES"), prior to the Effective Time, the Company, Merger Sub and Parent shall
enter into a supplemental indenture in accordance with Section 14.6 of the
Convertible Notes Indenture.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Convertible Notes appropriate notices setting forth
such holders' rights pursuant to the Convertible Notes Indenture with respect
thereto to the extent required by the terms thereof.
(c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery
upon conversion of the Convertible Notes and file a registration statement on
Form S-3 (or any successor or other appropriate form) with respect to such
shares and shall use its reasonable best efforts to maintain the effectiveness
of such registration statement for so long as the Convertible Notes remain
outstanding.
1.10 TREATMENT OF OPTIONS. (a) (i) Immediately prior to the
Effective Time, each outstanding stock option granted to present and former
employees and non-employee directors of the Company and its Subsidiaries
(together, an "OPTION"), whether or not then exercisable, which Option has an
exercise price per share that is less than the value of the per share Merger
Consideration on the Closing Date (based on the closing sales price on the
Closing Date of Parent Common Stock on the NYSE Composite Transactions Tape
(as reported in THE WALL STREET JOURNAL or, if not reported therein, in
another authoritative source mutually selected by Parent and the Company) (the
"CLOSING CONSIDERATION VALUE"), shall be canceled by the Company, and the
holder thereof shall be entitled to receive at the Effective Time or as soon
as practicable thereafter from the Company in consideration for such
cancellation an amount in cash equal to the product of (i) the number of
shares of Company Common Stock previously subject to such Option and (ii) the
excess of the Merger Consideration over the exercise price per share of
Company Common Stock previously subject to such Option.
(ii) Immediately prior to the Effective Time, each outstanding
Option, whether or not then exercisable, which Option has an exercise price
per share that is greater than the per share Closing Consideration Value
(each, an "UNDERWATER OPTION"), shall be converted into an option to acquire,
on the same terms and conditions (including exercise price) as previously
applicable to such Underwater Options, the per share Closing Consideration
Value for each share of Company Common Stock previously subject to such
Underwater Option (after any such adjustment, a "PARENT OPTION"); PROVIDED,
HOWEVER, that the Parent Option shall be further adjusted to (i) reduce the
exercise price of the Parent Option by the value of the cash portion of the
Closing Consideration Value, (ii) eliminate the requirement that the cash
portion of the Closing Consideration Value be delivered upon exercise of the
Parent Option, and (iii) with respect to each Parent Option having the same
exercise price, the number of any fractional shares of Parent Common Stock
shall be added together to create whole shares of Parent Common Stock, and the
per share exercise price of each Parent Option shall be appropriately
adjusted. The aggregate number of shares of Parent Common Stock delivered
pursuant to the Parent Option shall be rounded down to the nearest whole
share.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Company Options appropriate notices setting forth
such holders' rights pursuant to the Company Stock Option Plans after giving
effect to the transaction and the provisions set forth above. In addition,
Parent shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Parent Common Stock for delivery upon exercise
of a Parent Option. As soon as practicable after the Effective Time, Parent
shall file a registration statement on Form S-3 or Form S-8, as the case may
be (or any successor or other appropriate forms), or another appropriate form,
with respect to the shares of Parent Common Stock subject to such Parent
Options and shall use its reasonable best efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such Parent Options remain outstanding.
(c) The Company shall use its reasonable best efforts to take such
actions as are reasonably necessary to provide that (i) other than as
contemplated hereunder no further issuance, transfer or grant of any capital
stock of the Company or any interest in respect of any capital stock of the
Company shall be made on or after the Effective Time under any Company Stock
Plan and (ii) following the Effective Time, no holder of an Option or any
participant in any Company Stock Option Plan or other Company Plan shall have
the right thereunder to acquire any capital stock of the Company or the
Surviving Corporation.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 EXCHANGE FUND. At or prior to the Effective Time, Parent shall
deposit with the Exchange Agent, in trust for the benefit of holders of shares
of Company Common Stock, for exchange in accordance with SECTION 1.8, all the
cash and certificates representing shares of Parent Common Stock to be paid
or issued pursuant to this Agreement in exchange for outstanding Company
Common Stock and cash sufficient to pay cash in lieu of fractional shares
required to be paid pursuant to SECTION 2.5. Parent agrees to make available
to the Exchange Agent from time to time as needed, cash sufficient to pay any
dividends and other distributions pursuant to SECTION 2.3. Any cash and
certificates of Parent Common Stock deposited with the Exchange Agent shall
hereinafter be referred to as the "EXCHANGE FUND".
2.2 EXCHANGE PROCEDURES. As promptly as practicable after the
Effective Time, the Exchange Agent will send to each record holder of a
Certificate other than Certificates to be canceled pursuant to SECTION 1.8(c),
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in a form and
have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. As soon as reasonably practicable
after the Effective Time, each holder of a Certificate, upon surrender of a
Certificate to the Exchange Agent together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of whole shares of Parent
Common Stock and the amount of cash (including amounts to be paid pursuant to
SECTION 1.8(a)(i), in lieu of fractional shares of Parent Common Stock
pursuant to SECTION 2.5 and in respect of any dividends or other distributions
to which holders are entitled pursuant to SECTION 2.3), if any, into which the
aggregate number of shares of Company Common Stock previously represented by
such Certificate shall have been converted pursuant to this Agreement. The
Exchange Agent shall accept such Certificates upon compliance with such
reasonable terms and conditions as the Exchange Agent may impose to effect an
orderly exchange thereof in accordance with normal exchange practices. No
interest will be paid or will accrue on any cash payable pursuant to SECTION
1.8, SECTION 2.3 or SECTION 2.5. In the event of a transfer of ownership of
Company Common Stock which is not registered in the transfer records of the
Company, one or more shares of Parent Common Stock evidencing, in the
aggregate, the proper number of shares of Parent Common Stock, a check in the
proper amount of cash pursuant to SECTION 1.8(a) and cash in lieu of any
fractional shares of Parent Common Stock pursuant to SECTION 2.5 and any
dividends or other distributions to which such holder is entitled pursuant to
SECTION 2.3, may be issued with respect to such Company Common Stock to a
Person other than the Person in whose name the Certificate surrendered is
registered if such Certificate is presented to the Exchange Agent, accompanied
by all documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer or other taxes have been paid. Until
surrendered as contemplated by this SECTION 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration which the holder thereof
has the right to receive in respect of such Certificate pursuant to the other
provisions of this Article II.
2.3 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends
or other distributions declared or made with respect to shares of Parent
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock that such holder would be entitled to receive upon surrender of
such Certificate and no cash payment in lieu of fractional shares of Parent
Common Stock shall be paid to any such holder pursuant to SECTION 2.5 until
such holder shall surrender such Certificate in accordance with SECTION 2.2.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to such holder of shares of Parent Common
Stock issuable in exchange therefor, without interest, (a) promptly after the
time of such surrender, the amount of any cash payable in lieu of fractional
shares of Parent Common Stock to which such holder is entitled pursuant to
SECTION 2.5 and the amount of dividends or other distributions with a record
date after the Effective Time theretofore paid with respect to such whole
shares of Parent Common Stock, and (b) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to
such surrender payable with respect to such shares of Parent Common Stock.
2.4 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Parent Common Stock issued and cash paid upon conversion of shares
of Company Common Stock in accordance with the terms of ARTICLE I and this
ARTICLE II (including any cash paid pursuant to SECTION 1.8(a), 2.3 or 2.5)
shall be deemed to have been issued or paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock. If, after the Effective
Time, such Certificates are presented to the Surviving Corporation or the
Exchange Agent for transfer, they shall be canceled and exchanged as provided
in this Article II.
2.5 NO FRACTIONAL SHARES OF PARENT COMMON STOCK. (a) No
certificates or scrip or shares of Parent Common Stock representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange
of Certificates and such fractional share interests will not entitle the owner
thereof to vote or to have any rights of a shareholder of Parent or a holder
of shares of Parent Common Stock. For purposes of this SECTION 2.5, all
fractional shares to which a single record holder would be entitled shall be
aggregated and calculations shall be rounded to three decimal places.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of Parent
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to the product of (i) such fractional part of a share of Parent Common
Stock multiplied by (ii) the last sales price per share of Parent Common Stock
quoted on the NYSE on the Closing Date. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of
fractional interests, the Exchange Agent shall so notify Parent, and Parent
shall cause the Exchange Agent to forward payments to such holders of
fractional interests subject to and in accordance with the terms hereof.
2.6 TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates for twelve months
after the Effective Time shall be delivered to the Surviving Corporation or
otherwise on the instruction of the Surviving Corporation, and any holders of
Certificates who have not theretofore complied with this ARTICLE II shall
thereafter look only to the Surviving Corporation and Parent (subject to
abandoned property, escheat or other similar laws) for the Merger
Consideration with respect to the shares of Company Common Stock formerly
represented thereby to which such holders are entitled pursuant to SECTION 1.8
and SECTION 2.2, any cash in lieu of fractional shares of Parent Common Stock
to which such holders are entitled pursuant to SECTION 2.5 and any dividends
or distributions with respect to shares of Parent Common Stock to which such
holders are entitled pursuant to SECTION 2.3.
2.7 NO LIABILITY. None of Parent, Merger Sub, the Company, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
2.8 INVESTMENT OF THE EXCHANGE FUND. Any funds included in the
Exchange Fund may be invested by the Exchange Agent, as directed by Parent;
provided that such investments shall be in obligations of or guaranteed by the
United States of America and backed by the full faith and credit of the United
States of America or in commercial paper obligations rated A-1 or P-1 or
better by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation,
respectively. Any interest and other income resulting from such investments
shall promptly be paid to the Surviving Corporation.
2.9 LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will deliver in exchange for such lost, stolen
or destroyed Certificate the applicable Merger Consideration with respect to
the shares of Company Common Stock formerly represented thereby, any cash in
lieu of fractional shares of Parent Common Stock, and unpaid dividends and
distributions on shares of Parent Common Stock deliverable in respect thereof,
pursuant to this Agreement.
2.10 WITHHOLDING RIGHTS. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
Company Common Stock such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code and the rules and
regulations promulgated thereunder, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation or Parent, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder
of the shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the case may
be.
2.11 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger Sub,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of the Company or Merger Sub, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
2.12 STOCK TRANSFER BOOKS. At the close of business, New York City
time, on the day the Effective Time occurs, the stock transfer books of the
Company shall be closed and there shall be no further registration of
transfers of shares of Company Common Stock thereafter on the records of the
Company. From and after the Effective Time, the holders of Certificates shall
cease to have any rights with respect to such shares of Company Common Stock
formerly represented thereby, except as otherwise provided herein or by law.
On or after the Effective Time, any Certificates presented to the Exchange
Agent or Parent for any reason shall be converted into the Merger
Consideration with respect to the shares of Company Common Stock formerly
represented thereby, any cash in lieu of fractional shares of Parent Common
Stock to which the holders thereof are entitled pursuant to SECTION 2.5 and
any dividends or other distributions to which the holders thereof are entitled
pursuant to SECTION 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set
forth in the Company Disclosure Schedule delivered by the Company to Parent
prior to the execution of this Agreement (the "COMPANY DISCLOSURE SCHEDULE")
(each section of which qualifies the correspondingly numbered representation
and warranty or covenant to the extent specified therein and such other
representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the information
called for by such other representation and warranty or covenant readily
apparent), the Company represents and warrants to Parent as follows:
(a) ORGANIZATION, STANDING AND POWER. Each of the Company and each
of its Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the failure so
to qualify would not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect (as defined in SECTION 8.11(d)) on
the Company. The copies of the restated certificate of incorporation and the
second amended and restated by-laws of the Company which were previously
furnished to Parent are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
(b) CAPITAL STRUCTURE. (i) The authorized capital stock of the
Company consists of (A) 100,000,000 shares of Company Common Stock, of which
33,985,098 shares were outstanding as of February 26, 1999 and (B) 25,000,000
shares of preferred stock, par value $.01 per share, of which, as of the date
hereof, 70,000 shares of Series A Junior Participating Preferred Stock have
been designated and reserved for issuance upon exercise of the rights (the
"RIGHTS") distributed to the holders of Company Common Stock pursuant to the
Rights Agreement, dated as of February 17, 1998, between the Company and The
Bank of New York, as rights agent (the "RIGHTS AGREEMENT"), and as of February
26, 1999, there were no other shares of capital stock of the Company
outstanding. As of February 26, 1999, 1,952,900 shares of Company Common
Stock were held by the Company in its treasury. Since February 26, 1999 to
the date of this Agreement, there have been no issuances of shares of the
capital stock of the Company or any other securities of the Company other than
issuances of shares (and associated Rights) pursuant to options or rights
outstanding as of February 26, 1999 under the Benefit Plans (as defined in
SECTION 8.11(a)) of the Company and issuances of shares (and associated
Rights) upon conversion of the Convertible Notes. All issued and outstanding
shares of the capital stock of the Company are, and any shares of Company
Common Stock which may be issued upon the exercise of options when issued will
be, duly authorized, validly issued, fully paid and nonassessable, and no
class of capital stock is entitled to preemptive rights. There were
outstanding, as of February 26, 1999, no options, warrants or other rights to
acquire (including through the conversion or exchange of securities) capital
stock from the Company other than (x) the Rights, (y) Options (other than
Underwater Options), representing in the aggregate the right to purchase
248,422 shares of Company Common Stock and Underwater Options representing in
the aggregate the right to purchase 5,458,852 shares of Company Common Stock,
in each case under the Company's Second Amended and Restated Stock Option
Plan, 1993 Directors' Stock Option Plan and First Amended and Restated 1994
Long-Term Performance Plan (collectively, the "COMPANY STOCK OPTION PLANS"),
and (z) the Convertible Notes representing in the aggregate the right to
convert into 3,055,958 shares of Company Common Stock. Other than the
associated Rights issued with the shares issued as described above, no options
or warrants or other rights to acquire capital stock from the Company have
been issued or granted since February 26, 1999 to the date of this Agreement.
As of February 26, 1999, the weighted average exercise price of the Underwater
Options and the Options (other than the Underwater Options) was approximately
$31.79 and $16.55, respectively.
(ii) No bonds, debentures, notes or other indebtedness of the
Company having the right to vote (whether currently or upon the occurrence of
an event) on any matters on which stockholders of the Company or any of its
Subsidiaries may vote ("COMPANY VOTING DEBT") are issued or outstanding or
subject to issuance.
(iii) Except as otherwise set forth in this SECTION 3.1(b) and as
contemplated by SECTION 4.1, as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of the Company or any of its Subsidiaries or obligating the Company
or any of its Subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries.
(iv) All the outstanding shares of capital stock of, or other
equity interests in, each Subsidiary of the Company have been validly issued,
are fully paid and nonassessable and are owned by the Company or a wholly
owned Subsidiary of the Company free and clear of all claims, liens, charges,
mortgages, encumbrances, pledges, security interests or other restrictions of
any kind or nature whatsoever ("LIENS"), except for Liens which would not
reasonably be expected to have a Material Adverse Effect on the Company.
Except for the capital stock of its Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other ownership interest in any
Person that is material to the business of the Company and its Subsidiaries,
taken as a whole.
(c) AUTHORITY; NO CONFLICTS. (i) The Company has all requisite
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby, subject in the case of the consummation
of the Merger to the adoption of this Agreement by the Required Company Vote
(as defined in SECTION 3.1(g)). The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company,
subject in the case of the consummation of the Merger, to the adoption of this
Agreement by the Required Company Vote. This Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(ii) The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated hereby will
not, conflict with, or result in any breach or violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or result in
the termination of, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation or the loss of a material
benefit under, or to increased, additional, accelerated or guaranteed rights
or entitlements of any Person under, or result in the creation of a Lien on
any assets of the Company or any of its Subsidiaries (any such conflict,
breach, violation, default, right of termination, amendment, cancellation,
acceleration, guarantee, entitlements, liens or other occurrence, loss or
creation, a "VIOLATION") pursuant to: (A) any provision of the certificate of
incorporation or by-laws of the Company or the governing documents of any
Subsidiary of the Company, or (B) except as would not reasonably be expected
to have a Material Adverse Effect on the Company or to prevent or materially
impede or delay the consummation of the transactions contemplated hereby and,
subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any Subsidiary of
the Company or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any government, court,
administrative agency or commission or other governmental authority or
instrumentality, domestic, foreign or supranational, or any quasi-governmental
or private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "GOVERNMENTAL ENTITY"), is
required by or with respect to the Company or any Subsidiary of the Company in
connection with the execution and delivery of this Agreement by the Company or
the consummation of the Merger and the other transactions contemplated hereby,
except for those required under or in relation to (A) the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended , and the rules and regulations
promulgated thereunder (the "HSR ACT"), (B) state securities or "BLUE SKY"
laws (the "BLUE SKY LAWS"), (C) the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the "SECURITIES ACT"), (D)
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "EXCHANGE ACT"), (E) the DGCL with respect to the
filing of the Delaware Certificate of Merger, (F) rules and regulations of the
NYSE, (G) antitrust or other competition laws of any jurisdiction, and (H)
such consents, approvals, orders, authorizations, registrations, declarations
and filings the failure of which to make or obtain would not reasonably be
expected to have a Material Adverse Effect on the Company or to prevent or
materially impede or delay the consummation of the transactions contemplated
hereby. Consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to any of the foregoing
clauses (A) through (G) are hereinafter referred to as "REQUIRED CONSENTS."
(d) REPORTS AND FINANCIAL STATEMENTS. The Company has filed all
required reports, schedules, forms, statements and other documents required to
be filed by it with the Securities and Exchange Commission (the "SEC") since
February 1, 1997 (collectively, including all exhibits thereto, the "COMPANY
SEC REPORTS"). No Subsidiary of the Company is required to file any form,
report or other document with the SEC. None of the Company SEC Reports filed
prior to the date of this Agreement (as of their respective dates or, if
amended or superseded by a filing prior to the date of this Agreement, then
instead, as of the date of such filing), contained any untrue statement of a
material fact or omitted to state a 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. Each of the
financial statements (including the related notes) included in the Company SEC
Reports presents fairly, in all material respects, the consolidated financial
position and consolidated results of operations and cash flows of the Company
and its Subsidiaries as of the respective dates or for the respective periods
set forth therein, all in conformity with (and prepared in all material
respects in accordance with) United States generally accepted accounting
principles ("U.S. GAAP") consistently applied during the periods involved
except as otherwise noted therein, and subject, in the case of the unaudited
interim financial statements, to normal and recurring year-end adjustments
which are not expected to be material. All of such Company SEC Reports, as of
their respective dates (and as of the date of any amendment to the respective
Company SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act.
(e) INFORMATION SUPPLIED. (i) None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in
(A) the registration statement on Form S-4 to be filed with the SEC by Parent
in connection with the issuance of the Parent Common Stock in the Merger will,
at the time the Form S-4 (as defined in SECTION 5.1) is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (B) the Proxy
Statement/Prospectus (as defined in SECTION 5.1) included in the Form S-4
related to the Company Stockholders Meeting (as defined in SECTION 5.1) and
the Parent Common Stock to be issued in the Merger will, on the date it is
first mailed to stockholders of the Company or at the time of the Company
Stockholders Meeting, (x) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading or (y) be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading. The
Proxy Statement/Prospectus will comply as to form in all material respects
with the requirements of the Exchange Act.
(ii) Notwithstanding the foregoing provisions of this SECTION
3.1(e), no representation or warranty is made by the Company with respect to
statements made or incorporated by reference in the Form S-4 or the Proxy
Statement/Prospectus based on information supplied by Parent for inclusion or
incorporation by reference therein.
(f) BOARD APPROVAL. The Board of Directors of the Company, by
resolutions duly adopted at a meeting duly called and held and not
subsequently rescinded or modified in any way (the "BOARD APPROVAL"), has duly
(i) determined that this Agreement, the Merger and the other transactions
contemplated hereby are advisable and in the best interests of the Company and
its stockholders, (ii) approved the Stockholder Agreement and the transactions
contemplated thereby and this Agreement, the Merger and the other transactions
contemplated hereby and (iii) recommended that the stockholders of the Company
adopt and approve this Agreement and the Merger. The Board Approval
constitutes approval of the Stockholder Agreement and the transactions
contemplated thereby and of this Agreement and the Merger for purposes of
Section 203 of the DGCL and represents all the action necessary to ensure that
such Section 203 does not apply to Parent or any of its affiliates in
connection with the Stockholder Agreement, the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement
(assuming that Parent is not an "interested stockholder" of the Company under
Section 203 of the DGCL immediately before the execution and delivery of this
Agreement and the Stockholder Agreement and does not take any other actions
(other than actions relating to the Stockholder Agreement) to become an
"interested stockholder" thereunder). To the knowledge on the date of this
Agreement of the Company, no other state takeover statute or similar statute
or regulation applies to this Agreement, the Stockholder Agreement or the
transactions contemplated hereby or thereby except for those that would not
reasonably be expected to prevent or materially impede or delay the
consummation of the transactions contemplated hereby.
(g) VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote
(the "REQUIRED COMPANY VOTE") is the only vote or approval of the holders of
any class or series of Company capital stock necessary to adopt this Agreement
and approve the transactions contemplated hereby (assuming that Parent is not
an "interested stockholder" of the Company under Section 203 of the DGCL
immediately before the execution and delivery of this Agreement and the
Stockholder Agreement).
(h) RIGHTS AGREEMENT. The Board of Directors of the Company has
approved an amendment to the Rights Agreement to the effect that neither
Parent nor Merger Sub will become an "Acquiring Person," and that no "Stock
Acquisition Date" or "Distribution Date" (as such terms are defined in the
Rights Agreement) will occur, as a result of the approval, execution or
delivery of this Agreement or the Stockholder Agreement or the consummation of
the transactions contemplated hereby or thereby.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
the Company SEC Reports filed and publicly available prior to the date of this
Agreement (the "FILED COMPANY SEC REPORTS"), since January 31, 1998, (i) the
Company and its Subsidiaries have conducted their business in all material
respects in the ordinary course of business consistent with past practice
(except, after the date of this Agreement, to the extent permitted or
expressly contemplated by SECTION 4.1), (ii) there has not been any Material
Adverse Effect on the Company or, to the knowledge of the Company, any change,
event, circumstance or effect that would, in the reasonably foreseeable
future, have a Material Adverse Effect on the Company and (iii) there has not
occurred (A) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
capital stock of the Company or any repurchase, redemption or other
acquisition by the Company of any capital stock of the Company; (B) any
material change in financial or tax accounting methods, principles or
practices by the Company or any Subsidiary of the Company, except insofar as
may have been required by a change in GAAP or the Code; or (C) any material
elections with respect to Taxes (as defined in SECTION 3.1(1)) by the Company
or any Subsidiary thereof or any settlement or compromise by the Company or
any Subsidiary thereof of any material Tax liability or refund.
(j) LITIGATION. There are no claims, actions, suits, proceedings
or investigations (collectively, "CLAIMS") pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, or any
properties or rights of the Company or any of its Subsidiaries, before any
Governmental Entity nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator (collectively, "ORDERS")
outstanding against the Company or any of its Subsidiaries, except for such
Claims or Orders set forth in the Filed Company SEC Reports or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(k) COMPLIANCE WITH LAWS. The Company and its Subsidiaries hold
all permits, licenses, variances, exemptions, authorizations, operating
certificates, orders and approvals of all Governmental Entities (the "COMPANY
PERMITS"), that are required for them to own, lease or operate their assets
and to carry on their businesses as presently conducted, except as set forth
in the Filed Company SEC Reports or except where the failure to hold Company
Permits would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. There has occurred no default
under or violation of any such Company Permit, except as set forth in the
Filed Company SEC Reports or except for such violations or defaults that would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company. The businesses of the Company and its
Subsidiaries have not been and are not being conducted in violation of any
law, ordinance or regulation of any Governmental Entity, except for such
violations set forth in the Filed Company SEC Reports or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(l) TAXES. The Company and each of its Subsidiaries, and any
consolidated, combined, unitary or aggregate group for tax purposes of which
the Company or any of its Subsidiaries is or has been a member, has timely
filed all material Tax Returns (as defined below) required to be filed by it
in the manner provided by law and has paid all Taxes (as defined below) shown
thereon to be due. All assessments for Taxes due with respect to federal
income Tax Returns of the Company and each of its Subsidiaries that have been
examined by and settled with the United States Internal Revenue Service have
been fully paid, adequately provided for or are being contested in good faith,
except as set forth in the Filed Company SEC Reports or where the failure to
be fully paid, adequately provided for, or contested would not reasonably be
expected to have a Material Adverse Effect on the Company. For purposes of
this Agreement, "TAXES" shall mean any taxes of any kind, including but not
limited to those on or measured by or referred to as income, gross receipts,
capital, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, value
added, property or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. For purposes of this Agreement,
"TAX RETURN" shall mean any return, report or statement required to be filed
with any governmental authority with respect to Taxes, including any schedule
or attachment thereto or amendment thereof.
(m) EMPLOYEE BENEFITS. (i) Section 3.1(m)(i) of the Company
Disclosure Schedule sets forth a list of each material Benefit Plan of the
Company or its Subsidiaries sponsored or maintained by the Company or its
Subsidiaries, in which present or former employees of the Company or any of
its Subsidiaries ("COMPANY EMPLOYEES") participate (collectively, the "COMPANY
PLANS"), which list shall exclude (A) all Benefit Plans of the Company or its
Subsidiaries in which Company Employees employed outside the United States
participate and (B) any employment, termination or severance contracts or
agreements, which individually or in the aggregate, would not result in
liability that would be material to the Company. The Company has made
available to Parent true and correct copies of (i) each Company Plan, (ii) the
most recent Forms 5500 filed with respect to each Company Plan, (iii) the most
recent actuarial valuations prepared with respect to each Company Plan and
(iv) the most recent determination letter issued by the Internal Revenue
Service with respect to each Company Plan. The Company Plans are in
compliance in all respects with all applicable requirements of ERISA, the
Code, and other applicable laws and have been administered in all respects in
accordance with their terms and such laws, except where the failure to so
comply or be administered would not reasonably be expected to have a Material
Adverse Effect on the Company. Each Company Plan which is intended to be
qualified within the meaning of Section 401 of the Code has received a
favorable determination letter as to its qualification, and, to the knowledge
of the Company, nothing has occurred that would reasonably be expected to
cause the loss of such favorable determination.
(ii) No Company Plan is a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) and neither the Company nor any ERISA Affiliate
(defined as any corporation or trade or business (whether or not incorporated)
which would be treated as a member of a controlled group including the Company
under Section 4001(a)(14)) has sponsored or contributed to any "multiemployer
plan". No event or condition has occurred in connection with which the
Company or any of its ERISA Affiliates would be reasonably likely to be
subject to any material liability, encumbrance or lien with respect to any
Company Plan under ERISA, the Code or any other applicable law or under any
agreement or arrangement pursuant to or under which the Company or any of its
ERISA Affiliates are required to indemnify any person against such liability,
where such liability, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on the Company. Except as would not
reasonably be expected to have a Material Adverse Effect on the Company, (i)
there are no pending or, to the knowledge of the Company, threatened claims,
suits, audits or investigations related to any Company Plan and (ii) no
Company Plan provides post-retirement welfare benefits to any Company
Employees other than as required by law.
(iii) Except as would not be reasonably likely to result in
material liability, the consummation of the transactions contemplated by this
Agreement (alone or in connection with any subsequent event, including a
termination of employment) will not (A) accelerate the vesting or payment of
any economic benefit provided or made available to any Company Employees, (B)
increase the amount of any economic benefit provided or made available to any
Company Employees or (C) accelerate or increase the funding obligation of the
Company or its Subsidiaries with respect to any Company Plan.
(iv) Since September 30, 1998, there has not occurred any amendment
to, or adoption of, any Company Benefit Plan that increases the obligations of
the Company or its Subsidiaries or any granting by the Company or any
Subsidiaries thereof to a current or former director or officer of any
increase in compensation or bonus, except in the ordinary course of business
consistent with past practice, as was required under then-existing employment
agreements or as would not, individually or in the aggregate, be reasonably
likely to result in an increase in liability to the Company or any of its
Subsidiaries that would be material to the Company and its Subsidiaries, taken
as a whole.
(n) ENVIRONMENTAL MATTERS. (i) Except as disclosed in the Filed
Company SEC Reports or except where the failure to obtain or timely apply for
Environmental Permits (as defined below) would not reasonably be expected to
have a Material Adverse Effect on the Company, the Company and its
Subsidiaries have obtained, or have timely applied for, all environmental,
health and safety permits, licenses and governmental authorizations
(collectively, "ENVIRONMENTAL PERMITS") necessary under applicable
Environmental Laws to conduct their business and operations as currently
conducted.
(ii) Except as would not reasonably be expected to have a Material
Adverse Effect on the Company or except as disclosed in the Filed Company SEC
Reports, the Company and its Subsidiaries are in compliance with all
applicable Environmental Laws (as defined in SECTION 3.1(n)(vi)) and
Environmental Permits, and neither the Company nor any of its Subsidiaries has
received any written communication from any Person or Governmental Entity that
alleges that the Company or any of its Subsidiaries is not in such compliance.
(iii) Except as would not reasonably be expected to have a Material
Adverse Effect on the Company or except as disclosed in the Filed Company SEC
Reports, there are no Environmental Claims (as defined in SECTION 3.1(n))
pending or, to the knowledge of the Company, threatened, against the Company
or any of its Subsidiaries, in either case arising out of (A) any real
property currently or formerly owned, leased or operated by the Company or any
of its Subsidiaries or (B) any current or former operations of the Company or
any of its Subsidiaries.
(iv) Except as would not reasonably be expected to have a Material
Adverse Effect on the Company, or except as disclosed in the Filed Company SEC
Reports, neither the Company nor any of its Subsidiaries has retained, or
assumed, either contractually or by operation of law, any liabilities of which
the Company has knowledge arising under applicable Environmental Laws.
(v) Except as disclosed in the Filed Company SEC Reports and
except to the extent that the failure to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws governing the investigation,
remediation and monitoring of a facility at the time of its transfer,
including the New Jersey Industrial Site Recovery Act and the Connecticut
Transfer Act, to the extent required to consummate the transactions
contemplated by this Agreement.
(vi) (A) "ENVIRONMENTAL CLAIMS" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, investigations, proceedings or notices of noncompliance or
violation (in each case in writing) by any Person or entity (including any
Governmental Entity), alleging noncompliance, violation or potential liability
(including potential responsibility or liability for costs of enforcement,
investigation, cleanup, governmental response, removal or remediation, for
natural resources damages, property damage, personal injuries or penalties or
for contribution, indemnification, cost recovery, compensation or injunctive
relief) arising out of, or related to (x) the presence, Release (as defined in
SECTION 3.1(n)) or threatened Release of any Hazardous Materials at any
location, whether or not owned or operated by the Company or any of its
Subsidiaries or (y) circumstances forming the basis of any violation or
alleged violation of, or liability under, any Environmental Law or
Environmental Permit.
(B) "ENVIRONMENTAL LAWS" means all foreign, federal, state and local
laws, rules, regulations, orders, decrees, common law, judgments or binding
agreements issued, promulgated or entered into by or with any Governmental
Entity, relating to pollution, the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or protection of human
health as it related to the environment, including laws and regulations
relating to Releases or threatened Releases of Hazardous Materials, or
otherwise relating to the generation, manufacture, processing, distribution,
use, treatment, storage, transport, handling of or exposure to Hazardous
Materials.
(C) "HAZARDOUS MATERIALS" means (x) any petroleum or petroleum
products, fractions or wastes, radioactive materials or wastes, friable
asbestos and polychlorinated biphenyls; and (y) any other chemical, material,
substance or waste the generation, manufacture, processing, distribution,
possession, use, treatment, storage or Release of which is prohibited, limited
or regulated under any applicable Environmental Law.
(D) "RELEASE" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
(o) LIABILITIES. Except for (i) liabilities (other than those
incurred pursuant to contracts) incurred in the ordinary course of business
consistent with past practice since January 31, 1998, (ii) liabilities under
contracts incurred in the ordinary course of business consistent with past
practice, (iii) liabilities arising from this Agreement and transaction
expenses incurred in connection with this Agreement, (iv) liabilities which
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company and (v) liabilities set forth on any
balance sheet (including the notes thereto) included in the Filed Company SEC
Reports, to the knowledge as of the date hereof of the Company neither the
Company nor any of its Subsidiaries has any liabilities.
(p) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its Subsidiaries,
except Bear, Xxxxxxx & Co. Inc. (the "FINANCIAL ADVISOR"), whose fees and
expenses will be paid by the Company in accordance with the Company's
agreement with such firm previously provided to Parent.
(q) OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of the Financial Advisor, dated the date of this Agreement, to the
effect that, as of such date, the Merger Consideration is fair, from a
financial point of view, to the holders of the Company Common Stock (the
"FAIRNESS OPINION").
(r) CERTAIN AGREEMENTS. (i) Except as disclosed in the Filed
Company SEC Reports and, with respect to contracts entered into after January
31, 1998, except as would not reasonably be expected to have a Material
Adverse Effect on the Company, as of the date hereof there are no contracts to
which the Company or any of its Subsidiaries is a party or by which it is
bound which are or would be required to be filed as an exhibit to the Company
SEC Reports (any contracts so filed or required to be so filed collectively,
the "MATERIAL CONTRACTS"). Section 3.1(r)(i) of the Company Disclosure
Schedule lists all contracts to which the Company or any of its Subsidiaries
is a party or by which they are bound which contain provisions restricting or
limiting the Company's or its affiliates' ability to compete or otherwise
engage in specified lines of business, except those which would not reasonably
be expected to have a Material Adverse Effect on Parent.
(ii) To the knowledge as of the date hereof of the Company, the
aggregate principal amount of indebtedness for borrowed money of the Company
and its Subsidiaries (including any indebtedness for borrowed money under the
Trade Receivables Master Trust Pooling and Servicing Agreement of the Company)
outstanding as of the date hereof is approximately $674 million.
(iii) Neither the Company nor any of its Subsidiaries is in default
under any Material Contract, and there has not occurred any event that, with
the giving of notice or the lapse of time or both, would constitute such a
default by the Company or any of its Subsidiaries or, to the knowledge of the
Company, a default thereunder by any other party thereto, except as set forth
in the Filed Company SEC Reports or for such defaults as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(s) INTELLECTUAL PROPERTY. The Company and its Subsidiaries own,
or are licensed or otherwise have the right to use, all United States and
foreign issued patents, patent rights, patent applications, registered
trademarks, trademark applications, registered service marks, service xxxx
applications, trade names, copyrights, software and know-how (the
"INTELLECTUAL PROPERTY") currently used by the Company and its Subsidiaries in
their business, except where the failure to so own, license or otherwise have
the right to use such Intellectual Property would not reasonably be expected
to have a Material Adverse Effect on the Company. Except as would not
reasonably be expected to have a Material Adverse Effect on the Company:
(i) the use of the Intellectual Property by the Company and its
Subsidiaries does not interfere with, infringe upon, misappropriate or
otherwise come into conflict with any patent, trademark, service xxxx, trade
name, copyright, brand name, logo, symbol or other intellectual property or
proprietary information of any other Person; and
(ii) to the knowledge of the Company, no other Person is interfering
with, infringing upon, misappropriating or otherwise coming into conflict with
any Intellectual Property of the Company or any of its Subsidiaries.
(t) ANTITRUST MATTERS. In connection with all pending or threatened
antitrust and related investigations by Governmental Entities and purported
class action lawsuits involving the Company and its Subsidiaries and the
related resale pricing policies of all the branded wholesale divisions of the
Company and its Subsidiaries (collectively, the "ANTITRUST MATTERS"), and
subject in all respects to the terms of the Agreement Concerning the
Disclosure of Materials Subject to the Attorney-Client Privilege, Work Product
and Other Disclosures dated as of February 21, 1999 (the "DISCLOSURE
AGREEMENT") between Parent, the Company and the respective legal counsel to
Parent and the Company parties thereto, and the Company's rights generally to
assert attorney client, work product or similar privilege, the Company has
made available to Parent and/or its counsel certain information which is
relevant to the Antitrust Matters. To the knowledge of the Company as of the
date of this Agreement, there is no factual information which is relevant to
the Antitrust Matters which has not been made available to Parent and/or its
counsel, and there are no inaccuracies in the factual information which has so
been made available to Parent and/or its counsel, which in each case, if
considered in the context of the Antitrust Matters and the information that
has so been made available to Parent and/or its counsel, would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
on the Company.
(u) YEAR 2000 COMPLIANCE. All computer software and other
applicable technology used by the Company and/or any of its Subsidiaries is
currently (or will in sufficient time so as to avoid causing a Material
Adverse Effect on the Company be) designed to operate consistently after
December 31, 1999 to accurately process, provide and receive date data
(including calculating, comparing and sequencing) from, into and between the
Twentieth and Twenty-First centuries, including the years 1999 and 2000, and
making leap-year calculations, and is otherwise currently "Year 2000
compliant" (or will be "Year 2000 complaint" so as to avoid causing a Material
Adverse Effect on the Company), except where the failure to operate
consistently or be "Year 2000 compliant" would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or except as disclosed in the Filed Company SEC Reports.
3.2 REPRESENTATIONS AND WARRANTIES OF PARENT. Except as set forth
in the Parent Disclosure Schedule delivered by Parent to the Company prior to
the execution of this Agreement (the "PARENT DISCLOSURE SCHEDULE") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein and such other
representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the information
called for by such other representation and warranty or covenant readily
apparent), Parent represents and warrants to the Company as follows:
(a) ORGANIZATION, STANDING AND POWER. Each of Parent and each of
its Subsidiaries, including Merger Sub, is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and is duly
qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary other than in such jurisdictions where the
failure so to qualify or to be in good standing would not, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
on Parent. The copies of the articles of incorporation and by-laws of Parent
which were previously furnished to the Company are true, complete and correct
copies of such documents as in effect on the date of this Agreement. Merger
Sub is a wholly-owned subsidiary of Parent.
(b) CAPITAL STRUCTURE. (i) The authorized capital stock of Parent
consists of (A) 200,000,000 shares of Parent Common Stock of which 103,617,379
shares were outstanding as of February 26, 1999 and (B) 1,000,000 shares of
preferred stock, par value $.01 per share, of which no shares were issued or
outstanding as of February 26, 1999. As of February 26, 1999, 11,917,970
shares of Parent Common Stock were held by Parent in its treasury. Since
February 26, 1999 to the date of this Agreement, there have been no issuances
of shares of the capital stock of Parent or any other securities of Parent
other than issuances of shares pursuant to options or rights outstanding, as
of February 26, 1999, under the Benefit Plans (as defined in SECTION 8.11(a))
of Parent. All issued and outstanding shares of the capital stock of Parent
are, and any shares of Parent Common Stock which may be issued upon the
exercise of options when issued will be, duly authorized, validly issued,
fully paid and nonassessable, and no class of capital stock is entitled to
preemptive rights. There were outstanding as of February 26, 1999 no options,
warrants or other rights to acquire capital stock from Parent other than
options representing in the aggregate the right to purchase 10,841,609 shares
of Parent Common Stock under Parent's 1991 Stock Option Plan and 1996 Stock
Option Plan (collectively, the "PARENT STOCK OPTION PLANS"). No options or
warrants or other rights to acquire capital stock from Parent have been issued
or granted since February 26, 1999 to the date of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness of Parent
having the right to vote (whether currently or upon the occurrence of an
event) on any matters on which stockholders of Parent or any of its
Subsidiaries may vote ("PARENT VOTING DEBT") are issued or outstanding or
subject to issuance.
(iii) Except as otherwise set forth in this SECTION 3.2(b) and as
contemplated by Section 4.2, as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Parent or any of its
Subsidiaries is a party or by which any of them is bound obligating Parent or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of Parent or any of its Subsidiaries or obligating Parent or any of
its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding obligations of Parent or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Parent or any of its Subsidiaries.
(c) AUTHORITY; NO CONFLICTS. (i) Each of Parent and Merger Sub has
all requisite corporate power and authority to enter into this Agreement and
Parent has all requisite corporate power and authority to issue the shares of
Parent Common Stock to be issued in the Merger (the "SHARE ISSUANCE"). The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub. This Agreement has
been duly executed and delivered by Parent and Merger Sub and constitutes a
valid and binding agreement of Parent and Merger Sub, enforceable against each
of them in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally, by general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
(ii) The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated hereby will
not, conflict with, or result in a Violation pursuant to: (A) any provision of
the certificate of incorporation or by-laws of Parent or the governing
documents of any Subsidiary of Parent, or (B) except as would not reasonably
be expected to have a Material Adverse Effect on Parent or to prevent or
materially impede or delay the consummation of the transactions contemplated
hereby and, subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any Subsidiary of Parent
or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required
by or with respect to Parent or any Subsidiary of Parent in connection with
the execution and delivery of this Agreement by Parent or the consummation of
the Merger and the other transactions contemplated hereby, except for the
Required Consents and such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or obtain
would not reasonably be expected to have a Material Adverse Effect on Parent
or to prevent or materially impede or delay the consummation of the
transactions contemplated hereby.
(d) REPORTS AND FINANCIAL STATEMENTS. Parent has filed all
required reports, schedules, forms, statements and other documents required to
be filed by it with the SEC since January 1, 1997 (collectively, including all
exhibits thereto, the "PARENT SEC REPORTS"). No Subsidiary of Parent is
required to file any form, report or other document with the SEC. None of the
Parent SEC Reports filed prior to the date of this Agreement (as of their
respective dates or, if amended or superseded by a filing prior to the date of
this Agreement, then instead, as of the date of such filing), contained any
untrue statement of a material fact or omitted to state a 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. Each of the financial statements (including the related notes)
included in the Parent SEC Reports presents fairly, in all material respects,
the consolidated financial position and consolidated results of operations and
cash flows of Parent and its Subsidiaries as of the respective dates or for
the respective periods set forth therein, all in conformity with (and prepared
in all material respects in accordance with) U.S. GAAP consistently applied
during the periods involved except as otherwise noted therein, and subject, in
the case of the unaudited interim financial statements, to normal and
recurring year-end adjustments which are not expected to be material. All of
such Parent SEC Reports, as of their respective dates (and as of the date of
any amendment to the respective Parent SEC Report), complied as to form in all
material respects with the applicable requirements of the Securities Act and
the Exchange Act.
(e) INFORMATION SUPPLIED. (i) None of the information supplied or
to be supplied by Parent for inclusion or incorporation by reference in (A)
the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Proxy Statement/Prospectus
will, on the date it is first mailed to stockholders of the Company or at the
time of the Company Stockholders Meeting, (x) contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
are made, not misleading. The Form S-4 and the Proxy Statement/Prospectus
will comply as to form in all material respects with the requirements of the
Exchange Act and the Securities Act.
(ii) Notwithstanding the foregoing provisions of this SECTION
3.2(e), no representation or warranty is made by Parent with respect to
statements made or incorporated by reference in the Form S-4 or the Proxy
Statement/Prospectus based on information supplied by the Company for
inclusion or incorporation by reference therein.
(f) VOTE REQUIRED. No vote of holders of any shares of any class
or series of the capital stock of Parent is necessary to approve the Share
Issuance, this Agreement or the Merger.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
the Parent SEC Reports filed and publicly available prior to the date of this
Agreement (the "FILED PARENT SEC REPORTS"), (i) since September 30, 1998 and
prior to the date hereof, Parent has conducted its business in all material
respects in the ordinary course of business consistent with past practice and
(ii) since September 30, 1998, there has not been any Material Adverse Effect
on Parent or, to the knowledge of Parent, any change, event, circumstance or
effect that would, in the reasonably foreseeable future, have a Material
Adverse Effect on Parent.
(h) LITIGATION. There are no Claims pending or, to the knowledge
of Parent, threatened against Parent or any of its Subsidiaries, or any
properties or rights of Parent or any of its Subsidiaries, before any
Governmental Entity nor is there any Order outstanding against Parent or any
of its Subsidiaries, except for such Claims or Orders set forth in the Filed
Parent SEC Reports or as would not, individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on Parent.
(i) COMPLIANCE WITH LAWS. The businesses of Parent and its
Subsidiaries have not been and are not being conducted in violation of any
law, ordinance or regulation of any Governmental Entity, except for violations
set forth in the Filed Parent SEC Reports or as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent.
(j) TAXES. Parent and each of its Subsidiaries, and any
consolidated, combined, unitary or aggregate group for tax purposes of which
Parent or any of its Subsidiaries is or has been a member, has timely filed
all material Tax Returns required to be filed by it in the manner provided by
law and has paid all Taxes shown thereon to be due.
(k) EMPLOYEE BENEFITS. (i) "PARENT PLANS" means each material
"employee benefit plan" (within the meaning of Section 3(3) of ERISA),
severance, change in control or employment plan, program or agreement, and
vacation, incentive, bonus, stock option, stock purchase, and restricted stock
plan, program or policy sponsored or maintained by the Parent, in which
present or former employees of the Parent or any of its Subsidiaries ("PARENT
EMPLOYEES") participate. The Parent Plans are in compliance in all material
respects with all applicable requirements of ERISA, the Code, and other
applicable laws and have been administered in all respects in accordance with
their terms and such laws, in each case except where the failure to so comply
or be administered would not reasonably be expected to have a Material Adverse
Effect on Parent.
(ii) No event or condition has occurred, to the knowledge of Parent, in
connection with which Parent or any of its ERISA Affiliates would be
reasonably likely to be subject to any liability, encumbrance or lien with
respect to any Parent Plan under ERISA, the Code or any other applicable law
or under any agreement or arrangement pursuant to or under which Parent or any
of its ERISA Affiliates are required to indemnify any person against such
liability where such liability, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Parent. There are
no pending or, to the knowledge of Parent, threatened claims, suits, audits or
investigations related to any Parent Plan, except for such claims, suits,
audits or investigations which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent.
(l) LIABILITIES. Except for (i) liabilities (other than those
incurred pursuant to contracts) incurred in the ordinary course of business
consistent with past practice since December 31, 1997, (ii) liabilities under
contracts incurred in the ordinary course of business consistent with past
practice, (iii) liabilities arising from this Agreement and transaction
expenses incurred in connection with this Agreement, (iv) liabilities which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Parent and (v) liabilities set forth on any balance
sheet (including the notes thereto) included in the Filed Parent SEC Reports,
to the knowledge as of the date hereof of Parent, neither Parent nor any of
its Subsidiaries has any liabilities.
(m) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Merger Sub, except Palladin
Capital Group, Inc., whose fees and expenses will be paid by Parent in
accordance with Parent's agreement with such firm based upon arrangements made
by or on behalf of Parent and previously disclosed to the Company.
(n) NO BUSINESS ACTIVITIES. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.
(o) FINANCING. Parent (i) has, as of the date hereof, financing
commitments for sufficient funds to pay the Merger Consideration and any other
payments required to be made pursuant to Article II at the Effective Time or
(ii) shall have, at the Effective Time, sufficient funds available to pay the
Merger Consideration and any other payments required to be made pursuant to
Article II.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 COVENANTS OF THE COMPANY. During the period from the date of
this Agreement and continuing until the Effective Time, the Company agrees as
to itself and its Subsidiaries that (except as expressly contemplated or
permitted by this Agreement (other than, except as set forth in clause (a)
below, SECTION 5.3) or as set forth on the Company Disclosure Schedule or to
the extent that Parent shall otherwise consent in writing, which consent shall
not be withheld or delayed unless Parent determines in good faith that such
action would be detrimental in any material respect to Parent or the Company
following the consummation of the Merger):
(a) ORDINARY COURSE. (i) Except as contemplated by and consistent
with SECTION 5.3 the Company shall, and shall cause each of its Subsidiaries
to, carry on its business in the usual, regular and ordinary course (including
with respect to promotional sales or discounting activities , receivables
collections, payables activities and inventory stocking and management) in all
material respects, in substantially the same manner as heretofore conducted,
and shall use its reasonable best efforts to preserve intact its present lines
of business, maintain its rights and franchises and preserve its relationships
with customers, suppliers and others having business dealings with them to the
end that their ongoing businesses shall not be impaired in any material
respect at the Effective Time; PROVIDED that in no event shall the Company or
any of its Subsidiaries take any action outside the ordinary course of
business consistent with past practice pursuant to SECTION 5.3 which would,
individually or in the aggregate, reasonably be expected to materially
diminish the value of the transaction contemplated hereby to Parent and its
Subsidiaries.
(ii) The Company shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or (B) incur
or commit to any capital expenditures other than capital expenditures incurred
or committed to in the ordinary course of business consistent with past
practice and which, together with all such expenditures incurred or committed
to during any fiscal year, are not in excess of the respective amounts by
category or in the aggregate set forth in the Company's 1999 capital
expenditure budget, a true and complete copy of which has been previously
provided to Parent.
(b) DIVIDENDS; CHANGES IN SHARE CAPITAL. The Company shall not,
and shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare, set aside or pay any dividends on or make any other distributions in
respect of any of its capital stock, except dividends by wholly owned
Subsidiaries of the Company to its parent or joint venture entities in which
the Company holds an equity interest, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for any such transaction by a wholly owned Subsidiary of
the Company which remains a wholly owned Subsidiary after consummation of such
transaction, (iii) purchase, repurchase, redeem or otherwise acquire any
shares of its capital stock or any securities convertible into or exercisable
for any shares of its capital stock except for the purchase from time to time
by the Company of Company Common Stock (and the associated Rights) in the
ordinary course of business consistent with past practice (including with
respect to amount and timing) in connection with the Company Plans or (iv)
take any other action having the effects set forth in clause (i), (ii) or
(iii) above.
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall not
permit any of its Subsidiaries to, issue, deliver, sell , pledge, dispose of,
encumber or grant any Lien on, or authorize or propose the issuance, delivery,
sale, pledge, disposition of, encumbrance or grant of any Lien on, any shares
of the capital stock of any class of the Company or any of its Subsidiaries,
any Company Voting Debt or other voting securities or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such securities or Company Voting Debt or voting securities or
any other ownership interest (or interest the value of which is derived by
reference to any of the foregoing), or enter into any agreement with respect
to any of the foregoing, other than (i) the issuance of Company Common Stock
(and the associated Rights) upon the exercise of stock options outstanding on
the date hereof in accordance with their present terms, (ii) issuances by a
wholly owned Subsidiary of the Company of capital stock to such Subsidiary's
parent, (iii) issuances in accordance with the Rights Agreement, or (iv)
issuances of Company Common Stock (and the associated Rights) upon the
conversion of the Convertible Notes.
(d) GOVERNING DOCUMENTS. Except to the extent required to comply
with their respective obligations hereunder, required by law or required by
the rules and regulations of the NYSE, the Company and its Subsidiaries shall
not amend, in the case of Subsidiaries, in any material respect, or propose to
amend their respective certificates of incorporation, by-laws or other
governing documents.
(e) NO ACQUISITIONS. The Company shall not, and shall not permit
any of its Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets (other
than the acquisition of assets which, taken together, do not constitute a
business and which are of the type currently used in the operations of the
business of the Company and its Subsidiaries in the ordinary course of
business consistent with past practice); PROVIDED, HOWEVER, that the foregoing
shall not prohibit the creation of new Subsidiaries of the Company organized
to conduct or continue activities otherwise permitted by this Agreement.
Notwithstanding anything to the contrary in SECTION 4.1(a), any acquisition
transaction not prohibited by this paragraph (e) shall not be deemed to
violate the provisions of SECTION 4.1(a).
(f) NO DISPOSITIONS. Other than (i) dispositions required to be
made pursuant to an agreement or contract to which the Company or any
Subsidiary is a party or by which it is bound as of the date of this Agreement
and (ii) dispositions of inventory and excess or obsolete assets in the
ordinary course of the business consistent with past practice, the Company
shall not, and shall not permit any Subsidiary of the Company to, sell, lease,
encumber, license or otherwise dispose of, or agree to sell, lease, encumber,
license or otherwise dispose of, any of its assets. Notwithstanding anything
to the contrary in SECTION 4.1(a), any disposition transaction not prohibited
by this paragraph (f) shall not be deemed to violate the provisions of SECTION
4.1(a).
(g) INVESTMENTS; INDEBTEDNESS. The Company shall not, and shall not
permit any of its Subsidiaries to, (i) make any loans, advances or capital
contributions to, or investments in (other than acquisitions permitted by
SECTION 4.1(e)(i)), any other Person, other than (x) by the Company or a
Subsidiary of the Company to or in the Company or any direct or indirect
wholly owned Subsidiary of the Company or (y) pursuant to and in accordance
with the terms of any contract or other legal obligation of the Company or any
of its Subsidiaries existing at the date of this Agreement or (z) in the
ordinary course of business consistent with past practice in an aggregate
amount not in excess of $5 million or (ii) create, incur, assume or suffer to
exist any indebtedness, issuances of debt securities, guarantees, loans,
advances or other non-equity securities not in existence as of the date of
this Agreement except (x) pursuant to the credit facilities, indentures and
other arrangements in existence on the date of this Agreement, (y) for short-
term borrowings (1) in the ordinary course of business consistent with past
practice or (2) the proceeds of which are used to refund existing or maturing
indebtedness or fund any acquisition transaction permitted by Section 4.1(e)
or (z) intercompany indebtedness between the Company and any of its wholly
owned Subsidiaries or between such wholly owned Subsidiaries.
(h) ACCOUNTING METHODS; INCOME TAX ELECTIONS. Except as disclosed
in the Filed Company SEC Reports, or as required by a Governmental Entity, the
Company shall not change its methods of accounting except as required by
changes in U.S. GAAP as concurred in by the Company's independent accountants.
The Company shall not (i) change its fiscal year or (ii) make any material Tax
election, other than in the ordinary course of business consistent with past
practice.
(i) COMPANY RIGHTS AGREEMENT. Except as provided in SECTION 5.8,
the Company shall not (i) amend, modify or waive any provision of the Rights
Agreement or (ii) take any action to redeem the Rights or render the Rights
inapplicable to any transaction.
(j) COMPENSATION. (i) The Company shall not, nor shall it permit
any of its Subsidiaries to, materially increase the amount of compensation or
benefits of any director, officer or employee except in the ordinary course of
business consistent with past practice or as required by an agreement existing
on the date hereof, provided that with respect to officers, such increases
shall not exceed 5% of the current compensation of any such officer and such
increases shall not be made without consultation with Parent, (ii) materially
increase or commit or agree to materially increase any employee benefits,
(iii) issue any additional Company Options, (iv) adopt or make any commitment
to adopt any additional employee benefit plan or (v) make or agree to make any
contribution, other than regularly scheduled contributions, to any Company
Plan, except, in each case, as required by law.
(k) CLAIMS. The Company shall not, nor shall it permit any of its
Subsidiaries to, (i) pay, discharge or satisfy any material claims (including
claims of stockholders), liabilities or obligations (whether absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of liabilities or obligations in the
ordinary course of business consistent with past practice or as required by
their terms as in effect on the date hereof, (ii) waive, release, grant or
transfer any rights of material value outside the ordinary course of business
consistent with past practice or (iii) settle or compromise any material
litigation (whether or not commenced prior to the date of this Agreement);
PROVIDED, HOWEVER, that the Company and its Subsidiaries may enter into
settlements or compromises of material litigation not involving any obligation
of the Company other than the payment of money if the relevant litigation has
been the subject of a reserve and the amount paid or to be paid in settlement
or compromise does not exceed such reserve.
(l) OTHER ACTIONS. The Company shall not, nor shall it permit any
of its Subsidiaries to, take any action with knowledge that such action would
reasonably be expected to result in any of the conditions contained in Section
6.2(a) not being satisfied.
(m) NO GENERAL AUTHORIZATION. The Company shall not, nor shall it
permit any of its Subsidiaries to, authorize any of, or commit, resolve or
agree to take any of, the actions prohibited by paragraphs (a) through (l) of
this SECTION 4.1.
4.2 COVENANTS OF PARENT. During the period from the date of this
Agreement and continuing until the Effective Time, Parent agrees as to itself
and its Subsidiaries that (except as expressly contemplated or permitted by
this Agreement or as otherwise indicated on the Parent Disclosure Schedule or
to the extent that the Company shall otherwise consent in writing, which
consent shall not be withheld or delayed unless the Company determines in good
faith that such action would be detrimental in any material respect to the
Company or its stockholders following the consummation of the Merger):
(a) CONDUCT OF BUSINESS. Parent shall, to the extent consistent
with Parent's reasonable commercial judgment and to the extent material, use
its reasonable best efforts to preserve intact its and its Subsidiaries'
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, advertisers, distributors and others having
business dealings with them to the end that their goodwill and ongoing
businesses shall be materially unimpaired at the Effective Time of the Merger.
(b) DIVIDENDS; CHANGES IN SHARE CAPITAL. Parent shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any
of its capital stock, except dividends by wholly owned Subsidiaries of Parent,
(ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, except for any
such transaction by a wholly owned Subsidiary of Parent which remains a wholly
owned Subsidiary after consummation of such transaction, or (iii) acquire any
shares of its capital stock or any securities convertible into or exercisable
for any shares of its capital stock through a self-tender offer.
(c) LIQUIDATION. Parent shall not, without the prior written
consent of the Company, adopt a plan of complete or partial liquidation with
respect to Parent or resolutions providing for or authorizing such a
liquidation or a dissolution.
(d) GOVERNING DOCUMENTS. Except to the extent required to comply
with their respective obligations hereunder, required by law or required by
the rules and regulations of the NYSE, Parent and its material Subsidiaries
shall not amend, in the case of Subsidiaries, in any material respect, or
propose to amend their respective certificates of incorporation, by-laws or
other governing documents in such a manner as would cause holders of Parent
Common Stock that receive Parent Common Stock pursuant to the Merger to be
treated differently than other holders of Parent Common Stock.
(e) NO ACQUISITIONS. Parent shall not, and shall not permit any of
its Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets that
would, individually or in the aggregate, reasonably be expected to (i) prevent
or materially delay the consummation of the transactions contemplated hereby,
or (ii) fundamentally change the character of the business of Parent and its
Subsidiaries, taken as a whole.
(f) OTHER ACTIONS. Parent shall not, nor shall it permit any of
its Subsidiaries to, take any action with knowledge that such action would
reasonably be expected to result in any of the conditions contained in SECTION
6.3(a) not being satisfied.
(g) NO GENERAL AUTHORIZATION. Parent shall not, nor shall it
permit any of its Subsidiaries to, authorize any of, or commit, resolve or
agree to take any of, the actions prohibited by paragraphs (a) through (f) of
this SECTION 4.2.
Notwithstanding anything set forth in this Agreement to the contrary, during
the 15 consecutive NYSE trading days immediately preceding the second NYSE
trading day prior to the date on which the Effective Time occurs, Parent shall
not (i) acquire any Parent Common Stock in the open market, (ii) sell (or
announce any intention to sell) any shares of Parent Common Stock, (iii) take
any other action prohibited under Regulation M promulgated under the
Securities Act, or (iv) except as required by applicable law or by obligations
pursuant to any listing agreement with or rules of any securities exchange,
make any announcement outside the ordinary course of business which would
reasonably be expected to have the effect of resulting in a change in the
sales prices of the Parent Common Stock.
4.3 ADVICE OF CHANGES; GOVERNMENTAL FILINGS. Each party shall (a)
confer on a regular and frequent basis with the other and (b) report (to the
extent (i) not prohibited by law or regulation or (ii) any privilege would not
be waived or otherwise lost as a result of such action) on operational
matters. The Company and Parent shall file all reports required to be filed
by each of them with the SEC (and all other Governmental Entities) between the
date of this Agreement and the Effective Time and shall (to the extent (i) not
prohibited by law or regulation or (ii) any privilege would not be waived or
otherwise lost as a result of such action) deliver to the other party copies
of all such reports, announcements and publications promptly after the same
are filed. Subject to applicable laws relating to the exchange of
information, each of the Company and Parent shall have the right to review in
advance, and will consult with the other with respect to, all the information
relating to the other party and each of their respective Subsidiaries, which
appears in any filings, announcements or publications made with, or written
materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable.
4.4 SPECIFIED MATTERS. The Company shall, and shall cause its
Subsidiaries to, afford to Parent and its Representatives reasonable full
access to any information (regardless of the form thereof and regardless of
whether such information is held by the Company or any of its Subsidiaries or
any of their Representatives) which materially relates to the Specified
Matters (as defined below) (and, upon request of Parent, all information
reasonably available which relates to the Specified Matters), including access
to any officers or employees who would reasonably be expected to have access
to or knowledge of any such information, and will reasonably fully consult
Parent and keep Parent reasonably fully informed (in each case on a reasonably
prompt basis) as to all material events and developments which, to the
knowledge of the Company, materially relate to Specified Matters, and the
Company shall, and shall cause its Subsidiaries and counsel to, provide Parent
and its counsel with as full an opportunity as practicable to share its views
on material actions with respect to the Specified Matters to be taken by the
Company or its Subsidiaries or their counsel, to the fullest extent
practicable prior to the time such actions are taken, PROVIDED, HOWEVER, that
the foregoing obligations and all such information shall be subject in all
respects to the terms of the Disclosure Agreement and the Company's right
generally to assert attorney client, work product or similar privilege, it
being understood that the Company will use its reasonable best efforts to
achieve a result in which such obligations may be followed and such
information provided without causing any such privilege, whether under the
Disclosure Agreement or otherwise, to be waived, and in any event, the Company
shall provide to Parent, and update on a reasonably prompt basis, a "privilege
log" listing all information as to which access is not permitted by reason of
the assertion by the Company of any of the foregoing privileges. As used in
this Agreement, the term "SPECIFIED MATTERS" means the Antitrust Matters, and
any future investigations, claims, actions, proceedings, or lawsuits relating
to or based upon the same or similar facts or circumstances as are alleged in,
or form the basis for, the Antitrust Matters.
4.5 NOTIFICATION OF CERTAIN MATTERS. Parent shall give reasonably
prompt notice to the Company, and the Company shall give reasonably prompt
notice to Parent, if Parent, on the one hand, or the Company, on the other
hand, has knowledge of any of its respective material representations or
warranties becoming untrue or incorrect or any of its respective material
covenants having been breached where such untruth or incorrectness or such
breach (without regard to any cure thereof that cannot be made prior to the
time that such party is required to give notice hereunder) would result in the
condition set forth in SECTION 6.3(a) or (b) (in the case of notice by Parent
to the Company by Parent) or SECTION 6.2(a) or (b) (in the case of notice by
the Company to Parent) failing to be satisfied.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PREPARATION OF FORM S-4 AND PROXY STATEMENT/PROSPECTUS; COMPANY
STOCKHOLDERS MEETING. (a) As promptly as practicable following the date
hereof, Parent and Company shall prepare and file with the SEC preliminary
proxy materials which shall constitute the Proxy Statement/ Prospectus (such
proxy statement/prospectus, and any amendments or supplements thereto, the
"PROXY STATEMENT/PROSPECTUS") and Parent shall prepare and file with the SEC a
registration statement on Form S-4 with respect to the issuance of Parent
Common Stock in the Merger (the "FORM S-4"). The Proxy Statement/ Prospectus
will be included in the Form S-4 as Parent's prospectus. The Form S-4 and the
Proxy Statement/Prospectus shall comply as to form in all material respects
with the applicable provisions of the Securities Act and the Exchange Act.
Each of Parent and the Company shall use its reasonable best efforts to have
the Form S-4 declared effective under the Securities Act as promptly as
practicable after filing with the SEC and to keep the Form S-4 effective as
long as is necessary to consummate the Merger. Parent and the Company shall,
as promptly as practicable after receipt thereof, provide copies of any
written comments received from the SEC with respect to the Proxy Statement/
Prospectus to the other party and advise the other party of any oral comments
with respect to the Proxy Statement/Prospectus received from the SEC. The
Company shall use its reasonable best efforts to cause the Proxy
Statement/Prospectus to be mailed to the Company's stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
Parent shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a general consent
to service of process) required to be taken under any applicable state
securities laws in connection with the Share Issuance and the Company shall
furnish all information concerning the Company and the holders of Company
Common Stock as may be reasonably requested in connection with any such
action. Each of the Company and Parent will inform the other party, promptly
after it receives notice thereof, of any request by the SEC for the amendment
of the Form S-4 or the Proxy Statement/Prospectus, as the case may be, or
requests by the SEC for additional information. If at any time prior to the
Effective Time any information relating to the Company or Parent, or any of
their respective affiliates, officers or directors, should be discovered by
the Company or Parent which should be set forth in an amendment or supplement
to any of the Form S-4 or the Proxy Statement/Prospectus, so that any of such
documents would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto and
an appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law, disseminated
to the stockholders of the Company. Parent agrees that none of the
information supplied or to be supplied by Parent for inclusion or
incorporation by reference in the Proxy Statement/Prospectus and each
amendment or supplement thereto, at the time of mailing thereof and at the
time of the Company Stockholders Meeting, will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading or be false or misleading with
respect to any material fact, or omit to state any material fact required to
be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not 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 Company agrees that none of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the Proxy Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the Company
Stockholders Meeting, will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading or be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of circumstances under which they are made, not 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. For purposes of the foregoing, it is understood and
agreed that information concerning or related to Parent will be deemed to have
been supplied by Parent and information concerning or related to the Company
and the Company Stockholders Meeting shall be deemed to have been supplied by
the Company. Each of the Company and Parent will provide Parent or the
Company, respectively, with a reasonable opportunity to review and comment on
any amendment or supplement to the Proxy Statement/Prospectus and the Form S-
4, respectively, prior to filing such with the SEC, and will provide the other
party with a reasonable number of copies of all such filings made with the
SEC. No amendment or supplement to the information supplied by Parent or the
Company for inclusion in the Proxy Statement/Prospectus shall be made without
the approval of Parent or the Company, which approval shall not be
unreasonably withheld or delayed.
(b) The Company shall, as promptly as practicable following the
execution of this Agreement, duly call, give notice of, convene and hold a
meeting of its stockholders (the "COMPANY STOCKHOLDERS MEETING") for the
purpose of obtaining the Required Company Vote with respect to the adoption of
this Agreement (PROVIDED that it is understood that it is the intention of the
Company that the Company Stockholder Meeting will, to the extent reasonably
practicable, be scheduled such that it shall occur reasonably proximate to the
Effective Time), and shall take all lawful action to solicit the adoption of
this Agreement by the Required Company Vote, and subject to SECTION 5.4 and
without limiting its rights under SECTION 7.1(f), the Board of Directors of
the Company shall recommend adoption of this Agreement by the stockholders of
the Company. Without limiting the generality of the foregoing and without
limiting its rights pursuant to SECTIONS 5.4 and 7.1(f), the Company agrees
that its obligations pursuant to the first sentence of this SECTION
5.1(b)shall not be affected by the commencement, public proposal, public
disclosure or communication to the Company of any Acquisition Proposal (as
defined in SECTION 5.4(b)).
5.2 ACCESS TO INFORMATION. Upon reasonable notice, each party
hereto shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives
(collectively, the "REPRESENTATIVES") of the other party reasonable access
during normal business hours, during the period prior to the Effective Time,
to all its properties, books, contracts, officers, employees, commitments and
records and, during such period, each party hereto shall (and shall cause its
Subsidiaries to) furnish promptly to the other party (a) a copy of each
report, schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements of
Federal or state securities laws, as applicable, and (b) all other information
concerning its business, properties and personnel as such other party may
reasonably request; PROVIDED, HOWEVER, that each party may restrict the
foregoing access or disclosure to the extent that (i) such access or
disclosure would contravene any law, treaty, rule or regulation of any
Governmental Entity applicable to the Company or (ii) providing such access
would result in the Company waiving or otherwise losing any privilege with
respect to any such information. The parties hereto will hold, and will use
their best efforts to cause their respective Representatives to hold, any such
information which is non-public in confidence to the extent required by, and
in accordance with, the provisions of the letter dated November 12, 1998
between the Company and Parent (the "CONFIDENTIALITY AGREEMENT"). Any
investigation by Parent or the Company shall not affect the representations
and warranties of the Company or Parent, as the case may be.
5.3 REASONABLE BEST EFFORTS. (a) Subject to the terms and
conditions of this Agreement, each party hereto will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the Merger and the other transactions contemplated
by this Agreement as soon as practicable after the date hereof. In
furtherance and not in limitation of the foregoing, each party hereto agrees
to make an appropriate filing of a Notification and Report Form pursuant to
the HSR Act with respect to the transactions contemplated hereby as promptly
as practicable and to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to the HSR
Act and to otherwise use its reasonable best efforts to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable.
(b) Each of Parent and the Company shall, in connection with the
efforts referenced in this SECTION 5.3 to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the
HSR Act or any other Regulatory Law (as defined below), use its reasonable
best efforts to (i) cooperate in all respects with each other in connection
with any filing or submission and in connection with any investigation or
other inquiry, including any proceeding initiated by a private party; (ii)
promptly inform the other party of any communication received by such party
from, or given by such party to, the Antitrust Division of the Department of
Justice (the "DOJ"), the Federal Trade Commission (the "FTC") or any other
Governmental Entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any
of the transactions contemplated hereby, and (iii) permit the other party to
review any communication given by it to, and consult with each other in
advance of any meeting or conference with, the DOJ or any such other
Governmental Entity or, in connection with any proceeding by a private party,
with any other Person, and to the extent permitted by the DOJ or such other
applicable Governmental Entity or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences. For
purposes of this Agreement, "REGULATORY LAW" means the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or acquisition.
(c) In furtherance and not in limitation of the covenants of the
parties contained in this SECTION 5.3, if any administrative or judicial
action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law, each of
Parent and the Company shall reasonably cooperate in all respects with each
other and use its respective reasonable best efforts to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or overturned
any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement,
nothing in this SECTION 5.3 shall limit a party's right to terminate this
Agreement pursuant to SECTION 7.1(b) or 7.1(c) so long as such party has up to
then complied in all material respects with its obligations under this SECTION
5.3.
(d) If any objections are asserted with respect to the transactions
contemplated hereby under any Regulatory Law or if any suit is instituted by
any Governmental Entity (including any foreign governmental entity) or any
private party challenging any of the transactions contemplated hereby as
violative of any Regulatory Law, each of Parent and the Company shall use its
reasonable best efforts to resolve (through litigation, settlement or
otherwise as Parent shall reasonably determine) any such objections or
challenge as such Governmental Entity or private party may have to such
transactions under such Regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement.
(e) Each of Parent, Merger Sub and the Company shall use its
reasonable best efforts to (i) cause the Merger to qualify, and will not (both
before and after consummation of the Merger) take any actions which to its
knowledge would reasonably be expected to prevent, the Merger from qualifying,
as a reorganization under the provisions of Section 368 of the Code and (ii)
obtain the opinions of counsel referred to in SECTIONS 6.2(c) and 6.3(c).
(f) Each party hereto will consult with, and use its reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable (including using its
reasonable best efforts to provide all appropriate and necessary assistance to
the other party) with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
necessary or advisable in order to consummate the transactions contemplated by
this Agreement and each party will keep the other party apprised of the status
of matters relating to completion of the transactions contemplated hereby.
(g) Nothing in this SECTION 5.3 shall require any of Parent and its
Subsidiaries or the Company and its Subsidiaries to sell, hold separate or
otherwise dispose of or conduct their business in a specified manner, or
permit the sale, holding separate or other disposition of, any assets of
Parent or its Subsidiaries or the Company and its Subsidiaries or the conduct
of their business in a specified manner, or agree to payments or modifications
to contractual arrangements, whether as a condition to obtaining any approval
from a Governmental Entity or any permits, consents, approvals or
authorization of any other Person or for any other reason, if such sale,
holding separate or other disposition or the conduct of their business in a
specified manner or agreement or modification would reasonably be expected to
materially diminish the value of the transactions contemplated hereby to
Parent and its Subsidiaries.
5.4 ACQUISITION PROPOSALS. (a) The Company agrees that neither it
nor any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, initiate, solicit or knowingly
encourage any inquiries or the making of any proposal or offer with respect to
a merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase or sale of all or any significant portion of the assets (other
than dispositions of assets in connection with any transaction permitted under
SECTION 4.1(f)) or 20% or more of the equity securities of, it or any of it
Subsidiaries (any such proposal or offer (other than a proposal or offer made
by Parent or an affiliate thereof) being hereinafter referred to as an
"ACQUISITION PROPOSAL"). The Company further agrees that neither it nor any
of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, (i) have any discussion with or
provide any confidential information or data to any Person relating to an
Acquisition Proposal or (ii) engage in any negotiations concerning an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal or (iii) accept an Acquisition Proposal, or
execute or enter into any letter of intent, agreement in principle, merger
agreement, acquisition agreement, option agreement or other material agreement
(other than a confidentiality agreement referred to below) relating to any
Acquisition Proposal or propose, agree or resolve to do any of the foregoing.
Notwithstanding the foregoing, the Company or its Board of Directors shall be
permitted to (A) to the extent applicable, comply with Rule 14d-9 and Rule
14e-2(a) promulgated under the Exchange Act with regard to an Acquisition
Proposal (PROVIDED that the Board of Directors of the Company shall not
withdraw or modify in any adverse manner its approval or recommendation of
this Agreement or the Merger except as set forth below), (B) in response to an
unsolicited bona fide written Acquisition Proposal by any Person, recommend
such an unsolicited bona fide written Acquisition Proposal to the stockholders
of the Company, or withdraw or modify in any adverse manner its approval or
recommendation of this Agreement or (C) engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by such Person, if and only
to the extent that, in any such case as is referred to in clause (B) or (C),
(i) the Company Stockholders Meeting shall not have occurred, (ii) the Board
of Directors of the Company concludes in good faith that such Acquisition
Proposal (x) in the case of clause (B) above constitutes a Superior Proposal
or (y) in the case of clause (C) above would reasonably be expected to result
in a Superior Proposal, (iii) prior to providing any information or data to
any Person in connection with an Acquisition Proposal by any such Person, the
Company Board of Directors receives from such Person an executed
confidentiality agreement on terms substantially similar to those contained in
the Confidentiality Agreement (except for such changes as are necessary in
order to permit the Company to comply with its obligations under this
Agreement) and (iv) prior to providing any information or data to any Person
or entering into discussions or negotiations with any Person, the Board of
Directors of the Company notifies Parent promptly of such inquiries, proposals
or offers received by, any such information requested from, or any such
discussions or negotiations sought to be initiated or continued with, the
Company or any of its representatives indicating, in connection with such
notice, the name of such Person and the material terms and conditions of such
inquiries, proposals or offers. The Company agrees that it will keep Parent
informed, on a reasonably current basis, of the status and terms of any such
proposals or offers or any other Acquisition Proposal or inquiry or
communication with respect to or which would reasonably be expected to lead to
an Acquisition Proposal (including any material change to the details of any
such terms) and the status of any such material discussions or negotiations.
The Company agrees that it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any Acquisition Proposal. The Company
agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence of this SECTION 5.4
of the obligations undertaken in this SECTION 5.4. Nothing in this SECTION
5.4 shall (x) permit the Company to terminate this Agreement (except as
specifically provided in ARTICLE VII hereof) or (y) affect any other
obligation of the Company under this Agreement.
(b) The term "SUPERIOR PROPOSAL" means any BONA FIDE written offer
not solicited by or on behalf of the Company or any Subsidiary thereof made by
a third party to consummate an Acquisition Proposal which would result in such
third party (including its affiliates and/or stockholders) owning, directly or
indirectly, shares of Company Common Stock representing more than 50% of the
voting interests and the equity interests in the Company then outstanding or
more than 50% of the assets of the Company and its Subsidiaries, taken
together (including through a merger of such third party (including its
affiliates) and the Company), which the Board of Directors of the Company
determines in good faith is more favorable to the Company's stockholders (in
their capacities as stockholders), from a financial point of view than the
transactions contemplated by this Agreement (taking into account any changes
to the terms of this Agreement proposed by Parent in response to such offer or
otherwise) and is reasonably capable of being completed.
5.5 EMPLOYEE BENEFITS MATTERS. (a) As of the Closing Date, the
Surviving Corporation shall assume and perform in accordance with its terms,
including any reserved right to amend or terminate, each Company Plan
(including any indemnification agreements existing on the date hereof);
PROVIDED, HOWEVER, that for a period commencing on the Closing Date and ending
eight months after the Closing Date, Parent shall, or shall cause the
Surviving Corporation to, maintain the Company Plans as in effect immediately
prior to the Effective Time (other than such changes as are required by
applicable law) or provide benefits that are no less favorable, in the
aggregate, than the benefits provided to the Company Employees by the Company
prior to the Effective Time. For a period of at least 24 months thereafter,
Parent shall, or shall cause the Surviving Corporation to, provide the Company
Employees with benefits that are substantially similar or no less favorable in
the aggregate than the benefits provided to similarly situated employees of
Parent.
(b) Parent will, or will cause the Surviving Corporation to: (A)
waive all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Company Employees under any welfare plan that such employees may be
eligible to participate in after the Effective Time; (B) provide each Company
Employee with credit for any co-payments and deductibles paid prior to the
Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time; and (C) provide each Company Employee
with credit for all purposes for all service with the Company and its
affiliates under each employee benefit plan, program, or arrangement of the
Parent or its affiliates in which such employees are eligible to participate
to the extent such service was credited for similar purposes under similar
plans of the Company or its Subsidiaries; PROVIDED, HOWEVER, that in no event
shall the Company Employees be entitled to any credit to the extent that it
would result in a duplication of benefits with respect to the same period of
service.
(c) With respect to any officer or employee who is covered by a
severance policy or plan separate from the standard severance policy for the
Company Employees and set forth in SECTION 5.5 of the Company Disclosure
Schedule, Parent shall maintain or cause to be maintained such separate policy
or plan as in effect as of the date hereof, and as to all other officers and
employees, Parent shall maintain or cause to be maintained the Company's
standard severance plans or policies (as set forth in SECTION 3.1(m) of the
Company Disclosure Schedules), as in effect as of the date hereof and
previously disclosed in writing to Parent, in each case for a period of at
least 12 months from the Effective Time, whether or not such plans or policies
would by their terms otherwise expire prior to the end of such 12 month
period. Parent shall honor or cause to be honored all employment, severance,
and change in control agreements with the Company's directors, officers and
employees and, with respect to any such agreements which by their terms would
expire prior to the first anniversary of the Effective Time, shall, or shall
cause, such agreements to be continued for at least 12 months after the
Effective Time.
(d) With respect to the split-dollar life insurance policies (set
forth in Section 3.1(m)(i) of the Company Disclosure Schedule) with respect to
those persons who have elected coverage thereunder as of the date hereof, the
Surviving Corporation shall continue to pay, or cause to continue to be paid,
the "employer paid" portion of premiums due with respect to such policies, and
shall continue to pay such premiums until the earlier of the second year
following the Effective Time or the date on which the cash surrender value of
such policies exceeds the paid-in premiums. In addition, the Surviving
Corporation shall cause all Company Employees on whose lives such policies are
written to be indemnified from any claims for premium payments that may arise
in connection with any termination of employment by the Surviving Corporation
without cause, up to the amounts otherwise payable pursuant to the preceding
sentence.
(e) With respect to the Company's Supplemental Executive Retirement
Plan (the "SERP") (set forth in Section 3.1(m)(i) of the Company Disclosure
Schedule), after the Effective Time, the Surviving Corporation shall permit
the participants therein to elect to receive the present value of their
payments otherwise provided under to the terms of the SERP. Upon the
Surviving Corporation's receipt of notice by a participant of his or her
election to receive his or her SERP payment, the Surviving Corporation shall,
as soon as practicable thereafter, make payment thereof.
5.6 FEES AND EXPENSES. Whether or not the Merger is consummated,
all Expenses (as defined below) shall be paid by the party incurring such
Expenses, except that (a) if the Merger is consummated, the Surviving
Corporation shall pay, or cause to be paid, any and all property or transfer
taxes imposed on the Company or its Subsidiaries and any real property
transfer tax imposed on any holder of shares of capital stock of the Company
resulting from the Merger, (b) Expenses incurred in connection with the
filing, printing and mailing of the Form S-4 and the Proxy Statement/
Prospectus (including the SEC filing fees) and the fees required to be paid in
connection with the HSR Act, which shall be shared equally by Parent and the
Company and (c) as provided in SECTION 7.2. As used in this Agreement,
"EXPENSES" includes all out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, commercial bankers,
experts and consultants to a party hereto and its affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution, financing and performance of this
Agreement and the transactions contemplated hereby, including the preparation,
printing, filing and mailing of the Form S-4 and Proxy Statement/Prospectus
and the solicitation of stockholder approvals and all other matters related to
the transactions contemplated hereby.
5.7 DIRECTORS' AND OFFICERS' INSURANCE. Parent shall cause the
Surviving Corporation to and the Surviving Corporation shall (i) include and
maintain in effect in its certificate of incorporation and by-laws, the same
provisions regarding elimination of liability of directors and indemnification
of and advancement of expenses to officers, directors, employees and other
persons contained in the certificate of incorporation and by-laws of the
Company and (ii) maintain for a period of at least six years, the current
policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by the Company (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are, in the aggregate, no less
advantageous in any material respect to the insured) with respect to claims
arising from facts or events that occurred on or before the Effective Time;
including in respect of the transactions contemplated by this Agreement;
PROVIDED, HOWEVER, that in no event shall the Surviving Corporation be
required to expend in any one year an amount in excess of 225% of the annual
premiums currently paid by the Company for such insurance (such 225% amount,
the "MAXIMUM PREMIUM"); PROVIDED, FURTHER, that if the annual premiums of such
insurance coverage exceed such amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage available for a cost
not exceeding the Maximum Premium. The provisions of the immediately
preceding sentence shall be deemed to have been satisfied if prepaid policies
have been obtained by the Company prior to the Closing for purposes of this
SECTION 5.7, which policies provide such directors and officers with coverage
for an aggregate period of six years with respect to claims arising from facts
or events that occurred on or before the Effective Time, including, without
limitation, in respect of the transactions contemplated by this Agreement;
PROVIDED that the maximum amount of the premium to be paid for such policies
shall not exceed $2,225,000. If such prepaid policies have been obtained by
the Company prior to the Closing, Parent shall and shall cause the Surviving
Corporation to maintain such policies in full force and effect, and continue
to honor the Company's obligations thereunder. If the Surviving Corporation
or any of its successors or assigns (i) consolidates with or merges with or
into any other Person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in
each such case, to the extent necessary, proper provision shall be made so
that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this SECTION 5.7. Parent agrees to cause the
Surviving Corporation to comply with its obligations under this SECTION 5.7,
including by providing any funds to the Surviving Corporation necessary to
enable the Surviving Corporation to fulfill its obligations hereunder. The
Company represents and warrants that the Maximum Premium is equal to
approximately $731,250.
5.8 RIGHTS AGREEMENT. The Board of Directors of the Company shall
take all further action (in addition to that referred to in SECTION 3.1(h))
necessary or desirable (including redeeming the Rights immediately prior to
the Effective Time or amending the Rights Agreement if reasonably requested by
Parent) in order to render the Rights inapplicable to the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement. If
any "Distribution Date" or "Stock Acquisition Date" occurs under the Rights
Agreement at any time during the period from the date of this Agreement to the
Effective Time, the Company and Parent shall make such adjustment to the
Merger Consideration as the Company and Parent shall mutually agree so as to
preserve the economic benefits that the Company and Parent each reasonably
expected on the date of this Agreement to receive as a result of the
consummation of the Merger and the other transactions contemplated hereby.
5.9 PUBLIC ANNOUNCEMENTS. The Company and Parent shall use all
reasonable efforts to develop a joint communications plan and each party shall
use all reasonable best efforts to ensure that all press releases and other
public statements with respect to the transactions contemplated hereby shall
be consistent with such joint communications plan. Unless otherwise required
by applicable law or by obligations pursuant to any listing agreement with or
rules of any securities exchange, the Company and Parent shall consult with
each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the transactions contemplated
hereby and shall not issue any press release or make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed. The parties hereto agree that the initial
press release to be issued with respect to the transactions contemplated by
this Agreement shall be in the form heretofore agreed to by the parties
hereto.
5.10 ACCOUNTANTS' LETTERS. Upon reasonable notice from Parent, the
Company shall use its reasonable best efforts to cause Deloitte & Touche LLP
to deliver to Parent a letter, dated within two business days of the effective
time of the Form S-4 covering such matters as are requested by Parent and as
are customarily addressed in accountant's "comfort" letters. In connection
with the Company's efforts to obtain such letter, if requested by Deloitte &
Touche LLP, Parent shall provide a representation letter to Deloitte & Touche
LLP complying with Statement on Auditing Standards No. 72 ("SAS 72"), if then
required. Upon reasonable notice from the Company, Parent shall use its
reasonable best efforts to cause Deloitte & Touche LLP or BDO Xxxxxxx, LLP to
deliver to the Company a letter, dated within two business days of the
effective time of the Form S-4 covering such matters as are requested by the
Company and as are customarily addressed in accountant's "comfort" letters. In
connection with Parent's efforts to obtain such letter, if requested by
Deloitte & Touche LLP or BDO Xxxxxxx, LLP, the Company shall provide a
representation letter to Deloitte & Touche LLP or BDO Xxxxxxx, LLP complying
with the SAS 72, if then required.
5.11 LISTING OF SHARES OF PARENT COMMON STOCK. Parent shall use
its reasonable best efforts to cause the shares of Parent Common Stock to be
issued in the Merger and the shares of Parent Common Stock to be reserved for
issuance upon exercise of Company Options and upon conversion of the
Convertible Notes to be approved for listing, subject to official notice of
issuance, on the NYSE.
5.12 AFFILIATE LETTER. On or prior to the date of the Company
Stockholders Meeting, the Company will deliver to Parent a letter (the
"COMPANY AFFILIATE LETTER") identifying all persons who are, at the time this
Agreement is submitted for adoption by the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act
("RULE 145"). On or prior to the Closing Date, the Company will use all
reasonable efforts to cause each person identified as an "affiliate" in the
Company Affiliate Letter to deliver to Parent a written agreement (an
"AFFILIATE AGREEMENT"), substantially in the form of Exhibit 5.12 hereto, in
connection with restrictions on affiliates under Rule 145.
5.13 PARENT BOARD OF DIRECTORS. At or prior to the Effective Time,
the Board of Directors of Parent shall take all action necessary to elect
Xxxxxxx Xxxxxx as a member of the Board of Directors of Parent to become
effective immediately after the Effective Time.
5.14 STOCKHOLDER LITIGATION. The Company shall give Parent the
reasonable opportunity to participate in the defense or settlement of any
stockholder litigation against the Company and/or its directors relating to
the transactions contemplated by this Agreement, and no such settlement shall
be agreed to without Parent's prior written consent, which consent shall not
be unreasonably withheld or delayed.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The obligations of the Company, Parent and Merger Sub to effect the Merger are
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVAL. The Company shall have obtained the
Required Company Vote in connection with the adoption of this Agreement by the
stockholders of the Company.
(b) NO INJUNCTIONS OR RESTRAINTS, ILLEGALITY. No Laws shall have
been adopted or promulgated, and no temporary restraining order, preliminary
or permanent injunction or other order issued by a court or other Governmental
Entity of competent jurisdiction (each, a "LEGAL RESTRAINT") shall be in
effect, having the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.
(c) HSR ACT. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(d) NYSE LISTING. The shares of Parent Common Stock to be issued
in the Merger and reserved for issuance upon exercise of Company Options and
upon conversion of the Convertible Notes shall have been approved for listing
on the NYSE, subject to official notice of issuance.
(e) EFFECTIVENESS OF THE FORM S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB.
The obligations of Parent and Merger Sub to effect the Merger are subject to
the satisfaction of, or waiver by Parent, on or prior to the Closing Date of
the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. (x) Each of the
representations and warranties of the Company set forth in this Agreement that
is qualified as to Material Adverse Effect shall have been true and correct as
of the date of this Agreement and as of the Closing Date as if made at and as
of the Closing Date, and (y) each of such representations and warranties of
the Company that is not so qualified shall have been true and correct in all
material respects as of the date of this Agreement and as of the Closing Date
as if made at and as of the Closing Date (except, in each case, for those
representations and warranties which address matters only as of a particular
date, in which case, they shall be true and correct, or true and correct in
all material respects, as applicable, as of such date), PROVIDED that clause
(y) of this paragraph (a) shall be deemed satisfied so long as all failures of
such representations and warranties referred to therein to be so true and
correct, taken together, (i) would not reasonably be expected to have a
Material Adverse Effect on the Company and (ii) would not reasonably be
expected to materially diminish the value of the transactions contemplated by
this Agreement to Parent and its Subsidiaries; and Parent shall have received
a certificate of the chief executive officer and the chief financial officer
of the Company to the effect of the foregoing.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall
have performed or complied with all agreements and covenants required to be
performed or complied with by it under this Agreement at or prior to the
Closing Date that are qualified as to materiality and shall have performed or
complied in all material respects with all other agreements and covenants
required to be performed or complied with by it under this Agreement at or
prior to the Closing Date that are not so qualified as to materiality, and
Parent shall have received a certificate of the chief executive officer and
the chief financial officer of the Company to such effect.
(c) TAX OPINION. Unless the Company shall have made the Reverse
Merger Election, Parent shall have received from Cravath, Swaine & Xxxxx,
counsel to Parent, on the Closing Date, a written opinion dated as of such
date substantially in the form of Exhibit 6.2(c)(1). In rendering such
opinion, counsel to Parent shall be entitled to rely upon representations of
officers of Parent and the Company substantially in the form of the
representations set forth in Section 6.2(c) of the Company Disclosure Schedule
and 6.2(c) of the Parent Disclosure Schedule.
(d) NO LITIGATION. There shall not be pending by any Governmental
Entity any action, suit, claim or proceeding (other than those which have no
reasonable chance of success) seeking (i) a Legal Restraint, (ii) a judgment,
damages or other remedy which would have a Material Adverse Effect on Parent
(assuming the consummation of the Merger) or (iii) to prohibit or limit the
ownership or operation by the Company, Parent, Merger Sub or any of their
respective affiliates of any material portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, or Parent and its
Subsidiaries, taken as a whole, or to require any of them to dispose of or
hold separate any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken
as a whole, as a result of the Merger or to impose material limitations on the
ability of Parent, Merger Sub or any of their affiliates to acquire or hold,
or exercise full rights of ownership of, any shares of Company Common Stock,
including the right to vote any or all shares of Company Common Stock on all
matters properly presented to the stockholders of the Company.
(e) CONSENTS. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that such consents, approvals,
authorizations, qualifications and orders of Governmental Entities and other
third parties applicable to the Company and its Subsidiaries as are necessary
to permit the occurrence of the transactions contemplated hereby have been
obtained, other than those with respect to any retail store leases and other
than those the failure of which to have been obtained, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect
on the Company; provided that if Parent takes actions that cause the net worth
of the Surviving Corporation to be materially diminished this condition shall
be inapplicable with respect to any consent the requirement of which to obtain
is caused by such actions or the ability of which to obtain has been
materially adversely affected by such actions.
(f) MATERIAL ADVERSE EFFECT. Subject to the exceptions applicable
to SECTION 3.1(i)(ii) (other than the qualification as to knowledge contained
in such SECTION 3.1(i)(ii)), since January 31, 1998, there has not been any
Material Adverse Effect on the Company or any change, event, circumstance or
effect that would in the reasonably foreseeable future have a Material Adverse
Effect on the Company.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger are subject to the
satisfaction of, or waiver by the Company, on or prior to the Closing Date of
the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. (x) Each of the
representations and warranties of Parent and Merger Sub set forth in this
Agreement that is qualified as to Material Adverse Effect shall have been true
and correct at and as of the Closing Date as if made as of the date of this
Agreement and as of the Closing Date, and (y) each of such representations and
warranties of each of Parent and Merger Sub that is not so qualified shall
have been true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as if made at and as of the Closing Date
(except, in each case, for those representations and warranties which address
matters only as of a particular date, in which case, they shall be true and
correct, or true and correct in all material respects, as applicable, as of
such date), PROVIDED that clause (y) of this paragraph (a) shall be deemed
satisfied so long as all failures of such representations and warranties
referred to therein to be so true and correct, taken together, would not
reasonably be expected to have a Material Adverse Effect on Parent; and the
Company shall have received a certificate of the chief executive officer and
the chief financial officer of Parent to the effect of the foregoing.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT. Parent shall have
performed or complied with all agreements and covenants required to be
performed by or complied with it under this Agreement at or prior to the
Closing Date that are qualified as to materiality and shall have performed or
complied with or complied in all material respects with all agreements and
covenants required to be performed by it under this Agreement at or prior to
the Closing Date that are not so qualified as to materiality, and the Company
shall have received a certificate of the chief executive officer and the chief
financial officer of Parent to such effect.
(c) TAX OPINION. Unless the Company shall have made the Reverse
Merger Election, the Company shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel to the Company, on the Closing Date, a written opinion dated
as of such date substantially in the form of Exhibit 6.3(c)(1). In rendering
such opinion, counsel to the Company shall be entitled to rely upon
representations of officers of Parent and the Company substantially in the
form of the representations set forth in Section 6.2(c) of the Company
Disclosure Schedule and 6.2(c) of the Parent Disclosure Schedule.
(d) MATERIAL ADVERSE EFFECT. Subject to the exceptions applicable
to Section 3.2(g)(ii) (other than the qualification as to knowledge contained
in such Section 3.2(g)(ii)), since September 30, 1998, there has not been any
Material Adverse effect on Parent or any change, event, circumstance or effect
that would in the reasonably foreseeable future have a Material Adverse Effect
on Parent.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after the Required Company Vote has been obtained:
(a) By mutual written consent of Parent and the Company, by action
of their respective Boards of Directors;
(b) By either the Company or Parent if the Effective Time shall not
have occurred on or before October 31, 1999 (the "TERMINATION DATE");
PROVIDED, HOWEVER, that the right to terminate this Agreement under this
SECTION 7.1(b) shall not be available to any party whose failure to fulfill
any obligation under this Agreement (including SECTION 5.3) has been the
primary cause of the failure of the Effective Time to occur on or before the
Termination Date;
(c) By either the Company or Parent if any Legal Restraint (which
the parties shall have used their reasonable best efforts to resist, resolve
or lift, as applicable, in accordance with SECTION 5.3) having any of the
effects set forth in SECTION 6.1(b) shall be in effect and shall have become
permanent, final and nonappealable; PROVIDED, HOWEVER, that the right to
terminate this Agreement under this SECTION 7.1(c) shall not be available to
any party whose failure to comply with SECTION 5.3 has been the primary cause
of such action or inaction;
(d) By either the Company or Parent if the approval by the
stockholders of the Company required to adopt the Merger Agreement shall not
have been obtained by reason of the failure to obtain the Required Company
Vote at a duly held meeting of stockholders of the Company or at any
adjournment or postponement thereof;
(e) By Parent if the Board of Directors of the Company, prior to
the Company Stockholders Meeting (i) shall withdraw or modify in any adverse
manner its approval or recommendation of this Agreement pursuant to SECTION
5.4, (ii) shall approve or recommend a Superior Proposal pursuant to SECTION
5.4 or (iii) shall resolve to take any of the actions specified in clauses (i)
or (ii) above;
(f) By the Company at any time prior to the Company Stockholders
Meeting if the Board of Directors of the Company shall concurrently with such
termination enter into an agreement with respect to a Superior Proposal;
PROVIDED, HOWEVER, that (i) the Company shall have complied in all material
respects with SECTION 5.4, and (ii) the Board of Directors of the Company
shall have concluded in good faith, after giving effect to any changes to the
terms of this Agreement which are offered by Parent during the three-Business
Day or two-Business Day period referred to below, as the case may be, on the
basis of the advice of its financial advisors and outside counsel, that such
proposal is a Superior Proposal; PROVIDED, HOWEVER, that it shall be a
condition to termination by the Company pursuant to this SECTION 7.l(f) that
the Company shall have made the payment to Parent of the Termination Fee to
Parent required by SECTION 7.2(b); PROVIDED FURTHER, HOWEVER, that the Company
may only exercise its right to terminate this Agreement pursuant to this
SECTION 7,1(f) after the third Business Day (or, in the circumstances
described in the parenthetical below, the second Business Day) following
Parent's receipt of written notice advising Parent that the Board of Directors
of the Company is prepared, subject to any action taken by Parent pursuant to
this sentence, to cause the Company to accept a Superior Proposal, specifying
the material economic terms and conditions of such Superior Proposal and
identifying the Person making such Superior Proposal (it being understood and
agreed that if such Person changes the material economic terms of such
Superior Proposal, such changes in economic terms shall result in a new
Superior Proposal for which a new two Business Day period following a new
notice of such Superior Proposal referred to above shall be required;
PROVIDED, HOWEVER, that such changes shall not result in a new Superior
Proposal from a third party if, prior to the time such changes were made,
Parent had not taken action to cause a Superior Proposal from such third party
to no longer be a Superior Proposal within the applicable three or two
Business Day period);
(g) by Parent if the Company breaches in a material respect any of
its material representations, warranties or covenants contained in this
Agreement and such breach (i) would give rise to the failure of a condition
set forth in SECTION 6.2(a) or 6.2(b) and (ii) cannot be cured;
(h) by the Company if Parent breaches in a material respect of any
of its material representations, warranties or covenants contained in this
Agreement and such breach (i) would give rise to the failure of a condition
set forth in SECTION 6.3(a) or 6.3(b) and (ii) cannot be cured; or
(i) by the Company, if its Board of Directors so determines by a
vote of the majority of the members of its entire Board, if the Parent Common
Stock Price is less than $21.00; PROVIDED that the Company cannot terminate
this Agreement pursuant to this SECTION 7.1(i) on any date on which the
average closing sales prices of Parent Common Stock on the NYSE Composite
Transactions Tape (as reported in THE WALL STREET JOURNAL or, if not reported
therein, in another authoritative source mutually selected by Parent and the
Company) on each of the 15 consecutive NYSE trading days immediately preceding
the date on which the termination is proposed to be made is greater than or
equal to $21.00; provided, further, that if the Company has the right to
terminate under this SECTION 7.1(i), the Company may, at its election, give
Parent the opportunity to increase the Merger Consideration (by increasing the
amount of cash and/or the number of shares of Parent Common Stock which
holders of shares of Company Common Stock would have the right to receive
pursuant to SECTION 1.8) and in the event that the Company so elects and
Parent agrees to make such increase, the parties agree that the term "Merger
Consideration" shall thereafter refer to the Merger Consideration provided in
SECTION 1.8, as so increased.
7.2 EFFECT OF TERMINATION. (a) In the event of termination of
this Agreement by either the Company or Parent as provided in SECTION 7.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent or the Company or their respective officers
or directors except with respect to SECTION 3.1(o), SECTION 3.2(n), the second
sentence of SECTION 5.2, SECTION 5.6, this SECTION 7.2 and ARTICLE VIII,
PROVIDED that the termination of this Agreement shall not relieve any party
from any liability for any intentional material breach of any representation,
warranty, covenant or agreement in this Agreement occurring prior to
termination.
(b) Parent and the Company agree that (i) if the Company shall
terminate this Agreement pursuant to SECTION 7.1(f), (ii) if Parent shall
terminate this Agreement pursuant to SECTION 7.1(e), (iii) if (x) the Company
or Parent shall terminate this Agreement pursuant to SECTION 7.1(d), (y) prior
to such termination an Acquisition Proposal shall have been made or any Person
shall have announced an intention (whether or not conditional) to make an
Acquisition Proposal and (z) within 12 months of such termination, the Company
or any of its Subsidiaries either consummates a transaction which, if
proposed, would constitute an Acquisition Proposal or enters into a definitive
agreement with respect to an Acquisition Proposal or (iv) if (w) Parent shall
terminate this Agreement pursuant to SECTION 7.1(b), (x) prior to such
termination an Acquisition Proposal shall have been made or any Person shall
have announced an intention (whether or not conditional) to make an
Acquisition Proposal; (y) the Company Stockholders Meeting shall not have
occurred prior to the Termination Date other than as a result of a breach of
this Agreement by Parent and (z) within 12 months of such termination, the
Company or any of its Subsidiaries consummates a transaction which, if
proposed, would constitute an Acquisition Proposal or enters into a definitive
agreement with respect to an Acquisition Proposal, then the Company shall pay
to Parent an amount in cash equal to $35 million (the "TERMINATION FEE").
(c) The Termination Fee required to be paid pursuant to SECTION
7.2(b)(i) or 7.2(b)(ii) shall be paid prior to, and shall be a pre-condition
to the effectiveness of termination of this Agreement pursuant to such
Section. Any other payment required to be made pursuant to SECTION
7.2(b)shall be made to Parent not later than two Business Days after the
prerequisites for payment of such fee have been fulfilled. All payments under
this SECTION 7.2 shall be made by wire transfer of immediately available funds
to an account designated by the party entitled to receive payment. In no
event shall the Company be obligated to pay more than one Termination Fee
pursuant to this Agreement.
(d) Parent and the Company agree that if the Company shall terminate
this Agreement pursuant to SECTION 7.1(i), then (A) prior to such termination,
the Company shall pay to Parent an amount in cash without interest equal to
$10 million, PROVIDED that the Company shall only be required to pay such
amount to the extent that such payment (i) would not result in the Company not
having the ability in the ordinary course to incur $10 million of additional
indebtedness under the Company's revolving credit agreement or similar
facility after giving effect to such payment and (ii) would not result in a
breach of any of the Company's agreements (the "Company Debt Agreements")
relating to borrowed money (any amount so paid, the "PAID AMOUNT"), PROVIDED
that, in the event that at any time the Paid Amount is less than $10 million,
the Company shall pay to Parent in cash without interest the difference
between $10 million and the Paid Amount (the "OWED AMOUNT"), solely at such
time or times as and to the extent that the requirements contained in clauses
(i) and (ii) above are satisfied at such time or times; and (B) if within 12
months of such termination, the Company or any of its Subsidiaries consummates
a transaction which, if proposed, would constitute an Alternative Transaction
(as defined below) then, upon consummation of such Alternative Transaction,
the Company shall pay to Parent without interest an amount in cash equal to
$10 million plus the Owed Amount, if any. For purposes of this Agreement, the
term "ALTERNATIVE TRANSACTION" shall mean a transaction which, if proposed,
would constitute an Acquisition Proposal which would result in a third party
(including its affiliates and/or stockholders) owning, directly or indirectly,
shares of Company Common Stock representing more than 50% of the voting
interests and the equity interests in the Company then outstanding or more
than 50% of the assets of the Company and its Subsidiaries, taken together
(including through a merger of such third party (including its affiliates)and
the Company). The Company shall not agree to any covenant or amend any
existing covenant in any Company Debt Agreement the principal purpose of which
covenant or amendment is to prevent or materially delay the Company from being
able to make any payment to Parent pursuant to this SECTION 7.2(d).
7.3 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection
with the Merger by the stockholders of the Company, but, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.4 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards
of Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective Time,
except for those covenants and agreements contained herein and therein that by
their terms apply or are to be performed in whole or in part after the
Effective Time and this ARTICLE VIII.
8.2 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt or (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service. All notices hereunder
shall be delivered in the manner described above to the addresses set forth
below, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice:
(a) if to Parent or Merger Sub, to
Xxxxx Apparel Group, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Xxxxx Apparel Group, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Card
Facsimile No.: (000) 000-0000
with a copy to
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(b) if to the Company to
Nine West Group Inc.
Nine West Plaza
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: 000-000-0000
8.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table
of contents, glossary of defined terms and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The term "or" is not exclusive.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered (including by facsimile transmission ) to the
other parties hereto, it being understood that all parties need not sign the
same counterpart.
8.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. (a) This
Agreement constitutes the entire agreement and supersedes, except as set forth
in SECTION 5.2, all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof, other than
the Confidentiality Agreement, which shall survive the execution and delivery
of this Agreement.
(b) Nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement, other than SECTION 5.7
(which is intended to be for the benefit of the beneficiaries specified
therein and may be enforced by such Persons).
8.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
8.7 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
8.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties, and any attempt to
make any such assignment without such consent shall be null and void, except
that Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any direct wholly owned
Subsidiary of Parent without the consent of the Company, but no such
assignment shall relieve Parent or Merger Sub of any of its obligations under
this Agreement. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
8.9 SUBMISSION TO JURISDICTION; WAIVERS. Each of Parent and the
Company irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Chancery or other Courts of the State of
Delaware, and each of Parent and the Company hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Parent and the Company hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve process in accordance
with this SECTION 8.9, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by applicable law, that
(i) the suit, action or proceeding in any such court is brought in an
inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be
enforced in or by such courts. This Agreement does not involve less than
$100,000 and the parties intend that 6 DEL.C. Section 2708 shall apply to this
Agreement.
8.10 ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
8.11 DEFINITIONS. As used in this Agreement:
(a) "BENEFIT PLANS" means, with respect to any Person, each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, incentive, deferred compensation, stock bonus, stock purchase,
restricted stock, stock option, employment, termination, stay agreement or
bonus, change in control and severance plan, program, arrangement and
contract) all of the foregoing in effect on the date of this Agreement, to
which such Person is a party and which is maintained or contributed to by such
Person (excluding any plans or programs required to be maintained or
contributed to under the local law of the jurisdiction in which such person is
employed).
(b) "BOARD OF DIRECTORS" means the Board of Directors of any
specified Person and any committees thereof.
(c) "BUSINESS DAY" means any day on which banks are not required or
authorized to close in the City of New York.
(d) "MATERIAL ADVERSE EFFECT" means, with respect to any entity,
any change, event, circumstance or effect that is materially adverse to the
business (including any material adverse change, event, circumstance or effect
on assets that has such effect on the business), financial condition or
results of operations of such entity and its Subsidiaries taken as a whole,
other than any change, event, circumstance or effect relating principally to
(i) the economy or securities markets in general or (ii) the industries in
which Parent or the Company operate and not specifically relating to Parent or
the Company, as the case may be, and provided that, for all purposes under
this Agreement (other than SECTION 3.1(t)), Material Adverse Effect as it
applies to the Company shall not include any matter relating to, arising out
of or in connection with the Specified Matters or any change or development in
connection therewith.
(e) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(f) "SUBSIDIARY" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by
such party or any Subsidiary of such party do not have a majority of the
voting interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries, or by such party and one or more of its Subsidiaries.
(g) "THE OTHER PARTY" means, with respect to the Company, Parent
and means, with respect to Parent, the Company.
(h) "KNOWLEDGE" or "KNOWN" of or as to the Company or Parent means
(i) in the case of SECTIONS 4.4 and 4.5, the actual knowledge of such entity's
executive officers without any obligation of inquiry, (ii) in the case of
SECTION 3.1(t), the actual knowledge of such entity's executive officers
without any obligation of inquiry, except for an obligation of reasonable
inquiry of the Division Presidents of the branded wholesale divisions of the
Company and its Subsidiaries and of its counsel for the relevant matters, and
(iii) otherwise, the actual knowledge of such entity's executive officers,
after reasonable inquiry of the executive or senior managerial employees
responsible for the relevant matters.
8.12 OTHER AGREEMENTS. The parties hereto acknowledge and agree
that, except as otherwise expressly set forth in this Agreement, the rights
and obligations of the Company and Parent under any other agreement between
the parties shall not be affected by any provision of this Agreement.
IN WITNESS WHEREOF, Parent, the Company and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first above-written.
XXXXX APPAREL GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
XXXX ACQUISITION SUB INC.
By: /s/ Xxxxxx X. Card
-----------------------------
Name: Xxxxxx X. Card
Title: President and Treasurer
NINE WEST GROUP INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
