Exhibit 2
AGREEMENT AND PLAN OF MERGER
BETWEEN
XXXXXX GENERAL CORPORATION
AND
RIVER ACQUISITION CORP.
DATED AS OF
NOVEMBER 22, 1998
NYFS10...:\80\57780\0003\1948\AGR9038U.48K
TABLE OF CONTENTS
ARTICLE I
THE MERGER
SECTION 1.01. The Merger...................................... 1
SECTION 1.02. Effective Time.................................. 2
SECTION 1.03. Effects of the Merger........................... 2
SECTION 1.04. Certificate of Incorporation.................... 2
SECTION 1.05. Bylaws.......................................... 2
SECTION 1.06. Directors and Officers.......................... 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities........................ 3
SECTION 2.02. Exchange of Certificates and Cash............... 3
SECTION 2.03. Stock Transfer Books............................ 6
SECTION 2.04. Stock Options; Payment Rights................... 6
SECTION 2.05. Dissenting Shares............................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualifications; Subsidiaries... 7
SECTION 3.02. Certificate of Incorporation and Bylaws......... 8
SECTION 3.03. Capitalization.................................. 8
SECTION 3.04. Authority Relative to This Agreement............ 8
SECTION 3.05. No Conflict; Required Filings and Consents...... 9
SECTION 3.06. Opinion of Financial Advisor.................... 10
SECTION 3.07. Board Approval.................................. 10
SECTION 3.08. Brokers......................................... 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
SECTION 4.01. Organization and Qualification.................. 11
SECTION 4.02. Authority Relative to This Agreement............ 11
SECTION 4.03. No Conflict; Required Filings and Consents...... 12
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SECTION 4.04. Brokers......................................... 12
SECTION 4.05. Financing....................................... 13
SECTION 4.06. Capitalization of Merger Sub.................... 13
SECTION 4.07. Investigation by Merger Sub..................... 13
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the
Merger......................................... 14
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality.......... 15
SECTION 6.02. Proxy Statement; Schedule 13E-3................. 15
SECTION 6.03. Action by Stockholders.......................... 16
SECTION 6.04. No Solicitation................................. 17
SECTION 6.05. Directors' and Officers' Insurance and
Indemnification............................... 18
SECTION 6.06. Further Action; Best Efforts.................... 20
SECTION 6.07. Public Announcements............................ 21
SECTION 6.08. Conveyance Taxes................................ 21
SECTION 6.09. Employee Benefits............................... 21
SECTION 6.10. Commitment Letter Notices....................... 22
SECTION 6.11. Knowledge of Breach............................. 22
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to
Effect the Merger.............................. 22
SECTION 7.02. Additional Conditions to Obligations of
Merger Sub..................................... 23
SECTION 7.03. Additional Conditions to Obligations of the
Company........................................ 24
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination..................................... 24
SECTION 8.02. Effect of Termination........................... 26
SECTION 8.03. Amendment....................................... 26
ii
SECTION 8.04. Waiver.......................................... 26
SECTION 8.05. Fees, Expenses and Other Payments............... 26
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and
Agreements..................................... 27
SECTION 9.02. Notices......................................... 27
SECTION 9.03. Certain Definitions............................. 28
SECTION 9.04. Headings........................................ 29
SECTION 9.05. Severability.................................... 29
SECTION 9.06. Entire Agreement................................ 30
SECTION 9.07. Assignment...................................... 30
SECTION 9.08. Parties in Interest............................. 30
SECTION 9.09. Governing Law................................... 30
SECTION 9.10. Submission to Jurisdiction; Waivers............. 30
SECTION 9.11. Enforcement of this Agreement................... 31
SECTION 9.12. Counterparts.................................... 31
Annex A Commitment Letter
iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 22, 1998 (the
"Agreement"), between XXXXXX GENERAL CORPORATION, a Delaware corporation (the
"Company"), and RIVER ACQUISITION CORP., a Delaware corporation (the "Merger
Sub").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Merger Sub will merge with and into the Company (the "Merger") pursuant
to which each outstanding share of common stock, par value $1.00 per share, of
the Company (the "Common Stock" other than shares owned by Merger Sub), shall be
converted into the right to receive $57.25 in cash per share of Common Stock, as
more fully set forth herein;
WHEREAS, the Board of Directors of the Company, based on the unanimous
recommendation of the Special Committee (as defined in Section 3.07), has
determined that the Merger is fair to and in the best interests of the Company
and its stockholders (other than Merger Sub and its affiliates and members of
the Management Group (as defined in Section 9.03)) and has approved this
Agreement, the Merger and the other transactions contemplated hereby and has
recommended approval and adoption of this Agreement by the stockholders of the
Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, at the Effective Time
(as defined in Section 1.02), Merger Sub shall be merged with and into the
Company. Following the Merger, the separate existence of Merger Sub shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
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SECTION 1.02. Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware and by making any related filings required under the
DGCL in connection with the Merger. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware or at such later time as is agreed to by the parties
hereto and as is specified in the Certificate of Merger (the "Effective Time" or
the "Closing").
SECTION 1.03. Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in the DGCL (including, without
limitation, Sections 259, 260 and 261 thereof). Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest 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.
SECTION 1.04. Certificate of Incorporation. The certificate of
incorporation of the Company immediately prior to the Effective Time shall be
the certificate of incorporation of the Surviving Corporation (the "Surviving
Certificate") until thereafter amended in accordance with the DGCL.
SECTION 1.05. Bylaws. The bylaws of Merger Sub immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
amended in accordance with the Surviving Certificate and the DGCL.
SECTION 1.06. Directors and Officers. From and after the Effective Time,
until their respective successors are duly elected or appointed and qualified in
accordance with applicable law, (a) the directors of Merger Sub at the Effective
Time shall be the directors of the Surviving Corporation and (b) the officers of
the Company at the Effective Time shall be the officers of the Surviving
Corporation.
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ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holders of any of the following securities:
(a) Each share of the Common Stock issued and outstanding immediately
prior to the Effective Time (other than any shares of Common Stock to be
canceled pursuant to Section 2.01(b) and any Dissenting Shares (as defined
below)) shall be converted into the right to receive $57.25 in cash, without
interest (the "Merger Consideration"). At the Effective Time, each share of
Common Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each certificate previously evidencing
any such share (other than shares to be canceled pursuant to Section 2.01(b) and
any Dissenting Shares) shall thereafter represent only the right to receive,
upon the surrender of such certificate in accordance with the provisions of
Section 2.02, an amount in cash per share equal to the Merger Consideration. The
holders of such certificates previously evidencing such shares of Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Common Stock except as otherwise provided
herein or by law.
(b) Each share of capital stock of the Company (i) held in the treasury of
the Company or by any wholly owned subsidiary of the Company or (ii) owned by
Merger Sub or any of its subsidiaries shall automatically be canceled, retired
and cease to exist without any conversion thereof and no payment shall be made
with respect thereto.
(c) Each share of common stock of Merger Sub outstanding immediately prior
to the Effective Time shall be converted into and become one share of common
stock of the Surviving Corporation and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation.
SECTION 2.02. Exchange of Certificates and Cash. (a) Exchange Agent. On or
before the Closing Date, Merger Sub shall enter into an agreement providing for
the matters set forth in this Section 2.02 (the "Exchange Agent Agreement") with
a bank or trust company selected by Merger Sub and reasonably acceptable to the
Company (the "Exchange Agent"), authorizing such Exchange Agent to act as
Exchange Agent in connection with the Merger. Immediately prior to the Effective
Time, Merger Sub shall deposit or shall cause to be
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deposited with or for the account of the Exchange Agent, for the benefit of the
holders of shares of Common Stock (other than Dissenting Shares and shares to be
canceled pursuant to Section 2.01(b)), an amount in cash equal to the Merger
Consideration payable pursuant to Section 2.01(a) (such cash funds are hereafter
referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Merger Sub will instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time evidenced outstanding shares of Common Stock (other than
Dissenting Shares and shares to be canceled pursuant to Section 2.01(b)) (the
"Certificates"), (i) a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Merger Sub may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Merger Sub, together with a letter of transmittal,
duly executed, and such other customary documents as may be required pursuant to
such instructions (collectively, the "Transmittal Documents"), the holder of
such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate, without any interest thereon, less any required withholding of
taxes, and the Certificate so surrendered shall thereupon be canceled. In the
event of a transfer of ownership of shares of Common Stock which is not
registered in the transfer records of the Company, the Merger Consideration may
be issued and paid in accordance with this Article II to the transferee of such
shares if the Certificate evidencing such shares of Common Stock is presented to
the Exchange Agent and is properly endorsed or otherwise in proper form for
transfer. The signature on the Certificate or any related stock power must be
properly guaranteed and the person requesting payment of the Merger
Consideration must either pay any transfer or other taxes required by reason of
the payment to a person other than the registered holder of the Certificate so
surrendered or establish to the Surviving Corporation that such tax has been
paid or is not applicable. The Merger Consideration will be delivered by the
Exchange Agent as promptly as practicable following surrender of a Certificate
and the related Transmittal Documents. Cash payments may be made by check unless
otherwise required by a depositary institution in connection with the book-entry
delivery of securities. No interest will be payable on such Merger
Consideration. Until surrendered in accordance with this Section 2.02, each
Certificate shall be deemed at any time after the Effective Time to evidence
only
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the right to receive, upon such surrender, the Merger Consideration for each
share of Common Stock formerly represented by such Certificate. The Exchange
Fund shall not be used for any purpose other than as set forth in this Article
II. Any interest, dividends or other income earned on the investment of cash
held in the Exchange Fund shall be for the account of the Surviving Corporation.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) which remains undistributed
to the holders of Common Stock for one year following the Effective Time shall
be delivered to the Surviving Corporation, upon demand. Any holders of Common
Stock who have not theretofore complied with this Article II shall thereafter
look only to the Surviving Corporation for payment of the Merger Consideration.
(d) No Liability. None of Merger Sub, the Surviving Corporation or the
Company shall be liable to any holder of shares of Common Stock for any cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(e) Withholding Rights. The Surviving Corporation and the Exchange Agent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Common Stock such
amounts as the Surviving Corporation or the Exchange Agent is required to deduct
and withhold with respect to the making of such payment under the United States
Internal Revenue Code of 1986, as amended, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the shares
of Common Stock in respect of which such deduction and withholding was made by
the Surviving Corporation or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the event any Certificates
evidencing shares of Common Stock shall have been lost, stolen or destroyed, the
holder of such lost, stolen or destroyed Certificate(s) shall execute an
affidavit of that fact upon request. The holder of any such lost, stolen or
destroyed Certificate(s) shall also deliver a reasonable indemnity against any
claim that may be made against Merger Sub or the Exchange Agent with respect to
the Certificate(s) alleged to have been lost, stolen or destroyed. The affidavit
and any indemnity which may be required hereunder shall be delivered to the
Exchange Agent, who shall be responsible for making payment for such lost,
stolen or destroyed Certificates(s) pursuant to the terms hereof.
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SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of shares of Common Stock thereafter on the records of
the Company. Any Certificates presented to the Exchange Agent or the Surviving
Corporation for any reason at or after the Effective Time shall be exchanged for
the Merger Consideration pursuant to the terms hereof.
SECTION 2.04. Stock Options; Payment Rights. (a) Subject to Sections
2.04(b) and 2.04(c), each Option (as defined below) other than any Options held
by Merger Sub which is outstanding immediately prior to the Effective Time,
whether or not then exercisable, shall be canceled and the Company Option Plans
(as defined below) shall be assumed by the Surviving Corporation, in each case
at and as of the Effective Time, and each holder of such canceled Options shall
be paid by the Surviving Corporation as soon as practicable, but in any event
within five days after the Effective Time, for each such Option, an amount
determined by multiplying (i) the excess, if any, of the Merger Consideration
over the applicable exercise price per share of such Option by (ii) the number
of shares issuable upon exercise of such Option, subject to any required
withholding of taxes.
(b) Prior to the Effective Time, the Company shall use its best efforts to
(i) obtain any consents from holders of the Options and (ii) make any amendments
to the terms of the Company Option Plans and any Options granted thereunder
that, in the case of either (i) or (ii) are necessary or appropriate to give
effect to the transactions contemplated by this Section 2.04.
(c) In lieu of the cancellation of Options referred to in Section 2.04(a)
hereof, prior to the Effective Time Merger Sub may, with the consent of the Com
pany (which consent will not be unreasonably withheld), enter into mutually
acceptable arrangements with any holder of Options providing that such holder's
Options will be treated in a manner other than as provided in Section 2.04(a);
provided, however, that in no event will such holder be paid at the Effective
Time an amount in cash in excess of the amount such holder would have received
had such holder's Options been cancelled in accordance with Section 2.04(a).
SECTION 2.05. Dissenting Shares. (a) Notwithstanding any other provision
of this Agreement to the contrary, shares of Common Stock that are outstanding
immediately prior to the Effective Time and which are held by stockholders (i)
who shall not have voted in favor of adoption of this Agreement and (ii) who
shall be entitled to and shall have demanded properly in writing appraisal for
such shares in accordance with Section 262 of the DGCL ("Dissenting Shares"),
shall not be converted into or represent the right to receive
6
the Merger Consideration unless such stockholders fail to perfect, withdraw or
otherwise lose their right to appraisal. Such stockholders shall be entitled to
receive payment of the appraised value of such Dissenting Shares in accordance
with the provisions of the DGCL. If, after the Effective Time, any such
stockholder fails to perfect, withdraws or loses its right to appraisal, such
shares of Common Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, without
interest thereon, upon surrender of the Certificate or Certificates that
formerly evidenced such shares of Common Stock in the manner set forth in
Section 2.02.
(b) The Company shall give Merger Sub prompt notice of any demands for
appraisal received by it, withdrawals of such demands, and any other instruments
served pursuant to the DGCL and received by the Company and relating thereto.
Merger Sub shall direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. The Company shall not, except with the prior
written consent of Merger Sub, make any payment with respect to any demands for
appraisal, or offer to settle, or settle, any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Merger Sub that:
SECTION 3.01. Organization and Qualifications; Subsidiaries. The Company
and each significant subsidiary of the Company (a "Company Subsidiary") within
the meaning of Rule 1-02(w) of Regulation S-X under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), is a corporation, partnership or other
legal entity duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite power and authority and all necessary governmental
approvals, to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing would not have a Company Material Adverse Effect
(as defined below). The Company and each Company Subsidiary is duly qualified or
licensed and in good standing to do business in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that
7
would not, individually or in the aggregate, have a material adverse effect on
the business, assets, results of operations or financial condition of the
Company and the Company Subsidiaries, taken as a whole (a "Company Material
Adverse Effect").
SECTION 3.02. Certificate of Incorporation and Bylaws. Merger Sub has been
given access by the Company to a complete and correct copy of the certificate of
incorporation and the bylaws or equivalent organizational documents, each as
amended to the date hereof, of the Company and each Company Subsidiary. Such
certificates of incorporation, bylaws and equivalent organizational documents
are in full force and effect. Neither the Company nor any Company Subsidiary is
in violation of any provision of its certificate of incorporation, bylaws or
equivalent organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of the Company
consists of 7,000,000 shares of Common Stock and 100,000 shares of preferred
stock, par value $1.00 per share ("Preferred Stock"). As of October 31, 1998,
(a) 1,744,949 shares of Common Stock were outstanding, all of which were validly
issued, fully paid and nonassessable; (b) no shares of Preferred Stock were
issued and outstanding and no action had been taken by the Board of Directors of
the Company with respect to the designation of the rights and preferences of any
series of Preferred Stock; (c) 37,100 shares of Common Stock were reserved for
issuance upon the exercise of outstanding stock options (the "Options") granted
pursuant to the Company's 1981 Non-Qualified Stock Option and Stock Appreciation
Rights Plan and 1981 Incentive Stock Option and Stock Appreciation Rights Plan
(collectively, the "Company Option Plans"); (d) 357,311 shares of Common Stock
and no shares of Preferred Stock were held in the treasury of the Company; (e)
no Company Subsidiary owns any shares of the Company's capital stock; and (f)
there are no securities of any Company Subsidiary outstanding which are
convertible into or exercisable or exchangeable for capital stock of the
Company. Except as set forth above, no shares of capital stock or other voting
securities of the Company have been issued, are reserved for issuance or are
outstanding. All shares of Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable.
SECTION 3.04. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
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Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the adoption of this Agreement by the
holders of (x) a majority of the aggregate voting power of the issued and
outstanding shares of Common Stock and (y) a majority of the aggregate voting
power of the issued and outstanding shares of Common Stock not owned by Merger
Sub or the members of the Management Group, (such votes being collectively
referred to as the "Company Stockholder Approval"), and the filing and
recordation of appropriate merger documents as required by, and in accordance
with, the DGCL). This Agreement has been duly and validly executed and delivered
by the Company and, assuming the due authorization, execution and delivery by
Merger Sub, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the perfor
xxxxx of this Agreement and the consummation of the transactions contemplated
hereby will not, (i) conflict with or violate the Company's Restated Certificate
of Incorporation, as amended to the date hereof (the "Company Charter"), or its
by-laws, or the certificate of incorporation, by-laws or other equivalent
organizational documents of any Company Subsidiary or (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, except, in the case of
clause (ii), for any such conflicts, violations, breaches, defaults or other
occurrences which (A) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (B) would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign (each a
"Governmental Entity"), except (i) for (A) any applicable requirements of the
9
Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"),
(B) the pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act"), (C) the filing and recordation of appropriate merger and
similar documents as required by the DGCL, (D) filings under the rules and
regulations of the American Stock Exchange, Inc. and (E) filings and consents
under any applicable foreign laws, including, without limitation, the antitrust
laws or laws intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade and any filings and
consents which may be required by any foreign environmental, health or safety
laws or regulations pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by this
Agreement, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, (x) would
not prevent or delay consummation of the Merger in any material respect or
otherwise prevent the Company from performing its obligations under this
Agreement in any material respect, and (y) would not, individually or in the
aggregate, have a Company Material Adverse Effect.
SECTION 3.06. Opinion of Financial Advisor. Xxxxx & Company Incorporated
has delivered to the Special Committee (as defined below) its opinion
substantially to the effect that, as of the date hereof, the consideration to be
received by the stockholders of the Company (other than Merger Sub and its
affiliates and members of the Management Group) pursuant to the Merger is fair
to such stockholders from a financial point of view.
SECTION 3.07. Board Approval. The Board of Directors of the Company, based
on the unanimous recommendation of the Special Committee of the Board of
Directors of the Company (the "Special Committee"), at a meeting duly called and
held and at which a quorum was present and voting, unanimously (a) determined
that this Agreement and the Merger are fair to and in the best interests of the
Company's stockholders (other than Merger Sub and its affiliates and members of
the Management Group), (b) approved this Agreement, the Merger and the other
transactions contemplated hereby, and (c) resolved to recommend approval and
adoption of this Agreement by the Company's stockholders.
SECTION 3.08. Brokers. No broker, finder or investment banker (other
than Xxxxx & Company Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement, the Merger and the
10
other transactions contemplated hereby based upon arrangements made by or on
behalf of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub hereby makes to the Company the representations and warranties
set forth below:
SECTION 4.01. Organization and Qualification. Merger Sub is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted. Merger Sub is duly qualified or
licensed and in good standing to do business in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a material adverse effect on the
business, results of operations or financial condition of Merger Sub and its
subsidiaries, taken as a whole ("Merger Sub Material Adverse Effect").
SECTION 4.02. Authority Relative to This Agreement. Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Merger Sub
and the consummation by it of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Merger Sub and no other
corporate proceedings on the part of Merger Sub are necessary to authorize this
Agreement or to consummate such transactions (other than the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes the legal, valid and binding obligation of Merger Sub, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally and by general
principles of equity.
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SECTION 4.03. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Merger Sub do not, and the
consummation of the transactions contemplated hereby will not, (i) conflict with
or violate the certificate of incorporation or by-laws of Merger Sub, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Merger Sub or by which any of its properties or assets are bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which, with notice, lapse of time or both, would become a default) under,
result in the loss of a material benefit under or give to others any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any properties or
assets of Merger Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or any other instrument or
obligation to which Merger Sub is a party or by which Merger Sub or any of its
properties or assets is bound or affected, except in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent Merger Sub from performing its
obligations under this Agreement in any material respect, or (y) would not,
individually or in the aggregate, have a Merger Sub Material Adverse Effect.
(b) The execution and delivery of this Agreement by Merger Sub do not, and
the performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby by Merger Sub will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except (i) for (A) any applicable requirements, if
any, of the Exchange Act, the Securities Act and state takeover laws, (B) the
pre-merger notification requirements of the HSR Act and (C) filing and
recordation of appropriate merger and similar documents as required by the DGCL
and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not (x) prevent or
delay consummation of the Merger in any material respect or otherwise prevent
Merger Sub from performing its obligations under this Agreement in any material
respect, or (y) would not, individually or in the aggregate, have a Merger Sub
Material Adverse Effect.
SECTION 4.04. Brokers. No broker, finder or investment banker (other
than Lazard Freres & Co. LLC ("Lazard") and BancBoston Xxxxxxxxx Xxxxxxxx
Inc.) is entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement, the Merger and the other transactions
12
contemplated hereby based upon arrangements made by or on behalf of Merger Sub
or the members of the Management Group.
SECTION 4.05. Financing. Merger Sub has delivered to the Company a true
and complete copy of a letter (the "Commitment Letter") executed by BankBoston,
N.A., European American Bank, The Chase Manhattan Bank, and BancBoston Xxxxxxxxx
Xxxxxxxx Inc. describing the sources of financing for the transactions
contemplated by this Agreement. The amount provided pursuant to the Commitment
Letter will be sufficient to provide the funds required by Merger Sub to pay the
Merger Consideration pursuant to this Agreement and to pay all fees and expenses
required to be paid by Merger Sub in connection with the consummation of the
transactions contemplated by this Agreement. Merger Sub agrees to use its best
efforts to obtain the financing on the terms contemplated by the Commitment
Letter.
SECTION 4.06. Capitalization of Merger Sub. The authorized capital stock
of Merger Sub consists of 1,000 shares of Common Stock, par value $.01 per share
("Merger Sub Common Stock"). As of the date hereof, 200 shares of Merger Sub
Common Stock are outstanding, all of which were validly issued, fully paid and
nonassessable. Schedule 4.06 sets forth the ownership of the outstanding shares
of Merger Sub as of the date hereof.
SECTION 4.07. Investigation by Merger Sub. Merger Sub:
(a) acknowledges that, except as set forth in this Agreement, none of the
Company, any Company Subsidiary or any of their respective directors, officers,
employees, affiliates, agents or representatives makes any representation or
warranty, either express or implied, as to the accuracy or completeness of any
of the information provided or made available to Merger Sub or the members of
the Management Group or their agents, representatives or financing sources prior
to the execution of this Agreement; and
(b) agrees that, to the fullest extent permitted by law except as provided
by this Agreement, none of the Company, any Company Subsidiary or any of their
respective directors, officers, employees, stockholders, affiliates, agents or
representatives shall have any liability or responsibility whatsoever to Merger
Sub on any basis (including without limitation in contract, tort or otherwise)
based upon any information provided or made available, or statement made to
Merger Sub or the members of the Management Group prior to the execution of this
Agreement.
13
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, between the date of this Agreement and the
Effective Time, unless Merger Sub shall have consented (which consent shall not
be unreasonably withheld), neither the Company nor any Company Subsidiary shall:
(a) conduct its business in any manner other than in the ordinary course
of business consistent with past practice;
(b) amend or propose to amend its certificate of incorporation or by-laws;
(c) authorize for issuance, issue, grant, sell, pledge, redeem or acquire
for value any of its or their securities, including options, warrants,
commitments, stock appreciation rights, subscriptions, rights to purchase or
otherwise (other than the issuance of equity securities upon the conversion of
outstanding convertible securities or in connection with any dividend
reinvestment plan or any Benefit Plan with an employee stock fund or employee
stock ownership plan feature, consistent with applicable securities laws, or the
exercise of options or warrants outstanding as of the date of this Agreement and
in accordance with the terms of such options or warrants in effect on the date
of this Agreement);
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property, or otherwise, with respect to any of its
capital stock or other equity interests, except for (i) the regular semi-annual
dividends of $.50 per share which shall be paid consistent with past practice
and (ii) dividends and other distributions declared and paid by a Company
Subsidiary only to the Company (and also to LAGS (USA) Inc. in the case of
Xxxxxx General LLC), or subdivide, reclassify, recapitalize, split, combine or
exchange any of its shares of capital stock;
(e) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect to
accounting policies or procedures (including tax accounting policies and
procedures);
14
(f) take any action that would, or could reasonably be expected to result
in, any of its representations and warranties set forth in this Agreement being
untrue or in any of the conditions to the Merger set forth in Article VII not
being satisfied; or
(g) authorize any of, or commit or agree to take any of, the foregoing
actions.
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality. From the date hereof
to the Effective Time, the Company shall (and shall cause the Company
Subsidiaries and the officers, directors, employees, auditors and agents of the
Com pany and each of the Company Subsidiaries to) afford the officers, employees
and agents of Merger Sub (the "Merger Sub Representatives") reasonable access at
all reasonable times to its officers, employees, agents, properties, offices,
plants and other facilities, books and records, and shall furnish such Merger
Sub Representatives with all financial, operating and other data and information
as may from time to time be reasonably requested. Merger Sub agrees to be bound
by the terms of the Confidentiality Agreement, dated as of June 29, 1998,
between the Company and Xxx X. Xxxxxxx (the "Confidentiality Agreement").
SECTION 6.02. Proxy Statement; Schedule 13E-3. (a) As soon as practicable
after the date of this Agreement, the Company shall prepare and file with the
SEC a proxy statement, in form and substance reasonably satisfactory to Merger
Sub, relating to the meeting of the Company's stockholders to be held in
connection with the Merger (together with any amendments thereof or supplements
thereto, the "Proxy Statement"). Merger Sub shall furnish to the Company such
information concerning itself as the Company may reasonably request in
connection with the preparation of the Proxy Statement. The Proxy Statement will
comply in all material respects with applicable federal securities laws, except
that no representation is made by the Company with respect to information
supplied by Merger Sub for inclusion in the Proxy Statement. As promptly as
practicable after the Proxy Statement has been cleared by the SEC, the Company
shall mail the Proxy Statement to its stockholders. The Proxy Statement shall
include the opinion of Xxxxx & Company Incorporated referred to in Section 3.06
hereof.
15
(b) The information provided by each of the Company and Merger Sub for use
in the Proxy Statement shall not, at (i) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the stockholders of
the Company or (ii) the time of the Company stockholders' meeting contemplated
by such Proxy Statement, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. If at any time prior to the
Effective Time any event or circumstance relating to any party hereto, or their
respective officers or directors, should be discovered by such party which
should be set forth in an amendment or a supplement to the Proxy Statement, such
party shall promptly inform the Company and Merger Sub thereof and take
appropriate action in respect thereof.
(c) As soon as practicable after the date of this Agreement, Merger Sub,
members of the Management Group and the Company shall file with the SEC a Rule
13E-3 Transaction Statement on Schedule 13E-3 ("Schedule 13E-3"), with respect
to the Merger. Each of the parties hereto agrees to use its reasonable best
efforts to cooperate and to provide each other with such information as any of
such parties may reasonably request in connection with the preparation of the
Schedule 13E-3. The information provided by each of the Company and Merger Sub
for use in the Schedule 13E-3 shall not, at the time the Schedule 13E-3 is filed
with the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading. Each party hereto agrees promptly to
supplement, update and correct any information provided by it for use in the
Schedule 13E-3 if and to the extent that it is or shall have become incomplete,
false or misleading.
SECTION 6.03. Action by Stockholders. Except as otherwise required by the
fiduciary duties of the Board of Directors of the Company (as determined in good
faith by the Special Committee after consulting with its outside legal counsel):
(a) the Company, acting through its Board of Directors, shall, in accordance
with applicable law, the Company Charter and the Company's bylaws, duly call,
give notice of, convene and hold a special meeting of stockholders (the "Company
Stockholders' Meeting") as soon as practicable after the date of this Agreement
for the purpose of adopting this Agreement and (b) the Company will, through the
Board of Directors based on the recommendation of the Special Committee, (i)
recommend to its stockholders the adoption of this Agreement, and (ii) use its
best efforts to obtain the Company Stockholder Approval. Merger Sub shall vote
all shares of Common Stock owned by it in favor of the adoption of this
Agreement.
16
SECTION 6.04. No Solicitation. The Company shall not, and shall not
authorize or permit any of its officers, directors, employees or agents to
directly or indirectly, solicit, encourage, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Merger
Sub, any of its affiliates or representatives) (collectively, a "Person")
concerning any merger, consolidation, tender offer, exchange offer, sale of all
or substantially all of the Company's assets, sale of shares of capital stock or
similar business combination transaction involving the Company or any principal
operating or business unit of the Company or its Subsidiaries (an "Acquisition
Proposal"). Notwithstanding the foregoing, (i) if the Company or the Special
Committee receives an unsolicited, written indication of a willingness to make
an Acquisition Proposal at a price per share which the Special Committee
reasonably concludes is in excess of the Merger Consideration from any Person
and if the Special Committee reasonably concludes, based upon advice of its
financial advisor, that the Person delivering such indication is capable of
consummating such an Acquisition Proposal (based upon, among other things, the
availability of financing and the capacity to obtain financing, the expectation
of receipt of required antitrust and other regulatory approvals and the identity
and background of such Person), then the Company or the Special Committee may,
directly or indirectly, provide access to or furnish or cause to be furnished
information concerning the Company's business, properties or assets to any such
Person pursuant to an appropriate confidentiality agreement and the Company or
the Special Committee may engage in discussions related thereto, and (ii) the
Company or the Special Committee may participate in and engage in discussions
and negotiations with any Person meeting the requirement set forth in clause (i)
above in response to a written Acquisition Proposal if the Special Committee
concludes, upon advice of its legal counsel, that the failure to engage in such
discussions or negotiations would be inconsistent with the Special Committee's
(and the Board's) fiduciary duties to the Company's stockholders under
applicable law. In the event that, after the Company has received a written
Acquisition Proposal (without breaching its obligations under clause (i) or (ii)
above) but prior to obtaining the Company Stockholder Approval of the Merger,
the Special Committee determines, in good faith and upon advice of its financial
advisor and legal counsel, that it is necessary to do so in order to comply with
its fiduciary duties to the Company's stockholders under applicable law, the
Special Committee may do any or all of the following: (x) withdraw or modify the
Board of Directors' approval or recommendation of the Merger or this Agreement,
(y) approve or recommend an Acquisition Proposal and (z) terminate this
Agreement. Furthermore, nothing contained in this Section 6.04 shall prohibit
the Company or its Board of Directors, upon the recommendation of the Special
Committee, from taking and disclosing to the Company's stockholders a position
with respect to a
17
tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act or from making such disclosure to the
Company's stockholders or otherwise which, in the judgment of the Special
Committee upon advice of legal counsel, is necessary under applicable law or
rules of any stock exchange. The Company shall promptly (but in any event within
two days) advise Merger Sub in writing of any Acquisition Proposal or any
inquiry regarding the making of an Acquisition Proposal including any request
for information, the material terms and conditions of such request, Acquisition
Proposal or inquiry and the identity of the Person making such request,
Acquisition Proposal or inquiry. The Company will, to the extent reasonably
practicable, keep Merger Sub fully informed of the status and details (including
amendments or proposed amendments) of any such request, Acquisition Proposal or
inquiry.
SECTION 6.05. Directors' and Officers' Insurance and Indemnification. (a)
From and after the consummation of the Merger, the parties shall, and shall
cause the Surviving Corporation to, indemnify, defend and hold harmless any
person who is now, or has been at any time prior to the date hereof, or who
becomes prior to the Effective Time, an officer or director (the "Indemnified
Party") of the Company and its subsidiaries against all losses, claims, damages,
liabilities, costs and expenses (including attorneys' fees and expenses),
judgments, fines, losses, and amounts paid in settlement, with the written
approval of the Surviving Corporation (which approval shall not be unreasonably
withheld), in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any such Claim
is based on, or arises out of, (i) the fact that such person is or was a
director, officer, employee or agent of the Company or any subsidiaries or is or
was serving at the request of the Company or any of its subsidiaries as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (ii) this Agreement, or any of the
transactions contemplated hereby, in each case to the extent that any such Claim
pertains to any matter or fact arising, existing, or occurring prior to or at
the Effective Time, regardless of whether such Claim is asserted or claimed
prior to, at or after the Effective Time, to the full extent permitted under
Delaware law or the Company's Certificate of Incorporation, Bylaws or
indemnification agreements in effect at the date hereof, including provisions
relating to advancement of expenses incurred in the defense of any action or
suit. Without limiting the foregoing, in the event any Indemnified Party becomes
involved in any capacity in any Claim, then from and after consummation of the
Merger, the parties shall cause the Surviving Corporation to, periodically
advance to such Indemnified Party its legal and other expenses (including the
cost of any investigation and preparation incurred in connection
18
therewith), subject to the provision by such Indemnified Party of an undertaking
to reimburse the amounts so advanced in the event of a final non-appealable
determination by a court of competent jurisdiction that such Indemnified Party
is not entitled thereto,
(b) Merger Sub and the Company agree that all rights to
indemnification and all limitations on liability existing in favor of the
Indemnified Party as provided in the Company's Certificate of Incorporation and
By-laws as in effect as of the date hereof shall survive the Merger and shall
continue in full force and effect, without any amendment thereto, for a period
of six years from the Effective Time to the extent such rights are consistent
with the DGCL; provided that in the event any claim or claims are asserted or
made within such six year period, all rights to indemnification in respect of
any such claim or claims shall continue until disposition of any and all such
claims; provided further, that any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under Delaware law, the Company's Certificate of Incorporation or
By-laws or such agreements, as the case may be, shall be made by independent
legal counsel selected by the Indemnified Party and reasonably acceptable to the
Surviving Corporation; and, provided further, that nothing in this Section 6.05
shall impair any rights or obligations of any present or former directors or
officers of the Company.
(c) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary
to effectuate the purposes of this Section 6.05, proper provision shall be made
so that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.05 and none of the actions described in
clauses (i) or (ii) shall be taken until such provision is made.
(d) The parties shall cause the Surviving Corporation to maintain the
Company's existing officers' and directors' liability insurance policy ("D&O
Insurance") for a period of not less than six years after the Effective Date;
provided, that the Surviving Corporation may substitute therefor policies of
substantially similar coverage and amounts containing terms no less advantageous
to such former directors or officers so long as such substitution does not
result in gaps or lapses in coverage; provided, further, if the existing D&O
Insurance expires or is cancelled during such period, Merger Sub or the
Surviving Corporation will use its best efforts to obtain substantially similar
D&O Insurance;
19
provided, however, that if the aggregate annual premiums for such D&O Insurance
(or successor insurance policy) at any time during such period exceed 200% of
the per annum rate of premiums currently paid by the Company for such insurance
on the date of this Agreement, then the parties will cause the Surviving
Corporation to, and the Surviving Corporation will, provide the maximum coverage
that shall then be available at an annual premium equal to 200% of such rate.
(e) This Section 6.05 is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on the Surviving Corporation and its
respective successors and assigns.
SECTION 6.06. Further Action; Best Efforts.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall (i) make promptly its respective filings and thereafter
make any other required submissions under the HSR Act with respect to the Merger
and the other transactions contemplated hereby, and (ii) use its reasonable best
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations or otherwise to consummate and make effective the Merger
and the other transactions contemplated hereby, including, without limitation,
using its reasonable best efforts to obtain (x) the Financing and (y) all
licenses, permits, waivers, orders, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and parties to contracts with
the Company and the Company Subsidiaries as are necessary for the consummation
of the Merger and the other transactions contemplated hereby.
(b) Notwithstanding the provisions of Section 6.06(a), nothing contained
in this Agreement shall obligate Merger Sub to take any action to consummate the
Merger and the other transactions contemplated hereby, the consummation of which
is dependent or conditioned on the receipt of any governmental or regulatory
approval or consent, in the event that the approval or consent so received
specifically includes conditions or restrictions in addition to those imposed by
laws and regulations of general applicability as in effect from time to time
(including conditions in addition to those imposed by existing laws and
regulations which require the prior approval of any governmental or regulatory
agency to the taking of any action or the consummation of any transaction), the
direct or indirect effect of which is or would be, to restrict, limit or
otherwise subject to penalty Merger Sub in the ownership of its assets or the
conduct of its business. For purposes of the foregoing, a condition, restriction
or
20
limitation arising out of any such approval or consent shall be deemed to be a
restriction or limitation on Merger Sub (regardless of whether Merger Sub is a
party to or otherwise legally obligated by such consent or approval) to the
extent that the taking of an action or the consummation of a transaction by
Merger Sub would result in Merger Sub, the Company or any Company Subsidiary
being in breach or violation of such consent or approval or otherwise causing
such consent or approval to terminate or expire.
(c) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
SECTION 6.07. Public Announcements. Merger Sub and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement as may be required by law, regulation or any listing agreement
or arrangement to which the Company or Merger Sub is a party with a national
securities exchange or the Nasdaq Stock Market if it has used all reasonable
efforts to consult with the other party and to obtain such party's consent but
has been unable to do so in a timely manner.
SECTION 6.08. Conveyance Taxes. Merger Sub and the Company shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated by this Agreement that
are required or permitted to be filed on or before the Effective Time.
SECTION 6.09. Employee Benefits. For the one-year period immediately
following the Effective Time, the coverage and benefits provided to those
individuals who are employees of the Company immediately prior to the Effective
Time (the "Employees") pursuant to employee benefit plans or arrangements
maintained by the Surviving Corporation shall not be, in the aggregate,
materially less favorable than the coverage benefits provided to the Employees
immediately prior to the Effective Time.
21
SECTION 6.10. Commitment Letter Notices. Following receipt by Merger Sub
or any of its affiliates of any written or oral communication to the effect that
the banks that are parties to the Commitment Letter are contemplating not
providing the financing for the Merger or the terminating or cancelling or
modifying in any respect of the Commitment Letter, or that the financing for the
Merger is unlikely to be obtained, Merger Sub shall immediately communicate such
event to the Company and provide the Company with a true and complete copy of
any such written communication.
SECTION 6.11. Knowledge of Breach. If prior to the Closing Merger Sub or
any member of the Management Group shall have actual knowledge of any breach of
a representation and warranty or covenant of the Company, Merger Sub shall
promptly notify the Company of such knowledge, including the basis of such
belief set forth in reasonable detail. If an officer of Merger Sub or any member
of the Management Group had actual knowledge prior to the execution of this
Agreement of a breach by the Company of any representation, warranty, covenant,
agreement or condition of this Agreement, such breach shall not be deemed to be
a breach of this Agreement for any purpose hereunder, and neither Merger Sub nor
any member of the Management Group shall have any claim or recourse against the
Company or its directors, officers, employees, affiliates, controlling persons,
agents, advisors or representatives with respect to such breach.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part, to the extent permitted by applicable law:
(a) Stockholder Approval. The Company Stockholder Approval shall
have been obtained.
(b) No Order. No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which materially restricts, prevents or prohibits consummation of the Merger or
the other
22
transactions contemplated by this Agreement; provided, however, that the parties
shall use their reasonable best efforts (subject to Section 6.06(b)) to cause
any such decree, judgment, injunction or other order to be vacated or lifted.
(c) HSR Act. Any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated, and no action
shall have been instituted by the Department of Justice or the Federal Trade
Commission challenging or seeking to enjoin the consummation of the Merger,
which action shall not have been withdrawn or terminated.
SECTION 7.02. Additional Conditions to Obligations of Merger Sub. The
obligation of Merger Sub to effect the Merger is also subject to satisfaction or
waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement, shall be true and
correct, in each case as of the Effective Time as though made on and as of the
Effective Time, except (i) for changes specifically permitted by this Agreement
and (ii) that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date and (iii)
where the failure to be true and correct would not, individually or in the
aggregate with all other such failures, have a Company Material Adverse Effect.
(b) Agreement and Covenants. The Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Effective
Time.
(c) Financing. Merger Sub shall have obtained the financing (the
"Financing") described in the Commitment Letter attached hereto as Annex A, and
the proceeds of such Financing shall have been received by or made immediately
available to Merger Sub at or immediately prior to the Closing.
(d) Dissenting Shares. On the Closing Date, Dissenting Shares shall
aggregate no more than 7.5% of the then outstanding shares of Common Stock.
(e) Material Adverse Effect. Subsequent to the date of this Agreement,
there shall not have occurred an event or events which, individually or in the
aggregate, has had or could reasonably be expected to have a Company Material
Adverse Effect, provided, however, that, for the purposes of this Section
7.01(e), the following shall be excluded from the definition of "Company
Material Adverse
23
Effect" and from any determination as to whether a Company Material Adverse
Effect has occurred or may occur with respect to the Company: the effects of
changes that are applicable to (A) the United States and Canada aviation ground
services business generally, (B) the United States and Canadian economy
generally or (C) the United States securities markets generally.
(f) Officer's Certificate. Merger Sub shall have received a certificate of
an appropriate officer of the Company to the effect that the conditions set
forth in Section 7.02(a), (b), (d) and (e) have been satisfied at the Effective
Time.
SECTION 7.03. Additional Conditions to Obligations of the Company.
The obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Merger Sub contained in this Agreement shall, if qualified by
materiality, be true and correct, and if not so qualified, be true and correct
in all material respects, in each case as of the Effective Time as though made
on and as of the Effective Time, except (i) for changes specifically permitted
by this Agreement and (ii) that those representations and warranties which
address matters only as of a particular date shall remain true and correct as of
such date.
(b) Agreement and Covenants. Merger Sub shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Effective
Time.
(c) Officer's Certificate. The Company shall have received a certificate
of an appropriate officer of Merger Sub to the effect that the conditions set
forth in Section 7.03(a) and (b) have been satisfied at the Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after adoption of this
Agreement by the stockholders of the Company:
24
(a) by mutual consent of the Company (acting through the Special
Committee) and Merger Sub;
(b) by Merger Sub upon a material breach of any covenant or agreement on
the part of the Company set forth in this Agreement which has not been cured, or
if any representation or warranty of the Company shall have become untrue in any
material respect, in either case such that such breach or untruth is incapable
of being cured prior to April 30, 1999;
(c) by the Company upon a material breach of any covenant or agreement on
the part of Merger Sub set forth in this Agreement which has not been cured, or
if any representation or warranty of the Company or Merger Sub shall have become
untrue in any material respect, in either case such that such breach or untruth
is incapable of being cured prior to April 30, 1999;
(d) by either Merger Sub or the Company, if any permanent injunction,
order, decree, ruling or other action by any Governmental Entity preventing the
consummation of the Merger shall have become final and nonappealable;
(e) by either Merger Sub or the Company, if the Merger shall not have been
consummated before April 30, 1999 (provided that the right to terminate this
Agreement under this Section 8.01(e) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Effective Time to occur on or before such date);
(f) by Merger Sub if: (i) the Board of Directors of the Company (acting
through the Special Committee) shall withdraw, modify or change its
recommendation so that it is not in favor of this Agreement or the Merger or
shall have resolved to do any of the foregoing; (ii) the Board of Directors of
the Company (acting through the Special Committee) shall have recommended or
resolved to recommend to its stockholders an Acquisition Proposal; or (iii) the
stockholder approval required pursuant to Section 7.01(a) shall not have been
obtained by April 30, 1999;
(g) by the Company (acting through the Special Committee) as provided in
Section 6.04; and
(h) by the Company (acting through the Special Committee) if it has
received a notice from Merger Sub that the Commitment Letter has been terminated
or cancelled.
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The right of any party hereto to terminate this Agreement pursuant to this
Section 8.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
SECTION 8.02. Effect of Termination. Except as provided in Section 8.05 or
Section 9.01(b), in the event of the termination of this Agreement pursuant to
Section 8.01, this Agreement shall forthwith become void, there shall be no
liability on the part of any party hereto, or any of their respective officers
or directors, to the other and all rights and obligations of any party hereto
shall cease; provided, however, that nothing herein shall relieve any party from
liability for the wilful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. Before or after adoption of this Agreement by the
stockholders of the Company, this Agreement may be amended by the parties hereto
at any time prior to the Effective Time; provided, however, that (a) any such
amendment shall, on behalf of the Company, have been approved by the Special
Committee and (b) after adoption of this Agreement by the stockholders of the
Company, no amendment which under applicable law may not be made without the
approval of the stockholders of the Company may be made without such approval.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, either the
Company (acting through the Special Committee), on the one hand, or Merger Sub,
on the other, may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by the other
party with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby and, with respect to
extensions or waivers granted by the Company, if the Special Committee shall
have approved such waiver or extension.
SECTION 8.05. Fees, Expenses and Other Payments. (a) Subject to paragraph
(b) of this Section 8.05, all costs and expenses (including any expenses related
to any claims or litigation in connection with the transactions contemplated by
this Agreement, or any settlement thereof), including, without limitation, fees
26
and disbursements of counsel, financial advisors and accountants and other
out-of-pocket expenses, incurred or to be incurred by the parties hereto in
connection with the transactions contemplated hereby (with respect to such
party, its "Expenses"), shall be borne solely and entirely by the party which
has incurred such costs and expenses; provided, however, that all costs and
expenses related to printing and mailing the Proxy Statement shall be borne by
the Company.
(b) The Company agrees that it will, promptly following receipt of
reasonable supporting documentation, pay to Merger Sub the reasonable Expenses
incurred by Merger Sub in connection with the transactions contemplated by this
Agreement, including any fees or expenses payable pursuant to the Commitment
Letter upon such termination, (x) up to a maximum reimbursement amount of
$1,750,000, if this Agreement shall be terminated by Merger Sub pursuant to
clause (i) and (ii) of Section 8.01(f) hereof or if this Agreement is terminated
by the Company pursuant to Section 8.01(g) hereof and (y) up to a maximum
reimbursement amount of $875,000, if this Agreement shall be terminated by
Merger Sub pursuant to clause (iii) of Section 8.01(f) hereof.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and Agreements.
(a) Except as set forth in Section 9.01(b), the representations, warranties and
agreements of each party hereto shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any other party
hereto, any person controlling any such party or any of their respective
officers or directors, whether prior to or after the execution of this
Agreement.
(b) The representations, warranties and agreements in this Agreement shall
terminate at the Effective Time or upon the termination of this Agreement
pursuant to Article VIII, except that the agreements set forth in Articles I, II
and IX and Section 6.05 shall survive the Effective Time and those set forth in
the last sentence of Section 6.01 and Sections 8.02 and 8.05 and Article IX
shall survive termination.
SECTION 9.02. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at
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such other address for a party as shall be specified by like changes of address)
or sent by electronic transmission to the telecopier number specified below:
(a) If to Merger Sub:
c/o Xxx X. Xxxxxxx
River Acquisition Corp.
000 Xxxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Simeon Gold, Esq.
Telecopier No.: (000) 000-0000
(b) If to the Company:
Xxxxxx General Corporation
000 Xxxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
with separate copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
SECTION 9.03. Certain Definitions. For purposes of this Agreement, the
term:
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(a) "affiliate" means a person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person;
(b) "business day" means any day other than a day on which (i) banks in
the State of New York are authorized or obligated to be closed or (ii) the SEC
or The American Stock Exchange, Inc. is closed;
(c) "control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or polices of a person or entity, whether through the ownership of
stock or as trustee or executor, by contract or credit arrangement or otherwise;
and
(d) "Management Group" means those persons listed on Schedule 9.03(d).
(e) "person" means any person or any corporation, partnership, limited
liability company or other legal entity.
(f) "subsidiary" or "subsidiaries" of any person means any corporation,
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary) owns, directly or
indirectly, at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or other
organization.
SECTION 9.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this Agree
ment is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions 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 to the fullest extent
permitted by applicable law in an
29
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 9.06. Entire Agreement. This Agreement, together with the
Confidentiality Agreement and the other documents delivered in connection
herewith, constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings including, without limitation, the letter
agreement dated July 9, 1998 relating to reimbursement of expenses, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
SECTION 9.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise and any purported assignment shall be null and
void, provided that Merger Sub may assign its rights, but not its obligations,
under this Agreement to any of its subsidiaries.
SECTION 9.08. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied (other than the provisions of Section 6.05, which
provisions are intended to benefit and may be enforced by the beneficiaries
thereof), is intended to or shall confer upon any person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 9.09. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to the conflict of laws rules thereof.
SECTION 9.10. Submission to Jurisdiction; Waivers. Each party hereto
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 Court of Chancery, or other courts, of the State of
Delaware, and each party hereto hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property, generally
and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
Each party hereto 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) the defense of sovereign immunity, (b) any
claim that it is not personally subject to the jurisdiction of the courts for
any reason other than the failure to serve process in accordance with this
Section 9.10, (c) 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
30
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (d) 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.
SECTION 9.11. Enforcement of this Agreement. (a) The parties hereto 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 or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which they are entitled at law or in equity.
(b) The parties hereto acknowledge and agree that no director, officer,
employee, stockholder, affiliate or representative of Merger Sub shall have any
liability whatsoever for any obligation or liability of Merger Sub.
SECTION 9.12. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company and Merger Sub have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
COMPANY:
XXXXXX GENERAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
MERGER SUB:
RIVER ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxx
Title: Chairman
32
