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EXHIBIT 10.15
AGREEMENT AND PLAN OF MERGER
dated as of August 16, 2000
by and among
GLOBALNET XXXXXXXXX.XXX, INC.,
TEXAS ACQUISITION CORP.
and
TELESCAN, INC.
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience only.
Page
No.
ARTICLE I THE MERGER................................................................1
1.01 The Merger..............................................................1
1.02 Closing.................................................................1
1.03 Effective Time..........................................................2
1.04 Certificate of Incorporation and By-Laws of the Surviving Corporation...2
1.05 Directors and Officers of the Surviving Corporation.....................2
1.06 Directors and Certain Officers of Parent................................2
1.07 Effects of the Merger...................................................2
1.08 Further Assurances......................................................2
ARTICLE II CONVERSION OF SHARES.....................................................3
2.01 Conversion of Capital Stock.............................................3
2.02 Exchange of Certificates................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................8
3.01 Organization and Qualification..........................................8
3.02 Capital Stock...........................................................8
3.03 Authority Relative to this Agreement....................................9
3.04 Non-Contravention; Approvals and Consents..............................10
3.05 SEC Reports and Financial Statements...................................11
3.06 Absence of Certain Changes or Events...................................11
3.07 Absence of Undisclosed Liabilities.....................................12
3.08 Legal Proceedings......................................................12
3.09 Information Supplied...................................................12
3.10 Compliance with Laws and Orders........................................13
3.11 Compliance with Agreements; Certain Agreements.........................13
3.12 Taxes..................................................................14
3.13 Employee Benefit Plans; ERISA..........................................14
3.14 Labor Matters..........................................................16
3.15 Environmental Matters..................................................16
3.16 Intellectual Property Rights...........................................17
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3.17 Assets.................................................................18
3.18 Insurance..............................................................18
3.19 Affiliate Arrangements.................................................19
3.20 Vote Required..........................................................19
3.21 Opinion of Financial Advisor...........................................19
3.22 Ownership of Parent Common Stock.......................................19
3.23 Takeover Provisions of the DGCL Not Applicable.........................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB........................20
4.01 Organization and Qualification.........................................20
4.02 Capital Stock..........................................................20
4.03 Authority Relative to this Agreement...................................21
4.04 Non-Contravention; Approvals and Consents..............................22
4.05 SEC Reports and Financial Statements...................................23
4.06 Absence of Certain Changes or Events...................................23
4.07 Absence of Undisclosed Liabilities.....................................23
4.08 Legal Proceedings......................................................24
4.09 Information Supplied...................................................24
4.10 Compliance with Laws and Orders........................................24
4.11 Compliance with Agreements; Certain Agreements.........................25
4.12 Taxes..................................................................25
4.13 Employee Benefit Plans; ERISA..........................................26
4.14 Labor Matters..........................................................27
4.15 Environmental Matters..................................................28
4.16 Intellectual Property Rights...........................................28
4.17 Assets.................................................................29
4.18 Insurance..............................................................29
4.19 Affiliate Arrangements.................................................29
4.20 Vote Required..........................................................29
4.21 Opinion of Financial Advisor...........................................30
4.22 Ownership of Company Common Stock......................................30
4.23 Takeover Provisions of the DGCL Not Applicable.........................30
ARTICLE V COVENANTS................................................................30
5.01 Covenants of the Company and Parent....................................30
5.02 No Company Solicitations...............................................33
5.03 Third Party Standstill Agreements......................................34
5.04 Purchases of Common Stock of the Other Party...........................34
5.05 Conduct of Business of Sub.............................................34
5.06 Takeover Statutes......................................................35
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ARTICLE VI ADDITIONAL AGREEMENTS...................................................35
6.01 Access to Information; Confidentiality.................................35
6.02 Preparation of Registration Statement and Proxy Statement..............35
6.03 Approval of Stockholders...............................................36
6.04 Affiliates.............................................................37
6.05 Stock Exchange Listing.................................................37
6.06 Certain Tax Matters....................................................38
6.07 Regulatory and Other Approvals.........................................38
6.08 Directors' and Officers' Indemnification and Insurance.................38
6.09 Expenses...............................................................40
6.10 Brokers or Finders.....................................................40
6.11 Conveyance Taxes.......................................................40
6.12 Welfare Benefits.......................................................40
ARTICLE VII CONDITIONS.............................................................41
7.01 Conditions to Each Party's Obligation to Effect the Merger.............41
7.02 Conditions to Obligation of Parent and Sub to Effect the Merger........42
7.03 Conditions to Obligation of the Company to Effect the Merger...........43
7.04 Issuance of New Parent Preferred Stock.................................43
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.....................................44
8.01 Termination............................................................44
8.02 Effect of Termination..................................................45
8.03 Amendment..............................................................46
8.04 Waiver.................................................................46
ARTICLE IX GENERAL PROVISIONS......................................................46
9.01 Non-Survival of Representations, Warranties, Covenants and Agreements..46
9.02 Notices................................................................46
9.03 Entire Agreement; Incorporation of Exhibits............................48
9.04 Public Announcements...................................................48
9.05 No Third Party Beneficiary.............................................48
9.06 No Assignment; Binding Effect..........................................48
9.07 Headings...............................................................48
9.08 Invalid Provisions.....................................................48
9.09 Governing Law; Consent to Jurisdiction.................................49
9.10 Enforcement of Agreement...............................................49
9.11 Certain Definitions....................................................49
9.12 Counterparts...........................................................50
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EXHIBITS
EXHIBIT A Form of Affiliate Agreement
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GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the
meanings ascribed to them in the corresponding Sections of this Agreement listed
below:
"affiliate" -- Section 9.11(a)
"Affiliate Agreement" -- Section 6.04
"Agreement" -- Preamble
"Antitrust Division" -- Section 6.07
"Average Parent Stock Price" -- Section 2.01(c)
"beneficially" -- Section 9.11(b)
"business day" -- Section 9.11(c)
"CERCLA" -- Section 3.15(b)
"Certificate of Merger" -- Section 1.03
"Certificates" -- Section 2.02(b)
"Closing" -- Section 1.02
"Closing Date" -- Section 1.02
"Code" -- Preamble
"Common Stock Trust" -- Section 2.02(e)(ii)
"Company" -- Preamble
"Company Affiliates" -- Section 6.04
"Company Alternative Transaction" -- Section 5.02
"Company Common Stock" -- Section 2.01(b)
"Company Disclosure Letter" -- Section 3.01
"Company Financial Advisor" -- Section 3.21
"Company Financial Statements" -- Section 3.05
"Company Insurance Policies" -- Section 3.18
"Company Intellectual Property" -- Section 3.16(a)
"Company Option Plans" -- Section 2.01(d)
"Company Permits" -- Section 3.10
"Company Plans" -- Section 3.13(a)
"Company Preferred Stock" -- Section 2.01(a)(ii)
"Company SEC Reports" -- Section 3.05
"Company Stock" -- Section 2.01(b)
"Company Stockholders" -- Preamble
"Company Stockholders' Approval" -- Section 6.03(b)
"Company Stockholders' Meeting" -- Section 6.03(b)
"Confidentiality Agreement" -- Section 6.01
"Constituent Corporations" -- Section 1.01
"Contracts" -- Section 3.04(a)
"control," "controlling," "controlled
by" and "under common control with" -- Section 9.11(a)
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"DGCL" -- Section 1.01
"Effective Time" -- Section 1.03
"Employee Option" -- Section 2.01(d)
"Environmental Law" -- Section 3.15(e)(i)
"Environmental Permits" -- Section 3.15(a)
"ERISA" -- Section 3.13(a)
"Excess Shares" -- Section 2.02(e)
"Exchange Act" -- Section 3.04(b)
"Exchange Agent" -- Section 2.02(a)
"Exchange Fund" -- Section 2.02(a)
"Exchange Ratio" -- Section 2.01(c)
"Executive Employment Agreement" -- Section 1.06
"FTC" -- Section 6.07
"Governmental or Regulatory Authority" -- Section 3.04(a)
"group" -- Section 9.11(f)
"Hazardous Material" -- Section 3.15(e)(ii)
"HSR Act" -- Section 3.04(b)
"incentive stock options" -- Section 2.01(d)
"Indemnified Liabilities" -- Section 6.08(a)
"Indemnified Parties" -- Section 6.08(a)
"Intellectual Property" -- Section 3.16(b)
"knowledge" -- Section 9.11(d)
"Laws" -- Section 3.04(a)
"Lien" -- Section 3.02(b)
"material", "material adverse
effect" and "materially adverse" -- Section 9.11(e)
"Maximum Amount" -- Section 6.08(c)
"Merger" -- Preamble
"Merger Consideration" -- Section 2.01(c)
"NASDAQ" -- Section 2.02(e)(ii)
"New Parent Preferred Stock" -- Section 2.01(a)(ii)
"Optionee" -- Section 2.01(d)
"Options" -- Section 3.02(a)
"Orders" -- Section 3.04(a)
"Parent" -- Preamble
"Parent Class A Common" -- Section 4.02
"Parent Class B Common" -- Section 4.02
"Parent Common Stock" -- Preamble
"Parent Disclosure Letter" -- Section 4.01
"Parent Financial Advisor" -- Section 4.21
"Parent Financial Statements" -- Section 4.05
"Parent Insurance Policies" -- Section 4.18
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"Parent Intellectual Property" -- Section 4.16(a)
"Parent Option Plans" -- Section 4.02
"Parent Permits" -- Section 4.10
"Parent Plans" -- Section 4.14(a)
"Parent Preferred Stock" -- Section 4.02(a)
"Parent Proposal" -- Preamble
"Parent SEC Reports" -- Section 4.05
"Parent Stock" -- Section 2.01(a)(ii)
"Parent Stockholders" -- Preamble
"Parent Stockholders Agreement" -- Preamble
"Parent Stockholders' Approval" -- Section 6.03(a)
"Parent Stockholders' Meeting" -- Section 6.03(a)
"person" -- Section 9.11(f)
"Proxy Statement" -- Section 3.09
"Registration Statement" -- Section 4.09
"Representatives" -- Section 9.11(g)
"SEC" -- Section 3.04(b)
"Secretary of State" -- Section 1.03
"Securities Act" -- Section 3.04(b)
"Significant Subsidiaries" -- Section 9.11(i)
"Stockholders' Meetings" -- Section 6.03(b)
"Sub" -- Preamble
"Sub Common Stock" -- Section 2.01(a)
"Subsidiary" -- Section 9.11(h)
"Superior Company Transaction" -- Section 6.03(b)
"Surviving Corporation" -- Section 1.01
"Surviving Corporation Common Stock" -- Section 2.01(a)
"taxes" -- Section 3.12(c)
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This AGREEMENT AND PLAN OF MERGER dated as of August 16, 2000
(the "Agreement") is made and entered into by and among Globalnet Xxxxxxxxx.xxx,
Inc., a Delaware corporation ("Parent"), Texas Acquisition Corp., a Delaware
corporation wholly owned by Parent ("Sub"), and Telescan, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Board of Directors of the Company has determined
that the business combination transaction on the terms set forth herein in which
Sub would merge with and into the Company and the Company would become a
wholly-owned subsidiary of Parent (the "Merger") is fair to and in the best
interests of the Company and its shareholders and has approved this Agreement
and the Merger and the other transactions contemplated hereby and has
recommended that the shareholders of the Company adopt this Agreement;
WHEREAS, the Board of Directors of Parent has determined that
the Merger is fair to and in the best interests of Parent and its stockholders
and has approved this Agreement and the Merger and the other transactions
contemplated hereby and has recommended that the stockholders of Parent approve
the issuance of shares of common stock, par value $.001 per share, of Parent
("Parent Common Stock") in the Merger (the "Parent Proposal");
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 1.03), Sub shall
be merged with and into the Company in accordance with the General Corporation
Law of the State of Delaware (the "DGCL"). At the Effective Time, the separate
existence of Sub shall cease and the Company shall continue as the surviving
corporation in the Merger (the "Surviving Corporation"). The Company and Sub are
sometimes referred to herein as the "Constituent Corporations". As a result of
the Merger, the outstanding shares of capital stock of the Constituent
Corporations shall be converted or cancelled in the manner provided in Article
II.
1.02 Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 8.01, and
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subject to the satisfaction or waiver (where applicable) of the conditions set
forth in Article VII, the closing of the Merger (the "Closing") will take place
at the offices of Milbank, Tweed, Xxxxxx & XxXxxx LLP, Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., local time, on the business day
following satisfaction of the condition set forth in Section 7.01(a), unless
another date, time or place is agreed to in writing by the parties hereto (the
"Closing Date"). At the Closing there shall be delivered to Parent, Sub and the
Company the certificates and other documents and instruments required to be
delivered under Article VII.
1.03 Effective Time. At the Closing, a certificate of merger
(the "Certificate of Merger") shall be duly prepared and executed by the
Surviving Corporation and thereafter delivered to the Secretary of State of the
State of Delaware (the "Secretary of State") for filing, as provided in the DGCL
as soon as practicable on the Closing Date. The Merger shall become effective at
the time of the filing of the Certificate of Merger with the Secretary of State
(the date and time of such filing being referred to herein as the "Effective
Time").
1.04 Certificate of Incorporation and By-Laws of the Surviving
Corporation. At the Effective Time, (i) the Certificate of Incorporation of Sub
as in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation and (ii) the By-Laws of Sub as in
effect immediately prior to the Effective Time shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
1.05 Directors and Officers of the Surviving Corporation. The
directors of Sub and the officers of the Company immediately prior to the
Effective Time shall, from and after the Effective Time, be the directors and
officers, respectively, of the Surviving Corporation until their successors
shall have been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and By-Laws.
1.06 Directors and Certain Officers of Parent. At the
Effective Time, Parent shall cause Xx. Xxxxxxx Xxxxx, Mr. W. Xxxxxx Xxxxxxx and
Xx. Xxx X. Xxxxx to be appointed to the Board of Directors of Parent (with Xx.
Xxxxx being appointed as Chairman of the Board) to serve until the next election
of directors of Parent and, at such next election of directors, shall cause such
designees to be nominated to be elected for a successive one year term. From and
after the Effective Time, Xx. Xxx X. Xxxxx shall be the Chief Executive Officer,
Xx. Xxxxxxx Xxxxxxxxx shall be the Vice Chairman and Mr. W. Xxxxxx Xxxxxxx shall
be the Chief Operating Officer of Parent. It is understood and agreed that
certain members of existing senior management of Parent will have new employment
contracts with Parent prior to the Effective Date.
1.07 Effects of the Merger. Subject to the foregoing, the
effects of the Merger shall be as provided in the applicable provisions of the
DGCL.
1.08 Further Assurances. Each party hereto will, either prior
to or after the Effective Time, execute such further documents, instruments,
deeds, bills of sale, assignments
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and assurances and take such further actions as may reasonably be requested by
one or more of the others to consummate the Merger, to vest the Surviving
Corporation with full title to all assets, properties, privileges, rights,
approvals, immunities and franchises of either of the Constituent Corporations
or to effect the other purposes of this Agreement and all matters related
thereto.
ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
(a) Capital Stock of Sub. (i) Each issued and outstanding
share of the common stock, par value $.10 per share, of Sub ("Sub Common Stock")
shall be converted into and become one fully paid and nonassessable share of
common stock, par value $.10 per share, of the Surviving Corporation ("Surviving
Corporation Common Stock"). Each certificate representing outstanding shares of
Sub Common Stock shall at the Effective Time represent an equal number of shares
of Surviving Corporation Common Stock.
(ii) Each issued and outstanding share of the 5% convertible
preferred stock, par value $.01 per share, of the Company ("Company Preferred
Stock") shall be converted into and become one fully paid and nonassessable
share of 5% convertible preferred stock, par value $.01 per share, of Parent,
with identical terms as the Company Preferred Stock with the terms of conversion
into shares of Parent Common Stock consistent with the Exchange Ratio (the "New
Parent Preferred Stock", and together with Parent Common Stock, "Parent Stock").
Each certificate representing outstanding shares of Company Preferred Stock
shall at the Effective Time represent an equal number of shares of New Parent
Preferred Stock.
(b) Cancellation of Treasury Stock and Stock Owned by Parent
and Subsidiaries. All shares of common stock, par value $.01 per share, of the
Company ("Company Common Stock", and together with Company Preferred Stock,
"Company Stock") that are owned by the Company as treasury stock and any shares
of Company Common Stock owned by Parent, Sub or any other wholly-owned
Subsidiary (as defined in Section 9.11(h)) of Parent shall be canceled and
retired and shall cease to exist and no shares of Parent Common Stock or other
consideration shall be delivered in exchange therefor.
(c) Exchange Ratio for Company Common Stock. Each issued and
outstanding share of Company Common Stock (other than shares to be canceled in
accordance with Section 2.01(b)) shall be converted into the right to receive
.50 (the "Exchange Ratio") fully paid and nonassessable shares of Parent Common
Stock (the "Merger Consideration"). All shares of Company Common Stock converted
into the Merger Consideration in accordance with this Section 2.01(c) shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right to receive
the Merger
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Consideration and any cash in lieu of fractional shares of Parent Common Stock
to be issued or paid in consideration therefor (determined in accordance with
Section 2.02(e)), upon the surrender of such certificate in accordance with
Section 2.02, without interest. The Exchange Ratio shall be adjusted to reflect
fully the effect of any stock split, reverse split, stock dividend (including
any dividend or distribution of securities convertible into Parent Common
Stock), reorganization, recapitalization or other like change with respect to
Parent Common Stock occurring after the date hereof and prior to the Effective
Time.
(d) Treatment of Options. (i) At the Effective Time, the
Company shall, if necessary, have amended each of the employee stock option
plans set forth in Section 2.01(d) of the Company Disclosure Letter (the
"Company Option Plans") to provide that each of the options to purchase one
share of Company Common Stock outstanding thereunder at the Effective Time (an
"Employee Option") shall be made applicable to the purchase of a number of
shares of Parent Common Stock as provided in this Section 2.01(d). Parent shall
take such action as shall be necessary so that, as of the Effective Time, each
holder of an Employee Option (an "Optionee") shall have such Optionee's Employee
Options apply to that number of shares of Parent Common Stock (adjusted to the
nearest whole share) equal to the product of (i) the number of shares of Company
Common Stock subject to such Optionee's Employee Options immediately prior to
the Effective Time and (ii) the Exchange Ratio. The exercise price per share for
each Optionee's Employee Options (adjusted to the nearest cent) assumed will
equal the old exercise price per share of Company Common Stock divided by the
Exchange Ratio; provided, however, that in the case of any Employee Option to
which Section 421 of the Code continues to apply by reason of its qualification
under Section 422 of the Code ("incentive stock options"), the option price, the
number of shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order to comply
with Section 424(a) of the Code and the regulations promulgated thereunder.
Without limiting the foregoing, the duration and other terms of each assumed or
replaced Employee Option immediately after the Effective Time (unless otherwise
agreed in writing by the Optionee with respect to a particular Employee Option)
shall be the same as the corresponding Employee Options that were in effect
immediately before the Effective Time, except that (x) as of the Closing Date,
all Employee Options shall become vested and immediately exercisable and (y)
references to the Company and Company Common Stock in the Company Option Plans
(and the corresponding references in each option agreement documenting each such
Employee Option) shall, as appropriate, be deemed to be references to Parent and
Parent Common Stock; provided, however, that the exercise price with respect to
each share of Parent Common Stock shall not be less than the par value of $.001
thereof.
(ii) As soon as practicable after the Effective Time, Parent
shall deliver to each Optionee appropriate notices setting forth such Optionee's
rights with respect to his or her Employee Options as modified by this Section
and the agreements between the Company and the Optionees evidencing the grants
of such Employee Options shall continue in effect on the same terms and
conditions.
(iii) 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 Employee Options as modified by this Section. As soon
as practicable after the Effective Time (and in any
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event within 20 days thereafter), Parent shall file a registration statement on
Form S-8, or another appropriate form, as the case may be (or any successor
form), with respect to the shares of Parent Common Stock subject to such 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
options remain outstanding.
2.02 Exchange of Certificates. (a) Exchange Agent. Promptly
following the Effective Time, Parent shall make available to the Surviving
Corporation for deposit with a bank or trust company designated before the
Closing Date by Parent and reasonably acceptable to the Company (the "Exchange
Agent") certificates representing the number of duly authorized whole shares of
Parent Stock issuable in connection with the Merger to be held for the benefit
of and distributed to such holders in accordance with this Section. The Exchange
Agent shall agree to hold such shares of Parent Stock (such shares of Parent
Stock, together with earnings thereon, being referred to herein as the "Exchange
Fund") for delivery as contemplated by this Section and upon such additional
terms as may be agreed upon by the Exchange Agent, the Company and Parent.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Company Stock (the "Certificates") whose shares are converted pursuant to
Section 2.01(c) into the right to receive the Merger Consideration (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 such form and have such other
provisions as the Surviving Corporation may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal duly executed and completed in accordance with its
terms, the holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of Parent Stock
plus the cash amount payable in lieu of fractional shares in accordance with
Section 2.02(e), which such holder has the right to receive pursuant to the
provisions of this Article II, and the Certificate so surrendered shall
forthwith be canceled. In no event shall the holder of any Certificate be
entitled to receive interest on any portion of the Merger Consideration to be
received in the Merger. In the event of a transfer of ownership of Company Stock
which is not registered in the transfer records of the Company, a certificate
representing that number of whole shares of Parent Stock plus the cash amount
payable in lieu of fractional shares in accordance with Section 2.02(e) may be
issued to a transferee if the Certificate representing such Company Stock is
presented to the Exchange Agent accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.02(b), each Certificate shall be deemed at any time after the Effective Time
for all corporate purposes of Parent, except as limited by paragraph (c) below,
to represent ownership of the number of shares of Parent Stock into which the
number of shares of Company Stock shown thereon have been converted as
contemplated by this Article II. Notwithstanding the foregoing, Certificates
representing Company Stock
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surrendered for exchange by any person constituting an "affiliate" of the
Company for purposes of Section 6.04 shall not be exchanged, to the extent
permitted by law and for purposes of pooling of interests accounting, until
Parent has received an Affiliate Agreement (as defined in Section 6.04) as
provided in Section 6.04.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to Parent Stock with a record date on or after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.02(e)
until the holder of record of such Certificate shall surrender such Certificate
in accordance with this Section. Subject to the effect of applicable Laws,
following surrender of any such Certificate, there shall be paid to the record
holder of the certificates representing whole shares of Parent Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions, if any, with a record date on or
after the Effective Time which theretofore became payable, but which were not
paid by reason of the immediately preceding sentence, with respect to such whole
shares of Parent Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date on or after the Effective
Time but prior to surrender and a payment date subsequent to surrender payable
with respect to such whole shares of Parent Stock.
(d) No Further Ownership Rights in Company Stock. All shares
of Parent Stock issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash paid pursuant to Section
2.02(e)) shall be deemed to have been issued at the Effective Time in full
satisfaction of all rights pertaining to the shares of Company Stock represented
by such Certificates. From and after the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers on the stock transfer books of the Surviving Corporation of the
shares of Company Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Section.
(e) No Fractional Shares. (i) No certificate or scrip
representing fractional shares of Parent Common Stock will be issued in the
Merger upon the surrender for exchange of Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a
stockholder of Parent. In lieu of any such fractional shares, each holder of
Certificates who would otherwise have been entitled to a fraction of a share of
Parent Common Stock in exchange for such Certificates pursuant to this Section
shall receive from the Exchange Agent a cash payment in lieu of such fractional
share determined in accordance with paragraph (iii) of this Section 2.02(e).
(ii) As soon as practicable following the Effective Time, the
Exchange Agent shall determine the aggregate number of whole shares of Parent
Common Stock represented by fractional shares of Parent Common Stock to which
holders of Company Common Stock would be entitled but for the provisions of
clause (i) of this Section 2.02(e) (such number of shares being herein called
the "Excess Shares") and shall, as agent for the holders of Company
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Common Stock, sell the Excess Shares at then prevailing prices on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), all in
the manner provided below. The sale of the Excess Shares by the Exchange Agent
shall be executed on NASDAQ and shall be executed in round lots to the extent
practicable. Until the net proceeds of such sale or sales have been distributed
to the holders of Company Common Stock, the Exchange Agent will hold such
proceeds in trust for the holders of Company Common Stock (the "Common Stock
Trust"). All commissions, transfer taxes and other out-of-pocket transaction
costs incurred in connection with such sale of the Excess Shares shall be
deducted from the proceeds of such sale.
(iii) The Exchange Agent shall determine the portion of the
Common Stock Trust to which each holder of Certificates shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Stock Trust by a fraction the numerator of which is the amount of the
fractional share interest to which such holder of Certificates is entitled and
the denominator of which is the aggregate amount of fractional share interests
to which all holders of Company Common Stock are entitled. As soon as
practicable after the determination of the amount of cash to be paid to holders
of Company Common Stock in lieu of any fractional share interests in accordance
with the immediately preceding sentence, the Exchange Agent shall make available
such amounts to such holders of Company Common Stock.
(f) Termination of Exchange Fund and Common Stock Trust. Any
portion of the Exchange Fund and Common Stock Trust which remains undistributed
to the shareholders of the Company for six (6) months after the Effective Time
shall be delivered to the Surviving Corporation, upon demand, and any
shareholders of the Company who have not theretofore complied with this Article
II shall thereafter look only to the Surviving Corporation (subject to abandoned
property, escheat and other similar Laws) as general creditors for payment of
the Merger Consideration and any dividends or distributions with respect to
Parent Stock. Neither Parent nor the Surviving Corporation shall be liable to
any holder of shares of Company Stock for shares of Parent Stock (or dividends
or distributions with respect thereto) or cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(g) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Stock such amounts as Parent is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Stock in respect of which such deduction and withholding was made by
Parent.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as
follows:
3.01 Organization and Qualification. Each of the Company and
its Subsidiaries is a corporation duly incorporated or organized, validly
existing and in good standing under the Laws of its jurisdiction of
incorporation or organization and has full power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its assets
and properties, except for such failures to be so incorporated or organized,
existing and in good standing or to have such power and authority which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect (as defined in Section 9.11(e)) on
the Company and its Subsidiaries taken as a whole. Each of the Company and its
Subsidiaries is duly qualified, licensed or admitted to do business and is in
good standing in each jurisdiction in which the ownership, use or leasing of its
assets and properties, or the conduct or nature of its business, makes such
qualification, licensing or admission necessary, except for such failures to be
so qualified, licensed or admitted and in good standing which, individually or
in the aggregate, are not having and could not be reasonably expected to have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
Section 3.01 of the letter dated the date hereof and delivered to Parent and Sub
by the Company concurrently with the execution and delivery of this Agreement
(the "Company Disclosure Letter") sets forth (i) the name and jurisdiction of
incorporation or organization of each Significant Subsidiary of the Company,
(ii) its authorized capital stock or other equity or ownership interests, (iii)
the number of issued and outstanding shares of capital stock or other equity or
ownership interests and (iv) the record owners of such shares or other equity or
ownership interests. Except for interests in the Subsidiaries of the Company and
as disclosed in Section 3.01 of the Company Disclosure Letter, the Company does
not directly or indirectly own five percent (5%) or more of any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
trust, limited liability company, joint venture or other entity or organization.
The Company has previously delivered or made available to Parent correct and
complete copies of the articles of incorporation and bylaws (or other comparable
organizational documents) of the Company and each of its Significant
Subsidiaries.
3.02 Capital Stock. (a) The authorized capital stock of the
Company consists solely of 30,000,000 shares of Company Common Stock and
10,000,000 shares of Company Preferred Stock. As of August 7, 2000, 16,817,326
shares of Company Common Stock were issued and outstanding, no shares were held
in the treasury of the Company and 3,722,500 shares were authorized for issuance
under stock option plans that provide for the grant of options to purchase
shares of Company Common Stock to non-employee directors, officers and employees
of the Company (the "Company Option Plans"). Since such date, there has been no
change in the number of issued and outstanding shares of Company Common Stock or
shares of Company Common Stock held in treasury or reserved for issuance, except
for shares that may have been issued upon the exercise of options previously
granted under the Company Option Plans. As of the date hereof, 120,000 shares of
Company Preferred Stock are issued and outstanding. All of the issued and
outstanding shares of Company Common Stock are, and all shares reserved for
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issuance will be, upon issuance in accordance with the terms specified in the
instruments or agreements pursuant to which they are issuable, duly authorized,
validly issued, fully paid and nonassessable. Except pursuant to this Agreement
and except as set forth in this Section 3.02 or in Section 3.02 of the Company
Disclosure Letter, there are no outstanding subscriptions, options, warrants,
rights (including "phantom" stock rights), preemptive rights or other contracts,
commitments, understandings or arrangements, including any right of conversion
or exchange under any outstanding security, instrument or agreement (together,
"Options"), obligating the Company or any of its Subsidiaries to issue or sell
any shares of capital stock of the Company or to grant, extend or enter into any
Option with respect thereto.
(b) Except as disclosed in Section 3.02 of the Company
Disclosure Letter, all of the outstanding shares of capital stock or other
equity or ownership interests of each Significant Subsidiary of the Company are
duly authorized, validly issued, fully paid and nonassessable and are owned,
beneficially and of record, by the Company or a Subsidiary wholly owned,
directly or indirectly, by the Company, free and clear of any liens, claims,
mortgages, encumbrances, pledges, security interests, equities and charges of
any kind (each, a "Lien"). Except as disclosed in Section 3.02 of the Company
Disclosure Letter, there are no (i) outstanding Options obligating the Company
or any of its Significant Subsidiaries to issue or sell any shares of capital
stock or other equity or ownership interests of any Significant Subsidiary of
the Company (other than an Option in favor of a wholly-owned Subsidiary of the
Company as to the equity or ownership interests of another wholly-owned
Subsidiary of the Company) or to grant, extend or enter into any such Option or
(ii) voting trusts, proxies or other commitments, understandings, restrictions
or arrangements in favor of any person other than the Company or a Subsidiary
wholly owned, directly or indirectly, by the Company with respect to the voting
of or the right to participate in dividends or other earnings on any capital
stock or other equity or ownership interests of any Subsidiary of the Company.
(c) Except as disclosed in Section 3.02 of the Company
Disclosure Letter, there are no outstanding contractual obligations of the
Company or any Subsidiary of the Company to repurchase, redeem or otherwise
acquire any shares of Company Common Stock or any capital stock or other equity
or ownership interests of any Significant Subsidiary of the Company or to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Significant Subsidiary of the Company or any
other person.
3.03 Authority Relative to this Agreement. The Company has
full corporate power and authority to enter into this Agreement and, subject to
obtaining the Company Stockholders' Approval (as defined in Section 6.03(b)), to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of the Company, the Board of Directors of the Company has recommended
adoption of this Agreement by the shareholders of the Company and directed that
this Agreement be submitted to the shareholders of the Company for their
consideration, and no other corporate proceedings on the part of the Company or
its shareholders are necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby, other than obtaining the Company
Stockholders' Approval.
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This Agreement has been duly and validly executed and delivered by the Company
and, subject to the obtaining of the Company Stockholders' Approval, constitutes
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.04 Non-Contravention; Approvals and Consents. (a) Except as
disclosed in Section 3.04 of the Company Disclosure Letter, the execution and
delivery of this Agreement by the Company do not, and the performance by the
Company of its obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any Lien upon any of the assets or properties of the
Company or any of its Significant Subsidiaries under, any of the terms,
conditions or provisions of (i) the certificates or articles of incorporation or
bylaws (or other comparable organizational documents) of the Company or any of
its Subsidiaries, or (ii) subject to the obtaining of the Company Stockholders'
Approval and the taking of the actions described in paragraph (b) of this
Section, (x) any statute, law, rule, regulation or ordinance (together, "Laws"),
or any judgment, decree, order, writ, permit or license (together, "Orders"), of
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States, any foreign country or any domestic
or foreign state, county, city or other political subdivision (a "Governmental
or Regulatory Authority") applicable to the Company or any of its Subsidiaries
or any of their respective assets or properties, or (y) any note, bond,
mortgage, security agreement, indenture, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of any kind
(together, "Contracts") to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective assets or properties is bound, excluding from the foregoing clauses
(x) and (y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on the Company and its Subsidiaries taken as a whole or
on the ability of the Company to consummate the transactions contemplated by
this Agreement.
(b) Except (i) for the filing of a pre-merger notification
report by the Company under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"), (ii)
for the filing of the Proxy Statement (as defined in Section 3.09) and the
Registration Statement (as defined in Section 4.09) with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (the "Exchange Act"), and
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Securities Act"), the declaration of the effectiveness of the Registration
Statement by the SEC and filings with various state securities authorities that
are required in connection with the transactions contemplated by this Agreement,
(iii) for the filing of the Certificate of Merger and other appropriate merger
documents required by the DGCL with the Secretary of State and appropriate
documents with
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the relevant authorities of other states in which the Constituent Corporations
are qualified to do business, (iv) for the filing of a current report on Form
8-K pursuant to Section 13 or Section 15(d) of the Exchange Act and (v) as
disclosed in Section 3.04 of the Company Disclosure Letter, no consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
or other public or private third party is necessary or required under any of the
terms, conditions or provisions of any law or order of any Governmental or
Regulatory Authority or any Contract to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective assets or properties is bound for the execution and
delivery of this Agreement by the Company, the performance by the Company of its
obligations hereunder or the consummation of the transactions contemplated
hereby, other than such consents, approvals, actions, filings and notices which
the failure to make or obtain, as the case may be, individually or in the
aggregate, could not be reasonably expected to have a material adverse effect on
the Company and its Subsidiaries taken as a whole or on the ability of the
Company to consummate the transactions contemplated by this Agreement.
3.05 SEC Reports and Financial Statements. The Company
delivered or has made available to Parent prior to the execution of this
Agreement a true and complete copy of each form, report, schedule, registration
statement, definitive proxy statement and other document (together with all
amendments thereof and supplements thereto) filed by the Company or any of its
Subsidiaries with the SEC since December 31, 1998 (as such documents have since
the time of their filing been amended or supplemented, the "Company SEC
Reports"), which are all the documents (other than preliminary material) that
the Company and its Subsidiaries were required to file with the SEC since such
date. As of their respective dates, the Company SEC Reports (i) complied as to
form in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not contain any untrue statement
of a material fact or omit 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. The audited
consolidated financial statements and unaudited interim consolidated financial
statements (including, in each case, the notes, if any, thereto) included in the
Company SEC Reports (the "Company Financial Statements") complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated therein or in the notes thereto and except with respect to
unaudited statements as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments (which are not expected to be, individually
or in the aggregate, materially adverse to the Company and its Subsidiaries
taken as a whole)) the consolidated financial position of the Company and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended. Each Subsidiary of the Company is treated as a consolidated
Subsidiary of the Company in the Company Financial Statements for all periods
covered thereby.
3.06 Absence of Certain Changes or Events. Except as disclosed
in the Company SEC Reports filed prior to the date of this Agreement or in the
Company Disclosure Letter, (a) since March 31, 2000 there has not been any
change, event or development having, or that would have, individually or in the
aggregate, a material adverse effect on the Company and
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its Subsidiaries taken as a whole, and (b) except as disclosed in Section 3.06
of the Company Disclosure Letter, between such date and the date hereof (i) the
Company and its Subsidiaries have conducted their respective businesses only in
the ordinary course consistent with past practice and (ii) neither the Company
nor any of its Subsidiaries has taken any action which, if taken after the date
hereof, would constitute a breach of any provision of clause (ii) of Section
5.01(b).
3.07 Absence of Undisclosed Liabilities. Except for matters
reflected or reserved against in the balance sheet for the period ended March
31, 2000 included in the Company Financial Statements or as disclosed in the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries had
at such date, or has incurred since that date, any liabilities or obligations
(whether absolute, accrued, contingent, fixed or otherwise, or whether due or to
become due) of any nature that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of the
Company and its consolidated Subsidiaries (including the notes thereto), except
liabilities or obligations (i) which were incurred in the ordinary course of
business consistent with past practice, (ii) which have not been, and could not
be reasonably expected to be, individually or in the aggregate, materially
adverse to the Company and its Subsidiaries taken as a whole, or (iii) which
have been incurred in connection with this Agreement and the transactions
contemplated hereby.
3.08 Legal Proceedings. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or in Section 3.08 of the
Company Disclosure Letter, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of the Company, threatened against,
relating to or affecting, nor are there any Governmental or Regulatory Authority
investigations or audits pending or to the knowledge of the Company threatened
against, relating to or affecting, the Company or any of its Subsidiaries or any
of their respective assets and properties which, individually or in the
aggregate, could be reasonably expected to have a material adverse effect on the
Company and its Subsidiaries taken as a whole or on the ability of the Company
to consummate the transactions contemplated by this Agreement, and (ii) neither
the Company nor any of its Subsidiaries is subject to any order of any
Governmental or Regulatory Authority which, individually or in the aggregate, is
having or could be reasonably expected to have a material adverse effect on the
Company and its Subsidiaries taken as a whole or on the ability of the Company
to consummate the transactions contemplated by this Agreement.
3.09 Information Supplied. The joint proxy statement relating
to the Stockholders' Meetings (as defined in Section 6.03(b)), as amended or
supplemented from time to time (as so amended and supplemented, the "Proxy
Statement"), and any other documents to be filed by the Company with the SEC or
any other Governmental or Regulatory Authority in connection with the Merger and
the other transactions contemplated hereby will (in the case of the Proxy
Statement and any such other documents filed with the SEC under the Exchange Act
or the Securities Act) comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act, respectively, and will
not, on the date of its filing or, in the case of the Proxy Statement, at the
date it is mailed to stockholders of the Company and of Parent and at the times
of the Stockholders' Meetings, 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
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the statements therein, in light of the circumstances under which they are made,
not misleading, except that no representation is made by the Company with
respect to information supplied in writing by or on behalf of Parent or Sub
expressly for inclusion therein and information incorporated by reference
therein from documents filed by Parent or any of its Subsidiaries with the SEC.
3.10 Compliance with Laws and Orders. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, Orders and
approvals of all Governmental and Regulatory Authorities necessary for the
lawful conduct of their respective businesses (the "Company Permits"), except
for failures to hold such permits, licenses, variances, exemptions, Orders and
approvals which, individually or in the aggregate, are not having and could not
be reasonably expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole. The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except failures so to comply
which, individually or in the aggregate, are not having and could not be
reasonably expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement, the Company and its Subsidiaries are
not in violation of or default under any law or order of any Governmental or
Regulatory Authority, except for such violations or defaults which, individually
or in the aggregate, are not having and could not be reasonably expected to have
a material adverse effect on the Company and its Subsidiaries taken as a whole.
3.11 Compliance with Agreements; Certain Agreements. (a)
Except as disclosed in the Company SEC Reports filed prior to the date of this
Agreement, neither the Company nor any of its Subsidiaries nor, to the knowledge
of the Company, any other party thereto is in breach or violation of, or in
default in the performance or observance of any term or provision of, and no
event has occurred which, with notice or lapse of time or both, could be
reasonably expected to result in a default under, (i) the certificates or
articles of incorporation or bylaws (or other comparable charter documents) of
the Company or any of its Significant Subsidiaries or (ii) any Contract to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective assets or properties is bound,
except in the case of clause (ii) for breaches, violations and defaults which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(b) Except as disclosed in Section 3.11 of the Company
Disclosure Letter or in the Company SEC Reports filed prior to the date of this
Agreement or as provided for in this Agreement, as of the date hereof, neither
the Company nor any of its Subsidiaries is a party to any oral or written (i)
consulting agreement not terminable on thirty (30) days' or less notice, (ii)
union or collective bargaining agreement, (iii) agreement with any executive
officer or other key employee of the Company or any of its Subsidiaries the
benefits of which are contingent or vest, or the terms of which are materially
altered, upon the occurrence of a transaction involving the Company or any of
its Subsidiaries of the nature contemplated by this Agreement, (iv) agreement
with respect to any executive officer or other key employee of the Company or
any of its Subsidiaries providing any term of employment or compensation
guarantee or (v) agreement or plan, including any stock option, stock
appreciation right, restricted stock or stock purchase plan, any of the benefits
of which will be increased, or the vesting of the benefits
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of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement.
3.12 Taxes. (a) Each of the Company and its Subsidiaries has
filed all material tax returns and reports required to be filed by it, or
requests for extensions to file such returns or reports have been timely filed
or granted and have not expired, and all such tax returns and reports are
complete and accurate in all respects, except to the extent that such failures
to file, have extensions granted that remain in effect or be complete and
accurate in all respects, as applicable, individually or in the aggregate, would
not have a material adverse effect on the Company and its Subsidiaries taken as
a whole. The Company and each of its Subsidiaries has paid (or the Company has
paid on its behalf) all taxes shown as due on such tax returns and reports. The
most recent financial statements contained in the Company SEC Reports reflect an
adequate reserve for all taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements, and no deficiencies for any taxes have been proposed,
asserted or assessed against the Company or any of its Subsidiaries that are not
adequately reserved for, except for inadequately reserved taxes and inadequately
reserved deficiencies that would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries taken as a whole. No
requests for waivers of the time to assess any taxes against the Company or any
of its Subsidiaries have been granted or are pending, except for requests with
respect to such taxes that have been adequately reserved for in the most recent
financial statements contained in the Company SEC Reports, or, to the extent not
adequately reserved, the assessment of which would not, individually or in the
aggregate, have a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(b) Neither the Company nor any of its Subsidiaries has taken
any action or has any knowledge of any fact or circumstance that is reasonably
likely to prevent the Merger from qualifying as a tax-free reorganization within
the meaning of Section 368 of the Code.
(c) As used in this Section 3.12 and in Section 4.12, "taxes"
shall include all federal, state, local and foreign income, franchise, property,
sales, use, excise, value added, ad volorem and other taxes, including
obligations for withholding taxes from payments due or made to any other person
and any interest, penalties or additions to tax.
3.13 Employee Benefit Plans; ERISA. (a) Section 3.13 of the
Company Disclosure Letter contains a true and complete list of each material
"employee benefit plan" (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including, without
limitation, multiemployer plans within the meaning of ERISA Section 3(37)),
stock purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA (including any funding mechanism
therefor now in effect or required in the future as a result of the transactions
contemplated by this Agreement or otherwise), whether formal or informal, oral
or written, under which any employee or former employee of the Company or any of
its Subsidiaries has any present or future right to benefits or under which the
Company or any of its Subsidiaries has any present or future liability. All such
plans,
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agreements, programs, policies and arrangements shall be collectively referred
to as the "Company Plans".
(b) With respect to each Company Plan, the Company has made
available to Parent prior to the execution and delivery of this Agreement a
current, accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) any related
trust agreement or other funding instrument; (ii) the most recent determination
letter, if applicable; (iii) any summary plan description and other written
communications (or a description of any oral communications) by the Company or
any of its Subsidiaries to their employees concerning the extent of the benefits
provided under a Company Plan; and (iv) for the three most recent fiscal years
(A) the Form 5500 and attached schedules, (B) audited financial statements, (C)
actuarial valuation reports and (D) attorney's response to an auditor's request
for information.
(c) Except as would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole: (i) each Company Plan has been
established and administered in accordance with its terms, and in compliance
with the applicable provisions of ERISA, the Code and other applicable Laws,
rules and regulations; (ii) each Company Plan which is intended to be qualified
within the meaning of Code Section 401(a) is so qualified and has received a
favorable determination letter as to its qualification, and nothing has
occurred, whether by action or failure to act, that could reasonably be expected
to cause the loss of such qualification; (iii) no event has occurred and no
condition exists that would subject the Company or any of its Subsidiaries,
either directly or by reason of their affiliation with any member of their
"controlled group" (defined as any organization which is a member of a
controlled group of organizations within the meaning of Code Sections 414(b),
(c), (m) or (o)), to any tax, fine, lien, penalty or other liability imposed by
ERISA, the Code or other applicable Laws, rules and regulations; (iv) for each
Company Plan with respect to which a Form 5500 has been filed, no material
change has occurred with respect to the matters covered by the most recent Form
since the date thereof; (v) no "reportable event" (as such term is defined in
ERISA Section 4043), "prohibited transaction" (as such term is defined in ERISA
Section 406 and Code Section 4975) or "accumulated funding deficiency" (as such
term is defined in ERISA Section 302 and Code Section 412 (whether or not
waived)) has occurred with respect to any Company Plan; and (vi) no Company Plan
provides retiree welfare benefits and neither the Company nor any of its
Subsidiaries has any obligations to provide any retiree welfare benefits.
(d) With respect to any multiemployer plan (within the meaning
of ERISA Section 4001(a)(3)) to which the Company, any of its Subsidiaries or
any member of their controlled group has any liability or contributes (or has at
any time contributed or had an obligation to contribute), except as would not
have a material adverse effect on the Company and its Subsidiaries taken as a
whole: (i) none of the Company, any of its Subsidiaries or any member of their
controlled group has incurred any withdrawal liability under Title IV of ERISA;
and (ii) no such multiemployer plan is in reorganization or insolvent (as those
terms are defined in ERISA Sections 4241 and 4245, respectively).
(e) With respect to any Company Plan, except as would not have
a material adverse effect on the Company and its Subsidiaries taken as a whole:
(i) no actions, suits or
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claims (other than routine claims for benefits in the ordinary course) are
pending or, to the knowledge of the Company, threatened, and (ii) to the
Company's knowledge, no facts or circumstances exist that could reasonably be
expected to give rise to any such actions, suits or claims.
(f) No Company Plan exists that could result in the payment to
any present or former employee of the Company or any of its Subsidiaries of any
money or other property or accelerate or provide any other rights or benefits to
any present or former employee of the Company or any of its Subsidiaries as a
result of the transactions contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning of Code Section
280G.
3.14 Labor Matters. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or in Section 3.14 of the
Company Disclosure Letter, there are no controversies pending or, to the
knowledge of the Company, threatened between the Company or any of its
Subsidiaries and any representatives of its employees, except as would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries taken as a whole, and, to the knowledge of the Company,
there are no material organizational efforts presently being made involving any
of the now unorganized employees of the Company or any of its Subsidiaries.
Since December 31, 1997, there has been no work stoppage, strike or other
concerted action by employees of the Company or any of its Subsidiaries except
as is not having or could not be reasonably expected to have a material adverse
effect on the Company and its Subsidiaries taken as a whole.
3.15 Environmental Matters. (a) Each of the Company and its
Subsidiaries has obtained all licenses, permits, authorizations, approvals and
consents from Governmental or Regulatory Authorities which are required under
any applicable Environmental Law (as defined below) in respect of its business
or operations ("Environmental Permits"), except for such failures to have
Environmental Permits which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole. Each of such Environmental Permits is in full
force and effect and each of the Company and its Subsidiaries is in compliance
with the terms and conditions of all such Environmental Permits and with any
applicable Environmental Law, except for such failures to be in compliance
which, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the Company and its Subsidiaries taken as a
whole.
(b) To the knowledge of the Company, no site or facility now
or previously owned, operated or leased by the Company or any of its
Subsidiaries is listed or proposed for listing on the National Priorities List
promulgated pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the rules and regulations thereunder
("CERCLA"), or on any similar state or local list of sites requiring
investigation or clean-up.
(c) No Liens have arisen under or pursuant to any
Environmental Law on any site or facility owned, operated or leased by the
Company or any of its Subsidiaries, other than any such Liens on real property
not individually or in the aggregate material to the Company and its
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Subsidiaries taken as a whole, and no action of any Governmental or Regulatory
Authority has been taken or, to the knowledge of the Company, is in process
which could subject any of such properties to such Liens, and neither the
Company nor any of its Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any such site or
facility owned by it in any deed to the real property on which such site or
facility is located.
(d) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or which are in the
possession of, the Company or any of its Subsidiaries in relation to any site or
facility now or previously owned, operated or leased by the Company or any of
its Subsidiaries which have not been delivered to Parent prior to the execution
of this Agreement.
(e) As used in this Section 3.15 and Section 4.15:
(i) "Environmental Law" means any law or order of any
Governmental or Regulatory Authority relating to the
regulation or protection of human health, safety or the
environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface
strata), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes; and
(ii) "Hazardous Material" means (A) any petroleum or
petroleum products, flammable explosives, radioactive
materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing
levels of polychlorinated biphenyls (PCBs); (B) any chemicals
or other materials or substances which are now or hereafter
become defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants" or words of similar
import under any Environmental Law; and (C) any other chemical
or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated by any Governmental
or Regulatory Authority under any Environmental Law.
3.16 Intellectual Property Rights. (a) Section 3.16 of the
Company Disclosure Letter sets forth a complete and accurate list of all
Intellectual Property owned by the Company or any of its Subsidiaries that is
material to the conduct of the businesses of the Company and its Subsidiaries,
taken as a whole ("Company Intellectual Property"), including any Liens thereon,
the name of the holder of any such Lien and the amount and nature of any
obligation secured by such Lien. The Company and its Subsidiaries have all
right, title and interest in, or a valid and binding license to use, all Company
Intellectual Property. Neither the Company nor any Subsidiary of the Company is
in default (or with the giving of notice or lapse of time or both, would be in
default) under any licenses, consents, royalty and other agreements concerning
the
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Company Intellectual Property to which the Company is a party. To the knowledge
of the Company, the Company Intellectual Property is not being infringed by any
third party, and to the knowledge of the Company, neither the Company nor any
Subsidiary of the Company is infringing any Intellectual Property rights of any
third party, except for such defaults and infringements which, individually or
in the aggregate, are not having and could not be reasonably expected to have a
material adverse effect on the Company and its Subsidiaries taken as a whole. No
Company Intellectual Property has been canceled, abandoned or otherwise
terminated, all patent applications, trademark applications and copyright
applications included in Company Intellectual Property have been duly filed and
are recorded on the public record in the name of the Company or one of its
Subsidiaries, and all renewal fees with respect thereto have been duly paid,
other than where such action or failure to act, as the case may be, could not,
individually or in the aggregate, be reasonably expected to have a material
adverse effect on the Company and its Subsidiaries taken as a whole. Except as
set forth in Section 3.16 of the Company Disclosure Letter, neither the Company
nor any of its Subsidiaries has granted any material license or other rights
with respect to any Company Intellectual Property to any other person.
(b) For purposes of this Section 3.16 and Section 4.16,
"Intellectual Property" shall mean all U.S., state and foreign intellectual
property, including without limitation all (i) (a) patents, inventions,
discoveries, processes, designs, techniques, developments, technology, and
related improvements and know-how; (b) copyrights and works of authorship in any
media, including computer programs, hardware, firmware, software, applications,
files, databases, documentation and related items; (c) trademarks, service
marks, trade names, brand names, corporate names, domain names, logos, trade
dress, the goodwill of any business symbolized thereby, and all common-law
rights relating thereto; (d) trade secrets and other confidential or proprietary
documents, files, analyses, lists, ways of doing business and/or information;
(ii) registrations, applications and recordings related thereto; (iii) rights to
obtain renewals, extensions, continuations, continuations-in-part, reissues,
divisions or similar legal protections related thereto; and (iv) rights to bring
an action at law or in equity for the infringement or other impairment of the
foregoing before the Closing Date, including the right to receive all proceeds
and damages therefrom.
3.17 Assets. The assets, properties, rights and Contracts,
including (as applicable) title or leaseholds thereto, of the Company and its
Subsidiaries, taken as a whole, are sufficient to permit the Company and its
Subsidiaries to conduct their business as currently being conducted with only
such exceptions as are not reasonably likely to have a material adverse effect
on the Company and its Subsidiaries taken as a whole. All material real property
owned by the Company and its Subsidiaries is owned free and clear of all Liens,
except (i) those reflected or reserved against in the latest balance sheet or
notes thereto included in the Company Financial Statements, (ii) taxes and
general and special assessments not in default and payable without penalty or
interest, (iii) Liens disclosed in Section 3.17 of the Company Disclosure Letter
and (iv) Liens that do not materially adversely interfere with any present use
of such property.
3.18 Insurance. Section 3.18 of the Company Disclosure Letter
sets forth a complete and accurate list of all material policies of insurance of
the Company and its Significant Subsidiaries currently in force, including
surety bonds or other credit support therefor (the "Company Insurance
Policies"), the current annual premiums for each Company Insurance
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Policy and the types of risk covered and limits of coverage. All Company
Insurance Policies are in full force and effect and all premiums due thereon
have been paid. The Company has complied in all material respects with the terms
and provisions of the Company Insurance Policies. The Company has never applied
for and been refused or denied any policy of insurance with respect to product
liability matters, matters arising by reason of clinical trials, environmental
matters or workmen's compensation. The Company's insurance coverage is adequate
in kind and amount based on current industry practice.
3.19 Affiliate Arrangements. Except as disclosed in Section
3.19 of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries is a party to any Contract, arrangement, understanding or other
commitment or pending or proposed transaction with any director or officer of
the Company or of any of its Subsidiaries or any affiliates of any such persons
(other than compensation arrangements entered into in the ordinary course of
business and other than as disclosed in the Company SEC Reports filed prior to
the date of this Agreement and employee health, welfare and benefit plans
available generally to the officers or employees of the Company and its
Subsidiaries).
3.20 Vote Required. Assuming the accuracy of the
representation and warranty contained in Section 4.22, the affirmative vote of a
majority of the outstanding shares of Company Common Stock entitled to vote at
the Company Stockholders' Meeting (as defined in Section 6.03(b)) with respect
to the adoption of this Agreement is the only vote of the holders of any class
or series of the capital stock of the Company required to adopt this Agreement
and approve the Merger and the other transactions contemplated hereby.
3.21 Opinion of Financial Advisor. The Company has received
the opinion of Xxxxxxxxx Xxxxxxxx & Company (the "Company Financial Advisor"),
dated the date hereof, to the effect that, as of the date hereof, the
consideration to be received in the Merger by the shareholders of the Company is
fair from a financial point of view to the shareholders of the Company, and a
true and complete copy of such opinion has been delivered to Parent prior to the
execution of this Agreement.
3.22 Ownership of Parent Common Stock. The Company and its
Subsidiaries and other affiliates beneficially own 2,548,993 shares of Parent
Common Stock.
3.23 Takeover Provisions of the DGCL Not Applicable. The
Company has taken all necessary actions so that the provisions of Section 203 of
the DGCL do not and will not, before the termination of this Agreement, apply to
this Agreement, the Merger or the other transactions contemplated hereby.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as
follows:
4.01 Organization and Qualification. Each of Parent and its
Subsidiaries (including Sub) is a corporation duly incorporated or organized,
validly existing and in good standing under the Laws of its jurisdiction of
incorporation or organization and has full power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its assets
and properties, except for such failures to be so incorporated or organized,
existing and in good standing or to have such power and authority which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Parent and its Subsidiaries taken
as a whole. Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement, has engaged in no other business
activities and has conducted its operations only as contemplated hereby. Each of
Parent and its Subsidiaries is duly qualified, licensed or admitted to do
business and is in good standing in each jurisdiction in which the ownership,
use or leasing of its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary, except for
such failures to be so qualified, licensed or admitted and in good standing
which, individually or in the aggregate, are not having and could not be
reasonably expected to have a material adverse effect on Parent and its
Subsidiaries taken as a whole. Section 4.01 of the letter dated the date hereof
and delivered by Parent and Sub to the Company concurrently with the execution
and delivery of this Agreement (the "Parent Disclosure Letter") sets forth (i)
the name and jurisdiction of incorporation or organization of each Significant
Subsidiary of Parent, (ii) its authorized capital stock or other equity or
ownership interests, (iii) the number of issued and outstanding shares of
capital stock or other equity or ownership interests and (iv) the record owners
of such shares or other equity or ownership interests. Except for interests in
the Subsidiaries of Parent and as disclosed in Section 4.01 of the Parent
Disclosure Letter, Parent does not directly or indirectly own five percent (5%)
or more of any equity or similar interest in, or any interest convertible into
or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, trust, limited liability company, joint venture or
other entity or organization.
4.02 Capital Stock. (a) The authorized capital stock of Parent
consists solely of 50,000,000 shares of Parent Common Stock, 50,000,000 shares
of Class A common stock, par value $.001 per share ("Parent Class A Common"),
25,000,000 shares of Class B common stock, par value $.001 per share ("Parent
Class B Common"), and 20,000,000 shares of Preferred Stock, par value $.001 per
share ("Parent Preferred Stock"). As of August 3, 2000, 16,196,208 shares of
Parent Common Stock were issued and outstanding, 2,500 shares were held in the
treasury of Parent and 6,000,000 shares were reserved for issuance under stock
option plans that provide for the grant of options to purchase shares of Parent
Common Stock to non-employee directors, officers and employees of Parent and its
Subsidiaries (the "Parent Option Plans"). Since such date, there has been no
change in the number of issued and outstanding shares of Parent Common Stock or
shares of Parent Common Stock held in treasury or reserved for issuance, except
for shares that may have been issued upon the exercise of options previously
granted under the Parent Option Plans. As of August 3, 2000, 34,224,874 shares
of Parent Class A
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Common are issued and outstanding. As of August 3, 2000, no shares of Parent
Class B Common are issued and outstanding. As of the date hereof, no shares of
Parent Preferred Stock are issued and outstanding. All of the issued and
outstanding shares of Parent Common Stock are, and all shares reserved for
issuance and all shares issuable in the Merger pursuant to this Agreement will
be, upon issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized, validly issued,
fully paid and nonassessable. Except pursuant to this Agreement and except as
set forth in this Section 4.02 or Section 4.02 of the Parent Disclosure Letter,
there are no outstanding Options obligating Parent or any of its Subsidiaries to
issue or sell any shares of capital stock of Parent or to grant, extend or enter
into any Option with respect thereto.
(b) Except as disclosed in Section 4.02 of the Parent
Disclosure Letter, all of the outstanding shares of capital stock or other
equity or ownership interests of each Significant Subsidiary of Parent are duly
authorized, validly issued, fully paid and nonassessable and are owned,
beneficially and of record, by Parent or a Subsidiary wholly owned, directly or
indirectly, by Parent, free and clear of any Liens. Except as disclosed in
Section 4.02 of the Parent Disclosure Letter, there are no (i) outstanding
Options obligating Parent or any of its Significant Subsidiaries to issue or
sell any shares of capital stock or other equity or ownership interests of any
Significant Subsidiary of the Parent (other than an Option in favor of a
wholly-owned Subsidiary of Parent as to the equity or ownership interests of
another wholly-owned Subsidiary of Parent) or to grant, extend or enter into any
such Option or (ii) voting trusts, proxies or other commitments, understandings,
restrictions or arrangements in favor of any person other than Parent or a
Subsidiary wholly owned, directly or indirectly, by Parent with respect to the
voting of or the right to participate in dividends or other earnings on any
capital stock or other equity or ownership interests of any Subsidiary of
Parent.
(c) Except as disclosed in Section 4.02 of the Parent
Disclosure Letter, there are no outstanding contractual obligations of Parent or
any Subsidiary of Parent to repurchase, redeem or otherwise acquire any shares
of Parent Common Stock or any capital stock or other equity or ownership
interests of any Significant Subsidiary of Parent or to provide funds to, or
make any investment (in the form of a loan, capital contribution or otherwise)
in, any Significant Subsidiary of Parent or any other person.
4.03 Authority Relative to this Agreement. Each of Parent and
Sub has full corporate power and authority to enter into this Agreement and,
subject to obtaining the Parent Stockholders' Approval (as defined in Section
6.03(a)), to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of Parent and Sub and the consummation by each of Parent
and Sub of the transactions contemplated hereby have been duly and validly
approved by their respective Boards of Directors and by Parent in its capacity
as the sole shareholder of Sub, the Board of Directors of Parent has recommended
approval of the Parent Proposal by the stockholders of Parent and directed that
the Parent Proposal be submitted to the stockholders of Parent for their
consideration, and no other corporate proceedings on the part of either of
Parent or Sub or their stockholders are necessary to authorize the execution,
delivery and performance of this Agreement by Parent and Sub and the
consummation by Parent and Sub of the transactions contemplated hereby, other
than obtaining the Parent Stockholders' Approval. This Agreement
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has been duly and validly executed and delivered by each of Parent and Sub and,
subject to the obtaining of the Parent Stockholders' Approval, constitutes a
legal, valid and binding obligation of each of Parent and Sub enforceable
against each of Parent and Sub in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.04 Non-Contravention; Approvals and Consents. (a) Except as
disclosed in Section 4.04 of the Parent Disclosure Letter, the execution and
delivery of this Agreement by each of Parent and Sub do not, and the performance
by each of Parent and Sub of its obligations hereunder and the consummation of
the transactions contemplated hereby will not, conflict with, result in a
violation or breach of, constitute (with or without notice or lapse of time or
both) a default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of Parent or any of its Significant Subsidiaries under, any of the
terms, conditions or provisions of (i) the certificates or articles of
incorporation or bylaws (or other comparable organizational documents) of Parent
or any of its Subsidiaries, or (ii) subject to the obtaining of the Parent
Stockholders' Approval and the taking of the actions described in paragraph (b)
of this Section, (x) any Laws or Orders of any Governmental or Regulatory
Authority applicable to Parent or any of its Subsidiaries or any of their
respective assets or properties, or (y) any Contracts to which Parent or any of
its Subsidiaries is a party or by which Parent or any of its Subsidiaries or any
of their respective assets or properties is bound, excluding from the foregoing
clauses (x) and (y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on Parent and its Subsidiaries taken as a whole or on
the ability of Parent and Sub to consummate the transactions contemplated by
this Agreement.
(b) Except (i) for the filing of a pre-merger notification
report by Parent under the HSR Act, (ii) for the filing of the Proxy Statement
and Registration Statement with the SEC pursuant to the Exchange Act and the
Securities Act, the declaration of the effectiveness of the Registration
Statement by the SEC and filings with various state securities authorities that
are required in connection with the transactions contemplated by this Agreement,
(iii) for the filing of the Certificate of Merger and other appropriate merger
documents required by the DGCL with the Secretary of State and appropriate
documents with the relevant authorities of other states in which the Constituent
Corporations are qualified to do business, (iv) for the filing of a current
report on Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act and (v)
as disclosed in Section 4.04 of the Parent Disclosure Letter, no consent,
approval or action of, filing with or notice to any Governmental or Regulatory
Authority or other public or private third party is necessary or required under
any of the terms, conditions or provisions of any law or order of any
Governmental or Regulatory Authority or any Contract to which Parent or any of
its Subsidiaries is a party or by which Parent or any of its Subsidiaries or any
of their respective assets or properties is bound for the execution and delivery
of this Agreement by each of Parent and Sub, the performance by each of Parent
and Sub of its obligations hereunder or the consummation of the transactions
contemplated hereby, other than such consents, approvals, actions, filings and
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notices which the failure to make or obtain, as the case may be, individually or
in the aggregate, could not be reasonably expected to have a material adverse
effect on Parent and its Subsidiaries taken as a whole or on the ability of
Parent and Sub to consummate the transactions contemplated by this Agreement.
4.05 SEC Reports and Financial Statements. Parent delivered or
has made available to the Company prior to the execution of this Agreement a
true and complete copy of each form, report, schedule, registration statement,
definitive proxy statement and other document (together with all amendments
thereof and supplements thereto) filed by Parent or any of its Subsidiaries with
the SEC since December 31, 1998 (as such documents have since the time of their
filing been amended or supplemented, the "Parent SEC Reports"), which are all
the documents (other than preliminary material) that Parent and its Subsidiaries
were required to file with the SEC since such date. As of their respective
dates, the Parent SEC Reports (i) complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and (ii) did not contain any untrue statement of a material fact or omit 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. The audited consolidated financial statements and
unaudited interim consolidated financial statements (including, in each case,
the notes, if any, thereto) included in the Parent SEC Reports (the "Parent
Financial Statements") complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto and except with respect to unaudited statements as
permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of
the unaudited interim financial statements, to normal, recurring year-end audit
adjustments (which are not expected to be, individually or in the aggregate,
materially adverse to Parent and its Subsidiaries taken as a whole)) the
consolidated financial position of Parent and its consolidated Subsidiaries as
at the respective dates thereof and the consolidated results of their operations
and cash flows for the respective periods then ended. Except as set forth in
Section 4.05 of the Parent Disclosure Letter, each Subsidiary of Parent is
treated as a consolidated Subsidiary of Parent in the Parent Financial
Statements for all periods covered thereby.
4.06 Absence of Certain Changes or Events. Except as disclosed
in the Parent SEC Reports filed prior to the date of this Agreement or in the
Parent Disclosure Letter, (a) since March 31, 2000 there has not been any
change, event or development having, or that would have, individually or in the
aggregate, a material adverse effect on Parent and its Subsidiaries taken as a
whole, and (b) except as disclosed in Section 4.06 of the Parent Disclosure
Letter, between such date and the date hereof (i) Parent and its Subsidiaries
have conducted their respective businesses only in the ordinary course
consistent with past practice and (ii) neither Parent nor any of its
Subsidiaries has taken any action which, if taken after the date hereof, would
constitute a breach of any provision of clause (ii) of Section 5.01(b).
4.07 Absence of Undisclosed Liabilities. Except for matters
reflected or reserved against in the balance sheet for the period ended March
31, 2000 included in the Parent Financial Statements or as disclosed in the
Parent Disclosure Letter, neither Parent nor any of its
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Subsidiaries had at such date, or has incurred since that date, any liabilities
or obligations (whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to become due) of any nature that would be required by generally
accepted accounting principles to be reflected on a consolidated balance sheet
of Parent and its consolidated Subsidiaries (including the notes thereto),
except liabilities or obligations (i) which were incurred in the ordinary course
of business consistent with past practice, (ii) which have not been, and could
not be reasonably expected to be, individually or in the aggregate, materially
adverse to Parent and its Subsidiaries taken as a whole, or (iii) which have
been incurred in connection with this Agreement and the transactions
contemplated hereby.
4.08 Legal Proceedings. Except as disclosed in the Parent SEC
Reports filed prior to the date of this Agreement or in Section 4.08 of the
Parent Disclosure Letter, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of Parent, threatened against, relating
to or affecting, nor are there any Governmental or Regulatory Authority
investigations or audits pending or to the knowledge of Parent threatened
against, relating to or affecting, Parent or any of its Subsidiaries or any of
their respective assets and properties which, individually or in the aggregate,
could be reasonably expected to have a material adverse effect on Parent and its
Subsidiaries taken as a whole or on the ability of Parent and Sub to consummate
the transactions contemplated by this Agreement, and (ii) neither Parent nor any
of its Subsidiaries is subject to any order of any Governmental or Regulatory
Authority which, individually or in the aggregate, is having or could be
reasonably expected to have a material adverse effect on Parent and its
Subsidiaries taken as a whole or on the ability of Parent and Sub to consummate
the transactions contemplated by this Agreement.
4.09 Information Supplied. The registration statement on Form
S-4 to be filed with the SEC by Parent in connection with the issuance of shares
of Parent Common Stock in the Merger, as amended or supplemented from time to
time (as so amended and supplemented, the "Registration Statement"), and any
other documents to be filed by Parent with the SEC or any other Governmental or
Regulatory Authority in connection with the Merger and the other transactions
contemplated hereby will (in the case of the Registration Statement and any such
other documents filed with the SEC under the Securities Act or the Exchange Act)
comply as to form in all material respects with the requirements of the Exchange
Act and the Securities Act, respectively, and will not, on the date of its
filing or, in the case of the Registration Statement, at the time it becomes
effective under the Securities Act, at the date the Proxy Statement is mailed to
stockholders of the Company and of Parent and at the times of the Stockholders'
Meetings, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by Parent or Sub with respect
to information supplied in writing by or on behalf of the Company expressly for
inclusion therein and information incorporated by reference therein from
documents filed by the Company or any of its Subsidiaries with the SEC.
4.10 Compliance with Laws and Orders. Parent and its
Subsidiaries hold all permits, licenses, variances, exemptions, Orders and
approvals of all Governmental and Regulatory Authorities necessary for the
lawful conduct of their respective businesses (the "Parent Permits"), except for
failures to hold such permits, licenses, variances, exemptions,
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Orders and approvals which, individually or in the aggregate, are not having and
could not be reasonably expected to have a material adverse effect on Parent and
its Subsidiaries taken as a whole. Parent and its Subsidiaries are in compliance
with the terms of the Parent Permits, except failures so to comply which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Parent and its Subsidiaries taken
as a whole. Except as disclosed in the Parent SEC Reports filed prior to the
date of this Agreement, Parent and its Subsidiaries are not in violation of or
default under any law or order of any Governmental or Regulatory Authority,
except for such violations or defaults which, individually or in the aggregate,
are not having and could not be reasonably expected to have a material adverse
effect on Parent and its Subsidiaries taken as a whole.
4.11 Compliance with Agreements; Certain Agreements. (a)
Except as disclosed in the Parent SEC Reports filed prior to the date of this
Agreement, neither Parent nor any of its Subsidiaries nor, to the knowledge of
Parent, any other party thereto is in breach or violation of, or in default in
the performance or observance of any term or provision of, and no event has
occurred which, with notice or lapse of time or both, could be reasonably
expected to result in a default under, (i) the certificates or articles of
incorporation or bylaws (or other comparable charter documents) of Parent or any
of its Significant Subsidiaries or (ii) any Contract to which Parent or any of
its Subsidiaries is a party or by which Parent or any of its Subsidiaries or any
of their respective assets or properties is bound, except in the case of clause
(ii) for breaches, violations and defaults which, individually or in the
aggregate, are not having and could not be reasonably expected to have a
material adverse effect on Parent and its Subsidiaries taken as a whole.
(b) Except as disclosed in Section 4.11 of the Parent
Disclosure Letter or in the Parent SEC Reports filed prior to the date of this
Agreement or as provided for in this Agreement, as of the date hereof, neither
Parent nor any of its Subsidiaries is a party to any oral or written (i)
consulting agreement not terminable on thirty (30) days' or less notice, (ii)
union or collective bargaining agreement, (iii) agreement with any executive
officer or other key employee of Parent or any of its Subsidiaries the benefits
of which are contingent or vest, or the terms of which are materially altered,
upon the occurrence of a transaction involving Parent or any of its Subsidiaries
of the nature contemplated by this Agreement, (iv) agreement with respect to any
executive officer or other key employee of Parent or any of its Subsidiaries
providing any term of employment or compensation guarantee or (v) agreement or
plan, including any stock option, stock appreciation right, restricted stock or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
4.12 Taxes. (a) Each of Parent and its Subsidiaries has filed
all material tax returns and reports required to be filed by it, or requests for
extensions to file such returns or reports have been timely filed or granted and
have not expired, and all such tax returns and reports are complete and accurate
in all respects, except to the extent that such failures to file, have
extensions granted that remain in effect or be complete and accurate in all
respects, as applicable, individually or in the aggregate, would not have a
material adverse effect on Parent
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and its Subsidiaries taken as a whole. Parent and each of its Subsidiaries has
paid (or Parent has paid on its behalf) all taxes shown as due on such tax
returns and reports. The most recent financial statements contained in the
Parent SEC Reports reflect an adequate reserve for all taxes payable by Parent
and its Subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements, and no deficiencies for any taxes
have been proposed, asserted or assessed against Parent or any of its
Subsidiaries that are not adequately reserved for, except for inadequately
reserved taxes and inadequately reserved deficiencies that would not,
individually or in the aggregate, have a material adverse effect on Parent and
its Subsidiaries taken as a whole. No requests for waivers of the time to assess
any taxes against Parent or any of its Subsidiaries have been granted or are
pending, except for requests with respect to such taxes that have been
adequately reserved for in the most recent financial statements contained in the
Parent SEC Reports, or, to the extent not adequately reserved, the assessment of
which would not, individually or in the aggregate, have a material adverse
effect on Parent and its Subsidiaries taken as a whole.
(b) Neither Parent nor any of its Subsidiaries has taken any
action or has any knowledge of any fact or circumstance that is reasonably
likely to prevent the Merger from qualifying as a tax-free reorganization within
the meaning of Section 368 of the Code.
4.13 Employee Benefit Plans; ERISA. (a) Section 4.13 of the
Parent Disclosure Letter contains a true and complete list of each material
"employee benefit plan" (within the meaning of Section 3(3) of ERISA, including,
without limitation, multiemployer plans within the meaning of ERISA section
3(37)), stock purchase, stock option, severance, employment, change-in-control,
fringe benefit, collective bargaining, bonus, incentive, deferred compensation
and all other employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA (including any funding mechanism
therefor now in effect or required in the future as a result of the transactions
contemplated by this Agreement or otherwise), whether formal or informal, oral
or written, under which any employee or former employee of Parent or any of its
Subsidiaries has any present or future right to benefits or under which Parent
or any of its Subsidiaries has any present or future liability. All such plans,
agreements, programs, policies and arrangements shall be collectively referred
to as the "Parent Plans".
(b) With respect to each Parent Plan, Parent has made
available to the Company prior to the execution and delivery of this Agreement a
current, accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) any related
trust agreement or other funding instrument; (ii) the most recent determination
letter, if applicable; (iii) any summary plan description and other written
communications (or a description of any oral communications) by Parent or any of
its Subsidiaries to their employees concerning the extent of the benefits
provided under a Parent Plan; and (iv) for the three most recent fiscal years
(A) the Form 5500 and attached schedules, (B) audited financial statements, (C)
actuarial valuation reports and (D) attorney's response to an auditor's request
for information.
(c) Except as would not have a material adverse effect on
Parent and its Subsidiaries taken as a whole: (i) each Parent Plan has been
established and administered in accordance with its terms, and in compliance
with the applicable provisions of ERISA, the Code
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and other applicable Laws, rules and regulations; (ii) each Parent Plan which is
intended to be qualified within the meaning of Code Section 401(a) is so
qualified and has received a favorable determination letter as to its
qualification, and nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such qualification; (iii)
no event has occurred and no condition exists that would subject Parent or any
of its Subsidiaries, either directly or by reason of their affiliation with any
member of their "controlled group" (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
Sections 414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable Laws, rules and
regulations; (iv) for each Parent Plan with respect to which a Form 5500 has
been filed, no material change has occurred with respect to the matters covered
by the most recent Form since the date thereof; (v) no "reportable event" (as
such term is defined in ERISA Section 4043), "prohibited transaction" (as such
term is defined in ERISA Section 406 and Code Section 4975) or "accumulated
funding deficiency" (as such term is defined in ERISA Section 302 and Code
Section 412 (whether or not waived)) has occurred with respect to any Parent
Plan; and (vi) no Parent Plan provides retiree welfare benefits and neither
Parent nor any of its Subsidiaries has any obligations to provide any retiree
welfare benefits.
(d) With respect to any multiemployer plan (within the meaning
of ERISA Section 4001(a)(3)) to which Parent, any of its Subsidiaries or any
member of their controlled group has any liability or contributes (or has at any
time contributed or had an obligation to contribute), except as would not have a
material adverse effect on Parent and its Subsidiaries taken as a whole: (i)
none of Parent, any of its Subsidiaries or any member of their controlled group
has incurred any withdrawal liability under Title IV of ERISA; and (ii) no such
multiemployer plan is in reorganization or insolvent (as those terms are defined
in ERISA Sections 4241 and 4245, respectively).
(e) With respect to any Parent Plan, except as would not have
a material adverse effect on Parent and its Subsidiaries taken as a whole: (i)
no actions, suits or claims (other than routine claims for benefits in the
ordinary course) are pending or, to the knowledge of Parent, threatened, and
(ii) to Parent's knowledge, no facts or circumstances exist that could
reasonably be expected to give rise to any such actions, suits or claims.
(f) No Parent Plan exists that could result in the payment to
any present or former employee of Parent or any of its Subsidiaries of any money
or other property or accelerate or provide any other rights or benefits to any
present or former employee of Parent or any of its Subsidiaries as a result of
the transactions contemplated by this Agreement, whether or not such payment
would constitute a parachute payment within the meaning of Code Section 280G.
4.14 Labor Matters. Except as disclosed in the Parent SEC
Reports filed prior to the date of this Agreement or in Section 4.14 of the
Parent Disclosure Letter, there are no controversies pending or, to the
knowledge of Parent, threatened between Parent or any of its Subsidiaries and
any representatives of its employees, except as would not, individually or in
the aggregate, have a material adverse effect on Parent and its Subsidiaries
taken as a whole, and, to the knowledge of Parent, there are no material
organizational efforts presently being made involving any of the now unorganized
employees of Parent or any of its Subsidiaries. Since
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December 31, 1997, there has been no work stoppage, strike or other concerted
action by employees of Parent or any of its Subsidiaries except as is not having
or could not be reasonably expected to have a material adverse effect on Parent
and its Subsidiaries taken as a whole.
4.15 Environmental Matters. (a) Each of Parent and its
Subsidiaries has obtained all Environmental Permits which are required under any
applicable Environmental Law in respect of its business or operations, except
for such failures to have Environmental Permits which, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect on
Parent and its Subsidiaries taken as a whole. Each of such Environmental Permits
is in full force and effect and each of Parent and its Subsidiaries is in
compliance with the terms and conditions of all such Environmental Permits and
with any applicable Environmental Law, except for such failures to be in
compliance which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Parent and its Subsidiaries taken
as a whole.
(b) To the knowledge of Parent, no site or facility now or
previously owned, operated or leased by Parent or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List promulgated
pursuant to CERCLA or on any similar state or local list of sites requiring
investigation or clean-up.
(c) No Liens have arisen under or pursuant to any
Environmental Law on any site or facility owned, operated or leased by Parent or
any of its Subsidiaries, other than any such Liens on real property not
individually or in the aggregate material to Parent and its Subsidiaries taken
as a whole, and no action of any Governmental or Regulatory Authority has been
taken or, to the knowledge of Parent, is in process which could subject any of
such properties to such Liens, and neither Parent nor any of its Subsidiaries
would be required to place any notice or restriction relating to the presence of
Hazardous Materials at any such site or facility owned by it in any deed to the
real property on which such site or facility is located.
(d) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or which are in the
possession of, Parent or any of its Subsidiaries in relation to any site or
facility now or previously owned, operated or leased by Parent or any of its
Subsidiaries which have not been delivered to the Company prior to the execution
of this Agreement.
4.16 Intellectual Property Rights. (a) Section 4.16 of the
Parent Disclosure Letter sets forth a complete and accurate list of all
Intellectual Property owned by Parent or any of its Subsidiaries that is
material to the conduct of the businesses of Parent and its Subsidiaries, taken
as a whole ("Parent Intellectual Property"), including any Liens thereon, the
name of the holder of any such Lien and the amount and nature of any obligation
secured by such Lien. Parent and its Subsidiaries have all right, title and
interest in, or a valid and binding license to use, all Parent Intellectual
Property. Neither Parent nor any Subsidiary of Parent is in default (or with the
giving of notice or lapse of time or both, would be in default) under any
licenses, consents, royalty and other agreements concerning Parent Intellectual
Property to which Parent is a party. To the knowledge of Parent, Parent
Intellectual Property is not being infringed by any third party, and to the
knowledge of Parent, neither Parent nor any Subsidiary of Parent is
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infringing any Intellectual Property rights of any third party, except for such
defaults and infringements which, individually or in the aggregate, are not
having and could not be reasonably expected to have a material adverse effect on
Parent and its Subsidiaries taken as a whole. No Parent Intellectual Property
has been canceled, abandoned or otherwise terminated, all patent applications,
trademark applications and copyright applications included in Parent
Intellectual Property have been duly filed and are recorded on the public record
in the name of Parent or one of its Subsidiaries, and all renewal fees with
respect thereto have been duly paid, other than where such action or failure to
act, as the case may be, could not, individually or in the aggregate, be
reasonably expected to have a material adverse effect on Parent and its
Subsidiaries taken as a whole. Except as set forth in Section 4.16 of the Parent
Disclosure Letter, neither Parent nor any of its Subsidiaries has granted any
material license or other rights with respect to any Parent Intellectual
Property to any other person.
4.17 Assets. The assets, properties, rights and Contracts,
including (as applicable) title or leaseholds thereto, of Parent and its
Subsidiaries, taken as a whole, are sufficient to permit Parent and its
Subsidiaries to conduct their business as currently being conducted with only
such exceptions as are not reasonably likely to have a material adverse effect
on Parent and its Subsidiaries taken as a whole. All material real property
owned by Parent and its Subsidiaries is owned free and clear of all Liens,
except (i) those reflected or reserved against in the latest balance sheet or
notes thereto included in the Parent Financial Statements, (ii) taxes and
general and special assessments not in default and payable without penalty or
interest, (iii) Liens disclosed in Section 4.17 of the Parent Disclosure Letter
and (iv) Liens that do not materially adversely interfere with any present use
of such property.
4.18 Insurance. Section 4.18 of the Parent Disclosure Letter
sets forth a complete and accurate list of all material policies of insurance of
Parent and its Significant Subsidiaries currently in force, including surety
bonds or other credit support therefor (the "Parent Insurance Policies"), the
current annual premiums for each Parent Insurance Policy and the types of risk
covered and limits of coverage. All Parent Insurance Policies are in full force
and effect and all premiums due thereon have been paid. Parent has complied in
all material respects with the terms and provisions of the Parent Insurance
Policies. Parent has never applied for and been refused or denied any policy of
insurance with respect to product liability matters, matters arising by reason
of clinical trials, environmental matters or workmen's compensation. Parent's
insurance coverage is adequate in kind and amount based on current industry
practice.
4.19 Affiliate Arrangements. Except as disclosed in Section
4.19 of the Parent Disclosure Letter, neither Parent nor any of its Subsidiaries
is a party to any Contract, arrangement, understanding or other commitment or
pending or proposed transaction with any director or officer of Parent or of any
of its Subsidiaries or any affiliate of any such persons (other than
compensation arrangements entered into in the ordinary course of business and
other than as disclosed in the Parent SEC Reports filed prior to the date of
this Agreement and employee health, welfare and benefit plans available
generally to the officers or employees of Parent and its Subsidiaries).
4.20 Vote Required. Assuming the accuracy of the
representation and warranty contained in Section 3.22, the affirmative vote of
the holders of a majority of the outstanding
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shares of Parent Common Stock and Parent Class A Common, voting together as a
single class, entitled to vote at the Parent Stockholders' Meeting (as defined
in Section 6.03(a)) with respect to the approval of the Parent Proposal are the
only votes of the holders of any class or series of the capital stock of Parent
required to approve the Merger, the Parent Proposal and the other transactions
contemplated hereby.
4.21 Opinion of Financial Advisor. Parent has received the
opinion of PaineWebber Incorporated (the "Parent Financial Advisor"), dated the
date hereof, to the effect that, as of the date hereof, the consideration to be
paid in the Merger by Parent is fair from a financial point of view to Parent,
and a true and complete copy of such opinion has been delivered to the Company
prior to the execution of this Agreement.
4.22 Ownership of Company Common Stock. Parent and its
Subsidiaries and other affiliates beneficially own 545,000 shares of Company
Common Stock.
4.23 Takeover Provisions of the DGCL Not Applicable. Parent
has taken all necessary actions so that the provisions of Section 203 of the
DGCL do not and will not, before the termination of this Agreement, apply to
this Agreement, the Merger or the other transactions contemplated hereby.
ARTICLE V
COVENANTS
5.01 Covenants of the Company and Parent. At all times from
and after the date hereof until the Effective Time, the Company and Parent each
covenants and agrees as to itself and its Subsidiaries that (except as expressly
contemplated or permitted by this Agreement, or to the extent that the other
party shall otherwise previously consent in writing):
(a) Ordinary Course. Each party and each of its Subsidiaries
shall conduct their respective businesses only in, and none of the Company,
Parent and such Subsidiaries shall take any action except in, the ordinary
course consistent with past practice.
(b) Without limiting the generality of paragraph (a) of this
Section, (i) each party and its Subsidiaries shall use all commercially
reasonable efforts to preserve intact in all material respects their present
business organizations and reputation, to keep available the services of their
key officers and employees, to maintain their assets and properties in good
working order and condition, ordinary wear and tear excepted, to maintain
insurance on their tangible assets and businesses in such amounts and against
such risks and losses as are currently in effect, to preserve their
relationships with customers and suppliers and others having significant
business dealings with them and to comply in all material respects with all Laws
and Orders of all Governmental or Regulatory Authorities applicable to them, and
(ii) neither party shall, nor shall it permit any of its Subsidiaries to, except
as otherwise expressly provided for in this Agreement or in connection with a
Superior Company Transaction or as approved by the other party hereto in writing
(which consent shall not be unreasonably withheld or delayed) or as set forth in
Section 5.01(b)(ii) of the Company Disclosure Letter or the Parent Disclosure
Letter, as the case may be:
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(A) amend or propose to amend its certificate or articles of
incorporation or bylaws (or other comparable corporate charter
documents);
(B) (w) declare, set aside or pay any dividends on or make
other distributions in respect of any of its capital stock, (x) split,
combine, reclassify or take similar action with respect to 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, (y) adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing such
liquidation or a dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (z) directly or indirectly
redeem, repurchase or otherwise acquire any shares of its capital stock
or any Option with respect thereto, in each case other than such
actions between Parent or the Company, as the case may be, and any of
their respective wholly-owned Subsidiaries, or among such wholly-owned
Subsidiaries;
(C) issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock or any
Option with respect thereto (other than (x) the issuance of Company
Common Stock or Parent Common Stock or stock appreciation or similar
rights, as the case may be, pursuant to Options outstanding on the date
of this Agreement and in accordance with their present terms, (y) the
issuance of Options pursuant to Company and Parent stock option plans,
in each case in accordance with their present terms and only in
connection with the hiring of new employees, and the issuance of shares
of Company Common Stock and Parent Common Stock, as the case may be,
upon exercise of such Options and (z) the issuance by a wholly-owned
Subsidiary of its capital stock to its parent corporation or to another
wholly-owned Subsidiary of its parent corporation), or modify or amend
any right of any holder of outstanding shares of capital stock or
Options with respect thereto;
(D) 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 material assets
other than in the ordinary course of its business consistent with past
practice, in each case other than such actions between Parent or the
Company, as the case may be, and any of their respective wholly-owned
Subsidiaries, or among such wholly-owned Subsidiaries;
(E) other than dispositions in the ordinary course of its
business consistent with past practice, sell, lease, grant any security
interest in or otherwise dispose of or encumber any of its material
assets or properties, in each case other than such actions between
Parent or the Company, as the case may be, and any of their respective
wholly-owned Subsidiaries, or among such wholly-owned Subsidiaries;
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(F) except to the extent required by applicable law, (x)
permit any material change in (A) any pricing, marketing, purchasing,
investment, accounting, financial reporting, inventory, credit,
allowance or tax practice or policy or (B) any method of calculating
any bad debt, contingency or other reserve for accounting, financial
reporting or tax purposes, in each case other than such actions among
wholly-owned Subsidiaries of Parent or the Company in the ordinary
course of business consistent with past practice, or (y) make any
material tax election or settle or compromise any material income tax
liability with any Governmental or Regulatory Authority;
(G) (x) incur (which shall be deemed to include entering into
credit agreements, lines of credit or similar arrangements until
borrowings are made under such arrangements but shall be deemed not to
include renewals of existing agreements or arrangements with
substantially the same terms as the existing agreements or
arrangements) any indebtedness for borrowed money or guarantee any such
indebtedness in excess of $5,000,000 other than in the ordinary course
of its business consistent with past practice or (y) voluntarily
purchase, cancel, prepay or otherwise provide for a complete or partial
discharge in advance of a scheduled repayment date with respect to, or
waive any right under, any indebtedness for borrowed money other than
in the ordinary course of its business consistent with past practice,
in each case other than such actions between Parent or the Company, as
the case may be, and any of their respective wholly-owned Subsidiaries,
or among such wholly-owned Subsidiaries;
(H) except as specifically contemplated by the last sentence
of Section 1.06, enter into, adopt, amend in any material respect
(except as may be required by applicable law) or terminate any Company
Benefit Plan or Parent Benefit Plan, as the case may be, or other
agreement, arrangement, plan or policy between such party or one of its
Subsidiaries and one or more of its directors, officers or employees,
or, except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in
a material increase in benefits or compensation expense to such party
and its Subsidiaries taken as a whole, increase in any manner the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any plan or arrangement in effect as of
the date hereof;
(I) make any capital expenditures or commitments for additions
to plant, property or equipment constituting capital assets except in
the ordinary course of business consistent with past practice;
(J) make any material change in the lines of business in which
it participates or is engaged; or
(K) enter into any Contract, commitment or arrangement to do
or engage in any of the foregoing.
(c) Advice of Changes. Each party shall confer on a regular
and frequent basis with the other with respect to its business and operations
and other matters relevant to the Merger, and shall promptly advise the other,
orally and in writing, of any change or event,
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including, without limitation, any complaint, investigation or hearing by any
Governmental or Regulatory Authority (or communication indicating the same may
be contemplated) or the institution or threat of litigation, having, or which,
insofar as can be reasonably foreseen, could have, a material adverse effect on
the Company or Parent, as the case may be, and its Subsidiaries taken as a whole
or on the ability of the Company or Parent, as the case may be, to consummate
the transactions contemplated hereby; provided that no party shall be required
to make any disclosure to the extent such disclosure would constitute a
violation of any applicable law.
(d) Notice and Cure. Each of Parent and the Company will
notify the other of, and will use all commercially reasonable efforts to cure
before the Closing, any event, transaction or circumstance, as soon as practical
after it becomes known to such party, that causes or will cause any covenant or
agreement of Parent or the Company under this Agreement to be breached in any
material respect or that renders or will render untrue any representation or
warranty of Parent or the Company contained in this Agreement in any material
respect. Each of Parent and the Company also will notify the other in writing
of, and will use all commercially reasonable efforts to cure, before the
Closing, any material violation or breach, as soon as practical after it becomes
known to such party, of any representation, warranty, covenant or agreement made
by Parent or the Company. No notice given pursuant to this paragraph shall have
any effect on the representations, warranties, covenants or agreements contained
in this Agreement for purposes of determining satisfaction of any condition
contained herein.
(e) Fulfillment of Conditions. Subject to the terms and
conditions of this Agreement, each of Parent and the Company will take or cause
to be taken all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each condition to the other's
obligations contained in this Agreement and to consummate and make effective the
transactions contemplated by this Agreement, and neither Parent nor the Company
will, nor will it permit any of its Subsidiaries to, take or fail to take any
action that could be reasonably expected to result in the nonfulfillment of any
such condition.
5.02 No Company Solicitations. Prior to the Effective Time,
the Company agrees (a) that neither it nor any of its Subsidiaries or other
affiliates shall, and they shall use their reasonable best efforts to cause
their respective Representatives (as defined in Section 9.11(g)) not to,
initiate, solicit or knowingly encourage, directly or indirectly, any inquiries
or the making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to Company stockholders) with respect to a
merger, consolidation or other business combination including the Company or any
of its Subsidiaries, or any acquisition or similar transaction (including,
without limitation, a tender or exchange offer) involving the purchase of all or
any significant portion of the assets of the Company and its Subsidiaries taken
as a whole or 20% or more of the outstanding shares of Company Common Stock (any
such transaction, other than the transactions contemplated by this Agreement,
being hereinafter referred to as a "Company Alternative Transaction"), or engage
in any negotiations concerning, or provide any confidential information or data
to or have any discussions with any person relating to, or otherwise knowingly
facilitate any effort or attempt to make or implement, a Company Alternative
Transaction; (b) that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any person with respect to
any of the
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foregoing, and it will take the necessary steps to inform such person with
respect to any of the foregoing; and (c) that it will notify Parent immediately
if any such inquiries, proposals or offers are received by, any such information
is requested from, or any such negotiations or discussions are sought to be
initiated or continued with it by any person; provided, however, that nothing
contained in this Section 5.02 or in Section 6.03(b) shall prohibit the Board of
Directors of the Company from (i) furnishing information to or entering into
discussions or negotiations with any person that makes a bona fide unsolicited
written proposal for a Company Alternative Transaction if, and only to the
extent that, (A) the Board of Directors of the Company concludes in good faith
that such proposal has a reasonable possibility of resulting in a Superior
Company Transaction (as defined in Section 6.03(b)), (B) the Board of Directors
of the Company, based upon the advice of outside counsel, determines in good
faith that the failure to so act is reasonably likely to result in the Board of
Directors breaching its fiduciary duties to shareholders imposed by law, (C) the
Company shall have entered into a confidentiality agreement with such person in
customary form and having terms and conditions no less favorable to the Company
than the Confidentiality Agreement (as defined in Section 6.01), (D) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person, the Company provides written notice to Parent to the effect
that it is furnishing information to, or entering into discussions or
negotiations with, such person, which notice shall identify such person and the
proposed terms of such Company Alternative Transaction in reasonable detail, and
(E) the Company keeps Parent informed of the status and all material information
with respect to any such discussions or negotiations; and (ii) to the extent
required, complying with Rule 14e-2 and Rule 14d-9 promulgated under the
Exchange Act with regard to any proposal relating to a Company Alternative
Transaction. Nothing in this Section 5.02 or in Section 6.03(b) shall (x) permit
the Company to terminate this Agreement (except in accordance with Section 8.01)
or (y) permit the Company to enter into any agreement with respect to a Company
Alternative Transaction for so long as this Agreement remains in effect (other
than a confidentiality agreement under the circumstances described above).
5.03 Third Party Standstill Agreements. During the period from
the date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which it is a party. During such period, the Company
shall enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreement, including, but not limited to, by obtaining
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court having jurisdiction.
5.04 Purchases of Common Stock of the Other Party. During the
period from the date hereof through the Effective Time, neither Parent nor any
of its Subsidiaries or other affiliates will purchase any shares of Company
Common Stock, and neither the Company nor any of its Subsidiaries or other
affiliates will purchase any shares of Parent Common Stock.
5.05 Conduct of Business of Sub. Prior to the Effective Time,
except as may be required by applicable law and subject to the other provisions
of this Agreement, Parent shall cause Sub to (a) perform its obligations under
this Agreement in accordance with its terms, (b) not incur directly or
indirectly any material liabilities or obligations other than those incurred in
connection with the Merger, (c) not engage directly or indirectly in any
business or activities
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of any type or kind and not enter into any agreements or arrangements with any
person, or be subject to or bound by any obligation or undertaking, which is not
contemplated by this Agreement and (d) not create, grant or suffer to exist any
Lien upon its properties or assets which would attach to any properties or
assets of the Surviving Corporation after the Effective Time.
5.06 Takeover Statutes. If any "fair price", "moratorium",
"control share acquisition" or other form of antitakeover statute or regulation
shall become applicable to the transactions contemplated hereby, the Company and
the members of the Board of Directors of the Company shall grant such approvals
and take such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated hereby
and thereby.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Access to Information; Confidentiality. Each of the
Company and Parent shall, and shall cause each of its Subsidiaries to,
throughout the period from the date hereof to the Effective Time, (i) provide
the other party and its Representatives with full access, upon reasonable prior
notice and during normal business hours, to all officers, employees, agents and
accountants of the Company or Parent, as the case may be, and its Subsidiaries
and their respective assets, properties, books and records, but only to the
extent that such access does not unreasonably interfere with the business and
operations of the Company or Parent, as the case may be, and its Subsidiaries,
and (ii) furnish promptly to such persons (x) a copy of each report, statement,
schedule and other document filed or received by the Company or Parent, as the
case may be, or any of its Subsidiaries pursuant to the requirements of federal
or state securities Laws and each material report, statement, schedule and other
document filed with any other Governmental or Regulatory Authority, and (y) all
other information and data (including, without limitation, copies of Contracts,
Company Employee Benefit Plans or Parent Employee Benefit Plans, as the case may
be, and other books and records) concerning the business and operations of the
Company or Parent, as the case may be, and its Subsidiaries as the other party
or any of such other persons reasonably may request. No investigation pursuant
to this paragraph or otherwise shall affect any representation or warranty
contained in this Agreement or any condition to the obligations of the parties
hereto. Any such information or material obtained pursuant to this Section 6.01
that constitutes "Proprietary Information" (as such term is defined in the
letter agreement dated as of February 22, 1999, between the Company and Parent
(the "Confidentiality Agreement") shall be governed by the terms of the
Confidentiality Agreement.
6.02 Preparation of Registration Statement and Proxy
Statement. Parent shall prepare and file with the SEC as soon as reasonably
practicable after the date hereof the Registration Statement, in which the Proxy
Statement will be included as the prospectus. Parent shall use its reasonable
best efforts to have the Registration Statement declared effective by the
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SEC as promptly as practicable after such filing, and shall notify the Company
of the receipt of any comments of the SEC with respect to the Registration
Statement or the Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information, and shall provide
to the Company copies of all correspondence between Parent or any of its
Representatives and the SEC with respect to the Registration Statement or the
Proxy Statement. If at any time prior to the Effective Time any event shall
occur that should be set forth in an amendment of or a supplement to the
Registration Statement, Parent shall prepare and file with the SEC such
amendment or supplement as soon thereafter as is reasonably practicable. The
Company shall fully cooperate with Parent in the preparation of the Registration
Statement and the Proxy Statement and any amendment or supplement thereto,
including by providing all information with respect to the Company and its
Subsidiaries and other affiliates for inclusion in the Registration Statement
and the Proxy Statement as may be reasonably requested by Parent and its legal
advisors. Parent shall give the Company and its counsel the opportunity to
review all responses to requests for additional information by and replies to
comments of the SEC before their being filed with, or sent to, the SEC. Each of
the Company and Parent agrees to use its reasonable best efforts, after
consultation with the other, to respond promptly to all such comments of and
requests by the SEC and to cause (x) the Registration Statement to be declared
effective by the SEC at the earliest practicable time and to be kept effective
as long as is necessary to consummate the Merger, and (y) the Proxy Statement to
be mailed to the holders of Company Common Stock and Parent Common Stock
entitled to vote at the meetings of the stockholders of the Company and Parent
at the earliest practicable time. Parent shall also take any action (other than
qualifying as a foreign corporation or taking any action which would subject it
to service of process in any jurisdiction where Parent is not now so qualified
or subject) required to be taken under applicable state blue sky or securities
Laws in connection with the issuance of Parent Common Stock in connection with
the Merger.
6.03 Approval of Stockholders. (a) Parent shall, through its
Board of Directors, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Parent Stockholders' Meeting") for the purpose of voting on
the Parent Proposal (the "Parent Stockholders' Approval"), and shall use its
reasonable best efforts to solicit proxies from Parent stockholders in order to
obtain the Parent Stockholders' Approval. Parent shall, through its Board of
Directors, include in the Proxy Statement the recommendation of the Board of
Directors of Parent that the stockholders of Parent approve the Parent Proposal.
(b) The Company shall, through its Board of Directors, duly
call, give notice of, convene and hold a meeting of its shareholders (the
"Company Stockholders' Meeting" and, together with the Parent Stockholders'
Meeting, the "Stockholders' Meetings") for the purpose of voting on the adoption
of this Agreement and all matters relating thereto (the "Company Stockholders'
Approval"), and shall use its reasonable best efforts to solicit proxies from
Company shareholders in order to obtain the Company Stockholders' Approval.
Except as provided in the next sentence, the Company shall, through its Board of
Directors, include in the Proxy Statement the recommendation of the Board of
Directors of the Company that the shareholders of the Company adopt this
Agreement. The Board of Directors of the Company shall be permitted to (a) not
recommend to the Company's shareholders that they give the Company Stockholders'
Approval or (b) withdraw or modify in a manner adverse to Parent its
recommendation to the Company's shareholders that they give the Company
Stockholders'
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Approval (including in connection with its recommendation of a Superior Company
Transaction), but in either case only (x) if and to the extent that (i) a bona
fide unsolicited written proposal for a Superior Company Transaction is pending
at such time and (ii) the Board of Directors of the Company determines in its
good faith judgment that it is necessary to so fail to recommend, or to so
withdraw or modify its recommendation, in order to comply with its fiduciary
duties to shareholders under applicable law, which determination shall be based
upon the advice of outside legal counsel, and (y) the Company and its
Subsidiaries and other affiliates and their Representatives shall have complied
with their obligations under Section 5.02 with respect to such Superior Company
Transaction. "Superior Company Transaction" means any Company Alternative
Transaction which (i) relates to more than 50% of the outstanding shares of
Company Common Stock or all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole, (ii) is not conditioned on the receipt of
financing, (iii) is made by a person who the Board of Directors of the Company
has reasonably concluded in good faith will have adequate sources of financing
to, and will not encounter significant regulatory obstacles in order to,
consummate such Company Alternative Transaction and (iv) is on terms that the
Board of Directors of the Company determines in its good faith judgment, taking
into account all relevant factors, (including the advice of a financial advisor
of nationally-recognized reputation and all the terms and conditions of the
Company Alternative Transaction, including any break-up fees, expense
reimbursement provisions and conditions to consummation) are more favorable than
this Agreement and the Merger.
(c) Parent and the Company shall coordinate and cooperate with
respect to the timing of the Stockholders' Meetings and shall use their best
efforts to cause the Stockholders' Meetings to be held on the same day as soon
as practicable after the date hereof. Parent shall vote the shares of Company
Common Stock owned by Parent, and shall use its best efforts to cause its
Subsidiaries and other affiliates to vote the shares of Company Common Stock
owned by its Subsidiaries and other affiliates, in favor of the adoption of this
Agreement. The Company shall vote the shares of Parent Common Stock owned by the
Company, and shall use its best efforts to cause its Subsidiaries and other
affiliates to vote the shares of Parent Common Stock owned by its Subsidiaries
and other affiliates, in favor of the Parent Proposal.
6.04 Affiliates. At least thirty (30) days prior to the date
of the Company Stockholders' Meeting, the Company shall deliver a letter to
Parent identifying all persons who, at the time of the Company Stockholders'
Meeting, may, in the Company's reasonable judgment, be deemed to be "affiliates"
(as such term is used in Rule 145 under the Securities Act) of the Company
("Company Affiliates"). The Company shall use its reasonable efforts to cause
each Company Affiliate to deliver to Parent on or prior to the Closing Date a
written agreement substantially in the form and to the effect of Exhibit A
hereto (an "Affiliate Agreement"). Parent shall be entitled to place legends as
specified in such Affiliate Agreements on the certificates evidencing any shares
of Parent Common Stock to be received by such Company Affiliates pursuant to the
terms of this Agreement, and to issue appropriate stop transfer instructions to
the transfer agent for the Parent Common Stock, consistent with the terms of
such Affiliate Agreements.
6.05 Stock Exchange Listing. Parent shall use its best efforts
to cause the shares of Parent Common Stock to be issued in the Merger in
accordance with this Agreement to be approved for listing on NASDAQ, subject to
official notice of issuance, prior to the Closing Date.
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6.06 Certain Tax Matters. Parent and the Company shall not
take or fail to take any action that prevents the Merger from being treated as a
tax-free reorganization pursuant to the provisions of Code Section 368(a)(1)(A)
and Code Section 368(a)(2)(E) and shall not take any position inconsistent with
the foregoing on any tax return, unless required by law.
6.07 Regulatory and Other Approvals. Subject to the terms and
conditions of this Agreement and without limiting the provisions of Sections
6.02 and 6.03, each of the Company and Parent will proceed diligently and in
good faith to, as promptly as practicable, (a) obtain all consents, approvals or
actions of, make all filings with and give all notices to Governmental or
Regulatory Authorities or any other public or private third parties required of
Parent, the Company or any of their Subsidiaries to consummate the Merger and
the other matters contemplated hereby, and (b) provide such other information
and communications to such Governmental or Regulatory Authorities or other
public or private third parties as the other party or such Governmental or
Regulatory Authorities or other public or private third parties may request in
connection therewith. In addition to and not in limitation of the foregoing,
each of the parties will (x) take promptly all actions necessary to make the
filings required of Parent and the Company or their affiliates under the HSR
Act, (y) comply at the earliest practicable date with any request for additional
information received by such party or its affiliates from the Federal Trade
Commission (the "FTC") or the Antitrust Division of the Department of Justice
(the "Antitrust Division") pursuant to the HSR Act, and (z) cooperate with the
other party in connection with such party's filings under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
Merger or the other matters contemplated by this Agreement commenced by either
the FTC or the Antitrust Division or state attorneys general; provided, however,
that nothing herein shall obligate Parent to agree to hold separate, sell or
otherwise dispose of any Subsidiary of Parent or of the Company or any assets or
properties thereof which, individually or in the aggregate, would be material to
Parent and its Subsidiaries taken as a whole or would be reasonably likely to
materially diminish the value of the transaction to Parent.
6.08 Directors' and Officers' Indemnification and Insurance.
(a) Until the sixth anniversary of the Effective Time and for so long thereafter
as any claim for indemnification asserted on or prior to such date has not been
fully adjudicated, Parent shall and shall cause the Surviving Corporation to
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective Time, a
director or officer of the Company or any of its Subsidiaries (the "Indemnified
Parties") against (i) all losses, claims, damages, costs and expenses (including
reasonable attorneys' fees), liabilities, judgments and settlement amounts that
are paid or incurred in connection with any claim, action, suit, proceeding or
investigation (whether civil, criminal, administrative or investigative and
whether asserted or claimed prior to, at or after the Effective Time) that is
based on, or arises out of, the fact that such Indemnified Party is or was a
director or officer of the Company or any of its Subsidiaries and relates to or
arises out of any action or omission occurring at or prior to the Effective Time
("Indemnified Liabilities"), and (ii) all Indemnified Liabilities based on, or
arising out of, or pertaining to this Agreement or the transactions
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contemplated hereby, in each case to the full extent a corporation is permitted
under applicable law to indemnify its own directors or officers, as the case may
be; provided that the Surviving Corporation shall not be liable for any
settlement of any claim effected without its written consent, which consent
shall not be unreasonably withheld; and provided, further, that the Surviving
Corporation shall not be liable for any Indemnified Liabilities which occur as a
result of the gross negligence or willful misconduct of any Indemnified Party.
Without limiting the foregoing, in the event that any such claim, action, suit,
proceeding or investigation is brought against any Indemnified Party (whether
arising prior to or after the Effective Time), (w) the Surviving Corporation
will pay expenses in advance of the final disposition of any such claim, action,
suit, proceeding or investigation to each Indemnified Party to the full extent
permitted by applicable law; provided that the person to whom expenses are
advanced provides any undertaking required by applicable law to repay such
advance if it is ultimately determined that such person is not entitled to
indemnification; (x) the Indemnified Parties shall retain counsel reasonably
satisfactory to the Surviving Corporation; (y) the Surviving Corporation shall
pay all reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (z) the Surviving Corporation
shall use all commercially reasonable efforts to assist in the defense of any
such matter. Any Indemnified Party wishing to claim indemnification under this
Section, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify the Surviving Corporation, but the failure so to
notify the Surviving Corporation shall not relieve the Surviving Corporation
from any liability which it may have under this paragraph except to the extent
such failure materially prejudices the Surviving Corporation. The Indemnified
Parties as a group may retain only one law firm to represent them with respect
to each such matter unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnified Parties in which case, the Indemnified Parties may retain more
than one law firm.
(b) Except to the extent required by law, until the sixth
anniversary of the Effective Time, Parent will not take any action so as to
amend, modify or repeal the provisions for indemnification of directors,
officers or employees contained in the certificates or articles of incorporation
or bylaws (or other comparable charter documents) of the Surviving Corporation
and its Subsidiaries (which as of the Effective Time shall be the same for such
individuals as those maintained by the Company and its Subsidiaries on the date
hereof) in such a manner as would adversely affect the rights of any individual
who shall have served as a director, officer or employee of the Company or any
of its Subsidiaries prior to the Effective Time to be indemnified by such
corporations in respect of their serving in such capacities prior to the
Effective Time.
(c) The Surviving Corporation shall, until the sixth
anniversary of the Effective Time and for so long thereafter as any claim for
insurance coverage asserted on or prior to such date has not been fully
adjudicated, cause to be maintained in effect, to the extent available, the
policies of directors' and officers' liability insurance maintained by the
Company and its Subsidiaries as of the date hereof (or policies of at least the
same coverage and amounts containing terms that are no less advantageous to the
insured parties) with respect to claims arising from facts or events that
occurred on or prior to the Effective Time; provided that following the second
anniversary of the Effective Time, in no event shall the Surviving Corporation
be obligated to expend in order to maintain or procure insurance coverage
pursuant
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to this paragraph any amount per annum in excess of 150% of the aggregate
premiums payable by the Company and its Subsidiaries for the current fiscal year
(on an annualized basis) for such purpose (the "Maximum Amount"), and if after
the second anniversary of the Effective Time the Surviving Corporation is unable
to obtain the insurance required by this Section 6.08 for the Maximum Amount,
then it shall obtain as much comparable insurance as possible for an annual
premium equal to the Maximum Amount.
(d) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and each party
entitled to insurance coverage under paragraph (c) above, respectively, and his
or her heirs and legal representatives, and shall be in addition to any other
rights an Indemnified Party may have under the articles of incorporation or
bylaws of the Surviving Corporation or any of its Subsidiaries, under applicable
law or otherwise.
6.09 Expenses. Except as set forth in Section 8.02, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such cost or expense, except that the expenses incurred in
connection with printing and mailing the Proxy Statement and the Registration
Statement, as well as any filing fees relating thereto, shall be shared equally
by Parent and the Company.
6.10 Brokers or Finders. Each of Parent and the Company
represents, as to itself and its affiliates, that 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 commission or similar fee in connection
with any of the transactions contemplated by this Agreement except the Company
Financial Advisor, whose fees and expenses will be paid by the Company in
accordance with the Company's agreement with such firm (a true and complete copy
of which has been delivered by the Company to Parent prior to the execution of
this Agreement), and the Parent Financial Advisor, whose fees and expenses will
be paid by Parent in accordance with Parent's agreement with such firm (a true
and complete copy of which has been delivered by Parent to the Company prior to
the execution of this Agreement), and each of Parent and the Company shall
indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any other such fee or commission or
expenses related thereto asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliate.
6.11 Conveyance Taxes. The Company and Parent 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.
6.12 Welfare Benefits. For a period of one year following the
Effective Time, Parent shall provide or cause to be provided health, life,
disability and severance pay benefits and participation in bonus, savings,
incentive and retirement plans of Parent or the Surviving Corporation to the
employees of the Company and its Subsidiaries which, in the aggregate, are
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no less favorable to the employees of the Company and its Subsidiaries than
those provided to employees under the Company Plans as in effect on the date
hereof; provided, however, that (i) any programs, plans, policies or
arrangements of the Company or its Subsidiaries providing equity interests or
awards or providing awards based upon or calculated by reference to the
Company's equity shall not be taken into account for the purposes of this
Section 6.12, (ii) nothing in this Agreement shall require Parent, the Surviving
Corporation or any of their affiliates to provide awards based upon interests in
the Company, the Surviving Corporation or any of their affiliates and (iii)
nothing in this Agreement shall prevent or prohibit Parent from terminating,
suspending, amending or modifying any of the Parent Plans, the Surviving
Corporation's plans or any plans of any of their affiliates pursuant to the
terms of such plans. Parent shall cause the Surviving Corporation to provide to
employees of the Company and its Subsidiaries after the Effective Time credit
for service with the Company and its Subsidiaries (or their predecessors to the
extent credit has been provided by the Company or its Subsidiaries) for purposes
of vesting, eligibility and calculation of benefits (other than benefit accruals
under an employee pension benefit plan). Parent shall and shall cause the
Surviving Corporation to continue to honor the terms of all agreements
(including, but not limited to, employment, consulting and severance agreements)
between the Company or any of its Subsidiaries and any employee or employees
which relate to employment, compensation or benefits; provided, however, that
nothing in this Agreement shall limit or restrict the Company's, Parent's or any
of their affiliates' ability to terminate any employee at any time for any
reason subject to such agreements.
ARTICLE VII
CONDITIONS
7.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been
adopted by the requisite vote of the stockholders of the Company under the DGCL.
The stockholders of Parent shall have approved the Parent Proposal by the
requisite vote of such stockholders under the DGCL.
(b) Registration Statement; State Securities Laws. The
Registration Statement shall have become effective in accordance with the
provisions of the Securities Act, and no stop order suspending such
effectiveness shall have been issued and remain in effect and no proceeding
seeking such an order shall be pending or threatened. Parent shall have received
all state securities or "blue sky" permits and other authorizations necessary to
issue the Parent Common Stock pursuant to this Agreement.
(c) Exchange Listing. The shares of Parent Common Stock
issuable to the Company's stockholders in the Merger in accordance with this
Agreement shall have been authorized for listing on NASDAQ, upon official notice
of issuance.
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(d) HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
(e) No Injunctions or Restraints. No court of competent
jurisdiction or other competent Governmental or Regulatory Authority shall have
enacted, issued, promulgated, enforced or entered any law or order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making illegal or otherwise restricting, preventing or prohibiting
consummation of the Merger or the other transactions contemplated by this
Agreement.
7.02 Conditions to Obligation of Parent and Sub to Effect the
Merger. The obligation of Parent and Sub to effect the Merger is further subject
to the fulfillment, at or prior to the Closing, of each of the following
additional conditions (all or any of which may be waived in whole or in part by
Parent and Sub in their sole discretion):
(a) Representations and Warranties. Each of the
representations and warranties made by the Company in this Agreement shall be
true and correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be true and correct in all respects giving effect to such
standard) as of the Closing Date as though made on and as of the Closing Date
or, in the case of representations and warranties made as of a specified date
earlier than the Closing Date, on and as of such earlier date, except as
affected by the transactions contemplated by this Agreement.
(b) Performance of Obligations. The Company shall have
performed and complied with, in all material respects, each agreement, covenant
and obligation required by this Agreement to be so performed or complied with by
the Company at or prior to the Closing.
(c) Tax Opinion. Parent and Sub shall have received the
opinion, based on appropriate representations of the Company and Parent, of
Milbank, Tweed, Xxxxxx & XxXxxx LLP, special counsel to Parent, dated on or
about the date on which the Registration Statement (or the last amendment
thereto) shall have become effective, which opinion shall have been confirmed in
writing on and as of the Closing Date, to the effect that the Merger will
constitute a "reorganization" within the meaning of Code Section 368(a), and the
Company, Sub and Parent will each be a party to such reorganization within the
meaning of Code Section 368(b);
(d) Governmental and Regulatory and Other Consents and
Approvals. Other than the filing provided for by Section 1.03, all consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority or any other public or private third parties required of
Parent, the Company or any of their Subsidiaries to consummate the Merger and
the other matters contemplated hereby, the failure of which to be obtained or
taken could be reasonably expected to have a material adverse effect on the
Company and its Subsidiaries taken as a whole or to materially diminish the
value of the transactions contemplated by this Agreement to Parent, or on the
ability of Parent and the Company to consummate the transactions contemplated
hereby, shall have been obtained, all in form and substance reasonably
satisfactory to Parent.
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7.03 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger is further subject to
the fulfillment, at or prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part by the Company
in its sole discretion):
(a) Representations and Warranties. Each of the
representations and warranties made by Parent and Sub in this Agreement shall be
true and correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be true and correct in all respects giving effect to such
standard) as of the Closing Date as though made on and as of the Closing Date
or, in the case of representations and warranties made as of a specified date
earlier than the Closing Date, on and as of such earlier date, except as
affected by the transactions contemplated by this Agreement.
(b) Performance of Obligations. Parent and Sub shall have
performed and complied with, in all material respects, each agreement, covenant
and obligation required by this Agreement to be so performed or complied with by
Parent or Sub at or prior to the Closing.
(c) Tax Opinion. The Company shall have received the opinion,
based on appropriate representations of the Company and Parent, of Xxxxxxx
Xxxxxxx & Xxxxxxxx, special counsel to the Company, dated on or about the date
on which the Registration Statement (or the last amendment thereto) shall have
become effective, which opinion shall have been confirmed in writing on and as
of the Closing Date to the effect that the Merger will constitute a
"reorganization" within the meaning of Code Section 368(a), and the Company, Sub
and Parent will each be a party to such reorganization within the meaning of
Code Section 368(b);
(d) Governmental and Regulatory and Other Consents and
Approvals. Other than the filing provided for by Section 1.03, all consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority or any other public or private third parties required of
Parent, the Company or any of their Subsidiaries to consummate the Merger and
the other matters contemplated hereby, the failure of which to be obtained or
taken could be reasonably expected to have a material adverse effect on Parent
and its Subsidiaries taken as a whole or to materially diminish the value of the
transactions contemplated by this Agreement to the Company, or on the ability of
Parent and the Company to consummate the transactions contemplated hereby, shall
have been obtained, all in form and substance reasonably satisfactory to the
Company.
7.04 Issuance of New Parent Preferred Stock. Parent shall have
duly authorized and received shareholder approval (if necessary) for and taken
all other actions necessary to validly issue to the holders of the Company
Preferred Stock, the New Parent Preferred Stock the terms of which shall be
identical to the Company Preferred Stock and the terms of conversion of such New
Parent Preferred Stock into Parent Common Stock shall be consistent with the
Exchange Ratio.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether prior to or after the Company Stockholders' Approval or
the Parent Stockholders' Approval:
(a) By mutual written agreement of the parties hereto duly
authorized by action taken by or on behalf of their respective Boards of
Directors;
(b) By either the Company or Parent upon notification to the
non-terminating party by the terminating party:
(i) at any time after March 16, 2001 if the Merger
shall not have been consummated on or prior to such date and such
failure to consummate the Merger is not caused by a breach of this
Agreement by the terminating party;
(ii) if the Company Stockholders' Approval shall not
be obtained by reason of the failure to obtain the requisite vote upon
a vote held at a meeting of such stockholders, or any adjournment
thereof, called therefor, unless such failure is due to default on the
part of the Company;
(iii) if the Parent Stockholders' Approval shall not
be obtained with respect to the Parent Proposal by reason of the
failure to obtain the requisite vote upon a vote held at a meeting of
such stockholders, or any adjournment thereof, called therefor, unless
such failure is due to default on the part of Parent;
(iv) if there has been a material breach of any
representation, warranty, covenant or agreement or non-fulfillment of
any condition on the part of the non-terminating party set forth in
this Agreement, which breach has not been cured within thirty (30) days
following receipt by the non-terminating party of notice of such breach
from the terminating party; or
(v) if any court of competent jurisdiction or other
competent Governmental or Regulatory Authority shall have issued an
order making illegal or otherwise restricting, preventing or
prohibiting the Merger and such order shall have become final and
nonappealable;
(c) By the Company if the Board of Directors of the Company
shall have determined in good faith, based upon the advice of outside legal
counsel, that failure to terminate this Agreement is reasonably likely to result
in the Board of Directors breaching its fiduciary duties to stockholders under
applicable law by reason of the pendency of an unsolicited, bona fide proposal
for a Superior Company Transaction, but only if the Company and its Subsidiaries
and other Representatives of the Company shall have complied with their
obligations under Section 5.02; provided, however, that the Company may not
terminate this Agreement pursuant to this clause (c) unless (x) 48 hours shall
have elapsed after delivery to Parent of a written notice
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of such determination by such Board of Directors and (y) the Company shall have
paid to Parent any amounts owed by it pursuant to Section 8.02(b); or
(d) By Parent if the Board of Directors of the Company (or any
committee thereof) shall have (i) failed to recommend or withdrawn or modified
in a manner adverse to Parent its approval or recommendation of this Agreement
and the Merger, (ii) recommended or taken no position with respect to a proposal
for a Company Alternative Transaction or (iii) following the announcement or
making of a proposal for a Company Alternative Transaction, failed to reconfirm
its recommendation of this Agreement and the Merger within 96 hours following a
written request for such reconfirmation by Parent.
8.02 Effect of Termination. (a) If this Agreement is validly
terminated by either the Company or Parent pursuant to Section 8.01, this
Agreement will forthwith become null and void and there will be no liability or
obligation on the part of either the Company or Parent (or any of their
respective Representatives or affiliates), except (i) that the provisions of
Sections 6.09 and 6.10 and this Section 8.02 will continue to apply following
any such termination, (ii) that nothing contained herein shall relieve any party
hereto from liability for willful breach of its representations, warranties,
covenants or agreements contained in this Agreement and (iii) as provided in
paragraph (b) below.
(b) If (x) the Company shall have terminated this Agreement
pursuant to Section 8.01(c) or (y) Parent shall have terminated this Agreement
pursuant to Section 8.01(d) then, in either of such cases, the Company shall pay
Parent a termination fee of $4,000,000. Any fee payable under this Section
8.02(b) shall be paid by wire transfer of immediately available funds
contemporaneous with a termination described in clause (x) or promptly following
a termination described in clause (y).
(c) If, following the public announcement of a proposal for a
Company Alternative Transaction by any person, either Parent or the Company
shall have terminated this Agreement pursuant to Section 8.01(b)(i) or
8.01(b)(ii), or Parent shall have terminated this Agreement pursuant to Section
8.01(b)(iv), and, within twelve (12) months after any termination described in
this sentence, the Company or any of its Subsidiaries shall have entered into a
binding agreement providing for the consummation of (and which in fact is
consummated pursuant to such binding agreement), or shall have consummated a
Company Alternative Transaction, then, in any of such cases, the Company shall
pay Parent a termination fee of $4,000,000. Any fee payable under this Section
8.02(c) shall be paid by wire transfer of immediately available funds concurrent
with or prior to the consummation of such Company Alternative Transaction.
(d) Each of Parent and the Company acknowledges that the
agreements contained in the preceding two paragraphs are an integral part of the
transactions contemplated by this Agreement and that, without these agreements,
neither Parent nor the Company would enter into this Agreement; accordingly, if
the Company fails promptly to pay the amount due pursuant to either paragraph,
and in order to obtain such payment, Parent commences a suit which results in a
judgment against the Company for the amounts set forth in such paragraph, Parent
shall be entitled to have its cost and expenses (including reasonable attorneys'
fees and expenses)
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reimbursed in connection with such suit, together with interest on the amount of
the fee at the prime rate of The Chase Manhattan Bank in effect on the date such
payment was required to be made. Notwithstanding any other provision of this
Agreement to the contrary, if Parent receives a termination fee pursuant to this
Section 8.02, such fee shall be the sole and exclusive remedy of Parent for any
breach of this Agreement, whether pursuant to this Article VIII or otherwise.
8.03 Amendment. This Agreement may be amended, supplemented or
modified by action taken by or on behalf of the respective Boards of Directors
of the parties hereto at any time prior to the Effective Time, whether prior to
or after the Company Stockholders' Approval or the Parent Stockholders' Approval
shall have been obtained, but after such adoption and approval only to the
extent permitted by applicable law. No such amendment, supplement or
modification shall be effective unless set forth in a written instrument duly
executed by or on behalf of each party hereto.
8.04 Waiver. At any time prior to the Effective Time any party
hereto, by action taken by or on behalf of its Board of Directors, may to the
extent permitted by applicable law (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 or compliance with the
covenants or agreements of the other parties hereto contained herein or in any
document delivered pursuant hereto or (iii) waive compliance with any of the
conditions of such party contained herein. No such extension or waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the party extending the time of performance or waiving any such inaccuracy or
non-compliance. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on any
future occasion.
ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties, covenants and agreements
contained in this Agreement or in any instrument delivered pursuant to this
Agreement shall not survive the Merger but shall terminate at the Effective
Time, except for the agreements contained in Article I and Article II, in
Sections 6.06, 6.08, 6.09, 6.10 and 6.12, this Article IX and the agreements of
the "affiliates" of the Company delivered pursuant to Section 6.04, which shall
survive the Effective Time.
9.02 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid or by recognized overnight courier) to the parties at the following
addresses or facsimile numbers:
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If to Parent or Sub, to:
Globalnet Xxxxxxxxx.xxx, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Facsimile No.: 011 44 207 851 8202
Attn: W. Xxxxxx Xxxxxxx
Xxx X. Xxxxxx
Email: XXxxxxxx@xxxxxxxx.xxx
XXxxxxx@xxxxxxxxxxxxxxxxxx.xxx
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: Xxxx X. X'Xxxxxx
If to the Company, to:
Telescan, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxxx
E-mail: xxxxx.xxxxxxxxx@xxxxxxxx.xxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or recognized overnight courier in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other person to whom a copy of such notice, request or other communication
is to be delivered pursuant to this Section). Any party from time to time may
change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other
parties hereto.
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9.03 Entire Agreement; Incorporation of Exhibits. (a) This
Agreement supersedes all prior discussions and agreements among the parties
hereto with respect to the subject matter hereof, other than the Confidentiality
Agreement, which shall survive the execution and delivery of this Agreement in
accordance with its terms, and contains, together with the Confidentiality
Agreement, the sole and entire agreement among the parties hereto with respect
to the subject matter hereof.
(b) The Company Disclosure Letter, the Parent Disclosure
Letter and any Exhibit attached to this Agreement and referred to herein are
hereby incorporated herein and made a part hereof for all purposes as if fully
set forth herein.
9.04 Public Announcements. Except as otherwise required by law
or the rules of any applicable securities exchange or national market system, so
long as this Agreement is in effect, Parent and the Company will not, and will
not permit any of their respective Representatives to, issue or cause the
publication of any press release or make any other public announcement with
respect to the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld. Parent and
the Company will cooperate with each other in the development and distribution
of all press releases and other public announcements with respect to this
Agreement and the transactions contemplated hereby, and will furnish the other
with drafts of any such releases and announcements as far in advance as
practicable.
9.05 No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and except as provided in
Section 6.08(d), it is not the intention of the parties to confer third-party
beneficiary rights upon any other person.
9.06 No Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except that Sub may assign any or all of its rights,
interests and obligations hereunder to another direct or indirect wholly-owned
Subsidiary of Parent, provided that any such Subsidiary agrees in writing to be
bound by all of the terms, conditions and provisions contained herein. Subject
to the preceding sentence, this Agreement is binding upon, inures to the benefit
of and is enforceable by the parties hereto and their respective successors and
assigns.
9.07 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define, modify or limit
the provisions hereof.
9.08 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law or
order, and if the rights or obligations of any party hereto under this Agreement
will not be materially and adversely affected thereby, (i) such provision will
be fully severable, (ii) this Agreement will be construed
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and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and (iii) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
9.09 Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York applicable to a contract executed and performed in such State,
without giving effect to the conflicts of Laws principles thereof.
(b) Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated by this Agreement may be brought
against any of the parties in any federal court located in the State of New York
or any New York state court, and each of the parties hereto hereby consents to
the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and waives any
objection to venue laid therein. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
State of New York. Without limiting the generality of the foregoing, each party
hereto agrees that service of process upon such party at the address referred to
in Section 9.02, together with written notice of such service to such party,
shall be deemed effective service of process upon such party.
9.10 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specified terms or was
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 in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
9.11 Certain Definitions. As used in this Agreement:
(a) except as provided in Section 6.04, the term "affiliate,"
as applied to any person, shall mean any other person directly or indirectly
controlling, controlled by, or under common control with, that person; for
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
applied to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
person, whether through the ownership of voting securities, by contract or
otherwise;
(b) a person will be deemed to "beneficially" own securities
if such person would be the beneficial owner of such securities under Rule 13d-3
under the Exchange Act, including securities which such person has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time);
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(c) the term "business day" means a day other than Saturday,
Sunday or any day on which banks located in the State of Delaware are authorized
or obligated to close;
(d) the term "knowledge" or any similar formulation of
"knowledge" shall mean, (i) with respect to the Company, the actual knowledge of
the individuals listed in Section 9.11(d)(i) of the Company Disclosure Letter
and (ii) with respect to Parent, the knowledge of the individuals listed in
Section 9.11(d)(ii) of the Parent Disclosure Letter;
(e) any reference to any event, change or effect being
"material" or "materially adverse" or having a "material adverse effect" on or
with respect to an entity (or group of entities taken as a whole) means any such
event, change or effect that is material or materially adverse, as the case may
be, to the business, financial condition or results of operations of such entity
(or of such group of entities taken as a whole);
(f) the term "person" shall include individuals, corporations,
partnerships, trusts, limited liability companies and other entities and groups
(which term shall include a "group" as such term is defined in Section 13(d)(3)
of the Exchange Act);
(g) the "Representatives" of any entity means such entity's
directors, officers, employees, legal, investment banking and financial
advisors, accountants and any other agents and representatives;
(h) the term "Subsidiary" means, with respect to any party,
any corporation, partnership, trust, limited liability company, joint venture or
other entity or organization, whether incorporated or unincorporated, of which
more than fifty percent (50%) of either the equity interests in, or the voting
control of, such corporation or other organization is, directly or indirectly
through Subsidiaries or otherwise, beneficially owned by such party; and
(i) the term "Significant Subsidiaries" means, with respect to
any party, the Subsidiaries of such party which constitute "significant
subsidiaries" under Rule 405 promulgated by the SEC under the Securities Act.
9.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be signed by its officer thereunto duly authorized as of the date
first above written.
Attest: XXXXXXXXXXXXXXXXXX.XXX, INC.
By:
------------------------------ ------------------------------------
Secretary Name: Xxxxxxx Xxxxxx
Title: Chief Strategy Officer
Attest: TEXAS ACQUISITION CORP.
By:
------------------------------ ------------------------------------
Secretary Name: Xxxxxxx Xxxxxx
Title: President
Attest: TELESCAN, INC.
By:
------------------------------ ------------------------------------
Secretary Name:
Title:
60
EXHIBIT A
[Form of Affiliate's Agreement]
[Date]
Globalnet Xxxxxxxxx.xxx, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed
to be an "affiliate" of Telescan, Inc., a Delaware corporation (the "Company"),
as that term is defined for purposes of paragraphs (c) and (d) of Rule 145 of
the rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"). Neither my entering into this agreement, nor anything
contained herein, shall be deemed an admission on my part that I am such an
"affiliate".
Pursuant to the terms of the Agreement and Plan of Merger
dated as of August 16, 2000 (the "Merger Agreement"), among Globalnet
Xxxxxxxxx.xxx, Inc., a Delaware corporation ("Parent"), Texas Acquisition Corp.,
a Delaware corporation ("Sub"), and the Company providing for the merger of Sub
with and into the Company (the "Merger"), and as a result of the Merger, I may
receive shares of Parent's common stock, par value $.001 per share (the "Parent
Securities"), in exchange for the shares of common stock, par value $.10 per
share, of the Company owned by me at the Effective Time (as defined in the
Merger Agreement) of the Merger.
I represent and warrant to Parent that in such event:
A. I shall not make any sale, transfer or other disposition of
the Parent Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed their requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Parent Securities, to the
extent I felt necessary, with my counsel or counsel for the Company.
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C. I have been advised that the issuance of Parent Securities
to me pursuant to the Merger has been registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been advised
that, since at the time the Merger was submitted for a vote of the shareholders
of the Company I may have been deemed to have been an affiliate of the Company
and a distribution by me of Parent Securities has not been registered under the
Act, the Parent Securities must be held by me indefinitely unless (i) a
distribution of Parent Securities by me has been registered under the Act, (ii)
a sale of Parent Securities by me is made in conformity with the volume and
other limitations of Rule 145 promulgated by the Commission under the Act or
(iii) in the opinion of counsel reasonably acceptable to Parent, some other
exemption from registration is available with respect to a proposed sale,
transfer or other disposition of the Parent Securities by me.
D. I understand that Parent is under no obligation to register
the sale, transfer or other disposition of Parent Securities by me or on my
behalf or to take any other action necessary in order to make compliance with an
exemption from registration available.
E. I also understand that stop transfer instructions will be
given to Parent's transfer agents with respect to the Parent Securities and that
there will be placed on the certificates for the Parent Securities, or any
substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended, applies. The shares represented by this certificate
may only be transferred in accordance with the terms of an agreement
dated ____________, 2000, between the registered holder hereof and
Globalnet Xxxxxxxxx.xxx, Inc. (the "Corporation"), a copy of which
agreement is on file at the principal offices of the Corporation."
F. I also understand that unless the transfer by me of my
Parent Securities has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were
acquired from a person who received such shares in a transaction to
which Rule 145 promulgated under such Act applies. The shares have been
acquired by the holder not with a view to, or for resale in connection
with, any distribution thereof within the meaning of such Act and may
not be sold, pledged or otherwise transferred except in accordance with
an exemption from the registration requirements of such Act."
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It is understood and agreed that the legends set forth in
paragraph E and F above shall be removed by delivery of substitute certificates
without such legend if the undersigned shall have delivered to Parent a copy of
a letter from the staff of the Commission, or an opinion of counsel reasonably
acceptable to Parent to the effect that such legend is not required for purposes
of the Act.
Very truly yours,
-------------------------------
Name:
Accepted this ____ day of
__________, 2000, by:
GLOBALNET XXXXXXXXX.XXX, INC.
By
---------------------------
Name:
Title:
3
