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Exhibit (d)(1)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PENSKE TRUCK LEASING CO., L.P.
SUN ACQUISITION CORPORATION
AND
XXXXXXX TRUCK LEASING CORP.
DATED AS OF
January 15, 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions ........................................................... 1
ARTICLE II
THE OFFER
Section 2.1 The Offer ............................................................. 7
Section 2.2 Company Action ........................................................ 10
Section 2.3 Directors ............................................................. 11
Section 2.4 Merger Without Meeting of Shareholders ................................ 13
ARTICLE III
THE MERGER AND RELATED MATTERS
Section 3.1 The Merger ............................................................ 13
Section 3.2 Certificate of Incorporation of the Surviving Corporation ............. 13
Section 3.3 By-Laws of the Surviving Corporation .................................. 14
Section 3.4 Directors and Officers of the Surviving Corporation ................... 14
Section 3.5 Closing ............................................................... 14
Section 3.6 Subsequent Actions .................................................... 14
ARTICLE IV
CONVERSION OF SECURITIES
Section 4.1 Conversion of Capital Stock ........................................... 14
Section 4.2 Exchange of Certificates .............................................. 15
Section 4.3 Appraisal Rights ...................................................... 17
Section 4.4 Lost, Stolen or Destroyed Certificates ................................ 17
Section 4.5 Company Stock Plans ................................................... 17
ARTICLE V
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
Section 5.1 Disclosure Schedules .................................................. 18
Section 5.2 Standards ............................................................. 18
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 6.1 Due Organization, Good Standing and Power, ............................ 19
Section 6.2 Authorization and Validity of Agreement ............................... 19
Section 6.3 Capitalization ........................................................ 20
Section 6.4 Consents and Approvals; No Violations ................................. 21
Section 6.5 Company Reports and Financial Statements .............................. 22
Section 6.6 Information to Be Supplied ............................................ 22
Section 6.7 Absence of Certain Events ............................................. 23
Section 6.8 Litigation ............................................................ 23
Section 6.9 Title to Properties; Encumbrances; Leases ............................. 24
Section 6.10 Compliance with Laws .................................................. 24
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Section 6.11 Company Benefit Plans ................................................. 24
Section 6.12 Books and Records ..................................................... 26
Section 6.13 Taxes ................................................................. 26
Section 6.14 Intellectual Property ................................................. 28
Section 6.15 Brokers; Schedule of Fees and Expenses ................................ 28
Section 6.16 Environmental Matters ................................................. 28
Section 6.17 State Takeover Statutes ............................................... 29
Section 6.18 Voting Requirements; Board Approval ................................... 29
Section 6.19 Opinion of Financial Advisor .......................................... 29
Section 6.20 Contracts ............................................................. 30
Section 6.21 Plant and Equipment ................................................... 30
Section 6.22 Labor and Employment Matters .......................................... 31
Section 6.23 Rights Agreement ...................................................... 31
Section 6.24 Insurance ............................................................. 32
Section 6.25 Customers ............................................................. 32
Section 6.26 Affiliate Agreements .................................................. 32
Section 6.27 Full Disclosure ....................................................... 32
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 7.1 Due Organization; Good Standing ....................................... 33
Section 7.2 Authorization and Validity of Agreement ............................... 33
Section 7.3 Consents and Approvals; No Violations ................................. 33
Section 7.4 Information to Be Supplied ............................................ 34
Section 7.5 Broker's or Finder's Fee .............................................. 34
Section 7.6 Ownership of Capital Stock ............................................ 34
Section 7.7 No Prior Activities ................................................... 34
Section 7.8 Sufficient Funds ...................................................... 34
ARTICLE VIII
COVENANTS
Section 8.1 Access to Information Concerning Properties and Records ............... 35
Section 8.2 Conduct of the Business of the Company Pending the Closing Date ....... 35
Section 8.3 Company Shareholder Meeting; Preparation of Proxy Statement ........... 40
Section 8.4 Reasonable Best Efforts; Notification ................................. 40
Section 8.5 No Solicitation ....................................................... 42
Section 8.6 Antitrust Laws ........................................................ 44
Section 8.7 Indemnification; Directors' and Officers' Insurance ................... 45
Section 8.8 Public Announcements .................................................. 46
Section 8.9 Employee Benefits Plans ............................................... 46
Section 8.10 Option to Acquire Additional Shares ................................... 48
ARTICLE IX
CONDITIONS TO THE MERGER
Section 9.1 Conditions to Obligations of Each Party ............................... 49
Section 9.2 Conditions to the Obligations of Parent and Purchaser ................. 50
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ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.1 Termination ........................................................... 50
Section 10.2 Effect of Termination ................................................. 52
Section 10.3 Payment of Certain Fees ............................................... 52
ARTICLE XI
MISCELLANEOUS
Section 11.1 Representations and Warranties ........................................ 53
Section 11.2 Extension; Waiver ..................................................... 53
Section 11.3 Notices ............................................................... 53
Section 11.4 Entire Agreement ...................................................... 55
Section 11.5 Binding Effect; Benefit; Assignment ................................... 55
Section 11.6 Amendment and Modification ............................................ 55
Section 11.7 Further Actions ....................................................... 56
Section 11.8 Interpretation ........................................................ 56
Section 11.9 Enforcement ........................................................... 56
Section 11.10 Counterparts ....................................................... 56
Section 11.11 Applicable Law ..................................................... 56
Section 11.12 Severability ....................................................... 57
Section 11.13 Waiver of Jury Trial ............................................... 57
Section 11.14 Time ............................................................... 57
Annex I - Certain Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 15, 2001
(this "AGREEMENT"), by and among Penske Truck Leasing Co., L.P., a Delaware
limited partnership ("PARENT"), Sun Acquisition Corporation, a Delaware
corporation and an affiliate of Parent ("PURCHASER"), and Xxxxxxx Truck Leasing
Corp., a Delaware corporation (the "COMPANY").
WHEREAS, the Boards of Directors of each of Purchaser and the
Company have determined that it is advisable and in the best interests of each
corporation and its respective shareholders to consummate the acquisition of the
Company by Parent, upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of the general partner of
Parent and the Advisory Committee of Parent have determined that it is advisable
and in the best interests of Parent and its partners to consummate the
acquisition of the Company by Parent, upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser
make a cash tender offer to acquire all shares of the issued and outstanding
common stock, U.S. $1.00 par value, of the Company (the "COMPANY COMMON STOCK"),
including the related Rights (as hereinafter defined), for U.S. $13.00 per
share, net to the seller in cash;
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of each of the general partner of Parent, Purchaser and the Company
and the Advisory Committee of Parent have approved this Agreement and the
transactions contemplated hereby, including the merger of Purchaser with and
into the Company, with the Company as the surviving corporation, following the
Offer (as hereinafter defined); and
WHEREAS, simultaneously with the execution and delivery of
this Agreement, each executive officer of the Company and certain other
stockholders of the Company (the "CERTAIN STOCKHOLDERS") have executed and
delivered to Parent and Purchaser an agreement (the "TENDER AGREEMENT")
substantially in the form attached hereto as Exhibit A pursuant to which the
Certain Stockholders have agreed to take specified actions in furtherance of the
transactions contemplated by this Agreement, including tendering their shares of
Company Common Stock into the Offer.
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. When used in this Agreement, the
following terms shall have the respective meanings specified therefor below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined).
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"2001 PLAN OF THE COMPANY" shall have the meaning set forth in
Section 8.2(b)(4).
"ACQUISITION AGREEMENT" shall have the meaning set forth in
Section 8.5(b).
"AFFILIATE" of any Person shall mean any other Person directly
or indirectly controlling, controlled by, or under common control with, such
Person; provided that for the purposes of this definition, "control", (including
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or partnership interests, by contract or, otherwise.
"AGREEMENT" shall have the meaning set forth in the preamble
hereto.
"ANTITRUST AUTHORITIES" shall have the meaning set forth in
Section 8.6(d).
"ANTITRUST LAW" shall have the meaning set forth in Section
8.6(d).
"BALANCE SHEET" means the audited balance sheet of the Company
and its consolidated Subsidiaries as of September 30, 2000.
"business day" shall have the meaning set forth in Section
2.1(a).
"CERTAIN STOCKHOLDERS" shall have the meaning set forth in the
recitals hereof.
"CERTIFICATE OF MERGER" shall have the meaning set forth in
Section 3.1(b).
"CERTIFICATES" shall have the meaning set forth in Section
4.2(b).
"CLOSING" shall have the meaning set forth in Section 3.5.
"CLOSING DATE" shall have the meaning set forth in Section
3.5.
"CODE" shall mean the Internal Revenue Code of 1986, as may be
amended from time to time.
"COMPANY" shall have the meaning set forth in the preamble
hereto.
"COMPANY BENEFIT PLANS" shall have the meaning set forth in
Section 6.11(a).
"COMPANY COMMON STOCK" shall have the meaning set forth in the
recitals hereof.
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"COMPANY DISCLOSURE SCHEDULE" shall have the meaning set forth
in Section 5.1.
"COMPANY EMPLOYEES" shall mean the employees of the Company
and its Subsidiaries at the Measurement Date.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on (i) the ability of the Company to perform in all material
respects its obligations under this Agreement or to consummate the transactions
contemplated hereby or (ii) the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole; provided, however, that any
effect relating to any public disclosure of the transactions contemplated
hereby, the economy in general or affecting the United States truck leasing
industry generally shall be excluded for purposes of determining whether a
Company Material Adverse Effect has occurred.
"COMPANY SEC REPORTS" shall mean all forms, reports,
registration statements and other filings, together with any exhibits, any
amendments thereto and information incorporated by reference therein, filed by
the Company or any of its Subsidiaries with the SEC since September 30, 1998.
"COMPANY SHAREHOLDER APPROVAL" shall mean the approval of this
Agreement and the Merger at the Company Shareholder Meeting by the holders of a
majority of all outstanding shares of Company Common Stock, voting as one class,
with each share having one vote.
"COMPANY SHAREHOLDER MEETING" shall have the meaning set forth
in Section 8.3(a).
"COMPANY STOCK PLANS" shall mean the Company's 1982 Incentive
Stock Option Plan, the Company's 1986 Stock Option Plan, the Company's 1993
Stock Option Plan, the Company's 1997 Stock Option Plan, the Company's 2000
Stock Option Plan, whether or not approved by the Company's shareholders, and
any other stock-based incentive plan, program, agreement, grant or arrangement,
sponsored, maintained, entered into or made by the Company or any of its
Subsidiaries for the benefit of any employee, consultant, or officer or director
thereof.
"CONFIDENTIALITY AGREEMENT" shall mean the confidentiality
agreement between General Electric Capital Corporation and the Company, dated
October 10, 2000.
"CONSUMMATION OF THE OFFER" shall mean the acceptance for
payment of, and payment of the Offer Price for, shares of Company Common Stock
by Purchaser pursuant to the Offer, in accordance with the terms of this
Agreement.
"CONTRACTS" shall have the meaning set forth in Section 6.4.
"DEFINED BENEFIT PLAN" shall have the meaning set forth in
Section 6.11(d).
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"DGCL" shall mean the General Corporation Law of the State of
Delaware, as currently in effect and as amended from time to time.
"DISSENTING SHAREHOLDERS" shall have the meaning set forth in
Section 4.1(c).
"EFFECTIVE TIME" shall have the meaning set forth in Section
3.1(b).
"ENVIRONMENTAL CLAIMS" shall have the meaning set forth in
Section 6.16(b).
"ENVIRONMENTAL LAWS" shall have the meaning set forth in
Section 6.16(b).
"ERISA" shall have the meaning set forth in Section 6.11(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXPENSES" shall mean Parent's expenses reasonably incurred by
Parent in connection with the transactions contemplated by the Company
Transaction Documents, including but not limited to attorneys' fees and
expenses, filing fees, printing expenses and accountants' fees and expenses;
provided, however, that in no event shall such expenses exceed U.S. $1,000,000
for purposes of this Agreement.
"FINANCIAL STATEMENTS" means the audited and unaudited
financial statements of the Company and its consolidated Subsidiaries included
in the Company SEC Reports.
"GAAP" shall mean generally accepted accounting principles of
the United States of America, as in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall have the meaning set forth in
Section 6.4.
"HAZARDOUS MATERIALS" shall have the meaning set forth in
Section 6.16(b).
"HSR ACT" shall have the meaning set forth in Section 6.4.
"INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 8.7(a).
"INDEPENDENT DIRECTORS" shall have the meaning set forth in
Section 2.3(a).
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning set
forth in Section 6.14.
"ISSUANCE OBLIGATION" shall have the meaning set forth in
Section 6.3(a).
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"JOINT PRESS RELEASE" shall have meaning set forth in Section
2.1(b).
"KNOWLEDGE" shall mean, when used in any representation,
warranty or covenant of the Company contained herein, the actual knowledge of
any of the individuals named in Section 1.1 of the Company Disclosure Schedule
as set forth therein.
"LANDLORD LEASES" shall have the meaning set forth in Section
6.9(b).
"LAWS" shall have the meaning set forth in Section 6.4.
"LIENS" shall mean all security interests, liens, claims,
pledges, options, rights of first refusal, charges or other encumbrances of any
nature or any other similar limitation or restriction (including any restriction
on the right to vote or sell the same, except as may be provided under
applicable Federal or state securities Laws).
"MATERIAL CONTRACT" shall have the meaning set forth in
Section 6.20(a).
"MEASUREMENT DATE" shall mean the first to occur of (a) the
date upon which Parent first designates one or more directors of the Company
pursuant to Section 2.3(a) and (b) the date upon which the Effective Time
occurs.
"MERGER" shall have the meaning set forth in Section 3.1(a).
"MERGER CONSIDERATION" shall have the meaning set forth in
Section 4.1(c).
"MINIMUM CONDITION" shall have the meaning set forth in
Section 2.1(a).
"NEW BIDDER" shall have the meaning set forth in Section
8.5(a).
"NEW PLANS" shall have the meaning set forth in Section
8.9(e).
"NON-COMPETE AGREEMENTS" shall have the meaning set forth in
Section 8.9(g).
"OFFER" shall have the meaning set forth in Section 2.1(a).
"OFFER DOCUMENTS" shall have the meaning set forth in Section
2.1(c).
"OFFER PRICE" shall have the meaning set forth in Section
2.1(a).
"OFFER TO PURCHASE" shall have the meaning set forth in
Section 2.1(a).
"OPTION" shall have the meaning set forth in Section 8.10(a).
"OPTION SHARES" shall have the meaning set forth in Section
8.10(a).
"ORDERS" shall have the meaning set forth in Section 6.4.
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"OSHA" shall have the meaning set forth in Section 6.22(b).
"PARENT" shall have the meaning set forth in the preamble
hereto.
"PARENT MATERIAL ADVERSE EFFECT" shall mean any event,
change, occurrence, effect, fact or circumstance that is materially adverse to
the ability of Parent or Purchaser to perform its obligations under this
Agreement or to consummate the transactions contemplated hereby.
"PARENT OPTION PLAN" shall have the meaning set forth in
Section 8.9(e).
"PAYING AGENT" shall have the meaning set forth in Section
4.2(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERMITS" shall have the meaning set forth in Section 6.10(b).
"PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, a
limited liability company, other entity and a government or other department or
agency thereof.
"PROXY STATEMENT" shall have the meaning set forth in Section
8.3(b).
"PURCHASER" shall have the meaning set forth in the preamble
hereto.
"QUALIFIED PERSON" shall have the meaning set forth in Section
2.3(a).
"RETURNS" shall have the meaning set forth in Section 6.13(a).
"RIGHTS" means the stock purchase rights issued by the Company
pursuant to the Rights Agreement.
"RIGHTS AGREEMENT" means the Rights Agreement dated as of June
1, 1999, between the Company and Registrar and Transfer Company, as Rights
Agent, as amended from time to time consistent with the terms of this Agreement.
"SCHEDULE 14D-9" shall have the meaning set forth in Section
2.2(c).
"SCHEDULE TO" shall have the meaning set forth in Section
2.1(c).
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"STATE COURT" shall have the meaning set forth in Section
11.9.
"STOCK OPTIONS" shall mean any option or right to purchase,
acquire or receive Company Common Stock granted to any employee, consultant,
officer or director of the Company or any of its Subsidiaries, under any Company
Stock Plan or otherwise.
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"SUBSIDIARY" with respect to a Person shall mean (x) any
partnership of which such Person or any of its Subsidiaries is a general partner
(excluding any such partnership where such Person or any Subsidiary of such
Person does not have a majority of the voting interest in such partnership) or
(y) any other entity in which such Person together with any of its Subsidiaries
owns or has the power to vote more than 50% of the equity interests in such
entity having general voting power to participate in the election of the
governing body of such entity.
"SUFFICIENT FUNDS" shall have the meaning set forth in Section
7.8.
"SUPERIOR PROPOSAL" shall have the meaning set forth in
Section 8.5(a).
"SURVIVING CORPORATION" shall have the meaning set forth in
Section 3.1(a).
"TAKEOVER PROPOSAL" shall have the meaning set forth in
Section 8.5(a).
"TAXES" shall have the meaning set forth in Section 6.13(a).
"TENANT LEASES" shall have the meaning set forth in Section
6.9(b).
"TENDER AGREEMENT" shall have the meaning set forth in the
recitals hereof.
"TERMINATION DATE" shall mean ninety calendar days following
commencement of the Offer; provided, however, that if the condition provided for
in clause (a) (ii) of Annex I shall not have been satisfied on or prior to such
date, then the Termination Date shall be extended until ten business days after
such condition has been satisfied, but in no event shall the Termination Date be
extended beyond one hundred and fifty days following commencement of the Offer.
"TERMINATION FEE" shall mean an amount equal to the product of
(i) three percent (3%), (ii) the Offer Price and (iii) the number of shares of
Company Common Stock issued and outstanding as of the Termination Date.
"THIRD PARTY ACQUISITION EVENT" shall have the meaning set
forth in Section 10.3(b).
"U.S. $" shall mean United States dollars.
"VOTING DEBT" shall have the meaning set forth in Section
6.3(a).
ARTICLE II
THE OFFER
SECTION 2.1 THE OFFER.
(a) Provided that this Agreement shall not have been
terminated pursuant to Section 10.1 hereof, as promptly as reasonably
practicable, but in no event later than seven business days following the public
announcement of the terms of this Agreement (which public
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announcement shall occur no later than the first business day following the
execution of this Agreement), Purchaser shall, and Parent shall cause Purchaser
to, commence (within the meaning of Rule 14d-2 under the Exchange Act) a tender
offer (as it may be amended from time to time as permitted by this Agreement,
the "OFFER") to purchase all of the shares of Company Common Stock issued and
outstanding (including the related Rights) at a price of U.S. $13.00 per share,
net to the seller in cash (such price, or such higher price per share of Company
Common Stock as may be paid in the Offer, being referred to herein as the "OFFER
PRICE"). For purposes of this Agreement, the term "business day" shall mean any
day, other than Saturday, Sunday or a federal holiday, and shall consist of the
time period from 12:01 a.m. through 12:00 midnight Eastern time. The obligation
of Purchaser to accept for payment and pay for shares of Company Common Stock
(including the related Rights) tendered pursuant to the Offer shall be subject
only to the condition that there shall be validly tendered (other than by
guaranteed delivery where actual delivery has not occurred) in accordance with
the terms of the Offer, prior to the expiration date of the Offer and not
withdrawn, a number of shares of Company Common Stock that, together with the
shares of Company Common Stock then owned by Parent and/or Purchaser, represents
at least a majority of the shares of Company Common Stock outstanding on a fully
diluted basis (after giving effect to the conversion or exercise of all
outstanding options, warrants and other rights to acquire, and securities
exercisable or convertible into, Company Common Stock, whether or not exercised
or converted at the time of determination, other than potential dilution
attributable to the Rights or the Option Shares) (the "MINIMUM CONDITION") and
to the satisfaction or waiver by Purchaser as permitted hereunder of the other
conditions set forth in Annex I hereto. The Offer shall be made by means of an
offer to purchase (the "OFFER TO PURCHASE") and the related letter of
transmittal, each in form reasonably satisfactory to the Company, containing the
terms set forth in this Agreement and the conditions set forth in Annex I.
Parent and Purchaser agree that the Offer to Purchase will state at least in the
summary term sheet and in appropriate places in the Offer to Purchase that
"Purchaser's obligation to purchase shares of Company Common Stock under the
Offer is not conditioned on any financing arrangements or subject to any
financing condition." Without limiting the foregoing, effective upon
Consummation of the Offer, the holder of such Company Common Stock will sell and
assign to Purchaser all right, title and interest in and to all of the shares of
Company Common Stock tendered (including, but not limited to, such holder's
right to any and all dividends and distributions with a record date before, and
a payment date after, the scheduled or extended expiration date).
Purchaser expressly reserves the right, subject to compliance
with the Exchange Act, to waive any of the conditions to the Offer and to make
any change in the terms of or conditions to the Offer; provided that (i) the
Minimum Condition may not be waived or changed without the prior written consent
of the Company and (ii) no change may be made that changes the form of
consideration to be paid, decreases the Offer Price, decreases the number of
shares of Company Common Stock sought in the Offer, materially adds to or
modifies any of the conditions to the Offer, makes any other change in the terms
of the Offer that is in any manner adverse to the holders of the Company Common
Stock or (except as provided in the next sentence) changes the expiration date
of the Offer, without the prior written consent of the Company. Without the
consent of the Company, Purchaser shall have the right to extend the expiration
date of the Offer (which shall initially be 12:00 midnight Eastern time on the
date that is the twentieth business day from the commencement date of the Offer,
pursuant to Rule 14d-2 under the Exchange Act), (i) if, immediately before the
scheduled or extended expiration date of
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the Offer, any of the conditions to the Offer shall not have been satisfied or,
to the extent permitted, waived, until such conditions are satisfied or waived,
(ii) for any period required by any rule, regulation, interpretation or position
of the SEC or the staff thereof applicable to the Offer or any period required
by applicable law, or (iii) for up to 10 additional business days in increments
of not more than two business days each (but in no event beyond the Termination
Date), if, immediately prior to the scheduled or extended expiration date of the
Offer, the Company Common Stock tendered and not withdrawn pursuant to the Offer
constitutes more than 80% and less than 90% of the outstanding Company Common
Stock, notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer; provided, that, in the case of any extension under
clause (iii), Parent or Purchaser may not thereafter assert the failure of any
of the conditions provided in clauses (a)(ii), (b)(iii), (b)(v) and (c) of Annex
I, except, in each such case, by reason of a knowing, intentional breach of a
covenant by the Company. In addition, if, at the scheduled or extended
expiration date of the Offer, the Minimum Condition has been satisfied but
Company Common Stock tendered and not withdrawn pursuant to the Offer
constitutes less than 90% of the outstanding Company Common Stock, without the
consent of the Company, Purchaser shall have the right to provide for a
"subsequent offering period" (as contemplated by Rule 14d-11 under the Exchange
Act) for up to 20 business days after Purchaser's acceptance for payment of the
shares of Company Common Stock then tendered and not withdrawn pursuant to the
Offer.
If any of the conditions to the Offer is not satisfied or
waived on any scheduled or extended expiration date of the Offer, Purchaser
shall, and Parent shall cause Purchaser to, extend the Offer, if such condition
or conditions could reasonably be expected to be satisfied, from time to time
until such conditions are satisfied or waived; provided, that Purchaser shall
not be required to extend the Offer beyond, and in the case of clause (y) may
terminate the Offer upon, the earliest to occur of (x) the Termination Date or
(y) five business days following the public announcement of any Takeover
Proposal or amended Takeover Proposal that has not been publicly rejected by the
Company at the time of such expiration or termination (except that Purchaser may
not terminate the Offer pursuant to this clause (y) prior to the twentieth
business day following commencement of the Offer). Subject to the foregoing and
upon the terms and subject to the conditions of the Offer, Purchaser shall, and
Parent shall cause it to, accept for payment and pay for, as promptly as
practicable after the expiration of the Offer (or as required by Rule 14d-11
under the Exchange Act), all shares of Company Common Stock validly tendered and
not withdrawn pursuant to the Offer.
(b) No later than the first business day following
execution of this Agreement and subject to the conditions of this Agreement,
Parent shall issue a joint press release with the Company (the "JOINT PRESS
RELEASE") regarding this Agreement and its intent to make the Offer and shall
file with the SEC the Joint Press Release, under cover of Schedule TO,
indicating on the front of such Schedule TO that such filing contains
pre-commencement communications.
(c) As soon as practicable on the date of commencement of
the Offer, Parent and Purchaser shall file with the SEC a Tender Offer Statement
on Schedule TO (together with all amendments and supplements thereto and
including the exhibits thereto, the "SCHEDULE TO") with respect to the Offer.
The Schedule TO will include or incorporate by reference as exhibits the Offer
to Purchase and forms of the letter of transmittal and summary advertisement
(collectively, together with any supplements or amendments thereto, the "OFFER
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DOCUMENTS"). Parent and Purchaser will take all steps necessary to cause the
Offer Documents to be disseminated to holders of shares of Company Common Stock
to the extent required by applicable federal securities Laws. Parent, Purchaser
and the Company each agree promptly to correct any information provided by it
for use in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect. Parent and Purchaser
agree to take all steps necessary to cause the Schedule TO as so corrected to be
filed with the SEC and the Offer Documents as so corrected to be disseminated to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities Laws, including applicable SEC rules
and regulations thereunder. The Company and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule TO and the Offer
Documents prior to their being filed with the SEC or disseminated to the holders
of shares of Company Common Stock. Purchaser and Parent also agree to provide
the Company and its counsel in writing with any comments Purchaser, Parent or
their counsel may receive from the SEC or its staff with respect to the Schedule
TO or the Offer Documents promptly after the receipt of such comments and shall
consult with and provide the Company and its counsel a reasonable opportunity to
review and comment on the response of Purchaser to such comments prior to
responding.
SECTION 2.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the
Offer and represents that its Board of Directors, at a meeting duly called and
held on January 15, 2001 has unanimously (i) determined that this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, are
fair to the Company's shareholders and are advisable and in the best interests
of the Company and its shareholders, (ii) approved and adopted this Agreement
and the transactions contemplated hereby, including the Offer and the Merger, in
accordance with the requirements of the DGCL and (iii) resolved to recommend
acceptance of the Offer by its shareholders and the tender of their shares of
Company Common Stock into the Offer and, to the extent required by applicable
law, approval and adoption of this Agreement and the Merger by its shareholders.
The Company further represents that Xxxxxx Xxxxxxx Xxxx Xxxxxx has delivered to
the Company's Board of Directors its written opinion that the consideration to
be paid in the Offer and the Merger is fair to the holders of shares of Company
Common Stock (other than Parent or any of its Affiliates) from a financial point
of view. The Company has been advised that all of its directors and executive
officers who own shares of Company Common Stock intend to tender their shares of
Company Common Stock pursuant to the Offer. In connection with the Offer, the
Company will, or will cause its transfer agent to, promptly furnish Parent with
a list of its shareholders, mailing labels and any available listing or computer
file containing the names and addresses of all record holders of shares of
Company Common Stock and lists in the Company's possession or control of
securities positions of shares of Company Common Stock held in stock
depositories, in each case as of a recent date, and will provide to Parent such
additional information (including updated lists of shareholders, mailing labels
and lists of securities positions) and such other assistance as Parent may
reasonably request in connection with the Offer. Subject to the requirements of
applicable Laws, and, except for such steps as are necessary to disseminate the
Schedule TO and the Offer Documents and any other documents necessary to
consummate the Offer and the transactions contemplated by this Agreement, Parent
and Purchaser shall hold in confidence the information contained in any such
labels, listings and files, shall use such information only in connection with
the Offer
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and the Merger, and, if this Agreement shall be terminated, shall, upon request,
destroy all copies of such information then in their possession, except to the
extent that such information can be shown to have been previously known on a
nonconfidential basis by Parent or Purchaser, in the public domain through no
fault of Parent or Purchaser or later lawfully acquired by Parent or Purchaser
on a nonconfidential basis.
(b) No later than the first business day following
execution of this Agreement and subject to the conditions of this Agreement, the
Company shall issue the Joint Press Release with Parent and shall file with the
SEC the Joint Press Release, under cover of Schedule 14D-9, indicating on the
front of such Schedule 14D-9 that such filing contains pre-commencement
communications.
(c) As soon as practicable on the day that the Offer is
commenced, the Company shall file with the SEC and disseminate to holders of
shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities Laws, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto, the
"SCHEDULE 14D-9") that shall reflect the recommendations of the Company's Board
of Directors referred to in Section 2.2(a) above. The Company, Parent and
Purchaser each agree promptly to correct any information provided by it for use
in the Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of shares of Company Common Stock, in each
case as and to the extent required by applicable federal securities Laws. Parent
and its counsel shall be given a reasonable opportunity to review and comment on
the Schedule 14D-9 prior to its being filed with the SEC or disseminated to
holders of Company Common Stock. The Company also agrees to provide Parent and
its counsel in writing with any comments the Company or its counsel may receive
from the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments and shall consult with and provide Parent and its
counsel a reasonable opportunity to review and comment on the response of the
Company to such comments prior to responding.
SECTION 2.3 DIRECTORS.
(a) Promptly upon the purchase of and payment for not
less than a majority of the issued and outstanding shares of Company Common
Stock on a fully diluted basis by Parent or any of its direct or indirect
Subsidiaries pursuant to the Offer, Parent shall be entitled to designate for
appointment or election to the Company's then existing Board of Directors, upon
written notice to the Company, such number of directors, rounded up to the next
whole number, on the Board of Directors such that the percentage of its
designees on the Board shall equal the percentage of the outstanding shares of
Company Common Stock owned of record by Parent and its direct or indirect
Subsidiaries. In furtherance thereof, the Company shall, upon request of
Purchaser, use its reasonable best efforts promptly to cause Parent's designees
(and any replacement designees in the event that any designee shall no longer be
on the Board of Directors) to be so elected to the Company's Board, and in
furtherance thereof, to the extent necessary, increase the size of the Board of
Directors or use its reasonable best efforts to obtain the resignation of such
number of its current directors as is necessary to give effect to the foregoing
provision. At such time, the Company shall also, upon the request of Purchaser,
use
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its reasonable best efforts to cause the Persons designated by Parent to
constitute at least the same percentage (rounded up to the next whole number) as
is on the Company's Board of Directors of (i) each committee of the Company's
Board of Directors, (ii) each board of directors (or similar body) of each
Subsidiary of the Company and (iii) each committee (or similar body) of each
such board. Notwithstanding the foregoing, until the Effective Time, the Board
of Directors of the Company shall have at least two directors who are directors
of the Company on the date of this Agreement and who are not officers of the
Company or any of its Subsidiaries (the "INDEPENDENT DIRECTORS"); provided,
however, that (x) notwithstanding the foregoing, in no event shall the
requirement to have at least two Independent Directors result in Parent's
designees constituting less than a majority of the Company's Board of Directors
unless Parent shall have failed to designate a sufficient number of Persons to
constitute at least a majority and (y) if the number of Independent Directors
shall be reduced below two for any reason whatsoever (or if immediately
following Consummation of the Offer there are not at least two then-existing
directors of the Company who (1) are Qualified Persons (as defined below) and
(2) are willing to serve as Independent Directors), then the number of
Independent Directors required hereunder shall be one, unless the remaining
Independent Director is able to identify a person, who is not an officer or
Affiliate of the Company, Parent or any of their respective Subsidiaries (any
such person being referred to herein as a "QUALIFIED PERSON"), willing to serve
as an Independent Director, in which case such remaining Independent Director
shall be entitled to designate any such Qualified Person or Persons to fill such
vacancy, and such designated Qualified Person shall be deemed to be an
Independent Director for purposes of this Agreement, or if no Independent
Directors then remain, the other Directors shall be entitled (but not required)
to designate two Qualified Persons to fill such vacancies, and such persons
shall be deemed to be Independent Directors for purposes of this Agreement. The
Company Board shall take no action after Consummation of the Offer until the
Company Board has been reconstituted in accordance with this Section 2.3(a),
unless otherwise agreed in writing by Parent or Purchaser.
The Company shall promptly take all actions required pursuant
to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in
order to fulfill its obligations under this Section 2.3(a), including mailing to
shareholders the information required by such Section 14(f) and Rule 14f-1
(which the Company shall mail together with the Schedule 14D-9 if it receives
from Parent and Purchaser the information below on a basis timely to permit such
mailing) as is necessary to fulfill the Company's obligations under this Section
2.3(a). The Company's obligations to appoint Parent's designees to the Company's
Board of Directors shall be subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. Parent or Purchaser shall
supply the Company in writing any information with respect to either of them and
their nominees, officers, directors and Affiliates required by such Section
14(f) and Rule 14f-1 as is necessary in connection with the appointment of any
of Parent's designees under this Section 2.3(a). The provisions of this Section
2.3(a) are in addition to and shall not limit any rights that Purchaser, Parent
or any of their Affiliates may have as a holder or beneficial owner of shares of
Company Common Stock as a matter of law with respect to the election of
directors or otherwise.
(b) Following the election or appointment of Parent's
designees pursuant to Section 2.3(a), the approval by affirmative vote or
written consent of all of the Independent Directors then in office (or, if there
shall be only one Independent Director then in office, the Independent Director)
shall be required to authorize (and such authorization shall constitute the
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authorization of the Company's Board of Directors and no other action on the
part of the Company, including any action by any committee thereof or any other
director of the Company, shall be required or permitted to authorize) (i) any
amendment or termination of this Agreement by the Company, (ii) any extension of
time for performance of any obligation or action hereunder by Parent or
Purchaser or (iii) any waiver or exercise of any of the Company's rights under
this Agreement. If there is no Independent Director, any action that requires
approval by the Independent Directors shall be deemed to be approved by the
Independent Directors if approved by the Company's Board of Directors.
SECTION 2.4 MERGER WITHOUT MEETING OF SHAREHOLDERS. If
following Consummation of the Offer (or any subsequent offering period),
Purchaser owns at least 90% of the outstanding shares of Company Common Stock,
each of the parties hereto shall take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after such
acquisition, without the Company Shareholder Meeting, in accordance with Section
253 of the DGCL.
ARTICLE III
THE MERGER AND RELATED MATTERS
SECTION 3.1 THE MERGER.
(a) Upon the terms and subject to the conditions of this
Agreement, in accordance with the DGCL, at the Effective Time the Company and
Purchaser shall consummate a merger (the "MERGER") pursuant to which (a)
Purchaser shall be merged with and into the Company and the separate corporate
existence of Purchaser shall thereupon cease and (b) the Company shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"SURVIVING CORPORATION") and shall continue its corporate existence under the
Laws of the State of Delaware.
(b) Upon the terms and subject to the conditions of this
Agreement, on the date of the Closing (or on such other date as Parent and the
Company may agree), Parent, Purchaser and the Company shall file with the
Secretary of State of the State of Delaware a certificate of merger, (the
"CERTIFICATE OF MERGER") executed and acknowledged in accordance with the
relevant provisions of the DGCL, and shall make all other filings or recordings
required under the DGCL. The Merger shall become effective on the later of the
date on which the Certificate of Merger has been duly filed with the Secretary
of State of the State of Delaware or such time as is agreed upon by the parties
and specified in the Certificate of Merger, and such time is hereinafter
referred to as the "EFFECTIVE TIME."
(c) From and after the Effective Time, the Merger shall
have the effects set forth in this Agreement and Section 259 of the DGCL.
SECTION 3.2 CERTIFICATE OF INCORPORATION OF THE SURVIVING
CORPORATION. The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until such time that the Certificate
of Incorporation is amended thereafter in accordance with the DGCL and subject
to Section 8.7(a) hereof.
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SECTION 3.3 BY-LAWS OF THE SURVIVING CORPORATION. The By-Laws
of the Company, as in effect immediately prior to the Effective Time, shall be
the By-Laws of the Surviving Corporation until such time that the By-Laws are
amended thereafter in accordance with the DGCL and subject to Section 8.7(a)
hereof.
SECTION 3.4 DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION. At the Effective Time, the directors of Purchaser immediately prior
to the Effective Time shall be the directors of the Surviving Corporation, each
of such directors to hold office, subject to the applicable provisions of the
DGCL and the Certificate of Incorporation and By-Laws of the Surviving
Corporation, until the earlier of their resignation or the next annual
shareholders' meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At the Effective
Time, the officers of the Purchaser immediately prior to the Effective Time
shall, subject to the applicable provisions of the Certificate of Incorporation
and By-Laws of the Surviving Corporation, be the officers of the Surviving
Corporation until the earlier of their resignation or their respective
successors shall be duly elected or appointed and qualified.
SECTION 3.5 CLOSING. The closing of the Merger (the "CLOSING")
shall take place at 10:00 a.m., local time, on a date to be specified by the
parties, or, if no such date is specified, on the second business day after
satisfaction or, to the extent permitted by applicable Law, waiver by the
applicable parties, of all of the conditions set forth in Article IX hereof (the
"CLOSING DATE"), at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
SECTION 3.6 SUBSEQUENT ACTIONS. If at any time after the
Effective Time the Surviving Corporation will consider or be advised that any
deeds, bills of sale, instruments of conveyance, assignments, assurances or any
other actions or things are necessary or desirable to vest, perfect or confirm
of record or otherwise in the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of either of the Company
or Purchaser vested or to be vested in the Surviving Corporation as a result of,
or in connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either the Company or
Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments
and assurances and to take and do, in the name and on behalf of each such entity
or otherwise, all such other actions and things as may be necessary or desirable
to vest, perfect or confirm all right, title and interest in, to and under such
rights, properties or assets in the Surviving Corporation or otherwise to carry
out this Agreement.
ARTICLE IV
CONVERSION OF SECURITIES
SECTION 4.1 CONVERSION OF CAPITAL STOCK. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of Company Common Stock or any shares of capital stock of
Purchaser:
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(a) Purchaser Capital Stock. Each share of capital stock
of Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Purchaser-Owned
Stock. All shares of Company Common Stock that are owned by the Company, any
Subsidiary of the Company, Parent or any Subsidiary of Parent immediately prior
to the Effective Time shall be cancelled and retired and shall cease to exist
and no consideration shall be delivered in exchange therefor; provided that
shares of Company Common Stock held beneficially or of record by any Company
Stock Plan shall not be deemed to be held by the Company regardless of whether
the Company has, directly or indirectly, the power to vote or control the
disposition of such shares.
(c) Exchange of Shares of Company Common Stock. Each
share of Company Common Stock (other than shares to be cancelled in accordance
with Section 4.1(b) and any shares that are held by shareholders exercising
appraisal rights pursuant to Section 262 of the DGCL ("DISSENTING
SHAREHOLDERS")) issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive the Offer Price in cash, payable to
the holder thereof, without interest (the "MERGER CONSIDERATION"), upon
surrender of the certificate formerly representing such share in the manner
provided in Section 4.2. All such shares, when so converted, shall no longer be
outstanding and shall automatically be cancelled 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
Consideration therefor upon the surrender of such certificate in accordance with
Section 4.2, without interest.
SECTION 4.2 EXCHANGE OF CERTIFICATES.
(a) Paying Agent. Prior to the Effective Time, Parent
shall designate a bank or trust company organized under the Laws of the United
States or any state thereof and located therein reasonably acceptable to the
Company to act as agent for the holders of shares of Company Common Stock in
connection with the Merger (the "PAYING AGENT") to receive in trust the funds to
which holders of such shares shall become entitled pursuant to Section 4.1(c).
At the Effective Time, Parent shall deposit with the Paying Agent cash in U.S.
dollars in an amount sufficient to pay the Merger Consideration as provided
herein. The Paying Agent shall invest such funds as directed by the Surviving
Corporation on a daily basis; provided that no such investment or loss thereon
shall affect the amounts payable to the Company's shareholders pursuant to this
Article IV. Parent and the Surviving Corporation shall replace any monies lost
through an investment made pursuant to this Section 4.2. Any interest and other
income resulting from such investments shall be the exclusive property of and
shall be paid promptly to the Surviving Corporation.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Paying Agent shall mail to each holder
of record of a certificate or certificates, which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (the
"CERTIFICATES"), whose shares were converted pursuant to Section 4.1 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,
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only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent and the Company may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger Consideration. Upon surrender
of a Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each share formerly represented
by such Certificate and the Certificate so surrendered shall forthwith be
cancelled. If payment of the Merger Consideration is to be made to a Person
other than the Person in whose name the surrendered Certificate is registered,
it shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and that the
Person requesting such payment shall have paid any transfer and other Taxes
required by reason of the payment of the Merger Consideration to a Person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as contemplated by
this Section 4.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
in cash as contemplated by this Section 4.2. The right of any shareholder to
receive the Merger Consideration shall be subject to and reduced by any
applicable withholding Tax obligation.
(c) Transfer Books; No Further Ownership Rights in the
Shares of Company Common Stock. At the Effective Time, the stock transfer books
of the Company shall be closed and thereafter there shall be no further
registration of transfers of the shares of Company Common Stock on the records
of the Company. From and after the Effective Time, the holders of Certificates
evidencing ownership of the shares of Company Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Company Common Stock, except as otherwise provided for
herein or by applicable law, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time that may have been declared or made by the
Company on such shares of Company Common Stock in accordance with the terms of
this Agreement or prior to the date of this Agreement and that remain unpaid at
the Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be cancelled and exchanged
as provided in this Article IV, except as otherwise provided by Law.
(d) Termination of Fund; No Liability. At any time
following six months after the Effective Time, the Surviving Corporation shall
be entitled to require the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) that had been made available to the
Paying Agent and that have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or other similar Laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, none of Parent, Purchaser, the Surviving Corporation or the
Paying Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
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SECTION 4.3 APPRAISAL RIGHTS. Notwithstanding anything in this
Agreement to the contrary, if any Dissenting Shareholder shall demand to be paid
the fair cash value of such holder's shares of Company Common Stock, as provided
in Section 262 of the DGCL, such shares shall not be converted into or be
exchangeable for the right to receive the Merger Consideration except as
provided in this Section 4.3, and the Company shall give Parent notice of any
written objections to this Agreement or the Merger under Section 262 of the DGCL
received by the Company and of any demands received by the Company for the fair
cash value of any shares of Company Common Stock and Parent shall have the right
to participate in all negotiations and proceedings with respect to any such
demands. Neither the Company nor the Surviving Corporation shall, except with
the prior written consent of Parent, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for payment. If any Dissenting
Shareholder shall fail to perfect or shall have effectively withdrawn or lost
the right to dissent, the shares of Company Common Stock held by such Dissenting
Shareholder shall thereupon be treated as though such shares had been converted
into the Merger Consideration at the Effective Time pursuant to Section 4.1.
SECTION 4.4 LOST, STOLEN OR DESTROYED CERTIFICATES. If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it with respect to such Certificate, the Paying
Agent shall deliver the Merger Consideration for each of the shares of Company
Common Stock represented by such Certificate.
SECTION 4.5 COMPANY STOCK PLANS.
(a) The Company has, in accordance with the applicable
Company Stock Plan and option agreement, amended each Stock Option that is
outstanding as of the date hereof, whether granted under any Company Stock Plan
or otherwise, in order to cause, concurrently with Consummation of the Offer,
each such Stock Option to become fully vested and thereafter immediately
cancelled in exchange for an amount in cash, payable concurrently with
Consummation of the Offer, equal to the product of (i) the number of shares of
Company Common Stock subject to such Stock Option at the time of such
cancellation and exchange and (ii) the positive excess, if any, of the Offer
Price over the per share exercise price of such Stock Option (such payment to be
net of applicable withholding taxes); provided, however, that the cancellation
of Stock Options in exchange for cash shall be delayed to the Effective Time in
the event such delay is necessary to avoid short-swing profit liability under
Section 16(b) of the Exchange Act. The Company shall take such actions as are
necessary to fully advise holders of Stock Options of such cancellation and
exchange.
(b) All Company Stock Plans shall terminate as of the
Effective Time and the provisions in any other Company Benefit Plan (as
hereinafter defined) or any other plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in respect of any
capital stock of the Company shall be terminated as of the Effective Time, and
the Company shall ensure that following the Effective Time no holder of a Stock
Option or any participant in any Company Stock Plan or Company Benefit Plan or
any other plan or
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arrangement shall have any right thereunder to acquire any capital stock of the
Company, Parent or the Surviving Corporation.
ARTICLE V
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
SECTION 5.1 DISCLOSURE SCHEDULES. Prior to the execution and
delivery of this Agreement, the Company has delivered to Parent, a schedule (the
"COMPANY DISCLOSURE SCHEDULE") setting forth, among other things, items the
disclosure of which the Company desires or is required to make either in
response to an express disclosure requirement contained in a provision of this
Agreement or as an exception to one or more of the Company's representations,
warranties, covenants or agreements contained in Article VI, or to one or more
of the Company's covenants contained in Article VIII. Notwithstanding anything
in this Agreement to the contrary (a) no such item is required to be set forth
in the Disclosure Schedule as an exception to a representation or warranty
(other than the representations and warranties contained in Sections 6.1(a),
6.1(c), 6.1(d), 6.2, 6.3, 6.5, 6.6, 6.7, 6.12, 6.15, 6.17, 6.18, 6.19, 6.20(a),
6.22(a), 6.23, and 6.26) if its absence would not result in the related
representation or warranty being deemed untrue or incorrect under the standard
established by Section 5.2, and (b) the mere inclusion of an item in a
Disclosure Schedule in response to an express disclosure requirement or as an
exception to a representation, warranty or covenant shall not be deemed an
admission by the Company that such item is material or represents a material
exception or material fact, event or circumstance or that such item has had or
would reasonably be expected to have a Company Material Adverse Effect.
SECTION 5.2 STANDARDS. No representation or warranty of the
Company contained in Article VI (other than the representations and warranties
contained in Sections 6.1(a), 6.1(c), 6.1(d), 6.2, 6.3, 6.5, 6.6, 6.7, 6.12,
6.15, 6.17, 6.18, 6.19, 6.20(a), 6.22(a), 6.23 and 6.26) or of Parent and
Purchaser in Article VII (other than the representations and warranties
contained in Sections 7.1, 7.2, 7.4 and 7.5) shall be deemed untrue or incorrect
for any purpose under this Agreement or the Offer and no party hereto shall be
deemed to have breached any such representation or warranty for any purpose
under this Agreement, in any case as a consequence of the existence or absence
of any fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with any such representations or warranties contained in
Article VI, in the case of the Company, or Article VII, in the case of Parent
and Purchaser, has had or would reasonably be expected to have a Company
Material Adverse Effect or Parent Material Adverse Effect, as the case may be.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule, the
Company represents and warrants to, and covenants and agrees with, Parent and
Purchaser as set forth below in this Article VI. Each exception set forth in the
Company Disclosure Schedule and each other response to this Agreement set forth
in the Company Disclosure Schedule is identified by reference to, or has been
grouped under a heading referring to, a specific individual Section of
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this Agreement; provided, however, that any such exception or response made with
reference to one or more Sections of this Agreement shall be deemed to be made
with respect to each other Section of this Agreement to which such exception or
response is relevant provided that such relevance is reasonably apparent based
on the information set forth in the Company Disclosure Schedule.
SECTION 6.1 DUE ORGANIZATION, GOOD STANDING AND POWER,
(a) The Company and each of its Subsidiaries is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization, and each such Person has all requisite
corporate (or partnership, or limited liability company, as applicable) power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(b) The Company and each of its Subsidiaries is duly
qualified or licensed to do business as a foreign corporation or other entity
and is in good standing in each jurisdiction in which such qualification is
required.
(c) The Company has made available to Parent true,
complete and correct copies of the Certificate of Incorporation and By-laws of
the Company, in each case as amended (if so amended) to the date of this
Agreement, and has made available the certificates or articles of incorporation
and by-laws or other organizational documents of its Subsidiaries, in each case
as amended (if so amended) to the date of this Agreement.
(d) The respective certificates or articles of
incorporation and by-laws or other organizational documents of the Subsidiaries
of the Company do not contain any provision limiting or otherwise restricting
the ability of the Company to control such Subsidiaries. Section 6.1(d) of the
Company Disclosure Schedule sets forth a list of all Subsidiaries of the Company
and their respective jurisdictions of incorporation or organization and
identifies the Company's (direct or indirect) percentage of equity ownership
therein.
SECTION 6.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. The
Company has full corporate power and authority to execute and deliver this
Agreement, 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 it of the transactions
contemplated hereby, have been duly authorized and approved by its Board of
Directors and no other corporate action on the part of the Company is necessary
to authorize the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby, other than
obtaining the Company Shareholder Approval, if necessary, and the filing of the
Certificate of Merger. This Agreement has been duly executed and delivered by
the Company and, assuming the due and valid authorization, execution and
delivery of this Agreement by each of Parent and Purchaser, this Agreement is a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms.
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SECTION 6.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists
of 100,000,000 shares of Company Common Stock. As of January 12, 2001, (i)
57,979,616 shares of Company Common Stock were issued and outstanding and (ii)
3,303,976 shares of Company Common Stock were reserved for issuance under
outstanding Stock Options. Since January 12, 2001, the Company has not issued
any shares of Company Common Stock except pursuant to the exercise of Stock
Options outstanding as of January 12, 2001. Since January 12, 2001 the Company
has not granted any Stock Options, or other rights to acquire Company Common
Stock, except pursuant to this Agreement. The average exercise price for all
Stock Options is set forth in Section 6.3(a)of the Company Disclosure Schedule.
All issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and free from
preemptive or similar rights. Except for the Company's obligations under the
Company Stock Plans, the Rights Plan and the Rights, and except as contemplated
or permitted by this Agreement, there are no outstanding or authorized options,
warrants, rights, subscriptions, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or otherwise, relating
to shares of capital stock or other equity interests of the Company or any of
its Subsidiaries, pursuant to which the Company or any of its Subsidiaries is or
may become obligated to issue shares of its capital stock or other equity
interests or any securities convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of the capital stock or other equity
interests of the Company or any of its Subsidiaries (each an "ISSUANCE
OBLIGATION"). There are no outstanding obligations of the Company, contingent or
otherwise to repurchase, redeem or otherwise acquire or register any outstanding
securities of the Company. The Company has no authorized or outstanding bonds,
debentures, notes or other indebtedness the holders of which have the right to
vote (or convertible or exchangeable into or exercisable for securities the
holders of which have the right to vote) with or separately from the
shareholders of the Company on any matter ("VOTING DEBT"). All of the
outstanding securities of the Company and each of the Company's Subsidiaries
were issued in compliance with all federal and state securities Laws. There are
no limitations or restrictions (other than restrictions under the DGCL) of any
kind which prevent or restrict the payment of dividends by the Company or any of
its Subsidiaries and there are no limitations or restrictions (other than
restrictions on sales or other dispositions under federal or state securities
Laws) on the right to sell or otherwise dispose of such capital stock or other
ownership interests.
(b) All of the issued and outstanding shares of capital
stock of each Subsidiary are beneficially owned by the Company, directly or
indirectly, and all such shares are validly issued, fully paid and nonassessable
and free from preemptive or similar rights. No Subsidiary of the Company has
outstanding Voting Debt and there are no obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire or register any
outstanding securities of any of its Subsidiaries or any capital stock of, or
other ownership interests in, any of its Subsidiaries. There are no obligations,
contingent or otherwise, of the Company or any of its Subsidiaries to (other
than advances to Subsidiaries in the ordinary course of business) provide
material funds to, or make any material investment in (in the form of a loan,
capital contribution or otherwise), or provide any guarantee with respect to the
material obligations of, any Subsidiaries of the Company.
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(c) Except for the Company's interest in its
Subsidiaries, the Company does not directly or indirectly own 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,
joint venture, limited liability company or other business association or entity
other than such interests which do not exceed $1,000,000 individually or in the
aggregate.
(d) No indebtedness of the Company or any of its
Subsidiaries contains any restriction upon (i) the prepayment of any
indebtedness of the Company or its Subsidiaries, (ii) the incurrence of
indebtedness by the Company or its Subsidiaries or (iii) the ability of the
Company or any of its Subsidiaries to grant any Lien on the properties or assets
of the Company or its Subsidiaries.
(e) Following the Effective Time, no holder of Stock
Options will have any right to receive shares of common stock of the Surviving
Corporation upon exercise of Stock Options, assuming compliance by the Company
with its obligations under Section 4.5.
SECTION 6.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming
(i) the filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR ACT"), and any similar filings as may be required
pursuant to Canadian Law, including the Competition Act (Canada), are made and
the waiting periods thereunder (if applicable) have been terminated or expired,
(ii) the prior notification and reporting requirements of other antitrust or
competition Laws as may be applicable are satisfied and any antitrust
filings/notifications that must or may be effected in countries having
jurisdiction are made and any applicable waiting periods thereunder have been
terminated or expired, (iii) the applicable requirements of the Exchange Act are
met, (iv) the requirements under any applicable foreign or state securities or
blue sky Laws are met, (v) the filing of the Certificate of Merger is made, and
(vi) in the case of this Agreement and the Merger, Company Shareholder Approval
is received if necessary, the execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby (including the changes in the composition of the Board of Directors of
the Company) and the performance by the Company of its obligations hereunder do
not and will not: (A) violate or conflict with any provision of the Company's
Certificate of Incorporation or the Company's By-Laws or the comparable
governing documents of any of its Subsidiaries; (B) violate or conflict with (x)
any domestic or foreign statute, law, ordinance, rule or regulation (together,
"LAWS") or (y) any order, judgment, decree or writ (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
AUTHORITY") or (z) any Permit, in each case, applicable to the Company or any of
its Subsidiaries or by which any of their respective properties or assets may be
bound; (C) require any filing with, or permit, consent or approval of, or the
giving of any notice to, any Governmental Authority; or (D) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default under, or result in the creation of any Lien
upon any of the properties or assets of the Company or any of its Subsidiaries
under, or give rise to any obligation, right of termination, cancellation,
acceleration or increase of any obligation or a loss of a benefit under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, agreement, contract, lease or other instrument
("CONTRACTS") to which the Company or any of its Subsidiaries is a party, or by
which any such Person or any of its
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properties or assets are bound. There are no third-party consents or approvals
required to be obtained by the Company under the Contracts prior to the
consummation of the transactions contemplated by this Agreement.
SECTION 6.5 COMPANY REPORTS AND FINANCIAL STATEMENTS.
(a) Since September 30, 1998, the Company and, to the
extent applicable, its Subsidiaries, have filed all forms, reports and documents
(including exhibits and all other information incorporated therein) with the SEC
required to be filed by it pursuant to the federal securities Laws, including
the SEC rules and regulations thereunder, and all forms, reports, schedules,
registration statements and other documents filed with the SEC by the Company
and, to the extent applicable, its Subsidiaries have complied in all material
respects with all applicable requirements of the federal securities Laws,
including the SEC rules and regulations promulgated thereunder. The Company has,
prior to the date of this Agreement, made available to Parent true, complete and
correct copies of all Company SEC Reports. As of their respective dates, the
Company SEC Reports 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 the light of the circumstances under
which they were made, not misleading. Section 6.5(a) of the Company Disclosure
Schedule contains a true, complete and correct copy of all correspondence since
September 30, 1998 to date between the Company and the SEC, other than routine
transmittal letters.
(b) The Financial Statements (i) comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC, (ii) were prepared in accordance with GAAP
applied on a consistent basis (except as may be indicated therein or in the
notes or schedules thereto) and (iii) present fairly in all material respects
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of
operations and changes in shareholders' equity and cash flows for the periods
then ended (subject, in the case of unaudited interim statements, to normal
year-end adjustments).
(c) Except as set forth on the Balance Sheet, neither the
Company nor any of its Subsidiaries has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), in each case that
is required by GAAP to be set forth on a consolidated balance sheet of the
Company and its consolidated Subsidiaries, except for (i) liabilities and
obligations incurred in connection with this Agreement and fees and expenses
related thereto, and (ii) liabilities and obligations incurred in the ordinary
course of business consistent with past practice which would not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is in default in respect
of the terms and conditions of any indebtedness or other agreement which would
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 6.6 INFORMATION TO BE SUPPLIED
(a) Each of the Schedule 14D-9, any information to be
filed by the Company with the SEC in connection with the Offer pursuant to Rule
14e-1 promulgated under the
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Exchange Act (the "INFORMATION STATEMENT"), and the Proxy Statement and the
other documents required to be filed by the Company with the SEC in connection
with the Offer, the Merger and the other transactions contemplated hereby will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations of the SEC thereunder and will not, on the
date of its filing or, in the case of the Proxy Statement, on the date it is
mailed to shareholders of the Company and at the time of the Company Shareholder
Meeting, and neither the Information Statement nor any of the written
information supplied or to be supplied by the Company expressly for inclusion or
incorporation by reference in the Schedule TO or the Offer Documents will at the
time the Schedule TO, the Information Statement or the Offer Documents are filed
with the SEC and first published, sent or given to the Company's shareholders,
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 the light of the circumstances under which they are made, not
misleading.
(b) Notwithstanding the foregoing provisions of this
Section 6.6, no representation or warranty is made by the Company with respect
to statements made or incorporated by reference in the Proxy Statement or the
Schedule 14D-9 based on information supplied by Parent or Purchaser expressly
for inclusion or incorporation by reference therein or based on information
which is not included in or incorporated by reference in such documents but
which should have been disclosed pursuant to Section 7.4.
SECTION 6.7 ABSENCE OF CERTAIN EVENTS. Except as explicitly
disclosed in the Company SEC Reports filed prior to the date of this Agreement
or as required or expressly permitted by this Agreement, since September 30,
2000 the Company and its Subsidiaries have in all material respects operated
their respective businesses only in the ordinary course and there has not
occurred (i) any event, change, occurrence, effect, fact, circumstance or
condition which would reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect; and (ii) neither the Company
nor any of its Subsidiaries has taken any of the actions described in Section
8.2(b)(1) (with respect only to the Company), (2), (3), (4), (5), (6), (7), (9),
(10), (13), (14) or (17).
SECTION 6.8 LITIGATION. Other than (a) claims that are fully
covered by insurance (provided by insurers unaffiliated with the Company or any
of its Subsidiaries and subject to self-retention by the Company up to a maximum
of $500,000), (b) claims that would be reasonably likely to result in liability
of the Company of $1,000,000 or less, and (c) claims that are explicitly
disclosed in the Company SEC Reports, there are no investigations, grievances,
claims, charges, complaints, actions, suits or proceedings (including any
internal matters involving discrimination, harassment or other employee
grievances) pending against the Company or its Subsidiaries or, to the Knowledge
of the Company, threatened against the Company or its Subsidiaries (or any of
their respective properties, rights or franchises), at law or in equity, or
before or by any federal, state, local or foreign commission, board, bureau,
agency, regulatory or administrative instrumentality or other Governmental
Authority or any arbitrator or arbitration tribunal. Neither the Company nor any
of its Subsidiaries is subject to any continuing Order of any Governmental
Authority or arbitrator, including, without limitation, cease-and-desist or
other Orders.
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SECTION 6.9 TITLE TO PROPERTIES; ENCUMBRANCES; LEASES
(a) The Company and each of its Subsidiaries has good,
valid and marketable title (i) in fee simple to each interest in real property
owned by the Company or any of its Subsidiaries, and (ii) to all of its other
tangible properties and assets, with full right to convey the same; in each case
subject to no Liens, except for (A) Liens reflected in the Balance Sheet, (B)
Liens consisting of zoning or planning restrictions, minor utility and municipal
easements, permits and other restrictions or limitations on the use of real
property or irregularities in title thereto that do not detract from the value
or marketability of, or impair the use of, such property by the Company or any
of its Subsidiaries in the operation of their respective businesses and (C)
Liens for current Taxes, assessments or governmental charges or levies on
property not yet due or which are being contested in good faith.
(b) The Company and each of its Subsidiaries has valid
leasehold interests in each of its leased premises (collectively, the "TENANT
LEASES"). To the Company's Knowledge, each Tenant Lease is in full force and
effect and no notice of any default has been delivered by any landlord under any
of the Tenant Leases. To the Company's Knowledge, there are no pending claims by
any tenant as to premises leased to tenants by the Company or any of its
Subsidiaries (collectively, the "LANDLORD LEASES").
SECTION 6.10 COMPLIANCE WITH LAWS. Except with respect to
Taxes, which are the subject of Section 6.13, environmental matters, which are
the subject of Section 6.16, employee benefits matters, which are the subject of
Section 6.11, and labor matters, which are the subject of Section 6.22, and
except as explicitly disclosed in the Company SEC Reports filed prior to the
date of this Agreement:
(a) The Company and each of its Subsidiaries have
complied and are presently complying with all applicable Laws and Orders, and
neither the Company nor any of its Subsidiaries has received written
notification or claim of any asserted present or past failure to so comply.
(b) The Company and its Subsidiaries hold, to the extent
legally required, all federal, state, local and foreign permits, approvals,
licenses, authorizations, certificates, rights, agreements, settlements,
exemptions and orders from Governmental Authorities (the "PERMITS") that are
required for the operation of the respective businesses of the Company and its
Subsidiaries as now conducted, and such Permits are in full force and effect
without any default or violation thereunder and neither the Company nor any of
its Subsidiaries has received any notification or claim of any asserted, present
or past default or violation.
(c) Each of the Company's and its Subsidiaries' tangible
properties and assets is in compliance with all applicable Laws and Orders,
including, without limitation, all Laws and Orders with respect to zoning,
building, fire and health codes.
SECTION 6.11 COMPANY BENEFIT PLANS.
(a) The Company has furnished to Purchaser (i) a complete
and correct copy of each plan, program, policy or arrangement which is set forth
in writing and which provides (or within the past three years has provided)
benefits of any kind or description whatsoever to or on
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behalf of any current or former employee or director of the Company or any of
their dependents including, but not limited to, Company Stock Plans and
"employee benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), but not including any
multiemployer plan (as defined in Section 3(37) of ERISA) and (ii) a complete
description of any such plan, program, policy or arrangement which is not set
forth in writing (collectively, the "COMPANY BENEFIT PLANS"). As used in this
Section 6.11, "Company" shall include any other entity required to be aggregated
with the Company under Sections 414(b), 414(c), 414(m), or 414(o) of the Code
and the regulations thereunder. A list of each Company Benefit Plan is set forth
on Section 6.11(a) of the Company Disclosure Schedule.
(b) Each Company Benefit Plan intended to be "qualified"
within the meaning of Section 401(a) of the Code has a favorable determination
letter from the Internal Revenue Service to the effect that it is so qualified
and to the Company's Knowledge, no circumstance exists that would adversely
affect such status. There are no pending or, to the Knowledge of the Company,
threatened claims, penalties, inquiries or proceedings (other than routine
claims for benefits) by, on behalf of against or with respect to any Company
Benefit Plan or any trust which is a part of any Company Benefit Plan. Each
Company Benefit Plan has been established and administered in accordance with
its terms and in compliance with the applicable provisions of the Code, ERISA
and any other applicable Laws.
(c) No Company Benefit Plan which is subject to Part 3 of
Subtitle B of Title I of ERISA has an accumulated funding deficiency (as defined
in Section 302 of ERISA), whether or not waived. The Company has made all
required contributions under each Company Benefit Plan for all periods through
and including the fiscal year ended September 30, 2000 and has made all
contributions for subsequent periods or has provided adequate accruals therefor
in the Balance Sheet.
(d) No liability to the PBGC has been or is expected to
be incurred with respect to any Company Benefit Plan which is subject to Title
IV of ERISA (a "DEFINED BENEFIT PLAN"). With respect to each Defined Benefit
Plan, there has been no reportable event (as defined in Section 4043(c) of ERISA
and the regulations thereunder), other than any event with respect to which
reporting is waived pursuant to regulations under Section 4043 of ERISA. There
has been no event or condition referred to in Section 4041, 4042, 4062, 4064 or
4069 of ERISA which presents a material risk of termination of any Defined
Benefit Plan by the PBGC.
(e) No fiduciary or other party in interest with respect
to any Company Benefit Plan has caused any such plan to engage in a "prohibited
transaction," as defined in Section 406 of ERISA for which a statutory,
administrative or regulatory exemption is not available. No disqualified benefit
has been provided under any Company Benefit Plan which may result in the
imposition of tax under Section 4976 of the Code.
(f) Section 6.11(f) of the Company Disclosure Schedule
sets forth a list of all multiemployer plans (as defined in Section 3(37) of
ERISA) to which the Company or any Subsidiary of the Company makes, or has
within the last two years made, contributions. Within the last two years, the
Company has received no claims for withdrawal liabilities of the Company or any
Subsidiary of the Company with respect to any such plan.
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(g) The Company does not maintain any retiree life or
retiree health insurance plan that provides for continuing benefits or coverage
for any employee or any beneficiary of any employee after such employee's
termination of employment (except to the extent such continued coverage is
required by Section 4980B of the Code and Part 6 of Subtitle B of Title I of
ERISA).
(h) The transactions contemplated by this Agreement will
not, (i) entitle any employee of the Company to severance pay, except as
provided in Section 8.9, (ii) accelerate the timing of payment or vesting
(except as provided in Section 4.5) or trigger any payment or funding (through a
grantor trust or otherwise) of compensation or benefits under, increase the
amount payable or trigger any other obligation pursuant to, any Company Benefit
Plan, or (iii) result in any payments under any Company Benefit Plan which would
not be deductible under Section 162(m) or Section 280G of the Code.
SECTION 6.12 BOOKS AND RECORDS. The books of account, minute
books, stock record books and other records of the Company and the Subsidiaries
of the Company have been maintained in accordance with sound business practices
and the requirements of Section 13(b)(2) of the Exchange Act. The Company has
made available to Parent the complete minute books of the Company and each of
its Subsidiaries for all periods after September 30, 1997, and such minute books
contain true and correct records of all corporate action taken by the Company's
and each Subsidiary's shareholders, Boards of Directors and committees of Boards
of Directors since September 30, 1997, and no meeting of any of such
shareholders, Boards of Directors or such committees has been held for which
minutes have not been prepared and are not contained in such minute books.
SECTION 6.13 TAXES. Except as explicitly disclosed in the
Company SEC Reports filed prior to the date of this Agreement:
(a) Tax Returns. The Company and each of its Subsidiaries
has timely filed or caused to be timely filed with the appropriate taxing
authorities all returns, statements, forms and reports for federal income and
other Taxes (as hereinafter defined) ("RETURNS") that are required to be filed
by, or with respect to, the Company and such Subsidiaries on or prior to the
Closing Date. The Returns as filed were true, correct and complete and
accurately reflect all liability for Taxes for the periods covered thereby.
"TAXES" shall mean all taxes, assessments, charges, duties, fees, levies or
other governmental charges including, without limitation, all federal, state,
local, foreign and other income, franchise, profits, capital gains, capital
stock, transfer, sales, use, value-added, occupation, property, excise, fuel,
road, highway, heavy vehicle use, escheat, severance, windfall profits, stamp,
license, payroll, withholding and other taxes, assessments, charges, duties,
fees, levies or other governmental charges of any kind whatsoever (whether
payable directly or by withholding and whether or not requiring the filing of a
Return), all estimated taxes, and all deficiency assessments, additions to tax,
penalties and interest with respect thereto and shall include any liability for
such amounts as a result either of being a member of a combined, consolidated,
unitary or affiliated group or of a contractual obligation to indemnify, any
Person. The federal income tax Returns of the Company and its Subsidiaries have
been examined by the Internal Revenue Service (or the applicable statutes of
limitation for the assessment of federal income Taxes for such periods have
expired) for all periods through and including September 30, 1997.
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(b) Payment of Taxes. All Taxes and liabilities for Taxes
of the Company and its Subsidiaries that have become due and payable have been
timely paid or fully provided for as a liability on the Financial Statements of
the Company and its Subsidiaries (or in the notes thereto) in accordance with
GAAP. Since the date of the Balance Sheet, neither the Company nor any of its
Subsidiaries has incurred liability for Taxes other than in the ordinary course
of business.
(c) Other Tax Matters. No deficiencies for any Taxes have
been asserted or assessed against the Company or any of its Subsidiaries, which
are not fully reserved for or which are not being contested in good faith by
appropriate proceedings. No Governmental Authority is presently conducting a tax
audit or investigation with respect to the Company or any of its Subsidiaries.
No waivers of statutes of limitations are in place relative to any Taxes, and no
Governmental Authority has asked in writing for an extension or waiver of an
applicable statute of limitations. There are no Liens for Taxes upon any
property or assets of the Company or any of its Subsidiaries, except for Liens
for Taxes not yet due or for which adequate reserves have been established in
accordance with GAAP. With respect to Taxes or any Return, no power of attorney
has been executed by the Company or any of its Subsidiaries. To the Company's
Knowledge, there is no dispute or claim concerning any liability for Taxes of
the Company or any Company Subsidiary either claimed or raised by any taxing
authority in writing.
(d) Neither the Company nor any of its Subsidiaries has
been a member of any affiliated group within the meaning of Section 1504(a) of
the Code, or any similar affiliated or consolidated group for tax purposes under
state, local or foreign law (other than a group the common parent of which is
the Company), or has any liability for Taxes of any Person (other than the
Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 or any
similar provision of state, local or foreign law as a transferee or successor,
by contract or otherwise. There are no Tax sharing, allocation, indemnification
or similar agreements (in writing) in effect as between the Company, any of its
Subsidiaries, or any predecessor or Affiliate of any of them and any other party
under which the Company (or any of its Subsidiaries) could be liable for any
Taxes of any party other than the Company or any Subsidiaries of the Company.
(e) All Taxes which the Company or any of its
Subsidiaries is (or was) required by law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the proper authorities
to the extent due and payable. No transaction contemplated by this Agreement is
subject to withholding under Section 1445 of the Code.
(f) Neither the Company nor any of its Subsidiaries is a
party to any agreement, plan, contract or arrangement that could result,
separately or in the aggregate, in a payment of any "excess parachute payments"
within the meaning of Section 280G of the Code.
(g) No election under Section 341(f) of the Code has been
made or shall be made prior to the Closing Date to treat the Company or any of
its Subsidiaries as a consenting corporation, as defined in Section 341 of the
Code.
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(h) No unresolved claim that the Company or any of its
Subsidiaries is or may be subject to Taxes has been made by any taxing authority
in a jurisdiction where the Company or any of its Subsidiaries does not pay
Taxes or file Returns.
SECTION 6.14 INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own, or are validly licensed or otherwise have the right to use in
the manner currently used, all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, fictitious business names, trade
secrets, inventions, service marks, service xxxx rights, copyrights and other
proprietary intellectual property rights and computer programs and software and
each license or permit related to any of the foregoing (collectively,
"INTELLECTUAL PROPERTY RIGHTS") and the consummation of the transactions
contemplated hereby will not alter or impair any Intellectual Property Rights in
any respect. No claims are pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries that the Company or
any of its Subsidiaries is infringing or otherwise adversely affecting the
rights of any person with regard to any Intellectual Property Right . To the
Knowledge of the Company, no person is infringing the rights of the Company or
any of its Subsidiaries with respect to any Intellectual Property Right.
SECTION 6.15 BROKERS; SCHEDULE OF FEES AND EXPENSES. No
broker, investment banker, financial advisor or other person, other than Xxxxxx
Xxxxxxx Xxxx Xxxxxx, the fees and expenses of which will be paid by the Company,
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Company. The estimated professional
fees and expenses incurred and to be incurred by the Company in connection with
the Offer, the Merger and the other transactions contemplated hereby (including
the fees of Xxxxxx Xxxxxxx Xxxx Xxxxxx and the fees of the Company's legal
counsel) are set forth in Section 6.15 of the Company Disclosure Schedule. The
Company has furnished to Parent a true, complete and correct copy of all
agreements between the Company and Xxxxxx Xxxxxxx Xxxx Xxxxxx relating to the
Offer, the Merger and the other transactions contemplated hereby.
SECTION 6.16 ENVIRONMENTAL MATTERS. Except as explicitly
disclosed in the Company SEC Reports:
(a) To the Knowledge of the Company, the Company
possesses, and is in compliance with, all material Permits relating to public
health or safety or protection of the environment, pollution control and
hazardous materials applicable to the Company or the Company's facilities or
operations;
(b) To the Knowledge of the Company, neither the Company
nor any of its present or former Subsidiaries or predecessors is responsible, or
has received notice from a state, local or federal governmental authority or a
claim by any third party that the Company is responsible for, any liability
under any applicable federal, state, or local law, regulation or ordinance
relating to public health or safety or to the protection of the environment in
effect at the time of this Agreement or under common law (the "ENVIRONMENTAL
LAWS") to investigate, remediate or pay or otherwise be financially responsible
for environmental conditions at, under or from or regarding the investigation
and/or remediation of Hazardous Materials (as hereinafter defined) on property
the Company or any present or former Subsidiaries
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or predecessors now owns or formerly owned or on which it now operates or
formerly operated or on any other property at which Hazardous Materials
associated with the Company or for which the Company is liable are or were
located (collectively, the "ENVIRONMENTAL CLAIMS"). For purposes of this
Agreement, "HAZARDOUS MATERIALS" shall mean any waste, pollutant, hazardous
substance, toxic, ignitable, reactive or corrosive substance, hazardous waste,
special waste, industrial substance, by-product, process intermediate product or
waste, petroleum or petroleum-derived substance or waste, asbestos or asbestos
containing materials, polychlorinated biphenyls, chemical liquids or solids,
liquid or gaseous products regulated under Environmental Laws; and
(c) All storage tank systems for which the Company is
responsible under applicable Laws or existing agreements have been upgraded or
removed, if an underground storage tank system, in compliance with 40 CFR Part
280 and, in all cases, in compliance with any other applicable Laws.
SECTION 6.17 STATE TAKEOVER STATUTES. The Board of Directors
of the Company has approved the Offer, the Merger and this Agreement and,
assuming the accuracy of Parent's and Purchaser's representations in Section
7.6, such approval is sufficient to render inapplicable to the Offer, the
Merger, this Agreement, the Tender Agreement and the other transactions
contemplated hereby the provisions of Section 203 of the DGCL and Article Ninth
of the Company's Certificate of Incorporation. No other "fair price,"
"moratorium," "control share," "business combination," "affiliate transaction,"
or other anti-takeover statute or similar statute or regulation of any state is
applicable to the Offer, the Merger, this Agreement, the Tender Agreement and
the other transactions contemplated hereby.
SECTION 6.18 VOTING REQUIREMENTS; BOARD APPROVAL.
(a) The affirmative vote of the holders of a majority of
the outstanding shares of the Company Common Stock, voting as one class with
each share having one vote, is the only vote of the holders of any class or
series of the Company's securities necessary to approve this Agreement, the
Merger and the transactions contemplated hereby.
(b) The Board of Directors of the Company has, as of the
date of this Agreement, (i) unanimously determined that the Offer and the Merger
are fair to the Company's shareholders, and are in the best interests of the
Company and its shareholders, (ii) approved this Agreement and the transactions
contemplated hereby and (iii) resolved to recommend that the shareholders of the
Company approve and adopt this Agreement, the Offer and the Merger.
SECTION 6.19 OPINION OF FINANCIAL ADVISOR. The Company has
received the opinion of Xxxxxx Xxxxxxx Xxxx Xxxxxx to the effect that, as of the
date of this Agreement, the consideration to be paid in the offer and the Merger
is fair to the holders of shares of the Company Common Stock (other than Parent
or any of its Affiliates) from a financial point of view, and a true, complete
and correct copy of such opinion has been, or promptly upon receipt thereof will
be, delivered to Parent. The Company has been authorized by Xxxxxx Xxxxxxx Xxxx
Xxxxxx to permit the inclusion of such opinion in its entirety in the Schedule
14D-9 and Proxy Statement, and references thereto in Schedule TO and the Offer
Documents and Schedule 14D-9
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and the Proxy Statement, so long as such references are in form and substance
reasonably satisfactory to Xxxxxx Xxxxxxx Xxxx Xxxxxx and its counsel.
SECTION 6.20 CONTRACTS.
(a) Neither the Company nor any of its Subsidiaries is a
party to or bound by any contract, arrangement, commitment or understanding
(whether written or oral) (i) which, to the Knowledge of the Company, is an
employment agreement that, upon Consummation of the Offer or the effectiveness
of the Merger, could (either alone or upon the occurrence of any additional acts
or events) result in any payment or benefits (whether of severance pay or
otherwise) becoming due, or the acceleration or vesting of any rights to any
payment or benefits, from Parent, Purchaser, the Company or the Surviving
Corporation or any of their respective Subsidiaries to any officer, director or
consultant thereof, (ii) which is a material contract (as defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed in whole or in part
after the date of this Agreement that has not been filed or incorporated by
reference in the Company SEC Reports filed prior to the date hereof, (iii) which
contains any material restriction or limitation on the conduct of any business
or line of business, or the scope of business that may be conducted, by the
Company or any of its Subsidiaries, including geographic limitations on the
Company's or any of its Subsidiaries' activities, (iv) to the Knowledge of the
Company, which contains any material restriction or limitation on the
solicitation, hiring, retention or termination of any employee, (v) (including
any stock option plan, stock appreciation rights plan, restricted stock plan 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, (vi) which, to the Knowledge of the Company,
provides for an outstanding loan or advance (excluding advances for travel and
entertainment expenses made in accordance with the Company's customary policies
for such advances) in an amount in excess of $50,000 to any stockholder,
director or officer of the Company or any of its Subsidiaries, (vii) which, to
the Knowledge of the Company, provides for indemnification of any current or
former officer or director of the Company or any of its Subsidiaries, (viii)
which is a requirements contract for vehicle purchases that contains minimum
purchase requirements or (ix) which is otherwise material to the Company and its
Subsidiaries. Each contract, arrangement, commitment or understanding of the
type described in this Section 6.20(a), whether or not set forth in Section
6.20(a) of the Company Disclosure Schedule, is referred to herein as a "MATERIAL
CONTRACT." The Company has previously made available to Parent true, complete
and correct copies of each Material Contract.
(b) To the Knowledge of the Company: (i) Each Material
Contract is valid and binding and in full force and effect, (ii) no breach or
default exists on the part of the Company or any of its Subsidiaries under any
such Material Contract or any other party, (iii) no other party to such Material
Contract is in breach or default thereunder, and (iv) no event or condition
exists which, after notice or lapse of time or both, would constitute a breach
or default on the part of the Company or any of its Subsidiaries or any other
party under any such Material Contract.
SECTION 6.21 PLANT AND EQUIPMENT. To the Knowledge of the
Company, the plants, structures and equipment necessary for the continued
operation of the Company or any of
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its Subsidiaries are structurally sound with no defects and are in good
operating condition and repair.
SECTION 6.22 LABOR AND EMPLOYMENT MATTERS.
(a) To the Knowledge of the Company, the Company is in
compliance with all federal and state laws respecting employment and employment
practices, terms and conditions of employment, wages and hours, and is not
engaged in any unfair labor or unlawful employment practice, the violation of or
engagement in which would have a Company Material Adverse Effect. There are no
controversies pending or, to the Knowledge of the Company, threatened, between
the Company and any of its employees, which controversies have or are reasonably
likely to have a Company Material Adverse Effect. The Company is not a party to
any collective bargaining agreement or other labor union contract applicable to
Persons employed by the Company. There are no unfair labor practice complaints
pending against the Company before the National Labor Relations Board. To the
Knowledge of the Company, there are no strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the
Company.
(b) Except as described in Section 6.22 of the Company
Disclosure Schedule, to the Knowledge of the Company, neither the Company nor
any Subsidiary of the Company has during the past three years been cited for
violations of the Occupational Safety and Health Act of 1970, 29 U.S.C. sec. 651
et seq. ("OSHA"), any regulation promulgated pursuant to OSHA, or any other
statute, ordinance, rule, or regulation establishing standards of workplace
safety, or paid any fines or penalties with respect to any such citation. Except
as described in Section 6.22 of the Company Disclosure Schedule, during the past
three years, to the Knowledge of the Company: (i) neither the Company nor any
Subsidiary of the Company has been notified of any complaint or charge filed by
any employee or employee representative with any such government agency which
alleges that the Company or any Subsidiary of the Company has violated in any
respect OSHA or any other statute, ordinance, rule or regulation establishing
standards of workplace safety; (ii) neither the Company nor any Subsidiary of
the Company has been notified that any employee or employee representative has
requested that any such government agency conduct an inspection of any
facilities of the Company or any Subsidiary of the Company to determine whether
violations of OSHA or any other such statute, ordinance, rule or regulation may
exist; and (iii) neither the Company nor any Subsidiary of the Company maintains
any condition, process, practice or procedure at any of their respective
facilities which violates in any respect OSHA or any other statute, ordinance,
regulation or rule establishing standards or workplace safety in any respect.
SECTION 6.23 RIGHTS AGREEMENT. Assuming the accuracy of
Parent's representation set forth in Section 7.6, the Company has amended the
Rights Agreement to provide that neither Parent nor Purchaser, nor any affiliate
of Parent or Purchaser, shall be deemed to be an Acquiring Person (as defined in
the Rights Agreement) in connection with the transactions contemplated by this
Agreement. The Rights will not separate from the Company Common Stock as a
result of the execution, delivery or performance of this Agreement or the
consummation of the Offer or the Merger or any of the other transactions
contemplated hereby or thereby, and none of the Company, the Parent, the
Purchaser or the Surviving Corporation, nor any of their respective Affiliates,
shall have any obligations under the Rights Agreement to any
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holder ( or former holder) of Rights as of or following the consummation of the
Offer or following the Effective Time. The Company shall take any further action
requested by Parent to ensure and confirm that neither the Company, Parent nor
Purchaser will have any obligations with respect to the Rights or the Rights
Agreement in connection with the Offer, the Merger, this Agreement or any
transactions contemplated hereby or thereby.
SECTION 6.24 INSURANCE. The Company and each of its
Subsidiaries maintain insurance of the types and in the amounts customarily
purchased by companies in the same or similar types of businesses as the Company
is engaged in. Since September 30, 1998, neither the Company nor any of its
Subsidiaries has received (i) any notice of cancellation of any policy or binder
of insurance or refusal of coverage thereunder, (ii) any notice that any issuer
of such policy or binder has filed for protection under applicable bankruptcy or
insolvency Laws or is otherwise in the process of liquidating or has been
liquidated.
SECTION 6.25 CUSTOMERS. To the Knowledge of the Company and
except as described on Section 6.25 of the Company Disclosure Schedule, none of
the Company's top twenty customers (determined on the basis of estimated
annualized revenues for the fiscal year ending September 30, 2000) has
terminated or materially reduced, or has given notice that it intends to
terminate or materially reduce, the amount of business done with the Company.
SECTION 6.26 AFFILIATE AGREEMENTS. Except as described in
Section 6.26 of the Company Disclosure Schedule or in the Company SEC Reports
filed before the date of this Agreement, there are no agreements, arrangements
or understandings between the Company or any Subsidiary of the Company on the
one hand, and any present or former director, shareholder or officer of the
Company or any Subsidiary of the Company (or any Person controlled by, or any
family member of, any such person), on the other hand, that would be required to
be disclosed under Item 404 of Regulation S-K under the Securities Act.
SECTION 6.27 FULL DISCLOSURE. No representation or warranty of
the Company contained in this Agreement (including the Company Disclosure
Schedule) contains any untrue statement of a material fact or omits to state a
fact necessary in order to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Except as set forth in the Parent Disclosure Schedule, each of
Parent and Purchaser represents and warrants to, and covenants and agrees with,
the Company as set forth in this Article VII. Each exception set forth in the
Parent Disclosure Schedule and each other response to this Agreement set forth
in the Parent Disclosure Schedule is identified by reference to, or has been
grouped under a heading referring to, a specific individual Section of this
Agreement; provided, however, that any such exception or response made with
reference to one or more Sections of this Agreement shall be deemed to be made
with respect to each other Section of this Agreement to which such exception or
response is relevant provided that such relevance is reasonably apparent based
on the information set forth in the Parent Disclosure Schedule.
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SECTION 7.1 DUE ORGANIZATION; GOOD STANDING. Parent is a
limited partnership duly formed, validly existing and in good standing under the
Laws of the State of Delaware. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
SECTION 7.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of
Parent and Purchaser has full corporate or partnership power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Purchaser, and the consummation by
each such party of the transactions contemplated hereby, have been duly
authorized and approved by the Advisory Committee of Parent and the Board of
Directors of Purchaser and by the sole shareholder of Purchaser and no other
corporate action on the part of either of Parent or Purchaser is necessary to
authorize the execution, delivery and performance of this Agreement by each of
Parent and Purchaser and the consummation of the transactions contemplated
hereby other than filing the Certificate of Merger. This Agreement has been duly
executed and delivered by each of Parent and Purchaser and, assuming the due and
valid authorization, execution and delivery of this Agreement by the Company,
this Agreement is a valid and binding obligation of each of Parent and
Purchaser, enforceable against each of Parent and Purchaser in accordance with
its terms.
SECTION 7.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming
(i) the filings required under the HSR Act are made and the waiting periods
thereunder (if applicable) have been terminated or expired, (ii) the prior
notification and reporting requirements of other antitrust or competition Laws
as may be applicable are satisfied and any antitrust filings/notifications which
must or may be effected in countries having jurisdiction are made and any
waiting periods thereunder have been terminated or expired, (iii) the applicable
requirements of the Exchange Act are met, (iv) the requirements under any
applicable foreign or state securities or blue sky Laws are met and (v) the
filing of the Certificate of Merger and other appropriate merger documents, if
any, as required by the DGCL are made, the execution and delivery of this
Agreement by Parent and Purchaser and the consummation by Parent and Purchaser
of the transactions contemplated hereby and the performance of each of Parent
and Purchaser of its obligations hereunder do not and will not: (A) violate or
conflict with any provision of the governing documents of Parent, Purchaser or
any of their respective Subsidiaries; (B) violate or conflict with any Laws or
Orders of any Governmental Authority or any Permit applicable to Parent,
Purchaser or any of their respective Subsidiaries or by which any of their
respective properties or assets may be bound; (C) require any filing with, or
permit, consent or approval of, or the giving of any notice to, any Governmental
Authority; or (D) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any Lien upon any of the properties or assets of Parent, Purchaser
or any of their respective Subsidiaries under, or give rise to any obligation,
right of termination, cancellation, acceleration or increase of any obligation
or a loss of a benefit under, any of the terms, conditions or provisions of any
Contracts to which Parent, Purchaser or any of their respective Subsidiaries is
a party, or by which any such Person or any of its properties or assets are
bound.
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SECTION 7.4 INFORMATION TO BE SUPPLIED.
(a) Each of the Schedule TO and the Offer Documents and
the other documents required to be filed by Parent with the SEC in connection
with the Offer, the Merger and the other transactions contemplated hereby will
comply as to form, in all material respects, with the requirements of the
Exchange Act and will not, on the date of its filing, and none of the
information supplied or to be supplied by Parent or Purchaser expressly for
inclusion or incorporation by reference in the Schedule 14D-9 or the Proxy
Statement will, in the case of the Schedule 14D-9, at the time the Schedule
14D-9 is filed with the SEC and first published, sent or given to the Company's
shareholders or, in the case of the Proxy Statement on the dates the Proxy
Statement is mailed to shareholders of the Company and at the time of the
Company Shareholder Meeting will not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(b) Notwithstanding the foregoing provisions of this
Section 7.4, no representation or warranty is made by Parent with respect to
statements made or incorporated by reference in the Schedule TO, the Offer
Documents, the Schedule 14D-9 or Proxy Statement based on information supplied
by the Company expressly for inclusion or incorporation by reference therein or
based on information which is not made in or incorporated by reference in such
documents but which should have been disclosed pursuant to Section 6.6.
SECTION 7.5 BROKER'S OR FINDER'S FEE. No agent, broker, Person
or firm acting on behalf of Parent or Purchaser is, or will be, entitled to any
fee, commission or broker's or finder's fees from any of the parties hereto, or
from any Person controlling, controlled by, or under common control with any of
the parties hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
SECTION 7.6 OWNERSHIP OF CAPITAL STOCK. Neither Parent,
Purchaser nor any of their respective Subsidiaries beneficially owns, directly
or indirectly, any capital stock of the Company or is a party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any capital stock of the Company, other than as contemplated by
this Agreement. As of the date of this Agreement, none of Purchaser, Parent or
any Affiliate of Parent is an "interested stockholder" of the Company, as such
term is defined in Section 203 of the DGCL. As of the date of this Agreement,
none of Parent, Purchaser or any Affiliate of Parent is an "Acquiring Person",
as such term is defined in the Rights Agreement.
SECTION 7.7 NO PRIOR ACTIVITIES. Purchaser was formed solely
for the purpose of engaging in the transactions contemplated by this Agreement,
has no Subsidiaries and has undertaken no business or activities other than in
connection with entering into this Agreement and engaging in the transactions
contemplated hereby. All of the issued and outstanding shares of capital stock
of Purchaser are issued and outstanding, are duly authorized, validly issued,
fully paid and nonassessable.
SECTION 7.8 SUFFICIENT FUNDS. Either Parent or Purchaser has
available, or has made arrangements to obtain through a commitment letter (a
copy of which has heretofore been provided to the Company) from General Electric
Capital Corporation (the "COMMITMENT
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LETTER") to borrow sufficient funds to purchase all of the outstanding shares of
Company Common Stock at the Offer Price, terminate the outstanding stock options
of the Company in accordance with Section 4.5, and to retire all outstanding
indebtedness of the Company and its Subsidiaries required to be retired in order
to consummate the Offer and/or the Merger (collectively, "SUFFICIENT FUNDS").
Notwithstanding any conditions or other provisions of the Commitment Letter,
such funds will be available either pursuant to the Commitment Letter or from
other sources at the times required under this Agreement.
ARTICLE VIII
COVENANTS
SECTION 8.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND
RECORDS. During the period commencing on the date hereof and ending on the
earlier of (i) the Closing Date and (ii) the date on which this Agreement is
terminated pursuant to Section 10.1 hereof, the Company shall, and shall cause
its Subsidiaries to, upon reasonable notice, afford Parent, and Parent's
counsel, accountants, consultants, financing sources and other authorized
representatives, access during normal business hours to its and the Company's
Subsidiaries' executive officers, properties, books and records in order that
they may have the opportunity to make such investigations as they shall
reasonably deem necessary of the Company's and its Subsidiaries' affairs; such
investigation shall not, however, affect the representations and warranties made
by the Company in this Agreement. The Company shall furnish promptly to Parent
and Purchaser (x) a copy of each form, report, schedule, statement, registration
statement and other document filed by it during such period pursuant to the
requirements of federal, state or foreign securities Laws and (y) all other
information concerning the Company's or its Subsidiaries' business, properties
and personnel as Parent or Purchaser may reasonably request. The Company agrees
to cause its officers and employees to furnish such additional financial and
operating data and other information and respond to such inquiries as Parent or
Purchaser shall from time to time reasonably request. Parent and Purchaser shall
make all reasonable efforts to minimize any disruption to the businesses of the
Company and its Subsidiaries which may result from the requests made hereunder.
The foregoing provisions of this Section 8.1 shall not require the Company or
any of its Subsidiaries to disclose any information the disclosure of which in
the reasonable good faith judgment of the Company after consultation with
outside counsel would (i) violate any applicable antitrust or competition law or
(ii) violate the contractual obligation of the Company or its Subsidiary to any
third party to maintain the confidentiality of such information; provided,
however, that with respect to any information covered by this clause (ii), the
Company shall use reasonable best efforts to obtain the consent of any such
third party to such disclosure; provided, further, however that this clause (ii)
shall not limit or restrict any obligation of the Company to disclose
information to Parent pursuant to Section 8.5 or Section 10.1(c)(i). All
information exchanged pursuant to this Section 8.1 shall be subject to the
Confidentiality Agreement.
SECTION 8.2 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE
CLOSING DATE. Except as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise consented to or approved in
writing by Parent, and except as set forth in Section 8.2 of the Company
Disclosure Schedule, during the period commencing on the date hereof until the
Effective Time:
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(a) The Company shall and the Company shall cause each of
its Subsidiaries to conduct their respective operations only according to their
ordinary and usual course of business consistent with past practice and to use
their reasonable best efforts to preserve intact their respective business
organizations, keep available the services of their officers and employees and
maintain satisfactory relationships with those Persons having significant
business relationships with them;
(b) The Company shall not and shall cause each of its
Subsidiaries not to:
(1) make any change in or amendment to its
certificate or articles of incorporation or its by-laws or
similar organizational documents;
(2) issue or sell, or authorize to issue or
sell, any shares of its capital stock, Voting Debt or any
other securities, or issue or sell, or authorize to issue or
sell, any securities convertible into, or options, warrants or
rights to purchase or subscribe for, or enter into any
arrangement or contract with respect to the issuance or sale
of, any shares of its capital stock, Voting Debt or any other
securities, or make any other changes in its capital
structure, other than the issuance of Company Common Stock
upon the exercise of Stock Options which are outstanding on
the date hereof, in accordance with their present terms;
(3) declare, pay or set aside any dividend or
other distribution or payment with respect to, or split,
combine, redeem or reclassify, or purchase or otherwise
acquire, any shares of its capital stock or its other
securities, other than (A) normal quarterly cash dividends not
in excess of U.S. $0.055 per share declared and paid in
accordance with the Company's past dividend policy, including
as to the timing of the declaration, record and payment dates,
provided that no such cash dividends shall be declared after
Consummation of the Offer or (B) dividends payable by a wholly
owned Subsidiary of the Company to the Company or another
wholly owned Subsidiary of the Company;
(4) incur any capital expenditures or any
obligations or liabilities in respect thereof, except (A) with
respect to expansion projects, for expenditures for such
projects which are consistent with the 2001 Plan of the
Company set forth in Section 8.2(b) of the Company Disclosure
Schedule (the "2001 PLAN OF THE COMPANY"), (B) those required
for maintenance and replacement in the ordinary course of
business not to exceed the amounts provided for matters other
than expansion projects in the 2001 Plan of the Company and
(C) expenditures outside the scope of the 2001 Plan of the
Company that do not exceed U.S. $3,000,000 in the aggregate.
(5) acquire or agree to acquire (A) by merging
or consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other
business organization or division thereof (excluding any of
the Company's Subsidiaries) or (B) any assets, including real
estate, except purchases of
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inventory, equipment, real estate or other non-material assets
in the ordinary course of business consistent with the 2001
Plan of the Company;
(6) (A) except in the ordinary course of
business consistent with past practice and except to the
extent required under existing Company Benefit Plans as in
effect on the date of this Agreement, increase the
compensation or fringe benefits of any of its directors,
officers or employees or grant any severance or termination
pay not currently required to be paid under existing severance
plans; (B) change any titles of any directors, officers or
employees for the purpose of increasing severance or
termination pay; (C) enter into (x) any employment or
consulting agreement or arrangement with any present or former
director or officer of the Company or any of its Subsidiaries,
or any employment or consulting agreement with any other
employee of the Company or any of its Subsidiaries or (y)
except as contemplated by Section 8.9, any severance agreement
or arrangement with any present or former director, officer or
other employee of the Company or any of its Subsidiaries,
except that the Company or its Subsidiaries may enter into a
severance agreement or arrangement consistent with past
practice where the Company and its Subsidiaries would not have
any obligation or liability for the payment of any amount in
excess of U.S.$200,000 in any individual case or U.S.$500,000
in the aggregate; or (D) except in the ordinary course of
business consistent with past practice, except to the extent
necessary to fill vacancies and except as contemplated by
Section 8.9, hire or agree to hire, or enter into any written
employment agreement with, any new or additional employee or
officer (x) having an annual base salary of U.S.$250,000 or
more and (y) in the case of any new or additional officer (or
employee performing similar functions), if the aggregate
annual salaries of all such new officers and employees
performing similar functions would exceed U.S.$500,000;
(7) except as required to comply with applicable
law or expressly provided in this Agreement, (A) adopt, enter
into, terminate or amend any Company Benefit Plan, collective
bargaining agreement or other arrangement for the current or
future benefit or welfare of any director, officer or current
or former employee or any other Person, (B) pay any benefit
not provided for under any Company Benefit Plan, accelerate
the payment, right of payment or vesting of any bonus,
severance, profit sharing, retirement, deferred compensation,
stock option, insurance or other compensation or benefits, (C)
grant any awards under any bonus, incentive, performance or
other compensation plan or arrangement or Company Benefit Plan
(including the grant of stock options, stock appreciation
rights, stock based or stock related awards, performance units
or restricted stock, or the removal of existing restrictions
in any Company Benefit Plans or agreements or awards made
thereunder) or (D) except as required by the current terms
thereof take any action to fund or in any other way secure the
payment of compensation or benefits under any employee plan,
agreement, contract or arrangement or Company Benefit Plan;
(8) transfer, lease (as lessor), license, sell,
mortgage, pledge, dispose of, encumber or subject to any Lien,
any assets, other than in the ordinary course
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of business and consistent with past practice and except (x)
as provided for in Section 8.2(b)(11) and (y) for the
disposition in the ordinary course of business of dormant real
property;
(9) except as required by applicable law or
GAAP, make any change in its accounting methods, principles or
practices;
(10) adopt or enter into a plan of complete or
partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the
Company or any of its Subsidiaries (other than the Merger) or
any agreement relating to a Takeover Proposal, except as
permitted in Section 8.5;
(11) (A) incur or assume any long-term debt
(other than under the applicable LIBOR option under existing
revolving credit facilities, as may be amended as contemplated
hereby), or except in the ordinary course of business
consistent with past practice, incur or assume any short-term
indebtedness; (B) incur or modify any material indebtedness or
other liability including any liability for capital or
operating leases for vehicles; (C) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations or indebtedness
of any other Person (other than any wholly owned direct or
indirect Subsidiary of the Company (in the ordinary course of
business and consistent with past practice)), except in the
ordinary course of business and consistent with past practice
and except for guarantees by Subsidiaries of the Company of
indebtedness permitted under the preceding clause (A); (D)
engage in any currency or interest rate hedging activity,
including through transactions involving derivative
securities, (E) make any loans, advances or capital
contributions to, or investments in, any other Person (other
than in or to wholly owned Subsidiaries of the Company (in the
ordinary course of business and consistent with past
practice), or by wholly owned Subsidiaries to the Company, or
customary loans or advances to employees in accordance with
past practice for travel expenses); (F) other than with
respect to the settlement of any claim that is recommended,
endorsed or otherwise acceded to by the Company's insurance
carrier, settle any claims against the Company or any of its
Subsidiaries (x) outside the ordinary course of business
consistent with past practice or (y) where the amounts payable
by the Company and its Subsidiaries would exceed
U.S.$1,000,000 individually or U.S. $2,000,000 in the
aggregate, in each such case, without admission of liability;
or (G) enter into any material commitment or transaction other
than in the ordinary course of business;
(12) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction of any such claims, liabilities or
obligations, in the ordinary course of business and consistent
with past practice, or of other claims, liabilities or
obligations, but only to the extent reflected or reserved
against in the Financial Statements;
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(13) enter into any agreement, understanding or
commitment that contains any material restriction or
limitation on the conduct of any business or line of business,
or any material restriction or limitation on the scope of
business that may be conducted, by the Company or any of its
Subsidiaries, including geographic limitations on the
Company's or any of its Subsidiaries' activities or release
any third party from any of its material obligations under any
standstill, confidentiality, noncompetition or similar
agreement, provided, however that the Company shall be
entitled to release any New Bidder from any such agreement;
(14) (A) announce, implement or effect any
material reduction in labor force, lay-off, early retirement
program, severance program or other program or effort
concerning the termination of employment of employees of the
Company or its Subsidiaries; provided, however, that routine
employee terminations for cause shall not be considered
subject to this clause (14) or (B) terminate the employment of
any officer of the Company other than for cause or agree that
any voluntary termination of employment by an officer of the
Company shall be treated as having been with "good reason" or
in connection with a "change in control";
(15) take any action including, without
limitation, the adoption of any shareholder rights plan or
amendments to its Certificate or Articles of Incorporation or
By-Laws (or comparable governing documents) or Rights Plan,
which could, directly or indirectly, restrict or impair the
ability of Parent to vote, or otherwise to exercise the rights
and receive the benefits of a shareholder with respect to,
securities of the Company acquired by Purchaser in the Offer
or, the Merger or, except with respect to the exercise of
Stock Options issued and outstanding on the date of this
Agreement, permit any Person to acquire securities of the
Company on a basis not available to Parent or Purchaser, or
except as otherwise permitted under this Agreement, knowingly
and intentionally facilitate the acquisition by a Person or
"group" (as such term is defined in Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder) (other than Purchaser, Parent or their respective
Affiliates) of any securities of the Company (subject to the
Company's right to take action specifically permitted by
Section 8.5 prior to Consummation of the Offer);
(16) enter into, terminate or materially modify
or amend any Material Contract to which it is a party or waive
or assign any of its material rights or claims except in the
ordinary course of business consistent with past practice;
(17) other than consistent with past practice or
as required by a change in Law or required by Law because of a
change in facts, make or rescind any tax election or enter
into any settlement or compromise of any liability for Taxes
that in either case is material; or
(18) agree or commit, in writing or otherwise, to
take any of the foregoing actions.
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For purposes of this Section 8.2(b) (other than Section 8.2(b)(13)), references
to "material" (but not "materially") mean material to the Company and its
Subsidiaries, taken as a whole.
(c) The Company (i) shall not, and shall not permit any
of its Subsidiaries to, take any action that would, or would reasonably be
expected to, result in (A) any of the conditions to the Offer set forth in
Article IX or Annex I not being satisfied (subject to the Company's right to
take action specifically permitted by Section 8.5) or (B) a Company Material
Adverse Effect and (ii) shall not take, or permit any of its Subsidiaries to
take, any action that would, or would reasonably be expected to, result in any
of its representations and warranties set forth in this Agreement becoming
untrue in any respect.
(d) The Company agrees to use commercially reasonable
efforts not to allow the transfer or registration in violation of the Tender
Agreement of those shares of Company Common Stock held by the Certain
Stockholders.
SECTION 8.3 COMPANY SHAREHOLDER MEETING; PREPARATION OF PROXY
STATEMENT. Subject to Section 2.4, as promptly as practicable following
Consummation of the Offer, if required by applicable law in order to consummate
the Merger, the Company, acting through its Board of Directors, shall, in
accordance with applicable law:
(a) duly call, give notice of, convene and hold a special
meeting of its shareholders (the "COMPANY SHAREHOLDER MEETING") for the purpose
of considering and taking action upon the approval of the Merger and the
adoption of this Agreement;
(b) prepare and file with the SEC a preliminary proxy or
information statement in accordance with the Exchange Act relating to the Merger
and this Agreement and use its reasonable best efforts to obtain and furnish the
information required to be included by the Exchange Act and the SEC in the Proxy
Statement (as hereinafter defined) and, after consultation with Parent, to
respond promptly to any comments made by the SEC with respect to the preliminary
proxy or information statement and cause a definitive proxy or information
statement, including any amendment or supplement thereto (the "PROXY
STATEMENT"), to be mailed to its shareholders, provided that no amendment or
supplement to the Proxy Statement will be made by the Company without
consultation with Parent and its counsel;
(c) include in the Proxy Statement the recommendation of
the Board of Directors of the Company that shareholders of the Company vote in
favor of approval of the Merger and adoption of this Agreement; and
(d) use reasonable best efforts to solicit from its
shareholders proxies, and to take all other action necessary and advisable, to
secure the vote of shareholders required by applicable law and the Company's
Certificate of Incorporation or By-Laws to obtain the approval for this
Agreement and the Merger.
SECTION 8.4 REASONABLE BEST EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use its commercially
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other
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parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Offer and the
Merger, and the other transactions contemplated by this Agreement, including (i)
the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from any Governmental Authority and the making of all necessary
registrations and filings (including filings with any Governmental Authority, if
any) and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Authority, (ii) the obtaining of all necessary consents, approvals
or waivers from third parties, (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of any of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Authority vacated or reversed, and
(iv) the execution and delivery of any additional instruments necessary or
appropriate to consummate the transactions contemplated by, and to fully carry
out the purposes of, this Agreement; provided, however, that no loan agreement
or contract for borrowed money entered into by the Company or any of its
Subsidiaries shall be repaid except as currently required by its terms, in whole
or in part, and no contract shall be amended to increase the amount payable
thereunder or otherwise to be more burdensome to the Company or any of its
Subsidiaries in order to obtain any such consent, approval or authorization
without first obtaining the written approval of Parent. Nothing contained in
this Section 8.4(a) shall prohibit the Company and its Subsidiaries from taking
any action permitted by Section 8.5 or from terminating this Agreement pursuant
to Section 10.1.
(b) The Company shall give prompt notice to Parent of (i)
any representation or warranty made by the Company contained in this Agreement
becoming untrue or incorrect, subject to the standard established in Section 5.2
where applicable (including its receiving Knowledge of any fact, event or
circumstance which may cause any representation qualified as to its Knowledge to
be or become untrue or incorrect, subject to the standard established in Section
5.2 where applicable) in any respect that could cause the condition to the Offer
set forth in paragraph (c)(2) of Annex I hereto to fail to be satisfied; or (ii)
the failure by the Company to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the Company or the
conditions to the obligations of the parties under this Agreement. The Company
acknowledges that if after the date of this Agreement the Company receives
Knowledge of any fact, event or circumstance that would cause any representation
or warranty that is conditioned as to the Knowledge of the Company to be or
become untrue or incorrect (subject to the standard established in Section 5.2,
where applicable, and (in the case of representations or warranties not subject
to such standard), subject to such representation or warranty becoming untrue or
incorrect in any material respect), the receipt of such knowledge shall mean
that such representation or warranty shall be deemed to have become untrue or
incorrect as of the date of such receipt.
(c) Parent shall give prompt notice to the Company of (i)
any representation or warranty made by Parent contained in this Agreement
becoming untrue or inaccurate in any material respect or (ii) the failure by
Parent or Purchaser to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided that no such notification shall affect the
representations,
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warranties, covenants or agreements of Parent or Purchaser or the conditions to
the obligations of the parties under this Agreement.
(d) If at any time before the Effective Time, any event
or circumstance relating to the Company, the Parent or the Purchaser, or any of
their respective Affiliates, officers or directors, should be discovered by any
party hereto that should be set forth in an amendment or a supplement to the
Proxy Statement, so that such document will not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be promptly prepared by the parties, filed with the SEC
and, to the extent required by Law, disseminated to the Company's stockholders.
SECTION 8.5 NO SOLICITATION.
(a) The Company shall, and shall use its reasonable best
efforts to cause its Affiliates, officers, directors, employees, financial
advisors, attorneys and other advisors, representatives and agents to,
immediately cease any existing activities, discussions or negotiations conducted
with any parties other than Parent or Purchaser with respect to any Takeover
Proposal (as defined below). The Company shall not, nor shall it authorize or
permit any of its Affiliates to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor,
representative or agent of it or any of its Affiliates, to (i) directly or
indirectly solicit, facilitate, initiate or encourage the making or submission
of, any proposal that constitutes, or that may reasonably be expected to lead
to, a Takeover Proposal, (ii) enter into any agreement, arrangement or
understanding with respect to any Takeover Proposal or enter into any agreement,
arrangement or understanding requiring it to endorse a Takeover Proposal or
abandon or terminate, or seek to invalidate, in whole or in part, this Agreement
or to fail to consummate the Merger or any other transaction contemplated by
this Agreement, (iii) initiate or participate in any discussions or negotiations
regarding, or furnish or disclose to any Person (other than a party to this
Agreement) any information with respect to, or take any other action to
facilitate or in furtherance of any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, any Takeover Proposal,
or (iv) grant any waiver or release under any standstill or similar agreement
with respect to any class of the Company's equity securities (other than to
permit the Company to receive a Takeover Proposal that did not result from a
breach of any other provision of this Section 8.5(a)); provided that prior to
Consummation of the Offer, in response to a Takeover Proposal that did not
result from the breach of this Section 8.5 and following delivery to Parent of
notice of the Takeover Proposal in compliance with its obligations under Section
8.5(d) hereof, the Company may participate in discussions or negotiations with
or furnish information (pursuant to a confidentiality/standstill agreement with
customary terms as reasonably determined in good faith by the Company after
consultation with outside counsel; provided that each such agreement is at least
as limiting as the Confidentiality Agreement) to any third party which has made
a bona fide written Takeover Proposal if (A) the Company's Board of Directors
reasonably determines in good faith (after consultation with its financial
advisor) that such Takeover Proposal is a Superior Proposal, and (B) the
Company's Board of Directors determines in good faith (after consultation with
outside legal counsel) that it is necessary to take such actions in order to
comply with its fiduciary duties
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under applicable law. Without limiting the foregoing, the Company agrees that
any violation of the restrictions set forth in this Section 8.5(a) directly or
indirectly by any of its, or any of its Subsidiaries', officers, Affiliates or
directors, or any attorney advisor, representative, consultant or agent retained
by the Company or any of its Subsidiaries or Affiliates in connection with the
transactions contemplated hereby, whether or not such Person is purporting to
act on behalf of the Company or any of its Subsidiaries, shall constitute a
breach of this Section 8.5(a) by the Company. The Company will take all actions
necessary or advisable to inform the appropriate individuals or entities
referred to in the prior sentence of the obligations undertaken in this Section
8.5. For purposes of this Section 8.5, a Person shall be deemed to have
facilitated or encouraged an action or result only if any act or omission by
such Person (i) would reasonably be expected to facilitate or encourage such
action or result or (ii) was intended by such Person to facilitate or encourage
such action or result.
For purposes of this Agreement, "TAKEOVER PROPOSAL" means any
inquiry, proposal or offer from any Person or group relating to (i) any direct
or indirect acquisition or purchase of 15% or more of the assets of the Company
or any of its Subsidiaries or 15% or more of any class of equity securities of
the Company or any of its Subsidiaries, (ii) any tender offer or exchange offer
that, if consummated, would result in any Person beneficially owning 15% or more
of any class of equity securities of the Company or any of its Subsidiaries or
(iii) any merger, share exchange, consolidation, business combination, sale of
all or any substantial portion of the assets, recapitalization, liquidation or a
dissolution of, or similar transaction of the Company or any of its Subsidiaries
other than the Offer or the Merger; and "SUPERIOR PROPOSAL" means a bona fide
written Takeover Proposal made by a New Bidder (as defined below) that was not
solicited by the Company after the date of this Agreement to purchase all of the
outstanding equity securities of the Company pursuant to a tender offer,
exchange offer, merger or other business combination (y) on terms which the
Company's Board of Directors determines in good faith to be superior to the
Company and its shareholders (other than Parent, Purchaser and their respective
Affiliates), in their capacity as shareholders, from a financial point of view
(taking into account, among other things, all legal, financial, regulatory and
other aspects of the proposal and identity of the offeror and the financial
capacity of the offeror to consummate the transaction) as compared to the
transactions contemplated hereby and any alternative proposed by Parent or
Purchaser in accordance with Section 10.1(c) hereof, such determination having
been made only after consultation with the Company's financial advisor and (z)
which is not subject to any financing contingency and is otherwise reasonably
capable of being consummated. "NEW BIDDER" means any Person other than a Person
who submitted a bid price to the Company or an advisor to the Company in
response to the auction procedures conducted by Xxxxxx Xxxxxxx Xxxx Xxxxxx in
connection with the proposed sale of the Company.
(b) The Company agrees that, except as set forth in
Section 8.5(c), neither its Board of Directors nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent or Purchaser, the approval or recommendation of the Company's
Board of Directors of the Offer, the Merger or this Agreement, unless the Board
of Directors of the Company shall have determined in good faith, after
consultation with its outside counsel, that such withdrawal or modification is
necessary in order to satisfy its fiduciary duties to the Company's shareholders
under applicable law, (ii) approve or recommend, or, in the case of a committee,
propose to the Board of Directors to
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approve or recommend, any Takeover Proposal or (iii) approve, recommend or cause
it to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "ACQUISITION AGREEMENT") related
to any Takeover Proposal.
(c) Notwithstanding anything to the contrary herein,
prior to Consummation of the Offer, the Company and/or its Board of Directors
may take the actions otherwise prohibited by Sections 8.5(a) and 8.5(b) if (i) a
third party makes a Superior Proposal, (ii) the Company complies with its
obligations under Section 8.5(d), (iii) all of the conditions to the Company's
right to terminate this Agreement in accordance with Section 10.1(c) hereof
shall have been satisfied (including expiration of the five business day period
described therein (or such shorter period as may be provided therein) and the
payment of all amounts required pursuant to Section 10.3 hereof) and (iv)
simultaneously therewith, this Agreement is terminated in accordance with
Section 10.1(c)(i) hereof.
(d) The Company agrees that in addition to the
obligations of the Company set forth in paragraphs (a), (b) and (c) of this
Section 8.5, promptly after (but in no event more than 24 hours after) receipt
thereof, the Company shall provide Parent with a copy of any Superior Proposal.
(e) Parent and Purchaser agree that nothing contained in
this Section 8.5 shall prohibit the Company from taking and disclosing to its
shareholders a position contemplated by Rule 14d-9 and Rule 14e-2 promulgated
under the Exchange Act with respect to any tender offer or from making any
required disclosure to the Company's shareholders if, in the reasonable good
faith judgment of the Company's Board of Directors, after consultation with
outside counsel, failure so to disclose would be a violation of its disclosure
obligations under applicable Law.
(f) The Company agrees promptly to request the return or
destruction of confidential information provided to each Person who submitted a
bid price to the Company or an advisor to the Company in response to the auction
procedures conducted by Xxxxxx Xxxxxxx Xxxx Xxxxxx in connection with the
proposed sale of the Company, in accordance with the agreements executed by such
Person.
SECTION 8.6 ANTITRUST LAWS.
(a) Each party hereto shall (i) take promptly (but in no
event later than five business days following the date of this Agreement as to
initial filings) all actions necessary to make the filings required of it or any
of its Affiliates under any applicable Antitrust Laws in connection with this
Agreement and the transactions contemplated hereby, (ii) comply at the earliest
practicable date with any formal or informal request for additional information
or documentary material received by it or any of its Affiliates from any
Antitrust Authority and (iii) cooperate with one another in connection with any
filing under applicable Antitrust Laws and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement initiated by any Antitrust Authority.
(b) Each party hereto shall use its commercially
reasonable best efforts to resolve such objections, if any, as may be asserted
with respect to the transactions contemplated by this Agreement under any
Antitrust Law, including, if necessary, agreeing to or causing the
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divestiture of nonmaterial assets. In the event that, notwithstanding each
party's commercially reasonable best efforts, the requisite approval of Canadian
Antitrust Authorities cannot be obtained, and as a result thereof the sole
remaining condition to Consummation of the Offer is the condition set forth in
clause (a)(ii) of Annex I with respect to the approval of Canadian Antitrust
Authorities, then (i) the Company shall have the right to agree to or cause the
divestiture of the Company's Canadian assets in such manner as may be permitted
by Canadian Antitrust Law and (ii) upon the earlier to occur of such agreement
or the consummation of such divestiture the condition set forth in clause
(a)(ii) of Annex I with respect to the approval of Canadian Antitrust
Authorities shall no longer apply and shall be deemed satisfied.
(c) Each party hereto shall promptly inform the other
parties of any material communication made to, or received by such party from,
any Antitrust Authority or any other Governmental Authority regarding any of the
transactions contemplated hereby.
(d) For purposes of this Agreement, (i) "ANTITRUST
AUTHORITIES" means the Federal Trade Commission, the Antitrust Division of the
Department of Justice, the attorneys general of the several states of the United
States and any other Governmental Authority having jurisdiction with respect to
the transactions contemplated hereby pursuant to applicable Antitrust Laws and
(ii) "ANTITRUST LAW" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, the
Competition Act (Canada), as amended, and all other federal, state and foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other Laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
SECTION 8.7 INDEMNIFICATION; DIRECTORS' AND OFFICERS'
INSURANCE.
(a) Parent, Purchaser and the Surviving Corporation agree
that all rights to indemnification existing in favor of the present or former
directors, officers, employees, fiduciaries and agents of the Company or any of
its Subsidiaries (collectively, the "INDEMNIFIED PARTIES") for acts or omissions
of such Persons occurring at or prior to the Effective Time, as provided in the
Company's Certificate of Incorporation or By-Laws or the certificate or articles
of incorporation, by-laws or similar organizational documents of any of the
Subsidiaries or the terms of any individual indemnity agreement or other
arrangement with any director or executive officer, which agreement or
arrangement is listed in Section 8.7 of the Company Disclosure Schedule, in each
case as in effect as of the date of this Agreement, shall survive the Merger and
shall continue in full force and effect for six years after the Effective Time
(without modification or amendment, except as required by applicable law) in
accordance with their terms, to the fullest extent permitted by law, and shall
be enforceable by the Indemnified Parties against the Surviving Corporation, and
the Surviving Corporation shall also advance fees and expenses (including
reasonable attorney's fees) as incurred to the fullest extent permitted under
applicable Law upon receipt of any undertaking required by applicable Law. If,
within six years from the Effective Time, the Surviving Corporation is merged
with and into Parent or another entity, the certificate of limited partnership
and agreement of limited partnership of Parent (or equivalent organizational
documents) or such other entity shall, for at least the six-year period
following the Effective Time, provide rights to indemnification for the
Indemnified Persons at least equivalent to those in the certificate of
incorporation and bylaws of
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the Surviving Corporation. Subject to the foregoing, nothing in this Section 8.7
shall prevent a merger, consolidation, or business combination of the Surviving
Corporation with another entity.
(b) Purchaser shall cause to be maintained in effect for
not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company (provided
that Purchaser may substitute therefor policies of at least equivalent coverage
containing terms and conditions which are no less advantageous) with respect to
matters occurring prior to the Effective Time. Notwithstanding the foregoing
sentence or Section 8.2 to the contrary, the Company shall have the right to
procure, prior to the Effective Time, a policy for directors' and officers'
liability insurance with respect to matters occurring prior to the Effective
Time, having a term lasting no less than six years following the Effective Time
and providing U.S. $50,000,000 in coverage, and containing terms and conditions
which are no less advantageous than the Company's current policies with respect
to such insurance. The provisions of this Section 8.7 shall survive the
consummation of the Merger and expressly are intended to benefit each of the
Indemnified Parties. Notwithstanding any other provision of this Agreement to
the contrary, the provisions of this Section 8.7(b) may not be amended, waived
or altered in any respect without the prior written unanimous approval of the
Board of Directors of the Company.
(c) Nothing in this Agreement is intended to, shall be
construed to, or shall release, waive or impair any rights to directors' and
officers' insurance claims under any policy that is or has been in existence
with respect to the Company or any of its Subsidiaries or any of their
respective officers, directors or employees, it being understood and agreed that
the indemnification provided for in this Section 8.7 is not prior to or in
substitution for any such claims under such policies.
SECTION 8.8 PUBLIC ANNOUNCEMENTS. The initial press release
with respect to the execution of this Agreement shall be a joint press release
acceptable to Parent and the Company. Thereafter, Parent and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation and review by the other party of such
release or statement, except as may be required by Law, court process or by
obligations pursuant to any listing agreement with a national securities
exchange, or as may be permitted pursuant to Section 8.5.
SECTION 8.9 EMPLOYEE BENEFITS PLANS.
(a) From and after the Measurement Date, the Company and
the Surviving Corporation, as the case may be, shall honor in accordance with
their respective terms (as in effect on the date of this Agreement), all the
Company's written employment, severance and termination agreements, plans and
policies existing prior to the execution of this Agreement which are between the
Company or any of its Subsidiaries and any individual director, officer or
employee thereof and which have been disclosed in Section 8.9 of the Company
Disclosure Schedule. Parent acknowledges and agrees that Consummation of the
Offer would constitute a "Change in Control" (or the similar relevant defined
term) for all purposes pursuant to those agreements and arrangements indicated
on Section 8.9 of the Company Disclosure Schedule.
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(b) For a period of one year from and after the
Measurement Date, the Company and the Surviving Corporation, as the case may be,
shall provide severance pay to any employee of the Company or any Subsidiary of
the Company at the date of the consummation of the Merger that is listed on
Schedule 8.9(b) and who is subject to an Involuntary Termination in an amount
equal to the amount set forth on Schedule 8.9(b) hereto with respect to such
employee. For purposes of this Section 8.9(b), "INVOLUNTARY TERMINATION" shall
mean any termination of employment with the Company or any Subsidiary of the
Company for reasons other than (i) the employee's death, total and permanent
disability, or retirement under circumstances that entitle the employee to full
benefits under one or another of the death and disability, retirement or pension
plans or programs generally applicable to such employee, (ii) termination for
"cause" (meaning (1) the willful misconduct of such employee that results in
material injury to the Company or any of its Subsidiaries or (2) the employee's
willful and continued failure substantially to perform the employee's duties to
the Company or its Subsidiaries after a written demand for substantial
performance has been delivered to the employee by the employee's supervisor,
which specifically identifies the manner in which it is believed that the
employee has not substantially performed his or her duties), or (iii) the
employee's voluntary termination of employment other than a voluntary
termination following (1) a relocation of such employee's work location to a
location that is not within a reasonable commuting distance from the employee's
current residence or (2) the re-assignment of such employee to a position other
than another position involving the performance of substantially the same
duties, responsibilities and compensation as immediately before the Measurement
Date.
(c) For a period of not less than six months following
the Measurement Date, Parent shall, unless different terms are negotiated with
the relevant union representing any such employees, cause the Surviving
Corporation to provide to the Company Employees employee benefits that are, in
the aggregate, no less favorable than those provided immediately prior to the
Measurement Date to Company Employees; provided, however, that nothing contained
in this Section 8.9 shall require Parent or Purchaser to continue or replace, or
cause to be continued or replaced, any Company Stock Plan or other Company
Benefit Plan after the Measurement Date.
(d) Subject to compliance with Section 8.9(a), nothing
contained in this Section 8.9 or elsewhere in this Agreement shall be construed
to prevent the termination of employment of any Company Employee or any change
in the compensation or employee benefits available to any Company Employee or
the amendment or termination of any particular Company Benefit Plan to the
extent permitted by its terms as in effect immediately prior to the Measurement
Date.
(e) For all purposes under any employee benefit plans of
Parent and its Subsidiaries providing benefits to any Company Employee after the
Effective Time, other than Parent's employee stock option plan (the "PARENT
OPTION PLAN") (all such employee benefit plans, other than the Parent Option
Plan, are hereinafter referred to as the "NEW PLANS"), each such Company
Employee shall be credited with his or her years of service with the Company and
its Subsidiaries before the Effective Time, to the same extent as such employee
was entitled, before the Effective Time, to credit for such service under any
similar Company Benefit Plans for purposes of (i) eligibility to participate and
(ii) vesting, but in no event shall such service be taken into account in
determining the accrual of benefits under any New Plan, including, but not
limited to, a defined benefit plan. In addition, and without limiting the
generality of the foregoing, (x) each Company Employee shall be immediately
eligible to participate, without any waiting time, in any and all New Plans to
the extent coverage under such
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New Plan replaces coverage under a comparable benefit plan of the Company in
which such employee participated immediately before the Effective Time and which
plans were previously disclosed to Parent and (y) for purposes of each New Plan
providing medical, dental, pharmaceutical or vision benefits to any Company
Employee, Parent shall cause all pre-existing condition exclusions of such New
Plan to be waived for such employee and his or her covered dependents (other
than limitations or waiting periods that are already in effect with respect to
such employees and dependents and that have not been satisfied as of the
Effective Time), and, if coverage under a Company Benefit Plan is ended on a
date other than the last day of the plan year, Parent shall cause any eligible
expenses incurred by such employee and his or her covered dependents during the
portion of the plan year of the Company Benefit Plan ending on the date such
employee's participation in the corresponding New Plan begins, to be taken into
account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.
(f) Prior to the Consummation of the Offer, Company shall
take, or shall cause to be taken, all actions required under each Company
Benefit Plan to cause any employee who is not employed by an entity required to
be aggregated with the Company under Section 414(b), 414(c) or 414(m) of the
Code to cease participation in each Company Benefit Plan, effective as of the
Effective Time.
(g) From and after the Measurement Date, the Company and
the Surviving Corporation, as the case may be, and the Parent shall honor in
accordance with their respective terms (as in effect on the date of this
Agreement), all the Company's written non-compete agreements existing prior to
the execution of this Agreement which are between the Company or any of its
Subsidiaries and any director, officer or employee thereof and which have been
disclosed in Section 8.9 of the Company Disclosure Schedule (the "NON-COMPETE
AGREEMENTS").
(h) Prior to Consummation of the Offer, Purchaser shall
provide to the signatories of the Non-Compete Agreements a letter of credit,
insurance or other security securing the payment obligations of the Company
under the Non-Compete Agreements, in each case in form and substance reasonably
acceptable to the Company; provided, however, that if such security has not been
provided prior to the Consummation of the Offer, such security shall be in form
and substance satisfactory to each employee receiving the same.
SECTION 8.10 OPTION TO ACQUIRE ADDITIONAL SHARES.
(a) The Company hereby grants to Purchaser, an
irrevocable option (the "OPTION") to purchase, at an exercise price per share
equal to the Offer Price, up to that number of newly issued shares of Company
Common Stock (the "OPTION SHARES") equal to the number of shares of Company
Common Stock that, when added to the number of shares of Company Common Stock
owned by Purchaser immediately following Consummation of the Offer, shall
constitute one share more than 90% of the shares of Common Company Stock then
outstanding on a fully diluted basis (after giving effect to the issuance of the
Option Shares).
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(b) Such Option shall be exercisable only after
Consummation of the Offer if, as a result of Consummation of the Offer,
Purchaser owns beneficially at least 85% of the outstanding shares of the
Company Common Stock on a fully diluted basis. Such Option shall not be
exercisable if (i) the number of shares of Company Common Stock subject thereto
exceeds the number of authorized shares of Company Common Stock available for
issuance, or (ii) the exercise of the Option would violate the applicable rules
of the New York Stock Exchange applicable to the Company.
(c) In the event Purchaser wishes to exercise the Option,
Purchaser shall give the Company one-day prior written notice of its exercise of
the Option specifying the number of shares of Company Common Stock that are or
will be owned by Purchaser immediately following Consummation of the Offer and a
place and a time (which may be concurrent with the Consummation of the Offer)
for the closing of such purchase. The Company shall, as soon as practicable
following receipt of the notice, deliver written notice to Purchaser specifying
the number of Option Shares. At the closing of the purchase of the Option
Shares, the purchase price owing upon exercise of such Option which equals the
product of (x) the number of shares of Company Common Stock purchased pursuant
to such Option multiplied by (y) the Offer Price and shall be paid to the
Company in cash by wire transfer of immediately available funds.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
obligations of the Company, Parent and Purchaser to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) This Agreement shall have been approved and adopted
by the requisite vote of the shareholders of the Company, if required by
applicable law, in order to consummate the Merger;
(b) No Order, or Law entered, enacted, promulgated,
enforced or issued by any court or other Governmental Authority of competent
jurisdiction or other legal restraint or prohibition shall be in effect (i)
preventing the consummation of the Merger or (ii) prohibiting or limiting the
ownership or operation by Parent, Purchaser or the Company or their respective
Subsidiaries of any of their assets (except as otherwise provided in Section
8.6(b)) or (iii) compelling Parent, Purchaser or the Company and their
respective Subsidiaries to dispose of or hold separate any of their assets
(except as otherwise provided in Section 8.6(b));
(c) All Orders and approvals legally required for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time; and
(d) Purchaser, Parent or any Affiliate of Parent shall
have purchased shares of Company Common Stock pursuant to the Offer; provided,
however, that neither Parent nor Purchaser shall be entitled to rely on the
condition in this Section 9.1(d) if either of them shall have failed to purchase
shares of Company Common Stock pursuant to the Offer in breach of their
obligations under this Agreement.
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SECTION 9.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND
PURCHASER. The obligations of Parent and Purchaser to consummate the Merger are
further subject to the satisfaction of the condition that the Company shall have
performed in all material respects all of its obligations hereunder required to
be performed by it at or prior to the Effective Time, except for any action or
inaction after the Measurement Date that would constitute a breach hereunder
that is approved by a majority of Parent's designees to the Company's Board of
Directors or is otherwise expressly consented to by Parent in writing.
ARTICLE X
TERMINATION AND ABANDONMENT
SECTION 10.1 TERMINATION. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the Company Shareholder Approval:
(a) by mutual written consent of Parent and the Company
(which, if required by Section 2.3(b), must be approved by the Independent
Directors as provided therein); or
(b) by Parent:
(i) if at any time prior to Consummation of the
Offer, the Company has breached any representation or
warranty, or prior to the Effective Time has breached any
covenant or other agreement contained in this Agreement, which
(A) would give rise to the failure of a condition set forth in
clause (c) of Annex I, (B) cannot be or has not been cured
within 20 days after receipt of written notice thereof by the
Company or by the Termination Date, whichever is earlier, and
(C) has not been waived by Parent pursuant to the provisions
hereof (provided that Parent may not terminate this Agreement
pursuant to this clause (i) if either Parent or Purchaser is
then in material breach of any representation, warranty,
covenant or other agreement contained in this Agreement).
(ii) if at any time prior to Consummation of the
Offer, (A) the Company, or its Board of Directors, as the case
may be, shall have (u) after the date hereof, entered into any
agreement, other than a confidentiality/standstill agreement
permitted under Section 8.5, with respect to any Takeover
Proposal other than the Offer or the Merger, (v) amended,
conditioned, qualified, withdrawn, modified or contradicted,
or resolved to do any of the foregoing, in a manner adverse to
Parent or Purchaser, its approval and recommendation of the
Offer, the Merger and this Agreement (regardless of whether
such action was permitted under this Agreement), (w)
solicited, approved or recommended any Takeover Proposal other
than the Offer or the Merger, (x) failed to reaffirm publicly
its recommendation regarding the Offer or approval of the
Merger or any of the Company Transaction Documents within five
business days of Purchaser's written request to do so, (y)
failed to reject any Takeover Proposal or amended Takeover
Proposal within five business days following the public
announcement of such Takeover Proposal or amendment, or (z)
prior to the Consummation of the Offer, violated Section
8.2(b)(15), or (B) the Company or the Company's Board
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of Directors or any committee thereof shall have resolved or
agreed, in writing or otherwise, to do any of the foregoing;
or
(c) by the Company:
(i) if at any time prior to Consummation of the
Offer (A) a Superior Proposal is received by the Company and
(B) the Board of Directors of the Company reasonably
determines in good faith (after consultation with outside
counsel) that it is necessary to terminate this Agreement and
enter into an agreement to effect the Superior Proposal in
order to comply with its fiduciary duties to the Company's
shareholders under applicable law; provided that the Company
may not terminate this Agreement pursuant to this Section
10.1(c)(i) unless and until (w) five business days have
elapsed following delivery to Parent of a written notice of
such determination by the Board of Directors of the Company
and during such five business day period the Company has fully
cooperated with Parent, including, without limitation,
providing Parent with a copy of such Superior Proposal,
including any amendments or modifications thereto, with the
intent of enabling both parties to agree to a modification of
the terms and conditions of this Agreement so that the
transactions contemplated hereby may be effected; (x) at the
end of such five business day period the Takeover Proposal
continues to constitute a Superior Proposal (taking into
account any modifications to the terms hereof proposed by
Parent) and the Board of Directors of the Company confirms its
determination (after consultation with outside counsel) that
it is a Superior Proposal and that it is necessary to
terminate this Agreement and enter into an agreement to effect
the Superior Proposal to comply with its fiduciary duties
under applicable law; (y) following such termination the
Company enters into a definitive acquisition, merger or
similar agreement to effect the Superior Proposal; and (z) the
Company prior to such termination pays to the Parent in
immediately available funds the Termination Fee and the
Expenses to the extent Parent has notified the Company in
writing of the amount of the Expenses.
(ii) provided the Company is not in material
breach of any representation, warranty, covenant or other
agreement contained in this Agreement, if Parent or Purchaser
shall have (x) failed to commence the Offer as provided in
Section 2.1, (y) failed to pay for shares of Company Common
Stock pursuant to the Offer in accordance with Section 2.1, or
(z) breached in any material respect any of their respective
representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not
been cured within 20 days after receipt of written notice
thereof by Parent or by the Termination Date, whichever is
earlier; or
(d) by either Parent or the Company:
(i) if the Offer has not been consummated on or
before the Termination Date; provided that the right to
terminate this Agreement pursuant to this clause shall not be
available to any party whose failure to fulfill any material
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' obligation of this Agreement or other material breach of this
Agreement has been the cause of, or resulted in, the failure
of the Offer to have been consummated on or prior to the
aforesaid date; or
(ii) if, as a result of the failure of any of the
conditions set forth in Annex I to this Agreement, the Offer
shall have terminated or expired in accordance with its terms
without Purchaser having purchased any shares of Company
Common Stock pursuant to the Offer; provided that the right to
terminate this Agreement pursuant to this clause shall not be
available to any party whose failure to fulfill any obligation
under this Agreement or other breach of this Agreement has
resulted in the failure of such condition; or
(iii) if any court of competent jurisdiction or
any Governmental Authority shall have issued an order, decree
or ruling or taken any other action permanently restricting,
enjoining, restraining or otherwise prohibiting Consummation
of the Offer or consummation of the Merger and such order,
decree, ruling or other action shall have become final and
nonappealable; provided that the right to terminate pursuant
to this clause shall not be available to any party whose
material breach of Section 8.6 has been the cause of such
order, decree, ruling or other action.
SECTION 10.2 EFFECT OF TERMINATION. In the event of
termination of this Agreement by Parent or the Company, as provided in Section
10.1, this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of the Company, Parent or Purchaser or their respective
officers or directors (except as set forth in the Confidentiality Agreement,
this Section 10.2 and Sections 10.3, 11.3, 11.4, 11.5, 11.8, 11.9, 11.11, 11.12,
11.13, which shall survive the termination); provided, however, that nothing
contained in this Section 10.2 or in Section 10.3 shall relieve any party hereto
from any liability for any willful breach of its covenants under this Agreement.
SECTION 10.3 PAYMENT OF CERTAIN FEES.
(a) If this Agreement is terminated by Parent in
accordance with Section 10.1(b)(ii), then the Company shall pay to Parent,
within one business day after the date of termination of this Agreement, the
Termination Fee and the Expenses; provided, however, the Company is not
obligated to pay the Expenses until the Parent has notified the Company in
writing of the amount of the Expenses. If this Agreement is terminated by the
Company in accordance with Section 10.1(c)(i), then the Company shall pay to
Parent the Termination Fee and the Expenses as provided in Section 10.1(c)(i);
provided, however, the Company is not obligated to pay Expenses until the Parent
has notified the Company in writing of the amount of the Expenses.
(b) If (i) this Agreement is terminated by (A) Parent
pursuant to Section 10.1(b)(i), (B) Parent or the Company pursuant to Section
10.1(d)(i), or (C) Parent or the Company pursuant to clause 10.1(d)(ii) and
either the Minimum Condition or any of the conditions listed in Section (c) of
Annex I to this Agreement shall fail to have been satisfied and (ii)(A) a
Takeover Proposal shall have been made and publicly announced or communicated to
the Company's shareholders after the date of this Agreement and prior to the
effective date of such termination and (B) concurrently with or within 12 months
of the date of such termination a Third Party Acquisition Event occurs, then the
Company shall within one business day of the occurrence of such a Third Party
Acquisition Event (including any revisions or amendments
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thereto), if any, pay to Parent the Termination Fee and the Expenses; provided,
however, the Company is not obligated to pay the Expenses until the Parent has
notified the Company in writing of the amount of the Expenses. "THIRD PARTY
ACQUISITION EVENT" shall mean (i) the consummation of a Takeover Proposal
involving the purchase of a majority of either the equity securities of the
Company or of the consolidated assets of the Company and its Subsidiaries, taken
as a whole, or any such transaction that, if it had been proposed prior to the
termination of this Agreement would have constituted a Takeover Proposal or (ii)
the entering into by the Company or any of its Subsidiaries of a definitive
agreement with respect to any such transaction.
(c) Any payment of the Termination Fee and the Expenses
pursuant to this Section 10.3 shall be made by wire transfer of immediately
available funds. If the Company fails to pay to Parent the Termination Fee and
the Expenses when due hereunder, the Company shall pay the costs and expenses
(including legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of any unpaid fee and/or expense at the publicly
announced prime rate for leading money center banks as published in The Wall
Street Journal from the date such fee was required to be paid to the date it is
paid.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the Company, on the one hand, and Parent and
Purchaser, on the other hand, contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or
Purchaser shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 11.1 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Effective Time.
SECTION 11.2 EXTENSION; WAIVER. At any time prior to the
Effective Time, the parties hereto, by action taken by or on behalf of the
respective Boards of Directors of the Company (or, if required by Section 2.3,
the Independent Directors), Parent or Purchaser, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) subject to the
proviso of Section 11.6, waive compliance with any of the agreements or
conditions contained herein by the other parties hereto. Any agreement on the
part of any party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
SECTION 11.3 NOTICES. All notices, requests, demands, waivers
and other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or mailed, certified or registered mail with postage prepaid, or sent by
telex, telegram or telecopier, as follows:
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(a) if to the Company, to it at:
Xxxxxxx Truck Leasing Corp.
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: (000)000-0000
Telephone: (000)000-0000
Attention: Xxxxxxx X. Xxxxxx
in each case, with a copy (which shall not constitute
notice) to:
Xxxxxxx Truck Leasing Corp.
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: (000)000-0000
Telephone: (000)000-0000
Attention: Xxxxx Xxxxxxxxxx
Vice President - General Counsel and
Secretary
in each case, with an additional copy (which shall
not constitute notice) to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx III
(b) if to either Parent or Purchaser, to it at:
Penske Truck Leasing Co., L.P.
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Telecopy: (000)000-0000
Telephone: (000)000-0000
Attention: Xxxxx X. Xxxxxxxxx
Vice President - Business Development,
Treasurer
in each case, with a copy (which shall not constitute
notice) to:
Penske Truck Leasing Co., L.P.
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Telecopy: (000)000-0000
Telephone: (000)000-0000
Attention: Xxxxxxx X. Xxxx
Assistant General Counsel
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in each case, with an additional copy (which shall
not constitute notice) to:
Drinker Xxxxxx & Xxxxx LLP
Xxx Xxxxx Xxxxxx
00xx & Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: F. Xxxxxxx Xxxxxxx, III
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
SECTION 11.4 ENTIRE AGREEMENT. The Confidentiality Agreement
and this Agreement and the schedules and other documents referred to herein or
delivered pursuant hereto, collectively contain the entire understanding of the
parties hereto with respect to the subject matter contained herein and supersede
all prior agreements and understandings, oral and written, with respect thereto.
SECTION 11.5 BINDING EFFECT; BENEFIT; ASSIGNMENT. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and, with respect to the provisions of Section 8.7 hereof only, shall inure to
the benefit of the Persons or entities benefiting from the provisions thereof
who are intended to be third-party beneficiaries thereof and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Purchaser may assign and transfer its rights and obligations hereunder to
any of its Affiliates, provided that such assignment shall not release Parent
from its obligations hereunder. Except as provided in the immediately preceding
sentence, nothing in this Agreement, expressed or implied, is intended to confer
on any Person other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
SECTION 11.6 AMENDMENT AND MODIFICATION. Subject to applicable
law, this Agreement may be amended, modified and supplemented in writing by the
parties hereto in all respects before the Effective Time (whether before or
after the Company Shareholder Approval), by action taken by the respective
Boards of Directors of Parent, Purchaser and the Company (or, if required by
Section 2.3, the Independent Directors) or by the respective officers authorized
by such Boards of Directors or the Independent Directors, as the case may be;
provided, however, that after the Company Shareholder Approval, no amendment
shall be made which by law requires further approval by the shareholders of the
Company without such further approval.
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SECTION 11.7 FURTHER ACTIONS. Each of the parties hereto
agrees that, except as otherwise provided in this Agreement and subject to its
legal obligations and fiduciary duties, it will use its commercially reasonable
best efforts to fulfill all conditions precedent specified herein, to the extent
that such conditions are within its control, and to do all things reasonably
necessary to consummate the transactions contemplated hereby.
SECTION 11.8 INTERPRETATION. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to January 15, 2001.
SECTION 11.9 ENFORCEMENT. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity. Each of the parties hereto (a) irrevocably and unconditionally
consents to submit to the jurisdiction of any state court located in the County
of New Castle, State of Delaware (a "STATE COURT") or in the United States
District Court for the District of Delaware (the "Federal Court") for the
purpose of any action arising out of or based upon this Agreement or any of the
transactions contemplated by this Agreement brought by any party hereto and for
the recognition and enforcement of any judgment rendered in respect thereof, and
(b) waives, and agrees not to assert by way of motion, as a defense, or
otherwise, in any such action, any claim that it is not subject to the personal
jurisdiction of the above-named courts, that its assets or property is exempt or
immune from attachment or execution, that the action is brought in an
inconvenient forum, that the venue of the action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts. Each of Parent, Purchaser and the
Company irrevocably appoints CT Corporation System, 0000 Xxxxxx Xxxxxx, Xxxx xx
Xxxxxxxxxx, Xxxxxx of New Castle, 19801, as its agent for the sole purpose of
receiving service of process or other legal summons in connection with any
proceedings in the State of Delaware. If the appointment of the person mentioned
in this Section 11.9 ceases to be effective, Parent, Purchaser and the Company
each agrees that it will promptly appoint a further person in the State of
Delaware to accept service of process on its behalf in the State of Delaware and
so notify the other parties to this Agreement. Nothing contained in this Section
11.9 shall affect the right to serve process in any other manner permitted by
law.
SECTION 11.10 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, and all
of which together shall be deemed to be one and the same instrument.
SECTION 11.11 APPLICABLE LAW. This Agreement and the legal
relations between the parties hereto shall be governed by and construed in
accordance with the Laws of the State of Delaware (without regard to the
conflict of Laws rules thereof).
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SECTION 11.12 SEVERABILITY. If any term, provision, covenant
or restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
SECTION 11.13 WAIVER OF JURY TRIAL. Each of the parties to
this Agreement hereby irrevocably waives all right to a trial by jury in any
action, proceeding or counterclaim arising out of or relating to this Agreement
or the transactions contemplated hereby.
SECTION 11.14 TIME. Time is of the essence with respect to
this Agreement, the Offer, the Merger and the other transactions contemplated
hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of Parent, Purchaser and the Company
has caused this Agreement to be executed by its officers thereunto duly
authorized, all as of the date first above written.
PENSKE TRUCK LEASING, CO., L.P.
By: Penske Truck Leasing Corporation,
its General Partner
By: /s/ Xxxxx Hard
---------------------------------
Name: Xxxxx Hard
Title: President
SUN ACQUISITION CORPORATION
By: /s/ Xxxxx Hard
---------------------------------
Name: Xxxxx Hard
Title: President
XXXXXXX TRUCK LEASING CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President & CEO
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ANNEX I
CERTAIN CONDITIONS OF THE OFFER
The capitalized terms used in this Annex I which are not
defined herein shall have the meanings set forth in the Agreement to which this
Annex I is attached, except that the term the "Merger Agreement" shall be deemed
to refer to the Agreement to which this Annex I is attached.
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) promulgated under the
Exchange Act (relating to Purchaser's obligations to pay for or return tendered
shares of Company Common Stock promptly after termination or withdrawal of the
Offer), pay for any shares of Company Common Stock tendered pursuant to the
Offer, and may terminate or amend the Offer in accordance with the Merger
Agreement; if:
(a) immediately prior to any scheduled or extended
expiration date of the Offer:
(i) the Minimum Condition shall not have been
satisfied; or
(ii) the applicable waiting period under the HSR
Act shall not have expired or been terminated, or any similar
approval by Canadian Antitrust Authorities shall not have been
obtained;
(b) at any time before Consummation of the Offer, any of
the following conditions exists:
(i) there shall have been any action taken, or
suit or proceeding threatened or commenced, or any statute,
rule, regulation, legislation, judgment, order or injunction
promulgated, entered, enforced, enacted, issued or deemed
applicable to the Offer or the Merger, in each case by any
domestic or foreign Federal or state governmental regulatory
or administrative agency or authority or court or legislative
body or commission which directly or indirectly is seeking to
(1) prohibit, or impose any material limitations, other than
limitations generally affecting the industries in which the
Company and Parent and their respective Subsidiaries conduct
their business, on Parent's or Purchaser's ownership or
operation (or that of any of their respective Subsidiaries) of
all or a material portion of the Company's and its
Subsidiaries' businesses or assets as a whole, or compel
Parent or Purchaser or their respective Subsidiaries to
dispose of or hold separate any material portion of its shares
of Company Common Stock or of the business or assets of the
Company or Parent, in each case taken as a whole, (2)
prohibit, or make illegal, Consummation of the Offer or
consummation of the Merger or the other transactions
contemplated by the Merger Agreement, (3) cause a material
delay in the ability of Purchaser, or renders Purchaser
unable, to accept for payment, pay for or purchase a material
amount of the shares of Company Common Stock, or (4) impose
material limitations on the ability of Purchaser or Parent or
any of their Subsidiaries effectively to exercise full rights
64
of ownership of all or a substantial number of the shares of
the Company Common Stock including, without limitation, the
right to vote the shares of the Company Common Stock purchased
by it on all matters properly presented to the Company's
shareholders on an equal basis with all other holders of such
shares and the right to hold, transfer or dispose of such
shares;
(ii) there shall have occurred (1) any general
suspension of trading in, or limitation on prices for,
securities in the New York Stock Exchange (excluding any
coordinated trading halt triggered solely as a result of a
specified decrease in a market index and excluding any
suspension or limitation resulting from physical damage or
interference with any exchange not related to market
conditions) or (2) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United
States or the extension of credit by lending institutions
(whether or not mandatory);
(iii) other than as explicitly disclosed in the
Company Disclosure Schedule or the Company SEC Reports, filed
prior to the date of the Merger Agreement, any change shall
have occurred (or any development shall have occurred) after
September 30, 2000, in the financial condition or results of
operations of the Company or any of its Subsidiaries that has
had or would reasonably be expected to have a Company Material
Adverse Effect; or
(iv) the Company's Board of Directors shall have
withdrawn, or modified or changed in a manner adverse to
Parent or Purchaser (including by amendment of the Schedule
14D-9), its recommendation of the Offer, the Merger Agreement,
or the Merger, or approved or recommended another proposal or
offer regarding a Takeover Proposal, or shall have resolved to
do any of the foregoing; or
(v) tangible net equity (as defined by GAAP) of
the Company shall be less than U.S.$321,000,000 (to be
computed by subtracting from Total Shareholders' Equity, the
Excess of Cost over Net Assets of Businesses Acquired as such
asset classifications were historically reflected on the
Balance Sheet and as evidenced by a certificate of the chief
financial officer of the Company); or
(vi) the Merger Agreement shall have been
terminated in accordance with its terms; or
(c) as of the later to occur of (A) the satisfaction of
the conditions set forth in clauses (a) and (b) of this Annex I or (B) twenty
(20) days after the date of the Offer, but in no event later than any scheduled
or extended expiration date of the Offer, (1) the Company shall have breached or
failed to perform in any material respect any of its obligations under the
Merger Agreement required to have been performed at or prior to such time, or
(2) subject to Section 5.2 of the Merger Agreement, the representations and
warranties of the Company set forth in the Merger Agreement (other than the
representations and warranties set forth in Sections 6.1(a), 6.1(c), 6.1(d),
6.2, 6.3, 6.5, 6.6, 6.7, 6.12, 6.15, 6.17, 6.18, 6.19, 6.20(a), 6.22(a), 6.23,
6.26) shall fail to be true and correct as of the date of the Merger Agreement
and as of any scheduled or extended expiration date, or (3) the representations
and warranties of the Company set forth in Sections 6.1(a), 6.1(c), 6.1(d), 6.2,
6.3, 6.5, 6.6, 6.7, 6.12, 6.15, 6.17, 6.18, 6.19, 6.20(a), 6.22(a), 6.23 and
6.26 of the Merger Agreement shall fail to be true and correct in all
Annex I-2
65
material respects (except to the extent such representations and warranties are
qualified by materiality, in which case such qualified portions of such
representations and warranties shall be true and correct in all respects) as of
the date of the Merger Agreement and as of any scheduled or extended expiration
date of the Offer as though made on such date (or, in each case, if made as of a
specified date, as of such date).
Subject to the provisions of the Merger Agreement, the
foregoing conditions are for the sole benefit of Parent and Purchaser and may be
asserted by Purchaser or, subject to the terms of the Merger Agreement may be
waived by Parent or Purchaser, in whole or in part at any time and from time to
time in the sole discretion of Parent or Purchaser. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
Annex I-3
