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EXHIBIT 2.3
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[Conformed Copy]
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LCS INDUSTRIES, INC.,
CUSTOMERONE HOLDING CORPORATION
AND
CATALOG ACQUISITION CO.
DATED
AS OF
DECEMBER 17, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER
SECTION 1.1 The Offer ...................................................... 2
SECTION 1.2 Company Actions ................................................ 4
SECTION 1.3 Directors ...................................................... 5
ARTICLE II
THE MERGER
SECTION 2.1 The Merger ..................................................... 7
SECTION 2.2 Effect on Shares ............................................... 8
SECTION 2.3 Surrender and Payment .......................................... 8
SECTION 2.4 Dissenting Shares .............................................. 10
SECTION 2.5 Stock Options .................................................. 11
SECTION 2.6 Merger Without Meeting of Stockholders ......................... 12
SECTION 2.7 Closing ........................................................ 12
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1 Certificate of Incorporation ................................... 12
SECTION 3.2 Bylaws ......................................................... 12
SECTION 3.3 Directors and Officers ......................................... 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.1 Corporate Existence and Power .................................. 13
SECTION 4.2 Corporate Authorization ........................................ 14
SECTION 4.3 Governmental Authorization ..................................... 14
SECTION 4.4 Non-Contravention .............................................. 15
SECTION 4.5 Capitalization ................................................. 15
SECTION 4.6 Subsidiaries ................................................... 17
SECTION 4.7 SEC Documents .................................................. 18
SECTION 4.8 Financial Statements; No Undisclosed Liabilities ............... 18
SECTION 4.9 Disclosure Documents ........................................... 19
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SECTION 4.10 Absence of Certain Changes .................................... 19
SECTION 4.11 Litigation .................................................... 22
SECTION 4.12 Taxes ......................................................... 22
SECTION 4.13 Employee Plans ................................................ 23
SECTION 4.14 Labor Matters ................................................. 25
SECTION 4.15 Compliance with Laws .......................................... 26
SECTION 4.16 Finders' Fees ................................................. 26
SECTION 4.17 Environmental Matters ........................................ 26
SECTION 4.18 Property ...................................................... 28
SECTION 4.19 Trademarks .................................................... 29
SECTION 4.20 Material Contracts ........................................... 29
SECTION 4.21 Insurance ..................................................... 30
SECTION 4.22 Year 2000 Compliance .......................................... 30
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
SECTION 5.1 Corporate Existence and Power ................................. 31
SECTION 5.2 Corporate Authorization ....................................... 31
SECTION 5.3 Governmental Authorization .................................... 32
SECTION 5.4 Non-Contravention ............................................. 32
SECTION 5.5 Disclosure Documents .......................................... 32
SECTION 5.6 Finders' Fees ................................................. 33
SECTION 5.7 Financing ..................................................... 33
SECTION 5.8 Solvency ...................................................... 33
SECTION 5.9 Share Ownership ............................................... 34
SECTION 5.10 Merger Subsidiary's Operations ................................ 34
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.1 Conduct of the Company ........................................ 34
SECTION 6.2 Stockholder Meeting; Proxy Material ........................... 36
SECTION 6.3 Access to Information; Confidentiality Agreement .............. 37
SECTION 6.4 No Solicitation ............................................... 38
SECTION 6.5 Conveyance Taxes .............................................. 39
SECTION 6.6 Directors Stock Plan .......................................... 39
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.1 Obligations of Merger Subsidiary .............................. 40
SECTION 7.2 Voting of Shares .............................................. 40
SECTION 7.3 Director and Officer Insurance ................................ 40
SECTION 7.4 Investment Banking Fees ....................................... 41
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ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.1 Reasonable Efforts ........................................... 41
SECTION 8.2 Certain Filings .............................................. 41
SECTION 8.3 Public Announcements ......................................... 42
SECTION 8.4 Conveyance Taxes ............................................. 42
SECTION 8.5 Further Assurances ........................................... 42
SECTION 8.6 Employee Matters ............................................. 43
SECTION 8.7 Stockholder Litigation ....................................... 43
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1 Conditions to the Obligations of Each Party ................... 43
ARTICLE X
TERMINATION
SECTION 10.1 Termination .................................................. 44
SECTION 10.2 Effect of Termination ........................................ 45
ARTICLE XI
DEFINED TERMS
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices ...................................................... 51
SECTION 12.2 Nonsurvivial of Representations and Warranties ............... 52
SECTION 12.3 Amendments; No Waivers ....................................... 52
SECTION 12.4 Expenses ..................................................... 53
SECTION 12.5 Successors and Assigns ...................................... 53
SECTION 12.6 Governing Law ................................................ 53
SECTION 12.7 Severability ................................................. 53
SECTION 12.8 Third Party Beneficiaries .................................... 53
SECTION 12.9 Entire Agreement ............................................. 54
SECTION 12.10 Counterparts; Effectiveness .................................. 54
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ANNEX I
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 17, 1998 (this
"Agreement"), by and among LCS Industries, Inc., a Delaware
corporation (the "Company"), CustomerONE Holding Corporation, a
Delaware corporation ("Buyer"), and Catalog Acquisition Co., a
Delaware corporation and a wholly owned subsidiary of Buyer ("Merger
Subsidiary").
WHEREAS, the respective Boards of Directors of Buyer, Merger
Subsidiary and the Company have determined that it is fair to, and in
the best interests of their respective stockholders to consummate the
acquisition of the Company by Buyer upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, Buyer will cause
Merger Subsidiary to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to
purchase all of the issued and outstanding shares of Common Stock, par
value $.01 per share, of the Company (the "Shares") for $17.50 per
Share, net to the seller in cash (the "Offer Price"), upon the terms
and subject to the conditions of this Agreement and the Offer; and
WHEREAS, the Board of Directors of the Company has approved the
Offer and resolved and agreed to recommend that holders of Shares
tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the respective
Boards of Directors of Buyer, Merger Subsidiary and the Company have
approved the merger of Merger Subsidiary with and into the Company in
accordance with the Delaware General Corporation Law (the "DGCL")
whereby each issued and outstanding Share (other than Shares held by
the Company as treasury stock or owned by Buyer, Merger Subsidiary or
any other subsidiary of Buyer immediately prior to the Effective Time
and other than Dissenting Shares (as defined in Section 2.4 hereof)),
will be converted into the right to receive the Offer Price;
WHEREAS, Buyer, Merger Subsidiary and the Company desire to make
certain representations, warranties, covenants and agreements in
connection with the Offer and
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the Merger (as defined in Section 2.1) and also to prescribe various
conditions to the Offer and the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable, but in no event later than five
business days after the initial public announcement of the Offer,
Merger Subsidiary shall, and Buyer shall cause Merger Subsidiary to,
commence (as defined in Rule 14d-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) the Offer. The
obligation of Merger Subsidiary to, and Buyer to cause Merger
Subsidiary to, commence the Offer and accept for payment, and pay for,
any and all Shares tendered pursuant to the Offer shall be subject
only to the conditions set forth in Annex I hereto and to the terms
and conditions of this Agreement; provided, however, that Merger
Subsidiary shall not, without the Company's written consent, waive the
Minimum Condition (as defined in Annex I hereto). Merger Subsidiary
expressly reserves the right to modify the terms of the Offer;
provided that, without the Company's written consent, Merger
Subsidiary shall not (i) reduce the number of Shares which Merger
Subsidiary is offering to purchase in the Offer, (ii) reduce the Offer
Price, (iii) modify or add to the conditions set forth in Annex I
hereto, (iv) change the form of consideration payable in the Offer or
(v) otherwise amend or modify the Offer in any manner adverse to the
holders of the Shares. Notwithstanding the foregoing, if on any
scheduled expiration date the number of Shares that have been
physically tendered and not withdrawn are more than 5O% of the Shares
outstanding on a fully diluted basis but less than 90% of the
outstanding shares of each class of capital stock of the Company on a
fully diluted basis, Merger Subsidiary may extend the Offer for up to
10 additional business days from the date that all conditions to the
Offer (other than the Minimum Condition) shall first have been
satisfied, so long as Merger Subsidiary irrevocably waives the
satisfaction of any condition set forth in
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Annex A which relates to the occurrence of a Material Adverse Effect
on the Company (as defined in Section 4.1). Further, Merger Subsidiary
may extend the Offer beyond any scheduled expiration date up to the
Outside Termination Date (as defined in Section 10.1) if at the
initial expiration date of the Offer, or any extension thereof, the
conditions in clauses (a) and (b) to Annex I hereto are not satisfied
or waived. Subject to the terms and conditions of the Offer, Merger
Subsidiary shall, and Buyer shall cause Merger Subsidiary to, pay, as
promptly as practicable after expiration of the Offer, for all Shares
validly tendered and not withdrawn.
(b) On the date of commencement of the Offer, Buyer and Merger
Subsidiary shall file with the Securities and Exchange Commission (the
"SEC"), a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer which shall contain an offer to purchase and form of the related
letter of transmittal and summary advertisement (together with any
supplements or amendments thereto, collectively, the "Offer
Documents") and promptly thereafter shall disseminate the Offer
Documents to the stockholders of the Company. Buyer, Merger Subsidiary
and the Company each agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect;
and each of Buyer and Merger Subsidiary further agrees to take all
steps necessary to amend or supplement the Offer Documents and to
cause the Offer Documents as so amended or supplemented to be filed
with the SEC and to be disseminated to the Company's stockholders, in
each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment on the Offer Documents
prior to their being filed with the applicable authorities or
disseminated to the Company's stockholders. Buyer and Merger
Subsidiary agree to provide the Company and its counsel any comments
Buyer, Merger Subsidiary or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the
receipt of such comments and shall provide the Company and its counsel
an opportunity to participate, including by way of discussion with the
SEC or its staff, in the response of Buyer and/or Merger Subsidiary to
such comments.
(c) Buyer shall provide or cause to be provided to Merger
Subsidiary on a timely basis the funds necessary to accept for
payment, and pay for, any Shares
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that Merger Subsidiary becomes obligated to pay for pursuant to the
Offer or the Merger.
SECTION 1.2 Company Actions. (a) The Company hereby consents to
the Offer and represents that its Board of Directors, at a meeting
duly called and held on December 17, 1998, has (i) determined that
this Agreement and the transactions contemplated hereby, including the
terms of the Offer and the Merger, are fair to and in the best
interests of the Company's stockholders, (ii) approved this Agreement
and the transactions contemplated hereby, including the Offer and the
Merger, and (iii) resolved to recommend acceptance of the Offer and
approval and adoption of this Agreement and the Merger by its
stockholders; provided however, that prior to the purchase by Merger
Subsidiary of Shares pursuant to the Offer, the Company may modify,
withdraw or change such recommendation to the extent that the Board of
Directors of the Company determines, after consultation with outside
legal counsel to the Company, that the failure to so withdraw, modify
or change such recommendation would likely be inconsistent with the
fiduciary duties of the Board of Directors of the Company under
applicable laws.
(b) The Board of Directors of the Company has received the
written opinion of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
("DLJ") to the effect that, as of such date, the Merger Consideration
(as defined in Section 2.2(c)) to be received by holders of Shares
pursuant to the Offer and the Merger, taken together, is fair from a
financial point of view to such holders. The Company has provided a
copy of such opinion to the Buyer.
(c) In connection with the Offer, if requested by Merger
Subsidiary, the Company shall furnish or shall cause to be furnished
to Merger Subsidiary mailing labels and any available listing or
computer file containing the names and addresses of all holders of
record of Shares and lists of securities positions of Shares held in
stock depositories, in each case as of a recent date, and shall
provide to Merger Subsidiary such additional information (including,
without limitation, updated lists of stockholders, mailing labels and
lists of securities positions) and such other assistance as Buyer or
Merger Subsidiary may reasonably request in connection with the Offer.
Except for such steps as are necessary to disseminate the Offer
Documents, Buyer and Merger Subsidiary shall hold in confidence the
information contained in any
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of such labels and lists and the additional information referred to
in the preceding sentence, will use such information only in
connection with the Offer, and, if this Agreement is terminated, will
upon request of the company deliver or cause to be delivered to the
Company all copies of such information then in its possession or the
possession of its agents or representatives.
(d) As soon as practicable after the filing of the Offer
Documents with the SEC, the Company shall file with the SEC a
Solicitation/Recommendation Statement on schedule 14D-9 (such Schedule
14D-9, as amended or supplemented from time to time, the "Schedule
14D-9") which shall, subject to the fiduciary duties of the Company's
Board of Directors under applicable laws and the provisions of this
Agreement, reflect the recommendation of the Company's Board of
Directors described in Section 1.2(a) hereof, and disseminate the
Schedule 14D-9 to the stockholders of the Company. Buyer, Merger
Subsidiary and the Company each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that such Schedule 14D-9 shall have become false or misleading
in any material respect; and the Company further agrees to take all
steps necessary to amend or supplement the Schedule 14D-9 and to
cause the Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and to be disseminated to the Company's stockholders, in
each case as and to the extent required by applicable federal
securities laws. Buyer and Merger Subsidiary and their counsel shall
be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the applicable
authorities or disseminated to the Company's stockholders. The Company
agrees to provide Buyer and Merger Subsidiary and their counsel 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 provide Buyer and Merger Subsidiary and their
counsel an opportunity to participate, including by way of discussion
with the SEC or its staff, in the response of the Company to such
comments.
SECTION 1.3 Directors. (a) Subject to paragraph (b) below,
promptly upon the acceptance for payment by Merger Subsidiary of any
Shares pursuant to the Offer, Buyer shall be entitled to designate
such number of directors, rounded up to the next whole number, on the
Company's Board of Directors as is equal to the product of the total
number of directors on the Company's
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Board of Directors (giving effect to the election of any additional
directors pursuant to this sentence) and (ii) the percentage that the
aggregate number of Shares beneficially owned by Merger Subsidiary
(including Shares accepted for payment pursuant to the offer) bears to
the total number of Shares outstanding. The Company shall take all
action necessary to cause Merger Subsidiary's designees to be elected
or appointed to the Company's Board of Directors, including, without
limitation, increasing the number of directors and seeking and
accepting resignations of incumbent directors. At such times, the
Company will use its reasonable best efforts to cause individuals
designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of each
Committee of the Board of Directors (other than a Committee
established to take action under this Agreement), each Board of
Directors of any Subsidiary of the Company and each Committee of each
such board. Notwithstanding the foregoing, until the Effective Time
(as defined in Section 2.1(b)), the Company shall retain as members of
its Board of Directors at least two directors who are directors of the
Company on the date hereof (the "Continuing Directors").
(b) The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this Section 1.3(b) and shall include in
the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under Section 14(f) and Rule
14f-1 to fulfill its obligations under this Section 1.3. Buyer and
Merger Subsidiary shall supply in writing and be solely responsible to
the Company for any information with respect to themselves and their
nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1.
(c) From and after the time, if any, that Buyer's designees
constitute a majority of the Company's Board of Directors and prior to
the Effective Time, (i) any amendment of this Agreement, the Company
Certificate of Incorporation or the Company By-Laws or any of its
Subsidiaries, (ii) any termination of this Agreement by the Company,
(iii) any extension of time for performance of any of the obligations
of Buyer or Merger Subsidiary hereunder, (iv) any waiver of any
condition to the
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obligations of the Company or any of the Company's rights
hereunder and any termination pursuant to Section 10.1(i) hereof, (v)
any amendment or change to the policies of directors' and officers'
liability insurance maintained by the Company and its Subsidiaries on
the date hereof, (vi) any amendment or change to, or decision in
connection with, the indemnification of the individuals who on or
prior to the Effective Time were officers, directors, employees or
agents of the Company or any of its Subsidiaries under the Company
Certificate of Incorporation or Company By-laws, the certificate of
incorporation or bylaws of any Subsidiary of the Company, or under any
existing agreement between such person or persons and the Company or a
Subsidiary of the Company and (vii) any amendment or change to any
Plan (as defined in Section 4.13(a) hereof) or modifications to
existing compensation policies or severance obligations (including
those agreements or obligations referenced in Section 4.13 hereof or
set forth on Schedule 4.13 of the disclosure schedule delivered by the
Company in connection herewith and attached hereto (the "Company
Disclosure Schedule")) may be effected only by the action of a
majority of the directors of the Company then in office who are
Continuing Directors, which action shall be deemed to constitute the
action of a committee specifically designated by the Board of
Directors to approve the actions and transactions contemplated hereby;
provided, that if there shall be no Continuing Directors, such actions
may be effected by majority vote of the entire Board of Directors of
the Company. Any actions with respect to the enforcement of this
Agreement by the Company shall be effected only by the action of a
majority of the Continuing Directors.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. (a) Subject to the terms and conditions
of this Agreement, and in accordance with the DGCL, at the Effective
Time, Merger Subsidiary shall be merged (the "Merger") with and into
the Company, whereupon the separate existence of Merger Subsidiary
shall cease, and the Company shall be the surviving corporation (the
"Surviving Corporation") and shall continue to be governed by the laws
of the State of Delaware.
(b) The Company, Buyer and Merger Subsidiary will cause a
certificate of merger (the "Certificate of
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Merger") with respect to the Merger to be executed and filed with the
Secretary of State of the State of Delaware (the "Secretary of State")
as provided in the DGCL. The Merger shall become effective on the date
the Certificate of Merger has been duly filed with the Secretary of
State or at such date as is agreed between the parties 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 Surviving Corporation
shall possess all the rights, privileges, powers and franchises and
be subject to all of the restrictions, disabilities, liabilities and
duties of the Company and Merger Subsidiary.
SECTION 2.2 Effect on Shares. At the Effective Time:
(a) Cancellation of Certain Stock. Each Share held by the Company
as treasury stock or owned by Buyer, Merger Subsidiary or any other
Subsidiary of Buyer and the Dissenting Shares (defined in Section 2.4
hereof, but except as provided in Section 2.4 hereof) immediately
prior to the Effective Time shall automatically be canceled and
retired and cease to exist, and no payment shall be made with respect
thereto.
(b) Capital Stock of Merger Subsidiary. Each share of common
stock of Merger Subsidiary issued and outstanding immediately prior to
the Effective Time shall be converted into and become one fully paid
and nonassessable share of common stock, par value $0.01, of the
Surviving Corporation with the same rights, powers and privileges as
the shares so converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation.
(c) Conversion of Shares. Each Share issued and outstanding
immediately prior to the Effective Time shall, except as otherwise
provided in Section 2.2(a) hereof, be converted into the right to
receive the Offer Price, without interest (the "Merger
Consideration").
SECTION 2.3 Surrender and Payment. (a) Prior to the Effective
Time, Buyer shall appoint a depositary (the "Depositary") for the
purpose of exchanging certificates representing Shares for the Merger
Consideration. The Depositary shall at all times be a commercial bank
having a combined capital and surplus of at least
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$500,000,000. Buyer will pay to the Depositary immediately prior to
the Effective Time, the Merger Consideration to be paid in respect of
the Shares. For purposes of determining the Merger Consideration to be
so paid, Buyer shall assume that no holder of Shares will perfect his
right to appraisal of his Shares. Promptly after the Effective Time,
Buyer will send, or will cause the Depositary to send, but in no event
later than three business days after the Effective Time, to each
holder of Shares at the Effective Time a letter of transmittal for use
in such exchange (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates representing Shares to the Depositary)
and instructions for use in effecting the surrender of Shares in
exchange for the Merger Consideration.
(b) Each holder of Shares that has been converted into a right to
receive the Merger Consideration, upon surrender to the Depositary of
a certificate or certificates properly representing such Shares,
together with a properly completed letter of transmittal covering such
Shares, will be entitled to receive the Merger Consideration payable
in respect of such Shares less any amounts required to be withheld
under applicable federal, state, local or foreign income tax
regulations. Until so surrendered, each such certificate shall, after
the Effective Time, represent for all purposes, only the right to
receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by
the certificate or certificates surrendered in exchange therefor, it
shall be a condition to such payment that the certificate or
certificates so surrendered shall be properly endorsed or otherwise be
in proper form for transfer and that the Person requesting such
payment shall pay to the Depositary any transfer or other taxes
required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of
the Depositary that such tax has been paid or is not payable. For
purposes of this Agreement, "Person" means an individual, a
corporation, limited liability company, a partnership, an association,
a trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
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(d) After the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set
forth, in this Article II.
(e) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.3(a) that remains unclaimed by the
holders of Shares one year after the Effective Time shall be returned
to Surviving Corporation, upon demand, and any such holder who has not
exchanged his Shares for the Merger Consideration in accordance with
this Section 2.3 prior to that time shall thereafter look only to the
Surviving Corporation for payment of the Merger Consideration in
respect of his Shares, without any interest thereon. Notwithstanding
the foregoing, Buyer, Merger Subsidiary and the Surviving Corporation
shall not be liable to any holder of Shares for any amount paid to a
public official pursuant to applicable abandoned property laws. Any
amounts remaining unclaimed by holders of Shares on the day
immediately prior to such time as such amounts would otherwise escheat
to or become property of any governmental entity shall, to the extent
permitted by applicable law, become the property of Buyer free and
clear of any claims or interest of any Person previously entitled
thereto.
(f) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.3(a) hereof to pay for Shares for
which appraisal rights have been perfected shall be returned to
Surviving Corporation upon demand.
SECTION 2.4 Dissenting Shares. Notwithstanding Section 2.2
hereof, Shares issued and outstanding immediately prior to the
Effective Time and held by a holder who has properly exercised and
perfected appraisal rights under Section 262 of the DGCL (the
"Dissenting Shares"), shall not be converted into the right to receive
the Merger Consideration, but the holders of Dissenting Shares shall
be entitled to receive such consideration as shall be determined
pursuant to Section 262 of the DGCL; provided, however, that if any
such holder shall have failed to perfect or shall withdraw or lose his
right to appraisal and payment under the DGCL, such holder's Shares
shall thereupon be deemed to have been
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converted as of the Effective Time into the right to receive the
Merger Consideration, without any interest thereon, and such Shares
shall no longer be Dissenting Shares. The Company shall give Buyer (i)
prompt notice of any written demands for appraisal, withdrawals of
demands for appraisal and any other instruments served pursuant to the
DGCL received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal
under the DGCL. The Company will not voluntarily make any payment with
respect to any demands for appraisal and will not, except with the
prior written consent of Buyer, settle or offer to settle any such
demands.
SECTION 2.5 Stock Options. (a) Immediately prior to the Effective
Time, each outstanding employee or director stock option (an "Option")
to purchase Shares granted under the 1983 Incentive Stock Option Plan,
the 1993 Incentive Stock Option Plan, the 1993 Non-Employee Directors
Stock Option Plan or the 1996 Non-Employee Directors Stock Option Plan
(collectively, the "Option Plans") or any other compensation plan or
arrangement of the Company shall be canceled, and each holder of any
such Option, whether or not then vested or exercisable, shall be paid
by the Company at the Effective Time for each such Option an amount
determined by multiplying (i) the excess, if any, of the Merger
Consideration over the applicable exercise price of such Option by
(ii) the number of Shares such holder could have purchased (assuming
full vesting of all Options) had such holder exercised such Option in
full immediately prior to the Effective Time.
(b) Prior to the Effective Time, the Company shall use its best
efforts (i) to obtain any consents from holders of Options and (ii)
make any amendments to the terms of the Option Plans or compensation
plans or arrangements, to the extent such consents or amendments are
necessary to give effect to the transactions contemplated by Section
2.5(a). Notwithstanding any other provision of this Section 2.5,
payment may be withheld in respect of any Option until necessary
consents are obtained.
(c) The Company shall promptly amend the 1994 Employee Stock
Purchase Plan to provide for (i) the suspension of participation
during any offering periods commencing subsequent to the date of this
agreement for the pendency of the Merger and subject to the successful
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consummation of the Merger and (ii) the termination of the 1994
Employee Stock Purchase Plan as of the Effective Time.
SECTION 2.6 Merger Without Meeting of Stockholders.
Notwithstanding Section 6.2 hereof, in the event that Buyer, Merger
Subsidiary or any other subsidiary of Buyer shall acquire at least 90%
of the outstanding shares of each class of capital stock of the
Company, pursuant to the Offer or otherwise, the parties hereto agree
to take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with
Section 253 of the DGCL.
SECTION 2.7 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., New York City time, on a date to be
specified by the parties hereto, which shall be no later than the
third business day after satisfaction or waiver of all of the
conditions set forth in Article IX hereof (the "Closing Date"), at the
offices of Weil, Gotshal & Xxxxxx LLP in New York, New York unless
another time, date or place is agreed to in writing by the parties
hereto.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1 Certificate of Incorporation. The certificate of
incorporation of Merger Subsidiary in effect at the Effective Time
shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended in accordance with applicable law or such
certificate of incorporation.
SECTION 3.2 Bylaws. The by-laws of Merger Subsidiary in effect at
the Effective Time shall be the by-laws of the Surviving Corporation
until thereafter amended in accordance with applicable law, the
certificate of incorporation or such by-laws.
SECTION 3.3 Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, the directors of Merger Subsidiary at
the Effective Time shall be the initial directors of the
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Surviving Corporation and the officers of Merger Subsidiary at the
Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly
elected and appointed or qualified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer and Merger
Subsidiary that:
SECTION 4.1 Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and except as set forth on
Schedule 4.1 of the Company Disclosure Schedule, has all corporate
powers and all governmental licenses, authorizations, consents and
approvals (collectively, "Licenses") required to carry on its business
as now conducted except where the failure to have any such License,
individually or in the aggregate, would not have a Material Adverse
Effect (as defined below). The Company is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified,
individually or in the aggregate, would not have a Material Adverse
Effect. As used herein, the term "Material Adverse Effect" means a
material adverse effect on the condition (financial or otherwise),
business, assets, prospects or results of operations of the Company
and its Subsidiaries (as defined in Section 4.6) taken as a whole, or
the Buyer and the Merger Subsidiary, as the case may be, that is not a
result of general changes in the economy or the industries in which
such entities operate, provided, however, that "prospects" shall not
include the prospects of the Company's IT and Consultancy Services
businesses. The Company has heretofore delivered or made available to
Buyer true and complete copies of the Company Certificate of
Incorporation and Company By-laws as currently in effect. In all
material respects, the minute books of the Company contain accurate
records of all meetings and accurately reflect all other actions taken
by the stockholders, the board of directors
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and all committees of the board of directors of the Company. Complete
and accurate copies of all such minute books and of the stock register
of the Company have been made available by the Company to Buyer.
SECTION 4.2 Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby are within the
Company's corporate powers and, except for any required approval by
the Company's stockholders in connection with the consummation of the
Merger, have been duly authorized by all necessary corporate action.
This Agreement, assuming due and valid authorization, execution and
delivery by the other parties hereto, constitutes a legal, valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except that (i) enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors'
rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 4.3 Governmental Authorization. Except as set forth in
Schedule 4.3 of the Company Disclosure Schedule, the execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby
require no action by or in respect of, or filing with, any
governmental body, agency, official or authority (each, a
"Governmental Entity") other than: (i) the filing of a certificate of
merger in accordance with the DGCL; (ii) compliance with any
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"); (iii) compliance with any
applicable requirements of the Exchange Act; (iv) compliance with the
applicable requirements of state blue sky laws; (v) compliance with
the applicable requirements of any applicable takeover laws and (vi)
such other actions by or in respect of, or filings with, the failure
of which to obtain or make, individually or in the aggregate, would
not have a Material Adverse Effect and which would not materially
impair the ability of the Company to consummate the transactions
contemplated hereby.
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SECTION 4.4 Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby do not and will
not (i) contravene or conflict with the Certificate of Incorporation
or By-laws of the Company or any Subsidiary, (ii) except as set forth
in Schedule 4.4 of the Company Disclosure Schedule and assuming
compliance with the matters referred to in Section 4.3 hereof,
contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or any Subsidiary of the Company,
(iii) except as set forth in Schedule 4.4 of the Company Disclosure
Schedule, with or without the giving of notice or passage of time or
both, constitute a material default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation
of the Company or any Subsidiary of the Company or to a material loss
of any benefit to which the Company or any Subsidiary of the Company
is entitled under any provision of any agreement, contract or other
instrument binding upon the Company or any Subsidiary of the Company
or any license, franchise, permit or other similar authorization held
by the Company or any Subsidiary of the Company, or (iv) result in the
creation or imposition of any Lien (as defined below) on any asset of
the Company or any Subsidiary of the Company, excluding from the
foregoing clauses (ii), (iii) or (iv), such violations, breaches,
defaults or Liens, individually or in the aggregate, which would not
have a Material Adverse Effect. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
SECTION 4.5 Capitalization. The authorized capital stock of the
Company consists of 15,000,000 Shares and 1,000,000 shares of
preferred stock (the "Preferred Stock"). As of December 16, 1998,
there were (i) 4,898,447 Shares issued and outstanding; (ii) 214,663
Shares held in the Company's treasury; and (iii) no shares of
Preferred Stock issued and outstanding. As of December 16, 1998, there
were (i) options outstanding pursuant to the 1996 Non-Qualified
Non-Employee Directors Stock Option Plan ("the 1996 Plan") to acquire
an aggregate of 22,000 Shares, at an exercise price of $15.00; (ii)
options outstanding pursuant to the 1993 Non-Qualified Non-Employee
Directors Stock Option Plan ("the 1993 Plan") to acquire an aggregate
of 11,600 Shares, with an
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exercise price range of a minimum exercise price of $3.53 and a
maximum exercise price of $16.00; additional options outstanding
granted to non-employee directors to acquire an aggregate of 48,000
Shares, with an exercise price range of a minimum exercise price of
$2.05 and a maximum exercise price of $5.38; and additional options
outstanding granted to certain officers of the Company to acquire an
aggregate of 25,000 Shares, with an exercise price of $5.75. Schedule
4.5 of the Company Disclosure Schedule accurately sets forth
information regarding the exercise price, date of grant and number of
granted options for each holder of options pursuant to the 1993
Qualified Stock Option Plan and the 1983 Qualified Stock Option Plan
(the "Qualified Plans"). As of December 16, 1998, there were options
outstanding pursuant to the Qualified Plans to acquire an aggregate of
552,450 Shares for a total of 659,050 Shares under all plans. All
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section 4.5, and except for changes since
December 16, 1998 resulting from the exercise of employee options
outstanding on such date, there are outstanding (i) no shares of
capital stock or other voting securities of the Company, (ii) no
securities of the Company or of any Subsidiary of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) except as set forth on Schedule 4.5
of the Company Disclosure Schedule, no options, warrants, calls,
subscriptions or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company, (iv) no outstanding
contractual obligations or commitments of any character restricting
the transfer of, or requiring the registration for sale of, any
capital stock of the Company, (v) no outstanding contractual
obligations or commitments of any character granting any preemptive or
antidilutive right with respect to, any capital stock of the Company
and (vi) no voting trusts or similar agreements to which the Company
is a party with respect to the voting of the capital stock of the
Company (the items in clauses (i), (ii) and (iii) being referred to
collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any Subsidiary of the Company to
repurchase, redeem or otherwise acquire any Company Securities.
Neither the Company nor any Subsidiary of the Company has issued any
stock appreciation
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right or similar payment obligation based on the value of the
Company's common equity.
SECTION 4.6 Subsidiaries. (a) Each Subsidiary of the Company (a
"Subsidiary") (i) is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, (ii) except as set forth in Schedule 4.6(a) of the
Company Disclosure Schedule, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and (iii) except as set
forth in Schedule 4.6(a) of the Company Disclosure Schedule, is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such
qualification necessary, except in each case to the extent the failure
of this representation and warranty to be true would not have a
Material Adverse Effect. The Company has heretofore delivered or made
available to Buyer a complete and correct copy of the charter and
bylaws of each Subsidiary of the Company, as currently in effect. In
all material respects, the minute books of each Subsidiary of the
Company contain accurate records of all meetings and accurately
reflect all other actions taken by the stockholders, the boards of
directors and all committees of the boards of directors of each
Subsidiary of the Company. Complete and accurate copies of all such
minute books and of the stock register of each Subsidiary of the
Company have been made available to the Buyer. For purposes of this
Agreement, "Subsidiary" means with respect to any Person, any
corporation or other legal entity of which such Person owns, directly
or indirectly, more than 50% of the outstanding stock or other equity
interests, the holders of which are entitled to vote for the election
of the board of directors or other governing body of such corporation
or other legal entity. All Subsidiaries and their respective
jurisdictions of incorporation are identified on Schedule 4.6 of the
Company Disclosure Schedule.
(b) Each outstanding share of capital stock of each Subsidiary of
the Company has been duly and validly authorized and issued and is
fully paid and nonassessable. Except as set forth in Schedule 4.6(b)
each outstanding share of capital stock of each Subsidiary is
owned by the Company and/or one or more of its Subsidiaries and such
shares are owned free and clear of any Liens. There are no
subscriptions, options,
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warrants, calls, rights, convertible securities or other agreements or
commitments of any character relating to the issuance, transfer, sale,
delivery, voting or redemption (including any rights of conversion or
exchange under any outstanding security or other instrument) for, any
of the capital stock or other equity interests of any of such
Subsidiaries. There are no agreements requiring the Company or any of
its Subsidiaries to make contributions to the capital of, or lend or
advance funds to, any Subsidiaries of the Company.
SECTION 4.7 SEC Documents. The Company has filed all required
reports, proxy statements, forms and other documents with the SEC
since October 1, 1996 ("Company SEC Documents"). As of their
respective dates, to the knowledge of the Company, (i) the Company SEC
Documents complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such SEC Documents, and (ii)
none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading.
SECTION 4.8 Financial Statements, No Undisclosed Liabilities. The
financial statements of the Company included in the Company SEC
Documents (i) comply as to form in all material respects with all
applicable requirements of the Securities Act and the Exchange Act,
(ii) are in conformity with United States generally accepted
accounting principles ("GAAP"), applied on a consistent basis (except
in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) during the periods involved (except as may be indicated in the
related notes and schedules thereto) and (iii) fairly present in all
material respects the consolidated financial position of the Company
and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in Schedule
4.8 of the Company Disclosure Schedule and except as set forth in the
Company SEC Documents filed and publicly available prior to the date
of this Agreement, and except for liabilities and obligations incurred
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in the ordinary course of business consistent with past practices
since the date of the most recent consolidated balance sheet included
in the Company SEC Documents filed and publicly available prior to the
date of this Agreement, neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by GAAP to be
set forth on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes thereto. To the knowledge of
the Company the books and records of the Company and its Subsidiaries
have been, and are being, maintained, in all material respects, in
accordance with GAAP and any other applicable legal and accounting
requirements.
SECTION 4.9 Disclosure Documents. (a) Each document required to
be filed by the Company with the SEC in connection with the
transactions contemplated by this Agreement (the "Company Disclosure
Documents"), including, without limitation, the Schedule 14D-9 will,
when filed, comply as to form in all material respects with the
applicable requirements of applicable law, including without
limitation, the Exchange Act. The Company Disclosure Documents will
not at the time of the filing thereof, at the time of any distribution
thereof or at the time of consummation of the Offer, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided
that this representation and warranty will not apply to statements or
omissions in the Company Disclosure Documents based upon information
furnished to the Company in writing by Buyer and Merger Subsidiary
specifically for use therein.
(b) The information with respect to the Company or any Subsidiary
of the Company that the Company furnishes to Buyer and Merger
Subsidiary in writing specifically for use in the Offer Documents will
not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made
not misleading in the case of any of the Offer Documents, at the time
of the filing thereof and at the time of any distribution thereof.
SECTION 4.10 Absence of Certain Changes. Except as disclosed in
the Company SEC Documents filed by the Company and as set forth in
Schedule 4.10 of the
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Company Disclosure Schedule, the Company and its Subsidiaries have
conducted their business in the ordinary course of business and there
has not been since December 31, 1997:
(a) any event, occurrence or facts (whether or not in the
ordinary course of business) which, individually or in the
aggregate, has had or reasonably could be expected to have a
Material Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend (other than regular quarterly dividends) or other
distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by
the Company or any Subsidiary of the Company of any outstanding
shares of capital stock or other securities of, or other
ownership interests in, the Company or any Subsidiary of the
Company;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary of the Company;
(d) any incurrence, assumption or guarantee by the Company
or any Subsidiary of the Company of any indebtedness for borrowed
money other than in the ordinary course of business;
(e) any creation or assumption by the Company or any
Subsidiary of the Company of any Lien on any asset other than in
the ordinary course of business and other than Liens which do not
have and could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than advances to employees
in the ordinary course of business not in excess of customary
amounts and loans, advances or capital contributions to or
investments in wholly-owned Subsidiaries of the Company made in
the ordinary course of business;
(g) any damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of
the Company or any Subsidiary of the Company which individually
or in the
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aggregate, has had or could reasonably be expected to have a
Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary of the
Company relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment
by the Company or any Subsidiary of the Company of any contract
or other right, in either case, that have had or could reasonably
be expected individually or in the aggregate, to have a Material
Adverse Effect, other than transactions and commitments in the
ordinary course of business and those contemplated by this
Agreement;
(i) any change in any method of accounting or accounting
practice by the Company or any Subsidiary of the Company, except
for any such change required by reason of a concurrent change in
GAAP;
(j) any transaction, agreement or understanding between the
Company or any Subsidiary of the Company on the one hand and any
current director or officer of the Company or any Subsidiary of
the Company or any transaction which would be subject to proxy
statement disclosure under the Exchange Act pursuant to the
requirements of Item 404 of Regulation S-K (an "Affiliate
Transaction");
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary of
the Company, (ii) employment, deferred compensation or other
similar agreement (or any amendment to any such existing
agreement) with any director, officer or employee of the Company
or any Subsidiary of the Company entered into, (iii) increase in
benefits payable under any existing severance or termination pay
policies or employment agreements or (iv) increase in
compensation, bonus or other benefits payable to directors,
officers or employees of the Company or any Subsidiary of the
Company, in each case, other than in the ordinary course of
business not in excess of customary amounts; or
(l) authorization of, or committing or agreeing to take any
of, the foregoing actions except as otherwise permitted by this
Agreement.
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SECTION 4.11 Litigation. Except as set forth in either the
Company SEC Documents or in Schedule 4.11 of the Company Disclosure
Schedule, there is no action, suit, investigation or proceeding
pending against, or to the knowledge of the Company, threatened
against, the Company or any Subsidiary of the Company or any of their
respective properties before any court or arbitrator or any
Governmental Entity which, if determined or resolved adversely to the
Company or any Subsidiary of the Company in accordance with the
plaintiff's demands, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as
set forth in either the Company SEC documents or in Schedule 4.11 of
the Company Disclosure Schedule, neither the Company nor any
Subsidiary of the Company is subject to any outstanding order, writ,
injunction or decree which has had or, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect.
SECTION 4.12 Taxes. (a) Except as set forth on Schedule 4.12: (i)
the Company and each of its Subsidiaries has properly prepared and
filed or has had properly prepared and filed on its behalf in a timely
manner (within any applicable extension periods) with the appropriate
Governmental Entity all Tax Returns with respect to Taxes of the
Company or any of its Subsidiaries, or with respect to any Taxes for
which the Company or any such Subsidiary may be liable, other than
those Tax Returns the failure of which to file, individually or in the
aggregate, would not have a Material Adverse Effect; (ii) all Taxes
shown to be due and payable on all filed Tax Returns of or with
respect to the Company or any of its Subsidiaries have been paid in
full or have been properly provided for in the SEC Documents in
accordance with GAAP; (iii) there are no outstanding agreements or
waivers extending the statutory period of limitations applicable to
any federal, state, local or foreign income or other material Tax
Returns required to be filed by or with respect to the Company and its
Subsidiaries; (iv) none of the Tax Returns of or with respect to the
Company or any of its Subsidiaries is currently being audited or
examined by any Governmental Entity; and (v) no deficiency for any
income Taxes has been assessed with respect to the Company or any of
its Subsidiaries which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all
taxes, charges, fees, levies or
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other assessments, including, without limitation, income, gross
receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll,
employment, employer health, excise, estimated, severance, stamp,
occupation, property or other taxes, customs duties, fees, assessments
or charges of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts imposed by any
taxing authority and (ii) "Tax Return" shall mean any report, return,
documents, declaration or other information or filing required to be
supplied to any taxing authority or jurisdiction with respect to
Taxes.
SECTION 4.13 Employee Plans. (a) Schedule 4.13(a) of the Company
Disclosure Schedule lists all "employee benefit plans," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all other employee benefit plans or other
benefit arrangements, including but not limited to all employment and
consulting agreements and all bonus and other incentive compensation,
deferred compensation, disability, severance, retention, salary
continuation, vacation, stock award, stock option, stock purchase,
collective bargaining or workers' compensation agreements, plans,
policies and arrangements which the Company or any trade or business,
whether or not incorporated (an "ERISA Affiliate"), that together with
the Company would be deemed a "single employer" within the meaning of
Section 4001(b) of ERISA, maintains, is a party to, has contributed to
or has any obligation to or liability for current or former employees
and directors of the Company (each an "Employee Benefit Plan" and
collectively, the "Employee Benefit Plans"). Schedule 4.13(a)
separately identifies each of such plans and arrangements Employee
Benefit Plan subject to Title IV of ERISA.
(b) True, correct and complete copies of the following documents
with respect to each of the Employee Benefit Plans (as applicable)
have been delivered or made available to Buyer: (i) the most recent
plan, document or agreement, related trust documents and all
amendments thereto, (ii) the most recent summary plan description and
all related summaries of material modifications, (iii) the annual
report on Form 5500 and attached schedules filed with the Internal
Revenue Service in the last three years, (iv) the most recent
actuarial report, (v) the most recent Internal Revenue Service
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determination letter, and (vi) a description of any nonwritten
Employee Benefit Plan.
(c) Except as would not, individually or in the aggregate, have a
Material Adverse Effect on the Company, (i) all payments required to be
made by or under any Employee Benefit Plan, any related trusts, or any
collective bargaining agreement have been timely made; (ii) the Company and
its ERISA Affiliates have performed all material obligations required to be
performed by them under any Employee Benefit Plan; (iii) the Employee
Benefit Plans comply in all respects and have been maintained in compliance
with their terms and the requirements of ERISA, the Code and other
applicable laws; and (iv) there are no actions, suits, arbitrations or
claims (other than routine claims for benefits) pending or, to the
knowledge of the Company, threatened with respect to any Employee Benefit
Plan.
(d) The Company and its ERISA Affiliates have not incurred any
unsatisfied withdrawal liability with respect to any "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
(e) Each Employee Benefit Plan and its related trust which are
intended to be "qualified" within the meaning of Sections 401(a) and 501(a)
of the Internal Revenue Code of 1986, as from time to time amended (the
"Code"), respectively, have been determined by the Internal Revenue
Service to be so "qualified" under such Sections, as amended by the Tax
Reform Act of 1986, and the Company knows of no fact which would adversely
affect the qualified status of any such Employee Benefit Plan and its
related trust.
(f) Except as set forth on Schedule 4.13(f) of the Company Disclosure
Schedule, or as contemplated by this Agreement, neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in any payment becoming due, or
increase the amount of compensation due, to any current or former employee
or director of the Company or any of its subsidiaries; (ii) increase any
benefits otherwise payable under any Employment Benefit Plan; or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
(g) No Employee Benefit Plan has an "accumulated funding deficiency"
within the meaning of
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Section 302 of ERISA or Section 412 of the Code, nor has any waiver of the
minimum funding standards of Section 302 of ERISA and Section 412 of the
Code been requested of or granted by the Internal Revenue Service with
respect to any Employee Benefit Plan, nor has any lien in favor of any such
plan arisen under Section 412(n) of the Code or Section 302(f) of ERISA.
(h) The "benefits liabilities," as defined in Section 4001(a)(16)
of ERISA, of each of the Employee Benefit Plans subject to Title IV of
ERISA using the actuarial assumptions that were used in the most recent
actuarial valuation (a true and complete copy of which has been provided to
Buyer) in the event it terminated each such plan, do not exceed the fair
market value of the assets of each such plan.
(i) No stock or other security issued by the Company forms or has
formed a material part of the assets of any Employee Benefit Plan.
(j) No Employee Benefit Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
current or former employees or directors of the Company or any of its ERISA
Affiliates for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable
Laws, (ii) death benefits under any "pension plan" as defined in Section
3(2) of ERISA, or (iii) benefits, the full cost of which is borne by such
current or former employee or director (or his or her beneficiary).
SECTION 4.14 Labor Matters. Except to the extent set forth in Schedule
4.14 of the Disclosure Schedule (i) there is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or threatened, to the
knowledge of the Company, against the Company or any Subsidiary of the
Company and during the past three years there has not been any such action;
(ii) to the knowledge of the Company, there is no current union organizing
activities among the employees of the Company or any Subsidiary of the
Company nor does any question concerning representation exist concerning
such employees; (iii) there is no unfair labor practice charge or complaint
against the Company or any Subsidiary of the Company pending or, to the
knowledge of the Company, threatened before the National Labor Relations
Board or any similar state or foreign agency; (iv) there is no
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grievance pending relating to any collective bargaining agreement or other
grievance procedure; (v) to the knowledge of the Company, no charges with
respect to or relating to the Company or any Subsidiary of the Company are
pending before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices; and
(vi) there are no collective bargaining agreements, employment contracts or
severance agreements with any union or any employees of the Company or any
Subsidiary of the Company.
SECTION 4.15 Compliance with Laws. Except as set forth in Schedule
4.11 (as applicable) and Schedule 4.15 of the Company Disclosure Schedule,
the Company and its Subsidiaries are in compliance in all material respects
with all laws, statutes, ordinances or regulations except where such
violations, individually or in the aggregate, would not have a Material
Adverse Effect.
SECTION 4.16 Finders' Fees. Except for DLJ, there is no investment
banker, broker, finder or other intermediary which has been retained by or
is authorized to act on behalf, of the Company or any Subsidiary of the
Company who would be entitled to any fee or commission from the Company,
any Subsidiary of the Company, Buyer or any of Buyer's affiliates upon
consummation of the transactions contemplated by this Agreement. Other than
the fee payable to DLJ pursuant to the agreement between DLJ and the
Company dated September 2, 1997, as amended April 15, 1998 (the "DLJ
Letter"), the Company has no obligations or Commitments to any investment
banker or financial advisor in connection with any future transactions that
may be considered or entered into by the Company after the Effective Time.
SECTION 4.17 Environmental Matters. (a) Except as set forth in the
Company SEC Documents or in Schedule 4.17 of the Company Disclosure
Schedule:
(i) to the Company's knowledge, the Company is and for the past
five years has been in material compliance with Environmental Laws and
possesses all permits, authorizations, licenses or approvals required
by Environmental Laws and necessary for the operation of the Company
and each of its Subsidiaries;
(ii) the Company has not received any written communication from
any person or entity
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(including any Governmental Entity) stating or alleging that the
Company or any of its Subsidiaries is in violation of or may have
liability under Environmental Law (as defined in Section 4.17(c)
hereof) with respect to any actual or alleged environmental
contamination, which if adversely determined could reasonably be
expected to result in the Company or any of its Subsidiaries incurring
material liability under Environmental Laws; neither the Company nor
its Subsidiaries nor, to the Company's knowledge, any Governmental
Entity is conducting or has conducted any environmental remediation or
environmental investigation which could reasonably be expected to
result in liability for the Company or its Subsidiaries under
Environmental Law; and the Company and its Subsidiaries have not
received any request for information under Environmental Law from any
Governmental Entity with respect to any actual or alleged
environmental contamination, except, in each case, for communications,
environmental remediation and investigations and requests for
information which would not, individually or in the aggregate,
reasonably be expected to result in the Company or any of its
Subsidiaries incurring material liability under Environmental Laws;
(iii) since January 1, 1998, the Company and its Subsidiaries
have not received any written communication from any person or entity
(including any Governmental Entity) stating or alleging that the
Company or its Subsidiaries may have violated any Environmental Law,
or that the Company or its Subsidiaries has caused or contributed to
any environmental contamination that has caused any property damage or
personal injury under Environmental Law, except, in each case, for
statements and allegations of violations and statements and
allegations of responsibility for property damage and personal injury
which would not, individually or in the aggregate, result in the
Company or any of its Subsidiaries incurring material liability under
Environmental Laws;
(iv) the Company and its Subsidiaries are not aware of any facts,
circumstances or conditions arising out of or related to the Company
or its Subsidiaries or to any real property currently or formerly
owned, operated or leased by or for the Company or its Subsidiaries,
which could reasonably
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be expected to result in the Company or its Subsidiaries incurring
material liability under Environmental Laws; and
(v) to the knowledge of the Company, the transactions
contemplated by this Agreement do not trigger the New Jersey
Industrial Site Recovery Act or any similar environmental property
transfer law;
(b) (i) The Company has provided Buyer with true and correct copies of
any and all material environmental investigation, study, audit, test,
review and other analysis in the possession of the Company or its
Subsidiaries conducted in relation to the business of the Company or any
property or facility now or previously owned, operated or leased by the
Company or any Subsidiary; and (ii) the Company has not knowingly withheld
from Buyer any consent decree, consent order or similar document in force
and to which it is a party relating to any property currently owned, leased
or operated by the Company or its Subsidiaries.
(c) For purposes of this Section 4.17, "Environmental Law" means all
applicable state, federal and local laws, regulations and rules, including
common law, judgments, decrees and orders relating to pollution, the
preservation of the environment, and the release of material into the
environment.
SECTION 4.18 Property. The Company and its Subsidiaries, as the case
may be, have good and valid title to, or in the case of leased property,
have valid leasehold interests in all properties and assets necessary to
conduct the business of the Company as currently conducted, free and clear
of all Liens or encumbrances of any nature whatsoever, except (i) any Lien
for current Taxes, payments of which are not yet delinquent, (ii) such
imperfections in title, easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present use of the property subject
thereto or affected thereby, or otherwise materially impair the Company's
business operations or (iii) as disclosed in the Company SEC Documents.
There are no developments affecting any of such properties or assets
pending or, to the knowledge of the Company threatened, which, could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
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SECTION 4.19 Trademarks. (a) The Company and its Subsidiaries own or
possess adequate licenses or other valid rights to use all trademarks,
trademark rights, copyrights, patents, software, trade names and trade name
rights which are material to the Company's business and operations
(collectively, "Material Trademarks") used or held for use in connection
with the business of the Company and the Subsidiaries as currently
conducted in all material respects. Except set forth in Schedule 4.19(a),
all Material Trademarks are validly registered or registrations have been
applied for.
(b) The Company, except as set forth in Schedule 4.19(b) of the
Company Disclosure Schedule, is unaware of any assertion or claim
challenging the validity of any Material Trademark. Except as set forth in
Schedule 4.19(b) of the Company Disclosure Schedule, the conduct of the
business of the Company and its Subsidiaries as currently conducted does
not conflict with any trademark, trademark right, copyright, patent,
software license, trade name or trade name right of any third party in a
manner that could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect. To the knowledge of the Company, there
are no material infringements of any Material Trademarks.
SECTION 4.20 Material Contracts. (a) Except as set forth on Schedule
4.20 of the Company Disclosure Schedule, the Company SEC Documents list all
Material Contracts (as defined below) of the Company, and except as set
forth on Schedule 4.20 of the Company Disclosure Schedule or in the Company
SEC Documents, to the knowledge of the Company, each Material Contract is
valid, binding and enforceable and in full force and effect; except where
such failure to be valid, binding and enforceable and in full force and
effect, individually or in the aggregate, would not have a Material Adverse
Effect, and there are no defaults thereunder, except those defaults that,
individually or in the aggregate, would not have a Material Adverse Effect.
For purposes of this Agreement, "Material Contracts" shall mean (i) all
contracts, agreements or understandings with customers of the Company and
its Subsidiaries in the last fiscal year where each customers' contracts,
agreements or understandings in the aggregate account for more than $3
million of the Company's annual revenues; (ii) all acquisition, merger,
asset purchase or sale agreements entered into and not rescinded by the
Company in the last two fiscal years with a transaction value in excess of
$3
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million; and (iii) any other agreement within the meaning set forth in
Item 601(b)(10) Regulation S-K of Title 17, Part 229 of the Code of Federal
Regulations. The Company has previously made available to the Buyer true
and correct copies of the Material Contracts.
SECTION 4.21 Insurance. Schedule 4.21 of the Company Disclosure
Schedule sets forth the insurance policies and programs maintained by the
Company.
SECTION 4.22 Year 2000 Compliance. As set forth on Schedule 4.22 of
the Company Disclosure Schedule, the Company has a remediation program
which it presently believes will result in all Date Data and Date Sensitive
Systems of the Company and each Subsidiary of the Company being Year 2000
Compliant prior to December 31, 1999. "Date Data" means any data of any
type that includes date information or which is otherwise derived from,
dependent on or related to date information. "Date-Sensitive System" means
any software, microcode or hardware system or component, including any
electric or electronically controlled system or component, that processes
any Date Data and that is installed, in development or on order by the
Company or any Subsidiary of the Company for their internal use, or which
the Company or any Subsidiary of the Company sells, leases, licenses,
assigns or otherwise provides, or the provision or operation of which the
Company and any Subsidiary of the Company provides the benefit, to its
customers, vendors, suppliers, affiliates or any other third party. "Year
2000 Compliant" means (i) with respect to Date Data, that such data is in
proper format and accurate for all dates in the twentieth and twenty-first
centuries, and (ii) with respect to Date-Sensitive Systems, that each such
system accurately processes all Date Data, including for the twentieth and
twenty-first centuries, without loss of any functionality or performance,
including but not limited to calculating, comparing, sequencing, storing
and displaying such Date Data (including all leap year considerations),
when used as a stand-alone system or in combination with other software or
hardware.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
Buyer and Merger Subsidiary represent and warrant to the Company that:
SECTION 5.1 Corporate Existence and Power. Each of Buyer and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and except as
set forth on Schedule 5.1 of the disclosure schedule delivered by Buyer and
Merger Subsidiary attached hereto (the "Buyer Disclosure Schedule"), has
all corporate powers and all Licenses required to carry on its business as
now conducted except where the failure to have any such License would not,
individually or in the aggregate, have a Material Adverse Effect. Each of
Buyer and Merger Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect. Each of Buyer and
Merger Subsidiary has heretofore delivered or made available to the Company
true and complete copies of the Buyer's and Merger Subsidiary's Certificate
of Incorporation and By-laws as currently in effect.
SECTION 5.2 Corporate Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary corporate action.
This Agreement, assuming due and valid authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding
agreement of each of Buyer and Merger Subsidiary except that (i)
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the
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discretion of the court before which any proceeding therefor may be
brought.
SECTION 5.3 Governmental Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated by this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other
than (i) the filing of a certificate of merger in accordance with the DGCL;
(ii) compliance with any applicable requirements of the HSR Act; and (iii)
compliance with any applicable requirements of the Exchange Act.
SECTION 5.4 Non-Contravention. The execution, delivery and performance
by Buyer and Merger Subsidiary of this Agreement and the consummation by
Buyer and Merger Subsidiary of the transactions contemplated hereby do not
and will not (i) contravene or conflict with the certificate of
incorporation or by-laws of Merger Subsidiary or Buyer, (ii) assuming
compliance with the matters referred to in Section 5.3 hereof, contravene
or conflict or constitute a violation of any provision of law, regulation,
judgment, injunction, order or decree binding upon or applicable to Buyer
or Merger Subsidiary, or (iii) with or without the giving of notice or
passage of time or both, constitute a material default under or give rise
to a right of termination, cancellation or acceleration of any right or
obligation of Buyer or Merger Subsidiary or to a material loss of any
benefit to which Buyer or Merger Subsidiary or any license, franchise,
permit or other similar authorization held by Buyer or Merger Subsidiary,
or (iv) result in the creation or imposition of any Lien on any asset of
Buyer or Merger Subsidiary excluding from the foregoing clauses (ii),
(iii) or (iv) such violations, breaches, defaults or Liens which would not
have a Material Adverse Effect, and which will not materially impair the
ability of Buyer and Merger Subsidiary to consummate the transactions
contemplated hereby.
SECTION 5.5 Disclosure Documents. (a) The information with respect to
Buyer and its Subsidiaries and Merger Subsidiary that Buyer and Merger
Subsidiary furnish to the Company in writing specifically for use in any
Company Disclosure Document will not contain, any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements
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made therein, in the light of the circumstances under which they were
made, not misleading (i) in the case of the Company Proxy Statement
(defined in Section 6.2 herein), at the time the Company Proxy Statement or
any amendment or supplement thereto is first mailed to stockholders of the
Company, at the time the stockholders vote on adoption of this Agreement
and at the Effective Time, and (ii) in the case of any Company Disclosure
Document other than the Company Proxy Statement, at the time of the filing
thereof, at the consummation of the Offer and at the time of any
distribution thereof.
(b) The Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the Exchange Act. The
Offer Documents will not at the time of the filing thereof, at the time of
any distribution, publication or any mailing thereof or at the time of
consummation of the Offer, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty will not apply
to statements or omissions in the Offer Documents based upon information
furnished to Buyer or Merger Subsidiary in writing by the Company
specifically for use therein.
SECTION 5.6 Finders' Fees. There is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
in connection with or upon consummation of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Buyer or
Merger Subsidiary.
SECTION 5.7 Financing. Buyer has provided to the Company copies of an
equity commitment letter from Onex Corporation satisfactory to the Company.
Buyer and Merger Subsidiary have or will have, prior to the expiration of
the Offer and prior to the Effective Time, sufficient funds available to
purchase all of the Shares outstanding on a fully diluted basis and to pay
all related fees and expenses pursuant to the Offer and the Merger and this
Agreement.
SECTION 5.8 Solvency. At and following the expiration date of the
Offer and at the Closing Date, each of Buyer and Merger Subsidiary, in each
case together with their respective Subsidiaries, will be, on a
consolidated basis, Solvent after giving effect to the
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purchase and sale of the Shares and any other transactions contemplated
hereby or by Merger Subsidiary or any of its affiliates on such date or
which would be otherwise taken into account in determining whether the
purchase and sale of the Shares or any of the transactions contemplated
hereby were a fraudulent conveyance or impermissible dividend under
applicable law. For the purpose of the representation and warranty
contained in this Section, Buyer shall be entitled to assume that the
representations and warranties of the Company regarding its liabilities on
a consolidated basis are true and correct in all material respects.
SECTION 5.9 Share Ownership. As of the date hereof, Buyer and Merger
Subsidiary do not own any Shares.
SECTION 5.10 Merger Subsidiary's Operations. Merger Subsidiary was
formed solely for the purpose of engaging in the transactions contemplated
hereby and has not engaged in any business activities or conducted any
operations other than in connection with the transactions contemplated
hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.1 Conduct of the Company. From the date hereof until the
Effective Time, the Company and its Subsidiaries shall conduct their
business in the ordinary course, consistent with past practices, and shall
use their best commercially reasonable efforts to preserve intact their
business organizations and relationships with third parties and to keep
available the services of their present officers, employees and business
associates. Without limiting the generality of the foregoing, other than
(i) in the ordinary course of business consistent with past practices, (ii)
as set forth on Schedule 6.1 of the Company Disclosure Schedule, (iii) as
specifically contemplated by this Agreement or (iv) with the written
consent of Buyer or Merger Subsidiary (such consent which shall not be
unreasonably withheld), from the date hereof until the Effective Time, the
Company will not:
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(a) declare, set aside or pay any dividend (other than regular
quarterly dividends) or other distribution with respect to any shares
of capital stock of the Company, or any repurchase, redemption or
other acquisition by the Company or any Subsidiary of the Company of
any outstanding shares of capital stock or other securities of, or
other ownership interests in, the Company or any Subsidiary of the
Company;
(b) issue or sell any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital
stock of any class of the Company or any Subsidiary of the Company,
other than issuances pursuant to the exercise of options outstanding
on the date hereof and disclosed on Schedule 4.5 of the Company
Disclosure Schedule;
(c) amend any material term of the certificate of incorporation,
by-laws or any outstanding security of the Company or any Subsidiary
of the Company;
(d) split, combine or reclassify its outstanding capital stock;
(e) incur, assume or guarantee by the Company or any Subsidiary
of the Company of any indebtedness for borrowed money;
(f) make any loan, advance or capital contribution to or invest
in any Person;
(g) cause or willfully permit any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the
business or assets of the Company or any Subsidiary of the Company
which has had or could reasonably be expected to have a Material
Adverse Effect;
(h) enter into any transaction, commitment, contract or agreement
by the Company or any Subsidiary of the Company relating to their
assets or business (including the acquisition or disposition of any
assets) or relinquish any contract or other right, in either case,
that have had or could reasonably be expected to have a Material
Adverse
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Effect, other than those contemplated by this Agreement;
(i) neither the Company nor any Subsidiary of the Company shall
pay, discharge, or satisfy any material claims, liabilities or other
obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary course of business, consistent with past
practices, of liabilities reflected or reserved against in the
consolidated financial statements of the Company or incurred since the
most recent date thereof pursuant to an agreement or transaction
described in this Agreement or incurred in the ordinary course of
business, consistent with past practices;
(j) neither the Company nor any Subsidiary of the Company will
amend or modify any existing Affiliate Transaction or enter into any
new Affiliate Transaction other than with the prior written consent of
the Buyer;
(k) change any method of accounting or accounting practice by the
Company or any Subsidiary of the Company, except for any such change
required by reason of a concurrent change in GAAP;
(l) (A) grant any severance or termination pay to any director,
officer or employee of the Company or any Subsidiary of the Company,
(B) enter into any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any Subsidiary of the
Company, (C) increase the benefits payable under any existing
severance or termination pay policies or employment agreements or (D)
increase the compensation, bonus or other benefits payable to any
director, officer or employee of the Company or any Subsidiary of the
Company; or
(m) authorize any of, or commit or agree to take any of, the
foregoing actions except as otherwise permitted by this Agreement.
SECTION 6.2 Stockholder Meeting; Proxy Material. The Company shall
cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly
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called and held as soon as reasonably practicable for the purpose of voting
on the approval and adoption of this Agreement and the Merger. The Board of
Directors of the Company shall recommend approval and adoption of this
Agreement and the Merger by the Company's stockholders; provided that the
Company's Board of Directors may withdraw, modify or change such
recommendation if it has determined, after consultation with outside legal
counsel to the Company, that such recommendation would likely be
inconsistent with the Board of Directors' fiduciary duties under applicable
law. In connection with such meeting, the Company (i) will promptly, after
the consummation of the Offer, prepare and file with the SEC, will use its
reasonable efforts to have cleared by the SEC and will thereafter mail to
its stockholders as promptly as practicable a proxy statement and all other
proxy materials for such meeting (the "Company Proxy Statement"), (ii) will
use its reasonable efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and
(iii) will otherwise comply in all material respects with all legal
requirements applicable to such meeting.
SECTION 6.3 Access to Information; Confidentiality Agreement. (a) From
the date hereof until the Effective Time, the Company will give Buyer, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access during normal business hours to the offices, properties,
books and records of the Company and the Subsidiaries of the Company, will
furnish to Buyer, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
Company's employees, counsel, financial advisors and independent auditors
to cooperate with Buyer in its investigation of the business of the Company
and the Subsidiaries of the Company; provided that all requests for
information, to visit plants or facilities or to interview the Company's
employees or agents should be directed to and coordinated with an executive
officer of the Company; and provided further that any information received
by Buyer or its representatives shall remain subject to the Confidentiality
Agreement dated December 3, 1998 between Buyer and the Company (the
"Confidentiality Agreement").
(b) The Company shall confer on a regular and frequent basis with one
or more designated representatives of Buyer to report operational matters
of materiality,
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the general status of ongoing operations and such other matters as Buyer
may reasonably request.
(c) The parties hereto agree that the Confidentiality Agreement shall
be hereby amended to provide that any provision therein which in any manner
limits, restricts or prohibits the voting or acquisition of Shares by Buyer
or any of its affiliates or the representation of Buyer's designees on the
Company's Board of Directors or which in any manner would be inconsistent
with this Agreement or the transactions contemplated hereby shall be
amended as of the date hereof to permit the acquisition of Shares pursuant
to the Offer and the Merger, the voting of Shares at the Company
Stockholder Meeting or to otherwise affect the transactions contemplated
hereby. The Confidentiality Agreement shall otherwise remain in full force
and effect.
SECTION 6.4 No Solicitation. From the date of this Agreement until the
termination of this Agreement, the Company and its Subsidiaries will not,
and the Company will use its reasonable efforts to ensure that the
respective officers, directors, employees, agents, advisors or other
representatives of the Company and its Subsidiaries will not, directly or
indirectly (i) solicit, initiate or encourage any Acquisition Proposal (as
defined below) or (ii) engage in negotiations or discussions with, or
disclose any nonpublic information relating to the Company or any
Subsidiary of the Company or afford access to the properties, books or
records of the Company or any Subsidiary of the Company to, any Person
concerning an Acquisition Proposal; provided that, if the Company's Board
of Directors determines in good faith, after consultation with outside
legal counsel to the Company, that the failure to engage in such
negotiations or discussions or provide such information would likely be
inconsistent with the Board of Directors' fiduciary duties under applicable
law, the Company may in response to an Acquisition Proposal, which must be
a Superior Proposal (as defined below), furnish information with respect to
the Company and its Subsidiaries pursuant to a confidentiality agreement
and participate in negotiations and enter into agreements regarding such
Acquisition Proposal. The Company will promptly inform Buyer as to the fact
that information is to be provided and the identity of the third party
after receipt of any Acquisition Proposal and will keep Buyer informed of
the status and details of any such Acquisition Proposal, indication or
request. For purposes of this Agreement, "Acquisition
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Proposal" means any offer or proposal for a merger or other business
combination involving the Company or any Subsidiary of the Company or the
acquisition of any equity interest in, or a substantial portion of the
assets of, the Company or any Subsidiary of the Company, other than the
transactions contemplated by this Agreement. For purposes of this
Agreement, "Superior Proposal" means any bona fide Acquisition Proposal,
which proposal was not solicited by the Company after the date of this
Agreement, made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities (the value of any such
securities to be determined in good faith with the advice of a nationally
recognized investment banking firm) more than a majority of the Shares then
outstanding or all or substantially all of the assets of the Company, and
otherwise on terms which the Board of Directors of the Company determines
in good faith to be more favorable to the Company and its stockholders than
the Offer and the Merger (based on advice of the Company's financial
advisor that the value of the consideration provided for in such proposal
is superior to the value of the consideration provided for in the Offer and
Merger) and has a reasonable prospect of being consummated in accordance
with its terms. Furthermore, nothing contained in this Section 6.4 shall
prohibit the Company or its Board of Directors from taking and disclosing
to the Company's stockholders a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act or from making such disclosure to the
Company's stockholders or making such disclosure as may be required by
applicable law.
SECTION 6.5 Conveyance Taxes. The Company shall timely pay any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes (collectively, the "Conveyance Taxes") which
become payable prior to the Effective Time in connection with the
transactions contemplated hereunder that are required to be paid in
connection therewith.
SECTION 6.6 Directors Stock-Plan. Immediately prior to the acceptance
for payment by Merger Subsidiary of any Shares tendered pursuant to the
Offer, the Company shall amend the Company's 1996 Non-Qualified
Non-Employee Directors Stock Option Plan to provide that the Merger
Subsidiary's designees elected or appointed pursuant to
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Section 1.3 hereof shall not be entitled to receive any of the Company's
capital stock or other benefits under the Company's Directors Stock Plan.
ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.1 Obligations of Merger Subsidiary. Buyer will take all
action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Offer and the Merger on the
terms and conditions set forth in this Agreement.
SECTION 7.2 Voting of Shares. Merger Subsidiary shall and Buyer shall
cause Merger Subsidiary to vote all Shares beneficially owned by Merger
Subsidiary or its affiliates in favor of adoption and approval of the
Merger and this Agreement at the Company Stockholder Meeting.
SECTION 7.3 Director and Officer Insurance. (a) Buyer, Merger
Subsidiary and the Company agree that all rights to indemnification and all
limitations on liability existing in favor of any officer, director,
employee or agent of the Company and any of its subsidiaries (the
"Indemnitees") as provided in the Company Certificate of Incorporation,
Company By-laws or a Material Contract as in effect as of the date hereof
shall survive the Merger and continue in full force and effect. For five
years after the Effective Time, Buyer will, and will cause the Surviving
Corporation to, provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date
hereof. Buyer agrees that, should the Surviving Corporation fail to comply
with the obligations of this Section 7.3, Buyer shall be responsible
therefor. It is understood that the Indemnitees will seek to be reimbursed
for any liability or loss from such Indemnitee's liability insurance policy
prior to seeking any other reimbursement provided for herein, including
that referred to in the first sentence of this section.
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(b) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into
any other person or entity or (ii) transfers all or substantially all of
its properties or assets to any Person, then, and in each case, proper
provision shall be made so that successors and assigns of the Company or
the Surviving Corporation, as the case may be, honor the obligations set
forth in this Section 7.3 and the agreements set forth in Section 8.6(b)
hereof.
(c) The obligations of the Company, the Surviving Corporation, and
Buyer under this Section 7.3 and Section 8.6 hereof shall not be terminated
or modified in such a manner as to adversely affect any Person to whom this
Section 7.3 or Section 8.6 hereof applies without the consent of such
affected Person (it being expressly agreed that the Persons to whom this
Section 7.3 and Section 8.6(b) hereof applies shall be third party
beneficiaries of this Section 7.3 and Section 8.6(b) hereof).
SECTION 7.4 Investment Banking Fees. The Company has provided to Buyer
a copy of the DLJ Letter.
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
The parties hereto agree that:
SECTION 8.1 Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each party will use its reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement, and to
consummate the Merger by April 30, 1999. Nothing in this Section 8.1 or
otherwise in this Agreement shall prevent or restrict the Company from
entering into a definitive agreement with a third party in connection with
an Acquisition Proposal that the Board of Directors determines in good
faith, after Consultation with its legal counsel, is a Superior Proposal.
SECTION 8.2 Certain Filings. The Company and Buyer shall cooperate
with one another and use their best
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commercially reasonable efforts (a) in connection with the preparation of
the Company Disclosure Documents and the Offer Documents, and (b) in
determining whether any action by or in respect of, or filing with, any
Governmental Entity is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by
this Agreement and (c) in seeking promptly any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents
or the Offer Documents and seeking timely to obtain any such actions,
consents, approvals or waivers.
SECTION 8.3 Public Announcements. The initial press releases with
respect to the execution of this Agreement shall be approved in advance by
both Buyer and the Company. Buyer and the Company will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with
any national securities exchange or foreign securities exchange, will not
issue any such press release or make any such public statement prior to
such consultation.
SECTION 8.4 Conveyance Taxes. Buyer and the Company shall cooperate in
the preparation, execution and filing of all Tax Returns, questionnaires,
applications, or other documents regarding any Conveyance Taxes which
become payable in connection with the transactions contemplated hereunder
that are required or permitted to be filed on or before the Effective Time.
SECTION 8.5 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take
and do, in the name and on behalf of the Company or Merger Subsidiary, any
other actions and things to vest, perfect or confirm of record or otherwise
in the Surviving Corporation any and all right, title and interest in, to
and under any of the rights, properties or assets of the Company acquired
or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
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SECTION 8.6 Employee Matters. (a) For a period of one year
immediately following the Closing Date Buyer agrees to cause the Surviving
Corporation and its Subsidiaries to provide to all active employees of the
Company who continue to be employed by the Company as of the Effective Time
("Continuing Employees") coverage under existing benefit plans or
arrangements which is no less favorable than those provided to the
employees immediately prior to the Closing Date. During the second year
following the Closing Date, Buyer agrees to cause the Surviving Corporation
and its Subsidiaries to provide Continuing Employees coverage under benefit
plans and arrangements no less favorable in the aggregate than those
provided to the employees immediately prior to the Closing Date.
(b) Buyer shall, and shall cause its Subsidiaries to, honor in
accordance with their terms all agreements, contracts, arrangements,
commitments and understandings described in Schedule 8.6 of the Company
Disclosure Schedule.
SECTION 8.7 Stockholder Litigation. The Company and the Buyer agree
that in connection with any litigation which may be brought against the
Company or its directors relating to the transactions contemplated hereby,
the Company will keep Buyer, and any counsel which Buyer may retain,
informed of the course of such litigation, to the extent Buyer is not
otherwise a party thereto, and the Company agrees that it will consult with
Buyer prior to entering into any settlement or compromise of any such
stockholder litigation; provided that no such settlement or compromise will
be entered into without Buyer's prior written consent, which consent shall
not be unreasonably withheld.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1 Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction on or prior to the Effective Time of
the following conditions, except to the extent permitted by applicable law,
that such conditions may be waived:
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(i) if required by the DGCL, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such
Law;
(ii) any applicable waiting period under the HSR Act relating to
the Merger shall have expired;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Merger; and
(iv) Buyer or Merger Subsidiary shall have purchased the Shares
pursuant to the Offer.
ARTICLE X
TERMINATION
SECTION 10.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(i) by mutual written consent of the Company and Buyer;
(ii) by either the Company or Buyer, if the Offer has not been
consummated within 45 business days after the date of execution of
this Agreement (as such date may be extended pursuant to the proviso
to this sentence, the "Outside Termination Date"); provided, however,
that the right to terminate this Agreement under this paragraph shall
not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure to meet the date requirements of this paragraph;
(iii) by either the Company or Buyer, if there shall be any law
or regulation that makes consummation of the Merger illegal or if any
judgment, injunction, order or decree enjoining Buyer or the Company
from consummating the Merger is entered and such judgment, injunction,
order or decree shall become final and nonappealable;
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(iv) by the Company, if Buyer or Merger Subsidiary breaches or
fails in any material respect to perform or comply with any of its
material covenants and agreements contained herein or breaches its
representations and warranties in any material respect;
(v) by Buyer, if the Company breaches or fails in any material
respect to perform or comply with any of its material covenants and
agreements contained herein or breaches its representations and
warranties in any material respect; or
(vi) by either the Company or Buyer, upon the Company entering
into a definitive agreement in connection with an Acquisition Proposal
that the Board of Directors determines in good faith, after
consultation with its legal counsel is a Superior Proposal.
The party desiring to terminate this Agreement pursuant to clauses (ii),
(iii), (iv) or (v) shall give written notice of such termination to the
other party in accordance with the notice procedures set forth in Section
12.1.
SECTION 10.2 Effect of Termination. (a) If this Agreement is
terminated pursuant to Section 10.1 hereof, this Agreement shall become
void and of no effect with no liability on the part of any party hereto;
provided that the agreements contained in Sections 4.16, 10.2 and 12.4
hereof shall survive the termination hereof; and provided, further that the
Confidentiality Agreement shall remain in full force and effect and Section
6.3(b) hereof shall have no binding effect whatsoever.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 10.1(v) hereof, the Company shall pay to Buyer by wire
transfer of immediately available funds to an account designated by Buyer
on the next business day following such termination, an amount equal to
$3,000,000.
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ARTICLE XI
DEFINED TERMS
For the purposes of this Agreement, the following terms shall have the
following respective meanings:
"Acquisition Proposal" shall have the meaning set forth in Section
6.4.
"Affiliate Transaction" shall have the meaning set forth in Section
4.10(j).
"Agreement" shall have the meaning set forth in the Introduction.
"Buyer" shall have the meaning set forth in Introduction.
"Buyer Disclosure Schedule" shall have the meaning set forth in
Section 5.1.
"Certificate of Merger" shall have the meaning set forth in Section
2.1(b).
"Closing" shall have the meaning set forth in Section 2.7.
"Closing Date" shall have the meaning set forth in Section 2.7.
"Code" shall have the meaning set forth in Section 4.13(e).
"Company" shall have the meaning set forth in the Introduction.
"Company By-laws" means the by-laws of the Company as in effect on the
date of this Agreement.
"Company Certificate of Incorporation" means the certificate of
incorporation of the Company as in effect on the date of this Agreement.
"Company Disclosure Documents" shall have the meaning set forth in
Section 4.9.
"Company Disclosure Schedule" shall have the meaning set forth in
Section 1.3(c).
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"Company Proxy Statement" shall have the meaning set forth in Section
6.2.
"Company SEC Documents" shall have the meaning set forth in Section
4.7.
"Company Securities" shall have the meaning set forth in Section 4.5.
"Company Stockholder Meeting" shall have the meaning set forth in
Section 6.2.
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.3.
"Continuing Directors" shall have the meaning set forth in Section
1.3(a).
"Continuing Employees" shall have the meaning set forth in Section
8.6(a).
"Conveyance Taxes" shall have the meaning set forth in Section 6.5.
"Date Data" shall have the meaning set forth in Section 4.22.
"Date-Sensitive System" shall have the meaning set forth in Section
4.22.
"Depositary" shall have the meaning set forth in Section 2.3(a).
"DGCL" shall have the meaning set forth in the Introduction.
"Dissenting Shares" shall have the meaning set forth in Section 2.4.
"DLJ" shall have the meaning set forth in Section 1.2(b).
"Effective Time" shall have the meaning set forth in Section 2.1(b).
"Employee Benefit Plans" shall have the meaning set forth in Section
4.13(a).
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"Environmental Law" shall have the meaning set forth in Section
4.17(c).
"ERISA" shall have the meaning set forth in Section 4.13.
"ERISA Affiliate" shall have the meaning set forth in Section 4.13(a).
"Exchange Act" shall have the meaning set forth in Section 1.1(a).
"GAAP" shall have the meaning set forth in Section 4.8.
"Group" shall have the meaning set forth in Annex I.
"Governmental Entity" shall have the meaning set forth in Section 4.3.
"HSR Act" shall have the meaning set forth in Section 4.3.
"Indemnitees" shall have the meaning set forth in Section 7.3.
"Knowledge" or "knowledge" means, with respect to the Company and/or
any Subsidiary thereof, knowledge of the current President, Chief Financial
Officer and Executive Vice President of the Company after reasonable
investigation and inquiry commensurate with that of a reasonable person
holding such a position with a public company.
"Licenses" shall have the meaning set forth in Section 4.1.
"Lien" shall have the meaning set forth in Section 4.4.
"Material Adverse Effect" shall have the meaning set forth in Section
4.1.
"Material Contracts" shall have the meaning set forth in Section 4.20.
"Material Trademarks" shall have the meaning set forth in Section
4.19(a).
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"Merger" shall have the meaning set forth in Section 2.1(a).
"Merger Consideration" shall have the meaning set forth in Section
2.2(c).
"Merger Subsidiary" shall have the meaning set forth in the
Introduction.
"Minimum Condition" shall have the meaning set forth in Annex I.
"Offer" shall have the meaning set forth in the Introduction.
"Offer Documents" shall have the meaning set forth in Section 1.1(b).
"Offer Price" shall have the meaning set forth in the Introduction.
"Option" shall have the meaning set forth in Section 2.5(a).
"Option Plans" shall have the meaning set forth in Section 2.5(a).
"Outside Termination Date" shall have the meaning set forth in Section
10.1(ii).
"PBGC" shall have the meaning set forth in Section 4.13(c).
"Person" shall have the meaning set forth in Section 2.3(c).
"Plans" shall have the meaning set forth in Section 4.13(a).
"Preferred Stock" shall have the meaning set forth in Section 4.5.
"Qualified Plans" shall have the meaning set forth in Section 4.5.
"Schedule 14D-9" shall have the meaning set forth in Section 1.2(d).
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"SEC" shall have the meaning set forth in Section 1.1(b).
"Secretary of State" shall have the meaning set forth in Section
2.1(b).
"Securities Act" shall have the meaning set forth in Section 4.7.
"Shares" shall have the meaning set forth in Introduction.
"single employer" shall have the meaning set forth in Section 4.13(a).
"Solvent" shall mean, with respect to any Person, that (a) the fair
saleable value of the property of such Person is, on the date of
determination, greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of such date,
(b) as of such date, such Person is able to pay all of its liabilities as
such liabilities mature, (c) such Person does not have unreasonably small
capital for conducting the business theretofore or proposed to be conducted
by such Person and its Subsidiaries, and (d) such Person has not incurred
nor does it plan to incur debts beyond its ability to pay as they mature.
The amount of any contingent or unliquidated liability at any time will be
computed as the amount which, in light of all the facts and circumstances
existing at such time, can reasonably be expected to become an actual or
matured liability.
"Subsidiary" shall have the meaning set forth in Section 4.6.
"Superior Proposal" shall have the meaning set forth in Section 6.4.
"Surviving Corporation" shall have the meaning set forth in Section
2.1(a).
"Tax Return" shall have the meaning set forth in Section 4.12(b)(i).
"Taxes" shall have the meaning set forth in Section 4.12(b)(i).
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"The 1995 Plan" shall have the meaning set forth in Section 4.5.
"The 1996 Plan" shall have the meaning set forth in Section 4.5.
"Year 2000 Compliant" shall have the meaning set forth in Section
4.22.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Buyer or Merger Subsidiary, to:
CUSTOMERONE HOLDING CORPORATION
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx
with a copy to:
Xxxx X. Xxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
if to the Company, to:
LCS Industries, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxxxx
with copies to:
Xxxxxxxxxxx & Xxxxxxxx, L.L.P.
1251 Avenue of the Americas, 00xx Xxxxx
00
00
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
and:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or such other address or telecopy number as such party may hereafter
specify for the purpose of giving notice to the other parties hereto. Each
such notice, request or other communication shall be effective (i) if given
by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section 12.1 and the appropriate telecopy confirmation is
received or (ii) if given by any other means, when delivered at the address
specified in this Section 12.1.
SECTION 12.2 Nonsurvivial of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective
Time or the termination of this Agreement. All covenants and agreements
contained herein which by their terms are to be performed in whole or in
part subsequent to the Effective Time shall survive the Merger in
accordance with their terms. Nothing contained in this Section 12.2 shall
relieve any party from liability for any willful breach of this Agreement.
SECTION 12.3 Amendments; No Waivers. (a) Except as may otherwise be
provided herein, any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company, Buyer and
Merger Subsidiary or in the case of a waiver, by the party against whom the
waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver
shall, without the further approval of such stockholders: (i) reduce the
Offer Price; (ii) alter or change the Merger Consideration to be received
in exchange for the Shares, or (iii) alter or change any of the terms or
conditions of this Agreement if such alteration or change could adversely
affect the holders of any shares of capital stock of the Company.
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(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 12.4 Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 12.5 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Buyer
may transfer or assign, in whole or from time to time in part, to one or
more of its direct or indirect wholly-owned Subsidiaries, the right to
purchase Shares pursuant to the Offer, but any such transfer or assignment
will not relieve Buyer of its obligations under the Offer or prejudice the
rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
SECTION 12.6 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware without
regard to conflicts of laws.
SECTION 12.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner.
SECTION 12.8 Third Party Beneficiaries. No provision of this Agreement
other than Section 7.3 and Section 8.6 hereof is intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.
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SECTION 12.9 Entire Agreement. This Agreement, including any exhibits,
annexes or schedules hereto and the Confidentiality Agreement constitutes
the entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all other prior agreements or undertaking with
respect thereto, both written and oral.
SECTION 12.10 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
LCS INDUSTRIES, INC.
/s/ Xxxxxxx Xxxxx
------------------------------
Xxxxxxx Xxxxx
President and Chief Executive Officer
CUSTOMERONE HOLDING CORPORATION
/s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
President
CATALOG ACQUISITION CO.
/s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
President
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