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AGREEMENT AND PLAN OF MERGER
Dated as of January 23, 1997,
Between
NXS ACQUISITION CORP.
And
AMPHENOL CORPORATION
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TABLE OF CONTENTS
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ARTICLE I
The Merger............................... 2
SECTION 1.01. The Merger.................................................. 2
SECTION 1.02. Closing..................................................... 3
SECTION 1.03. Effective Time of the Merger................................ 3
SECTION 1.04. Effects of the Merger....................................... 4
SECTION 1.05. Certificate of Incorporation; By-Laws;
Purposes............................................. 4
SECTION 1.06. Directors................................................... 4
SECTION 1.07. Officers.................................................... 4
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations........................ 5
SECTION 2.01. Effect on Capital Stock..................................... 5
SECTION 2.02. Company Common Stock Elections.............................. 8
SECTION 2.03. Proration................................................... 11
SECTION 2.04. Treatment of Options and Other Employee
Equity Rights........................................ 13
SECTION 2.05. Exchange of Certificates.................................... 15
SECTION 2.06. The Debt Offer.............................................. 21
ARTICLE III
Representations and Warranties..................... 23
SECTION 3.01. Representations and Warranties of the
Company.............................................. 23
SECTION 3.02. Representations and Warranties of Newco..................... 60
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ARTICLE IV
Covenants Relating to Conduct of
Business Prior to Merger........................ 64
SECTION 4.01. Conduct of Business of the Company.......................... 64
ARTICLE V
Additional Agreements......................... 71
SECTION 5.01. Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting.................................. 71
SECTION 5.02. Access to Information; Confidentiality...................... 73
SECTION 5.03. Reasonable Best Efforts..................................... 74
SECTION 5.04. Benefit Matters............................................. 78
SECTION 5.05. Indemnification............................................. 79
SECTION 5.06. Public Announcements........................................ 81
SECTION 5.07. Affiliates.................................................. 82
SECTION 5.08. No Solicitation............................................. 82
SECTION 5.09. Resignation of Directors.................................... 85
SECTION 5.10. Certain Agreements.......................................... 85
SECTION 5.11. Stop Transfer............................................... 86
SECTION 5.12. New York Stock Exchange Listing............................. 86
ARTICLE VI
Conditions Precedent.......................... 87
SECTION 6.01. Conditions to Each Party's Obligation To
Effect the Merger.................................... 87
SECTION 6.02. Conditions to Obligations of Newco.......................... 88
SECTION 6.03. Conditions to Obligation of the Company..................... 91
ARTICLE VII
Termination, Amendment and Waiver................... 92
SECTION 7.01. Termination................................................. 92
SECTION 7.02. Effect of Termination....................................... 94
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SECTION 7.03. Amendment................................................... 95
SECTION 7.04. Extension; Waiver........................................... 95
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver.................................. 95
ARTICLE VIII
General Provisions........................... 96
SECTION 8.01. Nonsurvival of Representations and
Warranties........................................... 96
SECTION 8.02. Fees and Expenses........................................... 96
SECTION 8.03. Notices.....................................................100
SECTION 8.04. Definitions.................................................101
SECTION 8.05. Interpretation..............................................102
SECTION 8.06. Counterparts................................................102
SECTION 8.07. Entire Agreement; No Third-Party
Beneficiaries........................................103
SECTION 8.08. GOVERNING LAW...............................................103
SECTION 8.09. Assignment..................................................103
SECTION 8.10. Enforcement.................................................103
SCHEDULES
Disclosure Schedule
EXHIBITS
Exhibit A Amendments to Certificate of Incorporation of
the Company
Exhibit B Form of Affiliate Letter
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AGREEMENT AND PLAN OF MERGER, dated as of January 23, 1997, between
NXS ACQUISITION CORP., a Delaware corporation ("Newco"), and
AMPHENOL CORPORATION, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Company and Newco
have determined that the merger of Newco with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, would be fair and in the best interests of their respective
stockholders, and such Boards of Directors have approved such Merger, pursuant
to which each share of Class A common stock, par value $.001 per share, of the
Company (the "Company Common Stock") issued and outstanding immediately prior to
the Effective Time of the Merger (as defined in Section 1.03) (other than (a)
shares of Company Common Stock owned, directly or indirectly, by the Company or
any subsidiary (as defined in Section 8.04) of the Company or by Parent (as
defined below), Newco or any subsidiary of Parent and (b) Dissenting Shares (as
defined in Section 2.01(d)) will be converted into either (A) the right to
retain at the election of the holder thereof and subject to the terms hereof,
Class A common stock, par value $.001 per share, of the Company or (B) the right
to receive cash;
WHEREAS, the Merger and this Agreement require the vote of a
majority of the outstanding shares of the Company Common Stock for the approval
thereof (the "Company Stockholder Approval");
WHEREAS, Newco is a wholly owned subsidiary of KKR 1996 Fund L.P.
("Parent");
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WHEREAS, Newco is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, certain
beneficial and record stockholders of the Company enter into an agreement (the
"Stockholders Agreement") providing for certain actions relating to the shares
of Company Common Stock owned by them; and the Company has approved the entering
into by NXS I, L.L.C., a Delaware limited liability company ("NXS") and a
subsidiary of Parent, and such stockholders of the Stockholders Agreement, and
such stockholders have agreed to enter into, execute and deliver the
Stockholders Agreement;
WHEREAS, Newco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Newco shall be merged with and into the
Company at the Effective Time of the Merger. Upon the Effective Time of the
Merger, the
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separate existence of Newco shall cease, and the Company shall continue as the
surviving corporation and shall continue under the name "Amphenol Corporation."
SECTION 1.02. Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.01 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
will take place at 10:00 a.m. on the second business day after satisfaction of
the conditions set forth in Section 6.01 (or as soon as practicable thereafter
following satisfaction or waiver of the conditions set forth in Sections 6.02
and 6.03) (the "Closing Date"), at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or
place is agreed to in writing by the parties hereto.
SECTION 1.03. Effective Time of the Merger. As soon as practicable
following the satisfaction or waiver of the conditions set forth in Article VI,
the parties shall file with the Secretary of State of the State of Delaware a
certificate of merger (the "Certificate of Merger") executed in accordance with
the relevant provisions of the DGCL and shall make all other filings or
recordings required under the DGCL. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware, or at such other time as is permissible in accordance
with the DGCL and as Newco and the Company shall agree should be specified
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in the Certificate of Merger (the time the Merger becomes effective being the
"Effective Time of the Merger").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the DGCL.
SECTION 1.05. Certificate of Incorporation; By-Laws; Purposes. (a)
At the Effective Time of the Merger, and without any further action on the part
of the Company or Newco, the Certificate of Incorporation of the Company, as in
effect immediately prior to the Effective Time of the Merger, shall be amended
so as to read in its entirety in the form set forth as Exhibit A hereto, and, as
so amended, until thereafter further amended as provided therein and under the
DGCL, it shall be the certificate of incorporation of the Company following the
Merger.
(b) At the Effective Time of the Merger, and without any further
action on the part of the Company or Newco, the By-laws of Newco as in effect at
the Effective Time of the Merger shall be the By-laws of the Company following
the Merger until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.06. Directors. The directors of Newco at the Effective
Time of the Merger shall be the directors of the Company following the Merger,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Newco at the Effective Time
of the Merger shall be the officers of the Company
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following the Merger, until the earlier of their resignation or removal or until
their respective successors are duly elected or appointed and qualified, as the
case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations
SECTION 2.01. Effect on Capital Stock. As of the Effective Time of
the Merger, by virtue of the Merger and without any action on the part of the
Company, Newco or any holder of any shares of Company Common Stock or any shares
of capital stock of Newco:
(a) Common Stock of Newco. Each share of common stock of Newco
issued and outstanding immediately prior to the Effective Time of the
Merger shall be converted into a number of shares of the Class A common
stock, par value $.001 per share, of the Company following the Merger
equal to the quotient of (i) 13,116,955 divided by (ii) the number of
shares of common stock of Newco outstanding immediately prior to the
Effective Time of the Merger.
(b) Cancellation of Treasury Stock and Parent-Owned Company Common
Stock. Each share of Company Common Stock that is owned by the Company or
by any subsidiary of the Company, and each share of Company Common Stock
that is owned by Parent, Newco or any subsidiary of Parent shall
automatically be cancelled and retired and shall cease to exist, and no
cash, Company Common Stock or other consideration shall be delivered or
deliverable in exchange therefor.
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(c) Conversion (or Retention) of Company Common Stock. Except as
otherwise provided herein and subject to Section 2.03, each issued and
outstanding share of Company Common Stock (other than shares cancelled
pursuant to Section 2.01(b) and Dissenting Shares) shall be converted into
the following (the "Merger Consideration"):
(i) for each such share of Company Common Stock with respect
to which an election to retain Company Common Stock has been
effectively made and not revoked or lost, pursuant to Sections
2.02(c), (d) and (e) ("Electing Shares"), the right to retain one
fully paid and nonassessable share of Company Common Stock (a
"Non-Cash Election Share"); and
(ii) for each such share of Company Common Stock (other than
Electing Shares), the right to receive in cash from the Company
following the Merger an amount equal to $26.00 (the "Cash Election
Price"). (d) Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger held by
a holder (if any) who has the right to demand payment for and an appraisal
of such shares in accordance with Section 262 of the DGCL (or any
successor provision) ("Dissenting Shares") shall not be converted into a
right to receive Merger Consideration or any cash in lieu of fractional
shares of Company Common Stock (but shall have the rights set forth in
Section 262 of
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the DGCL (or any successor provision)) unless such holder fails to perfect
or otherwise loses such holder's right to such payment or appraisal, if
any. If, after the Effective Time of the Merger, such holder fails to
perfect or loses any such right to appraisal, each such share of such
holder shall be treated as a share (other than an Electing Share) that had
been converted as of the Effective Time of the Merger into the right to
receive Merger Consideration in accordance with this Section 2.01. The
Company shall give prompt notice to Newco of any demands received by the
Company for appraisal of shares of Company Common Stock, and Newco shall
have the right to participate in and approve all negotiations and
proceedings with respect to such demands. The Company shall not, except
with the prior written consent of Newco, make any payment with respect to,
or settle or offer to settle, any such demands.
(e) Cancellation and Retirement of Company Common Stock. As of the
Effective Time of the Merger, all shares of Company Common Stock (other
than shares referred to in Section 2.01(d) and 2.01(c)(i)) issued and
outstanding immediately prior to the Effective Time of the Merger, shall
no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate representing
any such shares of Company Common Stock shall, to the extent such
certificate represents such shares, cease to have any rights with respect
thereto, except the right to receive cash, including
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cash in lieu of fractional shares of Company Common Stock, to be issued or
paid in consideration therefor upon surrender of such certificate in
accordance with Section 2.05.
SECTION 2.02. Company Common Stock Elections. (a) Each person who,
on or prior to the Election Date (as defined in Section 2.02(c)) is a record
holder of shares of Company Common Stock will be entitled, with respect to all
or any portion of his shares, to make an unconditional election (a "Non-Cash
Election") on or prior to such Election Date to retain Non-Cash Election Shares,
on the basis hereinafter set forth.
(b) Prior to the mailing of the Proxy Statement (as defined in
Section 3.01(d)), Newco shall appoint a bank or trust company which is
reasonably satisfactory to the Company to act as exchange agent (the "Exchange
Agent") for the payment of the Merger Consideration.
(c) Newco shall prepare a form of election, which form shall be
subject to the reasonable approval of the Company (the "Form of Election"), to
be mailed by the Company with the Proxy Statement to the record holders of
Company Common Stock as of the record date for the Stockholders Meeting (as
defined in Section 5.01(c)), which Form of Election shall be used by each record
holder of shares of Company Common Stock who wishes to elect to retain Non-Cash
Election Shares for any or all shares of Company Common Stock held, subject to
the provisions of Section 2.03 hereof, by such holder. The Company will use its
reasonable best efforts to make the Form of Election and the Proxy Statement
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available to all persons who become holders of Company Common Stock during the
period between such record date and the Election Date referred to below. Any
such holder's election to retain Non-Cash Election Shares shall have been
properly made only if the Exchange Agent shall have received at its designated
office, by 5:00 p.m., New York City time on the business day next preceding the
date of the Stockholders Meeting (the "Election Date"), a Form of Election
properly completed and signed and accompanied by certificates representing the
shares of Company Common Stock to which such Form of Election relates, duly
endorsed in blank or otherwise in form acceptable for transfer on the books of
the Company (or by an appropriate guarantee of delivery of such certificates as
set forth in such Form of Election from a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, provided such certificates are in fact
delivered to the Exchange Agent within five New York Stock Exchange trading days
after the date of execution of such guarantee of delivery).
(d) Any Form of Election may be revoked by the holder submitting it
to the Exchange Agent only by written notice received by the Exchange Agent
prior to 5:00 p.m, New York City time on the Election Date (unless Newco and the
Company determine not less than two business days prior to the Election Date
that the Closing Date is not likely to occur within five business days following
the date of the Stockholders Meeting, in which case any
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Form of Election will remain revocable until a subsequent date which shall be a
date prior to the Closing Date determined by Newco and the Company). In
addition, all Forms of Election shall automatically be revoked if the Exchange
Agent is notified in writing by Newco and the Company that the Merger has been
abandoned. If a Form of Election is revoked, the certificate or certificates (or
guarantees of delivery, as appropriate) for the shares of Company Common Stock
to which such Form of Election relates shall be promptly returned by the
Exchange Agent to the stockholder submitting the same.
(e) The determination of the Exchange Agent shall be binding whether
or not elections to retain Non-Cash Election Shares have been properly made or
revoked pursuant to this Section 2.02 with respect to shares of Company Common
Stock and when elections and revocations were received by it. If the Exchange
Agent reasonably determines in good faith that any election to retain Non-Cash
Election Shares was not properly made with respect to shares of Company Common
Stock, such shares shall be treated by the Exchange Agent as shares which were
not Electing Shares at the Effective Time of the Merger, and such shares shall
be exchanged in the Merger for cash pursuant to Section 2.01(c)(ii). The
Exchange Agent shall also make all computations as to the allocation and the
proration contemplated by Section 2.03, and any such computation shall be
conclusive and binding on the holders of shares of Company Common Stock. The
Exchange Agent may, with the mutual written agreement of Newco and the Company,
make such rules as are consistent with this
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Section 2.02 for the implementation of the elections provided for herein as
shall be necessary or desirable fully to effect such elections.
SECTION 2.03. Proration.
(a) Notwithstanding anything in this Agreement to the contrary, the
aggregate number of shares of Company Common Stock to be converted into the
right to retain Company Common Stock at the Effective Time of the Merger (the
"Non-Cash Election Number") shall be equal to 4,400,000 (excluding for this
purpose any shares of Company Common Stock to be cancelled pursuant to Section
2.01(b)).
(b) If the number of Electing Shares exceeds the Non-Cash Election
Number, then each Electing Share shall be converted into the right to retain
Non-Cash Election Shares or receive cash in accordance with the terms of Section
2.01(c) in the following manner:
(i) A proration factor (the "Non-Cash Proration Factor") shall be
determined by dividing the Non-Cash Election Number by the total number of
Electing Shares.
(ii) The number of Electing Shares covered by each Non-Cash Election
to be converted into the right to retain Non-Cash Election Shares shall be
determined by multiplying the Non-Cash Proration Factor by the total
number of Electing Shares covered by such Non-Cash Election.
(iii) All Electing Shares, other than those shares converted into
the right to receive Non-Cash Election Shares in accordance with Section
2.03(b)(ii), shall be converted
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into cash (on a consistent basis among stockholders who made the election
referred to in Section 2.01(c)(i), pro rata to the number of shares as to
which they made such election) as if such shares were not Electing Shares
in accordance with the terms of Section 2.01(c)(ii).
(c) If the number of Electing Shares is less than the Non-Cash
Election Number, then:
(i) all Electing Shares shall be converted into the right to retain
Company Common Stock in accordance with the terms of Section 2.01(c)(i);
(ii) additional shares of Company Common Stock other than Electing
Shares and Dissenting Shares shall be converted into the right to retain
Non-Cash Election Shares in accordance with the terms of 2.01(c) in the
following manner:
(1) a proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) the difference between the Non-Cash
Election Number and the number of Electing Shares, by (y) the total
number of shares of Company Common Stock other than Electing Shares
and Dissenting Shares; and
(2) the number of shares of Company Common Stock in addition
to Electing Shares to be converted into the right to retain Non-Cash
Election Shares shall be determined by multiplying the Cash
Proration Factor by the total number of shares other than Electing
Shares and Dissenting Shares; and
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(iii) subject to Section 2.01(d), shares of Company Common Stock
subject to clause (ii) of this paragraph (c) shall be converted into the
right to retain Non-Cash Election Shares in accordance with Section
2.01(c)(i) (on a consistent basis among shareholders who held shares of
Company Common Stock as to which they did not make the election referred
to in Section 2.01(c)(i), pro rata to the number of shares as to which
they did not make such election).
SECTION 2.04. Treatment of Options and Other Employee Equity Rights.
(a) Except as otherwise agreed to in writing between the Company and the holder
of any Company Stock Option (as defined below), and as consented to by Newco,
immediately prior to the Effective Time of the Merger, each outstanding stock
option to purchase shares of Company Common Stock held by a current or former
employee or director of the Company or any subsidiary thereof (a "Company Stock
Option") granted under any stock option or stock purchase plan, program or
arrangement of the Company, including without limitation, the Stock Option Plan
of Amphenol, as amended, and the 1996 Long-Term Incentive Stock Plan of Amphenol
(collectively and together with the Restricted Stock Plan of Amphenol, the
"Stock Plans"), whether or not then exercisable, shall be cancelled by the
Company, and at the Effective Time of the Merger or as soon as practicable
thereafter, the holder thereof shall be entitled to receive from the Company as
of or as soon as practicable after the Effective Time of the Merger in
consideration for such cancellation an
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amount in cash equal to the product of (i) the number of shares of Company
Common Stock previously subject to such Company Stock Option and (ii) the
excess, if any, of the Cash Election Price per share over the exercise price per
share, if any, previously subject to such Company Stock Option, reduced by the
amount of withholding or other taxes required by law to be withheld.
(b) Prior to the Effective time of the Merger, any restrictions
imposed pursuant to any Stock Plan on any outstanding shares of Company Common
Stock (such shares, "Company Restricted Stock") shall lapse and each share of
Company Restricted Stock shall be subject to the same terms and conditions of
this Agreement as other shares of Company Common Stock, including, but not
limited to, Section 2.03(c) herein.
(c) Except as provided herein or as otherwise agreed by the parties,
the Stock Plans and any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any subsidiary shall terminate as of the Effective Time of the
Merger, and the Company shall exercise its best efforts to ensure that following
the Effective Time of the Merger, no current or former employee or director
shall have any Company Stock Option to purchase shares of the Company Common
Stock or any other equity interest in the Company under any Stock Plan.
(d) Prior to the Effective Time of the Merger, the Board of
Directors (or, if appropriate, any committee administering the Stock Plans)
shall adopt such resolutions or take such actions as are necessary, subject if
necessary, to
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obtaining consents of the holders thereof, to carry out the terms of this
Section 2.04.
SECTION 2.05. Exchange of Certificates. (a) Exchange Agent. As of or
as soon as reasonably practicable after the Effective Time of the Merger, the
Company shall deposit with the Exchange Agent, for the benefit of the holders of
shares of Company Common Stock, for exchange in accordance with this Article II,
the cash portion of Merger Consideration.
(b) Exchange Procedures. As soon as practicable after the Effective
Time of the Merger, each holder of an outstanding certificate or certificates
which prior thereto represented shares of Company Common Stock shall, upon
surrender to the Exchange Agent of such certificate or certificates and
acceptance thereof by the Exchange Agent, be entitled to a certificate or
certificates representing the number of full shares of Company Common Stock, if
any, to be retained by the holder thereof pursuant to this Agreement and the
amount of cash, if any, into which the number of shares of Company Common Stock
previously represented by such certificate or certificates surrendered shall
have been converted pursuant to this Agreement. The Exchange Agent shall accept
such certificates upon compliance with such reasonable terms and conditions as
the Exchange Agent may impose to effect an orderly exchange thereof in
accordance with normal exchange practices. After the Effective Time of the
Merger, there shall be no further transfer on the records of the Company or its
transfer agent of certificates representing shares of Company Common Stock which
have been converted, in whole or in
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part, pursuant to this Agreement into the right to receive cash, and if such
certificates are presented to the Company for transfer, they shall be cancelled
against delivery of cash and, if appropriate, certificates for retained Company
Common Stock. If any certificate for such retained Company Common Stock is to be
issued in, or if cash is to be remitted to, a name other than that in which the
certificate for Company Common Stock surrendered for exchange is registered, it
shall be a condition of such exchange that the certificate so surrendered shall
be properly endorsed, with signature guaranteed, or otherwise in proper form for
transfer and that the person requesting such exchange shall pay to the Company
or its transfer agent any transfer or other taxes required by reason of the
issuance of certificates for such retained Company Common Stock in a name other
than that of the registered holder of the certificate surrendered, or establish
to the satisfaction of the Company or its transfer agent that such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
2.05(b), each certificate for shares of Company Common Stock shall be deemed at
any time after the Effective Time of the Merger to represent only the right to
receive upon such surrender the Merger Consideration as contemplated by Section
2.01. No interest will be paid or will accrue on any cash payable as Merger
Consideration or in lieu of any fractional shares of retained Company Common
Stock.
(c) Distributions with Respect to Unexchanged Shares. No dividends
or other distributions with respect to retained
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Company Common Stock with a record date after the Effective Time of the Merger
shall be paid to the holder of any unsurrendered certificate for shares of
Company Common Stock with respect to the shares of retained Company Common Stock
represented thereby and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.05(e) until the surrender of such
certificate in accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such certificate, there shall be
paid to the holder of the certificate representing whole shares of retained
Company Common Stock issued in connection therewith, without interest, (i) at
the time of such surrender or as promptly after the sale of the Excess Shares
(as defined in Section 2.05(e)) as practicable, the amount of any cash payable
in lieu of a fractional share of retained Company Common Stock to which such
holder is entitled pursuant to Section 2.05(e) and the proportionate amount of
any dividends or other distributions with a record date after the Effective Time
of the Merger theretofore paid with respect to such whole shares of retained
Company Common Stock, and (ii) at the appropriate payment date, the
proportionate amount of any dividends or other distributions with a record date
after the Effective Time of the Merger but prior to such surrender and a payment
date subsequent to such surrender payable with respect to such whole shares of
retained Company Common Stock.
(d) No Further Ownership Rights in Company Common Stock Exchanged
For Cash. All cash paid upon the surrender for exchange of certificates
representing shares of Company Common
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Stock in accordance with the terms of this Article II (including any cash paid
pursuant to Section 2.05(e)) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to the shares of Company Common Stock
exchanged for cash theretofore represented by such certificates.
(e) No Fractional Shares. (i) No certificates or scrip representing
fractional shares of retained Company Common Stock shall be issued in connection
with the Merger, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of the Company after the
Merger; and
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of retained
Company Common Stock (after taking into account all shares of Company Common
Stock delivered by such holder) shall receive, in lieu thereof, a cash payment
(without interest) representing such holder's proportionate interest in the net
proceeds from the sale by the Exchange Agent (following the deduction of
applicable transaction costs), on behalf of all such holders, of the shares (the
"Excess Shares") of retained Company Common Stock representing such fractions.
Such sale shall be made as soon as practicable after the Effective Time of the
Merger.
(f) Termination of Exchange Fund. Any portion of the Merger
Consideration deposited with the Exchange Agent pursuant to this Section 2.05
(the "Exchange Fund") which remains
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undistributed to the holders of the certificates representing shares of Company
Common Stock for six months after the Effective Time of the Merger shall be
delivered to the Company, upon demand, and any holders of shares of Company
Common Stock prior to the Merger who have not theretofore complied with this
Article II shall thereafter look only to the Company and only as general
creditors thereof for payment of their claim for cash, if any, retained Company
Common Stock, if any, any cash in lieu of fractional shares of retained Company
Common Stock and any dividends or distributions with respect to retained Company
Common Stock to which such holders may be entitled.
(g) No Liability. None of Newco or the Company or the Exchange Agent
shall be liable to any person in respect of any shares of retained Company
Common Stock (or dividends or distributions with respect thereto) or cash from
the Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any certificates representing
shares of Company Common Stock shall not have been surrendered prior to one year
after the Effective Time of the Merger (or immediately prior to such earlier
date on which any cash, if any, any cash in lieu of fractional shares of
retained Company Common Stock or any dividends or distributions with respect to
retained Company Common Stock in respect of such certificate would otherwise
escheat to or become the property of any Governmental Entity (as defined in
Section 3.01(d))), any such cash, dividends or distributions in respect of such
certificate shall, to the extent permitted by applicable law,
20
become the property of the Company, free and clear of all claims or interest of
any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by the Company, provided that
such investment shall be (i) securities issued or directly and fully guaranteed
or insured by the United States government or any agency or instrumentality
thereof having maturities of not more than six months from the Effective Time of
the Merger, (ii) certificates of deposit, eurodollar time deposits and bankers'
acceptances with maturities not exceeding six months and overnight bank deposits
with any commercial bank, depository institution or trust company incorporated
or doing business under the laws of the United States of America, any state
thereof or the District of Columbia, provided that such commercial bank,
depository institution or trust company has, at the time of investment, (A)
capital and surplus exceeding $250 million and (B) outstanding short-term debt
securities which are rated at least A-1 by Standard & Poor's Rating Group
Division of The XxXxxx-Xxxx Companies, Inc. or at least P-1 by Xxxxx'x Investors
Services, Inc. or carry an equivalent rating by a nationally recognized rating
agency if both of the two named rating agencies cease to publish ratings of
investment, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clauses (i) and (ii) above
entered into with any financial institution meeting the qualifications specified
in clause (ii) above, (iv) commercial paper having a rating in the highest
21
rating categories from Standard & Poor's Rating Group Division of The
McGraw-Hills Companies, Inc. or Xxxxx'x Investors Services, Inc. or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease to publish ratings of investments and in each case
maturing within six months of the Effective Time of the Merger and (v) money
market mutual or similar funds having assets in excess of $1 billion. Any
interest and other income resulting from such investments shall be paid to the
Company.
SECTION 2.06. The Debt Offer. (a) Provided that this Agreement shall
not have been terminated in accordance with Section 7.01, the Company shall,
within 10 days of receiving any request by Newco to do so (but in no event
earlier than twenty calendar days after the date hereof), commence an offer to
purchase all of the outstanding aggregate principal amount of the Company's
Subordinated Notes (as defined in Section 3.01(c)) on the terms set forth in
Section 2.06 of the Disclosure Schedule (as defined in Section 3.01(a)) and such
other customary terms and conditions as are reasonably acceptable to Newco (the
"Debt Offer"). The Company shall waive any of the conditions to the Debt Offer
and make any other changes in the terms and conditions of the Debt Offer as may
be reasonably requested by Newco, and the Company shall not, without Newco's
prior consent, waive any material condition to the Debt Offer, make any changes
to the terms and conditions of the Debt Offer set forth in Section 2.06 of the
Disclosure Schedule or make any other material changes in the terms and
conditions of the Debt Offer. Notwithstanding the
22
immediately preceding sentence, Newco shall not request that the Company make
any change to the terms and conditions of the Debt Offer which decreases the
price per Subordinated Note payable in the Debt Offer, changes the form of
consideration payable in the Debt Offer (other than by adding consideration) or
imposes conditions to the Debt Offer in addition to those set forth in Section
2.06 of the Disclosure Schedule which are materially adverse to holders of the
Subordinated Notes (it being agreed that a request by Newco that the Company
waive any condition in whole or in part at any time and from time to time in its
sole discretion shall not be deemed to be materially adverse to any holder of
Subordinated Notes), unless such change was previously approved by the Company
in writing. The Company covenants and agrees that, subject to the terms and
conditions of this Agreement, including but not limited to the conditions to the
Debt Offer, it will accept for payment and pay for the Subordinated Notes as
soon as such conditions to the Debt Offer are satisfied and it is permitted to
do so under applicable law, provided that the Company shall coordinate the
timing of any such purchase with Newco in order to obtain the greatest
participation in the Debt Offer.
(b) Promptly following the date of this Agreement, the Company shall
prepare, subject to advice and comments of Newco, an offer to purchase the
Subordinated Notes (or portions thereof) and forms of the related letter of
transmittal (the "Letter of Transmittal") (collectively, the "Offer to
Purchase") and summary advertisement, as well as all other information and
exhibits
23
(collectively, the "Offer Documents"). All mailings to the holders of
Subordinated Notes in connection with the Debt Offer shall be subject to the
prior review, comment and reasonable approval of Newco. The Company will use its
reasonable best efforts to cause the Offer Documents to be mailed to the holders
of the Subordinated Notes as promptly as practicable following receipt of the
request from Newco to do so. The Company agrees promptly to correct any
information in the Offer Documents that shall be or have become false or
misleading in any material respect.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. The
Company represents and warrants to Newco as follows:
(a) Organization, Standing and Corporate Power. Each of the Company
and each of its Subsidiaries (as defined in Section 3.01(b)) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate
power and authority to carry on its business as now being conducted. Each
of the Company and each of its Subsidiaries is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or
24
licensed (individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect (as defined in Section 8.04)
with respect to the Company. Attached as Section 3.01(a) of the disclosure
schedule ("Disclosure Schedule") delivered to Newco by the Company at the
time of execution of this Agreement are complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company as currently in
effect. The Company has made available to Newco complete and correct
copies of the certificates of incorporation (or other organizational
documents) and by-laws of each of its Subsidiaries, in each case as
amended to the date of this Agreement.
(b) Subsidiaries. The only direct or indirect subsidiaries of the
Company (other than any subsidiary of the Company that does not constitute
a "Significant Subsidiary" within the meaning of Rule 1-02 of Regulation
SX of the Securities and Exchange Commission (the "SEC")) are those listed
in Section 3.01(b) of the Disclosure Schedule (the "Subsidiaries"). All
the outstanding shares of capital stock of each such Subsidiary have been
validly issued and are fully paid and nonassessable and, other than
director qualifying shares and except as is set forth in Section 3.01(b)
of the Disclosure Schedule, are owned (of record and beneficially) by the
Company, by another Subsidiary (wholly owned) of the Company or by the
Company and another such Subsidiary (wholly owned), free and clear of all
pledges, claims, liens, charges, encumbrances and security interests
25
of any kind or nature whatsoever (collectively, "Liens"). Except for the
ownership interests set forth in Section 3.01(b) of the Disclosure
Schedule, the Company does not own, directly or indirectly, any capital
stock or other ownership interest in any corporation, partnership,
business association, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of (i) 96,250,000 shares of Company Common Stock, par value $.001
per share, and (ii) 3,750,000 shares of Class B Common Stock (the "Class B
Common Stock") and (iii) 1,000,000 shares of preferred stock (the
"Preferred Stock"). Subject to any Permitted Changes (as defined in
Section 4.01(a)(ii)) there are: (i) 47,366,158 shares of Company Common
Stock issued and outstanding (including shares held in the treasury of the
Company and including shares of Company Restricted Stock); (ii) 2,645,871
shares of Company Common Stock held in the treasury of the Company; (iii)
452,065 shares of Company Common Stock reserved for issuance upon exercise
of authorized but unissued Company Stock Options pursuant to the Stock
Plans, and 354,334 shares of Company Common Stock reserved for issuance
pursuant to the Stock Plans (other than upon exercise of Company Stock
Options); (iv) 423,438 shares of Company Common Stock issuable upon
exercise of awarded but unexercised Company Stock Options, with an
exercise price per each awarded but unexercised Company Stock Option as is
set forth in Section 3.01(c) of the
26
Disclosure Schedule; (v) no shares of Class B Common Stock issued and
outstanding or in the treasury of the Company, and, to the knowledge of
the Company, no shares of Class B Common Stock issuable upon conversion of
Company Common Stock; and (vi) no shares of Preferred Stock issued and
outstanding or in the treasury of the Company. Except as set forth above,
no shares of capital stock or other equity securities of the Company are
issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all shares which may be issued
pursuant to the Stock Plans will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
There are no outstanding bonds, debentures, notes or other indebtedness or
other securities of the Company having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which stockholders of the Company may vote. Except as set forth
above, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind
to which the Company or any of its subsidiaries is a party or by which any
of them is bound obligating the Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity or voting securities of
the Company or of any of its subsidiaries or obligating the Company or any
of its subsidiaries to issue, grant,
27
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the date hereof,
the only outstanding indebtedness for borrowed money of the Company and
its subsidiaries is (i) $100 million in principal amount of 10.45% Senior
Notes Due 2001 (the "Senior Notes") issued pursuant to the Note and
Guarantee Agreement, dated as of October 30, 1991, as amended as of
December 9, 1992 (the "Note and Guarantee Agreement"), (ii) $95 million in
aggregate principal amount of 12 3/4% Senior Subordinated Notes Due 2002
(the "Subordinated Notes," and together with the Senior Notes, the
"Notes") issued pursuant to the Indenture dated as of December 15, 1992
(the "Indenture"), (iii) debt under the Credit Agreement dated as of
November 30, 1995 among the Company, Chemical Bank, as Administrative
Agent and the several lenders parties thereto (the "Credit Agreement") of
$29,200,000, and (iv) other indebtedness for borrowed money not exceeding
$10,000,000, the sources of which, and amounts attributable to each such
source, are set forth in Section 3.01(c) of the Disclosure Schedule. As of
the Closing, the total outstanding indebtedness for borrowed money of the
Company (subject to Section 3.01(c) of the Disclosure Schedule) will not
exceed $210,000,000. Other than the Senior Notes and any loans and other
extensions of credit under the Credit Agreement, each of which is
prepayable in full in accordance with its terms, and other than the
Subordinated Notes, no indebtedness for borrowed
28
money of the Company or its subsidiaries contains any restriction upon the
incurrence of indebtedness for borrowed money by the Company or any of its
subsidiaries or restricts the ability of the Company or any of its
subsidiaries to grant any Liens on its properties or assets. Other than
the Company Stock Options and the Stockholders Agreement, (i) there are no
outstanding contractual obligations, commitments, understandings or
arrangements of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares
of capital stock of the Company or any of its subsidiaries and (ii) to the
knowledge of the Company, there are no irrevocable proxies with respect to
shares of capital stock of the Company or any subsidiary of the Company.
Schedule I to the Stockholders Agreement accurately sets forth in all
material respects the record and, to the knowledge of the Company,
beneficial ownership of, and voting power in respect of, the capital stock
of the Company with respect to the signatories to the Stockholders
Agreement. Except as set forth above, there are no agreements or
arrangements pursuant to which the Company is or could be required to
register shares of Company Common Stock or other securities under the
Securities Act of 1933, as amended (the "Securities Act") or other
agreements or arrangements with or among any securityholders of the
Company with respect to securities of the Company.
29
(d) Authority; Noncontravention. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to
the Company Stockholder Approval with respect to the consummation of the
Merger, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject, in
the case of the Merger, to the Company Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and
(assuming due authorization, execution and delivery by Newco) constitutes
a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency or 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. Except for the
Notes, the Credit Agreement and the Receivables Purchase Agreement dated
as of December 3, 1993, and the Purchase and Sale Agreement, dated as of
December 3, 1993, each as amended, between the Company, certain of its
subsidiaries, Pooled Accounts Receivable Corporation and Xxxxxxx Xxxxx
Securities
30
Inc. (successor to Bank of Montreal) (the "Receivables Agreements") and
except as disclosed in Section 3.01(d) of the Disclosure Schedule, the
execution and delivery of this Agreement does not, and the consummation by
the Company of the transactions contemplated by this Agreement and
compliance by the Company with the provisions hereof will not, conflict
with, or result in any breach or violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect
to any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company
or any of its subsidiaries under, (i) the Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company or the comparable charter
or organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, note purchase agreement, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its subsidiaries
or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to the Company or any of its
subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such
31
conflicts, breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect with respect to the Company or could not
prevent, hinder or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration or
filing with, or notice to, any federal, state or local government or any
court, administrative agency or commission or other governmental authority
or agency, domestic or foreign (a "Governmental Entity"), is required by
or with respect to the Company or any of its subsidiaries in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby,
except, with respect to this Agreement, for (i) the filing of a premerger
notification and report form by the Company under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the
filing with the SEC of (x) a proxy statement relating to the Company
Stockholder Approval (such proxy statement as amended or supplemented from
time to time, the "Proxy Statement"), (y) the registration statement on
Form S-4 to be filed with the SEC by the Company in connection with the
issuance of the Common Stock of the Company following the Merger (the
"Form S-4") and (z) such reports under the Securities Exchange Act of
1934, as amended (the "Exchange
32
Act"), as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, including the Debt Offer,
(iii) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business, and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices the failure of which to
make or obtain, individually or in the aggregate, could not reasonably be
expected to (x) prevent or materially delay consummation of the Debt
Offer, the Merger or the other transactions contemplated hereby or (y)
have a Material Adverse Effect with respect to the Company.
(e) SEC Documents; Undisclosed Liabilities. The Company has filed
with the SEC all reports, schedules, forms, statements and other documents
required pursuant to the Securities Act and the Exchange Act since January
1, 1994 (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the
"SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of 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 none of
the SEC Documents (including any and all financial statements included
therein) as of
33
such dates contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The consolidated financial
statements of the Company included in all SEC Documents filed since
January 1, 1994 (the "SEC Financial Statements") comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited consolidated quarterly statements, as
permitted by Form 10-Q of the SEC), applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present 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 quarterly statements, to normal
year-end audit adjustments). Except as set forth in the SEC Documents
filed by the Company since January 1, 1996 and prior to the date of this
Agreement (the "Recent SEC Documents") and except as disclosed in Section
3.01(e) of the Disclosure Schedule, at the date of the most recent audited
financial statements of the Company included in the Recent SEC Documents,
neither the Company nor any of its subsidiaries
34
had, and since such date neither the Company nor any of such subsidiaries
has incurred, any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Company.
(f) Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in (i)
the Form S-4 will, at the time the Form S-4 is filed with the SEC, and at
any time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Proxy
Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, or (iii) the Offer Documents will, at the time the Offer
Documents or any amendments or supplements thereto are first published,
sent or given to holders of Subordinated Notes, as the case may be, or at
the time the Debt Offer is consummated, contain any untrue statement of a
material fact or omit to state any material fact required to
35
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The Form S-4 will, as of its effective date, and the prospectus contained
therein will, as of its date, comply as to form in all material respects
with the requirements of the Securities Act and the rules and regulations
promulgated thereunder, and the Proxy Statement will comply as to form in
all material respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder, except that no
representation is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied in writing
by Newco specifically for inclusion therein. For purposes of this
Agreement, the parties agree that statements made and information in the
Form S-4 and the Proxy Statement relating to the Federal income tax
consequences of the transactions herein contemplated to holders of Company
Common Stock shall be deemed to be supplied by the Company and not by
Newco.
(g) Absence of Certain Changes or Events. Except as required by this
Agreement, and except as disclosed in the Recent SEC Documents, since the
date of the most recent audited financial statements included in such
Recent SEC Documents, the Company has conducted its business only in the
ordinary course consistent with past practice, and there is not and has
not been: (i) any Material Adverse Change (as defined in Section 8.04)
with respect to the Company; (ii)
36
any condition, event or occurrence which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
or give rise to a Material Adverse Change with respect to the Company;
(iii) any action which, if it had been taken or occurred after the
execution of this Agreement, would have required the consent of Newco
pursuant to this Agreement; or (iv) any condition, event or occurrence
which, individually or in the aggregate, could reasonably be expected to
prevent, hinder or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement.
(h) Litigation; Labor Matters; Compliance with Laws.
(i) Except as disclosed in the Recent SEC Documents, there is
(1) no suit, action or proceeding pending, and (2) to the knowledge
of the Company, no suit, action or proceeding threatened against or
investigation pending with respect to the Company or any of its
subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect with
respect to the Company or prevent, hinder or materially delay the
ability of the Company to consummate the transactions contemplated
by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any of its subsidiaries which, individually
or in the
37
aggregate, has or could reasonably be expected to have, any such
effect.
(ii) Except as disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule, (1) neither the Company nor any of its
subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor
union or labor organization; (2) to the knowledge of the Company,
neither the Company nor any of its subsidiaries is the subject of
any proceeding asserting that it or any subsidiary has committed an
unfair labor practice or seeking to compel it to bargain with any
labor organization as to wages or conditions of employment; (3)
there is no strike, work stoppage or other labor dispute involving
it or any of its subsidiaries pending or, to its knowledge,
threatened; (4) no action, suit, complaint, charge, arbitration,
inquiry, proceeding or investigation by or before any court,
governmental agency, administrative agency or commission brought by
or on behalf of any employee, prospective employee, former employee,
retiree, labor organization or other representative of the Company's
employees is pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries which, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect with respect to the Company; (5) no grievance is
pending or, to the
38
knowledge of the Company, threatened against the Company or any of
its subsidiaries which, individually or in the aggregate, could have
a Material Adverse Effect with respect to the Company; (6) neither
the Company nor any of its subsidiaries is a party to, or otherwise
bound by, any consent decree with, or citation by, any government
agency relating to employees or employment practices; (7) to the
knowledge of the Company, the Company and each subsidiary is in
compliance with all applicable laws, agreements, contracts, and
policies relating to employment, employment practices, wages, hours,
and terms and conditions of employment except for failures so to
comply, if any, that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect with
respect to the Company; (8) the Company has paid in full to all
employees of the Company and its subsidiaries all wages, salaries,
commissions, bonuses, benefits and other compensation due and
payable to such employees under any policy, practice, agreement,
plan, program, statute or other law; (9) the Company is not liable
for any severance pay or other payments to any employee or former
employee arising from the termination of employment under any
benefit or severance policy, practice, agreement, plan, or program
of the Company, nor to the knowledge of the Company will the Company
have any
39
liability which exists or arises, or may be deemed to exist or
arise, under any applicable law or otherwise, as a result of or in
connection with the transactions contemplated hereunder or as a
result of the termination by the Company of any persons employed by
the Company or any of its subsidiaries on or prior to the Effective
Time of the Merger; and (10) the Company is in compliance with its
obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988, and all other employee notification and
bargaining obligations arising under any collective bargaining
agreement, statute or otherwise.
(iii) The conduct of the business of each of the Company and
each of its subsidiaries complies with all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or
arbitration awards applicable thereto, except for violations or
failures so to comply, if any, that, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect with respect to the Company. (i) Employee Benefit
Plans. (1) Section 3.01(i) of
the Disclosure Schedule contains a true and complete list of each
"employee benefit plan" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(including, without limitation, multiemployer plans within the meaning of
ERISA Section 3(37)), stock purchase, stock option, severance, employment,
40
change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements relating to
employment, benefits or entitlements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding
or not under which any employee or former employee of the Company has any
present or future right to benefits or under which the Company has any
present or future liability. All such plans, agreements, programs,
policies and arrangements shall be collectively referred to as the
"Company Plans".
(2) With respect to each Company Plan, the Company will deliver to
Newco a current, accurate and complete copy (or, to the extent no such
copy exists, an accurate description) thereof and, to the extent
applicable, (i) any related trust agreement, annuity contract or other
funding instrument; (ii) the most recent determination letter; (iii) any
summary plan description and other written communications (or a
description of any oral communications) by the Company to its employees
concerning the extent of the benefits provided under a Company Plan; and
(iv) for the three most recent years (I) the Form 5500 and attached
schedules; (II) audited financial statements;
41
(III) actuarial valuation reports; and (IV) attorney's response to an
auditor's request for information.
(3) (i) Each Company Plan has been established and administered in
accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Internal Revenue Code of 1986, as amended (the
"Code") and other applicable laws, rules and regulations (including the
applicable laws, rules and regulations of any foreign jurisdiction), in
each case, in all material respects; (ii) each Company Plan which is
intended to be qualified within the meaning of Code Section 401(a) is so
qualified and has received a favorable determination letter as to its
qualification and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification; (iii) with respect
to any Company Plan, no actions, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or, to the best
knowledge of the Company, threatened, no facts or circumstances exist
which could give rise to any such actions, suits or claims and the Company
will promptly notify Newco in writing of any pending claims or, to the
knowledge of the Company, any threatened claims arising between the date
hereof and the Effective Time of the Merger; (iv) neither the Company nor
any other party has engaged in a prohibited transaction, as such term is
defined under Code Section 4975 or ERISA Section 406, which would subject
the Company or the Buyer to any material taxes,
42
penalties or other liabilities under the Code or ERISA (v) no event has
occurred and no condition exists that would subject the Company, either
directly or by reason of its affiliation with any member of its Controlled
Group (defined as any organization which is a member of a controlled group
of organizations within the meaning of Code Sections 414(b), (c), (m) or
(o)), to any material tax, fine or penalty imposed by ERISA, the Code or
other applicable laws, rules and regulations (including the applicable
laws, rules and regulations of any foreign jurisdiction); (vi) all
insurance premiums required to be paid and all contributions required to
be made under the terms of any Company Plan, the Code, ERISA or other
applicable laws, rules and regulations (including the applicable laws,
rules and regulations of any foreign jurisdiction) as of the Effective
Time of the Merger have been or will be timely paid or made prior thereto
and adequate reserves have been provided for on the Company's balance
sheet for any premiums (or portions thereof) and for all benefits
attributable to service on or prior to the Effective Time of the Merger;
(vii) for each Company Plan with respect to which a Form 5500 has been
filed, no material change has occurred with respect to the matters covered
by the most recent Form since the date thereof; and (viii) no Company Plan
provides for an increase in benefits on or after the Effective Time of the
Merger.
(4) Except to the extent that each of the following, individually or
in the aggregate, would not result in a
43
material liability to the Company, (i) no Company Plan has incurred any
"accumulated funding deficiency" as such term is defined in ERISA Section
302 and Code Section 412 (whether or not waived); (ii) no event or
condition exists which could be deemed a reportable event within the
meaning of ERISA Section 4043 which could result in a liability to the
Company or any member of its Controlled Group and no condition exists
which could subject the Company or any member of its Controlled Group to a
fine under ERISA Section 4071; (iii) as of the Effective Time of the
Merger, the Company and each member of its Controlled Group have made all
required premium payments when due to the Pension Benefit Guaranty
Corporation; (iv) neither the Company nor any member of its Controlled
Group is subject to any liability to the PBGC for any plan termination
occurring on or prior to the Effective Time of the Merger; (v) no
amendment has occurred which has required or could require the Company or
any member of its Controlled Group to provide security pursuant to Code
Section 401(a)(29); and (vi) neither the Company nor any member of its
Controlled Group has engaged in a transaction which could subject it to
liability under ERISA Section 4069.
(5) With respect to each of the Company Plans which is not a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA but
is subject to Title IV of ERISA (or a substantially similar provision of a
foreign jurisdiction), as of the Effective Time of the Merger,
44
except as disclosed in Section 3.01(i) of the Disclosure Schedule, the
assets of each such Company Plan are at least equal in value to the
present value of the accrued benefits (vested and unvested) of the
participants in such Company Plan on an accumulated benefit obligation and
projected benefit obligation basis within the meaning of Statement of
Financial Accounting Standard ("SFAS") No. 87, based on the actuarial
methods and assumptions indicated in the most recent actuarial valuation
reports.
(6) With respect to any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) to which the Company or any member of its
Controlled Group has any liability or contributes (or has at any time
contributed or had an obligation to contribute): (i) the Company and each
member of its Controlled Group has or will have, as of the Effective Time
of the Merger, made all contributions to each such multiemployer plan
required by the terms of such multiemployer plan or any collective
bargaining agreement; (ii) neither the Company nor any member of its
Controlled Group has incurred any material withdrawal liability under
Title IV of ERISA or would be subject to such liability if, as of the
Effective Time of the Merger, the Company or any member of its Controlled
Group were to engage in a complete withdrawal (as defined in ERISA Section
4203) or partial withdrawal (as defined in ERISA Section 4205) from any
such multiemployer plan; (iii) no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in
45
ERISA Sections 4241 and 4245, respectively); and (iv) neither the Company
nor any member of its Controlled Group has engaged in a transaction which
could subject it to liability under ERISA Section 4212(c).
(7) (i) Each Company Plan which is intended to meet the requirements
for tax-favored treatment under Subchapter B of Chapter 1 of Subtitle A of
the Code meets such requirements; and (ii) the Company has received a
favorable determination from the Internal Revenue Service with respect to
any trust intended to be qualified within the meaning of Code Section
501(c)(9).
(8) Section 3.01(i)(8) of the Disclosure Schedule sets forth, on a
plan by plan basis, the present value of benefits payable presently or in
the future to present or former employees of the Company under each
unfunded Company Plan that must be accounted for in accordance with SFAS
No. 87, 106 or 112.
(9) Except as set forth in Section 3.01(i)(9) of the Disclosure
Schedule, no Company Plan exists which could result in the payment to any
Company employee of any money or other property or rights or accelerate or
provide any other rights or benefits to any Company employee as a result
of the transaction contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning of Code
section 280G.
(j) Tax Returns and Tax Payments. Except as disclosed in Section
3.01(j) of the Disclosure Schedule, the Company
46
and each of its subsidiaries, and any consolidated, combined, unitary or
aggregate group for Tax purposes of which the Company or any of its
subsidiaries is or has been a member (a "Consolidated Group") has timely
filed all Tax Returns required to be filed by it and such Tax Returns are
complete and correct in all respects, has paid all Taxes shown thereon to
be due and has provided adequate reserves in its financial statements for
any Taxes that have not been paid, whether or not shown as being due on
any returns. Except as disclosed in Section 3.01(j) of the Disclosure
Schedule, (i) no material claim for unpaid Taxes has become a lien against
the property of the Company or any of its subsidiaries or is being
asserted against the Company or any of its subsidiaries; (ii) to the best
knowledge of the Company, no audit of any Tax Return of the Company or any
of its subsidiaries is pending, threatened or being conducted by a Tax
authority; (iii) no extension of the statute of limitations on the
assessment of any Taxes has been granted by the Company or any of its
subsidiaries and is currently in effect; (iv) no consent under Section
341(f) of the Code has been filed with respect to the Company or any of
its subsidiaries; (v) neither the Company nor any of its subsidiaries is a
party to any agreement or arrangement that would result, separately or in
the aggregate, in the actual or deemed payment by the Company or a
subsidiary of any "excess parachute payments" within the meaning of
Section 280G of the Code; (vi) no acceleration of the vesting
47
schedule for any property that is substantially unvested within the
meaning of the regulations under Section 83 of the Code will occur in
connection with the transactions contemplated by this Agreement; (vii)
none of the Company or its subsidiaries has been at any time a member of
any partnership or joint venture or the holder of a beneficial interest in
any trust for any period for which the statute of limitations for any Tax
has not expired; (viii) none of the Company or its subsidiaries has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code; (ix) none of the Company or its
subsidiaries is doing business in or engaged in a trade or business in any
jurisdiction in which it has not filed all required income or franchise
tax returns; (x) the Company and each of its subsidiaries have made all
payments of estimated Taxes required to be made under Section 6655 of the
Code and any comparable state, local or foreign Tax provision; (xi) all
Taxes required to be withheld, collected or deposited by or with respect
to the Company and each of its subsidiaries have been timely withheld,
collected or deposited, as the case may be, and, to the extent required,
have been paid to the relevant taxing authority; (xii) neither the Company
nor any of its subsidiaries has issued or assumed (A) any obligations
described in Section 279(a) of the Code, (B) any applicable high yield
discount obligations, as defined in Section
48
163(i) of the Code, or (C) any registration-required obligations, within
the meaning of Section 163(f)(2) of the Code, that is not in registered
form; (xiii) there are no requests for information currently outstanding
that could affect the Taxes of the Company or any of its subsidiaries;
(xiv) there are no proposed reassessments of any property owned by the
Company or any of its subsidiaries or other proposals that could increase
the amount of any Tax to which the Company or any such subsidiary would be
subject; and (xv) no power of attorney that is currently in force has been
granted with respect to any matter relating to Taxes that could materially
affect the Tax liability of the Company or one of its subsidiaries. As
used herein, "Taxes" shall mean all taxes of any kind, including, without
limitation, those on or measured by or referred to as income, gross
receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profits taxes, customs, duties
or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority, domestic or foreign. As
used herein, "Tax Return" shall mean any return, report or statement
required to be filed with any governmental authority with respect to
Taxes.
(k) Properties. Section 3.01(k) of the Disclosure Schedule contains
a true and complete list of all real
49
properties owned or leased by the Company or any of its subsidiaries. Each
of the Company and its subsidiaries has good and marketable title to all
properties, assets and rights of any kind whatsoever (whether real,
personal or mixed, and whether tangible or intangible) owned by it
(collectively, the "Company Assets"), in each case free and clear of all
Liens and other encumbrances except those which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect with respect to the Company. There are no pending or, to the
knowledge of the Company, threatened condemnation proceedings against or
affecting any Company Asset, and none of the Company Assets is subject to
any commitment or other arrangement for its sale to a third party outside
the ordinary course of business, which either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect
with respect to the Company. Each of the Company and each of its
subsidiaries has all permits (other than Environmental Permits (as defined
in Section 3.01(l)), the representations and warranties with respect to
which are set forth in Section 3.01(l)) necessary to own or operate the
Company Assets owned or leased by it, and no such permits will be
required, as a result of the Merger or the other transactions contemplated
hereby, to be issued, re-issued or transferred after the Closing in order
to permit the Company following the Merger to continue to own or operate
such Company Assets, other than any such permits
50
which are ministerial in nature or the absence of which, individually or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect with respect to the Company.
(l) Environmental Matters. Except as could not reasonably be
expected to result in liability under Environmental Laws to the Company or
any of its subsidiaries which would be material to the Company, and except
as disclosed in Section 3.01(l) of the Disclosure Schedule, which
disclosed items of non-compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect with
respect to the Company
(i) the Company and its subsidiaries hold and to the knowledge of
the Company are in compliance with all Environmental Permits, and the
Company and its subsidiaries are otherwise in compliance with all
Environmental Laws and, to the knowledge of the Company, there are no
conditions that might prevent or interfere with such compliance in the
future;
(ii) As of the date hereof, neither the Company nor any of its
subsidiaries has received any Environmental Claim, and to the knowledge of
the Company there is no threatened Environmental Claim;
(iii) Neither the Company nor any of its subsidiaries have entered
into any consent decree, order or agreement under any Environmental Law;
51
(iv) There are no (A) underground storage tanks, (B) polychlorinated
biphenyls, (C) friable asbestos or asbestos-containing materials, (D)
sumps, (E) surface impoundments, (F) landfills, or (G) sewers or septic
systems present at any facility currently owned, leased, operated or
otherwise used by the Company or any of its subsidiaries that could
reasonably be expected to give rise to liability of the Company or any of
its subsidiaries under any Environmental Laws;
(v) There are no past (including, without limitation, with respect
to assets or businesses formerly owned, leased or operated by the Company
or any of its subsidiaries) or present actions, activities, events,
conditions or circumstances, including without limitation the release,
threatened release, emission, discharge, generation, treatment, storage or
disposal of Hazardous Materials, that could reasonably be expected to give
rise to liability of the Company or any of its subsidiaries under any
Environmental Laws;
(vi) No modification, revocation, reissuance, alteration, transfer,
or amendment of the Environmental Permits, or any review by, or approval
of, any third party of the Environmental Permits is required in connection
with the execution or delivery of this Agreement or the consummation of
the transactions contemplated hereby or the continuation of the business
of the Company or its subsidiaries following such consummation;
52
(vii) Hazardous Materials have not been generated, transported,
treated, stored, disposed of, released or threatened to be released at,
on, from or under any of the properties or facilities currently owned,
leased or otherwise used by the Company or any of its subsidiaries, in
violation of, or so as could result in liability under, any Environmental
Laws;
(viii) None of the Company or its subsidiaries have contractually
assumed, any liabilities or obligations under any Environmental Laws;
(ix) To the extent required by generally accepted accounting
principles, the Company and its subsidiaries have accrued or otherwise
provided for all damages, liabilities, penalties or costs that they may
incur in connection with any claim pending or threatened against them, or
any requirement that is or may be applicable to them, under any
Environmental Laws, and such accrual or other provision is reflected in
the Company's most recent consolidated financial statements.
(x) For purposes of this Agreement, the following terms shall have
the following meanings:
"Environmental Claim" means any written or oral notice, claim,
demand, action, suit, complaint, proceeding or other communication
by any person alleging liability or potential liability (including
without limitation liability or potential liability for
investigatory costs, cleanup costs, governmental
53
response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or
resulting from (A) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any location,
whether or not owned, leased or operated by the Company or any of
its subsidiaries or (B) circumstances forming the basis of any
violation or alleged violation of any Environmental Law or
Environmental Permit or (C) otherwise relating to obligations or
liabilities under any Environmental Laws.
"Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations required under
Environmental Laws for the Company and its subsidiaries to conduct
their operations and businesses on the date hereof and consistent
with past practices.
"Environmental Laws" means all applicable federal, state and
local statutes, rules, regulations, ordinances, orders, decrees and
common law relating in any manner to contamination, pollution or
protection of the environment, including without limitation the
Comprehensive Environmental Response, Compensation and Liability
Act, the Solid Waste Disposal Act, the Clean Air Act, the Clean
Water Act, the Toxic Substances Control Act, the Occupational Safety
and Health Act, the Emergency Planning and Xxxxxxxxx-Xxxxx-xx-Xxxx
Xxx,
00
the Safe Drinking Water Act, all as amended, and similar state laws.
"Hazardous Materials" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or
any fraction thereof) and petroleum products, friable asbestos and
asbestos-containing materials, pollutants, contaminants and all
other materials, and substances regulated pursuant to, or that could
reasonably be expected to provide the basis of liability under, any
Environmental Law.
(m) Material Contracts. (i) Neither the Company nor any of its
subsidiaries is, or has received any notice or has any knowledge that any
other party is, in default in any respect under any material contract,
agreement, commitment, arrangement, lease, policy or other instrument to
which it or any of its subsidiaries is a party or by which it or any such
subsidiary is bound ("Material Contracts"), except for those defaults
which could not reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect with respect to the Company;
and, to the knowledge of the Company, there has not occurred any event
that with the lapse of time or the giving of notice or both would
constitute such a material default.
(ii) The Agreement and Plan of Merger among Amphenol Acquisition
Corporation, Allied Corporation ("Allied") and the Company, dated April 1,
1987, and the Amendment thereto dated as of May 15, 1987, and the
55
Settlement Agreement among Allied Signal Inc., the Company and LPL
Investment Group, Inc. dated November 28, 1988 (collectively, the "Allied
Agreements") are valid and binding agreements of the Company and, to the
knowledge of the Company, the other parties thereto. The Company has given
the notice or notices required under the Allied Agreements to entitle the
Company to be indemnified by Allied with respect to the Environmental
Claims arising at the facilities set forth in Section 3.01(m) of the
Disclosure Schedule. The Company's right to be indemnified against certain
Environmental Claims pursuant to such Allied Agreements is enforceable
against Allied and its successors, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or 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. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with, or result in a breach or
violation of, or give rise to a right of termination or cancellation
under, the Allied Agreements or otherwise adversely affect the Company's
right to be indemnified thereunder.
(n) Brokers. No broker, investment banker, financial advisor or
other person, other than Xxxxxx Brothers Inc. and
56
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), the
fees and expenses of which will be paid by the Company (pursuant to fee
agreements, copies of which have been provided to Newco), is entitled to
any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.
(o) Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxxx Xxxxx, dated the date of this Agreement, to the effect
that, as of such date, the consideration to be received in the Merger by
the Company's stockholders (other than Parent or any affiliate thereof) is
fair to such holders of the Company Common Stock from a financial point of
view, a signed copy of which opinion has been delivered to Newco.
(p) Board Recommendation. The Board of Directors of the Company, at
a meeting duly called and held, has by unanimous vote of those directors
present (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, taken together are fair to and
in the best interests of the stockholders of the Company and has taken all
actions necessary on the part of the Company to render the restrictions on
business combinations contained in Section 203 of the DGCL inapplicable to
this Agreement, the Merger and the Stockholders Agreement and (iii)
resolved to recommend that the holders of the shares
57
of Company Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger.
(q) Required Company Vote. The Company Stockholder Approval, being
the affirmative vote of a majority of the outstanding shares of the
Company Common Stock, is the only vote of the holders of any class or
series of the Company's securities necessary to approve this Agreement,
the Merger and the other transactions contemplated hereby. There is no
vote of the holders of any class or series of the Company's securities
necessary to approve the Stockholders Agreement or the Debt Offer.
(r) No Rights Plan. Neither the Company nor any of its subsidiaries
has any rights plan or similar preferred stock purchase plan or similar
arrangement.
(s) Intellectual Property. (i) Section 3.01(s)(i) of the Disclosure
Schedule sets forth all material Intellectual Property, owned or used by
the Company or its subsidiaries, which is registered or filed with, or has
been submitted to, any Governmental Entity, and the nature of the
Company's or its subsidiaries' rights therein and thereto.
(ii) To the knowledge of the Company, the Company and its
subsidiaries own or have the right to use all material Intellectual
Property reasonably necessary for the Company and its subsidiaries to
conduct their business as it is currently conducted and consistent with
past practice.
(iii) Except as set forth on Section 3.01(s)(iii) of the
Disclosure Schedule, to the knowledge of the Company:
58
(1) all of the Intellectual Property of the Company and its subsidiaries
is subsisting and unexpired, free of all liens, encumbrances or other
defects, has not been abandoned and does not infringe or otherwise impair
the intellectual property rights of any third party; (2) none of the
Intellectual Property of the Company and its subsidiaries is the subject
of any license, security interest or other agreement granting rights
therein to any third party; (3) no judgment, decree, injunction, rule or
order has been rendered by any U.S. or foreign Governmental Entity which
would limit, cancel or question the validity of, or the Company's or its
subsidiaries rights in and to any Intellectual Property in any respect
that could reasonably be expected to have individually or in the aggregate
a Material Adverse Effect with respect to the Company; (4) the Company has
not received notice of any pending or threatened suit, action or
proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its subsidiaries' rights in and to any Intellectual Property,
which, if adversely determined, could reasonably be expected to have
individually or in the aggregate a Material Adverse Effect with respect to
the Company; and (5) the Company and its subsidiaries take reasonable
steps to protect, maintain and safeguard their Intellectual Property,
including any material Intellectual Property for which improper or
unauthorized disclosure would impair its value or validity,
59
and have caused their employees to execute agreements in connection with
the foregoing.
(iv) For purposes of this Agreement "Intellectual Property"
shall mean all rights, privileges and priorities provided under U.S.,
state and foreign law relating to intellectual property, including without
limitation all (i) (a) inventions, discoveries, processes, formulae,
designs, methods, techniques, procedures, concepts, developments,
technology, new and useful improvements thereof and know-how relating
thereto, whether or not patented or eligible for patent protection; (b)
copyrights and copyrightable works, including computer applications,
programs, software, databases and related items; (c) trademarks, service
marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; (d) trade
secrets and other confidential information; and (ii) all registrations,
applications, recordings, and licenses or other similar agreements related
to the foregoing.
(t) Senior Notes Make-Whole Premium. As of April 1, 1997, the
Make-Whole Premium (as defined in the Note and Guarantee Agreement) in
respect of the Senior Notes to be paid in connection with any offer to
prepay the Senior Notes upon a Change in Control (as defined in the Note
and Guarantee Agreement) shall equal the amount set forth in Section
3.01(t) of the Disclosure Schedule after giving effect to the assumptions
set forth therein.
60
SECTION 3.02. Representations and Warranties of Newco. Newco
represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. Newco is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate
power and authority to carry on its business as now being conducted. Newco
is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a material
adverse effect with respect to Newco. Newco has delivered to the Company
complete and correct copies of its certificate of incorporation (or other
organizational documents) and by-laws.
(b) Subsidiaries. Newco has no direct or indirect subsidiaries.
(c) Capital Structure. The authorized capital stock of Newco
consists of 100 shares of common stock, par value $.01 per share, all of
which have been validly issued, are fully paid and nonassessable and are
owned by Parent, free and clear of any Lien.
(d) Authority; Noncontravention. Newco has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated by
61
this Agreement. The execution and delivery of this Agreement by Newco and
the consummation by Newco of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the part of Newco. This Agreement has been duly executed and delivered by
Newco and (assuming due authorization, execution and delivery by the
Company) constitutes a valid and binding obligation of Newco, enforceable
against Newco in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or 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. The execution and delivery of this Agreement do not, and the
consummation by Newco of the transactions contemplated by this Agreement
and compliance by Newco with the provisions of this Agreement will not,
conflict with, or result in any breach or violation of, or default (with
or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets of
Newco under, (i) the certificate of incorporation or by-laws of Newco,
(ii) any loan or credit agreement,
62
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Newco or its
properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule, regulation or arbitration award
applicable to Newco or its properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, breaches, violations,
defaults, rights, losses or Liens that individually or in the aggregate
could not have a material adverse effect with respect to Newco or could
not prevent, hinder or materially delay the ability of Newco to consummate
the transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with, or
notice to, any Governmental Entity is required by or with respect to Newco
in connection with the execution and delivery of this Agreement by Newco
or the consummation by Newco of any of the transactions contemplated by
this Agreement, except for (i) the filing of a premerger notification and
report form under the HSR Act, (ii) the filing with the SEC of (y) the
Proxy Statement and the Form S-4 and (z) such reports under the Exchange
Act as may be required in connection with this Agreement, the Stockholders
Agreement and the transactions contemplated hereby and thereby, including
the Debt Offer, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate
63
documents with the relevant authorities of other states in which the
Company is qualified to do business and (iv) such other consents,
approvals, orders, authorizations, registrations, declarations, filings or
notices as may be required under the "takeover" or "blue sky" laws of
various states.
(e) Brokers. No broker, investment banker, financial advisor or
other person, other than Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, the fees and expenses of which will be paid by Newco or its
affiliates, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on
behalf of Newco to its affiliates.
(f) Interim Operations of Newco. Newco was formed on January 13,
1997 solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
(g) Offer Documents; Proxy Statement. None of the information
supplied in writing by Newco specifically for inclusion in (i) the Offer
Documents shall, at the time the Offer Documents or any amendments or
supplements thereto are first published, sent or given to noteholders, as
the case may be, contain any untrue statement of a material fact or omit
to state any material fact required to be stated
64
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, (ii) the
Form S-4 will, at the time the Form S-4 is filed with the SEC, and at any
time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (iii) the
Proxy Statement will, at the date it is first mailed to the stockholders
of the Company or at the time of the Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, Newco makes no representation
or warranty with respect to any information supplied by the Company or any
of its representatives which is contained in or incorporated by reference
in any of the foregoing documents.
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Merger.
SECTION 4.01. Conduct of Business of the Company. (a) Conduct of
Business by the Company. During the period from the date of this Agreement to
the Effective Time of the Merger (except as otherwise expressly contemplated by
the terms of this
65
Agreement), the Company shall, and shall cause its subsidiaries to, act and
carry on their respective businesses in the usual, regular and ordinary course
of business consistent with past practice and use its and their respective
reasonable best efforts to preserve substantially intact their current business
organizations, keep available the services of their current officers and
employees and preserve their relationships with customers, suppliers, licensors,
licensees, advertisers, distributors and others having significant business
dealings with them. Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time of the Merger, the
Company shall not, and shall not permit any of its subsidiaries (or Subsidiaries
as set forth below) to, without the prior consent of Newco (which consent shall
not be unreasonably withheld):
(i) (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
dividends and distributions by a direct or indirect wholly owned domestic
subsidiary of the Company to its parent, (y) split, combine or reclassify
any capital stock of the Company or any subsidiary or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of capital stock of the Company or any subsidiary,
or (z) purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its subsidiaries or any other securities thereof
or any rights, warrants or options to
66
acquire any such shares or other securities, except, in the case of clause
(z), for the Debt Offer and the purchase of the Senior Notes;
(ii) authorize for issuance, issue, deliver, sell, pledge or
otherwise encumber any shares of its capital stock or the capital stock of
any of its subsidiaries, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities or any other
securities or equity equivalents (including without limitation stock
appreciation rights) other than the issuance of Company Common Stock upon
the exercise of Company Stock Options awarded but unexercised on the date
of this Agreement and in accordance with their present terms (such
issuances, together with the acquisitions of securities permitted under
clause (i)(z) above, being referred to herein as "Permitted Changes");
(iii) amend the certificate of incorporation, by-laws or other
comparable charter or organizational documents of the Company or any
subsidiary;
(iv) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the stock or assets of, or by
any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof;
67
(v) sell, lease, license, mortgage or otherwise encumber or subject
to any Lien or otherwise dispose of any of its properties or assets other
than any such properties or assets the value of which do not exceed
$100,000 individually and $1,000,000 in the aggregate, except sales of
inventory and receivables in the ordinary course of business consistent
with past practice and except for the sale-leaseback of the land and
buildings owned by Xxx-Xxxx Industrial Co., Ltd.;
(vi) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for borrowings
necessary to effect the Debt Offer and to repay the principal amount of
the Senior Notes and pay the Make-Whole Premium, and for short-term
borrowings incurred in the ordinary course of business consistent with
past practice, or (B) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or any
direct or indirect wholly owned subsidiary of the Company;
(vii) acquire or agree to acquire any assets, other than inventory
in the ordinary course of business consistent with
68
past practice, that are material, individually or in the aggregate, to the
Company and its subsidiaries taken as a whole, or make or agree to make
any capital expenditures except capital expenditures which, individually
or in the aggregate, do not exceed the amount budgeted therefor in the
Company's annual capital expenditures budget for 1997 previously provided
to Newco;
(viii) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction of (x) liabilities or obligations in the ordinary course of
business consistent with past practice or in accordance with their terms
as in effect on the date hereof, (y) claims settled or compromised to the
extent permitted by Section 4.01(a)(xii), or waive, release, grant, or
transfer any rights of material value or modify or change in any material
respect any existing material license, lease, contract or other document,
other than in the ordinary course of business consistent with past
practice or (z) the Notes;
(ix) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;
(x) enter into any new collective bargaining agreement or any
successor collective bargaining agreement to any
69
collective bargaining agreement disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule;
(xi) change any material accounting principle used by it;
(xii) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or compromises
of litigation where the amount paid (after giving effect to insurance
proceeds actually received) in settlement or compromise does not exceed
$100,000, provided that the aggregate amount paid in connection with the
settlement or compromise of all such litigation matters shall not exceed
$250,000;
(xiii) engage in any transaction with, or enter into any agreement,
arrangement, or understanding with, directly or indirectly, any of the
Company's affiliates, including, without limitation, any transactions,
agreements, arrangements or understandings with any affiliate or other
Person covered under Item 404 of SEC Regulation S-K that would be required
to be disclosed under such Item 404 other than such transactions of the
same general nature, scope and magnitude as are disclosed in the Company
SEC Documents; or
(xiv) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Changes in Employment Arrangements. Neither the Company nor any
of its subsidiaries shall (except as may be required in order to give effect to
the requirements of Section 2.04) adopt or amend (except as may be required by
law) any
70
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement, trust, fund
or other arrangement (including any Company Plan) for the benefit or welfare of
any employee, director or former director or employee or, other than increases
for individuals (other than officers and directors) in the ordinary course of
business consistent with past practice, increase the compensation or fringe
benefits of any director, employee or former director or employee or pay any
benefit not required by any existing plan, arrangement or agreement.
(c) Severance. Neither the Company nor any of its subsidiaries shall
grant any new or modified severance or termination arrangement or increase or
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
(d) WARN. Neither the Company nor any of its subsidiaries shall
effectuate a "plant closing" or "mass layoff", as those terms are defined in the
Worker Adjustment and Retraining Notification Act of 1988 ("WARN"), affecting in
whole or in part any site of employment, facility, operating unit or employee of
the Company or any subsidiary, without notifying Newco or its affiliates in
advance and without complying with the notice requirements and other provisions
of WARN.
(e) Tax Elections. Except in the ordinary course of business and
consistent with past practice, neither the Company nor any of its subsidiaries
shall make any tax election or settle or compromise any federal, state, local or
foreign Tax liability.
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ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting.
(a) Promptly following the date of this Agreement, the Company shall
prepare the Proxy Statement, and the Company shall prepare and file with the SEC
the Form S-4, in which the Proxy Statement will be included. Newco will
cooperate with the Company in connection with the preparation of the Proxy
Statement including, but not limited to, furnishing to the Company any and all
information regarding Parent as may be required to be disclosed therein. The
Company shall use its reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such filing.
The Company will use its reasonable best efforts to cause the Proxy Statement to
be mailed to the Company's stockholders as promptly as practicable after the
Form S-4 is declared effective under the Securities Act. The Company shall also
take any action required to be taken under any applicable state securities laws
in connection with the registration and qualification of Common Stock of the
Company following the Merger. The information provided and to be provided by
Newco and the Company, respectively, for use in the Form S-4 shall, at the time
the Form S-4 becomes effective and on the date of the Stockholders Meeting
referred to below, be true and correct in all material respects and shall not
omit to state any material fact required to be stated therein or necessary in
order to make such information not
72
misleading, and the Company and Newco each agree to correct any information
provided by it for use in the Form S-4 which shall have become false or
misleading.
(b) The Company will as promptly as practicable notify Newco of (i)
the effectiveness of the Form S-4, (ii) the receipt of any comments from the SEC
and (iii) any request by the SEC for any amendment to the Form S-4 or for
additional information. All filings by the Company with the SEC, including the
Form S-4 and any amendment thereto, and all mailings to the Company's
stockholders in connection with the Merger, including the Proxy Statement, shall
be subject to the prior review, comment and approval of Newco (such approval not
to be unreasonably withheld or delayed).
(c) The Company will, as promptly as practicable following the date
of this Agreement and in consultation with Newco, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Stockholders Meeting") for
the purpose of approving this Agreement and the transactions contemplated by
this Agreement to the extent required by the DGCL. The Company will, through its
Board of Directors, recommend to its stockholders approval of the foregoing
matters, as set forth in Section 3.01(p); provided, however, that the Board of
Directors of the Company may fail to make or withdraw or modify such
recommendation, but only to the extent that the Board of Directors of the
Company shall have concluded in good faith on the basis of written advice from
outside counsel that such action is required to prevent the Board of Directors
of the Company from
73
breaching its fiduciary duties to the stockholders of the Company under
applicable law. Any such recommendation, together with a copy of the opinion
referred to in Section 3.01(o) shall be included in the Proxy Statement. The
Company will use its best efforts to hold such meeting as soon as practicable
after the date hereof.
SECTION 5.02. Access to Information; Confidentiality. (a) The
Company shall, and shall cause its subsidiaries, officers, employees, counsel,
financial advisors and other representatives to, afford to Newco and its
representatives and to potential financing sources reasonable access during
normal business hours, in a manner initially coordinated with the chief
executive officer of the Company, and thereafter coordinated with those persons
designated by the chief executive officer, during the period prior to the
Effective Time of the Merger to its properties, books, contracts, commitments,
personnel and records, including security position listings and other
information concerning beneficial owners and/or record owners of the Company's
securities which may be relevant to the Merger or Debt Offer, and, during such
period, the Company shall, and shall cause its subsidiaries, officers, employees
and representatives to, furnish promptly to Newco (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and (ii)
all other information concerning its business, properties, financial condition,
operations and personnel as Newco may from time to time reasonably request.
74
Each of the Company and Newco will hold, and will cause its respective
directors, officers, employees, accountants, counsel, financial advisors and
other representatives and affiliates to hold, any nonpublic information in
confidence to the extent required by, and in accordance with, the provisions of
the letter dated December 11, 1996, between Kohlberg Kravis Xxxxxxx & Co. ("KKR
& Co.") and the Company (and additional individual agreements executed and
delivered pursuant thereto) (collectively, the "Confidentiality Agreement").
(b) No investigation pursuant to this Section 5.02 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
SECTION 5.03. Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including the Debt Offer. Newco and the Company
will use their reasonable best efforts and cooperate with one another (i) in
promptly determining whether any filings are required to be made or consents,
approvals, waivers, licenses, permits or authorizations are required to be
obtained (or, which if not obtained, would
75
result in an event of default, termination or acceleration of any agreement or
any put right under any agreement) under any applicable law or regulation or
from any governmental authorities or third parties, including parties to loan
agreements or other debt instruments, in connection with the transactions
contemplated by this Agreement, including the Merger and the Debt Offer and (ii)
in promptly making any such filings, in furnishing information required in
connection therewith and in timely seeking to obtain any such consents,
approvals, permits or authorizations.
(b) The Company shall make, subject to the condition that the
transactions contemplated herein actually occur, any undertakings (including
undertakings to make divestitures, provided that such divestitures need not
themselves be made until after the transactions contemplated hereby actually
occur) required in order to comply with the antitrust requirements or laws of
any governmental entity, including the HSR Act, in connection with the
transactions contemplated by this Agreement; provided that no such divestiture
or undertaking shall be made unless acceptable to Newco.
(c) The Company shall cooperate with any reasonable requests of
Newco or the SEC related to the recording of the Merger as a recapitalization
for financial reporting purposes, including, without limitation, to assist Newco
and its affiliates with any presentation to the SEC with regard to such
recording and to include appropriate disclosure with regard to such recording in
all filings with the SEC and all mailings to
76
stockholders made in connection with the Merger. In furtherance of the
foregoing, the Company shall provide to Newco for the prior review of Newco's
advisors any description of the transactions contemplated by this Agreement
which is meant to be disseminated.
(d) The Company agrees to provide, and will cause its subsidiaries
and its and their respective officers, employees and advisors to provide, all
necessary cooperation in connection with the arrangement of any financing to be
consummated contemporaneous with or at or after the Closing in respect of the
transactions contemplated by this Agreement, including without limitation, (x)
participation in meetings, due diligence sessions and road shows, (y) the
preparation of offering memoranda, private placement memoranda, prospectuses and
similar documents, and (z) the execution and delivery of any commitment letters,
underwriting or placement agreements, pledge and security documents, other
definitive financing documents, or other requested certificates or documents,
including a certificate of the chief financial officer of the Company with
respect to solvency matters, comfort letters of accountants and legal opinions
as may be requested by Newco; provided that the form and substance of any of the
material documents referred to in clause (y), and the terms and conditions of
any of the material agreements and other documents referred to in clause (z),
shall be substantially consistent with the terms and conditions of the financing
required to satisfy the condition precedent set forth in Section 6.02(f) and,
provided, further, that the terms and
77
conditions of such financing may not require the payment of any commitment or
other similar fee by the Company, or the incurrence of any liabilities by the
Company, prior to the Effective Time of the Merger without the Company's prior
consent (which consent will not be unreasonably withheld). The parties
acknowledge that the payment of any fees by the Company in connection with any
commitment letters shall be subject to the occurrence of the Closing. In
addition, in conjunction with the obtaining of any such financing, the Company
agrees, at the request of Newco, to call for prepayment or redemption, or to
prepay, redeem and/or renegotiate, as the case may be, any then existing
indebtedness of the Company, including, without limitation, the Senior Notes;
provided that no such prepayment or redemption or in the case of the Senior
Notes, call for prepayment or redemption, shall themselves actually be made
until contemporaneously with or after, or, in the case of the call for
prepayment of the Senior Notes, immediately prior to or contemporaneously with,
the Effective Time of the Merger.
(e) (i) Newco hereby agrees to use its reasonable best efforts,
subject to normal conditions, to assist the Company in arranging the financing
in respect of the transactions contemplated by this Agreement described in Annex
A-1 and Annex A-2 of the Disclosure Schedule, including, subject to normal
conditions, using its reasonable best efforts (A) to assist the Company in the
negotiation of definitive agreements with respect thereto and (B) to satisfy all
conditions applicable to Newco in such definitive agreements. Newco will keep
the Company informed
78
of the status of its efforts to assist the Company in arranging such financing,
including making reports with respect to significant developments. In the event
any portion of such financing becomes unavailable in the manner or from the
sources originally contemplated, Newco will use its reasonable best efforts,
subject to normal conditions, to assist the Company in arranging any such
portion from alternative sources. Each of Newco and the Company shall notify the
other within 24 hours of its learning that any such financing will not be
available on terms satisfactory to Newco.
(ii) Subject to the Company having received the proceeds of the
financing described in Section 6.02(f) on terms satisfactory to Newco, Newco at
Closing will be capitalized with an equity contribution of at least $341
million. Newco will be under no obligation pursuant to the preceding sentence
unless and until the Company receives the proceeds of the financing described in
Section 6.02(f) on terms satisfactory to Newco. In addition, Newco will be under
no obligation under any circumstances to be capitalized with equity of more than
$341 million.
SECTION 5.04. Benefit Matters. Except as contemplated herein, the
Company, for the period ending on December 31, 1997, shall provide employee
benefits under plans, programs and arrangements which, in the aggregate, will
provide benefits to the employees of the Company which are no less favorable, in
the aggregate, than those provided pursuant to the plans, programs and
arrangements of the Company (other than those related to
79
Company Common Stock) in effect and disclosed to Newco on the date hereof;
provided, however, that nothing herein shall prevent the amendment or
termination of any such plan, program or arrangement, require that the Company
provide or permit investment in the securities of the Company, interfere with
the Company's right or obligation to make such changes as are necessary to
conform with applicable law or prevent the termination by the Company or any
subsidiary of any employee of the Company or of any subsidiary.
SECTION 5.05. Indemnification. (a) The Certificate of Incorporation
and By-laws of the Company following the Merger shall contain provisions
identical with respect to elimination of personal liability and indemnification
to those set forth in Articles Sixth and Seventh of the Certificate of
Incorporation of the Company set forth in Exhibit A hereto and Article VIII of
the By-laws of the Company on the date hereof, respectively, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the Effective Time of the Merger in any manner that would adversely affect
the rights thereunder of individuals who at the Effective Time of the Merger
were directors, officers, agents or employees of the Company.
(b) The Company shall maintain in effect for six years from the
Effective Time of the Merger policies of directors' and officers' liability
insurance containing terms and conditions which are not less advantageous than
any such policies which may be purchased by the Company prior to the Effective
Time of the Merger (the "Company Insurance"), with respect to matters
80
occurring prior to the Effective Time of the Merger, to the extent available,
and having the maximum available coverage under any such Company Insurance
policies; provided that (i) the Company following the Merger shall not be
required to spend in excess of $100,000 per year therefor; provided further that
if the Company following the Merger would be required to spend in excess of
$100,000 per year to obtain insurance having the maximum available coverage
under the Company Insurance policies, the Company will be required to spend up
to such amount to maintain or procure insurance coverage pursuant hereto,
subject to availability of such (or similar) coverage and (ii) such policies may
in the sole discretion of the Company be one or more "tail" policies for all or
any portion of the full six year period. The Company agrees that in the event it
would be required to spend in excess of $100,000 per year to obtain insurance
having the maximum available coverage under the Company Insurance policies, the
Company will notify the officers and directors who are the beneficiaries thereof
and permit such officers and directors to pay any excess amount over $100,000
which may be necessary to maintain such policies.
(c) In furtherance of and not in limitation of the preceding
paragraph, Newco agrees that the officers and directors of the Company that are
defendants in all litigation commenced by stockholders of the Company with
respect to (x) the performance of their duties as such officers and/or directors
under federal or state law (including litigation under federal and state
securities laws) and (y) the Merger, including, without
81
limitation, any and all such litigation commenced on or after the date of this
Agreement (the "Subject Litigation") shall be entitled to be represented, at the
reasonable expense of the Company, in the Subject Litigation by one counsel (and
Delaware counsel if appropriate and one local counsel in each jurisdiction in
which a case is pending) each of which such counsel shall be selected by a
plurality of such director defendants; provided that the Company shall not be
liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld) and that a condition to the
indemnification payments provided in Section 5.05(a) shall be that such
officer/director defendant not have settled any Subject Litigation without the
consent of the Company (such consent not to be unreasonably withheld) and, prior
to the Closing, Newco; and provided further that neither Newco nor the Company
shall have any obligation hereunder to any officer/director defendant when and
if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and non-appealable, that indemnification
of such officer/director defendant in the manner contemplated hereby is
prohibited by applicable law.
SECTION 5.06. Public Announcements. Neither Newco, on the one hand,
nor the Company, on the other hand, will issue any press release or public
statement with respect to the transactions contemplated by this Agreement and
the Stockholders Agreement, including the Merger and the Debt Offer, without the
other party's prior consent (such consent not to be unreasonably
82
withheld), except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with the New York Stock Exchange.
In addition to the foregoing, Newco and the Company will consult with each other
before issuing, and provide each other the opportunity to review and comment
upon, any such press release or other public statements with respect to such
transactions. The parties agree that the initial press release or releases to be
issued with respect to the transactions contemplated by this Agreement shall be
mutually agreed upon prior to the issuance thereof.
SECTION 5.07. Affiliates. Prior to the Closing Date, the Company
shall deliver to Newco a letter identifying all persons who are, at the time
this Agreement is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use its reasonable best efforts to cause each such person to
deliver to Newco on or prior to the Closing Date a written agreement
substantially in the form attached as Exhibit B hereto.
SECTION 5.08. No Solicitation. Neither the Company nor any of its
subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or subsidiaries to (a) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any person (other than Newco, Parent or NXS) relating
83
to (i) any acquisition or purchase of 20% or more of the consolidated assets of
the Company and its subsidiaries or of over 20% of any class of equity
securities of the Company or any of its subsidiaries, (ii) any tender offer
(including a self tender offer) or exchange offer that if consummated would
result in any Person (as defined in Section 8.02) beneficially owning 20% or
more of any class of equity securities of the Company or any of its
subsidiaries, (iii) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its subsidiaries whose assets,
individually or in the aggregate, constitute more than 20% of the consolidated
assets of the Company other than the transactions contemplated by this Agreement
and the Stockholders Agreement, or (iv) any other transaction the consummation
of which would or could reasonably be expected to impede, interfere with,
prevent or materially delay the Merger or Debt Offer or which would or could
reasonably be expected to materially dilute the benefits to Newco of the
transactions contemplated hereby (collectively, "Transaction Proposals"), or
agree to or endorse any Transaction Proposal, or (b) enter into or participate
in any discussions or negotiations regarding any of the foregoing, or furnish to
any other person any information with respect to its business, properties or
assets or any of the foregoing, or otherwise cooperate in any way with, or
knowingly assist or participate in, facilitate or encourage, any effort or
attempt by any other person (other than Newco, Parent or NXS) to do or seek any
of the
84
foregoing; provided, however, that the foregoing shall not prohibit the Company
(either directly or indirectly through advisors, agents or other intermediaries)
from (i) furnishing information pursuant to an appropriate confidentiality
letter (which letter shall not be less favorable to the Company in any material
respect than the Confidentiality Agreement, and a copy of which shall be
provided for informational purposes only to Newco) concerning the Company and
its businesses, properties or assets to a third party who has made a bona fide
Transaction Proposal, (ii) engaging in discussions or negotiations with such a
third party who has made a bona fide Transaction Proposal, (iii) following
receipt of a bona fide Transaction Proposal, taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) under the Exchange Act or
otherwise making disclosure to its stockholders, (iv) following receipt of a
bona fide Transaction Proposal, failing to make or withdrawing or modifying its
recommendation referred to in Section 3.01(p), and/or (v) taking any
non-appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction but in each case referred to in the foregoing clauses (i)
through (v) only to the extent that the Board of Directors of the Company shall
have concluded in good faith on the basis of written advice from outside counsel
that such action is required to prevent the Board of Directors of the Company
from breaching its fiduciary duties to the stockholders of the Company under
applicable law; provided, further, that the Board of Directors of the Company
shall not take any of the foregoing actions referred to in
85
clauses (i) through (iv) until after reasonable notice to Newco with respect to
such action and that such Board of Directors shall, to the extent it may do so
without breaching such fiduciary duties, continue to advise Newco after taking
such action and, in addition, if the Board of Directors of the Company receives
a Transaction Proposal, then the Company shall promptly inform Newco of the
terms and conditions of such proposal and the identity of the person making it.
The Company will immediately cease and cause its advisors, agents and other
intermediaries to cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing, and shall use its reasonable best efforts to cause any such parties
in possession of confidential information about the Company that was furnished
by or on behalf of the Company to return or destroy all such information in the
possession of any such party or in the possession of any agent or advisor of any
such party.
SECTION 5.09. Resignation of Directors. At the Closing, the Company
shall deliver to Newco evidence satisfactory to Newco of the resignation of all
directors of the Company, effective at the Effective Time of the Merger.
SECTION 5.10. Certain Agreements. (a) Neither the Company nor any
subsidiary of the Company will waive or fail to enforce any provision of any
confidentiality or standstill or similar agreement to which it is a party
without the prior written consent of Newco.
86
(b) The Company shall, as promptly as practicable and in any event
at least 10 days prior to the Closing, prepare and deliver or cause to be
delivered to Newco financial statements for the fiscal year ended December 31,
1996 which shall be accompanied by an unqualified audit opinion of the Company's
independent certified public accountants.
SECTION 5.11. Stop Transfer. The Company acknowledges and agrees to
be bound by and comply with the provisions of the Stockholders Agreement as if a
party thereto with respect to transfers of record ownership of shares of Company
Common Stock, and agrees to notify the transfer agent for any shares of Company
Common Stock or voting rights certificates and provide such documentation and do
such other things as may be reasonably necessary to effectuate the provisions of
such agreement.
SECTION 5.12. New York Stock Exchange Listing. The Company will not
take any action, for at least three years from the Effective Time of the Merger,
to cause the Company Common Stock to be delisted from the New York Stock
Exchange (the "NYSE") except in compliance with Rule 500 of the NYSE, as
interpreted in Section 806 of the NYSE Listed Company Manual as in effect on the
date hereof (and provided that, in addition to the requirements of the NYSE, a
majority of shares not held of record or beneficially by Parent or its
affiliates must be voted in favor of the de-listing); provided, however, that
the Company may cause or permit the Company Common Stock to be de-listed in
connection with a transaction which results in the termination of registration
of such securities under Section 12 of the Exchange
87
Act, and provided, further, that nothing in this Section 5.12 shall require the
Company to take any affirmative action to prevent the Company Common Stock from
being de-listed by the NYSE in the event that the Company Common Stock ceases to
meet the applicable NYSE listing standards.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect; provided, however, that
the parties hereto shall use their best efforts to have any such
injunction, order, restraint or prohibition vacated.
(d) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop
88
order, and any material "blue sky" and other state securities laws
applicable to the registration and qualification of the Common Stock of
the Company following the Merger shall have been complied with.
SECTION 6.02. Conditions to Obligations of Newco. The obligations of
Newco to effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct in each case as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing Date, except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) would not individually or in
the aggregate reasonably be expected to have a Material Adverse Effect.
Newco shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief financial officer of the Company
to the effect set forth in this paragraph.
(b) Performance of Obligations of the Company. The Company shall
have performed the obligations required to be performed by it under this
Agreement at or prior to the Closing Date (except for such failures to
perform as have not had or could not reasonably be expected, either
89
individually or in the aggregate, to have a Material Adverse Effect with
respect to the Company or adversely affect the ability of the Company to
consummate the transactions herein contemplated or perform its obligations
hereunder).
(c) Consents, etc. Newco shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties as are necessary in
connection with the transactions contemplated hereby have been obtained,
except where the failure to obtain such licenses, permits, consents,
approvals, authorizations, qualifications and orders could not,
individually or in the aggregate with all other failures, reasonably be
expected to have a Material Adverse Effect with respect to the Company.
(d) No Litigation. There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding (or by any other person
any suit, action or proceeding which has a reasonable likelihood of
success), (i) challenging or seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated
by this Agreement or the Stockholders Agreement or seeking to obtain from
Parent, Newco or any of their affiliates any damages that are material to
any such party, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries
of any material portion of the business or
90
assets of the Company or any of its subsidiaries, to dispose of or hold
separate any material portion of the business or assets of the Company or
any of its subsidiaries, as a result of the Merger or any of the other
transactions contemplated by this Agreement or the Stockholders Agreement,
(iii) seeking to impose limitations on the ability of Parent or Newco to
acquire or hold, or exercise full rights of ownership of, any shares of
the Company Common Stock, including, without limitation, the right to vote
the Company Common Stock on all matters properly presented to the
stockholders of the Company or (iv) seeking to prohibit Parent or any of
its subsidiaries from effectively controlling in any material respect the
business or operations of the Company or its subsidiaries.
(e) Affiliate Letters. Newco shall have received the agreements
referred to in Section 5.07.
(f) Financing. The Company shall have received the proceeds of
financing on terms and conditions set forth in Annex A-1 and Annex A-2 of
the Disclosure Schedule or upon terms and conditions which are, in the
reasonable judgment of Newco, substantially equivalent thereto, and to the
extent that any of the terms and conditions are not set forth in Annex A-1
and Annex A-2 of the Disclosure Schedule, on terms and conditions
reasonably satisfactory to Newco.
(g) Newco shall have received evidence that the terms of the
Subordinated Notes shall have been amended to the reasonable satisfaction
of Newco including, without
91
limitation, the elimination of the negative covenants contained therein
and the elimination of any restrictions applicable to transactions
contemplated by this Agreement. The Company shall have purchased at least
that principal amount of Subordinated Notes as equals the minimum
condition in the Debt Offer. The Company shall have, immediately prior to
or contemporaneously with the Closing, called the Senior Notes for
redemption.
(h) Newco shall be reasonably satisfied that the Merger shall be
recorded as a recapitalization for financial reporting purposes.
(i) The individuals listed in Section 6.02(i) of the Disclosure
Schedule shall have entered into one or more subscription, option,
stockholder and/or other agreements relating to their respective equity
interests in the Company after the Effective Time of the Merger on terms
and conditions substantially consistent with the agreement in principle
delivered to the Company prior to the date hereof or otherwise
satisfactory to Newco.
SECTION 6.03. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Newco set forth in this Agreement shall be true and correct,
in each case as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date)
92
as of the Closing Date as though made on and as of the Closing Date,
except where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation as to
"materiality" or "material adverse effect" set forth therein) would not
individually or in the aggregate reasonably be expected to have a material
adverse effect. The Company shall have received a certificate signed on
behalf of Newco by an authorized officer of Newco to the effect set forth
in this paragraph.
(b) Performance of Obligations of Newco. Newco shall have performed
the obligations required to be performed by it under this Agreement at or
prior to the Closing Date (except for such failures to perform as have not
had or could not reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect with respect to Newco or
adversely affect the ability of Newco to consummate the transactions
herein contemplated or perform its obligations hereunder).
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time of the Merger, whether before
or after approval of matters presented in connection with the Merger by the
stockholders of the Company:
93
(a) by mutual written consent of Newco and the Company; or
(b) by either Newco or the Company if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger or
the Debt Offer and such order, decree, ruling or other action shall have
become final and nonappealable; or
(c) by either Newco or the Company if the Merger shall not have been
consummated on or before June 30, 1997 (other than due to the failure of
the party seeking to terminate this Agreement to perform its obligations
under this Agreement required to be performed at or prior to the Effective
Time of the Merger); or
(d) by either Newco or the Company if at the duly held meeting of
the stockholders of the Company (including any adjournment thereof) held
for the purpose of voting on the Merger, this Agreement and the
consummation of the transactions contemplated hereby, the holders of a
majority of the outstanding shares of Company Common Stock shall not have
approved the Merger, this Agreement and the consummation of the
transactions contemplated hereby; or
(e) by Newco, if the Company or its Board of Directors shall have
(1) withdrawn, modified or amended in any respect adverse to Newco its
approval or recommendation of this Agreement or any of the transactions
contemplated herein, (2) failed as promptly as practicable after the Form
S-4 is
94
declared effective to mail the Proxy Statement to its stockholders or
failed to include in such statement such recommendation, (3) recommended
any Transaction Proposal from a person other than Newco or any of its
affiliates, (4) resolved to do any of the foregoing or (5) in response to
the commencement of any tender offer or exchange offer for more than 20%
of the outstanding shares of Company Common Stock, not recommended
rejection of such tender offer or exchange offer; or
(f) by the Company, if, pursuant to and in compliance with Section
5.08 hereof, the Board of Directors of the Company concludes in good
faith, based on written advice from outside counsel, that in order to
prevent the Board of Directors of the Company from breaching its fiduciary
duties to the stockholders of the Company under the DGCL, the Board of
Directors must not make or must withdraw or modify its recommendation
referred to in Section 3.01(p) and the Board of Directors does not make or
withdraws or modifies such recommendation.
SECTION 7.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Newco as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Newco or the Company, other than the provisions of
Section 3.01(n), Section 3.02(e), the last sentence of Section 5.02(a), this
Section 7.02, Section 8.02 and Section 8.07. Nothing contained in this Section
shall relieve any party for any
95
breach of the representations, warranties, covenants or agreements set forth in
this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time before or after any required approval of matters presented
in connection with the Merger by the stockholders of the Company; provided,
however, that after any such approval, there shall be made no amendment that by
law requires further approval by such stockholders without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the Effective
Time of the Merger, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso of Section 7.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an amendment
of this Agreement pursuant to Section
96
7.03 or an extension or waiver pursuant to Section 7.04 shall, in order to be
effective, require in the case of Newco or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time of the
Merger and all such representations and warranties will be extinguished on
consummation of the Merger and neither the Company nor any officer, director or
employee or shareholder shall be under any liability whatsoever with respect to
any such representation or warranty after such time. This Section 8.01 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time of the Merger.
SECTION 8.02. Fees and Expenses. (a) In addition to any other
amounts which may be payable or become payable pursuant to any other paragraph
of this Section 8.02, if the Company shall have failed to satisfy or perform any
of the conditions or obligations required to be satisfied or performed by it
pursuant to Section 6.02(a) or 6.02(b) hereof and, as a result thereof, this
Agreement is thereafter terminated, then the Company shall (provided that Newco
is not then in material breach of its obligations under this Agreement),
promptly, but in no event later than one business day after the termination of
this
97
Agreement (or from time to time after Closing), reimburse KKR & Co. for all
documented out-of-pocket expenses and fees (including, without limitation, fees
payable to all banks, investment banking firms and other financial institutions,
and their respective agents and counsel, and all fees of counsel, accountants,
financial printers, experts and consultants to Newco and its affiliates),
whether incurred prior to, on or after the date hereof, in connection with the
Merger and the consummation of all transactions contemplated by this Agreement
and the financing thereof; provided that, except as set forth in the next
succeeding proviso or with respect to any reimbursement following the Closing,
in no event shall the Company be required to pay in excess of an aggregate of $5
million pursuant to this paragraph (a); and provided further that, whether or
not the Company has satisfied or performed the conditions and obligations
required to be performed by it pursuant to Section 6.02(a) and 6.02(b) hereof,
in the event a fee is payable to KKR & Co. pursuant to Section 8.02(b) hereof,
the Company shall be required to pay expenses pursuant to this paragraph (a) up
to a maximum of $12.5 million.
(b) (i) If this Agreement shall have been terminated in accordance
with its terms and either of the following shall have occurred prior to
such termination: (A) any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person, other entity or "group"
(as referred to in Section 13(d)(3) of the Exchange Act) other than Newco
or any of its affiliates and
98
other than any party to the Stockholders Agreement, including any
Permitted Transferee (as defined in the Stockholders Agreement) of such a
party which is or agrees to become bound thereby (so long as neither any
such party to the Stockholders Agreement nor any such Permitted Transferee
is a member of a "group" which includes any other person) (collectively,
"Persons"), shall have become the beneficial owner of more than 20% of the
outstanding shares of Company Common Stock; or (B)(x) any Person (other
than Newco or any of its affiliates) shall have made, or proposed,
communicated or disclosed in a manner which is or otherwise becomes public
(including being known by stockholders of the Company owning of record or
beneficially in the aggregate 5% or more of the outstanding shares of
Company Common Stock) a bona fide intention to make a Transaction Proposal
(including by making such a Transaction Proposal) and (y) on or prior to
January 15, 1998, the Company either consummates with a Person a
transaction the proposal of which would otherwise qualify as a Transaction
Proposal under Section 5.08 or enters into a definitive agreement with a
Person with respect to a transaction the proposal of which would otherwise
qualify as a Transaction Proposal under Section 5.08 (whether or not such
Person is the Person referred to in clause (x) above); or
(ii) if this Agreement is terminated pursuant to Section 7.01(e) or
Section 7.01(f);
99
then the Company shall, (1) in the case of clause (b)(i)(A) and (b)(ii)
above, promptly, but in no event later than one business day after the
termination of this Agreement and (2) in the case of clause (b)(i)(B)
above, promptly, but in no event later than one business day after an
event specified in subclause (y) thereof shall have occurred, pay KKR &
Co. a fee of $37.5 million in cash, which amount shall be payable in same
day funds. No termination of this Agreement at a time when a fee is
reasonably expected to be payable pursuant to this Section 8.02(b)
following termination of this Agreement shall be effective until such fee
is paid. Only one fee in the aggregate of $37.5 million shall be payable
pursuant to this Section 8.02(b). No amount payable pursuant to any of the
other provisions of this Section 8.02 shall reduce the amount of the fee
payable pursuant to this paragraph (b).
(c) In addition to the other provisions of this Section 8.02, in the
event a fee is or becomes payable pursuant to Section 8.02(b) hereof, the
Company agrees promptly, but in no event later than two business days
following written notice thereof, together with related bills or receipts,
to reimburse KKR & Co. and Newco for all reasonable out-of-pocket costs,
fees and expenses, including, without limitation, the reasonable fees and
disbursements of counsel and the expenses of litigation, incurred in
connection with collecting the expenses pursuant to paragraph (a) of this
Section and the fee pursuant to paragraph (b) of this Section, as a result
of any breach by the Company of its obligations under this Section 8.02.
100
(d) Except as provided otherwise in paragraph (a) above, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses.
SECTION 8.03. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Newco, to
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
(b) if to the Company, to
Amphenol Corporation
000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
with copies to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
101
SECTION 8.04. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such first person;
(b) "knowledge" with respect to the Company means the actual
knowledge of the following officers and employees (as well as any of their
successors) of the Company and its subsidiaries: Xxxxxxxx X. XxXxxxxx,
Xxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxxx,
and Xxxxxx X. Xxxxxxx, and, without duplication, the employees primarily
responsible for environmental and tax matters concerning the Company and
its subsidiaries or any of the foregoing, in each case after reasonable
investigation and inquiry;
(c) "Material Adverse Change" or "Material Adverse Effect" means,
when used in connection with the Company, any change or effect that either
individually or in the aggregate with all other such changes or effects is
materially adverse to the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole but shall
exclude any change or effect resulting from general economic conditions
(including, without limitation changes in interest rates) and, with
respect to Section 3.01(g)(i) and (ii) hereof, any occurrence or condition
arising out of the transactions
102
contemplated by this Agreement or the public announcement thereof;
(d) "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity;
and
(e) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board
of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person.
SECTION 8.05. Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 8.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
103
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement, other than Sections 5.05 and 8.02, is not intended to
confer upon any person other than the parties any rights or remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS
OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS
OF LAWS.
SECTION 8.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 8.10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement
104
and to enforce specifically the terms and provisions of this Agreement.
105
IN WITNESS WHEREOF, Newco and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
NXS ACQUISITION CORP.
By:_____________________________________
Name:
Title:
AMPHENOL CORPORATION
By:_____________________________________
Name:
Title:
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AMPHENOL CORPORATION
--------------------
The undersigned, in order to form a corporation for the purpose
hereinafter stated, under and pursuant to the provisions of the Delaware General
Corporation Law, hereby certifies that:
FIRST: The name of the Corporation is Amphenol Corporation.
SECOND: The registered office and registered agent of the
Corporation is The Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the Delaware General
Corporation Law.
FOURTH: The total number of shares of stock that the Corporation is
authorized to issue is 40,000,000 shares of Class A Common Stock, par value
$.001 each.
FIFTH: The Board of Directors of the Corporation, acting by majority
vote, may alter, amend or repeal the By-Laws of the Corporation.
SIXTH: Except as otherwise provided by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article SIXTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
SEVENTH: To the fullest extent permitted by the Delaware General
Corporation Law, the Corporation shall indemnify any current or former director
or officer of the Corporation and may, at the discretion of the Board of
Directors, indemnify any current or former employee or agent of the Corporation
against all expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with any threatened, pending or
completed action, suit or proceeding brought by or in the right of the
Corporation or otherwise, to which he was or is a party by reason of his current
or former position with the Corporation or by reason of the fact that he is or
was serving, at the request of the Corporation, as a director, officer, partner,
trustee, employee or agent of another
2
corporation, partnership, joint venture, trust or other enterprise.
EXHIBIT B
Form of Company Affiliate Letter
Gentlemen:
The undersigned, a holder of shares of Common Stock, par value $.001
per share ("Company Stock"), of Amphenol Corporation, a Delaware corporation
(the "Company"), is entitled to retain in connection with the merger (the
"Merger") of the Company with NXS Acquisition Corp., a Delaware corporation,
securities (the "Securities") of the Company. The undersigned acknowledges that
the undersigned may be deemed an "affiliate" of the Company within the meaning
of Rule 145 ("Rule 145") promulgated under the Securities Act of 1933 (the
"Act"), although nothing contained herein should be construed as an admission of
such fact.
If in fact the undersigned were an affiliate under the Act, the
undersigned's ability to sell, assign or transfer the Securities retained by the
undersigned pursuant to the Merger may be restricted unless such transaction is
registered under the Act or an exemption from such registration is available.
The undersigned understands that such exemptions are limited and the undersigned
has obtained advice of counsel as to the nature and conditions of such
exemptions, including information with respect to the applicability to the sale
of such securities of Rules 144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with the Company
that the undersigned will not sell, assign or
2
transfer any of the Securities retained by the undersigned pursuant to the
Merger except (i) pursuant to an effective registration statement under the Act,
(ii) in conformity with the volume and other limitations of Rule 145 or (iii) in
a transaction which, in the opinion of independent counsel reasonably
satisfactory to the Company or as described in a "no-action" or interpretive
letter from the Staff of the Securities and Exchange Commission (the "SEC"), is
not required to be registered under the Act.
In the event of a sale or other disposition by the undersigned of
Securities pursuant to Rule 145, the undersigned will supply the Company with
evidence of compliance with such Rule, in the form of a letter in the form of
Annex I hereto. The undersigned understands that the Company may instruct its
transfer agent to withhold the transfer of any Securities disposed of by the
undersigned, but that upon receipt of such evidence of compliance the transfer
agent shall effectuate the transfer of the Securities sold as indicated in the
letter.
The undersigned acknowledges and agrees that appropriate legends
will be placed on certificates representing Securities retained by the
undersigned in the Merger or held by a transferee thereof, which legends will be
removed by delivery of substitute certificates upon receipt of an opinion in
form and substance reasonably satisfactory to the Company from independent
counsel reasonably satisfactory to the Company to the effect that such legends
are no longer required for purposes of the Act.
3
The undersigned acknowledges that (i) the undersigned has carefully
read this letter and understands the requirements hereof and the limitations
imposed upon the distribution, sale, transfer or other disposition of Securities
and (ii) the receipt by Newco of this letter is an inducement and a condition to
Newco's obligations to consummate the Merger.
Very truly yours,
Dated:
ANNEX I
TO EXHIBIT B
[Name] [Date]
On __________________ the undersigned sold the securities
("Securities") of the Company (the "Company") described below in the space
provided for that purpose (the "Securities"). The Securities were retained by
the undersigned in connection with the merger of NXS Acquisition Corp. with and
into Amphenol Corporation.
Based upon the most recent report or statement filed by the Company
with the Securities and Exchange Commission, the Securities sold by the
undersigned were within the prescribed limitations set forth in paragraph (e) of
Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act").
The undersigned hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Act or in
transactions directly with a "market maker" as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended. The undersigned
further represents that the undersigned has not solicited or arranged for the
solicitation of orders to buy the Securities, and that the undersigned has not
made any payment in connection
2
with the offer or sale of the Securities to any person other than to the broker
who executed the order in respect of such sale.
Very truly yours,
[Space to be provided for description of securities]
