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EXHIBIT (c)(1)
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of June 10, 1999
Among
FORD MOTOR COMPANY,
AM1 ACQUISITION COMPANY
and
AUTOMOBILE PROTECTION CORPORATION - APCO
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions.......................................................................................................2
SECTION 1.01. Definitions........................................................................................2
ARTICLE II
The Offer and the Merger..........................................................................................8
SECTION 2.01. The Offer..........................................................................................8
SECTION 2.02. Company Actions....................................................................................9
SECTION 2.03. Board of Directors; Section 14(f).................................................................10
SECTION 2.04. The Merger........................................................................................11
SECTION 2.05. Closing...........................................................................................11
SECTION 2.06. Effective Time....................................................................................11
SECTION 2.07. Effects...........................................................................................12
SECTION 2.08. Certificate of Incorporation and By-laws..........................................................12
SECTION 2.09. Directors.........................................................................................12
SECTION 2.10. Officers..........................................................................................12
ARTICLE III
Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates............................12
SECTION 3.01. Effect on Capital Stock...........................................................................12
SECTION 3.02. Exchange of Certificates..........................................................................13
ARTICLE IV
Representations and Warranties of the Company....................................................................15
SECTION 4.01. Organization, Standing and Power..................................................................15
SECTION 4.02. Company Subsidiaries; Equity Interests............................................................15
SECTION 4.03. Capital Structure.................................................................................16
SECTION 4.04. Authority; Execution and Delivery; Enforceability.................................................17
SECTION 4.05. No Conflicts; Consents............................................................................17
SECTION 4.07. Information Supplied..............................................................................19
SECTION 4.08. Absence of Certain Changes or Events..............................................................19
SECTION 4.09. Taxes.............................................................................................19
SECTION 4.10. Benefit Plans ERISA Compliance; Excess Parachute Payments.........................................20
SECTION 4.11. Litigation........................................................................................22
SECTION 4.12. Compliance with Applicable Laws...................................................................22
SECTION 4.13. Contracts; Debt Instruments.......................................................................22
SECTION 4.14. Title to Properties...............................................................................23
SECTION 4.15. Intellectual Property.............................................................................23
SECTION 4.16. Takeover Laws.....................................................................................24
SECTION 4.17. Year 2000.........................................................................................24
SECTION 4.18. Affiliate Transactions............................................................................24
SECTION 4.19. Environmental, Health, and Safety.................................................................25
SECTION 4.20. Brokers; Fees and Expenses........................................................................25
SECTION 4.21. Opinion of Financial Advisor......................................................................26
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Page
ARTICLE V
Representations and Warranties of Parent and Sub.................................................................26
SECTION 5.01. Organization, Standing and Power..................................................................26
SECTION 5.02. Sub...............................................................................................26
SECTION 5.03. Financing.........................................................................................26
SECTION 5.04. Ownership of Company Common Stock.................................................................26
SECTION 5.05. Authority; Execution and Delivery; Enforceability.................................................26
SECTION 5.06. No Conflicts; Consents............................................................................27
SECTION 5.07. Information Supplied..............................................................................27
SECTION 5.08. Brokers...........................................................................................27
ARTICLE VI
Covenants Relating to Conduct of Business........................................................................28
SECTION 6.01. Conduct of Business...............................................................................28
SECTION 6.02. No Solicitation...................................................................................31
ARTICLE VII
Additional Agreements............................................................................................32
SECTION 7.01. Preparation of Proxy Statement; Stockholders Meeting..............................................32
SECTION 7.02. Access to Information; Confidentiality............................................................33
SECTION 7.03. Commercially Reasonable Efforts; Notification.....................................................33
SECTION 7.04. Stock Options.....................................................................................34
SECTION 7.05. Indemnification; D&O Insurance....................................................................35
SECTION 7.06. Public Announcements..............................................................................36
SECTION 7.07. Transfer Taxes....................................................................................36
SECTION 7.08. Transaction Litigation............................................................................36
ARTICLE VIII
Conditions Precedent.............................................................................................36
SECTION 8.01. Conditions to Each Party's Obligation To Effect The Merger........................................36
SECTION 8.02. Conditions to Obligations of Parent and Sub.......................................................37
SECTION 8.03. Conditions to Obligations of the Company..........................................................38
ARTICLE IX
Termination, Amendment and Waiver................................................................................39
SECTION 9.01. Termination.......................................................................................39
SECTION 9.02. Effect of Termination; Fees and Expenses..........................................................40
SECTION 9.03. Amendment.........................................................................................42
SECTION 9.04. Extension; Waiver.................................................................................42
SECTION 9.05. Procedure for Termination, Amendment, Extension or Waiver.........................................42
ARTICLE X
General Provisions...............................................................................................43
SECTION 10.01. Nonsurvival of Representations and Warranties....................................................43
SECTION 10.02. Notices..........................................................................................43
SECTION 10.03. Interpretation; Disclosure Letters...............................................................44
SECTION 10.04. Severability.....................................................................................44
SECTION 10.05. Counterparts.....................................................................................44
SECTION 10.06. Entire Agreement; No Third-Party Beneficiaries...................................................44
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SECTION 10.07. Governing Law....................................................................................44
SECTION 10.08. Assignment.......................................................................................45
SECTION 10.09. Enforcement......................................................................................45
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AGREEMENT AND PLAN OF MERGER dated as of June 10,
1999, among FORD MOTOR COMPANY, a Delaware corporation
("Parent"), AM1 ACQUISITION COMPANY, a Georgia
corporation ("Sub"), and a wholly owned subsidiary of
Parent, and AUTOMOBILE PROTECTION CORPORATION - APCO, a
Georgia corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company have approved the acquisition of the Company by Parent on the terms
and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes
to cause Sub to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all the issued and
outstanding shares of Company Common Stock (as defined herein) at a price per
share of Company Common Stock of not less than $13.00, net to the seller in
cash, upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company have approved the merger (the "Merger") of Sub into the Company, or
(at the election of Parent) the Company into Sub, on the terms and subject to
the conditions set forth in this Agreement, whereby each issued share of Company
Common Stock not owned directly or indirectly by Parent or the Company, will be
converted into the right to receive the per share consideration paid pursuant to
the Offer;
WHEREAS simultaneously with the execution and delivery of this
Agreement Parent and the Principal Company Stockholders (as defined herein) are
entering into Stock Option and Tender Agreements (as defined herein) and the
Company and Parent are entering into the Company Stock Option Agreement (as
defined herein);
WHEREAS, as a condition to their willingness to enter into
this Agreement and consummate the transactions contemplated hereby, Parent and
Sub have required each of the Principal Company Stockholders, contemporaneously
with the execution and delivery of this Agreement, to execute the Principal
Stockholders Employment Agreements (as defined herein), to be effective upon the
consummation of the Merger, and in order to induce Parent and Sub to enter into
this Agreement, the Principal Company Stockholders have agreed to execute and
deliver the Principal Stockholders Employment Agreements; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) As used in this Agreement,
the following terms shall have the following meanings:
"affiliate" means, for any person, another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"Applicable Law" means any statute, law (including common law),
ordinance, rule or regulation applicable to the Company or any Company
Subsidiary or their respective properties or assets.
"Article 13" means Article 13 of the GBCC.
"Auto Warranty Law" means any statute, law (including common law),
ordinance, rule or regulation applicable to automobile warranty or service
contract providers, automobile insurance providers or persons in other similar
businesses or other businesses operated by the Company or the Company
Subsidiaries.
"Certificate" or "Certificates" mean the certificate or certificates
that immediately prior to the Effective Time represented outstanding shares of
Company Common Stock.
"Certificate of Merger" means a certificate of merger, or other
appropriate documents, to be filed with the Secretary of State of Georgia to
effect the Merger.
"Closing" means the closing of the Merger.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"commercially reasonable efforts" means spending $100,000 in a single
instance or $500,000 in the aggregate for all costs (including reasonable
attorney's, consultants and accountants fees and expenses) associated with a
specific action or all actions, respectively, which are required to be taken
under this Agreement.
"Company" has the meaning set forth in the heading hereof.
"Company Board" means the Board of Directors of the Company.
"Company By-laws" means the by-laws of the Company, as amended to the
date of this Agreement.
"Company Capital Stock" has the meaning set forth in Section 4.03.
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"Company Charter" means the articles of incorporation of the Company,
as amended to the date of this Agreement.
"Company Common Stock" means the common stock, par value $.001 per
share, of the Company.
"Company Employee Stock Option" means any option to purchase Company
Common Stock granted under any Company Stock Plan.
"Company Disclosure Letter" means the letter, dated as the date of this
Agreement, delivered by the Company to Parent and Sub which lists each Company
Subsidiary.
"Company Investment" has the meaning set forth in Section 4.02(b).
"Company Material Adverse Effect" means a material adverse effect on
the business, assets, results of operations, financial condition or prospects of
the Company, and the Company Subsidiaries taken as a whole, on the ability of
the Company to perform its obligations under the Transaction Agreements to which
it is a party or on the ability of the Company to consummate the Offer, the
Merger and the other Transactions; provided however, that only with respect to a
material adverse effect on the prospects of the Company and the Company
Subsidiaries, events changes, effects and developments relating to the economy
in general and not specifically relating to the Company or the Company
Subsidiaries shall not be included.
"Company Plans" has the meaning set forth in Section 4.10(a).
"Company Preferred Stock" has the meaning set forth in Section 4.03.
"Company SAR" means any stock appreciation right linked to the price of
Company Common Stock and granted under any Company Stock Plan.
"Company SEC Documents" means all reports, schedules, forms, statements
and other documents required to be filed by the Company with the SEC since
January 1, 1996.
"Company Stock Option Agreement" means the stock option agreement
between Parent and Sub pursuant to which the Company will grant Parent an option
to purchase shares of Company Common Stock on the terms and subject to the
conditions set forth therein.
"Company Stock Plans" means the 1988 Stock Option Plan of Automobile
Protection Corporation-APCO, the Automobile Protection Corporation-APCO Outside
Directors' Stock Option Plan, the Automobile Protection Corporation-APCO 1997
Performance Equity Plan, the Automobile Protection Corporation-APCO 1998
Performance Equity Plan and any other stock option or equity plan of the
Company.
"Company Stockholder Approval" has the meaning set forth in Section
4.04(c).
"Company Stockholders Meeting" means a meeting of the Company's
stockholders for the purpose of seeking Company Stockholder Approval.
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"Company Subsidiaries" means all the subsidiaries of the Company.
"Company Takeover Proposal" means any tender offer or exchange offer,
proposal for a tender offer, exchange offer, merger, consolidation,
recapitalization or other business combination involving the Company or any
Company Subsidiary, any proposal for the issuance by the Company of a material
amount of its equity securities as consideration for the assets or securities of
another person or any proposal or offer to acquire in any manner, directly or
indirectly, a material equity interest in, any voting securities of, or a
substantial portion of the assets of, the Company or any Company Subsidiary,
other than the Transactions.
"Confidentiality Agreement" means the confidentiality agreement, dated
December 8, 1998, between the Company and Parent.
"Consent" means any consent, approval, license, permit order or
authorization.
"Contract" means any contract, lease, license, indenture, note, bond,
mortgage, agreement, permit, concession, franchise, instrument, undertaking,
commitment, understanding or other arrangement (whether written or oral).
"D&O Insurance" means directors' and officers' insurance.
"Dissenters' Shares" means shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by any
person who is entitled to demand and properly demands payment of the fair value
of such shares pursuant to, and who complies in all respects with, Article 13 of
the GBCC.
"Effective Time" means the time the Merger becomes effective.
"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, common law, plans, injunctions, judgments, orders, decrees,
rulings and charges thereunder) of any Governmental Entity concerning pollution
or protection of the environment, public health and safety, or employee health
and safety, including laws relating to emissions, discharges, releases, or
threatened releases of Hazardous Substances into ambient air, surface water,
ground water, or lands or otherwise relating to the manufacture, generation,
processing, distribution, use, treatment, storage, disposal, clean-up,
transport, or handling of Hazardous Substances.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Fund" shall have the meaning set forth in Section 3.02(a).
"Filed Company SEC Documents" means all Company SEC Documents that were
filed and publicly available prior to the date of this Agreement.
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"Financial Statements" means the consolidated financial statements of
the Company included in each of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 and Quarterly Report on Form 10-Q for the
Quarter ended March 31, 1999, including in each case the footnotes thereto.
"Fully Diluted Shares" shall have the meaning set forth in Exhibit A
hereto.
"GAAP" means U.S. generally accepted accounting principles.
"GBCC" means the Business Corporation Code of the State of Georgia, as
amended from time to time.
"Governmental Entity" means any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign.
"Hazardous Substance" means any hazardous, acutely hazardous, or toxic
substance, waste or contaminant, or any other material, including, without
limitation, petroleum hydrocarbons and asbestos, regulated under any
Environmental, Health and Safety Law and applicable to the material, substance,
waste or contaminant in the jurisdiction in which such material, substance,
waste or contaminant is located.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"indebtedness" means, without duplication, (A) all obligations for
borrowed money, or with respect to deposits or advances of any kind, (B) all
obligations evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations upon which interest charges are customarily paid, (D) all
obligations under conditional sale or other title retention agreements relating
to purchased property, (E) all obligations issued or assumed as the deferred
purchase price of property or services (excluding obligations to creditors for
raw materials, inventory, services and supplies incurred in the ordinary course
of business), (F) all capitalized lease obligations, (G) all obligations of
others secured by a Lien, other than Permitted Liens under clauses (a), (b) or
(c) of the definition thereof, on property or assets, whether or not the
obligations secured thereby have been assumed, (H) all obligations under
interest rate or currency hedging transactions (valued at the termination value
thereof), (I) all letters of credit and (J) all guarantees and arrangements
having the economic effect of a guarantee of any indebtedness of any other
person.
"Information Statement" means any information statement required under
Rule 14f-1 promulgated under the Exchange Act in connection with the Offer.
"Intellectual Property Rights" means, collectively, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service xxxx rights, copyrights and other proprietary intellectual
property rights and all technology, know-how, data, computer programs and other
tangible or intangible proprietary information or material.
"Judgment" means any judgment, order, writ or decree.
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"knowledge" and "known" means, when used to modify any representation
or warranty of the Company, that Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxxx Xxxxxx Xxxxxxxxx have no knowledge, after due investigation
and inquiry, that such representation or warranty is not true and correct.
"Liens" means pledges, liens, charges, mortgages, encumbrances and
security interests of any kind or nature whatsoever.
"Material Contracts" means Contracts that are material to the business,
properties, assets, financial condition or results of operations of the Company
and the Company Subsidiaries taken as a whole and those which are set forth in
Section 4.13(a) of the Company Disclosure Letter.
"Material Intellectual Property Rights" means all Intellectual Property
Rights which are material to the conduct of the business of the Company and the
Company Subsidiaries taken as a whole.
"Maximum Premium" has the meaning set forth in Section 7.05(b).
"Merger" has the meaning set forth in the recitals hereto.
"Merger Consideration" means the price per share of Company Common
Stock paid pursuant to the Offer.
"Minimum Tender Condition" shall have the meaning set forth in Exhibit
A hereto.
"Offer" has the meaning set forth in the recitals hereto.
"Offer Documents" has the meaning set forth in Section 2.01(b).
"Outside Date" has the meaning set forth in Section 9.01(b)(i) .
"Parent" has the meaning set forth in the heading hereto.
"Parent Disclosure Letter" means the letter, dated as of the date of
this Agreement, delivered by Parent to the Company.
"Parent Material Adverse Effect" means a material adverse effect on the
ability of Parent or Sub to perform its obligations under this Agreement or on
the ability of Parent or Sub to consummate the Offer, the Merger and the other
Transactions.
"Paying Agent" means the bank or trust company selected by Parent prior
to the Effective Time to act as paying agent for the payment of the Merger
Consideration.
"Permitted Lien" has the meaning set forth in Section 4.14(a).
"person" means any individual, firm, corporation, partnership, company,
limited liability company, trust, joint venture, association, Governmental
Entity or other entity.
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"Potential Stock Options" means options to purchase Company Common
Stock issued to persons other than directors of the Company or alleged to have
been issued to such persons prior to the date hereof that the Company does not
have knowledge of as of the date hereof; provided that the number of Potential
Stock Options shall not exceed 20,000 shares.
"Principal Company Stockholders" means those stockholders of the
Company identified in Part A of the Parent Disclosure Letter.
"Principal Stockholders Employment Agreements" means employment
agreements between the Company and each of the Principal Company Stockholders.
"Proxy Statement" means a proxy or information statement of the Company
relating to the approval of this Agreement by the Company's stockholders.
"Schedule 14D-9" means the Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer, as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Option and Tender Agreements" means agreements entered into by
Parent and the Principal Company Stockholders pursuant to which each of the
Principal Company Stockholders has agreed to take specified actions in
furtherance of the Offer and the Merger.
"Stock Transfer Taxes" means any state, local, foreign or provincial
Tax which is attributable to the transfer of Company Common Stock pursuant to
this Agreement.
"Sub" has the meaning set forth in the heading hereto.
"subsidiary" means, with respect to any person, 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.
"Surviving Corporation" shall have the meaning set forth in Section
2.04.
"Taxes" means and includes all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, Federal or other Governmental
Entity, or in connection with any agreement with respect to Taxes, including all
interest, penalties and additions imposed with respect to such amounts.
"Termination Fee" has the meaning set forth in Section 7.06(b).
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"Tax Return" means all Federal, state, local, provincial and foreign
Tax Returns, declarations, statements, reports, schedules, forms and information
Returns and any amended Tax Return relating to Taxes.
"Third Party Stock Options" means outstanding options to purchase
Company Common Stock granted to persons other than employees of the Company,
excluding Potential Stock Options.
"Transactions" means, collectively, the Offer, the Merger and the other
transactions contemplated by the Transaction Agreements.
"Transaction Agreements" means this Agreement together with the Stock
Option and Tender Agreements and the Company Stock Option Agreement.
"Transfer Taxes" means any state, local, foreign or provincial Tax
which is attributable to the transfer of the beneficial ownership of the
Company's or the Company's subsidiaries' real property.
"Voting Company Debt" means any bonds, debentures, notes or other
indebtedness 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.
"Year 2000 Compliant" means the ability to store and produce data
before, on or after January 1, 2000 (including taking into account that the
ability of software, systems, hardware and related equipment, data, interfaces
or processes (i) to operate such year is a leap year), as accurately and without
additional delay, corruption, interruption or error due to the fact that the
time at which and the date on which such items are operating is on or after
00:00 on January 1, 2000, or (ii) to accept, calculate, process, store,
maintain, write, output (to a system that is Year 2000 Compliant), as accurately
and without additional delay, interruption, corruption or error, any function
referencing a time or date on or after 00:00 on January 1, 2000, or both,
whether before, on or after 00:00 on January 1, 2000, and any time period
determined or to be determined based on any such times or dates, or both, in the
case of clause (i) and (ii), as compared to the functionality, data integrity
and performance of such software, systems, hardware and related equipment, data,
interfaces or processes as applied to times before 00:00 on January 1, 2000.
ARTICLE II
The Offer and the Merger
SECTION 2.01. The Offer. (a) As promptly as practicable but in
no event later than five business days after the date of this Agreement, Sub
shall, and Parent shall cause Sub to, commence the Offer within the meaning of
the applicable rules and regulations of the SEC. The obligation of Sub to, and
of Parent to cause Sub to, accept for payment, and pay for, any shares of
Company Common Stock tendered pursuant to the Offer shall be subject to the
conditions set forth in Exhibit A (any of which may be waived by Sub in its sole
discretion) and to the other conditions in this Agreement. Sub expressly
reserves the right to modify the terms of the Offer, except that, without the
consent of the Company (unless the Company takes any action permitted
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to be taken pursuant to Section 6.02(b)), Sub shall not (i) reduce the number of
shares of Company Common Stock subject to the Offer, (ii) reduce the price per
share of Company Common Stock to be paid pursuant to the Offer, (iii) modify or
add to the conditions set forth in Exhibit A in any manner adverse to the
holders of Company Common Stock, (iv) except as provided in the next sentence,
extend the Offer or (v) change the form of consideration payable in the Offer.
Notwithstanding the foregoing, Sub may, without the consent of the Company, (i)
extend the Offer, if at the scheduled expiration date of the Offer any of the
conditions to Sub's obligation to purchase shares of Company Common Stock are
not satisfied, until such time as such conditions are satisfied or waived, (ii)
extend the Offer for a period of not more than ten business days beyond the
initial expiration date of the Offer, if on the date of such extension less than
90% of the outstanding shares of Company Common Stock have been validly tendered
and not properly withdrawn pursuant to the Offer, (iii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the SEC
or the staff thereof applicable to the Offer, (iv) extend the Offer in order to
provide sufficient time to respond to any supplement or amendment to the Company
Disclosure Letter delivered to Parent pursuant to Section 6.01(c)(ii) and (v)
extend the Offer for any reason for a period of not more than ten business days
beyond the latest expiration date that would otherwise be permitted under clause
(i), (ii), (iii) or (iv) of this sentence. On the terms and subject to the
conditions of the Offer and this Agreement, Sub shall pay for all shares of
Company Common Stock validly tendered and not withdrawn pursuant to the Offer
that Sub becomes obligated to purchase pursuant to the Offer as soon as
practicable after the expiration of the Offer. Sub may, at any time, transfer or
assign to one or more corporations directly or indirectly majority owned by
Parent the right to purchase all or any portion of the shares of Company Common
Stock tendered pursuant to the Offer, but any such transfer or assignment shall
not relieve Sub of its obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for shares of Company Common Stock
properly tendered and accepted for payment. Parent and Sub agree that the
conditions set forth in paragraphs (a) through (h) of Exhibit A shall be subject
to the reasonable judgment of Parent or Sub.
(b) On the date of commencement of the Offer, Parent and Sub
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). Each of Parent, Sub
and the Company shall promptly correct any information provided by it for use in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and each of Parent and Sub shall
take all steps necessary to amend or supplement the Offer Documents and to cause
the Offer Documents, as so amended or supplemented, to be filed with the SEC and
to be disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. Parent and Sub shall
provide the Company and its counsel in writing with any comments Parent, Sub or
their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
SECTION 2.02. Company Actions. (a) The Company hereby
approves of and consents to each of the Transactions.
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(b) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC the Schedule 14D-9 containing the
recommendations described in Section 4.04(b) and shall mail the Schedule 14D-9
to the holders of Company Common Stock. Each of the Company, Parent and Sub
shall promptly correct any information provided by it for use in the Schedule
14D-9 if and to the extent that such information shall have become false or
misleading in any material respect, and the Company shall take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9 as so amended or supplemented to be filed with the SEC and disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable Federal securities laws. The Company shall provide Parent and its
counsel in writing with any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Company Common Stock as of a recent date
and of those persons becoming record holders subsequent to such date, together
with copies of all lists of stockholders, security position listings and
computer files and all other information in the Company's possession or control
regarding the beneficial owners of Company Common Stock, and shall furnish to
Sub such information and assistance (including updated lists of stockholders,
security position listings and computer files) as Parent may reasonably request
in communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Transactions, Parent and Sub shall hold in confidence the information
contained in any such labels, listings and files, shall use such information
only in connection with the Offer and the Merger and, if this Agreement shall be
terminated, shall deliver to the Company all copies of such information then in
their possession.
SECTION 2.03. Board of Directors; Section 14(f). (a) If
requested by Parent, upon the acceptance for payment of the shares of Company
Common Stock to be purchased pursuant to the Offer, Sub shall be entitled to
designate such number of directors on the Company Board (and on each committee
of the Company Board and on each board of directors of each Company Subsidiary
designated by Parent) as will give Sub representation on the Company Board (or
such committee or Company Subsidiary board of directors) equal to at least that
number of directors, rounded up to the next whole number, which is the product
of (a) the total number of directors on the Company Board (or such committee or
Company Subsidiary board of directors) giving effect to the directors appointed
or elected pursuant to this sentence multiplied by (b) the percentage that (i)
such number of shares of Company Common Stock so accepted for payment and paid
for by Sub plus the number of shares of Company Common Stock otherwise owned by
Sub or any other subsidiary of Parent bears to (ii) the number of such shares
outstanding, and the Company shall, at such time, cause Sub's designees to be so
appointed or elected. The Company shall take all actions necessary to cause the
persons designated by Parent to be directors on the Company Board (or a
committee of the Company Board or the board of directors of a Company Subsidiary
designated by Parent) pursuant to the preceding sentence to be so appointed or
elected (whether, at the request of Parent, by means of increasing the size of
the Company Board (or such committee or Company Subsidiary board of directors)
or seeking the resignation of directors and causing Parent's designees to be
appointed or elected).
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(b) The Company's obligation to appoint designees of Parent to
the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all actions
required pursuant to Section 14(f) and Rule l4f-1 in order to fulfill its
obligations under this Section 2.03, and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1. Parent and Sub will supply to
the Company any information with respect to any of them and their nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Parent's
designees pursuant to this Section 2.03 and prior to the Effective Time, any
amendment or termination of this Agreement, extension for the performance or
waiver of the obligations or other acts of Parent or Sub or waiver of the
Company's rights hereunder, will require the concurrence of a majority of the
members of the Company Board who are members of the Company Board on the date of
this Agreement.
SECTION 2.04. The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the GBCC, Sub
shall be merged with and into the Company at the Effective Time (as defined in
Section 2.06). At the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). Notwithstanding the foregoing, Parent may elect at any
time prior to the Effective Time, instead of merging Sub into the Company as
provided above, to merge the Company with and into Sub. In such event, the
parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing, including to provide the same benefits and protections to
third parties as are provided hereby under Section 7.05. At the election of
Parent, any direct or indirect subsidiary or other affiliate of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing.
SECTION 2.05. Closing. The Closing shall take place at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at 10:00 a.m. on the second business day following the satisfaction (or,
to the extent permitted by law, waiver by all parties) of the conditions set
forth in Section 8.01, or, if on such day any condition set forth in Section
8.02 or 8.03 has not been satisfied (or, to the extent permitted by law, waived
by the party or parties entitled to the benefits thereof), as soon as
practicable after all the conditions set forth in Article VIII have been
satisfied (or, to the extent permitted by law, waived by the parties entitled to
the benefits thereof), or at such other place, time and date as shall be agreed
in writing between Parent and the Company.
SECTION 2.06. Effective Time. Prior to the Closing, Parent and
the Company shall prepare, and on the Closing Date, or as soon as practicable
thereafter, shall file with the Secretary of State of Georgia the Certificate of
Merger executed in accordance with the relevant provisions of the GBCC and shall
make all other filings or recordings required under the GBCC. 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 Georgia, or at such other time as Parent
and the Company shall agree and specify in the Certificate of Merger. No later
than the business day following the day on which the Certificate of Merger is
filed with the Secretary of State of the State of Georgia, the
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Surviving Corporation shall cause to be published the notice required by Section
1105 of the GBCC.
SECTION 2.07. Effects. The Merger shall have the effects set
forth in Section 1106 of the GBCC.
SECTION 2.08. Certificate of Incorporation and By-laws. (a)
The articles of incorporation of Sub, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law; provided, however, that such Articles of Incorporation shall be
amended to change the name of the Surviving Corporation to the name of the
Company.
(b) The By-laws of Sub as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 2.09. Directors. Subject to Section 2.03, the
directors of Sub immediately prior to the Effective Time shall be the directors
of the Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
SECTION 2.10. Officers. The officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
ARTICLE III
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent- Owned Stock.
Each share of Company Common Stock that is owned by the Company or any of its
subsidiaries, Parent or Sub shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and no Parent
Common Stock or other consideration shall be delivered in exchange therefor.
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(c) Conversion of Company Common Stock and Options. (i)
Subject to Sections 3.01(b), and 3.01(d), each issued share of Company Common
Stock shall be converted into the price per share of Company Common Stock paid
pursuant to the Offer in cash.
(ii) As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive Merger Consideration
upon surrender of such certificate in accordance with Section 3.02, without
interest.
(iii) Company Employee Stock Options, Potential Stock Options
and Third Party Stock Options shall be treated as set forth in Section 7.04.
(d) Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary, Dissenters' Shares shall not be converted into Merger
Consideration as provided in Section 3.01(c), but rather the holders of
Dissenters' Shares shall be entitled to payment of the fair value of such
Dissenters' Shares in accordance with Article 13; provided, however, that if any
such holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to receive payment of fair value under Article 13, then the right of such
holder to be paid the fair value of such holder's Dissenters' Shares shall cease
and such Dissenters' Shares shall be treated as if they had been converted as of
the Effective Time into Merger Consideration as provided in Section 3.01(c). The
Company shall serve prompt notice to Parent of any demands received by the
Company for appraisal of any shares of Company Common Stock, attempted
withdrawals of any such demands and any other documents received in connection
with any assertion of rights to payment of fair value under Article 13, and
Parent shall have the right to participate in and direct all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands, or agree to do any of the foregoing.
SECTION 3.02. Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall select a bank or trust company to act
as the Paying Agent for the payment of the Merger Consideration upon surrender
of certificates representing Company Common Stock. The Surviving Corporation
shall provide to the Paying Agent on a timely basis, as and when needed after
the Effective Time, cash necessary to pay for the shares of Company Common Stock
converted into the right to receive cash pursuant to Section 3.01(c) (such cash
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a Certificate or Certificates, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount of cash into which the shares of Company Common
Stock theretofore represented by such Certificate shall have been
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converted pursuant to Section 3.01, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company Common
Stock which is not registered in the transfer records of the Company, payment
may be made to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the amount of cash, without
interest, into which the shares of Company Common Stock theretofore represented
by such Certificate shall have been converted pursuant to Section 3.01. No
interest shall be paid or shall accrue on the cash payable upon the surrender of
any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The
Merger Consideration paid in accordance with the terms of this Article III upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time that may
have been declared or made by the Company on such shares in accordance with the
terms of this Agreement or prior to the date of this Agreement and which remain
unpaid at the Effective Time, and there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of shares of
Company Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, any certificates formerly representing
shares of Company Common Stock are presented to the Surviving Corporation or the
Paying Agent for any reason, they shall be canceled and exchanged as provided in
this Article III.
(d) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to the holder of Company Common Stock for six
months after the Effective Time shall be delivered to the Surviving Corporation
and any holder of Company Common Stock who has not theretofore complied with
this Article III shall thereafter look only to the Surviving Corporation for
payment of its claim for Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate has not been surrendered prior to five years after the Effective
Time (or immediately prior to such earlier date on which Merger Consideration in
respect of such Certificate would otherwise escheat to or become the property of
any Governmental Entity), any such shares, cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest
any cash included in the Exchange Fund, as directed by Parent, on a daily basis.
Any interest and other income resulting from such investments shall be paid to
Parent.
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(g) Withholding Rights. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable to any
holder of Company Common Stock pursuant to this Agreement such amounts as may be
required to be deducted and withheld with respect to the making of such payment
under the Code, or under any provision of state, local or foreign tax law. To
the extent that amounts are so withheld and paid over to the appropriate taxing
authority, the Surviving Corporation will be treated as though it withheld an
appropriate amount of the type of consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock, sold such consideration
for an amount of cash equal to the fair market value of such consideration at
the time of such deemed sale and paid such cash proceeds to the appropriate
taxing authority.
ARTICLE IV
Representations and Warranties of the Company
The Company represents and warrants to Parent and Sub as
follows:
SECTION 4.01. Organization, Standing and Power. (a) Each of
the Company and each of the Company Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Company Material Adverse Effect. The Company and each Company
Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business or their ownership or leasing of its properties make such
qualification necessary, except in such jurisdictions where the failure to be so
qualified, individually or in the aggregate, has not had and could not
reasonably be expected to have a Company Material Adverse Effect. The Company
has delivered to Parent true and complete copies of the Company Charter and the
Company By-laws, and the comparable charter and organizational documents of each
Company Subsidiary, in each case as amended through the date of this Agreement.
The Company By-Laws do not conflict in any respect with the Company Charter.
SECTION 4.02. Company Subsidiaries; Equity Interests. (a)
Section 4.02 of the Company Disclosure Letter lists each Company Subsidiary. All
the outstanding shares of capital stock of each Company Subsidiary have been
validly issued and are fully paid and nonassessable and, except as set forth in
the Company Disclosure Letter, are owned by the Company, by another Company
Subsidiary or by the Company and another Company Subsidiary, free and clear of
all Liens.
(b) Except for its interests in the Company Subsidiaries and
except for the ownership interests set forth in Section 4.02 of the Company
Disclosure Letter, neither the Company nor any Company Subsidiary (i) owns, has
any right to, or is involved in negotiations to, acquire, directly or
indirectly, any capital stock, membership interest, partnership interest, joint
venture interest or other equity interest in any person or (ii) has the ability
to control (whether through the ownership of voting securities or otherwise) any
other person (any of such interests
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under clause (i) or (ii) other than a Company Subsidiary, a "Company
Investment"). No Company Investment is, individually or when taken together with
all other Company Investments, material to the business of the Company and the
Company Subsidiaries taken as a whole.
SECTION 4.03. Capital Structure. The authorized capital stock
of the Company consists of 40,000,000 shares of Company Common Stock, 900 shares
of Class A Convertible Preferred Stock, par value $1.00 per share, 600 shares of
Class B Convertible Preferred Stock, par value $1.00 per share, 300 shares of
Class C Preferred Stock, par value $.01 per share, and 5,000,000 shares of Class
D Preferred Stock, par value $.01 per share (all classes of such preferred stock
being collectively referred to herein as "Company Preferred Stock" and
collectively with the Company Common Stock, "Company Capital Stock"). As of the
date hereof, (i) 11,936,716 shares of Company Common Stock and no shares of
Company Preferred Stock were issued and outstanding, (ii) no shares of Company
Common Stock were held by the Company in its treasury, (iii) 1,233,129 shares of
Company Common Stock were subject to outstanding Company Employee Stock Options,
(iv) 464,822 shares of Company Common Stock were subject to Third Party Stock
Options and (v) up to 20,000 shares of Company Common Stock may be issuable in
respect of Potential Stock Options. The exercise price of all outstanding
Company Employee Stock Options and of all outstanding Third Party Stock Options
are as set forth in Section 4.03 of the Company Disclosure Letter. Except as
specifically set forth in Section 4.03 of the Company Disclosure Letter, upon
the Effective Time, all outstanding Third Party Stock Options will terminate in
accordance with their terms without any action on the part of the Company or the
holder thereof and without any cash payment by, or other obligation of, the
Company or the Surviving Corporation as a result thereof. Except as set forth
above, and except for the shares of Company Common Stock reserved for issuance
upon the exercise of the option granted to Parent pursuant to the Company Stock
Option Agreement, as of the date hereof, no shares of capital stock or other
voting securities of the Company were issued, reserved for issuance or
outstanding. There are no outstanding Company SARs. All outstanding shares of
Company Capital Stock are, and all such shares that may be issued prior to the
Effective Time will be when issued, duly authorized, validly issued, fully paid
and nonassessable and not subject to or issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of the GBCC, the Company Charter,
the Company By-laws or any Contract to which the Company is a party or otherwise
bound. There is no Voting Company Debt issued or outstanding. Except as set
forth above, as of the date of this Agreement, there are no options, warrants,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (i) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or of any
Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or
any Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of Company Capital Stock. There are not any (i) outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary, (ii) voting trusts or other agreements or understandings to which
the Company or any of the
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Company Subsidiaries is a party with respect to the voting or transfer of
capital stock of the Company or any of the Company Subsidiaries.
SECTION 4.04. Authority; Execution and Delivery;
Enforceability. (a) The Company has all requisite corporate power and authority
to execute the Transaction Agreements to which it is a party and to consummate
the Transactions. The execution and delivery by the Company of each Transaction
Agreement to which it is a party and the consummation by the Company of the
Transactions have been duly authorized by all necessary corporate action on the
part of the Company, subject, in the case of the Merger, to receipt of Company
Stockholder Approval. The Company has duly and validly executed and delivered
each Transaction Agreement to which it is a party, and each Transaction
Agreement to which it is a party constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
(b) The Company Board, at a meeting duly called and held prior
to execution of any of the Transaction Agreements, duly and unanimously adopted
resolutions (i) approving this Agreement and the other Transaction Agreements,
the Merger and the other Transactions, (ii) determining that the terms of the
Offer, the Merger and the other Transactions are fair to and in the best
interests of the Company and its stockholders, (iii) recommending that the
holders of Company Common Stock accept the Offer and tender their shares of
Company Common Stock pursuant to the Offer, (iv) recommending that the Company's
stockholders approve and adopt this Agreement and (v) adopting this Agreement
and other Transaction Agreements. Such resolutions are sufficient to render
inapplicable to Parent and Sub and this Agreement and the other Transaction
Agreements, the Offer, the Merger and the other Transactions (A) the provisions
of Parts 2 and 3 of Article 11 of the GBCC. The Company has been advised by each
of its directors and executive officers that each such person intends to tender
all shares of Company Common Stock owned by such person pursuant to the Offer,
except to the extent of any restrictions created by Section 16(b) of the
Exchange Act.
(c) The only vote of holders of any class or series of Company
Capital Stock necessary to approve and adopt this Agreement and the Merger is
the approval of this Agreement by the holders of a majority of the outstanding
shares of Company Common Stock (the "Company Stockholder Approval"). The
affirmative vote of the holders of Company Capital Stock, or any of them, is not
necessary to approve any Transaction Agreement other than this Agreement or
consummate the Offer or any Transaction other than the Merger.
SECTION 4.05. No Conflicts; Consents. Except as set forth in
Section 4.05 of the Company Disclosure Letter, the execution and delivery by the
Company of each Transaction Agreement to which it is a party do not, and the
consummation of the Offer, the Merger and the other Transactions and compliance
with the terms hereof and thereof will not, conflict with, or result in any
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
any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien (other than Permitted Liens) upon
any of the properties or assets of the Company or any Company Subsidiary under,
any provision of (i) the Company Charter, the Company By-laws or the comparable
charter or organizational documents of any Company Subsidiary, (ii) any Material
Contract, (iii) any other Contract to which the Company or any Company
Subsidiary is a party or by which any of their respective
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properties or assets is bound or (iv) subject to the filings and other matters
referred to in the following sentence, any provision of any Judgment or
Applicable Law applicable to the Company or any Company Subsidiary or their
respective properties or assets, other than, in the cases of clause (iii) or
(iv) above, any such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Company Material Adverse Effect;
provided that termination rights arising due to the consummation of the Offer or
the Merger under the Contracts listed in item (1) of Section 4.05 of the Company
Disclosure Letter will not constitute (x) a breach of the representations and
warranties contained herein or (y) an event which could reasonably be expected
to have a Company Material Adverse Effect. No Consent of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by or with respect to the Company or any Company Subsidiary in
connection with the execution, delivery and performance of any Transaction
Agreement to which it is a party or the consummation of the Transactions, other
than (i) compliance with and filings under the HSR Act, (ii) the filing with the
SEC of (A) the Schedule 14D-9, (B) a Proxy Statement, if such approval is
required by law, (C) any Information Statement and (D) such reports under
Section 13 of the Exchange Act, as may be required in connection with this
Agreement and the other Transaction Agreements, the Offer, the Merger and the
other Transactions, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Georgia and appropriate documents with the
relevant authorities of the other jurisdictions in which the Company is
qualified to do business, (iv) such filings as may be required in connection
with the taxes described in Section 7.08, (v) compliance with and filings under
the Auto Warranty Laws of the States set forth in Section 4.05 of the Company
Disclosure Letter and (vi) such other items as are set forth in Section 4.05 of
the Company Disclosure Letter. For purposes of this Section 4.05 and any other
relevant representations and warranties of the Company, the representations and
warranties are made based upon the assumption that the Company shall be the
Surviving Corporation.
SECTION 4.06. SEC Documents; Financial Statements; Undisclosed
Liabilities. (a) The Company has filed with the SEC all Company SEC Documents.
As of its respective date, each Company SEC Document, including, without
limitation, any financial statements or schedules included therein, complied in
all material respects with the requirements of the Securities Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Document, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent that information contained in any Company SEC Document has been revised
or superseded by a later filed Filed Company SEC Document, none of the Company
SEC Documents contains any untrue statement of a material fact or omits 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.
(b) The Financial Statements when filed with the SEC will,
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 GAAP (except, in the case of
unaudited 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 statements, to normal year-end audit
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adjustments). As of April 30, 1999, the Company and the Company Subsidiaries
have available to them cash, cash equivalents, deposits to secure licenses,
trading securities, held to maturity securities and available for sale
securities (current and non-current) in the amounts set forth in Section 4.06(b)
of the Company Disclosure Letter.
(c) Except as set forth in the Filed Company SEC Documents and
except for liabilities or obligations which have not had and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, neither the Company nor any Company Subsidiary has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a consolidated balance sheet
or in the notes thereto. None of the Company Subsidiaries is, or has at any time
been, subject to the reporting requirements of Sections 13(a) and 15(d) of the
Exchange Act.
SECTION 4.07. Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) Offer Documents, the Schedule 14D-9 or the Information
Statement will, at the time such document is filed with the SEC, at any time it
is amended or supplemented or at the time it is first published, sent or given
to the Company's stockholders, 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, or (ii) the Proxy Statement will, at
the date it is first mailed to the Company's stockholders or at the time of
Company 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 are made, not misleading. The Schedule 14D-9, the Information Statement 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 thereunder,
except that no representation is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub for inclusion or incorporation by reference therein.
SECTION 4.08. Absence of Certain Changes or Events. Except as
disclosed in the Filed Company SEC Documents or in Section 4.08 of the Company
Disclosure Letter, from the date of the most recent audited financial statements
included in the Filed Company SEC Documents to the date of this Agreement, the
Company has conducted its business only in the ordinary course, and during such
period none of the Company or any Company Subsidiary has:
(i) experienced or been affected by any event, change, effect
or development that, individually or in the aggregate, has had or could
reasonably be expected to have a Company Material Adverse Effect;
(ii) any action that would not be permitted to be taken after
the date hereof under Section 6.01; or
(iii) entered into any material transaction, or conducted its
business or operations, other than in the ordinary course of business,
consistent with past practice.
SECTION 4.09. Taxes. (a) Each of the Company and each
Company Subsidiary has timely filed, or has caused to be timely filed on its
behalf, all Tax Returns required to be filed by it, and all such Tax Returns are
true, complete and accurate in all material respects. The
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Company and each Company Subsidiary (i) has timely paid in full
all Taxes due and owing (whether or not shown on such Tax Returns) and (ii) has
provided for all Taxes (in addition to deferred taxes established to reflect
differences between tax and book basis in assets) in the Financial Statements.
The Financial Statements reflect an adequate reserve for all Taxes payable by
the Company and the Company Subsidiaries for all taxable periods and portions
thereof through the date of such financial statements.
(b) No deficiency with respect to any Taxes has been proposed,
asserted or assessed against the Company or any Company Subsidiary, and no
requests for waivers of the time to assess any such Taxes are pending. The
Federal income Tax Returns of the Company and each Company Subsidiary
consolidated in such Returns have been examined by and settled with the United
States Internal Revenue Service for all years through 1994. No audit or other
proceeding with respect to Taxes or Tax Returns of the Company or any Company
Subsidiary is pending or being conducted by a Tax authority, and neither the
Company nor any Company Subsidiary has been notified in writing of any such
audit or other proceeding.
(c) Each of the Company and each Company Subsidiary has
withheld and paid all Taxes required to be withheld and paid in connection with
amounts paid or owing to any employee, creditor, stockholder or third party. The
Company and each Company Subsidiary have collected all material sales and use
Taxes required to be collected, and have remitted or will remit on a timely
basis, such amounts to the appropriate governmental authorities, or have been
furnished properly completed exemption certificates.
(d) There are no Liens for Taxes (other than for current Taxes
not yet due and payable) on the assets of the Company or any Company Subsidiary
and no material claims have been asserted with respect to any such Taxes.
(e) Except as disclosed in Section 4.09(e) of the Company
Disclosure Letter no issue relating to the Taxes of the Company or any Company
Subsidiary has been raised by any taxing authority in any audit or examination
which, by application of similar principles, could result in increased Taxes in
a taxable period (or portion thereof) ending after the Closing Date. Neither the
Company nor any Company Subsidiary has agreed to or is required to make any
adjustments pursuant to Section 481(a) of the Code or any similar provision of
state, local or foreign law by reason of a change in accounting method initiated
by the Company or any such Company Subsidiary or has any knowledge that the
Internal Revenue Service has proposed any such adjustment or change in
accounting method, or has any application pending with any taxing authority
requesting permission for any changes in accounting methods that relate to the
business or operations of the Company or any Company Subsidiary.
SECTION 4.10. Benefit Plans ERISA Compliance; Excess Parachute
Payments. (a) Section 4.10 of the Company Disclosure Letter contains a true and
complete list of each "employee benefit plan" (within the meaning of section
3(3) of ERISA, including, without limitation, multiemployer plans within the
meaning of ERISA section 3(37)), stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of any Transaction, including the Offer or the Merger or
otherwise), whether formal or informal, oral or written,
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legally binding or not, under which any employee or former employee of the
Company or the Company Subsidiaries has any present or future right to benefits
or under which the Company or the Company Subsidiaries has any present or future
liability. All such plans, agreements, programs, policies and arrangements shall
be collectively referred to as the "Company Plans".
(b) With respect to each Company Plan, the Company has
delivered to Parent a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii)
the most recent determination letter, if applicable; (iii) any summary plan
description and other written communications (or a description of any oral
communications) by the Company or the Company Subsidiaries to their employees
concerning the extent of the benefits provided under a Company Plan; and (iv)
for the three most recent years (A) the Form 5500 and attached schedules, (B)
audited financial statements, (C) actuarial valuation reports and (D) attorney's
response to an auditor's request for information.
(c) (i) Each Company Plan has been established and
administered in accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, rules and regulations;
(ii) each Company Plan which is intended to be qualified within the meaning of
Code section 401(a) is so qualified and has received a favorable determination
letter as to its qualification, and nothing has occurred, whether by action or
failure to act, that could reasonably be expected to cause the loss of such
qualification; (iii) no event has occurred and no condition exists that would
subject the Company or the Company Subsidiaries, either directly or by reason of
their affiliation with any member of their "Controlled Group" (defined as any
organization which is a member of a controlled group of organizations within the
meaning of Code sections 414(b), (c), (m) or (o)), to any tax, fine, Lien,
penalty or other liability imposed by ERISA, the Code or other applicable laws,
rules and regulations; (iv) for each Company Plan with respect to which a Form
5500 has been filed, no material change has occurred with respect to the matters
covered by the most recent Form since the date thereof; (v) no "prohibited
transaction" (as such term is defined in ERISA section 406 and Code section
4975) has occurred with respect to any Company Plan; (vi) no Company Plan
provides retiree welfare benefits and none of the Company or any Company
Subsidiaries has any obligations to provide any retiree welfare benefits; and
(vii) all awards, grants or bonuses made pursuant to any Company Plan have been,
or will be, fully deductible to the Company or the Company Subsidiaries
notwithstanding the provisions of Section 162(m) of the Code and the regulations
promulgated thereunder.
(d) With respect to any Company Plan, (i) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or threatened in writing and (ii) no facts or circumstances exist that
could give rise to any such actions, suits or claims.
(e) Except as set forth in Section 4.10 of the Company
Disclosure Letter, no Company Plan exists that could result in the payment to
any present or former employee of the Company or the Company Subsidiaries of any
money or other property or accelerate or provide any other rights or benefits to
any present or former employee of the Company or any Company Subsidiary as a
result of the Transactions, including the Offer and the Merger, whether or not
such payment would constitute a parachute payment within the meaning of Code
section 280G. No Company Plan exists that could give rise to the payment of any
amount that would not be deductible by the Company or the Company Subsidiaries
under Section 162(m) of the Code.
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SECTION 4.11. Litigation. Except as disclosed in the Filed
Company SEC Documents or in Section 4.11 of the Company Disclosure Letter and
except for claims made in the ordinary course of business with respect to
amounts to be reimbursed in the Company's capacity as administrator or obligor
under a service contract, there is no suit, action or proceeding pending or
threatened in writing or to the Company's knowledge which may be filed against
or affecting the Company or any Company Subsidiary that, individually or in the
aggregate, has had or could reasonably be expected to result in the payment of
damages in excess of $250,000, nor is there any Judgment outstanding against the
Company or any Company Subsidiary that has had or could reasonably be expected
to have a Company Material Adverse Effect.
SECTION 4.12. Compliance with Applicable Laws. Except as
disclosed in the Filed Company SEC Documents or in Section 4.12 of the Company
Disclosure Letter, the Company and the Company Subsidiaries are in compliance in
all material respects with all Applicable Laws. Except as set forth in the Filed
Company SEC Documents or in Section 4.12 of the Company Disclosure Letter, none
of the Company or a Company Subsidiary has received any written communication
during the past two years from a Governmental Entity that alleges that the
Company or a Company Subsidiary is not in compliance in any material respect
with any Applicable Law. This Section 4.12 does not relate to matters with
respect to Taxes or environmental, health and safety laws, which are the subject
of Section 4.09 and 4.19, respectively.
SECTION 4.13. Contracts; Debt Instruments. (a) Except as
disclosed in the Filed SEC Documents or in Section 4.13(a) of the Company
Disclosure Letter, there are no Material Contracts or other significant
agreements relating to the business of the Company. Neither the Company nor any
of the Company Subsidiaries is in violation of or in default under (nor does
there exist any condition which with the passage of time or the giving of notice
or both would cause such a violation of or default under) any Material Contract
to which it is a party or by which it or any of its properties or assets is
bound, except for violations or defaults that have not and could not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect. Except with respect to any termination right arising
from the consummation of the Offer or the Merger, each Material Contract is in
full force and effect, and is a legal, valid and binding obligation of the
Company or a Company Subsidiary and, to the knowledge of the Company, each of
the other parties thereto, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and general principles of equity (regardless of
whether considered in a proceeding in equity or at law). No condition exists or
event has occurred which (whether with or without notice or lapse of time or
both) would constitute a default by the Company or a Company Subsidiary or, to
the knowledge of the Company, any other party thereto under any Material
Contract or result (other than due to consummation of the Offer or the Merger)
in a right of termination of any Material Contract.
(b) Set forth in Section 4.13(b) of the Company Disclosure
Letter is (i) a list of all loan or credit agreements, notes, bonds, mortgages,
indentures and other agreements and instruments pursuant to which any
indebtedness of the Company or any of its subsidiaries in an aggregate principal
amount in excess of $50,000 is outstanding or may be incurred and (ii) the
respective principal amounts currently outstanding thereunder.
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SECTION 4.14. Title to Properties. (a) Except as set forth in
Section 4.14 of the Company Disclosure Letter, each of the Company and each
Company Subsidiary has good and marketable title to, or valid leasehold
interests in, all its properties and assets except for such as are no longer
used or useful in the conduct of its businesses or as have been disposed of in
the ordinary course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in the
aggregate, do not and will not materially interfere with its ability to conduct
its business as currently conducted. All such assets and properties, other than
assets and properties in which the Company or any of its subsidiaries has
leasehold interests, are free and clear of all Liens other than those set forth
in Section 4.14 of the Company Disclosure Letter and except for (i) Statutory
Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen
incurred in the ordinary course of business for amounts not yet overdue or being
contested in good faith, (ii) Liens for taxes not yet due and payable or being
contested in good faith in appropriate proceedings during which collection or
enforcement is stayed, (iii) undetermined or inchoate Liens incidental to the
construction at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxx and (iv) Liens that,
in the aggregate, do not and will not materially interfere with the ability of
the Company and its subsidiaries to conduct business as currently conducted (any
or all of such liens under clauses (i), (ii), (iii) or (iv), "Permitted Liens").
(b) Except as set forth in Section 4.14 of the Company
Disclosure Letter, each of the Company and each Company Subsidiary has complied
in all material respects with the terms of all leases to which it is a party and
under which it is in occupancy, and all such leases are in full force and
effect. Each of the Company and each Company Subsidiary enjoys peaceful and
undisturbed possession under all such material leases.
SECTION 4.15. Intellectual Property. (a) The Company and the
Company Subsidiaries own, or are validly licensed or otherwise have the
enforceable right to use, all Intellectual Property Rights which are currently
used in the conduct of the business of the Company and the Company Subsidiaries.
Section 4.15 of the Company Disclosure Letter sets forth a description of all
the Material Intellectual Property Rights. Either the Company or one of the
Company Subsidiaries is the sole and exclusive owner of, or the exclusive or
non-exclusive licensee of, with all right, title and interest in and to (and are
free and clear of any Liens), all Material Intellectual Property Rights, and in
the use of Material Intellectual Property Rights owned by the Company or any of
the Company Subsidiaries. The Company has sole and exclusive rights (and is not
contractually obligated to pay any compensation to any third party in respect
thereof) to the use of all the Material Intellectual Property Rights or the
material covered thereby in connection with the services or products in respect
of which the Material Intellectual Property Rights are being used.
(b) No claims with respect to any Intellectual Property Rights
owned or used by the Company and the Company Subsidiaries have been asserted or,
to the knowledge of the Company, are threatened in writing by any person (i) to
the effect that the manufacture, sale, licensing or use of any of the products
or services of the Company or any of the Company Subsidiaries as now
manufactured, sold or licensed or used or proposed for manufacture, use, sale or
licensing by the Company or any of the Company Subsidiaries infringes on any
Intellectual Property Rights of another person, (ii) against the use by the
Company or any of the Company Subsidiaries of any Intellectual Property Rights
of another person, or (iii) challenging the ownership by the Company or any of
the Company Subsidiaries or the validity of any of Intellectual Property Rights
owned or used by the Company and the Company Subsidiaries,
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except claims which have not had and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. All
registered trademarks service marks, and copyrights held by the Company are
valid and subsisting, except to the extent any failure has not had and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. To the knowledge of the Company, there is no
unauthorized use, infringement or misappropriation of any of the Intellectual
Property Rights owned or used by the Company and the Company Subsidiaries by any
third party, including any employee or former employee of the Company or any of
the Company Subsidiaries, which has had or could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. No
Intellectual Property Rights owned or used by the Company and the Company
Subsidiaries or product of the Company or any of the Company Subsidiaries is
subject to any outstanding Judgment restricting in any manner the licensing
thereof by the Company or any of the Company Subsidiaries, except to the extent
any such restriction has not had and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Neither the
Company nor any of the Company Subsidiaries has entered into any agreement under
which the Company or any of the Company Subsidiaries is restricted from selling,
licensing or otherwise distributing any of its products to any class of
customers, in any geographic area, during any period of time or in any segment
of the market.
SECTION 4.16. Takeover Laws. The Companies' By-laws do not
provide that Part 2 or Part 3 of Article 11 of the GBCC are applicable to the
Company and such statutes are not applicable to the Company, the Offer, the
Merger or any of the other transactions contemplated by the Transaction
Agreements. The Company's Board of Directors has taken all action necessary to
ensure that Part 2 or Part 3 of Article 11 of the GBCC, if such statutes were
applicable to the Company, would not impose any additional procedural, voting,
approval, fairness or other restrictions on the timely consummation of the
Transactions or restrict, impair or delay the ability of Parent to vote or
otherwise exercise all rights as a stockholder of the Company.
SECTION 4.17. Year 2000. All software, systems, hardware and
related equipment, data, interfaces and processes used in connection with the
Company's business (including in products or services supplied to the Company's
customers and in administrative functions or other internal operations of the
Company or the Company Subsidiaries) are Year 2000 Compliant.
SECTION 4.18. Affiliate Transactions. Except as disclosed and
described in Section 4.18 of the Company Disclosure Letter and for employment
arrangements filed as exhibits to or described in the Filed Company SEC
Documents, there is no contract, commitment or other arrangement, whether
written or oral, between the Company or any Company Subsidiary on the one hand
and any 5% or greater stockholder, director or officer of the Company or any
Company Subsidiary or any affiliate or family member of any such 5% or greater
stockholder, director or officer (other than the Company or a Company
Subsidiary) on the other hand and none of the Company or the Company
Subsidiaries receives any products, goods, services (other than services
provided as an employee, officer of director) or other rights from, or provides
any such products, goods, services or other rights to, any such stockholder,
director, officer, affiliate or family member.
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SECTION 4.19. Environmental, Health, and Safety. (a) The
Company, the Company Subsidiaries, and their respective predecessors and
affiliates have complied with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed, commenced or to the Company's knowledge,
threatened against any of them alleging any failure so to comply. Without
limiting the generality of the preceding sentence, the Company, the Company
Subsidiaries and their respective predecessors and affiliates have obtained and
been in compliance with all of the terms and conditions of all permits,
licenses, and other authorizations which are required under, and have complied
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained in, all
Environmental, Health, and Safety Laws.
(b) None of the Company or any Company Subsidiary has any
liability (and neither the Company, the Company Subsidiaries nor their
respective predecessors and affiliates has handled or disposed of any Hazardous
Substance, arranged for the disposal of any Hazardous Substance, exposed any
employee or other individual to any Hazardous Substance or condition, or owned
or operated any property or facility in any manner that, could form the basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against the Company or any Company
Subsidiary giving rise to any liability) for damage to any site, location, or
body of water (surface or subsurface), for any illness of or personal injury to
any employee or other individual, or for any reason under any Environmental,
Health, and Safety Law.
(c) All properties and equipment used in the business of the
Company, the Company Subsidiaries and their respective predecessors and
affiliates are and have been free from any Hazardous Substance.
SECTION 4.20. Brokers; Fees and Expenses. (a) No broker,
investment banker, financial advisor or other person, other than The
Xxxxxxxx-Xxxxxxxx Company, LLC, the fees and expenses of which will be paid by
the Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the Offer, the Merger and or any
other Transaction based upon arrangements made by or on behalf of the Company.
The amount of the fees of The Xxxxxxxx-Xxxxxxxx Company, LLC payable in
connection with the Transactions and the estimated amount of all other fees and
expenses incurred and to be incurred by the Company in connection with the
Offer, the Merger and the other Transactions (including the fees of the
Company's legal counsel) are set forth and itemized in Section 4.20 of the
Company Disclosure Letter. The Company has furnished to Parent a true and
complete copy of all agreements between the Company and The Xxxxxxxx-Xxxxxxxx
Company, LLC relating to the Offer, the Merger and the other Transactions.
(b) No valid claim against the Company or the Surviving
Corporation or, to the Company's knowledge, against Parent or Sub exists or will
exist for payment of any "topping," "break-up," "bust-up" or "termination" fee
or any similar compensation or payment arrangement as a result of the
transactions contemplated hereby, including the Offer and the Merger.
SECTION 4.21. Opinion of Financial Advisor. The Company has
received the opinion of The Xxxxxxxx-Xxxxxxxx Company, LLC, the Company's
financial advisor dated the date of this Agreement, that, as of such date, the
consideration to be received in the Offer and the
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Merger by the Company's stockholders is, in the opinion of such advisors, fair
to the Company's stockholders from a financial point of view, a signed copy of
which opinion has been delivered to Parent.
ARTICLE V
Representations and Warranties of Parent and Sub
Parent and Sub jointly and severally represent and warrant to
the Company as follows:
SECTION 5.01. Organization, Standing and Power. (a) Each of
Parent and Sub is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized and has full corporate
power and authority to conduct its businesses as presently conducted, other than
such franchises, licenses, permits, authorizations and approvals the lack of
which, individually or in the aggregate, has not had and could not reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 5.02. Sub. Since the date of its incorporation,
Sub has not carried on any business or conducted any operations other than the
execution of the Transaction Agreements to which it is a party, the performance
of its obligations hereunder and thereunder and matters ancillary thereto.
SECTION 5.03. Financing. Parent has sufficient funds to
consummate all the transactions contemplated hereby and pay related fees and
expenses.
SECTION 5.04. Ownership of Company Common Stock. Except for
the transactions contemplated by the Stock Option and Tender Agreements and the
Company Stock Option Agreement, as of the date of this Agreement, neither Parent
nor Sub beneficially owns any Company Common Stock.
SECTION 5.05. Authority; Execution and Delivery;
Enforceability. Each of Parent and Sub has all requisite corporate power and
authority to execute each Transaction Agreement to which it is a party and to
consummate the Transactions. The execution and delivery by each of Parent and
Sub of each Transaction Agreement to which it is a party and the consummation by
it of the Transactions have been duly authorized by all necessary corporate
action on the part of Parent and Sub. Parent, as sole stockholder of Sub, has
adopted this Agreement. Each of Parent and Sub has duly executed and delivered
each Transaction Agreement to which it is a party, and each Transaction
Agreement to which it is a party constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
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SECTION 5.06. No Conflicts; Consents. The execution and
delivery by each of Parent and Sub of each Transaction Agreement to which it is
a party, do not, and the consummation of the Offer, the Merger and the other
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under any provision of (i) the charter or organizational
documents of Parent or Sub, (ii) any material Contract to which Parent or Sub is
a party or by which any of their respective properties or assets is bound or
(iii) subject to the filings and other matters referred to in the following
sentence, any Judgment or Applicable Law applicable to Parent or Sub or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Parent Material Adverse Effect.
No Consent of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made by or with respect to Parent or Sub in
connection with the execution, delivery and performance of any Transaction
Agreement to which Parent or Sub is a party or the consummation of the
Transactions, other than (i) compliance with and filings under the HSR Act, (ii)
the filing with the SEC of (A) the Offer Documents and (B) such reports under
Sections 13 and 16 of the Exchange Act, as may be required in connection with
this Agreement and the other Transaction Agreements, the Offer, the Merger and
the other Transactions, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Georgia, (iv) such filings as may be required
in connection with the taxes described in Section 7.08, (v) compliance with and
filings under the Auto Warranty Laws of the States set forth in Section 5.06 of
the Parent Disclosure Letter, (vi) Consents, registrations, declarations or
filings required to be made solely by reason of the Company's participation in
the Transactions and (vii) such other items as are set forth in Section 5.06 of
the Parent Disclosure Letter.
SECTION 5.07. Information Supplied. None of the information
supplied or to be supplied in writing by Parent or Sub for inclusion or
incorporation by reference in (i) Offer Documents, the Schedule 14D-9 or the
Information Statement will, at the time such document is filed with the SEC, at
any time it is amended or supplemented or at the time it is first published,
sent or given to the Company's stockholders, 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, or (ii) the Proxy
Statement will, at the date it is first mailed to the Company's stockholders or
at the time of the Company 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 are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
SECTION 5.08. Brokers. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Offer, the
Merger and the other Transactions based upon arrangements made by or on behalf
of Parent or Sub.
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ARTICLE VI
Covenants Relating to Conduct of Business
SECTION 6.01. Conduct of Business.
(a) Conduct of Business by the Company. Except for matters
expressly permitted by the Transaction Agreements, from the date of this
Agreement to the Effective Time the Company shall, and shall cause each Company
Subsidiary to, conduct its business in the usual, regular and ordinary course in
substantially the same manner as previously conducted and use its commercially
reasonable efforts to preserve intact its current business organization, keep
available the services of its officers and employees and maintain its
relationships with customers, suppliers, licensors, licensees, distributors and
agents and others having business dealings with them. In addition, and without
limiting the generality of the foregoing, except for matters expressly permitted
by this Agreement, from the date of this Agreement to the Effective Time, the
Company shall not, and shall not permit any Company Subsidiary to, do any of the
following without the prior written consent of Parent:
(i) (A) 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
subsidiary of the Company to its parent, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, (C) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities or (D) adopt a
plan of complete or partial liquidation or resolutions providing for or
authorizing such liquidation or a dissolution, merger, consolidation,
restructuring, recapitalization or reorganization of the Company or any
of the Company Subsidiaries;
(ii) authorize for issuance, issue, deliver, sell or grant
(A) any shares of its capital stock, (B) any Voting Company Debt or
other voting securities, (C) any securities convertible into or
exchangeable for, or any options, warrants or rights to acquire, any
such shares, voting securities or convertible or exchangeable
securities or (D) any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock-based performance units, other than (1)
the issuance of Company Common Stock upon the exercise of Company
Employee Stock Options, Potential Stock Options or Third Party Stock
Options outstanding on the date of this Agreement and in accordance
with their present terms, and (2) the issuance of Company Common Stock
pursuant to the Company Stock Option Agreement;
(iii) amend its articles of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) except as disclosed in Section 6.01(a)(iv) of the
Company Disclosure Letter, acquire or agree to acquire (A) by merging
or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or
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division thereof or (B) any assets outside the ordinary course of
business consistent with past practice;
(v) except as disclosed in Section 6.01(a)(v) of the
Company Disclosure Letter, (A) grant to any present or former employee,
officer or director of the Company or any Company Subsidiary any
increase in compensation or fringe benefits, except for increases in
salary for non-officer employees in the ordinary course of business
consistent with past practice, (B) grant to any present or former
employee, officer or director of the Company or any Company Subsidiary
any increase in severance or termination pay, (C) other than entering
into employment agreements with employees of the Company approved in
advance by Parent, enter into or amend any employment, consulting,
indemnification, severance or termination agreement with any such
present or former employee, officer or director, (D) establish, adopt,
enter into or amend in any material respect any collective bargaining
agreement or Company Plan, (E) take any action to accelerate any rights
or benefits, or make any material determinations not in the ordinary
course of business consistent with prior practice, under any collective
bargaining agreement or Company Plan, (F) loan or advance money or
other property in excess of $250,000 in the aggregate, to any present
or former employee, officer or director of the Company or any Company
Subsidiary or (G) grant any new, or amend any existing, Third Party
Stock Option, Potential Stock Option or any agreement under which any
Third Party Stock Options or Potential Stock Option are issued;
(vi) make any change in accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar as
may have been required by a change in GAAP;
(vii) sell, lease, license or otherwise dispose of or permit
to become subject to any Lien, other than a Permitted Lien, any
properties or assets, tangible or intangible, except sales of inventory
and excess or obsolete assets in the ordinary course of business
consistent with past practice;
(viii) except as disclosed in Section 6.01(a)(viii) of the
Company Disclosure Letter, (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 Company Subsidiary, 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 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 or in the Company or any direct or indirect
wholly owned subsidiary of the Company;
(ix) make or agree to make any new capital expenditure or
expenditures that, individually, is in excess of $100,000 or, in the
aggregate, are in excess of $250,000, other than capital expenditures
in connection with the development and construction of the property
located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxx, and the related
furnishing and equipment for the building and Company operations
thereat not to exceed $5,500,000 in the aggregate.
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(x) make any material Tax election or settle or compromise
any material Tax liability or refund;
(xi) (A) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in the most recent consolidated financial statements of the
Company included in the Filed SEC Documents or incurred in the ordinary
course of business consistent with past practice, (B) cancel any
material indebtedness (individually or in the aggregate) or waive any
claims or rights of substantial value or (C) waive the benefits of, or
agree to modify in any manner, any confidentiality, standstill or
similar agreement to which the Company or any Company Subsidiary is a
party;
(xii) amend any Material Contract or Contract providing for
payments or otherwise involving amounts in excess of $100,000 or,
except in the ordinary course of business consistent with past
practice, enter into any Material Contract; and
(xiii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Other Actions. The Company shall not, and shall not permit
any Company Subsidiary to, take any action that would, or that could reasonably
be expected to, result in (i) any of the representations and warranties of the
Company set forth in any Transaction Agreement to which it is a party becoming
untrue or (ii) any condition to the Offer set forth in Exhibit A or any
condition to the Merger set forth in Article VIII not being satisfied.
(c) Advice of Changes. (i) The Company shall promptly advise
Parent orally and in writing of any change or event having, or which, insofar as
can reasonably be foreseen, would have, a Company Material Adverse Effect.
(ii) After the date hereof, the Company shall have the
continuing obligation promptly to supplement or amend the Company
Disclosure Letter with respect to any matter hereafter arising or
discovered which would be required to be set forth or described in the
Company Disclosure Letter or would have been required to be taken as an
exception to any representation or warranty of the Company in order for
the representations and warranties of the Company to be true and
correct at and as of the times such representations and warranties are
required to be true and correct in accordance with this Agreement;
provided, however, that if (x) Parent consents in writing to any such
supplement or amendment or fails to respond in writing to the Company
by 11:59 p.m. on the fifth full business day following the date of
receipt by Parent of such supplement or amendment, such supplement or
amendment shall be deemed a part of the Company Disclosure Letter or an
exception to the specified representation or warranty, as the case may
be, at all future times that the representations and warranties of the
Company are required to be true and correct and (y) Parent responds in
writing but does not consent to any such supplement or amendment, the
matter so disclosed shall be deemed a failure of the condition set
forth in Section 8.02(a) hereof and paragraph (e) of Exhibit A hereto
delivered pursuant to this Section 6.01(c)(ii).
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SECTION 6.02. No Solicitation. (a) Except as specifically
permitted in this Section 6.02, (i) the Company and the Company Subsidiaries
shall not, and the Company and the Company Subsidiaries shall use commercially
reasonable efforts to cause each of its officers, directors, employees,
representatives and agents not to, directly or indirectly, (x) encourage,
solicit, initiate, engage or participate in negotiations, or enter into any
agreement with any person or entity (other than the Parent or Sub) concerning
any Company Takeover Proposal or (y) take any other action intended or designed
to facilitate the efforts of any person or entity (other than Parent or Sub)
relating to a possible Company Takeover Proposal and (ii) neither the Company
Board nor any committee thereof shall withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Parent or Sub, the approval or recommendation
by the Company Board or any such committee of this Agreement, the Offer or the
Merger. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in the preceding sentence by any officer of the Company
or any Company Subsidiary or any affiliate, director or investment banker,
attorney or other advisor or representative of the Company or any Company
Subsidiary, whether or not such person is purporting to act on behalf of the
Company or any Company Subsidiary or otherwise, shall be deemed to be a breach
of this Section 6.02(a) by the Company. The Company will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any Company Takeover Proposal.
(b) Notwithstanding anything herein to the contrary, in the
event that the Company receives a Company Takeover Proposal that did not result
from a breach of Section 6.02(a), the Company and Company Subsidiaries, at their
discretion, shall be permitted to (i) furnish to and communicate with the party
making such Company Takeover Proposal any information (subject to a customary
confidentiality agreement), and otherwise negotiate with such party or (ii)
withdraw or modify its approval or recommendation of this Agreement, the Offer
or the Merger, in each case only if (x) two (2) business days prior written
notice shall have been given to Parent and (y)(A) the Company Board shall have
been advised in writing by its investment banker that it believes the party is
financially capable of consummating such Company Takeover Proposal, which
proposal does not have any financing contingency, (B) the Company Board shall
have been reasonably advised in writing, by outside counsel to the Company, that
any failure to provide such information to the party or withdraw or modify such
approval or recommendation, respectively, would be reasonably likely to
constitute a breach of the fiduciary duties of the Company Board to the
stockholders of the Company and (C) the Company Board, after weighing such
advice, determines in good faith that failing to furnish such information or
withdraw or modify such approval or recommendation, respectively, would
constitute a breach of its fiduciary duties to stockholders of the Company.
Notwithstanding anything herein to the contrary, nothing shall prohibit the
Company Board from complying with its obligations under Rules 14d-9 or 14e- 2 of
the Exchange Act.
(c) The Company promptly shall advise Parent orally and in
writing of any Company Takeover Proposal or any inquiry with respect to or that
could lead to any Company Takeover Proposal and the identity of the person
making any such Company Takeover Proposal or inquiry. The Company shall keep
Parent fully informed of significant developments including any change to the
terms of any such Company Takeover Proposal or inquiry.
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(d) Neither the Company nor any Company Subsidiary will waive
any provision of any confidentiality or standstill agreement to which it is a
party without the prior written consent of Parent.
ARTICLE VII
Additional Agreements
SECTION 7.01. Preparation of Proxy Statement; Stockholders
Meeting. (a) If the approval of this Agreement (including as this Agreement may
be proposed by Parent to be amended pursuant to Section 2.04) by the Company's
stockholders is required by law, the Company shall, as soon as practicable
following the expiration of the Offer, prepare and file with the SEC the Proxy
Statement in preliminary form, and each of the Company and Parent shall use its
commercially reasonable efforts to respond as promptly as practicable to any
comments of the SEC with respect thereto. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and shall supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. If at any time prior to receipt of Company Stockholder Approval there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company shall promptly prepare and mail to its
stockholders such an amendment or supplement. The Company shall not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects. The Company shall use commercially reasonable efforts to
cause the Proxy Statement to be mailed to the Company's stockholders as promptly
as practicable after filing with the SEC.
(b) If the approval of this Agreement (including as this
Agreement may be proposed by Parent to be amended pursuant to Section 2.04) by
the Company's stockholders is required by law, the Company shall, as soon as
practicable following the expiration of the Offer, duly call, give notice of,
convene and hold the Company Stockholders Meeting for the purpose of seeking
Company Stockholder Approval. The Company shall, through the Company Board,
recommend to its stockholders that they give Company Stockholder Approval,
except to the extent that the Company Board shall have withdrawn or modified its
approval or recommendation of this Agreement, the Offer or the Merger as
permitted by Section 6.02(b). Without limiting the generality of the foregoing,
the Company agrees that its obligations pursuant to the first sentence of this
Section 7.01(b) shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any Company Takeover
Proposal or (ii) the withdrawal or modification by the Company Board of its
approval or recommendation of this Agreement, the Offer or the Merger.
Notwithstanding the foregoing, if Sub or any other subsidiary of Parent shall
acquire at least 90% of the outstanding shares of Company Common Stock, the
parties shall, at the request of Parent, take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
expiration of the Offer without a stockholders meeting in accordance with
Section 1104 of the GBCC.
(c) Parent shall cause all shares of Common Stock purchased
pursuant to the Offer and all other shares of Common Stock owned by Sub or any
other subsidiary of Parent to be voted in favor of the approval of this
Agreement.
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SECTION 7.02. Access to Information; Confidentiality. The
Company shall, and shall cause each of its subsidiaries to, afford to Parent,
and to Parent's officers, employees, accountants, counsel, financial advisers
and other representatives, reasonable access during normal business hours during
the period prior to the Effective Time to all their respective properties,
books, Contracts, commitments, personnel and records and, during such period,
the Company shall, and shall cause each of its subsidiaries to, furnish promptly
to Parent (a) 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 (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Without limiting the
generality of the foregoing, the Company shall, within two business days of
request therefor, provide to Parent the information described in Rule
14a-7(a)(2)(ii) under the Exchange Act and any information to which a holder of
Company Common Stock would be entitled under Section 1602 of the GBCC (assuming
such holder met the requirements of such section). All information exchanged
pursuant to this Section 7.02 shall be subject to the Confidentiality Agreement.
SECTION 7.03. Commercially Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this Agreement,
unless, to the extent permitted by Section 6.02(b), the Board of Directors of
the Company approves or recommends a Company Takeover Proposal, each of the
parties shall use commercially reasonable 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 to
consummate and make effective, in the most expeditious manner practicable, the
Offer, the Merger and the other Transactions, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
including under the HSR Act and the Auto Warranty Laws identified in Section
4.05 or the Company Disclosure Letter and Section 5.06 of the Parent Disclosure
Letter, (ii) the obtaining of all necessary consents, approvals or waivers from
third parties, (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or any other
Transaction Agreement or the consummation of the Transactions, including seeking
to have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery of
any additional instruments necessary to consummate the Transactions and to fully
carry out the purposes of the Transaction Agreements. In connection with and
without limiting the foregoing, the Company and the Company Board shall (i) take
all commercially reasonable action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to any
Transaction or this Agreement or any other Transaction Agreement, and (ii) if
any state takeover statute or similar statute or regulation becomes applicable
to this Agreement or any other Transaction Agreement, take all commercially
reasonable action necessary to ensure that the Offer, the Merger and the other
Transactions may be consummated as promptly as practicable on the terms
contemplated by the Transaction Agreements and otherwise to minimize the effect
of such statute or regulation on the Offer, the Merger and the other
Transactions. Nothing in this Agreement shall be deemed to require any party to
waive any substantial rights or agree to any substantial limitation on the
nature, scope or geographic area of its operations or business or to dispose of
or hold separate (through the establishment of a trust or otherwise) any
significant asset or collection of assets.
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(b) The Company shall give prompt notice to Parent, and Parent
or Sub shall give prompt notice to the Company, of, and such party shall use
commercially reasonable efforts to prevent, or promptly remedy (i) any
representation or warranty made by it contained in any Transaction Agreement
that is qualified as to becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under any Transaction Agreement; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under any other Transaction Agreement.
SECTION 7.04. Stock Options. (a) As soon as practicable
following the date of this Agreement, the Company Board (or, if appropriate, any
committee administering the Company Stock Plans) shall adopt such resolutions or
take such other actions as are required to adjust the terms of all outstanding
Company Employee Stock Options and Potential Stock Options heretofore granted
under any Company Stock Plan or otherwise, to provide that each Company Employee
Stock Option and each Potential Stock Option outstanding immediately prior to
the Effective Time shall be canceled on the date following the Effective Time in
exchange for a cash payment by the Company to be made on such date of an amount
equal to (i) the excess, if any, of (x) the price per share of Company Common
Stock to be paid pursuant to the Offer over (y) the exercise price per share of
Company Common Stock subject to such Company Employee Stock Option or Potential
Stock Option, multiplied by (ii) the number of shares of Company Common Stock
for which such Company Employee Stock Option or Potential Stock Option shall not
theretofore have been exercised.
(b) Except with respect to the Third Party Stock Options set
forth on Section 7.04(b) of the Company Disclosure Letter, which shall be
treated as described in such Section, as soon as practicable following the date
of this Agreement, the Company shall offer to each holder of a Third Party Stock
Option the right to have each Third Party Stock Option outstanding immediately
prior to the acceptance for payment of shares of Company Common Stock pursuant
to the Offer canceled in exchange for a cash payment by the Company in an amount
equal to (i) the excess, if any, of (x) the price per share of Company Common
Stock to be paid pursuant to the Offer over (y) the exercise price per share of
Company Common Stock subject to such Third Party Stock Option, multiplied by
(ii) the number of shares of Company Common Stock for which such Third Party
Stock Option shall not theretofore have been exercised.
(c) All amounts payable pursuant to this Section 7.04 shall be
subject to any required withholding of taxes and shall be paid without interest.
The Company shall use commercially reasonable efforts to obtain all consents of
the holders of the Company Employee Stock Options and Potential Stock Options as
shall be necessary to effectuate the foregoing. Notwithstanding anything to the
contrary contained in this Agreement, payment shall, at Parent's request, be
withheld in respect of any Company Employee Stock Option, Potential Stock Option
or Third Party Stock Option until all necessary consents are obtained.
(d) The Company Stock Plans shall terminate as of the
Effective Time, and the provisions in any other Benefit Plan providing for the
issuance, transfer or grant of any capital stock of the Company or any interest
in respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall ensure that following the Effective Time
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no holder of a Company Employee Stock Option, Potential Stock Option or Third
Party Stock Option or any participant in any Stock Plan or other Benefit Plan
shall have any right thereunder to acquire any capital stock of the Company or
the Surviving Corporation.
SECTION 7.05. Indemnification; D&O Insurance. (a) Parent and
Sub agree that all rights to indemnification for acts or omissions occurring
prior to the Effective Time now existing in favor of the current or former
directors, officers or employees of the Company and the Company Subsidiaries as
provided in their respective certificates of incorporation or by-laws shall
survive the Merger and shall continue in full force and effect in accordance
with their terms for a period of not less than six years from the Effective
Time.
(b) Parent shall cause to be maintained for a period of three
years from the Effective Time the Company's current D&O Insurance policy to the
extent that it provides coverage for events occurring prior to the Effective
Time for all persons who are directors and officers of the Company on the date
of this Agreement, so long as the annual premium therefor would not be in excess
of 125% of the last annual premium paid prior to the date of this Agreement
(such amount, the "Maximum Premium"). Upon request by Parent, the Company shall
use commercially reasonable efforts to extend coverage under the Company's D&O
Insurance by obtaining a three-year "tail" policy (provided that the lump sum
payment to purchase such coverage does not exceed three times the Maximum
Premium) and such "tail" policy shall satisfy Parent's obligations under this
Section 7.05(b). Parent's obligations under this Section 7.05(b) shall also be
satisfied if Parent's D&O Insurance provides (or is amended to provide)
substantially similar coverage for events occurring prior to the Effective Time
for persons who are directors and officers of the Company on the date of this
Agreement. If the Company's existing D&O Insurance expires, is terminated or
canceled during such three-year period or a "tail" policy cannot be purchased on
the terms set forth above and Parent cannot or determines not to satisfy its
obligations under this Section 7.05(b) pursuant to the preceding sentence,
Parent shall use commercially reasonable efforts to cause to be obtained as much
D&O Insurance as can be obtained for the remainder of such period for an
annualized premium not in excess of the Maximum Premium, on terms and conditions
no less advantageous than the existing D&O Insurance. The Company represents to
Parent that the last annual premium paid prior to the date of this Agreement is
not greater than $30,000.
(c) In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Surviving Corporation assume the obligations set forth in this
Section 7.05.
(d) The provisions of this Section 7.05 are intended to be for
the benefit of, and shall be enforceable by, each identified party and his or
her heirs and representatives.
SECTION 7.06. Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Offer, the Merger
and the other Transactions and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be required
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by applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
SECTION 7.07. Transfer Taxes. Either Sub or the Surviving
Corporation shall pay all Transfer Taxes, if any, and any penalties or interest
with respect to the Transfer Taxes, payable in connection with the consummation
of the Offer or the Merger, and all Stock Transfer Taxes, if any, and any
penalties or interest with respect to any such Stock Transfer Taxes. The Company
acknowledges that the amount of the Transfer Taxes payable with respect to any
shares of Company Common Stock may be withheld by Sub from the amount to be paid
pursuant to the Offer and the Merger with respect to such shares, unless the
date on which the beneficial owner of such shares acquired beneficial ownership
thereof is certified to Sub.
SECTION 7.08. Transaction Litigation. The Company shall give
Parent the opportunity to participate fully in the conduct of the defense or the
settlement of any litigation against the Company and its directors relating to
any Transaction; provided, however, that no such settlement shall be agreed to
without Parent's prior written consent, which shall not be unreasonably
withheld.
ARTICLE VIII
Conditions Precedent
SECTION 8.01. 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) Stockholder Approval. If required by law, the Company
shall have obtained Company Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired and any consents, approvals and filings under any foreign antitrust
law, the absence of which would prohibit the consummation of Merger, shall have
been obtained or made.
(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 each of
the parties shall have used commercially reasonable efforts to prevent the entry
of any such injunction or other order and to appeal as promptly as possible any
such injunction or other order that may be entered.
SECTION 8.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Company in this Agreement that are qualified as to materiality
shall be true and correct and those
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not so qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the Closing Date as though made on the Closing
Date, except (i) to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on and as of such
earlier date) and (ii) to the extent Parent has consented in writing (or is
deemed pursuant to Section 6.01(c)(ii) to have consented) to any supplement or
amendment to the Company Disclosure Letter delivered to Parent pursuant to
Section 6.01(c)(ii). Parent shall have received a certificate signed on behalf
of the Company by the chief executive officer and the chief operating officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under any Transaction Agreement at or prior to the Closing Date,
and Parent shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief operating officer of the Company to
such effect.
(c) No Litigation. There shall not be pending or threatened in
writing any suit, action or proceeding, in each case that has a reasonable
likelihood of success, (i) challenging the acquisition by Parent or Sub of any
Company Common Stock, seeking to restrain or prohibit the consummation of the
Merger or any of the other Transactions or seeking to obtain from the Company,
Parent or Sub any damages that are material in relation to the Company and its
subsidiaries taken as a whole, (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 assets of the Company, Parent or any of
their respective subsidiaries of any material portion of the business or assets
of the Company, Parent or any of their respective subsidiaries, or to compel the
Company, Parent or any of their respective subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company, Parent
or any of their respective subsidiaries, as a result of the Merger or any other
Transaction, (iii) seeking to impose limitations on the ability of Parent to
acquire or hold, or exercise full rights of ownership of, any shares of Company
Common Stock, including the right to vote the Company Common Stock purchased by
it 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
and the Company Subsidiaries; provided that Parent and Sub shall be required
reasonably to contest or cooperate with the Company in contesting, as
applicable, the suit, action or proceeding.
(d) Absence of Company Material Adverse Effect. Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Letter, since the date of the most recent audited financial statements included
in the Filed Company SEC Documents there shall not have been any event or
development that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect.
(e) Auto Warranty Laws. All consents, approvals and filings
under the Auto Warranty Laws of any state that are required to be made or
obtained prior to the Effective Time shall have been made or obtained.
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(f) Acceptance of Shares. Sub shall have accepted shares of
Company Common Stock for payment pursuant to the Offer.
(g) Other Agreements. Each of the Principal Stockholders
Employment Agreements, the Stock Option and Tender Agreements and the Company
Stock Option Agreement shall be in full force and effect and each of the Company
and the Principal Company Stockholders shall have performed in all material
respects all obligations to be performed by any of them under any such
agreement.
SECTION 8.03. Conditions to Obligations of the Company. The
obligations of Company to effect the Merger are further subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub in this Agreement that are qualified as to
materiality shall be true and correct and those not so qualified shall be true
and correct in all material respects, as of the date of this Agreement and as of
the Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). Company shall have received
a certificate signed on behalf of the Parent and Sub by an officer of each of
Parent and Sub to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and
Sub shall have performed in all material respects all obligations required to be
performed by each of them under any Transaction Agreement to which the Company
is a party at or prior to the Closing Date, and the Company shall have received
a certificate signed on behalf of Parent and Sub by an officer of each of Parent
and Sub to such effect.
(c) No Litigation. There shall not be pending or threatened in
writing any suit, action or proceeding, in each case that has a likelihood of
success, challenging the acquisition by Parent or Sub of any Company Common
Stock or seeking to restrain or prohibit the consummation of the Merger that
would reasonably be expected to cause any of the transactions contemplated by
this Agreement to be rescinded following the Effective Date; provided that the
Company shall be required reasonably to contest or cooperate with Parent in
contesting, as applicable, the suit, action or proceeding.
ARTICLE IX
Termination, Amendment and Waiver
SECTION 9.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
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(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before
November 30, 1999 (the "Outside Date"), unless the failure to
consummate the Merger is the result of a breach of this
Agreement by the party seeking to terminate this Agreement;
provided, however, that (A) the passage of such period shall
be tolled for any part thereof during which any party shall be
subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the
consummation of the Merger and (B) this Agreement may not be
terminated pursuant to this clause (i) if Sub has accepted
shares of Company Common Stock for payment pursuant to the
Offer;
(ii) if any Governmental Entity issues an order,
decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become
final and nonappealable;
(iii) (A) Sub shall have failed to commence the Offer
within 30 days following the date of this Agreement or (B) the
Offer shall have terminated or expired in accordance with its
terms without Sub having purchased any shares of Company
Common Stock pursuant to the Offer; provided, however, that
the right to terminate this Agreement pursuant to this clause
(iii) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement or the
failure of whose representations and warranties to be true
results in the failure of any such condition, unless such
failure to fulfill such party's obligations follows a failure
by another party to fulfill its obligations in a manner giving
rise to a right by the first party to terminate this Agreement
under this clause (iii) or subparagraph (c) or (f) below;
(iv) if, upon a vote at a duly held stockholders
meeting to obtain Company Stockholder Approval, Company
Stockholder Approval is not obtained;
(c) by Parent, if the Company breaches or fails to perform in
any material respect any of its representations, warranties, covenants or
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Exhibit A, Section
8.02(a) or 8.02(b), and (ii) cannot be or has not been cured within 30 days
after the giving of written notice to the Company of such breach (provided that
Parent or Sub are not then in material breach of any representation, warranty or
covenant contained in this Agreement); provided, however, that this Agreement
may not be terminated pursuant to this clause (c) if Sub has accepted shares of
Company Common Stock for payment pursuant to the Offer;
(d) by Parent:
(i) if the Company Board or any committee thereof withdraws or
modifies in a manner adverse to Parent its approval or recommendation
of the Offer, the Merger or this Agreement or fails to recommend to the
Company's stockholders that they accept the
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Offer or give Company Stockholder Approval, or the Company Board or any
committee thereof resolves to take any of the foregoing actions; or
(ii) if the Company Board fails to reaffirm publicly and
unconditionally its recommendation to the Company's stockholders that
they accept the Offer and give Company Stockholder Approval within 10
business days of Parent's written request to do so (which request may
be made at any time following public disclosure of a Company Takeover
Proposal), which public reaffirmation must also include the
unconditional rejection of such Company Takeover Proposal;
(e) by the Company prior to the acceptance of shares of
Company Common Stock for payment pursuant to the Offer in accordance with
Section 9.05(b); provided, however, that the Company shall have complied with
all provisions thereof, including the notice provisions therein and shall have
paid the Termination Fee to Parent;
(f) by the Company, if Parent or Sub breaches or fails to
perform in any material respect any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in Section
8.03(a) or 8.03(b), and (ii) cannot be cured or has not been cured within 30
days after the giving of written notice to Parent of such breach (provided that
Company is not then in material breach of any representation, warranty or
covenant contained in this Agreement); provided, however, that this Agreement
may not be terminated pursuant to this clause (f) if Sub has accepted shares of
Company Common Stock pursuant to the Offer; or
(g) if the Company breaches or fails to perform in any
material respect any of its covenants or agreements contained in the Company
Stock Option Agreement.
SECTION 9.02. Effect of Termination; Fees and Expenses. (a) In
the event of termination of this Agreement by either the Company or Parent as
provided in Section 9.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Parent, Sub or the
Company, other than Section 4.20, Section 5.08, the last sentence of Section
7.02, this Section 9.02 and Article X and except to the extent that such
termination results from the breach by a party of any representation, warranty
or covenant set forth in this Agreement.
(b) The Company shall pay to Parent a fee in an amount equal
to $6,300,000 (the "Termination Fee") if:
(i) Parent terminates this Agreement pursuant to Section
9.01(d) or the Company terminates this Agreement pursuant to Section
9.01(e); or
(ii) (x) after the date of this Agreement, any person or group
(as defined under Section 13(d)(3) of the Exchange Act) shall have
become the beneficial owner of more than 35% of the outstanding shares
of Company Common Stock or any person shall have made, or proposed,
communicated or disclosed in a manner which is or otherwise becomes
public prior to or during the pendency of the Offer (including being
known by stockholders of the Company) an intention to make a Company
Takeover Proposal;
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(y) this Agreement is terminated (other than termination
pursuant to Section 9.01(a)); and
(z) within eighteen months of such termination the Company
enters into a letter of intent or agreement in principle for a
Company Takeover Proposal or a definitive agreement to
consummate a Company Takeover Proposal, or the transactions
contemplated by a Company Takeover Proposal are consummated.
Any fee due under this Section 9.02 shall be paid by wire
transfer of same-day funds on the date of termination of this
Agreement (except that in the case of a payment pursuant to
clause (ii) above such payment shall be made on the date of
execution of such letter of intent, agreement in principle or
definitive agreement or, if earlier, consummation of such
transaction).
(c) Except as provided below, all fees and expenses incurred
in connection with the Merger and the other Transactions shall be paid by the
party incurring such fees or expenses, whether or not the Merger is consummated;
provided that Parent shall pay the filing fees in connection with the HSR Act
and the filing fees in connection with the Offer Documents. Parent acknowledges
and agrees that the Company has disclosed that it is obligated and will become
further obligated for reasonable fees and expenses (including reasonable fees
and expenses of Xxxxxxxx Xxxxxx & Xxxxxx, its counsel, PricewaterhouseCoopers,
its independent accountants, and The Xxxxxxxx-Xxxxxxxx Company, LLC, its
financial advisor) incurred by it in connection with the Merger and the
transactions contemplated hereby. It is understood and agreed that certain of
such fees and expenses may be paid by the Company prior to the execution of this
Agreement, and Parent and Sub agree to refrain from taking any action designed
to prevent or delay the payment of such reasonable fees and expenses by the
Company. Further, Parent agrees to take, and cause Sub to take, all action
necessary to cause the Surviving Corporation to pay promptly, following the
provision to Parent of adequate written support for such fees and expenses, any
of the foregoing reasonable fees and expenses incurred, but not paid, by the
Company prior to the Effective Time.
(d) In addition to the other provisions of this Section 9.02,
in the event a Termination Fee is or becomes payable pursuant to Section
9.02(b), the Company agrees promptly, but in no event later than two business
days following written notice thereof, to reimburse Parent and Sub for all
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 such amounts. The right to receive the
Termination Fee pursuant to Section 9.02(b) and other amounts pursuant to this
Section 9.02 shall not be the exclusive remedy for any breach by the Company of
any of the representations, warranties, covenants or other provisions of this
Agreement and shall be in addition to any other remedies available at law or in
equity to Parent or Sub.
SECTION 9.03. Amendment. This Agreement may be amended by the
parties at any time before or after receipt of Company Stockholder Approval;
provided, however, that after receipt of Company Stockholder 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.
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SECTION 9.04. Extension; Waiver. At any time prior to the
Effective Time, 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 9.03, 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 9.05. Procedure for Termination, Amendment, Extension
or Waiver. (a) A termination of this Agreement pursuant to Section 9.01, an
amendment of this Agreement pursuant to Section 9.03 or an extension or waiver
pursuant to Section 9.04 shall, in order to be effective, be in writing and
require in the case of Parent, Sub or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors.
(b) The Company may terminate this Agreement pursuant to
Section 9.01(e) only if (i) the Company Board has received a bona fide proposal
to consummate a Company Takeover Proposal, (ii) the Company Board shall have
been advised in writing by its investment banker that it believes the party
making such proposal is financially capable of consummating such Company
Takeover Proposal, which proposal does not have any financing contingency, (iii)
the Company Board shall have been reasonably advised in writing, by outside
counsel to the Company, that any failure to withdraw or modify its approval or
recommendation of this Agreement, the Offer or the Merger would be reasonably
likely to constitute a breach of the fiduciary duties of the Company Board to
the stockholders of the Company, (iv) the Company Board, after weighing such
advice and the terms of such Company Takeover Proposal, shall have reasonably
determined in good faith that failing to withdraw or modify its approval or
recommendation of the Offer, the Merger and this Agreement would constitute a
breach of its fiduciary duties to stockholders of the Company, (v) the Company
has notified Parent in writing of the determinations described in clauses (ii),
(iii) and (iv) above, (vi) at least five business days following receipt by
Parent of such notice, and taking into account any revised proposal made by
Parent since receipt of such notice, such Company Takeover Proposal remains a
bona fide Company Takeover Proposal and the Company Board has again received the
advice referred to in clauses (ii) and (iii) above and made the determinations
referred to in clause (iv) above, (vii) the Company is in compliance with
Section 6.02, and (viii) the Company has previously paid the fee due under
Sections 9.01(e) and 9.02.
ARTICLE X
General Provisions
SECTION 10.01. Nonsurvival of Representations and Warranties.
Except as provided in the Stock Option and Tender Agreements, none of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 10.01
shall not limit any covenant or agreement contained in any Transaction Agreement
which by its terms contemplates performance after the Effective Time.
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SECTION 10.02. Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Ford Motor Company
The American Road
Dearborn, Michigan
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to the Company, to
Automobile Protection Corporation-APCO
00 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
SECTION 10.03. Interpretation; Disclosure Letters. When a
reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless
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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 10.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
SECTION 10.05. 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. Delivery of an
executed counterpart of this Agreement by facsimile shall be effective to the
fullest extent permitted by applicable law.
SECTION 10.06. Entire Agreement; No Third-Party Beneficiaries.
The Transaction Agreements, the Company Disclosure Letter, the Parent Disclosure
Letter and all exhibits and schedules hereto and the Confidentiality Agreement,
taken together, (a) constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the Transactions and (b) except for Section 7.05 and, from and after
the Effective Time, Section 3.01(c)(i), Section 7.04(a) and Section 9.02(c) are
not intended to confer upon any person other than the parties any rights or
remedies.
SECTION 10.07. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof, except to the extent the laws of Georgia are
mandatorily applicable to the Merger.
SECTION 10.08. 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, except that Sub may assign, in
its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 10.09. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of any Transaction
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 any Transaction
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Agreement and to enforce specifically the terms and provisions of each
Transaction Agreement in any New York state court or any Federal court located
in the State of New York, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any New York state
court or any Federal court located in the State of New York in the event any
dispute arises out of any Transaction Agreement or any Transaction, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to any Transaction Agreement or any Transaction in any
court other than any New York state court or any Federal court sitting in the
State of New York and (d) waives any right to trial by jury with respect to any
action related to or arising out of any Transaction Agreement or any
Transaction.
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IN WITNESS WHEREOF, Parent, Sub and the Company have duly
executed this Agreement, all as of the date first written above.
FORD MOTOR COMPANY,
by
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Business Manager, Ford Customer
Service Division
AM1 ACQUISITION COMPANY,
by
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board and President
AUTOMOBILE PROTECTION CORPORATION-
APCO,
by
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board, Chief
Operating Officer and Secretary
51
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered shares of Company
Common Stock promptly after the termination or withdrawal of the Offer), to pay
for any shares of Company Common Stock tendered pursuant to the Offer unless (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Company Common Stock which would represent
at least a majority of the Fully Diluted Shares (the "Minimum Tender
Condition"), (ii) the waiting period (and any extension thereof) applicable to
the purchase of shares of Company Common Stock pursuant to the Offer under the
HSR Act shall have been terminated or shall have expired and any consents,
approvals and filings under any foreign antitrust law, the absence of which
would prohibit the purchase of all shares of Company Common Stock tendered
pursuant to the Offer under the HSR Act, shall have been obtained or made and
(iii) all consents, approvals and filings under the Auto Warranty Laws of any
state that are required to be made or obtained prior to the acceptance of shares
of Company Common Stock pursuant to the Offer shall have been made or obtained.
The term "Fully Diluted Shares" means all outstanding securities entitled
generally to vote in the election of directors of the Company on a fully diluted
basis, after giving effect to the exercise, conversion or termination of all
options (including any Potential Stock Options, but excluding the option granted
pursuant to the Company Stock Option Agreement), rights and securities
exercisable or convertible into such voting securities. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Sub shall not be
required to, accept for payment or, subject as aforesaid, to pay for any shares
of Company Common Stock not theretofore accepted for payment or paid for, and
may terminate or amend the Offer, with the consent of the Company or if, at any
time on or after the date of this Agreement and before the acceptance of such
shares for payment or the payment therefor, any of the following conditions
exists:
(a) there shall be threatened in writing or pending any suit,
action or proceeding that has a reasonable likelihood of success, (i)
challenging the acquisition by Parent or Sub of any Company Common
Stock, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or any other Transaction, or seeking to obtain
from the Company, Parent or Sub any damages that are material in
relation to the Company and its subsidiaries taken as a whole, (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 assets of the Company, Parent or any of their
respective subsidiaries, or to compel the Company, Parent or any of
their respective subsidiaries to dispose of or hold separate any
material portion of the business or assets of the Company, Parent or
any of their respective subsidiaries, as a result of the Offer, the
Merger or any of the other Transaction, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire or hold, or
exercise full rights of ownership of, any shares of Company Common
Stock, including the right to vote the Company Common Stock purchased
by it on all matters properly presented to the stockholders of the
Company, (iv) seeking to prohibit Parent or any of its subsidiaries
from effectively controlling in any
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material respect the business or operations of the Company and the
Company Subsidiaries, or (v) which otherwise is reasonably likely to
have a Parent Material Adverse Effect or a Company Material Adverse
Effect;
(b) any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction shall be threatened, proposed, sought,
enacted, entered, enforced, promulgated, amended or issued with respect
to, or deemed applicable to, or any consent or approval withheld with
respect to the Offer, the Merger or any of the other Transactions, by
any Governmental Entity that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in paragraph (a)
above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of the most recent audited
financial statements included in the Filed Company SEC Documents there
shall have occurred any event, change, effect or development that,
individually or in the aggregate, has had or is reasonably likely to
have, a Company Material Adverse Effect;
(d)(i) it shall have been publicly disclosed or Parent shall have
otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under
the Exchange Act) of more than 35% of the outstanding shares of the
Company Common Stock has been acquired by another person or (ii) the
Company Board or any committee thereof shall have withdrawn or modified
in a manner adverse to Parent its approval or recommendation of the
Offer and this Agreement or the Company Board or any committee thereof
shall have resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company in
this Agreement that are qualified as to materiality shall not be true
and correct or any such representation and warranty that is not so
qualified shall not be true and correct in any material respect, as of
the date of this Agreement and as of such time as though made at such
time, except (i) to the extent such representation and warranty
expressly relates to an earlier date (in which case on and as of such
earlier date) or (ii) to the extent Parent had consented in writing (or
is deemed to have consented) to any supplement or amendment to the
Company Disclosure Letter delivered to Parent pursuant to Section
6.01(c)(ii) of the Merger Agreement;
(f) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under this Agreement;
(g) this Agreement shall have been terminated in accordance with
its terms; or
(h) any of the Principal Stockholder Employment Agreements, the
Stock Option and Tender Agreements or the Company Stock Option
Agreement shall not be in full force and effect or either of the
Principal Company Stockholders shall have failed to perform in any
material respect any obligation or to comply in any material respect
with any agreement or covenant to be performed or complied with by
either of them under any such agreement;
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which, in the sole judgment of Sub or Parent, in any such case, and regardless
of the circumstances giving rise to any such condition (including any action or
inaction by Parent or any of its affiliates), makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and
Parent and may be asserted by Sub or Parent regardless of the circumstances
giving rise to such condition or may be waived by Sub and Parent in whole or in
part at any time and from time to time in their sole discretion. The failure by
Parent, Sub or any other affiliate of Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
