EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated March 8, 2005
among
XXXXXXX DENVER, INC.,
PT ACQUISITION CORPORATION
and
XXXXXX INDUSTRIES INC.
TABLE OF CONTENTS
Page
ARTICLE I Definitions................................................................................1
Section 1.01 Definitions................................................................................1
Section 1.02 Cross References to Certain Terms Defined Elsewhere in this Agreement......................4
ARTICLE II The Merger.................................................................................6
Section 2.01 The Merger.................................................................................6
Section 2.02 Closing....................................................................................6
Section 2.03 Effective Time.............................................................................6
Section 2.04 Effects....................................................................................6
Section 2.05 Certificate of Incorporation and Bylaws....................................................7
Section 2.06 Directors..................................................................................7
Section 2.07 Officers...................................................................................7
ARTICLE III Effect of Merger; Exchange of Certificates.................................................7
Section 3.01 Effect on Capital Stock....................................................................7
Section 3.02 Exchange of Certificates...................................................................8
Section 3.03 Stock Options, SARs and Performance Shares................................................10
ARTICLE IV Representations and Warranties of the Company.............................................12
Section 4.01 Organization, Standing and Power..........................................................12
Section 4.02 Company Subsidiaries; Equity Interests....................................................12
Section 4.03 Capital Structure.........................................................................12
Section 4.04 Authority; Execution and Delivery, Enforceability.........................................13
Section 4.05 No Conflicts; Consents....................................................................14
Section 4.06 SEC Documents and Related Matters.........................................................15
Section 4.07 Proxy Statement and Company Future SEC Filings............................................17
Section 4.08 Compliance with Applicable Laws...........................................................19
Section 4.09 Litigation and Insurance..................................................................20
Section 4.10 Taxes.....................................................................................20
Section 4.11 Certain Agreements........................................................................21
Section 4.12 Absence of Changes in Benefit Plans.......................................................21
Section 4.13 ERISA Compliance; Excess Parachute Payments...............................................22
Section 4.14 Absence of Certain Changes or Events......................................................24
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Section 4.15 Properties................................................................................24
Section 4.16 Intellectual Property.....................................................................24
Section 4.17 Environmental Matters.....................................................................25
Section 4.18 Labor and Employment Matters..............................................................26
Section 4.19 Brokers; Schedule of Fees and Expenses....................................................26
Section 4.20 Opinion of Financial Advisor..............................................................27
ARTICLE V Representations and Warranties of Parent and Sub..........................................27
Section 5.01 Organization, Standing and Power..........................................................27
Section 5.02 Sub.......................................................................................27
Section 5.03 Authority; Execution and Delivery, Enforceability.........................................27
Section 5.04 No Conflicts; Consents....................................................................27
Section 5.05 Information Supplied......................................................................28
Section 5.06 Brokers...................................................................................28
Section 5.07 Financing.................................................................................28
Section 5.08 No Additional Representations; Investigation by Parent and Sub............................29
ARTICLE VI Covenants Relating to Conduct of Business.................................................30
Section 6.01 Conduct of Business.......................................................................30
Section 6.02 No Solicitation...........................................................................33
ARTICLE VII Additional Agreements.....................................................................34
Section 7.01 Preparation of Proxy Statement; Stockholders Meeting......................................34
Section 7.02 Access to Information; Confidentiality....................................................35
Section 7.03 Best Efforts; Notification................................................................35
Section 7.04 Employment, Compensation and Benefit Plans................................................36
Section 7.05 Indemnification; Directors' and Officers' Insurance.......................................37
Section 7.06 Fees and Expenses.........................................................................39
Section 7.07 Public Announcements......................................................................39
Section 7.08 Transfer Taxes............................................................................39
ARTICLE VIII Conditions Precedent......................................................................39
Section 8.01 Conditions to Each Party's Obligation To Effect The Merger................................39
Section 8.02 Further Conditions to Obligation of the Company...........................................40
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Page
Section 8.03 Further Conditions to Obligation of Parent and Sub........................................40
ARTICLE IX Termination, Amendment and Waiver.........................................................41
Section 9.01 Termination...............................................................................41
Section 9.02 Effect of Termination.....................................................................42
Section 9.03 Amendment.................................................................................44
Section 9.04 Extension; Waiver.........................................................................44
ARTICLE X General Provisions........................................................................45
Section 10.01 Non-Survival of Representations, Warranties and Agreements................................45
Section 10.02 Notices...................................................................................45
Section 10.03 Interpretation; Disclosure Letters........................................................46
Section 10.04 Severability..............................................................................46
Section 10.05 Counterparts..............................................................................46
Section 10.06 Entire Agreement; No Third-Party Beneficiaries............................................47
Section 10.07 Governing Law.............................................................................47
Section 10.08 Assignment................................................................................47
Section 10.09 Enforcement; Jurisdiction; WAIVER OF JURY TRIAL...........................................47
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This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is dated
this 8th day of March, 2005 by and among Xxxxxxx Denver, Inc., a Delaware
corporation ("PARENT"), PT Acquisition Corporation, a Delaware corporation and a
wholly owned Subsidiary of Parent ("SUB"), and Xxxxxx Industries Inc., a
Delaware corporation (the "COMPANY").
WHEREAS, the Boards of Directors of Sub and the Company have
approved and deemed it advisable and in the best interests of their respective
stockholders to consummate, and the Board of Directors of Parent has approved,
the acquisition of the Company by Parent on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Boards of Directors of Sub and the Company have
approved and deemed it advisable and in the best interests of their respective
stockholders to consummate, and the Board of Directors of Parent has approved,
the merger (the "MERGER") of Sub with and into the Company, on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, upon the consummation of the Merger, each issued and
outstanding share of common stock of the Company, par value $1.00 per share (the
"COMPANY COMMON STOCK"), shall be converted into the right to receive in cash
$40.00 (such amount, or any higher amount per share of Company Common Stock paid
pursuant to this Agreement, the "MERGER PRICE"), upon the terms and subject to
the limitations and conditions of this Agreement;
WHEREAS, the Boards of Directors of Parent, Sub and the
Company have each determined that the Merger and the other Transactions are
consistent with, and in furtherance of, their respective business strategies and
goals; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"AFFILIATE" of any Person means another Person that, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
New York.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY MATERIAL ADVERSE EFFECT" means (a) any change,
effect, event, occurrence or state of facts having a material adverse effect on
the business, assets, financial condition or results of operations of the
Company and the Company Subsidiaries, taken as a whole, other than effects
relating to (1) changes, effects, events, occurrences or circumstances that
generally affect the United States or the global economy or the industries in
which the Company operates, (2) general economic, financial or securities market
conditions in the United States or elsewhere, (3) the execution, delivery or
announcement of this Agreement or the announcement of the Merger, (4) changes in
GAAP or requirements applicable to the Company and the Company Subsidiaries, (5)
changes in Laws or interpretations thereof by a Governmental Entity, (6)
changes, effects, events or occurrences caused by or resulting from the taking
of any action required or permitted by this Agreement or approved by Parent or
(7) any outbreak of major hostilities in any country in which the Company
operates or in which the United States is involved or any act of terrorism
within the United States or any country in which the Company operates or
directed against United States facilities or citizens wherever located or (b) a
material adverse effect on the ability of the Company to perform its obligations
under this Agreement.
"COMPANY PERFORMANCE SHARES" mean the performance shares
issued under the Company Stock Plan.
"COMPANY SAR" means any stock appreciation right linked to the
price of Company Common Stock and granted under the Company Stock Plan.
"COMPANY STOCK OPTION" means any option to purchase Company
Common Stock granted under the Company Stock Plan.
"COMPANY STOCK PLAN" means the Xxxxxx Industries Inc. 1995
Incentive Stock Plan, as Amended and Restated (and predecessors thereto
including the Xxxxxx Industries Inc. 1995 Incentive Stock Plan and the Xxxxxx
Industries Inc. Non-Employee Director Stock Option Plan).
"COMPANY TAKEOVER PROPOSAL" means any proposal or offer (1)
for a merger, share exchange, business combination, consolidation, dual listed
structure, liquidation, dissolution, recapitalization, reorganization or other
similar transaction involving the Company, or (2) to acquire in any manner,
directly or indirectly, 15% or more of the equity securities of the Company or
(3) to acquire, lease, exchange, mortgage, pledge, dispose of or otherwise
transfer, in any manner (including through any arrangement having substantially
the same economic effect as a sale of assets), directly or indirectly, over 15%
of the consolidated total assets of the Company, in a single transaction or a
series of related transactions, in each case other than the Transactions.
"ISO" means a Company Stock Option that meets the incentive
stock option requirements of Section 422 of the Code.
"PARENT MATERIAL ADVERSE EFFECT" means any effect, event or
change that prevents or materially delays the ability of Parent and Sub to
perform their obligations under this Agreement or to consummate the Merger or
the other Transactions in accordance with the terms hereof.
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"PERSON" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
"XXXXXXXX-XXXXX ACT" means the Xxxxxxxx-Xxxxx Act of 2002.
"SEC" means the United States Securities and Exchange
Commission.
"SIGNIFICANT COMPANY SUBSIDIARY" means any Subsidiary of the
Company that constitutes a significant subsidiary within the meaning of Rule
1-02 of Regulation S-X of the SEC.
"SUBSIDIARY" of any Person means another Person, an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.
"SUPERIOR COMPANY PROPOSAL" means a written proposal made by a
third Person to acquire all of the outstanding Company Common Stock or all or
substantially all of the assets of the Company and the Company Subsidiaries,
pursuant to a tender or exchange offer, a merger, a consolidation, a liquidation
or dissolution, a recapitalization or a sale of assets, in each case that the
Board of Directors of the Company determines in good faith after consulting with
the Company's outside financial and legal advisors (i) is reasonably capable of
being completed, taking into account all legal, financial, regulatory and other
aspects of such proposal, and (ii) presents to the Company and its stockholders
more favorable financial and other terms, taken as a whole, than the Merger
(taking into account any changes in the terms of the Merger made by Parent and
Sub as a result of such proposal).
"TAXES" 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.
"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.
"TRANSACTIONS" means the Merger and the other transactions
contemplated by this Agreement.
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Section 1.02 Cross References to Certain Terms Defined
Elsewhere in this Agreement.
Term Section
---- -------
Affected Employee 7.04(c)
Affiliate 1.01
Agreement Preamble
All Benefit Plans and Agreements 4.12
Appraisal Shares 3.01(d)
Auditing Standard No. 2 4.07(c)
Xxxxx 4.19
Business Day 1.01
Certificate of Merger 2.03
Certificates 3.02(b)
Certifications 4.06(b)
Closing 2.02
Closing Date 2.02
Code 1.01
Company Preamble
Company Benefit Agreements 4.12
Company Benefit Plans 4.12
Company Board 4.04(b)
Company Bylaws 4.01
Company Capital Stock 4.03
Company Charter 4.01
Company Common Stock Preamble
Company Contracts 4.11
Company Disclosure Letter Article IV
Company Future SEC Filings 4.07(c)
Company Intellectual Property 4.16
Company Material Adverse Effect 1.01
Company Multiemployer Pension Plan 4.13(b)
Company Pension Plans 4.13(a)
Company Performance Shares 1.01
Company Permits 4.08(a)
Company Rights 4.03
Company Rights Agreement 4.03
Company SAR 1.01
Company SEC Documents 4.06(b)
Company Stock Option 1.01
Company Stock Plan 1.01
Company Stockholder Approval 4.04(c)
Company Stockholders Meeting 7.01(b)
Company Subsidiary 4.02
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Term Section
---- -------
Company Takeover Proposal 1.01
Company Termination Fee 9.02(b)
Company 2004 Form 10-K 4.07(b)
Confidentiality Agreement 7.02
Consent 4.05(b)
Contract 4.05(a)
DGCL 2.01
Effective Time 2.03
Environmental Laws 4.17(a)
ERISA 4.13(a)
Exchange Act 3.03(f)
Exchange Fund 3.02
Expense Reimbursement 9.02(c)
GAAP 4.06(e)
Governmental Entity 4.05(b)
Hazardous Materials 4.17(c)
HSR Act 4.05(b)
Indemnified Parties 7.05(b)
Infringe 4.16
Injunction 8.01(c)
Insolvent 5.07(c)
Judgment 4.05(a)
Law 4.05(a)
Liens 4.02(a)
Management Report 4.07(c)
Merger Preamble
Merger Consideration 3.01(c)(2)
Merger Price Preamble
Outside Date 9.01(d)
Parent Preamble
Parent Disclosure Letter Article V
Parent Material Adverse Effect 1.01
Parent Termination Fee 9.02(d)
Paying Agent 3.02
Permitted Liens 4.15
Person 1.01
Proxy Statement 7.01
Representatives 6.02(b)
Requisite Regulatory Approvals 8.01(b)
Xxxxxxxx-Xxxxx Act 1.01
SEC 1.01
Section 262 3.01(d)
Securities Act 4.06(c)
Significant Company Subsidiary 1.01
Sub Preamble
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Term Section
---- -------
Subsidiary 1.01
Superior Company Proposal 1.01
Surviving Corporation 2.01
Tail Insurance 7.05(c)
Tax Return 1.01
Taxes 1.01
Transactions 1.01
Transfer Taxes 7.08
U.S. Benefit Plans and Agreements 4.12
ARTICLE II
The Merger
----------
Section 2.01 The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time. At the Effective Time, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "SURVIVING CORPORATION"). As a result of the Merger, the
Company shall become a wholly-owned Subsidiary of Parent.
Section 2.02 Closing. The closing of the Merger (the
"CLOSING") will take place at the offices of XxXxxxxxx Will & Xxxxx LLP, 000
Xxxx Xxxxxx Xx., Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. on the date (the "CLOSING
DATE") that is the second Business Day following the satisfaction (or, to the
extent permitted by Law, waiver by all parties) of the conditions set forth in
Article VIII, or, if on such day any condition set forth in Article VIII has not
been satisfied (or, to the extent permitted by Law, has not been 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 2.03 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date the Company and Sub shall execute and deliver for
filing a certificate of merger (the "CERTIFICATE OF MERGER") to the Secretary of
State of the State of Delaware in such form and manner provided in the DGCL and
shall make all other filings or recordings required under the DGCL in connection
with the Merger. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware, or at such later time as may be specified in the Certificate of Merger
(the time the Merger becomes effective being the "EFFECTIVE TIME").
Section 2.04 Effects. The Merger shall have the effects set
forth in Section 259 of the DGCL.
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Section 2.05 Certificate of Incorporation and Bylaws. (a) At
the Effective Time, the Certificate of Incorporation of the Surviving
Corporation shall be amended to read in the form of Exhibit A and, as so
amended, such Certificate of Incorporation shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable Law.
(b) The bylaws of Sub as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law.
Section 2.06 Directors. 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 2.07 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 or appointed and qualified, as the case may be.
ARTICLE III
Effect of Merger; 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 Parent, Sub, the
Company or 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 issued and outstanding immediately prior to the Effective
Time shall be converted into and become one fully paid and nonassessable share
of common stock, par value $0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Company
Common Stock. Each share of Company Common Stock that is owned by the Company
(or any Subsidiary of the Company), Parent (or any Subsidiary of Parent) or Sub
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and no consideration shall be delivered or deliverable
in exchange therefor.
(c) Conversion of Company Common Stock. (1) Except as
otherwise provided by Sections 3.01(b) and 3.01(d), each issued share of Company
Common Stock shall be converted into the right to receive the Merger Price.
(2) The aggregate amount of cash payable upon the conversion
of all of the issued shares of Company Common Stock pursuant to this Section
3.01(c) is referred to as the "MERGER CONSIDERATION." 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
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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.
(d) Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, each of the shares ("APPRAISAL 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
appraisal of such Appraisal Shares pursuant to, and who complies in all respects
with, Section 262 of the DGCL ("SECTION 262") shall not be converted into the
Merger Price as provided in Section 3.01(c), but rather the holders of Appraisal
Shares shall be entitled to payment of the fair market value of such Appraisal
Shares in accordance with Section 262; provided that if any such holder shall
fail to perfect or otherwise shall waive, withdraw or lose the right to
appraisal under Section 262, then the right of such holder to be paid the fair
value of any of such holder's Appraisal Shares shall cease and each of such
holder's Appraisal Shares shall be deemed to have been converted as of the
Effective Time into, and to have become exchangeable solely for the right to
receive, the Merger Price as provided in Section 3.01(c), without any interest
thereon.
Section 3.02 Exchange of Certificates. (a) Paying Agent.
Parent shall appoint JPMorgan Trust Company, N.A. or another paying agent
acceptable to the Company to act as paying agent (the "PAYING AGENT") for the
payment of the Merger Consideration upon surrender of certificates representing
Company Common Stock. Parent shall take all steps necessary to enable and cause
the Surviving Corporation to provide to the Paying Agent immediately following
the Effective Time all the cash necessary to pay for the shares of Company
Common Stock converted into the right to receive cash pursuant to Section 3.01
and the amounts payable to holders of Company Stock Options, Company SARs and
Company Performance Shares as set forth in Section 3.03 (such cash being
hereinafter referred to as the "EXCHANGE FUND"). The Exchange Fund shall not be
used for any other purpose. The Paying Agent shall invest any cash deposited
with the Paying Agent by Parent as directed by Parent; provided that no such
investment or losses thereon shall affect the Merger Consideration payable to
holders of shares of Company Common Stock entitled to receive such
consideration, or the consideration to be paid to the holders of the Company
Stock Options, Company SARs and Company Performance Shares as set forth in
Section 3.03, and Parent shall promptly provide additional funds to Paying Agent
for the benefit of holders of shares of Company Common Stock, Company Stock
Options, Company SARs and Company Performance Shares entitled to receive such
consideration in the amount of any such losses. Any interest or income produced
by such investment shall not be deemed part of the Exchange Fund and shall be
payable to Parent.
(b) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, but in no event later than three Business Days after
the Effective Time, Parent shall cause the Paying Agent to mail to each holder
of record of a certificate or certificates that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (the
"CERTIFICATES") whose shares were converted into the right to receive Merger
Consideration pursuant to Section 3.01, (1) 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 such form and have such other provisions as are reasonably
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acceptable to each of Parent and the Company) and (2) instructions for use in
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration therefor. Upon surrender of a Certificate for cancellation
to the Paying Agent together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may reasonably be required pursuant to such instructions, 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 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 that 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 Parent 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 have been converted pursuant to
Section 3.01. No interest shall be paid or accrue on the cash payable upon
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 of Company
Common Stock, subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared or made by the Company on such shares
of Company Common Stock in accordance with the terms of this Agreement or prior
to the date of this Agreement and which remain unpaid at the Effective Time.
After the Effective Time 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. Upon demand by Parent, any
portion of the Exchange Fund that remains undistributed to the holders of
Company Common Stock for one year after the Effective Time shall be delivered to
Parent, upon demand, and any holder of Company Common Stock, Company Stock
Options, Company SARs or Company Performance Shares who has not theretofore
complied with this Article III shall thereafter look only to Parent for payment
of its claim for Merger Consideration or the consideration to be paid pursuant
to Section 3.03, as the case may be.
(e) No Liability. None of Parent, Sub, the Company 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.
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(f) Withholding Rights. Each of Parent, the Surviving
Corporation and the Paying Agent 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 such amounts are so
withheld by Parent, the Surviving Corporation or the Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Company Common Stock in respect of which such deduction and
withholding was made by Parent, the Surviving Corporation or the Paying Agent.
(g) Lost Certificates. If any Certificate has been or is
claimed to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming that Certificate has been lost, stolen or
destroyed, the Paying Agent will deliver in exchange for such lost, stolen or
destroyed Certificate, the proper amount of the Merger Consideration. The
Surviving Corporation shall have the right to require the posting of a bond or
other indemnity in connection with any such affidavit.
Section 3.03 Stock Options, SARs and Performance Shares. (a)
As soon as practicable following the date of this Agreement, the Board of
Directors or the committee administering the Company Stock Plan shall adopt such
resolutions or take such other actions, as are required to adjust the terms of
all outstanding Company Stock Options that are not ISOs and all outstanding
Company SARs heretofore granted under the Company Stock Plan to provide that
each Company Stock Option that is not an ISO and each Company SAR outstanding at
the Effective Time shall be cancelled and that in exchange therefor the holder
thereof shall not have the right to receive any capital stock of the Company or
the Surviving Corporation after the Effective Time or to receive from the
Company or the Surviving Corporation any consideration other than an amount of
cash equal to (1) the excess, if any, of (x) the Merger Price over (y) the
exercise price per share of Company Common Stock subject to such Company Stock
Option that is not an ISO or Company SAR, as the case may be, multiplied by (2)
the number of shares of Company Common Stock for which such Company Stock Option
that is not an ISO or Company SAR shall not theretofore have been exercised. All
amounts payable pursuant to this paragraph shall be subject to any required
withholding of Taxes and shall be paid without interest.
(b) As soon as practicable following the date of this
Agreement, the Board of Directors or the committee administering the Company
Stock Plan shall adopt such resolutions or take such other actions, as are
required to adjust the terms of all outstanding ISOs heretofore granted under
the Company Stock Plan to provide that each ISO outstanding at the Effective
Time shall be fully vested and exercised automatically on a net exercise basis
with the ISO holder immediately selling the shares received on exercise to the
Company for an amount of cash equal to the number of shares received multiplied
by the Merger Price. All amounts payable pursuant to this paragraph shall not be
subject to any required withholding of Taxes and shall be paid without interest.
(c) As soon as practicable following the date of this
Agreement, the Board of Directors or the committee administering the Company
Stock Plan shall adopt such resolutions or take such other actions, as are
required to adjust the terms of any Company Performance Share awards heretofore
granted under the Company Stock Plan to provide that as of the Effective Time
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the performance goals established thereunder shall be deemed satisfied and 100%
of the target shares then credited to each participant shall be awarded and
deemed payable to each participant; provided that the holder thereof shall not
have the right to receive any capital stock of the Company or the Surviving
Corporation after the Effective Time or to receive from the Company or the
Surviving Corporation any consideration other than an amount of cash equal to
(x) the Merger Price multiplied by (y) the number of target shares awarded to
the participant pursuant to this sentence. All amounts payable pursuant to this
paragraph shall be subject to any required withholding of Taxes and shall be
paid without interest.
(d) As soon as practicable following the date of this
Agreement, the Board of Directors or the committee administering the Company
Stock Plan shall adopt such resolutions or take such other actions, as are
required to adjust the terms of any deferrals under such plan to non-employee
directors to provide that participants shall not have the right to receive any
capital stock of the Company or the Surviving Corporation after the Effective
Time or to receive from the Company or the Surviving Corporation any
consideration other than an amount of cash equal to the Merger Price multiplied
by the number of full and fractional shares held by the participant under such
plan.
(e) The Company Stock Plan shall terminate as of the Effective
Time, and the provisions in any other Company 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
no holder of a Company Stock Option, Company SAR or Company Performance Share or
any participant in the Company Stock Plan or other Company Benefit Plan shall
have any right thereunder to acquire any capital stock of the Company or the
Surviving Corporation.
(f) As soon as reasonably practicable after the Effective
Time, but in no event later than three Business Days after the Effective Time,
Parent shall cause the Paying Agent to mail to each holder of Company Stock
Options, Company SARs and Company Performance Shares entitled to receive cash in
exchange therefor pursuant to this Section 3.03 (i) a letter of transmittal
(which shall be in such form and have such other provisions as are reasonably
acceptable to each of Parent and the Company) and (ii) instructions reasonably
acceptable to Parent and the Company for use in effecting the surrender,
cancellation and termination of such Company Stock Options, Company SARs and
Company Performance Shares in exchange for cash in accordance with this Section
3.03.
(g) Prior to the Effective Time, the Board of Directors or
Compensation Committee of the Company shall take all reasonable actions required
pursuant to Rule 16b-3(e) under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), to cause the disposition in the Merger of Company Common
Stock, Company Stock Options, Company SARs and Company Performance Shares by
each executive officer and director of the Company who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company to be exempt from the provisions of Section 16(b) of the Exchange Act.
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ARTICLE IV
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to Parent and Sub that,
except as set forth in the Company SEC Documents or in the letter, dated as of
the date of this Agreement, from the Company to Parent and Sub (the "COMPANY
DISCLOSURE LETTER"):
Section 4.01 Organization, Standing and Power. Each of the
Company and each Company Subsidiary 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. The Company and each Company Subsidiary is duly qualified to do
business in each jurisdiction where the nature of its business or the ownership
or leasing of its properties makes such qualification necessary or the failure
to so qualify has had or could reasonably be expected to have a Company Material
Adverse Effect. The Company has made available to Parent true and complete
copies of the certificate of incorporation of the Company, as amended to the
date of this Agreement (as so amended, the "COMPANY CHARTER"), and the bylaws of
the Company, as amended to the date of this Agreement (as so amended, the
"COMPANY BYLAWS"), and the comparable charter and organizational documents of
each Significant Company Subsidiary, in each case as amended through the date of
this Agreement.
Section 4.02 Company Subsidiaries; Equity Interests. (a) The
Company Disclosure Letter lists each Subsidiary of the Company (each, a "COMPANY
SUBSIDIARY") and its jurisdiction of organization. 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 (other than director's qualifying shares
or similar requirements of a foreign jurisdiction), free and clear of all
pledges, liens, charges, mortgages, encumbrances, security interests or other
adverse claims of any kind or nature whatsoever (collectively, "Liens"). Except
with respect to agreements relating to director's qualifying shares or similar
requirements of a foreign jurisdiction, neither the Company nor any Company
Subsidiary is a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of the Company or
any Company Subsidiary.
(b) Except for its interests in the Company Subsidiaries and
except for the ownership interests set forth in the Company Disclosure Letter,
the Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
with a fair market value as of the date of this Agreement in excess of
$1,000,000 in any Person.
Section 4.03 Capital Structure. The authorized capital stock
of the Company consists of 60,000,000 shares of Company Common Stock and
3,000,000 shares of preferred stock, par value $1.00 per share (the "COMPANY
PREFERRED STOCK" and, together with the Company Common Stock, the "COMPANY
CAPITAL STOCK"). At the close of business on March 3, 2005, (a) 17,849,925
shares of Company Common Stock and no shares of Company Preferred Stock were
issued and outstanding, (b) 822,339 shares of Company Common Stock were held by
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the Company in its treasury, (c) 1,032,826 shares of Company Common Stock were
subject to outstanding Company Stock Options, Company SARs or Company
Performance Shares and 810,851 additional shares of Company Common Stock were
reserved for issuance pursuant to the Company Stock Plan, (d) 22,539.41 shares
of Company Common Stock were subject to outstanding deferrals by non-employee
directors under the Company Stock Plan and (e) 60,000,000 shares of Company
Common Stock and 3,000,000 shares of Company Preferred Stock were reserved for
issuance in connection with the rights (the "COMPANY RIGHTS") issued pursuant to
the Amended and Restated Rights Agreement dated as of April 20, 2000 (as amended
from time to time, the "COMPANY RIGHTS AGREEMENT"), between the Company and
National City Bank, as Rights Agent. Except as set forth above, at the close of
business on March 3, 2005, no shares of capital stock or other equity securities
of the Company, including any securities or instruments containing profit
participation or similar features, were issued, reserved for issuance or
outstanding. 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. No outstanding shares
of Company Capital Stock were issued in violation of any contract to which the
Company or any Company Subsidiary is or was a party or any statutory preemptive
right, right of first refusal or similar right. Except for this Agreement or as
set forth above or disclosed in the Company Disclosure Letter, there are not any
options, warrants, rights, convertible or exchangeable securities, subscriptions
or agreements to which the Company or any Company Subsidiary is a party (1)
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 (2) 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. There are not
any 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. The Company has made available to Parent a
true and complete copy of the Company Rights Agreement, as amended to the date
of this Agreement. As of the Effective Time, all of the Company Rights shall
have expired and no Company Right shall be outstanding. As of the Effective
Time, the former holders of Company Rights shall not be entitled to receive any
payment or consideration in connection therewith. Except as set forth in the
Company Disclosure Letter, the Board of Directors of the Company has not
declared any dividend or distribution with respect to the Company Common Stock
the record or payment date for which is on or after the date of this Agreement.
Section 4.04 Authority; Execution and Delivery,
Enforceability. (a) Except for the receipt of the Company Stockholder Approval,
the execution and delivery by the Company of this Agreement and the consummation
by the Company of the Merger and the other Transactions have been duly
authorized by all necessary corporate action on the part of the Company. The
Company has duly executed and delivered this Agreement and, assuming this
Agreement constitutes the valid and binding agreement of Parent and Sub, this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.
-13-
(b) The Board of Directors of the Company (the "COMPANY
BOARD"), at a meeting duly called and held duly and unanimously adopted
resolutions (i) approving this Agreement, the Merger and the other Transactions,
(ii) determining that the terms of the Merger and the other Transactions are
fair to and in the best interests of the stockholders of the Company, (iii)
recommending that the Company's stockholders adopt this Agreement and (iv)
declaring that this Agreement is advisable.
(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 adoption of this Agreement by the holders of a majority of the outstanding
Company Common Stock (the "COMPANY STOCKHOLDER APPROVAL").
Section 4.05 No Conflicts; Consents. (a) Except as set forth
in the Company Disclosure Letter, the execution and delivery by the Company of
this Agreement does not, and the consummation of the Merger and the other
Transactions 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 loss of
a material benefit under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any Company Subsidiary under, any
provision of (1) the Company Charter, the Company Bylaws or the comparable
charter or organizational documents of any Company Subsidiary, (2) to the
knowledge of the Company, any contract, lease, license, indenture, note, bond,
agreement, permit, concession, franchise or other instrument (a "CONTRACT") to
which the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets is bound or (3) to the knowledge of the Company,
subject to the filings and other matters referred to in Section 4.05(b), any
judgment, order or decree ("JUDGMENT") or statute, law, ordinance, rule or
regulation (including common law and interpretations thereof by a Governmental
Entity) ("LAW") applicable to the Company or any Company Subsidiary or their
respective properties or assets, other than, in the case of clauses (2) and (3)
above, any such items that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect.
(b) Except as set forth in the Company Disclosure Letter, no
consent, approval, license, permit, order or authorization ("CONSENT") of, or
registration, declaration or filing with, or permit from, 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 (a "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 this Agreement or the
consummation of the Transactions, which failure to make or obtain, individually
or in the aggregate, would reasonably be expected to have a Company Material
Adverse Effect, other than (1) compliance with and filings under (i) the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and (ii) applicable foreign merger control or competition Laws and
regulations, (2) the filing with the SEC of (i) the Proxy Statement and (ii)
such other reports under the Exchange Act or the rules and regulations of the
New York Stock Exchange, as may be required in connection with this Agreement,
the Merger or the other Transactions and the obtaining from the SEC of such
orders as may be required in connection therewith, (3) the filing and
recordation of appropriate documents for the Merger and the other Transactions
as required by the DGCL and appropriate documents with the relevant authorities
-14-
of the other jurisdictions in which the Company is qualified to do business, (4)
such filings as may be required in connection with the Taxes described in
Section 7.08, and (5) such other items (i) that may be required under the
applicable Law of any foreign country or Governmental Entity or (ii) required
solely by reason of the participation of Parent or Sub (as opposed to any third
party) in the Merger or the Transactions.
(c) The Company and the Company Board have taken all action
necessary to (1) render the Company Rights inapplicable to this Agreement, the
Merger and the other Transactions and (2) ensure that Parent and Sub will not
become an "Acquiring Person" (as defined in the Company Rights Agreement) by
reason of this Agreement, the Merger or any other Transaction).
(d) The Company Board has taken all actions necessary to cause
the provisions of Section 203 of the DGCL to be inapplicable to Parent or Sub
with respect to this Agreement, the Merger and the other Transactions. To the
Company's knowledge, no other fair price, moratorium, control share acquisition
or other form of antitakeover statute, rule or regulation of any state or
jurisdiction applies or purports to apply to this Agreement, the Merger or the
other Transactions.
Section 4.06 SEC Documents and Related Matters.
(a) The Company has filed on a timely basis all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC since January 1, 2003. No Company Subsidiary is required to file any
report, schedule, form, statement and other document with the SEC.
(b) Except to the extent available in full without redaction
on the SEC's website at least two Business Days prior to the date of this
Agreement, Section 4.06 of the Company Disclosure Letter lists, and the Company
has made available to Parent complete copies of, all of the following:
(i) the Company's Annual Reports on Form 10-K for the
fiscal years of the Company ended December 31, 2002 and December 31, 2003;
(ii) the Company's Quarterly Reports on Form 10-Q for each
of the first three fiscal quarters in the fiscal years of the Company ended
December 31, 2003 and December 31, 2004;
(iii) the Company's Current Reports on Form 8-K filed with
the SEC from January 1, 2003 through the date of this Agreement;
(iv) all proxy statements relating to the Company's
meetings of stockholders (whether annual or special) held, and all information
statements relating to stockholder consents, from January 1, 2003 through the
date of this Agreement;
-15-
(v) all certifications and statements required pursuant to
Rule 13a-14(a) or 15d-14(a) under the Exchange Act or 18 U.S.C. ss.1350 (Section
906 of the Xxxxxxxx-Xxxxx Act) with respect to any report referred to in clause
(i) and (ii) above (the "Certifications"); and
(vi) all other forms, reports, registration statements and
other documents (other than preliminary materials if the corresponding
definitive materials have been provided to Parent pursuant to this Section 4.06)
filed by the Company with the SEC from January 1, 2003 through the date of this
Agreement.
The foregoing reports, schedules, forms, statements and other
documents are collectively referred to in this Agreement as the "Company SEC
Documents."
(c) The Company SEC Documents as of their respective dates of
filing with the SEC (or, if amended or superseded by a filing prior to the date
of this Agreement, as of the date of such filing) (i) were prepared in all
material respects in accordance with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act, as applicable,
and the rules and regulations of the SEC thereunder and (ii) did not at the time
they were filed with the SEC 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 made therein, in the light of the circumstances
under which they were made, not misleading.
(d) Section 4.06 of the Company Disclosure Letter lists and
the Company has delivered to Parent complete copies of all comment letters
received by the Company from the Staff of the SEC since January 1, 2003 and all
responses to such comment letters by or on behalf of the Company. The term
"comment letter" as used herein shall exclude routine correspondence or
communications sent to or received from the SEC that do not contain substantive
comments regarding the Company's filings under the Securities Act or the
Exchange Act.
(e) The consolidated financial statements of the Company,
including the notes thereto, included or incorporated by reference in the
Company SEC Documents were prepared in accordance with generally accepted
accounting principles ("GAAP") and Regulation S-X of the SEC as in effect on the
date of filing such reports (except, in the case of unaudited statements, as
permitted by Form 10-Q or Form 8-K 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, changes in stockholders' equity and cash flows for the
periods shown (subject, in the case of unaudited statements, to the absence of
footnotes and to normal year-end audit adjustments). Except as provided in the
Company SEC Documents and with respect to Genlyte Xxxxxx Group LLC, no financial
statements of any Person other than the Company and the Company Subsidiaries are
required by GAAP or Regulation S-X of the SEC to be included in the consolidated
financial statements of the Company. As of the date of the Agreement, the
Company has consolidated cash and cash equivalents of not less than $230
million.
-16-
(f) Except as set forth in the Company SEC Documents or
liabilities incurred since September 30, 2004 in the ordinary course of business
consistent with past practice, neither the Company nor any Company Subsidiary
has any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse Effect.
(g) The Company maintains disclosure controls and procedures
as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act.
(h) The Company has prepared and is implementing a plan to
comply with requirements of Section 404 of the Xxxxxxxx-Xxxxx Act on the date by
which it must comply with such requirements. As of the date of this Agreement,
the Company is not aware of any reason it will not comply with the requirements
of Section 404 of the Xxxxxxxx-Xxxxx Act on the applicable compliance date.
During the period from January 1, 2003 through the date of this Agreement, the
management of the Company has not disclosed to the Company's independent
registered public accounting firm or the audit committee of the Board of
Directors of the Company any occurrence of material fraud that involves
management or other employees of the Company or the Company Subsidiaries who
have a significant role in the Company's internal controls over financial
reporting.
(i) The Company is in compliance in all material respects with
the applicable listing standards of the New York Stock Exchange and has not
since January 1, 2003 received any written notice from the New York Stock
Exchange asserting any material non-compliance with such standards.
Section 4.07 Proxy Statement and Company Future SEC Filings.
(a) The Proxy Statement will not, on the date it is first
published or sent or delivered to the Company 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 made therein, in light of the circumstances under
which they were made, not misleading. The Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the SEC thereunder. Notwithstanding the
foregoing, no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in any of the foregoing documents.
(b) The Company has provided Parent with the most recent draft
of the Company's Annual Report on Form 10-K for the fiscal year of the Company
ended December 31, 2004 (the "Company 2004 Form 10-K").
(c) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect:
(i) the Company 2004 Form 10-K and the other reports
filed by the Company with the SEC pursuant to Section 13(a) of the Exchange Act
on or after the date of this Agreement but on or prior to the Closing Date (the
"Company Future SEC Filings") will not, on the date they are filed with the SEC,
-17-
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
made therein, in light of the circumstances under which they were made, not
misleading;
(ii) the consolidated financial statements of the
Company, including the notes thereto, included or incorporated by reference in
the Company Future SEC Filings will be prepared in accordance with GAAP and
Regulation S-X of the SEC as in effect on the date of filing such reports
(except in the case of unaudited statements, as permitted by Form 10-Q or Form
8-K of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and will 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,
changes in stockholders' equity and cash flows for the periods shown (subject,
in the case of unaudited statements, to the absence of footnotes and normal
year-end audit adjustments);
(iii) the consolidated financial statements of the
Company included in the Company 2004 Form 10-K will be accompanied by an
opinion, which will not be subject to any qualification or limitation, issued by
the Company's independent registered public accounting firm;
(iv) the Company Future SEC Filings will comply as to
form in all material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the SEC thereunder;
(v) to the Company's knowledge, there is no reason why
the Certifications required to be filed with the Company 2004 Form 10-K cannot
be filed without material qualification or exception;
(vi) to the Company's knowledge, (A) the Company's
management will conclude that the Company's internal control over financial
reporting was effective as of December 31, 2004 based on the criteria set forth
by the Committee of Sponsoring Organizations of the Xxxxxxxx Commission (COSO)
-18-
in Internal Control-Integrated Framework and (B) the management report on
internal control over financial reporting included in the Company 2004 Form 10-K
("Management Report") will not describe any "material weaknesses" as defined in
the Public Company Accounting Oversight Board's Auditing Standard No. 2, as in
effect as of the date hereof ("Auditing Standard No. 2"), in the design or
operation of the Company's internal control over financial reporting; and
(vii) to the Company's knowledge, the attestation report
by the Company's independent registered public accounting firm with respect to
the Management Report included in the Company 2004 Form 10-K will concur in all
material respects with management's assessment included in the Management Report
and will conclude that the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2004
based on the criteria set forth by the Committee on Sponsoring Organizations of
the Xxxxxxxx Commission (COSO) in Internal Control-Integrated Framework.
For the avoidance of doubt, the Company acknowledges that a statement
of the existence of one or more "material weaknesses" as defined in Auditing
Standard No. 2 with respect to the Company's internal control over financial
reporting contained in the Management Report, or in the attestation by the
Company's independent registered public accounting firm with respect to the
Management Report, will be deemed to have a Company Material Adverse Effect,
irrespective of whether the Company had knowledge thereof as of the date of this
Agreement.
Section 4.08 Compliance with Applicable Laws.
(a) To the knowledge of the Company, except as disclosed in
the Company SEC Documents or in the Company Disclosure Letter, and except for
instances of noncompliance or violation that, individually and in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, (i)
the Company and the Company Subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities that are material
to the operation of the businesses of the Company and the Company Subsidiaries,
taken as a whole (the "COMPANY PERMITS"), (ii) the Company and the Company
Subsidiaries and their respective operations are in compliance with the terms of
the Company Permits and all applicable Laws, and (iii) since January 1, 2004,
neither the Company nor any of the Company Subsidiaries has been given written
notice of any violation or purported violation of any Company Permits or Laws.
This Section 4.08(a) and Section 4.08(c) do not relate to (1) matters with
respect to Taxes, which are the subject of Section 4.10, (2) employee benefits
matters, which are the subject of Section 4.13, (3) environmental matters, which
are the subject of Section 4.17 and (4) labor and employment matters, which are
the subject of Section 4.18.
(b) To the knowledge of the Company, except as disclosed in
the Company SEC Documents or in the Company Disclosure Letter and except for
matters that, individually or in the aggregate, would not reasonably be expected
to have a Company Material Adverse Effect, none of the Company, any of the
Company Subsidiaries or any of their respective directors, officers, employees
or agents has in connection with the operation of the businesses of the Company
and the Company Subsidiaries (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials, candidates
or members of political parties, political parties, public international
organizations, or organizations, or established or maintained any unlawful or
unrecorded accounts in violation of Sections 13(b)(2)(a) and 13(b)(2)(b) of the
Exchange Act, or any other similar applicable foreign, Federal or state Law,
(ii) paid, accepted or received any unlawful contributions, payments,
expenditures or gifts, or (iii) violated or operated in noncompliance with any
export restrictions, anti-boycott regulations, embargo regulations or other
applicable domestic or foreign Laws.
(c) To the knowledge of the Company, except as disclosed in
the Company SEC Documents or in the Company Disclosure Letter and except for
matters that, individually or in the aggregate, would not reasonably be expected
to have a Company Material Adverse Effect, since January 1, 2004, no
investigation, review, audit, prosecution or other enforcement action by any
Governmental Entity is or was pending, or threatened in writing, against or with
respect to the Company or any of the Company Subsidiaries, nor has any
-19-
Governmental Entity indicated in a writing made available to the Company or any
Company Subsidiary an intention to conduct the same.
Section 4.09 Litigation and Insurance.
(a) Except as disclosed in the Company SEC Documents or in the
Company Disclosure Letter and except for matters that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect, there is no suit, action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any Company Subsidiary, nor is
there any Judgment outstanding against the Company or any Company Subsidiary.
(b) Section 4.09(b) of the Company Disclosure Letter sets
forth all the insurance policies maintained by, or covering, the Company and the
Company Subsidiaries as of the date of this Agreement. All the policies listed
on Section 4.09(b) of the Company Disclosure Letter are in full force and effect
and, to the Company's knowledge, no written notice of cancellation of any such
policies have been received by the Company or the Company Subsidiaries. Section
4.09(a) of the Company Disclosure Letter includes a copy of the most recent
version of the Company's regularly-maintained pending litigation and claims
schedule. With respect to each matter listed on such schedule, Section 4.09(a)
of the Company Disclosure Letter sets forth the Company's insurance coverage and
policy limits applicable to such matter and the amount, if any, of the reserve
relating to such matter to be set forth or reflected in the Company's
consolidated balance sheet as of December 31, 2004.
Section 4.10 Taxes. (a) The Company and each Company
Subsidiary has filed, or has caused to be filed on its behalf, all Tax Returns
required to be filed by it, except to the extent any failure to file,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect. All such Tax Returns are
true and complete in all material respects. All Taxes shown to be due on such
Tax Returns have been timely paid, except to the extent that any failure to pay,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(b) The most recent financial statements contained in the
Company SEC Documents reflect an adequate reserve, in accordance with GAAP, 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. No
material 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, except to the extent
any such deficiency or request for waiver has been resolved prior to the date of
this Agreement or would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(c) Except as set forth in the Company Disclosure Letter,
since January 1, 2004, neither the Company nor any Company Subsidiary has: (i)
made or changed any material election concerning Taxes, (ii) changed an annual
accounting period or adopted or changed any material accounting method, (iii)
settled any material Tax claim or assessment, or (iv) surrendered any right to
claim a material refund of any Taxes.
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Section 4.11 Certain Agreements. Except for this Agreement or
as disclosed in the Company SEC Documents or in the Company Disclosure Letter,
neither the Company nor any Company Subsidiary is a party to or bound by any
Contract (a) with respect to the employment of any directors, executive officers
or employees, or with any consultants that are natural Persons, involving the
payment of salary and cash bonus having a value of $200,000 or more (or its
equivalent in foreign currency) per annum; (b) that is a "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), whether
or not filed as an exhibit to the Company SEC Documents; (c) that contains an
annual minimum purchase obligation of $750,000 or more or that requires annual
payments by or to the Company or any Company Subsidiary of $750,000 or more (in
each case excluding purchase orders in the ordinary course of business); (d)
that limits the ability of the Company or any of the Company Subsidiaries to
compete in any line of business, in any geographic area or with any Person, or
that requires referrals of business or exclusive dealing and, in each case,
which limitation or requirement would reasonably be expected to be material to
the Company and the Company Subsidiaries taken as a whole; (e) that would
prevent, materially delay or materially impede the consummation of any of the
Transactions; or (f) with respect to supplier or customer contracts required to
be disclosed under (b) and (c) of this Section 4.11, that provide a third party
a right to terminate or exercise any other material right (such as the right to
terminate exclusivity or the right to require the purchase or sale of assets) in
the event any of the Transactions are consummated. All contracts, arrangements,
commitments or understandings of the type described in this Section 4.11
(collectively referred to herein as the "COMPANY CONTRACTS") are valid and in
full force and effect as to the Company, and to the knowledge of the Company,
each other party thereto, except to the extent they have previously expired in
accordance with their terms or if the failure to be in full force and effect,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of the Company
Subsidiaries has, and to the knowledge of the Company, none of the other parties
thereto have, violated any provision of, or committed or failed to perform any
act, and no event or condition exists, which with or without notice, lapse of
time or both would constitute a default under the provisions of, any Company
Contract, except in each case for those violations and defaults that,
individually or in the aggregate, would not reasonably be expected to result in
a Company Material Adverse Effect. Except as disclosed in the Company SEC
Documents or the Company Disclosure Letter and except for matters that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect, to the Company's knowledge, during the period
from September 30, 2004 through the date of this Agreement no material customer
or supplier of the Company or any Company Subsidiary has provided notice, orally
or in writing, of an intention to terminate or materially reduce its business
relationship with the Company and the Company Subsidiaries.
Section 4.12 Absence of Changes in Benefit Plans. Except as
disclosed in the Company SEC Documents or the Company Disclosure Letter or as
required by applicable Law, during the period since September 30, 2004, there
has not been any adoption or amendment in any material respect by the Company or
any Company Subsidiary of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, stock appreciation
right, performance share, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of the Company or any Company Subsidiary
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(collectively, "COMPANY BENEFIT PLANS"). Except as disclosed in the Company SEC
Documents or the Company Disclosure Letter, there are not any severance,
termination or change in control agreements or arrangements between the Company
or any Company Subsidiary and any current or former executive officer or
director of the Company or any Company Subsidiary (collectively, the "COMPANY
BENEFIT AGREEMENTS"). For purposes of Section 4.13, Company Benefit Plans and
Company Benefit Agreements may be grouped into either (i) only those Company
Benefit Plans and Company Benefit Agreements covering only employees in the
United States ("U.S. BENEFIT PLANS AND AGREEMENTS") or (ii) all such Company
Benefit Plans and Company Benefit Agreements ("ALL BENEFIT PLANS AND
AGREEMENTS").
Section 4.13 ERISA Compliance; Excess Parachute Payments. (a)
With respect to All Benefit Plans and Agreements, the Company Disclosure Letter
contains a list of all "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) ("COMPANY PENSION Plans"), "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA) and all other Company Benefit Plans
maintained, or contributed to, by the Company or any Company Subsidiary for the
benefit of any current or former employees, officers or directors of the Company
or any Company Subsidiary (determined, for this purpose only, without regard to
the exception in ERISA Section 4(b)(4) for plans maintained outside of the
United States primarily for the benefit of nonresident aliens). Each Company
Benefit Plan has been administered in compliance in all material respects with
its terms, applicable Law and any applicable collective bargaining agreement,
other than instances of noncompliance that, individually and in the aggregate,
have not had and would not reasonably be expected to have a Company Material
Adverse Effect. The Company has made available to Parent true and complete
copies of (1) each Company Benefit Plan (or, in the case of any unwritten
Company Benefit Plan, a description thereof), (2) the most recent annual report
on Form 5500 filed with the Internal Revenue Service with respect to each
Company Benefit Plan (if any such report was required), (3) the most recent
determination letter (or in the case of a prototype plan, the most recent IRS
opinion letter) for each U.S. Benefit Plan and Agreement intended to be
qualified under Section 401(a) of the Code, (4) the most recent summary plan
description for each Company Benefit Plan for which such summary plan
description is required, and (5) each trust agreement and group annuity contract
relating to any Company Benefit Plan.
(b) With respect to any U.S. Benefit Plans and Agreements,
except as disclosed in the Company Disclosure Letter or in the Company SEC
Documents, no Company Pension Plan, other than any Company Pension Plan that is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a
"COMPANY MULTIEMPLOYER PENSION PLAN"), had, as of the respective last annual
valuation date for each such Company Pension Plan, an "unfunded benefit
liability" (as such term is defined in Section 4001(a)(18) of ERISA), based on
actuarial assumptions that have been furnished to Parent. None of the Company
Pension Plans has an "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code), whether or not waived. Each
U.S. Benefit Plan and Agreement that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (or in the case of a prototype plan, the most recent
IRS opinion letter) to that effect and each such plan complies in all material
respects in form and in operation with the requirements of the Code and meets
the requirements of a "qualified plan" under Section 401(a) of the Code. To the
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Company's knowledge, no event has occurred or circumstances exist that will or
could give rise to disqualification or loss of tax-exempt status of any such
plan or agreement. To the Company's knowledge, none of the Company, any Company
Subsidiary, any officer of the Company or any of its Company Subsidiary or, any
of the Company Benefit Plans which are subject to ERISA, including the Company
Pension Plans, any trusts created thereunder or any trustee or administrator
thereof, or any fiduciary, has engaged in a "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of the Code). None of
such Company Benefit Plans and trusts has been terminated, nor to the Company's
knowledge has there been any "reportable event" (as that term is defined in
Section 4043 of ERISA) with respect to any Company Benefit Plan during the last
five years. Neither the Company nor any Company Subsidiary has incurred a
"complete withdrawal" or a "partial withdrawal" (as such terms are defined in
Sections 4203 and 4205, respectively, of ERISA) with respect to any Company
Multiemployer Pension Plan during the last five years.
(c) With respect to any U.S. Benefit Plans and Agreements that
are employee welfare benefit plans, except as disclosed in the Company
Disclosure Letter, no such Company Benefit Plan is funded through a "welfare
benefits fund" (as such term is defined in Section 419(e) of the Code) and each
such Company Benefit Plan that is a "group health plan" (as such term is defined
in Section 5000(b)(1) of the Code) materially complies with the applicable
requirements of Section 4980B(f) of the Code, except in such instances in which
noncompliance, individually and in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(d) With respect to U.S. Benefit Plans and Agreements, other
than payments that may be made to the Persons listed in the Company Disclosure
Letter or disclosed in the Company SEC Documents, any amount that could be
received (whether in cash or property or the vesting of property) as a result of
the Merger or any other Transaction by any employee, officer or director of the
Company or any of its affiliates who is a "disqualified individual" (as such
term is defined in Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or Company
Benefit Plan currently in effect would not be characterized as an "excess
parachute payment" (as defined in Section 280G(b)(1) of the Code).
(e) With respect to All Benefit Plans and Agreements, except
as disclosed in the Company Disclosure Letter or in the Company SEC Documents,
the execution and delivery by the Company of this Agreement do not, and the
consummation of the Merger and the other Transactions and compliance with the
terms hereof will not, (1) entitle any employee, officer or director of the
Company or any Company Subsidiary to severance pay, (2) accelerate the time of
payment or vesting or trigger any payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount payable or
trigger any other material obligation pursuant to, any Company Benefit Plan or
Company Benefit Agreement or (3) result in any breach or violation of, or a
default under, any Company Benefit Plan or Company Benefit Agreement.
(f) With respect to All Benefit Plans and Agreements, except
as disclosed in the Company Disclosure Letter, (1) other than routine claims for
benefits submitted by or on behalf of participants or beneficiaries (including
alternate payees in connection with qualified domestic relations orders as
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defined in Section 414(p) of the Code), no claim, legal proceeding or
investigation by a Governmental Entity is pending, or to the Company's
knowledge, is threatened, (2) the Company and each Company Subsidiary have made
all contributions due under each Company Benefit Plan and each Company Benefit
Agreement as of the date of this Agreement in accordance with local Law and past
practice, (3) the liabilities of the Company and each Company Subsidiary as of
the date of this Agreement have been appropriately reflected in all material
respects on the relevant financial statements in accordance with local Law, past
practice, and generally accepted accounting principles in each jurisdiction, and
(4) to the extent a separate trust or other funding vehicle has been established
to fund the liabilities under a Company Benefit Plan or Company Benefit
Agreement, the actuarially determined fair market value of all accrued benefits
does not exceed, as of the date of this Agreement, the fair market value of the
assets in such trust or funding vehicle, determined using assumptions and
actuarial principles consistent with local Law and past practice in each
jurisdiction.
Section 4.14 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents or the Company Disclosure Letter, during
the period since September 30, 2004, the Company and the Company Subsidiaries
have conducted their respective businesses only in the ordinary course
consistent with their past practices and there has not been any change,
circumstance or event that has had, or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section 4.15 Properties. Except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, the Company or one of the Company Subsidiaries (a) has good and
marketable title to all the properties and assets reflected in the latest
audited balance sheet included in the Company SEC Documents as being owned by
the Company or one of the Company Subsidiaries or acquired after the date
thereof that are material to the Company's business on a consolidated basis
(except properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of all Liens, except statutory
liens securing payments not yet due, such imperfections or irregularities of
title, claims, Liens, easements, covenants and other restrictions or
encumbrances as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair business
operations at such properties and mortgages, or deeds of trust, security
interests or other encumbrances on title related to indebtedness reflected on
the consolidated financial statements of the Company (such liens, imperfections
and irregularities in clauses (1), (2) and (3), "PERMITTED LIENS"), and (b) is
the lessee of all leasehold estates reflected in the latest audited financial
statements included in the Company SEC Documents or acquired after the date
thereof that are material to its business on a consolidated basis (except for
leases that have expired by their terms since the date thereof or been assigned,
terminated or otherwise disposed of in the ordinary course of business
consistent with past practice) and is in possession of the properties purported
to be leased thereunder, and each such lease is valid without default thereunder
by the lessee or, to the Company's knowledge, the lessor.
Section 4.16 Intellectual Property. Except as disclosed in the
Company Disclosure Letter or in the Company SEC Documents or as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (a) the Company or the Company Subsidiaries own free
and clear of all Liens other than Permitted Liens or have a valid license to use
all material patents, inventions, copyrights, software, trademarks, service
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marks, domain names, trade names and other intellectual property (including any
registrations or applications for registration of any of the foregoing)
(collectively, the "COMPANY INTELLECTUAL PROPERTY") necessary to carry on their
business as currently conducted, (b) to the knowledge of the Company, the
Company Intellectual Property does not infringe, imitate, misappropriate,
dilute, violate or otherwise derogate or make unauthorized use of ("INFRINGE")
the intellectual property rights of third parties and, to the knowledge of the
Company, is not being Infringed by any third parties, (c) to the knowledge of
the Company, no facts or circumstances exist that would affect the validity,
substance or existence of, or the Company's rights in, the Company Intellectual
Property, (d) the Company and the Company Subsidiaries have taken reasonable
actions to protect and maintain the Company Intellectual Property, including
Company Intellectual Property that is confidential in nature, and (e) there are
no claims, suits or other actions, and to the knowledge of the Company, no
claim, suit or other action is threatened, that seek to limit or challenge the
validity, enforceability, ownership, or right to use, sell or license the
Company Intellectual Property, nor does the Company know of any valid basis
therefor.
Section 4.17 Environmental Matters. Except as disclosed in the
Company Disclosure Letter or in the Company SEC Documents or as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect:
(a) to the Company's knowledge, the Company and the Company
Subsidiaries are in compliance with all applicable permits, licenses and
registrations required under all foreign, Federal, state and local Laws relating
to contamination, pollution, natural resources or the environment
("ENVIRONMENTAL LAWS") for the Company and the Company Subsidiaries to conduct
their operations and are in compliance with all applicable Environmental Laws;
(b) there are no claims pending and, to the Company's
knowledge, the Company and the Company Subsidiaries have not received any
written notice, claim or demand, by any Person alleging any violation of any
Environmental Laws or permits, licenses or registrations;
(c) to the Company's knowledge, no waste, hazardous,
radioactive, dangerous or toxic substance or pollutant or contaminant or any
substance that is listed, defined, designated or classified as such under or
pursuant to any Environmental Law, including asbestos, asbestos-containing
materials, silica, mixed dust, PCBs, methylene chloride, tricholoroethylene,
1,2-trans-dichoro-ethylene, dioxins, dibenzoflurans (or any combination thereof)
or petroleum (including crude oil or any fraction or derivatives thereof)
(collectively, "HAZARDOUS MATERIALS"), have been disposed of or released by the
Company, any of the Company Subsidiaries, any of their respective predecessors
in interest or any other entity for or from which the Company or any Company
Subsidiary has assumed environmental liability and are present at, on, from or
under any of the properties or facilities currently or previously owned or
leased by the Company, the Company Subsidiaries, any of their respective
predecessors-in-interest or any other entity for or from which the Company or
any Company Subsidiary has assumed environmental liability, in violation of, or
in a manner or to a location that would reasonably be expected to give rise to
liability to the Company or the Company Subsidiaries under or relating to, any
Environmental Laws. The Company has made available to Parent complete copies of
all material reports and studies in the possession of the Company or the Company
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Subsidiaries relating to environmental conditions and compliance with respect to
the facilities owned or leased by the Company and the Company Subsidiaries;
(d) to the Company's knowledge, as of the date of this
Agreement:
(i) no facts, circumstances or conditions exist that
could reasonably be expected to result in a material liability or cost to the
Company or any Company Subsidiary (A) under any Environmental Law or (B) in
connection with the manufacture, marketing, use, sale or distribution of
asbestos, asbestos-containing materials, silica or mixed dust (or any
combination thereof); and
(ii) neither the Company, any Company Subsidiary nor any
of their respective predecessors-in-interest utilizes or has ever previously
utilized asbestos or asbestos-containing materials, silica or mixed dust as a
raw material, component or otherwise in connection with any of their respective
products. Section 4.18 Labor and Employment Matters. Except as disclosed in the
Company Disclosure Letter or in the Company SEC Documents or as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (a) there is no labor strike, dispute, slowdown,
stoppage or lockout actually pending or, to the knowledge of the Company,
threatened against the Company or any of the Company Subsidiaries, (b) no union
organizing campaign with respect to the employees of the Company or the Company
Subsidiaries is underway or, to the Company's knowledge, threatened, (c) there
is no unfair labor practice charge or complaint against the Company or the
Company Subsidiaries pending or, to the knowledge of the Company, threatened
before the National Labor Relations Board or any similar state or foreign
agency, (d) there is no grievance pending relating to any collective bargaining
agreement or other grievance procedure, (e) no charges with respect to or
relating to the Company or the Company Subsidiaries are pending before the Equal
Employment Opportunity Commission or any other Governmental Entity responsible
for the prevention of unlawful employment practices, (f) there is no works
council, union, employee representative, or other labor organization which
pursuant to applicable Law has to be notified or consulted or with which
negotiations need to be conducted by operation of Law in connection with the
Transactions and (g) the Company and each Company Subsidiary are in compliance
with all domestic and applicable foreign Laws, regulations, ordinances, codes or
other legally binding rules and their own policies respecting employment,
employment practices, terms and conditions of employment, wage and hours, equal
opportunity, equal pay, civil rights, labor relations, immigration, occupational
health and safety, and payroll and wage taxes, except to the extent any
noncompliance would not reasonably be expected to have a Company Material
Adverse Effect.
Section 4.19 Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other Person except Xxxxxx X.
Xxxxx & Co. Incorporated ("BAIRD") is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Merger and the other Transactions based upon arrangements made by or on behalf
of the Company. The Company provided to Parent a correct and complete copy of
its engagement letter with Baird and has disclosed to Parent all material terms
of the engagement of Baird.
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Section 4.20 Opinion of Financial Advisor. The Company has
received the opinion of Baird, dated the date of this Agreement, to the effect
that, as of such date, the consideration to be received in the Merger by the
holders of Company Common Stock (other than Parent and its Affiliates) is fair
to such holders from a financial point of view.
ARTICLE V
Representations and Warranties of Parent and Sub
------------------------------------------------
Parent and Sub, jointly and severally, represent and warrant
to the Company that, except as set forth in the letter, dated as of the date of
this Agreement, from the Parent to the Company (the "PARENT DISCLOSURE LETTER"):
Section 5.01 Organization, Standing and Power. 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. Each of Parent and
Sub is duly qualified to do business in each jurisdiction where the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary or the failure to so qualify has had or could reasonably
be expected to have a Parent Material Adverse Effect. Parent has made available
to the Company true and complete copies of the organizational documents of
Parent, as amended through the date of this Agreement. Parent has made available
to the Company true and complete copies of the certificate of incorporation of
Sub and the bylaws of Sub, in each case as amended through the date of this
Agreement.
Section 5.02 Sub. (a) Since the date of its incorporation, Sub
has not carried on any business or conducted any operations other than the
execution of this Agreement, the performance of its obligations hereunder and
matters ancillary thereto.
(b) The authorized capital stock of Sub consists of 10,000
shares of common stock, par value $0.01 per share, 100 of which have been
validly issued, are fully paid and nonassessable and are owned by Parent free
and clear of any Lien.
Section 5.03 Authority; Execution and Delivery,
Enforceability. Each of Parent and Sub has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
Transactions. The execution and delivery by each of Parent and Sub of this
Agreement 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 approved this Agreement. Each of Parent
and Sub has duly executed this Agreement, and, assuming this Agreement
constitutes the valid and binding agreement of the Company, this Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
Section 5.04 No Conflicts; Consents. (a) The execution and
delivery by each of Parent and Sub of this Agreement, do not, and the
consummation of the Merger and the other Transactions will not, conflict with,
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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 result
in the creation of any Lien upon any of the properties or assets of Parent or
any of its Subsidiaries under, any provision of (1) the charter or
organizational documents of Parent or any of its Subsidiaries, (2) any Contract
to which Parent or any of its Subsidiaries is a party or by which any of their
respective properties or assets is bound or (3) subject to the filings and other
matters referred to in Section 5.04(b), any Judgment or Law applicable to Parent
or any of its Subsidiaries or their respective properties or assets, other than,
in the case of clauses (2) and (3) 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.
(b) 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 any of its Subsidiaries in connection with the execution,
delivery and performance of this Agreement or the consummation of the Merger or
the other Transactions, other than (1) compliance with and filings under the HSR
Act and compliance with and filings under the applicable foreign merger control
or competition Laws or regulations, (2) the filing with the SEC of such reports
under Section 13 of the Exchange Act, as may be required in connection with this
Agreement, the Merger and the other Transactions, (3) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, (4)
such filings as may be required in connection with the Taxes described in
Section 7.08 and (5) such other items (i) that may be required under the
applicable Law of any foreign country, (ii) required solely by reason of the
participation of the Company (as opposed to any third party) in the
Transactions, (iii) that, individually or in the aggregate, have not had and
could not reasonably be expected to have a Parent Material Adverse Effect or
(iv) as are set forth in the Parent Disclosure Letter.
Section 5.05 Information Supplied. None of the information
supplied or to be supplied by or on behalf of Parent or Sub specifically for
inclusion or incorporation by reference in the Proxy Statement will, at the date
such documents are first published, sent or delivered 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 made therein,
in light of the circumstances under which they were made, not misleading.
Section 5.06 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 Merger and
the other Transactions based upon arrangements made by or on behalf of Parent or
Sub.
Section 5.07 Financing. (a) At Closing, Parent and Sub will
have available all of the funds necessary for the acquisition of all shares of
Company Common Stock pursuant to the Merger and to perform their respective
obligations under this Agreement.
(b) Parent has previously delivered to the Company copies of
any commitment letters pursuant to which Parent shall obtain the funds necessary
to acquire all shares of Company Common Stock pursuant to the Merger, together
with all of Parent's fees and expenses incurred in connection with the Merger
and the other Transactions. For the avoidance of doubt, it shall not be a
condition to Closing for Parent to obtain such funds, and the Company shall be
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entitled to pursue any and all remedies available at Law or in equity if Parent
breaches this Agreement on account of Parent's failure to obtain such funds on
or before the Closing Date.
(c) Assuming the Company is not Insolvent (as defined below)
prior to the Effective Time, immediately after the Effective Time and after
giving effect to any change in the Surviving Corporation's assets and
liabilities as a result of the Merger, the Surviving Corporation will not (1) be
insolvent (either because its financial condition is such that the sum of its
debts is greater than the fair value of its assets or because the fair saleable
value of its assets is less than the amount required to pay its probable
liability on existing debts as they mature), (2) have unreasonably small capital
with which to engage in its business or (3) have incurred liabilities beyond its
ability to pay as they become due. For purposes hereof, the Company will be
deemed to be "INSOLVENT" if any of the conditions described in clause (1), (2)
or (3) above are applicable to the Company on or prior to the Effective Time.
Section 5.08 No Additional Representations; Investigation by
Parent and Sub. In entering into this Agreement, Parent and Sub have not been
induced by, or relied upon, any representations, warranties or statements by the
Company not specifically set forth herein, the Company Disclosure Letter or the
other documents specifically referred to herein or required to be delivered
thereby, whether or not such representations, warranties or statements have
actually been made, in writing or orally, and Parent and Sub acknowledge that
they have made their own investigation of the Company and the Company
Subsidiaries prior to the execution of this Agreement and have not been induced
by or relied upon any representations, warranties or statements as to the
advisability of entering into this Agreement other than the representations,
warranties and statements in Article IV above, and Parent and Sub:
(a) acknowledge that, other than as set forth in this
Agreement, the Company Disclosure Letter or the other documents required to be
delivered by the Company or specifically referred to herein, none of the
Company, its Subsidiaries or any of their respective directors, officers,
employees, affiliates, agents or representatives makes any representation or
warranty, either express or implied, as to the accuracy or completeness of any
of the information provided or made available to Parent or Sub or their agents
or representatives; and
(b) agree that if the Merger and the other Transactions are
consummated, to the fullest extent permitted by Law (except with respect to
fraud), that none of the Company, its Subsidiaries or any of their respective
directors, officers, employees, affiliates, agents or representatives shall have
any liability or responsibility whatsoever to Parent or Sub on any basis
(including in contract, tort or otherwise) based upon any information provided
or made available, or statements made, to Parent or Sub or with respect to the
certificate to be delivered pursuant to Section 8.03(d).
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ARTICLE VI
Covenants Relating to Conduct of Business
-----------------------------------------
Section 6.01 Conduct of Business. Except as set forth in the
Company Disclosure Letter or as otherwise expressly contemplated hereby, without
the prior consent of Parent (which consent shall not be unreasonably withheld or
delayed), from the date hereof until the Effective Time, the Company shall, and
shall cause each of the Company Subsidiaries to, conduct their business in all
material respects in the ordinary course consistent with past practice and shall
use commercially reasonable efforts to (a) preserve intact its present business
organization, (b) maintain in effect all material foreign, Federal, state and
local licenses, approvals and authorizations, including, all Company Permits
that are required for the Company and the Company Subsidiaries to carry on their
business and (c) preserve existing relationships with its material customers,
lenders, suppliers and others having material business relationships with it;
provided that in each case, the Company shall not be held responsible for any
change or development relating to (t) changes, effects, events, occurrences or
circumstances that generally affect the United States or the global economy or
the industries in which the Company operates, (u) general economic, financial or
securities market conditions in the United States or elsewhere, (v) the
execution, delivery or announcement of this Agreement or the announcement of the
Merger, (w) changes in GAAP or requirements applicable to the Company and the
Company Subsidiaries, (x) changes in Laws or interpretations thereof by a
Governmental Entity, (y) changes, effects, events or occurrences caused by or
resulting from the taking of any action required or permitted by this Agreement
or approved by Parent and/or (z) any outbreak of major hostilities in any
country in which the Company operates or in which the United States is involved
or any act of terrorism within the United States or any country in which the
Company operates or directed against United States facilities or citizens
wherever located. Without limiting the generality of the foregoing, except as
set forth in the Company Disclosure Letter or as otherwise expressly
contemplated by this Agreement, from the date hereof until the Effective Time,
without the prior consent of Parent (which consent shall not be unreasonably
withheld or delayed), the Company shall not, nor shall it permit any of the
Company Subsidiaries to:
(1) amend the Company's or any Company Subsidiary's
certificate of incorporation or bylaws or similar organizational documents;
(2) split, combine or reclassify any shares of capital stock
of the Company or declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock, or redeem, repurchase or otherwise acquire or offer to
redeem, repurchase, or otherwise acquire any of its securities, except (i) for
ordinary course dividends by Company Subsidiaries or (ii) pursuant to the
existing terms of the Company Stock Plan or redemptions under the Rights Plan;
(3) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of its capital stock, stock appreciation rights
or any securities convertible into or exercisable for, or any rights, warrants
or options to acquire, any capital stock, other than the issuance of shares of
Company Common Stock pursuant to the exercise of Company Stock Options
outstanding as of the date of this Agreement;
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(4) acquire (whether pursuant to merger, stock or asset
purchase or otherwise) in one transaction or series of related transactions (i)
except for purchases in the ordinary course of business, any assets having a
fair market value in excess of $1,000,000, or (ii) all or substantially all of
the equity interests of any Person or any business or division of any Person
having a fair market value in excess of $100,000;
(5) sell, lease, encumber or otherwise dispose of any assets,
other than (i) sales in the ordinary course of business, (ii) equipment and
property no longer used in the operation of the Company's business and (iii)
assets related to discontinued operations;
(6) incur (which shall not include entering into credit
agreements, lines of credit or similar arrangements until the Company or any of
the Company Subsidiaries becomes liable with respect to any indebtedness for
borrowed money or guarantees thereof) any indebtedness for borrowed money or
guarantee any indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of the Company or any of the Company
Subsidiaries or guarantee any debt securities of others, except in the ordinary
course of business (which shall include borrowings under the Company's existing
credit agreements and overnight borrowings);
(7) affirmatively waive without appropriate consideration
therefor any material rights under any Company Contract or forgive any material
indebtedness for borrowed money owed to the Company or any Company Subsidiary;
(8) except in the ordinary course of business, amend, modify
or terminate any Company Contract or otherwise waive, release or assign without
appropriate consideration any material rights, claims or benefits of the Company
or any of its Subsidiaries thereunder, in each case material to the Company and
the Company Subsidiaries, taken as a whole;
(9) (i) except as disclosed in the Company Disclosure Letter
or as required by Law or an agreement existing on the date hereof, increase the
amount of compensation of any director, executive officer or employee at or
above the manager level or make any increase in or commitment to increase any
employee benefits, (ii) except as required by Law, an agreement existing on the
date hereof or the Company's or any Company Subsidiaries' severance policy as of
the date hereof, grant any severance or termination pay to any director or
officer of the Company or any Company Subsidiary, (iii) adopt any additional
employee benefit plan or, except in the ordinary course of business or as
required by Law, make any contribution to any existing Company Benefit Plan,
(iv) except as may be required by Law, amend in any material respect any Company
Benefit Plan, (v) except as disclosed in the Company Disclosure Letter or as
required under the terms of any collective bargaining agreement existing on the
date hereof, implement or announce any intention to implement any general
increase in the compensation or benefits payable to non-executive employees of
the Company or the Company Subsidiaries, or (vi) except as disclosed in the
Company Disclosure Letter or as may be required by Law or under the terms of any
collective bargaining agreement existing on the date hereof, make any
announcement or enter into commitment with respect to general employment levels
or the general terms and conditions of employment applicable after the Effective
Time to the employees of the Company and the Company Subsidiaries;
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(10) settle, or propose to settle, any litigation,
investigation, arbitration, proceeding or other claim that is material to the
business of the Company and the Company Subsidiaries, taken as a whole, other
than the payment, discharge or satisfaction, in the ordinary course of business
consistent with past practice, of liabilities (i) recognized or disclosed in the
most recent consolidated financial statements (or notes thereto) of the Company
included in the Company SEC Documents or (ii) incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice;
(11) other than in the ordinary course of business consistent
with past practice, (i) make any Tax election or take any position on any Tax
Return filed on or after the date of this Agreement or adopt any method thereof
that is inconsistent with elections made, positions taken or methods used in
preparing or filing similar returns in prior periods or (ii) enter into any
settlement or compromise of any Tax liability that in either case is material to
the business of the Company and the Company Subsidiaries, taken as a whole;
(12) materially change the Company's methods of accounting in
effect at September 30, 2004, except as required by changes in Law, GAAP or by
Regulation S-X of the Exchange Act, as concurred by the Company's independent
public accountants;
(13) except as expressly permitted in accordance with Section
6.02, amend, waive any provision of or terminate any agreement identified as a
"Confidentiality and Standstill Agreement" in Section 6.01 of the Company
Disclosure Letter;
(14) except as contemplated by Section 4.05(c) or as expressly
permitted in accordance with Section 6.02, amend or terminate the Rights
Agreement or redeem any of the Company Rights;
(15) enter into any Contract that would constitute a Company
Contract outside the ordinary course of business consistent with past practice;
(16) materially amend or terminate any insurance policy
required to be disclosed on the Company Disclosure Letter or allow any material
insurance policy to lapse;
(17) (i) make or contractually commit to make capital
expenditures (as determined in accordance with GAAP, consistently applied) in
excess of $15 million in the aggregate, excluding the Shopfheim facility
expansion, or (ii) make or contractually commit to make capital expenditures (as
determined in accordance with GAAP, consistently applied) with respect to the
Shopfheim facility expansion for 2005 and 2006 in excess of $14 million in the
aggregate; provided that in the event the Closing has not occurred within 60
days after the date of this Agreement, the limitations set forth in clause (i)
shall not apply; provided further that, in any event, the Company shall make all
capital expenditures only in the ordinary course of business, consistent with
past practice, and shall notify Parent prior to making or committing to make any
individual capital expenditure of $500,000 or more;
(18) except as permitted in accordance with Section 6.02,
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any Company Subsidiary (other than the Merger); or
(19) agree, resolve or commit to do any of the foregoing;
provided that the limitations set forth herein shall not apply to any action,
transaction or event occurring exclusively between the Company and any Company
Subsidiary or between any Company Subsidiaries.
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Section 6.02 No Solicitation. (a) The Company, each of the
Company Subsidiaries and each of their respective directors, officers,
employees, agents and representatives shall immediately cease any discussions or
negotiations presently being conducted with respect to any Company Takeover
Proposal. The Company shall immediately discontinue access to the electronic
data room maintained by the Company by all third Persons other than Parent and
Sub and their lenders, employees, agents and representatives and the Company's
representatives and, except as expressly permitted in accordance with Section
6.02(c), shall not provide any such other Person with further access, electronic
or otherwise, to any information, documents, facilities or employees of the
Company or any Company Subsidiary that are not in the public domain. Nothing in
this Section 6.02(a) shall prevent the Company from supplying information to any
Person (other than a Person that has made or is reasonably expected to make a
Company Takeover Proposal) to the extent required by Law.
(b) Subject to Section 6.02(c), after the date of this
Agreement, the Company shall not, nor shall it authorize or permit any Company
Subsidiary to, nor shall it authorize or knowingly permit any officer, director
or employee of, or any investment banker, attorney or other advisor or
representative (collectively, "REPRESENTATIVES") of, the Company or any Company
Subsidiary to (i) directly or indirectly solicit or initiate any Company
Takeover Proposal, (ii) enter into any agreement, including any letter of intent
or similar agreement, with respect to any Company Takeover Proposal or (iii)
enter into, participate in or continue any discussions or negotiations
regarding, or furnish to any Person any information with respect to, any Company
Takeover Proposal.
(c) Notwithstanding the provisions of this Section 6.02 or any
other provisions contained in this Agreement, if prior to the date the Company
Stockholder Approval is obtained the Company receives an unsolicited Company
Takeover Proposal and the Company Board determines in good faith, after
consultation with its outside legal and financial advisors, that (i) the Company
Takeover Proposal is reasonably likely to result in a transaction meeting the
requirements of the definition of "Superior Company Proposal" and (ii) failing
to take such action would be inconsistent with the Company Board's fiduciary
duties to the Company and its stockholders under applicable Law, then, subject
to providing at least two Business Days prior written notice to Parent, the
Company may (i) furnish information with respect to the Company to the Person
making such Company Takeover Proposal and its Representatives pursuant to a
confidentiality agreement not less restrictive of the other party than the
Confidentiality Agreement (as defined in Section 7.02) and (ii) participate in
discussions or negotiations (including solicitation of a revised Company
Takeover Proposal) with such Person and its Representatives regarding such
Company Takeover Proposal.
(d) Neither the Company Board nor any committee thereof shall
(i) withdraw or propose publicly to withdraw the approval or recommendation by
the Company Board or any such committee of this Agreement or the Merger or (ii)
approve or recommend, or propose publicly to approve or recommend, any Company
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Takeover Proposal. Notwithstanding the foregoing, if the Company Board receives
an unsolicited Superior Company Proposal and as a result thereof the Company
Board determines in good faith, after consultation with its outside legal and
financial advisors, that it is necessary to do so in order to comply with their
fiduciary duties under applicable Law, the Company Board may withdraw or modify
its approval or recommendation of the Merger and this Agreement and, in
connection therewith, approve or recommend such Superior Company Proposal.
(e) The Company shall within 48 hours after its receipt of any
Company Takeover Proposal notify Parent of such Company Takeover Proposal and
the material terms and conditions of such Company Takeover Proposal, excluding
the identity of the acquiring party. In connection with any determination by the
Company Board that a Company Takeover Proposal is a Superior Company Proposal,
the Company shall within 24 hours after the making of such determination provide
Parent with a written summary in reasonable detail of the reasons for such
determination.
(f) Nothing contained in this Section 6.02 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2 promulgated under the Exchange Act or from making any disclosure
to the Company's stockholders if, in the good faith judgment of the Company
Board, failure so to disclose would be inconsistent with its obligations under
applicable Law. Any action taken by the Company or the Company Board in
accordance with this Section 6.02(f) shall be deemed not to be a modification of
the Company Board's approval or recommendation of the Merger and this Agreement.
ARTICLE VII
Additional Agreements
---------------------
Section 7.01 Preparation of Proxy Statement; Stockholders
Meeting. (a) The Company shall, as soon as practicable, prepare and file with
the SEC the proxy materials that shall constitute the proxy statement relating
to the Merger and the Transactions to be submitted to the Company's stockholders
at the Company Stockholders Meeting to approve the Merger and the Transactions
(such proxy materials, and any amendments or supplements, the "PROXY STATEMENT")
in preliminary form, and the Company shall use its reasonable best efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto. The Parent shall promptly provide to the Company all information
regarding the Parent required to be included in the Proxy Statement in
accordance with the Exchange Act and the rules of the SEC thereunder. Except as
otherwise expressly permitted in accordance with Section 6.02(d), the Proxy
Statement shall include the recommendation of the Company Board as provided in
Section 4.04(b). Parent and its counsel shall be given a reasonable opportunity
to review and comment on the Proxy Statement and all related proxy materials
prior to such documents being filed with the SEC. At the earliest practical date
following clearance of the Proxy Statement by the SEC, the Company shall use its
reasonable best efforts to prepare and file with the SEC the definitive Proxy
Statement and to cause the definitive Proxy Statement to be mailed to the
Company's stockholders, in each case at the earliest practicable date following
the filing of the preliminary Proxy Statement with the SEC. If at any time prior
to receipt of the Company Stockholder Approval there shall occur any event that
should be set forth in an amendment or supplement to the Proxy Statement, the
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Company shall promptly prepare and mail to its stockholders such an amendment or
supplement.
(b) The Company shall establish a record date for, duly call,
give notice of, convene and hold a meeting of its stockholders (the "COMPANY
STOCKHOLDERS MEETING") for the purpose of seeking the Company Stockholder
Approval. The record and meeting dates for the Company Stockholders Meeting
shall be established so as to permit completion of the Merger and the other
Transactions at the earliest practicable date and shall be reasonably acceptable
to each of the Company and Parent.
(c) The Company shall be required to comply with Section
7.01(b) notwithstanding any action taken by the Company Board pursuant to
Section 6.02(d) to withdraw or modify its approval or recommendation of the
Merger and this Agreement or to approve or recommend any Superior Company
Proposal.
(d) Parent shall: (i) cause Sub promptly to submit this
Agreement and the Transactions for approval and adoption by Parent by written
consent of sole stockholder; (ii) cause the shares of capital stock of Sub to be
voted for adoption and approval of this Agreement, the Merger and the other
Transactions; and (iii) cause to be taken all additional actions necessary for
Sub to adopt and approve this Agreement and the Transactions and to consummate
the Merger.
Section 7.02 Access to Information; Confidentiality. Upon
reasonable notice, the Company shall, and shall cause each of the Company
Subsidiaries to, afford to Parent, and to Parent's and its lenders' officers,
employees, accountants, counsel, financial advisors and other representatives,
reasonable access during normal business hours during the period prior to the
Effective Time to all its properties, books and contracts and, during such
period, the Company shall, and shall cause each of the Company Subsidiaries to,
make available to Parent all other information concerning its business,
properties and personnel as Parent may reasonably request. Any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the business or operations of the Company. Neither the Company
nor any of the Company Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would violate or contravene
any Law, order, judgment, decree or binding agreement entered into prior to the
date hereof. To the extent practicable, the parties will make appropriate
substitute disclosure arrangements under circumstances in which the restrictions
of the preceding sentence apply. All information exchanged pursuant to this
Section 7.02 shall be subject to the confidentiality agreement effective as of
October 13, 2004 between the Company and Parent (the "CONFIDENTIALITY
AGREEMENT").
Section 7.03 Best 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(d), the Company Board approves or recommends a
Superior Company Proposal, each of the parties shall use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, 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
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registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, to secure the expiration of any mandatory waiting periods of or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the Merger or
the other Transactions and (iv) the execution and delivery of any additional
instruments necessary to consummate the Merger and the other Transactions and to
fully carry out the purposes of this Agreement. Notwithstanding the foregoing,
(x) the requirement under this Section 7.03(a) that Parent and Sub use their
best efforts to obtain all necessary consents and approvals from Governmental
Entities with respect to the Merger or the other Transactions shall not be
construed to require Parent or Sub to sell, divest, hold separate or otherwise
dispose of, or agree to sell, divest, hold separate or otherwise dispose of, any
assets or businesses, including any assets or businesses of the Company or the
Company Subsidiaries, or to enter into or agree to enter into any compulsory
licensing or similar arrangement, in order to obtain approval, clearance or
expiration of any waiting periods under the HSR Act or any other antitrust or
competition Law and (y) the Company and its Representatives shall not be
prohibited under this Section 7.03(a) from taking any action permitted by
Section 6.02.
(b) The Company shall give prompt notice to Parent, and Parent
or Sub shall give prompt notice to the Company, of (1) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality 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 (2) any 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 this Agreement; provided 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 this Agreement.
(c) Parent shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of the Company, take any
action or enter into any transaction, including any merger, acquisition, joint
venture, disposition, lease, contract or debt or equity financing that would
reasonably be expected to impair, delay or prevent Parent's or Sub's ability to
perform its obligations under this Agreement or to consummate the Merger or the
other Transactions.
Section 7.04 Employment, Compensation and Benefit Plans. (a)
From and after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, honor in accordance with their respective terms (as in effect on
the date of this Agreement), the Company's written employment, severance and
termination agreements with individual employees set forth in the Company
Disclosure Letter.
(b) With respect to any "employee benefit plan," as defined in
Section 3(3) of ERISA but without regard to Section 4(b)(4) of ERISA, maintained
by Parent or any of its Subsidiaries (including but not limited to any severance
plan), for all purposes, including determining eligibility to participate or to
receive benefits and vesting, service with the Company or any Company Subsidiary
or predecessor entity (and any other service credited by the Company under
similar severance plans), shall be treated as service with Parent or any of its
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Subsidiaries or Affiliates; provided that such service need not be recognized to
the extent that such recognition would result in any duplication of benefits.
(c) With respect to each U.S. Benefit Plan and Agreement that
is an employee welfare benefit plan, Parent shall waive, or cause to be waived,
any pre-existing condition, evidence of insurability, waiting period,
continuing-course-of-treatment, or actively-at-work requirement limitation under
any employee welfare benefit plan, as defined in Section 3(1) of ERISA,
maintained by Parent or any of its Subsidiaries or Affiliates (other than the
Surviving Corporation) in which each employee who was an employee of the Company
or a Company Subsidiary immediately prior to the Effective Time (an "AFFECTED
EMPLOYEE") (and their eligible dependents) will be eligible to participate from
and after the Effective Time, with respect to those Affected Employees (and
their eligible dependents) except, with respect to any Person, to the extent
that such requirements would have been applicable to such Person under the
comparable employee welfare benefit plan of the Company or Company Subsidiary
immediately prior to the Effective Time. Parent shall recognize, or cause to be
recognized, the dollar amount of all expenses incurred by each Affected Employee
(and his or her eligible dependents) during the calendar year in which the
Effective Time occurs for purposes of satisfying such year's deductible,
co-payment and "out-of-pocket" maximum limitations under the relevant employee
welfare benefit plans, as defined in Section 3(1) of ERISA, in which they will
be eligible to participate from and after the Effective Time.
(d) The obligations of the Surviving Corporation and Parent
under clauses (a) through (c) of this Section 7.04, shall not be terminated,
amended, repealed, revoked or modified in any manner which will adversely affect
any director, officer or other person to whom such Sections apply without the
consent of the affected director, officer or other person (it being expressly
agreed that each director, officer or other person to whom such Sections apply
shall be third-party beneficiaries of such Sections).
(e) Notwithstanding the provisions of this Section 7.04, from
and after the Effective Time and subject to the terms of any applicable
collective bargaining agreement or any employment agreement existing as of the
date hereof, the Affected Employees shall be deemed employees at will and
nothing expressed or implied herein will obligate Parent or its Subsidiaries to
provide continued employment to any Affected Employee for a specified period of
time following the Effective Time.
Section 7.05 Indemnification; Directors' and Officers'
Insurance.
(a) The certificate of incorporation and the bylaws of the
Surviving Corporation shall contain provisions with respect to indemnification,
advancement of expenses and director exculpation as are set forth in the Company
Charter and the Company Bylaws as in effect at the date hereof (to the extent
consistent with applicable Law), which provisions shall not be amended, repealed
or otherwise modified in any manner that would adversely affect the rights
thereunder of the persons who at any time prior to the Effective Time were
entitled to indemnification, advancement of expenses or exculpation under the
Company Charter or Company Bylaws in respect of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, the
Transactions), unless otherwise required by applicable Law.
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(b) From and after the Effective Time, to the fullest extent
permitted by applicable Law, Parent shall and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless, and provide advancement of
expenses to, each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, a director or officer of the
Company or any of the Company Subsidiaries (the "INDEMNIFIED Parties") against
all losses, claims, damages, liabilities, fees and expenses (including
attorneys' fees and disbursements), judgments, fines and amounts paid in
settlement of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was a director or officer of the Company or any
Company Subsidiary, and pertaining to any matter existing or occurring, or any
acts or omissions occurring, at or prior to the Effective Time, whether asserted
or claimed prior to, or at or after, the Effective Time (including matters, acts
or omissions occurring in connection with (1) the approval of this Agreement and
the consummation of the Merger and the other Transactions or (2) serving as
fiduciary under any Company Benefit Plan) to the same extent such persons are
indemnified or have the right to advancement of expenses as of the date hereof
by the Company pursuant to the Company Charter, Company Bylaws and
indemnification agreements in existence on the date hereof with any current or
former directors or officers of the Company and the Company Subsidiaries.
(c) As of the Effective Time, Parent shall cause to be
obtained, and shall pay the full lump sum premium with respect to, policies of
directors' and officers' liability insurance providing an aggregate coverage
amount of $25 million issued by the Company's current directors' and officers'
liability insurance carriers or other insurance carriers with ratings by A.M.
Best & Co. equal to or higher than the ratings of such current insurance
carriers (the "TAIL INSURANCE"). At least 10 Business Days prior to the
Effective Time, Parent shall deliver to the Company evidence reasonably
satisfactory to the Company that the Tail Insurance will be in full force and
effect as of the Effective Time. The Tail Insurance shall have terms and
conditions that are not less advantageous to the insured parties than the
directors' and officers' liability insurance currently in effect for the
Company. For a period of six (6) years after the Effective Time, Parent shall
cause to be maintained (1) the Tail Insurance and (2) a letter of credit in an
amount of $2,500,000 for the purpose of funding the trust established pursuant
to indemnification agreements in existence on the date hereof with the Company's
directors and officers. Neither Parent nor the Surviving Corporation shall take
any action to cause the Tail Insurance to be modified, terminated or cancelled
prior to the end of such six-year period after the Effective Time.
(d) Parent shall pay (as incurred) all expenses, including
reasonable fees and expenses of counsel, that an Indemnified Party may incur in
enforcing the indemnity and other obligations provided for in this Section 7.05.
(e) If Parent 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 Parent, as
the case may be, shall assume and agree to perform the obligations set forth in
this Section 7.05.
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(f) The provisions of this Section 7.05 (i) are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and representatives, (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by Law, contract or otherwise and (iii) shall survive the consummation
of the Merger.
Section 7.06 Fees and Expenses. 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;
provided that (a) the costs and expenses of printing and mailing the Proxy
Statement (excluding attorneys' and accountants' fees and expenses), the fees
and expenses of a proxy solicitor mutually acceptable to Parent and the Company
and all filing and other fees paid to the SEC in connection with the Merger,
shall be shared equally by Company and Parent and (b) if the Merger is
consummated the Surviving Corporation shall pay all expenses.
Section 7.07 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 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 by
applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 7.08 Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("TRANSFER TAXES") incurred
in connection with the Transactions shall be paid by either Sub or the Surviving
Corporation, and the Company shall cooperate with Sub and Parent in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes.
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) the Company shall have obtained the Company Stockholder
Approval;
(b) all authorizations, consents, orders or approvals of, or
declarations or filings with, and all expirations of waiting periods (and
extensions thereof) required from, any Governmental Entity under the HSR Act or
any other applicable Law of those jurisdictions set forth in Section 5.04(b) of
the Parent Disclosure Letter shall have been filed, have occurred or have been
obtained (all such permits, approvals, filings and consents and lapse of all
such waiting periods being referred to as the "REQUISITE REGULATORY APPROVALS"),
and all such Requisite Regulatory Approvals shall be in full force and effect;
and
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(c) no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition (an "INJUNCTION") preventing the consummation of
the Merger shall be in effect. There shall not be any action taken, or any law
or order enacted, entered, enforced or deemed applicable to the Merger, by any
Governmental Entity of competent jurisdiction that makes the consummation of the
Merger illegal.
Section 8.02 Further Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is further subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Parent and Sub shall have each performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing Date;
(b) the representations and warranties of Parent and Sub in
this Agreement that are qualified as to materiality shall be true and correct
and any of those not so qualified shall be true and correct in all material
respects, as of 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), other than for such failures to be
true and correct that, individually and in the aggregate, have not had and could
not reasonably be expected to have a Parent Material Adverse Effect; and
(c) the Company shall have received a certificate, dated as of
the Closing Date, executed on behalf of Parent by the Chief Executive Officer
and Chief Financial Officer of Parent stating that the conditions set forth in
paragraphs (a) and (b) above have been satisfied.
Section 8.03 Further Conditions to Obligation of Parent and
Sub. The obligation of Parent and Sub to effect the Merger is further subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) the Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date;
(b) the representations and warranties of the Company in this
Agreement that are qualified as to materiality shall be true and correct and any
of those not so qualified shall be true and correct in all material respects, as
of 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), other than for such failures to be true and correct that,
individually and in the aggregate, have not had and could not reasonably be
expected to have a Company Material Adverse Effect;
(c) there shall not be pending any suit, action or proceeding
by any Governmental Entity against Parent, Sub, the Company or any Company
Subsidiary relating to the Merger or the other Transactions seeking to prohibit
or impose, and no Requisite Regulatory Approval shall be conditioned upon or
seek to impose, any material limitations on Parent's or Sub's ownership or
operation (or that of any of their respective Subsidiaries or affiliates) of all
-40-
or a material portion of their or the Company's and the Company's Subsidiaries'
business or assets, taken as a whole, or to compel Parent or Sub or their
respective Subsidiaries and affiliates to dispose of, sell, license or hold
separate any material portion of the business or assets of Parent or the Company
and their respective Subsidiaries; and
(d) Parent shall have received a certificate, dated as of the
Closing Date, executed on behalf of the Company by the Chief Executive Officer
and the Chief Financial Officer of the Company stating that the conditions set
forth in paragraphs (a) and (b) above have been satisfied.
ARTICLE IX
Termination, Amendment and Waiver
---------------------------------
Section 9.01 Termination. This Agreement may be terminated at
any time prior to the Effective Time, by action taken or authorized by the Board
of Directors of the terminating party or parties, whether before or after
receipt of Company Stockholder Approval:
(a) by mutual consent of Parent, Sub and the Company in a
written instrument;
(b) by either Parent or the Company if the Company Stockholder
Approval shall not have been obtained upon a vote taken thereon at a duly
convened Company Stockholder Meeting;
(c) by either Parent or the Company if a Governmental Entity
of competent jurisdiction that must grant a Requisite Regulatory Approval has
denied approval of the Merger and such denial has become final and
nonappealable; or any Governmental Entity of competent jurisdiction shall have
issued 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;
provided that the right to terminate this Agreement under this Section 9.01(c)
shall not be available to any party whose failure to comply with Section 7.03 or
any other provision of this Agreement has been the cause of, or resulted in,
such action;
(d) by Parent if:
(i) the Company breaches or fails to perform in any
material respect any of its representations, warranties or covenants set forth
in this Agreement, which
breach or failure to perform (A) would give rise, if occurring or continuing on
the Closing Date, to the failure of one or more of the conditions set forth in
Sections 8.03(a) or 8.03(b) and (B) cannot be or has not been cured within 30
days after the date written notice of such breach or failure to perform is given
by Parent to the Company; provided that Parent and Sub are not then in material
breach of their obligations under this Agreement and provided further that any
right of Parent under this Agreement to terminate this Agreement due to a
reference to one or more "material weaknesses" in the Management Report or in
the attestation report by the Company's independent registered public accounting
firm with respect to the Management Report must be exercised within 10 Business
Days after Parent receives written notice from the Company of such material
-41-
weaknesses and thereafter Parent shall not be entitled to terminate this
Agreement as a result of such matter;
(ii) the Board of Directors of the Company has withdrawn
or amended in any manner adverse to Parent or Sub its recommendation and
approval of the Merger in accordance with Section 4.04(b) or approves or
recommends any Superior Company Proposal; or
(iii) the Merger has not been consummated on or before
December 15, 2005 (the "OUTSIDE DATE") (unless the failure of the Merger to have
been consummated results from Parent or Sub breaching in any material respect
any representation, warranty, covenant or agreement contained in this
Agreement);
(e) by the Company if:
(i) Parent or Sub breaches or fails to perform in any
material respect any of its representations, warranties or covenants set forth
in this Agreement, which breach or failure to perform (A) would give rise, if
occurring or continuing on the Closing Date, to the failure of one or more of
the conditions set forth Sections 8.02(a) or 8.02(b) and (B) cannot be or has
not been cured within 30 days after the date written notice of such breach or
failure to perform is given by the Company to Parent (or one Business Day after
the date such notice is given in the case of any breach of the representations
and warranties of Parent and Sub set forth in Section 5.07(a) or any failure by
Parent or Sub to perform their obligations under Section 3.02(a) to provide the
Paying Agent with the Exchange Fund); provided that the Company is not then in
material breach of its obligations under this Agreement; or
(ii) the Merger has not been consummated on or before the
Outside Date (unless the failure of the Merger to have been consummated results
from the Company breaching in any material respect any representation, warranty,
covenant or agreement contained in this Agreement); or
(f) by the Company in the event its Board determines in
accordance with Section 6.02 that there is a Superior Company Proposal.
Section 9.02 Effect of Termination. (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 or
their officers, directors, stockholders, affiliates and agents; provided that
the last sentence of Section 7.02, Section 7.06, this Section 9.02 and Article X
shall survive such termination and provided further that each party shall be
entitled to all remedies available under this Agreement and applicable Law to
the extent that such termination results from the willful and material breach by
the other party or parties of any representation, warranty or covenant set forth
in this Agreement.
-42-
(b) If:
(i) Parent terminates this Agreement pursuant to Section
9.01(d)(ii);
(ii) the Board of Directors of the Company withdraws or
amends in any manner adverse to Parent or Sub its recommendation and approval of
the Merger in accordance with Section 4.04(b), or the Board of Directors of the
Company approves or recommends any Superior Company Proposal, and in either case
the Company Stockholder Approval is not obtained upon a vote taken thereon at a
duly convened Company Stockholder Meeting; or
(iii) the Company terminates this Agreement pursuant to
Section 9.01(f);
then the Company will pay to Parent, within three
Business Days following the delivery of notice of such termination (in the case
of clauses (i) and (iii) above) or the occurrence of such event (in the case of
clause (ii) above), a termination fee equal to $12,000,000 (the "COMPANY
TERMINATION FEE"), payable by wire transfer of immediately available funds to an
account designated by Parent.
(c) If Parent terminates this Agreement pursuant to Section
9.01(d)(i) with respect to any breach of the Company's representations and
warranties, solely as such representations and warranties are made as of the
date of this Agreement, or with respect to the failure by the Company to perform
any covenant set forth in this Agreement, then the Company will pay to Parent,
within three Business Days following the delivery of notice of such termination,
an amount equal to the reasonable fees and expenses (including reasonable
attorneys' fees and expenses) incurred by Parent and Sub in connection with this
Agreement, the Merger or the other Transactions, the amount of which shall be
set forth and reasonably documented in the notice of such termination (the
"EXPENSE REIMBURSEMENT"), payable by wire transfer of immediately available
funds to an account designated by Parent; provided that the aggregate amount of
the Expense Reimbursement shall not exceed $3,000,000.
(d) Subject to Section 9.02(e), if as of the Outside Date the
conditions set forth in Sections 8.03(a) and 8.03(b) have been satisfied (and
the Company has delivered to Parent the certificate described in Section 8.03(d)
confirming the satisfaction of such conditions as of the Outside Date) and
either:
(i) the Company, on or after the Outside Date, terminates
this Agreement pursuant to Section 9.01(e)(ii) as a result of the failure of the
conditions set forth in Section 8.01(b) to have been satisfied; or
(ii) Parent, on or after the Outside Date, terminates
this Agreement pursuant to Section 9.01(d)(iii) as a result of the failure of
the conditions set forth in Section 8.01(b) or Section 8.03(c) to have been
satisfied;
then Parent will pay to the Company, within three
Business Days following the delivery of notice of such termination, a
-43-
termination fee equal to $5,000,000 (the "PARENT TERMINATION FEE"), payable by
wire transfer of immediately available funds to an account designated by the
Company.
(e) Notwithstanding Section 9.02(d)(i), if Parent, at any time
prior to the termination of this Agreement by the Company, delivers written
notice to the Company of Parent's election, in its sole and absolute discretion,
to waive satisfaction of the conditions set forth in Section 8.01(b) and Section
8.03(c) and proceed with the Closing, then the Company shall continue to be
entitled to terminate this Agreement on or after the Outside Date pursuant to
Section 9.01(e)(ii) as a result of the failure of the conditions set forth in
Section 8.01(b) to have been satisfied, but the Company shall not be entitled to
receive the Parent Termination Fee if it exercises such termination right.
(f) The parties acknowledge that the agreements contained in
this Section 9.02 are an integral part of the Transactions and that, without
these agreements, the parties would not enter into this Agreement. Each party
accordingly agrees that in the event it fails to pay any amount when due under
this Section 9.02, it shall in addition to the payment of such amount also pay
to the other party all of the costs and expenses (including reasonable
attorneys' fees and expenses) incurred in the enforcement of the other party's
rights under this Section 9.02, together with interest on such amount at a rate
per annum equal to the prime rate as quoted from time to time by JPMorgan Chase
Bank, N.A., plus three percentage points, payable from the date upon which such
payment was due, to and including the date of payment. Provided that a party is
not in breach of its obligations under this Section 9.02, each of the parties
hereto acknowledges that (i) all amounts payable under this Section 9.02, if
any, shall constitute liquidated damages in lieu of any actual damages for
termination of this Agreement and (ii) that upon the payment of the amounts
payable under this Section 9.02, if any, the paying party and its Affiliates and
Representatives shall be relieved from any and all liabilities for any breach or
termination of this Agreement.
Section 9.03 Amendment. This Agreement may be amended by the
parties at any time whether before or after receipt of the Company Stockholder
Approval and prior to the Effective Time; provided that after receipt of the
Company Stockholder Approval, there shall be made no amendment that by Law
requires further approval by the stockholders of the Company without the further
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
Section 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.
-44-
ARTICLE X
General Provisions
------------------
Section 10.01 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement (other than the covenants contained in Section 5.08, the last
sentence of Section 7.02 and in Sections 7.04, 7.05, 7.06, 9.02 and this Article
X) or in any instrument delivered pursuant to this Agreement, including any
rights arising out of the breach of such representations, warranties, covenants
and agreements, shall survive the Effective Time. This Section 10.01 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
Section 10.02 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, or by facsimile, upon confirmation of receipt,
(b) on the first Business Day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the fifth Business Day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice.
(a) if to Parent or Sub, to
Xxxxxxx Denver, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
with a copy to:
Xxxxx & XxXxxxxx LLP
One Prudential Plaza, Suite 3500
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
(b) if to the Company, to
Xxxxxx Industries Inc.
Xxxxx 000
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
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with a copy to:
XxXxxxxxx Will & Xxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx X. Xxxxxxxx
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 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. Each
party hereto has participated in the drafting of this Agreement, which each
party acknowledges and agrees is the result of extensive negotiations among the
parties. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available by the party to whom such
information is to be made available. The phrases "herein," "hereof," "hereunder"
and words of similar import shall be deemed to refer to this Agreement as a
whole, including the Exhibits and Schedules hereto, and not to any particular
provision of this Agreement. The word "or" shall be inclusive and not exclusive.
Any pronoun shall include the corresponding masculine, feminine and neuter
forms. The phrases "known" or "knowledge" mean, with respect to the Company and
the Company Subsidiaries, the actual knowledge of the officers of the Company
and the Company Subsidiaries identified on Section 10.03 of the Company
Disclosure Letter. The Company Disclosure Letter shall be organized in numbered
sections corresponding to the sections of this Agreement. Any matter disclosed
in any section of the Company Disclosure Letter shall be deemed disclosed for
all purposes and all sections of the Company Disclosure Letter provided that the
relevance of such matter to such other sections would be reasonably apparent to
a reasonable Person.
Section 10.04 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law, or
public policy, all other terms, 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 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 the Transactions are fulfilled to the fullest 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.
-46-
Section 10.06 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, taken together with the Company Disclosure Letter, the
Confidentiality Agreement, any other written agreements executed by the parties
on or after the date of this Agreement and the certificates and documents
contemplated by this Agreement, (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the Merger and the other Transactions and (b) except
for the provisions of Sections 7.04 and 7.05, 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 Delaware,
regardless of the Laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
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. 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; Jurisdiction; WAIVER OF JURY TRIAL.
The parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of Delaware or in any
Delaware state court, 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 Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this 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 this Agreement or any Transaction in any court other than any
Federal court sitting in the State of Delaware or any Delaware state court and
(d) waives any right to trial by jury with respect to any action related to or
arising out of this Agreement or any Transaction.
[SIGNATURE PAGE FOLLOWS]
-47-
IN WITNESS WHEREOF, Parent, Sub and the Company have duly
executed this Agreement, all as of the date first written above.
XXXXXXX DENVER, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer
PT ACQUISITION CORPORATION
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President and Secretary
XXXXXX INDUSTRIES INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
-48-
EXHIBIT A
---------
RESTATED CERTIFICATE OF INCORPORATION
OF
XXXXXX INDUSTRIES INC.
================================================================================
The original Certificate of Incorporation of Xxxxxx Industries Inc. was
filed with the Secretary of State of Delaware on December 28, 1928, under the
name The Electric Sprayit Company. The following Restated Certificate of
Incorporation restates, integrates and further amends the provisions of the
corporation's Certificate of Incorporation, and all amendments thereto.
ARTICLE 1
The name of the corporation is:
Xxxxxx Industries Inc.
ARTICLE 2
---------
The address of the corporation's registered office in the State of
Delaware is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, in the City of Wilmington, County
of New Castle. The name of the corporation's registered agent at such address is
Corporation Service Company.
ARTICLE 3
---------
The nature of the business or the objects or purposes to be conducted
or promoted by the corporation are to engage in any capacity in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware as now in force or as hereafter amended
and to possess, exercise and enjoy all the powers, rights and privileges granted
by the General Corporation Law of the State of Delaware, together with any
lawful powers, rights and privileges incidental thereto.
ARTICLE 4
---------
The total number of shares of capital stock which the Corporation shall
have authority to issue is 10,000 shares, all of which shall be common stock
having $0.01 par value per share.
ARTICLE 5
---------
The corporation shall have perpetual existence.
-2-
ARTICLE 6
---------
In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to adopt, amend or
repeal the bylaws of the corporation; provided, however, that such authorization
shall not divest the stockholders of the power or limit the power of the
stockholders to adopt, amend or repeal the bylaws of the corporation.
ARTICLE 7
---------
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the bylaws
of the corporation. Election of directors need not be by written ballot unless
the bylaws of the corporation so provide.
ARTICLE 8
---------
The corporation shall have the power to indemnify its directors,
officers, employees or agents to the full extent permitted by the General
Corporation Law of the State of Delaware as now in force or hereafter amended.
ARTICLE 9
---------
A Director of this corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except that this Article 9 shall not eliminate or limit a
Director's liability (i) for any breach of the Director's duty of loyalty to the
corporation or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 or the Delaware General Corporation Law, or (iv) for any transaction
from which the Director derived an improper personal benefit. If the Delaware
General Corporation Law is amended after approval by the shareholders of this
Article 9 to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a Director of the
corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended from time to time.
Any repeal or modification of this Article 9 shall not increase the
personal liability of any Director of this corporation for any act or occurrence
taking place prior to such repeal or modification, or otherwise adversely affect
any right or protection of a Director of the corporation existing at the tine of
such repeal or modification.
The provisions of this Article 9 shall not be deemed to limit or
preclude indemnification of a Director by the corporation for any liability of a
Director which has not been eliminated by the provisions of this Article 9.
-3-
ARTICLE 10
----------
Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
ARTICLE 11
----------
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation in the manner now
or hereafter prescribed by the laws of the State of Delaware, and all rights and
powers conferred upon stockholders herein are granted subject to this
reservation.
