SECURITIES PURCHASE AGREEMENT
Dated as of February 5, 2000
among
Perini Corporation,
and
Xxxxx-Xxxxxx Corporation
and
O&G Industries, Inc.
and
National Union Fire Insurance Company of Pittsburgh, PA.
Table of Contents
-----------------
Page
ARTICLE I Definitions.............................................................................................1
ARTICLE II Purchase and Sale of Shares............................................................................6
SECTION 2.01 Purchase and Sale of Shares...........................................6
SECTION 2.02 Time and Place of the Closing.........................................7
SECTION 2.03 Transactions at the Closing...........................................7
ARTICLE III Representations and Warranties........................................................................7
SECTION 3.01 Representations and Warranties of the Company.........................7
SECTION 3.02 Representations and Warranties of TSC................................21
SECTION 3.03 Representations and Warranties of National Union.....................23
ARTICLE IV [Intentionally Omitted]...............................................................................26
ARTICLE V Covenants and Additional Agreements....................................................................26
SECTION 5.01 Pre-Closing Activities...............................................26
SECTION 5.02 Covenants of the Company.............................................27
SECTION 5.03 HSR..................................................................28
SECTION 5.04 [Intentionally Omitted]..............................................28
SECTION 5.05 Stockholder Approvals; Proxy Statement...............................28
SECTION 5.06 Stock Exchange Listing...............................................29
SECTION 5.07 Transaction Proposals................................................30
SECTION 5.08 Access and Information...............................................30
SECTION 5.09 Confidentiality and Publicity........................................32
SECTION 5.11 Further Assurances...................................................32
SECTION 5.12 Directors' and Officers' Indemnification and Insurance...............32
SECTION 5.13 Shareholders Agreement...............................................33
ARTICLE VI Conditions Precedent..................................................................................33
SECTION 6.01 Conditions to Each Party's Obligations...............................33
SECTION 6.02 Conditions to the Obligations of the Company.........................34
SECTION 6.03 Conditions to the Obligations of Purchasers..........................35
ARTICLE VII Termination..........................................................................................40
SECTION 7.01 Termination..........................................................40
SECTION 7.02 Effect of Termination................................................42
SECTION 7.03 Termination by One Purchaser.........................................42
ARTICLE VIII Indemnification.....................................................................................42
SECTION 8.01 Indemnification of Purchasers........................................42
SECTION 8.02 Indemnification Procedures...........................................43
SECTION 8.03 Survival of Representations, Warranties and Covenants................43
ARTICLE IX Miscellaneous.........................................................................................44
SECTION 9.01 Severability.........................................................44
SECTION 9.02 Specific Enforcement.................................................44
SECTION 9.03 Entire Agreement.....................................................44
SECTION 9.04 Counterparts.........................................................44
SECTION 9.05 Notices..............................................................44
SECTION 9.06 Amendments...........................................................46
SECTION 9.07 Successors and Assigns...............................................46
SECTION 9.08 Expenses and Remedies................................................46
SECTION 9.09 Transfer of Shares...................................................47
SECTION 9.10 Governing Law; Consent to Jurisdiction...............................48
SECTION 9.11 Third Party Beneficiaries............................................48
SECTION 9.12 Mutual Drafting......................................................48
SECTION 9.13 Further Representations..............................................48
ii
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
February 5, 2000, is entered into between Xxxxx-Xxxxxx Corporation, a California
corporation ("TSC"), O&G Industries, Inc., a Connecticut corporation ("O&G"),
and the National Union Fire Insurance Company of Pittsburgh, PA, a Pennsylvania
corporation ("National Union") and, collectively with TSC and O&G, the
"Purchasers"), and Perini Corporation, a Massachusetts corporation (the
"Company").
R E C I T A L S
---------------
WHEREAS, the Company is engaged primarily in the construction business;
and
WHEREAS, Purchasers propose to invest $40 million in the Company in
order to mitigate the continuing effects of the Company's negative net worth on
its business and financial condition; and
WHEREAS, the Company wishes to sell, and Purchasers wish to purchase
(severally but not jointly), an aggregate of 9,411,765 newly issued shares of
common stock, par value $1.00, of the Company (the "Common Stock"), each for the
consideration and upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
ARTICLE I
Definitions
-----------
The terms defined in this Article I, whenever used in this Agreement,
shall have the following meanings for all purposes of this Agreement:
1.01 "Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange
Act.
1.02 "Articles of Organization" means the Articles of Organization of the
Company as filed with the Office of the Secretary of State for the
Commonwealth of Massachusetts, as amended, restated or supplemented from
time to time.
1.03 "Balance Sheet" is defined in Section 3.01(g).
1.04 "Benefit Arrangement" means any benefit arrangement, obligation, or
practice, whether or not legally enforceable, to provide benefits (other
than merely as salary or under a Benefit Plan), as compensation for
services rendered, to present or former directors, employees, agents, or
independent contractors, including, but not limited to, employment or
consulting agreements, severance agreements or pay policies, executive
or incentive compensation programs or arrangements, sick leave, vacation
pay, plant closing benefits, salary
continuation for disability, workers' compensation, retirement, deferred
compensation, bonus, stock option or purchase, tuition reimbursement or
scholarship programs, employee discount programs, any plans subject to
Section 125 of the Code, and any plans providing benefits or payments in
the event of a change of control, change in ownership or effective
control, or sale of a substantial portion (including all or
substantially all) of the assets of any business or portion thereof, in
each case with respect to any present or former employees, directors, or
agents.
1.05 "Benefit Plan" means an employee benefit plan as defined in Section 3(3)
of ERISA, together with plans or arrangements that would be so defined
if they were not (i) otherwise exempt from ERISA by that or another
section, (ii) maintained outside the United States, or (iii)
individually negotiated or applicable to only one person.
1.06 "Board" means the Board of Directors of the Company.
1.07 "Business Day" has the meaning specified in Rule 14d-1(e)(6) of the
Exchange Act.
1.08 "By-Laws" is defined in Section 3.01(a).
1.09 "By-Law Amendment" is defined in Section 6.03(d).
1.10 "Closing" is defined in Section 2.02.
1.11 "Closing Date" is defined in Section 2.02.
1.12 "Common Stock" is defined in the third recital.
1.13 "Company" is defined in the first paragraph of this Agreement.
1.14 "Company Benefit Arrangement" means any Benefit Arrangement any Related
Employer sponsors or maintains or with respect to which any Related
Employer has or may have any current or future liability (whether
actual, contingent, with respect to any of its assets or otherwise) , in
each case with respect to any present or former service providers to any
Related Employer.
1.15 "Company Plan" means any Benefit Plan that any Related Employer
maintains or has maintained or to which any Related Employer is
obligated to make payments or has or may have any liability, in each
case with respect to any present or former employees of any Related
Employer.
1.16 "Company Intellectual Property" is defined in Section 3.01(s).
1.17 "Credit Facility" is defined in Section 6.03(g).
1.18 "Disclosure Schedule" means the Disclosure Schedule attached hereto,
which is divided by Section numbers corresponding with specificity to
the Sections hereof and discloses all matters which are inconsistent
with the representations set forth in Section 3.01.
2
1.19 "Disinterested Majority" means the affirmative vote of a majority of the
outstanding voting power of the Company's Common Stock, voting as a
single class, excluding any stockholder that is or is an Affiliate of
either (i) a Purchaser or (ii) a holder of Series B Preferred Stock that
is exchanging its shares of such stock for Common Stock as contemplated
by Section 6.03(c).
1.20 "Environmental Laws" means the laws of all Governmental Entities
relating to health or pollution or protection of the environment or
contained in any binding and enforceable regulation, code, plan, order,
decree or judgment issued, entered, promulgated or approved thereunder.
1.21 "Environmental Subsidiary" means Perini Environmental Services, Inc.
1.22 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all regulations and rules issued thereunder, or any
successor law.
1.23 "ERISA Affiliate" means any person or entity that, together with the
entity referenced and at the relevant time, would be treated as a single
employer under Code Section 414 or ERISA Section 4001 (including any
entities excluded from the definition because they are not subject to
U.S. jurisdiction) and any general partnership of which such entity is
or has been a general partner.
1.24 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.25 "Filed Company SEC Documents" is defined in Section 3.01(f).
1.26 "GAAP" means United States generally accepted accounting principles in
effect from time to time.
1.27 "Government Entity" means any foreign, federal, state, or local court or
tribunal or administrative, governmental or regulatory body, agency,
commission, division, department, public body or other authority.
1.28 "Hazardous Material" means any substance that has been designated by any
Governmental Entity or by applicable federal, state, local or other
applicable law to be radioactive, toxic, hazardous or otherwise a danger
to health or the environment, including, without limitation, PCBs,
asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource
Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and janitorial
supplies properly and safely maintained.
1.29 "HSR Act" is defined in Section 3.01(c).
1.30 "Indemnifiable Losses" means any and all direct or indirect demands,
claims, payments, obligations, actions or causes of action, assessments,
losses, liabilities, fines,
3
damages, costs or expenses paid or incurred, of any kind or character
(whether or not known or asserted before the date of this Agreement,
fixed or unfixed, conditional or unconditional, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent, or otherwise). Indemnifiable Losses shall include penalties,
interest, or any amount payable to a third party as a result of such
Indemnifiable Losses. Indemnifiable Losses shall include legal,
accounting, expert and other expenses reasonably incurred in connection
with investigating or defending any of the foregoing, whether or not
resulting in any liability, and all amounts paid in settlement of claims
or actions in accordance with Article VIII.
1.31 "Indemnification Agreements" is defined in Section 5.12(b).
1.32 "Intellectual Property" means trademarks, trade names, trade dress,
service marks, copyrights, domain names, and similar rights (including
registrations and applications to register or renew the registration of
any of the foregoing), patents and patent applications, trade secrets,
ideas, inventions, improvements, practices, processes, formulas,
designs, know-how, confidential business or technical information,
computer software, firmware, data and documentation, licenses of or
agreements relating to any of the foregoing, rights of privacy and
publicity, moral rights, and any other similar intellectual property
rights and tangible embodiments of any of the foregoing (in any medium
including electronic media).
1.33 "Issuance" is defined in Section 5.05.
1.34 "Knowledge of the Company" means to the actual knowledge of (i) any
executive officer or director of the Company or any Subsidiary of the
Company or (ii) Xxxxxx Band, Xxxxxx X. Tutor, Xxxxxx X. Xxxx, Xxxxxx X.
Xxxxxxxxxx, Xxxxx X. Xxxx, Xxxxxxx X. Xxxxxx or Xxxxx X. Xxxxxxx.
1.35 "Lien" is defined in Section 3.01(c).
1.36 "Management Agreement Amendment" is defined in Section 6.01(d).
1.37 "Material Adverse Effect" on or with respect to a Person (or group of
entities taken as a whole) means any state of facts, event or effect
that individually (or in aggregate with all other states of facts,
events and effects) has had, or would reasonably be expected to have, a
material adverse change in the business, properties, prospects, results
of operations or financial condition of such Person (or, if applicable,
of such group of Persons taken as a whole), or on the ability of such
entity (or group of Persons) to consummate the transactions contemplated
hereby or to perform its obligations under the Transaction Documents to
which it is or will be a party or by which it or its properties or
assets is or will be bound.
1.38 "Multiemployer Plan" means any plan described in ERISA Section 3(37).
1.39 "Outside Date" is defined in Section 7.01(b)(i).
1.40 "Owned Intellectual Property" is defined in Section 3.01(s).
4
1.41 "Pension Plan" means any plan subject to Code Section 412 or ERISA
Section 302 or Title IV (excluding any Multiemployer Plan) or any
comparable benefit plan not covered by ERISA.
1.42 "Permit" is defined in Section 3.01(c)(i).
1.43 "Permitted Liens" means those Liens (i) securing debt (including,
without limitation, the Credit Facility) that is reflected on the
Balance Sheet or the notes thereto, (ii) referred to in Section 3.01(g)
of the Disclosure Statement, (iii) for Taxes not yet due or payable or
being contested in good faith and for which adequate reserves have been
established in accordance with GAAP, (iv) that constitute mechanics',
carriers', workmens' or like liens, liens arising under original
purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course, or (v) Liens incurred
or deposits made in the ordinary course of business consistent with past
practice in connection with workers' compensation, unemployment
insurance and social security, retirement and other legislation and in
the case of Liens described in clauses (ii), (iii), (iv) or (v) that
would not have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
1.44 "Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, limited liability company, an
unincorporated organization, a Government Entity or any other
organization or entity.
1.45 "Proxy Statement" is defined in Section 5.05.
1.46 "Purchase Price" is defined in Section 2.01.
1.47 "Purchasers" is defined in the first paragraph of this Agreement.
1.48 "Qualified Plan" means any Company Plan intended to meet the
requirements of Section 401(a) of the Code, including any previously
terminated plan.
1.49 "Registration Rights Agreement" is defined in Section 6.02(c)(i).
1.50 "Related Employer" means the Company and every ERISA Affiliate.
1.51 "Rights Agreement" means that certain Shareholder Rights Agreement by
and between the Company and State Street Bank and Trust Company, dated
as of September 23, 1988, as amended, restated and supplemented from
time to time.
1.52 "SEC" means the Securities and Exchange Commission.
1.53 "Securities Act" means the Securities Act of 1933, as amended.
1.54 "Shareholders Agreement" is defined in Section 6.02(c)(ii).
1.55 "Shares" means the shares of Common Stock purchased pursuant to this
Agreement.
5
1.56 "Stockholder Approvals" is defined in Section 5.05.
1.57 "Stockholder Meeting" is defined in Section 5.05.
1.58 "Stockholder Meeting Proposals" is defined in Section 5.05.
1.59 "Stock Purchase Warrants" is defined in Section 3.01(d).
1.60 "Subsidiary" means, with respect to the Company, any corporation,
limited or general partnership, joint venture, association, limited
liability company, joint stock company, trust, unincorporated
organization, or other entity analogous to any of the foregoing of which
a majority of the equity ownership (whether voting stock or comparable
interest) is, at the time, owned directly or indirectly by the Company.
Subsidiary also means, with respect to the Company, any such entity of
which a minority of the equity ownership is, at the time, owned directly
or indirectly by the Company; provided, however, that, in the case of
such minority-owned entities, any representation or warranty that is not
already qualified to the Company's Knowledge shall be deemed to be so
qualified.
1.61 "Superior Transaction Proposal" is defined in Section 7.01(d).
1.62 "Transaction Documents" means this Agreement, the Shareholders
Agreement, the Registration Rights Agreement, the By-Law Amendment, and
the amendment to the Rights Agreement.
1.63 "Voting Security" means at any time shares of any class of capital stock
of the Company which are then entitled to vote generally in the election
of directors.
1.64 "Year 2000 Compatible" (and variations thereof) means, with respect to
any computer system, that such Computer System (a) records, stores,
processes and provides true and accurate dates and calculations for
dates and spans of dates, (b) is and will be able to operate on a basis
comparable to its current operation during and after calendar year 2000,
including, but not limited to, leap years, and (c) shall not end
abnormally or provide invalid or incorrect results as a result of date
data which represents or references (or fails to represent or reference)
different centuries or more than one century.
ARTICLE II
Purchase and Sale of Shares
---------------------------
SECTION 2.01 Purchase and Sale of Shares. Upon the terms and subject to
the conditions set forth herein, the Company agrees to sell to Purchasers and
Purchasers agree (severally and not jointly) to purchase from the Company
9,411,765 shares of Common Stock for an aggregate purchase price of $40 million
(the "Purchase Price"). Each Purchaser shall purchase such number of Shares as
is set forth adjacent to its name on Exhibit 2.01 hereto; provided, however,
that Purchasers shall be entitled to amend Exhibit 2.01 (i) to change the number
of shares each of them is purchasing in their sole, joint discretion, so long as
the number
6
of Shares to be purchased equals 9,411,765 and (ii) to reflect any
assignment permitted under Section 9.07.
SECTION 2.02 Time and Place of the Closing. The closing (the "Closing")
shall take place at the offices of Xxxxxxx, Procter & Xxxx, Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, at 10:00 a.m. Boston time, on the third Business
Day following the first date on which the conditions to Closing (other than the
conditions which may only be satisfied at Closing) set forth in Article VI have
first been satisfied or waived, or at such other place, time and date as the
parties may agree. The "Closing Date" shall be the date the Closing occurs, and
shall be effective as of 12:01 a.m. on the Closing Date, unless another date is
agreed to in writing by the Company and Purchasers.
SECTION 2.03 Transactions at the Closing. At the Closing, subject to the
terms and conditions of this Agreement, (a) the Company shall issue and sell to
Purchasers and Purchasers shall purchase the Shares; (b) the Company and the
Purchasers shall enter into the Shareholders Agreement; and (c) the Company and
Purchasers shall enter into the Registration Rights Agreement.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01 Representations and Warranties of the Company. The Company
hereby represents and warrants to Purchasers, except as set forth on the
Disclosure Schedule or as disclosed in the Filed Company SEC documents, as
follows:
(a) Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts. The Company is duly qualified or licensed
and, if applicable, is in good standing as a foreign corporation, in
each jurisdiction in which the properties owned, leased or operated, or
the business conducted, by it require such qualification or licensing,
except for any such failure so to qualify or be in good standing which
would not reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole. The Company has the
requisite power and authority to carry on its business as it is now
being or is currently proposed to be conducted. The Company has
heretofore made available to Purchasers complete and correct copies of
the Articles of Organization and the Amended and Restated By-laws of the
Company, dated as of January 17, 1997 (the "By-Laws"), in each case as
amended, restated and supplemented.
(b) Corporate Authority. Subject to obtaining the Stockholders
Approvals, each of the Company and its Subsidiaries has (or will have at
the time of such act) the requisite corporate or other power and
authority to execute, deliver and perform each Transaction Document to
which it is or will be a party and to consummate the transactions
contemplated thereby. The execution, delivery and performance of each
Transaction Document by the Company and the consummation by the Company
of the transactions contemplated hereby
7
and thereby have been duly authorized (or will have been duly authorized
at the time of such act) by the Board, and no other corporate
proceedings on the part of the Company are necessary to authorize any
Transaction Document or for the Company to consummate the transactions
so contemplated (other than as expressly provided in the terms of this
Agreement and, with respect to the Issuance, the Stockholder Approvals).
Each Transaction Document to which the Company is or will be a party is,
or when executed and delivered will be, a valid and binding agreement of
such party, enforceable against the Company in accordance with the terms
thereof, assuming that each Transaction Document to which the Company is
a party is a valid and binding agreement of the Purchasers (as
applicable).
(c) No Violations; Consents and Approvals.
(i) Assuming that the Stockholder Approvals are obtained
and that the Credit Facility is amended as contemplated in
Section 6.03(g), the execution, delivery or performance by the
Company or any of its Subsidiaries of each Transaction Document
to which any of them is or will be a party or the consummation
by the Company or any of its Subsidiaries of the transactions
contemplated thereby (A) will not result in a violation or
breach of the Articles of Organization or the By-laws, the
articles or certificate of incorporation or by-laws (or other
organizational documents) of any of the Subsidiaries and (B)
subject to the governmental filings and other matters referred
to in clause (ii) below, will not result in a violation or
breach of (or give rise to any right of termination, revocation,
cancellation or acceleration under or increased payments under),
or constitute a default (with or without due notice or lapse of
time or both) under, or result in the creation of any mortgage,
lien, charge, security interest or encumbrance of any kind (a
"Lien"), other than a Permitted Lien, upon any of the properties
or assets of the Company and its Subsidiaries under (1) any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, contract, agreement, lease, license, obligation,
instrument, offer, commitment, understanding or other
arrangement (each a "Contract") or of any license, waiver,
exemption, order, franchise, permit or concession (each a
"Permit") to which the Company or any Subsidiary is a party or
by which any of their properties or assets may be bound, or (2)
any judgment, order, decree, statute, law, regulation or rule
applicable to the Company or any Subsidiary.
(ii) Except for consents, approvals, orders,
authorizations, registrations, declarations or filings as may be
required under, and other applicable requirements of, the
Securities Act, the Exchange Act, and the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and filings under state securities or "blue sky" laws, and as
required by the American Stock Exchange, no consent, approval,
order or authorization of, or registration, declaration or
filing with, any government or any court, administrative agency
or commission or other governmental authority or agency,
federal, state or local or foreign (a "Governmental Entity"), is
required with respect to the Company or any of its Subsidiaries
in connection with the execution, delivery or
8
performance by the Company and any Subsidiary of each
Transaction Document to which it is or will be a party or the
consummation by the Company and its Subsidiaries of the
transactions contemplated hereby and thereby (except where the
failure to obtain such consents, approvals, orders or
authorizations, or to make such registrations, declarations,
filings or agreements would not have a Material Adverse Effect
on the Company and the Subsidiaries, taken as a whole).
(d) Capital Stock. The authorized capital stock of the Company
consists of (i) 15,000,000 shares of Common Stock, par value $1.00 per
share, of which an aggregate of 5,682,287 shares of Common Stock were
issued and outstanding as of the close of business on January 14, 2000
and of which 4,135,094 shares of Common Stock were reserved for issuance
upon the conversion of the Series B Preferred Stock as of the close of
business on January 14, 2000, and (ii) 1,000,000 shares of preferred
stock, $1.00 par value per share, of which (1) 100,000 shares of $21.25
Convertible Exchangeable Preferred Stock (the "$21.25 Preferred Stock")
have been designated and 99,990 shares of which are issued and
outstanding as of the close of business on January 14, 2000; (2) 200,000
shares of Series A Junior Participating Preferred Stock have been
designated and none of which are issued or outstanding, as of the close
of business on January 14, 2000; and (3) 500,000 shares of Series B
Cumulative Convertible Preferred Stock (the "Series B Preferred Stock")
have been designated and 200,184 of which are issued and outstanding, as
of the close of business on January 14, 2000. As of the close of
business on January 14, 2000, there were outstanding under the Company's
1982 Stock Option Plan and certain other Options granted on January 17,
1997, January 19, 1998, December 10, 1998 and January 4, 1999
(collectively, the "Company Stock Plans") options to acquire an
aggregate of 696,500 shares of Common Stock (subject to adjustment on
the terms set forth therein). As of the close of business on January 14,
2000, the Company had no shares of Common Stock reserved for issuance,
other than 916,610 shares of Common Stock reserved for issuance upon
exercise of outstanding stock options issued pursuant to the Company
Stock Plans, 662,186 shares reserved for issuance upon the conversion of
the $21.25 Preferred Stock, 4,135,094 shares reserved for issuance upon
the conversion of the Series B Preferred Stock, and 420,000 shares
reserved for issuance upon exercise of stock purchase warrants (the
"Stock Purchase Warrants"). As of the close of business on January 14,
2000, there were outstanding under the Company Stock Plans no shares of
restricted stock and no shares of Common Stock reserved for issuance of
restricted stock. All of the outstanding shares of Common Stock, $21.25
Preferred Stock and Series B Preferred Stock have been duly authorized
and validly issued, and are fully paid and nonassessable. There are no
preemptive or similar rights on the part of any holders of any class of
securities of the Company or of any of its Subsidiaries. Except for the
Common Stock, the $21.25 Preferred Stock, the Series B Preferred Stock
and the Stock Purchase Warrants, as set forth above, the Company has
outstanding no bonds, debentures, notes or other obligations or
securities the holders of which have the right to vote (or are
convertible or exchangeable into or exercisable for securities having
the right to vote) with the stockholders of the Company on any matter.
Except as set forth above and in the Rights Agreement, there are no
securities convertible into or exchangeable for, or options, warrants,
calls, subscriptions, rights, contracts, commitments, arrangements or
understandings of any kind to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries contingently or otherwise to issue,
deliver or sell, or cause to be issued,
9
delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any of its Subsidiaries. Except for the
Rights Agreement, there are no outstanding Contracts of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or of any of its Subsidiaries.
Except for shares of Series B Preferred Stock and shares to be issued in
connection with this Agreement, all securities of the Company have been
registered under the Securities Act and applicable state securities and
blue sky law, or have been issued in reliance on an exemption therefrom.
Since January 14, 2000, the Company has not redeemed or otherwise
acquired any shares of its capital stock or issued any capital stock
(except upon exercise of options issued or agreed to be issued prior to
the date hereof under a Company Stock Plan and for payment of dividends
to the holders of Series B Preferred Stock) or any option, warrant or
right relating thereto.
(e) Subsidiaries. Exhibit 21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 as filed with the SEC
(the "Annual Report") is a true, accurate and correct statement of all
of the information required to be set forth in Exhibit 21 by the
regulations of the SEC as of the date of such report and as of the date
of this Agreement. Each Subsidiary has been duly incorporated or
organized and is validly existing as a corporation or other legal entity
in good standing under the laws of the jurisdiction of its incorporation
or formation, has the corporate or other power and authority to own,
lease and operate its assets and properties and to conduct its business
as described in the Filed Company SEC Documents and as currently owned
or leased and conducted and is duly qualified to transact business as a
foreign corporation or other legal entity and is in good standing (if
applicable) in each jurisdiction in which the conduct of its business or
its ownership, leasing or operation of assets or property requires such
qualification, other than any failure to be so qualified or in good
standing as would not reasonably be expected to have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole. All of the
outstanding capital stock of each Subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and all capital
stock of Subsidiaries owned by the Company, directly or through
Subsidiaries (other than directors' qualifying shares), are free and
clear of any Lien or restriction upon voting or transfer of any kind
(other than the pledge of all of the capital stock of the Subsidiaries
pursuant to the Credit Facility and such transfer restrictions as may
exist under federal and state securities laws), and there are no rights
granted to or in favor of any third party (whether acting in an
individual, fiduciary or other capacity) other than the Company to
acquire any such capital stock, any additional capital stock or any
other securities of any Subsidiary.
(f) SEC Filings. The Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by
it with the SEC under the Securities Act and the Exchange Act since
January 1, 1993 and up to the date hereof and it will file all such
documents required to be filed before the Closing (the "Filed Company
SEC Documents"). As of its filing date, each Filed Company SEC Document
filed, as amended or supplemented, if applicable, (i) complied in all
respects with the applicable requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations thereunder
and (ii) did not, at the time it was filed, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
10
(g) Financial Statements. Each of the consolidated financial
statements (including, in each case, any related notes and schedules)
contained or to be contained in the Filed Company SEC Documents (i)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by the SEC on Form 10-Q under the
Exchange Act) and (iii) fairly presented the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
thereof and the consolidated results of its operations, stockholders'
equity and cash flows, in each case for the respective periods
indicated, consistent with the books and records of the Company and its
Subsidiaries, except that the unaudited interim financial statements are
subject to normal year-end adjustments which are not expected to be
material in amount. The unaudited balance sheet of the Company as of
September 30, 1999 is referred to herein as the "Balance Sheet."
(h) Undisclosed Liabilities. Except (i) as disclosed in the
Filed Company SEC Documents or in any Section of the Disclosure
Schedule, and, in either case, reserved for in the Balance Sheet, and
(ii) normal and recurring liabilities incurred since the date of the
Balance Sheet in the ordinary course of business consistent with prior
practices and not prohibited by the Transaction Documents, the Company
and its Subsidiaries do not have any liabilities or obligations or any
nature, whether known or unknown, whether absolute, accrued, contingent
or otherwise, and whether due or to become due, which would reasonably
be expected to have a Material Adverse Effect on the Company and the
Subsidiaries, taken as a whole.
(i) Absence of Certain Events and Changes. Except as otherwise
contemplated by the Transaction Documents, since January 1, 1999, the
Company and its Subsidiaries have conducted their business in the
ordinary course, consistent with past practices, and there has not been
any event, change or development which would reasonably be expected to
have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
(j) Compliance with Applicable Laws. Each of the Company and its
Subsidiaries is in compliance with all statutes, laws, regulations,
rules, judgments, orders and decrees of all Governmental Entities
applicable to it, and neither the Company nor any of the Subsidiaries
has received any notice alleging noncompliance except, with reference to
all the foregoing, where the failure to be in compliance would not
reasonably be expected to have a Material Adverse Effect on the Company
and its Subsidiaries, taken as a whole. Each of the Company and its
Subsidiaries has all Permits that are required in order to permit it to
carry on its business as it is presently conducted, except where the
failure to have such Permits would not reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole. All such Permits are in full force and effect and the Company and
its Subsidiaries are in compliance with the terms of such Permits,
except where the failure to be in full force and effect or in compliance
would not reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole. This Section 3.01(j)
does not relate to employee benefits matters (for which Section 3.01(o)
is applicable), environmental
11
matters (for which Section 3.01(p) is applicable) or tax matters (for
which Section 3.01(n) is applicable).
(k) Title to Assets. The Company and the Subsidiaries have title
to all material properties (real and personal) owned by the Company and
the Subsidiaries which are necessary for the conduct of the business of
the Company and the Subsidiaries as described in the Filed Company SEC
Documents and as currently conducted, free and clear of any Lien that
would reasonably be expected to have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole. To the Company's
Knowledge, all material properties held under lease by the Company or
the Subsidiaries are held under valid, subsisting and enforceable
leases. This Section 3.01(k) does not relate to Intellectual Property
(for which Section 3.01(s) is applicable).
(l) Litigation. There are no civil, criminal or administrative
actions, suits or proceedings pending or, to the Knowledge of the
Company, threatened, against the Company or any of its Subsidiaries
that, if adversely determined, would reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole. There are no outstanding judgments, orders, decrees, or
injunctions of any Governmental Entity against the Company or any of its
Subsidiaries that, would be reasonably expected to have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole.
(m) Contracts. All of the Company's Contracts that are required
to be described in the Filed Company SEC Documents or to be filed as
exhibits thereto are described in the Filed Company SEC Documents or
filed as exhibits thereto and are legal, valid, binding and in full
force and effect except to the extent that any failure to be enforceable
would not reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole. There does not exist
under any Contract any violation, breach or event of default, or event
or condition that, after notice or lapse of time or both, would
constitute a violation, breach or event of default thereunder, on the
part of the Company or any of the Subsidiaries or, to the Knowledge of
the Company, any other Person, other than such violations, breaches or
events of default as would not reasonably be expected to have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole.
The enforceability of all Contracts will not be affected in any manner
by the execution, delivery or performance of any of the Transaction
Documents or the consummation of the transactions contemplated thereby,
and no Contract contains any change in control or other terms or
conditions that will become applicable or inapplicable as a result of
the consummation of the transactions contemplated hereby or thereby
except for such effects as would not reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole.
(n) Taxes.
(i) (A) All Tax Returns required to be filed by or on
behalf of each of the Company and the Subsidiaries have been
filed; (B) all such Tax Returns filed are complete and accurate
in all material respects, and all Taxes (whether or not shown to
be due on such Tax Returns) have been paid; (C) neither the
Company nor any of the Subsidiaries is currently the beneficiary
of any
12
extension of time within which to file any such Tax Return; (D)
no written claim (other than a claim that has been finally
settled) has been made by a taxing authority that the Company or
any of the Subsidiaries is subject to an obligation to file Tax
Returns or to pay or collect Taxes imposed by any jurisdiction
in which such entity does not file Tax Returns or pay or collect
Taxes; and (E) all material assessments for Taxes due with
respect to completed and settled examinations or concluded
litigation have been paid. As used in this Agreement, "Taxes"
shall include all federal, state, local and foreign income,
franchise, property, sales, excise and other taxes, tariffs or
governmental charges of any nature whatsoever, including
interest and penalties, and additions thereto; and "Tax Returns"
shall mean all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and
information returns relating to Taxes.
(ii) The Company and each of the Subsidiaries has duly
and timely withheld all Taxes required to be withheld in
connection with its business and assets, and such withheld Taxes
have been either duly and timely paid to the proper governmental
authorities or properly set aside in accounts for such purpose.
(iii) (A) Neither the Company nor any of the
Subsidiaries is a party to or bound by or has any obligation
under any Tax allocation, sharing, indemnification or similar
agreement or arrangement; and (B) neither the Company nor any of
the Subsidiaries is or has been at any time a member of any
group of companies filing a consolidated, combined or unitary
income tax return.
(iv) (A) All taxable periods of the Company and each of
the Subsidiaries ending on or before December 31, 1996 are
closed or no longer subject to audit; (B) neither the Company
nor any the Subsidiaries is currently under audit by any taxing
authority; (C) no waiver of the statute of limitations is in
effect with respect to any taxable year of the Company or any of
the Subsidiaries; and (D) correct and complete copies of all
income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by the Company or any
Subsidiary since January 1, 1993 have been made available to the
Purchasers for their review.
(o) Employee Benefit Plans and Related Matters; ERISA.
(i) Schedule 3.01(o) contains a complete and accurate
list of all Company Plans and Company Benefit Arrangements.
Schedule 3.01(o) specifically identifies all Company Plans (if
any) that are Qualified Plans.
(ii) With respect, as applicable, to Benefit Plans and
Benefit Arrangements:
(A) the Company has made available true,
correct, and complete copies of the following documents
with respect to all Company Plans
13
and Company Benefit Arrangements to the Purchasers: (1)
all current plan or arrangement documents, including but
not limited to trust agreements, insurance policies,
service agreements and formal and informal amendments to
each; (2) the most recent Forms 5500 or 5500C/R and any
attached financial statements and related actuarial
reports, and those for the prior three years; (3) the
last Internal Revenue Service ("IRS") determination
letter, the last IRS determination letter that covered
the qualification of the entire plan (if different), and
the materials submitted to obtain those letters; (4)
summary plan descriptions and summaries of material
modifications, and any prospectuses that describe the
Company Benefit Arrangements or Company Plans; (5)
written descriptions of all non-written agreements
relating to any such plan or arrangement; (6) all
reports submitted within the three years preceding the
date of this Agreement by third-party administrators,
actuaries, investment managers, consultants, or other
independent contractors (other than participant
statements); (7) all notices that the IRS, Department of
Labor or any other governmental agency or entity issued
to the Seller within the four years preceding the date
of this Agreement; (8) employee manuals or handbooks
containing personnel or employee relations policies; (9)
the most recent quarterly listing of workers'
compensation claims and a schedule of workers'
compensation claims of the Seller for the last three
fiscal years; and (10) any other documents Purchasers
has requested;
(B) the Qualified Plans qualify under Section
401(a) of the Code, and nothing has occurred with
respect to the operation of any Qualified Plan that
could cause the imposition of any liability, lien,
penalty, or tax under ERISA or the Code; each Company
Plan and each Company Benefit Arrangement has been
maintained in accordance with its constituent documents
and with all applicable provisions of domestic and
foreign laws, including federal and state securities
laws and any reporting and disclosure requirements; with
respect to each Company Plan, no transactions prohibited
by Code Section 4975 or ERISA Section 406 and no
breaches of fiduciary duty described in ERISA Section
404 have occurred, except to the extent that such
transaction or breach would not have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a
whole; and, to the Company's Knowledge, no such
transaction or breach has occurred; and no Company Plan,
other than the Company's employee stock ownership plan,
contains any security issued by any Related Employer;
(C) with respect to each Pension Plan, (1) no
Related Employer has terminated or withdrawn (partially
or fully) or sought a funding waiver, and no facts exist
that could reasonably be expected to cause such actions;
(2) no accumulated funding deficiency (under Code
Section 412) exists or has existed; (3) no reportable
event (as defined in ERISA Section 4043) has occurred;
(4) all costs have been provided for on the basis of
consistent methods in accordance with sound actuarial
assumptions and practices; (5) the assets, as of its
last valuation date, exceeded its "Benefit Liabilities"
(as defined in ERISA Section 4001(a)(16)); (6) since the
last valuation date, there have been no
14
amendments or changes to increase the amounts of
benefits and, to the Knowledge of the Company, nothing
has occurred that would reduce the excess of assets over
benefit liabilities in such plans; and (7) no Related
Employer has incurred liability (other than for routine
contributions not yet due) with respect to any
Multiemployer Plan nor terminated or withdrawn
(partially or fully) from any such Plan, and no facts
exist that could reasonably be expected to cause such
result or actions;
(D) there are no pending claims (other than
routine benefit claims) or lawsuits that have been
asserted or instituted by, against, or relating to, any
Company Plans or Company Benefit Arrangements, nor is
there any basis for any such claim or lawsuit. No
Company Plans or Company Benefit Arrangements are or
have been under audit or examination (nor has notice
been received of a potential audit or examination) by
any domestic or foreign governmental agency or entity,
and no matters are pending with respect to any Company
Plan under the IRS's Employee Plans Compliance
Resolutions System or any successor or predecessor
program;
(E) no Company Plan or Company Benefit
Arrangement contains any provision or is subject to any
law that would accelerate or vest any benefit or require
severance, termination or other payments or trigger any
liabilities as a result of the transactions this
Agreement contemplates; no Related Employer has declared
or paid any bonus or incentive compensation related to
the transactions this Agreement contemplates; and no
payments under any Company Plan or Company Benefit
Arrangement would, individually or collectively, be
nondeductible under Code Section 280G;
(F) all reporting, disclosure, and notice
requirements of ERISA and the Code have been satisfied
in all material respects with respect to each Company
Plan and each Company Benefit Arrangement;
(G) each Related Employer has paid all amounts
it is required to pay as contributions to the Company
Plans as of the date of the Balance Sheet; all benefits
accrued under any unfunded Company Plan or Company
Benefit Arrangement will have been paid, accrued, or
otherwise adequately reserved in accordance with GAAP as
of the date of the Balance Sheet; and all monies
withheld from employee paychecks with respect to Company
Plans have been transferred to the appropriate plan
within 30 days of such withholding;
(H) to the Knowledge of the Company, no
statement, either written or oral, has been made by the
Related Employers to any person with regard to any
Company Plan or Company Benefit Arrangement that was not
in accordance with the Company Plan or Company Benefit
Arrangement and that would involve a material increase
in expense or liability under such plan or arrangement;
15
(I) the Related Employers have no liability with
respect to any Benefit Plan that should have been
sponsored or maintained by any ERISA Affiliate;
(J) all group health plans of the Related
Employers materially comply with the requirements of
Part 6 of Title I of ERISA ("COBRA"), Code Section 5000,
and the Health Insurance Portability and Accountability
Act; the Related Employers have no liability under or
with respect to COBRA for their own actions or omissions
or those of any predecessor; the Related Employers'
voluntary employee beneficiary association, if any, is
exempt from tax and complies with all requirements
applicable to it; no employee or former employee (or
beneficiary of either) of a Related Employer is entitled
to receive any benefits, including, without limitation,
death or medical benefits (whether or not insured)
beyond retirement or other termination of employment ,
other than as applicable law requires, and Seller has
provided its method and supporting documentation for any
accounting charge it or the Related Employers have
calculated for such benefits;
(iii) Schedule 3.01(o) hereto contains
the most recent quarterly listing of workers'
compensation claims and a schedule of workers'
compensation claims of the Company for the last
three (3) fiscal years.
(p) Environmental Matters.
(i) Hazardous Material. To the Knowledge of the Company,
no Hazardous Material has been released in, on or under any
property (including the land and the improvements, ground water
and surface water thereof) that the Company has at any time
owned, operated or leased. Schedule 3.01(p) identifies all known
underground and aboveground storage tanks, and the capacity,
age, and contents of such tanks, located on real property owned
or leased by the Company. Except as listed on Schedule 3.01(p),
no underground storage tanks are currently located under any
property owned, operated or leased by the Company.
(ii) Hazardous Materials Activities. The Company has not
transported, stored, used, manufactured, disposed of or
released, or exposed its employees or others to, Hazardous
Materials in violation of any Environmental Law in effect on or
before the Closing Date, nor has the Company disposed of,
transported, sold, or manufactured any product containing a
Hazardous Material (collectively, "Company Hazardous Materials
Activities") in violation of any Environmental Law in effect
prior to or as of the date hereof and the Closing.
(iii) Permits. The Company currently holds all
environmental and health approvals, permits, licenses,
clearances and consents (the "Environmental Permits) necessary
for the conduct of the Company's Hazardous Material Activities
and other business of the Company as such activities and
business are currently being conducted. All Environmental
Permits are in full
16
force and effect. The Company (x) is in compliance in all
material respects with all terms and conditions of the
Environmental Permits and (y) is in compliance in all material
respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules
and timetables contained in the Environmental Laws. To the
Company's Knowledge, there are no circumstances that may prevent
such compliance in the future. Schedule 3.01(p) includes a
listing and description of all Environmental Permits currently
held by the Company.
(iv) Environmental Liabilities. No action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or
claim is pending, or, to the Knowledge of the Company,
threatened against the Company concerning any Environmental
Permit, Hazardous Material or any Company Hazardous Materials
Activity. There are no past or present actions, activities,
circumstances, conditions, events, or incidents that are
reasonably likely to involve the Company or any of its
Subsidiaries (or any person or entity whose liability the
Company or any of its Subsidiaries has retained or assumed,
either by contract or operation of law) in any litigation under
the Environmental Laws, or impose upon the Company or any of its
Subsidiaries (or any person or entity whose liability the
Company or any of its Subsidiaries has retained or assumed,
either by contract or operation of law) any liability under the
Environmental Laws material to the Company and its Subsidiaries
on a consolidated basis.
(v) Environmental Subsidiary. As to the Environmental
Subsidiary, in addition to the other representations and
warranties contained in this 3.01(p):
(A) The Environmental Subsidiary is not listed
as the generator of any Hazardous Material on any waste
manifest or other document prepared pursuant to the
Environmental Laws or by contract, and the Environmental
Subsidiary has not assumed, under the Environmental Laws
or by contract, the responsibilities or liabilities of
the generator of any Hazardous Material;
(B) To the Knowledge of the Company, the
Environmental Subsidiary has not performed any remedial
action taken pursuant to the Environmental Laws, where
the remedial action is not, or it is alleged in writing
by any Person or entity that the remedial action is not,
constructed and operating in accordance with the
Environmental Laws or contract; and
(C) There are no claims, actions, causes of
action, or other written notices pending or, to the
Company's Knowledge, threatened against the
Environmental Subsidiary under the Environmental Laws or
contract, arising from the Environmental Subsidiary's
provision of materials or services to any Person or
entity, that are not subject to coverage under the
Environmental Subsidiary's insurance policies, except
where such claims, actions, causes of
17
action or other written notice will not have a Material
Adverse Effect on the Environmental Subsidiary.
(q) Takeover Law. The Company has taken all action necessary to
ensure that the provisions of Chapter 110F of the Massachusetts General
Laws will not be applicable to Purchasers or their Affiliates as a
result of the transactions contemplated by the Transaction Documents.
(r) Status of Shares. Assuming the Stockholder Approvals are
obtained, the Shares to be issued at the Closing will have been duly
authorized by all necessary corporate action on the part of the Company,
and at Closing such Shares will have been validly issued and, assuming
payment therefor has been made, will be fully paid and nonassessable,
and the issuance of such Shares will not be subject to preemptive rights
of any other stockholder of the Company. Assuming the Stockholder
Approvals have been obtained, the Shares will be eligible for listing on
the American Stock Exchange subject only to notice of issuance.
(s) Intellectual Property.
(i) The Intellectual Property that is owned by the
Company and its Subsidiaries (the "Owned Intellectual Property")
constitutes all of the Intellectual Property used, intended to
be used or held for use in connection with, necessary for the
conduct of, or otherwise material to the Company and the
Subsidiaries, except for Intellectual Property subject to
written or oral licenses, agreements or arrangements pursuant to
which the use of Intellectual Property by any Company or any
Subsidiary is permitted by any Person (the "Intellectual
Property Licenses" and, together with the Owned Intellectual
Property, the "Company Intellectual Property"). The Owned
Intellectual Property is owned free from any Liens (other than
Permitted Liens). All material Intellectual Property Licenses
are in full force and effect in accordance with their terms, and
are free and clear of any Liens (other than Permitted Liens).
Immediately after the Closing, the Company and the Subsidiaries
will own or have the right to use all the Company Intellectual
Property, in each case free from Liens (except for Permitted
Liens incurred in the ordinary course of business) and on the
same terms and conditions as in effect prior to the Closing.
(ii) To the knowledge of the Company, the conduct of the
business of the Company and its Subsidiaries does not infringe
or conflict with the rights of any third party in respect of any
Intellectual Property. To the Knowledge of the Company, none of
the Company Intellectual Property is being infringed by any
third party. There is no claim or demand of any Person
pertaining to, or any proceeding which is pending or, to the
Knowledge of the Company, threatened, that challenges the rights
of the Company or any of the Subsidiaries in respect of any
Company Intellectual Property, or that claims that any default
exists under any Intellectual Property License. None of the
Company Intellectual Property is subject to any outstanding
order, ruling, decree, judgment
18
or stipulation by or with any court, tribunal, arbitrator, or
other Governmental Entity adverse to the Company.
(iii) The Owned Intellectual Property has been duly
registered with, filed in or issued by, as the case may be, the
appropriate filing offices, domestic or foreign, to the extent
necessary or desirable to ensure usual and customary protection
for Intellectual Property in the relevant jurisdiction under any
applicable law, and the same remain in full force and effect.
The Company and the Subsidiaries have taken all necessary
actions to ensure usual and customary protection in the relevant
jurisdiction of the Company Intellectual Property (including
maintaining the secrecy of all confidential Intellectual
Property) under any applicable law or any Contract.
(t) Guarantees. Section 3.01(t) of the Disclosure Schedule sets
forth a description of any obligations or liabilities of any person
other than the Company or its Subsidiaries that are guaranteed by or
subject to a contingent obligation of the Company or any of its
Subsidiaries.
(u) Labor Matters. With respect to employees of and service
providers to the Related Employers:
(i) the Related Employers are complying and have
complied in all material respects with all applicable domestic
and foreign laws respecting employment and employment practices,
terms and conditions of employment and wages and hours,
including without limitation any such laws respecting employment
discrimination, workers' compensation, family and medical leave,
the Immigration Reform and Control Act, and occupational safety
and health requirements, and no claims or investigations are
pending or, to the Knowledge of the Company, threatened with
respect to such laws, either by private individuals or by
governmental agencies;
(ii) no Related Employer is or has been engaged in any
unfair labor practice, and there is not now, nor within the past
three years has there been, any unfair labor practice complaint
against any Related Employer pending or, to the Knowledge of the
Company, threatened, before the National Labor Relations Board
or any other comparable foreign or domestic authority or any
workers' council;
(iii) no labor strike, lock-out, slowdown, or work
stoppage is or has been, within the last three years, pending
or, to the Knowledge of the Company, threatened against or
directly affecting any Related Employer; and
(iv) all persons who are or were performing services for
any Related Employer and are or were classified as independent
contractors do or did satisfy and have satisfied the
requirements of law to be so classified, and the
19
appropriate Related Employer has fully and accurately reported
their compensation on IRS Forms 1099 when required to do so.
(v) Brokers or Finders. Other than Xxxxxxxx, no agent, broker,
investment banker or other firm is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by the Transaction Documents.
(w) Disclosure. To the Knowledge of the Company, no
representation or warranty by the Company contained in this Agreement or
any of the other Transaction Documents, or in any certificate to be
furnished by or on behalf of the Company pursuant hereto or thereto,
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
under which they were made, not misleading.
(x) Opinion of Independent Investment Banking Firm; Special
Committee. The Special Committee of the Board (the "Special Committee")
has obtained an opinion from Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Capital
("Houlihan"), in a form satisfactory to the Special Committee, that the
financial terms of the transactions contemplated by the Transaction
Documents are fair to the holders of the Common Stock from a financial
point of view. The Special Committee has recommended the execution and
performance of this Agreement to the full Board.
(y) Year 2000. The disclosure as to Year 2000 Compatibility
issues in the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1999, is true and correct in all material respects
and does not omit to state a material fact necessary to make the
statements contained therein not misleading.
(z) No Illegal or Improper Transactions. Neither the Company nor
any Subsidiary has, nor has any director, officer, employee, agent or
affiliate of the Company or any Subsidiary, directly or indirectly, used
funds or other assets of the Company or any Subsidiary, or made any
promise or undertaking in such regard, for (i) illegal contributions,
gifts, entertainment or other expenses relating to political activity;
(ii) illegal payments to or for the benefit of governmental officials or
employees, whether domestic or foreign; (iii) illegal payments to or for
the benefit of any Person, or any director, officer, employee, agent,
affiliate or representative thereof; or (iv) the establishment or
maintenance of a secret or unrecorded fund; and, to the Knowledge of the
Company, there have been no false or fictitious entries made in the
books or records of the Company or any Subsidiary.
(aa) Insurance.
(i) All insurance policies to which the Company or any of the
Subsidiaries is a party or that provide coverage to any director or
officer of the Company or of any of the Subsidiaries (A) are valid,
outstanding, and enforceable, (B) are issued by an insurer that, to the
Knowledge of the Company, is financially sound and reputable, (C) taken
together provide adequate insurance
20
for the properties, assets and business of the Company and the
Subsidiaries for all risks normally insured against by a Person carrying
on the same or similar business or businesses, (D) comply with the
insurance requirements of all laws and contracts to which the Company
and any of the Subsidiaries is a party or by which it is bound, except
where such failures to so comply would not be reasonably likely to have
a Material Adverse Effect on the Company and the Subsidiaries, taken as
a whole, and (E) do not provide for any retrospective premium adjustment
or other experience-based liability on the part of the Company or any of
the Subsidiaries.
(ii) Neither the Company nor any Subsidiary has received any
refusal of coverage or any notice that a defense will be afforded with
reservation of rights, or any notice of cancellation or any other
indication that any insurance policy is no longer in full force or
effect or will not be renewed or that the issuer of any policy is not
willing or able to perform its obligations thereunder, except where such
refusals, failures to renew or cancellations would not be reasonably
likely to have a Material Adverse Effect on the Company and the
Subsidiaries, taken as a whole.
(iii) The Company and each of the Subsidiaries has paid all
premiums due with respect to all periods up to and including the date
hereof and has otherwise performed all of its obligations under each
policy to which such Person is a party or that provides coverage to such
Person or any officers or directors thereof, except where the failure to
do so would not be reasonably likely to have a Material Adverse Effect
on the Company and the Subsidiaries, taken as a whole.
(iv) The Company and each Subsidiary has given notice to the
insurer of all material claims that may be insured thereby.
SECTION 3.02 Representations and Warranties of TSC. TSC represents and
warrants as follows:
(a) Organization. TSC is a corporation validly existing and in
good standing under the laws of the jurisdiction of its organization,
with all requisite corporate power and authority to own, lease and
operate its assets and properties and to conduct its business as now
being conducted.
(b) Corporate Authority. TSC has (or will have at the time of
such act) the requisite corporate or other power and authority to
execute, deliver and perform each Transaction Document to which it is or
will be a party and to consummate the transactions contemplated thereby.
The execution, delivery and performance of each Transaction Document by
TSC and the consummation by TSC of the transactions contemplated hereby
and thereby have been duly authorized (or will have been duly authorized
at the time of such act) and no other corporate proceedings on the part
of TSC are necessary to authorize any Transaction Document or for TSC to
consummate the transactions so contemplated. Each Transaction Document
to
21
which TSC is or will be a party is, or when executed and delivered will
be, a valid and binding agreement of such party, enforceable against TSC
in accordance with the terms thereof, assuming that each Transaction
Document to which TSC is a party is a valid and binding agreement of the
Company and each other Purchaser (as applicable).
(c) No Violations; Consents and Approvals.
(i) The execution, delivery or performance by TSC of
each Transaction Document to which it is or will be a party or
the consummation by TSC of the transactions contemplated thereby
(A) will not result in a violation or breach of its articles or
certificate of incorporation or by-laws (or other organizational
documents) or (B) subject to the governmental filings and other
matters referred to in clause (ii) below, will not result in a
violation or breach of (or give rise to any right of
termination, revocation, cancellation or acceleration under or
increased payments under), or constitute a default (with or
without due notice or lapse of time or both) under, or result in
the creation of any Lien upon any of the properties or assets of
TSC or the Company and its Subsidiaries under any judgment,
order, decree, statute, law, regulation or rule applicable to
TSC.
(ii) Except for consents, approvals, orders,
authorizations, registrations, declarations or filings as may be
required under, and other applicable requirements of, the HSR
Act (and filings after the Closing, if any, under Regulation D,
Section 13(d) and/or Section 16 of the Exchange Act), no
consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required
with respect to TSC in connection with the execution, delivery
or performance by TSC of each Transaction Document to which it
is or will be a party or the consummation by TSC of the
transactions contemplated hereby and thereby (except where the
failure to obtain such consents, approvals, orders or
authorizations, or to make such registrations, declarations,
filings or agreements would not have a Material Adverse Effect
on TSC).
(d) Acquisition for Investment. TSC is acquiring the Shares
being purchased by it for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution
thereof, and TSC has no present intention or plan to effect any
distribution of Shares; provided that the disposition of TSC's property
shall at all times be and remain within its control and subject to the
provisions of this Agreement and the Registration Rights Agreement. TSC
is an "Accredited Investor" within the meaning of Rule 501(a) of
Regulation D under the Act.
(e) Brokers or Finders. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from TSC in connection with any of the
transactions contemplated by the Transaction Documents.
22
(f) Proxy Statement. The information to be supplied by TSC for
inclusion in the Proxy Statement shall not, on the date the Proxy
Statement (or any amendment thereof or supplement thereto) is first
mailed to stockholders of the Company and at the time of the Stockholder
Meeting, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact
necessary in order to make such statements made in Proxy Statement not
false or misleading. If at any time prior to Stockholder Meeting any
event relating to TSC or any of its Affiliates, officers or directors
should be discovered by TSC which should be set forth in a Supplement to
the Proxy Statement, TSC shall promptly inform the Company.
SECTION 3.03 Representations and Warranties of National Union. National
Union represents and warrants as follows:
(a) Organization. National Union is a corporation validly
existing and in good standing under the laws of the jurisdiction of its
organization, with all requisite power and authority to own, lease and
operate its properties and to conduct its business as now being
conducted.
(b) Authority. National Union has (or will have at the time of
such act) the requisite corporate or other power and authority to
execute, deliver and perform each Transaction Document to which it is or
will be a party and to consummate the transactions contemplated thereby.
The execution, delivery and performance of each Transaction Document by
National Union and the consummation by National Union of the
transactions contemplated hereby and thereby have been duly authorized
(or will have been duly authorized at the time of such act) and no other
proceedings on the part of National Union are necessary to authorize any
Transaction Document or for National Union to consummate the
transactions so contemplated. Each Transaction Document to which
National Union is or will be a party is, or when executed and delivered
will be, a valid and binding agreement of such party, enforceable
against National Union in accordance with the terms thereof, assuming
that each Transaction Document to which National Union is a party is a
valid and binding agreement of the Company and each other Purchaser (as
applicable).
(c) No Violations; Consents and Approvals.
(i) The execution, delivery or performance by National
Union of each Transaction Document to which it is or will be a
party or the consummation by National Union of the transactions
contemplated thereby (A) will not result in a violation or
breach of its articles or certificate of incorporation or
by-laws (or other organizational documents) or (B) subject to
the governmental filings and other matters referred to in clause
(ii) below, will not result in a violation or breach of (or give
rise to any right of termination, revocation, cancellation or
acceleration under or increased payments under), or constitute a
default (with or without due notice or lapse of time or both)
under, or result in the creation of any Lien upon any of the
properties or assets of National Union or the Company and its
Subsidiaries under any judgment, order, decree, statute, law,
regulation or rule applicable to National Union.
23
(ii) Except for consents, approvals, orders,
authorizations, registrations, declarations or filings as may be
required under, and other applicable requirements of, the HSR
Act (and filings after the Closing, if any, under Regulation D,
Section 13(d) and/or Section 16 of the Exchange Act), no
consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required
with respect to National Union in connection with the execution,
delivery or performance by National Union of each Transaction
Document to which it is or will be a party or the consummation
by National Union of the transactions contemplated hereby and
thereby (except where the failure to obtain such consents,
approvals, orders or authorizations, or to make such
registrations, declarations, filings or agreements would not
have a Material Adverse Effect on National Union).
(d) Acquisition for Investment. Except as contemplated by
Section 9.07, National Union is acquiring the Shares being purchased by
it for its own account for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof, and National
Union has no present intention or plan to effect any distribution of
Shares; provided that the disposition of National Union's property shall
at all times be and remain within its control and subject to the
provisions of this Agreement and the Registration Rights Agreement.
National Union is an "Accredited Investor" within the meaning of Rule
501(a) of Regulation D under the Act.
(e) Brokers or Finders. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from National Union in connection with
any of the transactions contemplated by the Transaction Documents.
(f) Proxy Statement. The information to be supplied by National
Union for inclusion in the Proxy Statement shall not, on the date the
Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to stockholders of the Company and at the time of the
Stockholder Meeting, contain any statement which, at such time and in
light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or omit to state any
material fact necessary in order to make such statements made in Proxy
Statement not false or misleading. If at any time prior to Stockholder
Meeting any event relating to National Union or any of its Affiliates,
officers or directors should be discovered by National Union which
should be set forth in a Supplement to the Proxy Statement, National
Union shall promptly inform the Company.
SECTION 3.04 Representations and Warranties of O&G. O&G represents and
warrants as follows:
(a) Organization. O&G is a corporation validly existing and in
good standing under the laws of the jurisdiction of its organization,
with all requisite power and authority to own, lease and operate its
properties and to conduct its business as now being conducted.
24
(b) Authority. O&G has (or will have at the time of such act)
the requisite corporate or other power and authority to execute, deliver
and perform each Transaction Document to which it is or will be a party
and to consummate the transactions contemplated thereby. The execution,
delivery and performance of each Transaction Document by O&G and the
consummation by O&G of the transactions contemplated hereby and thereby
have been duly authorized (or will have been duly authorized at the time
of such act) and no other corporate proceedings on the part of O&G are
necessary to authorize any Transaction Document or for O&G to consummate
the transactions so contemplated. Each Transaction Document to which O&G
is or will be a party is, or when executed and delivered will be, a
valid and binding agreement of such party, enforceable against O&G in
accordance with the terms thereof, assuming that each Transaction
Document to which O&G is a party is a valid and binding agreement of the
Company and each other Purchaser (as applicable).
(c) No Violations; Consents and Approvals.
(i) The execution, delivery or performance by O&G of
each Transaction Document to which it is or will be a party or
the consummation by O&G of the transactions contemplated thereby
(A) will not result in a violation or breach of its articles or
certificate of incorporation or by-laws (or other organizational
documents) or (B) subject to the governmental filings and other
matters referred to in clause (ii) below, will not result in a
violation or breach of (or give rise to any right of
termination, revocation, cancellation or acceleration under or
increased payments under), or constitute a default (with or
without due notice or lapse of time or both) under, or result in
the creation of any Lien upon any of the properties or assets of
O&G or the Company and its Subsidiaries under any judgment,
order, decree, statute, law, regulation or rule applicable to
O&G.
(ii) Except for consents, approvals, orders,
authorizations, registrations, declarations or filings as may be
required under, and other applicable requirements of, the HSR
Act (and filings after the Closing, if any, under Regulation D,
Section 13(d) and/or Section 16 of the Exchange Act), no
consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required
with respect to O&G in connection with the execution, delivery
or performance by O&G of each Transaction Document to which it
is or will be a party or the consummation by O&G of the
transactions contemplated hereby and thereby (except where the
failure to obtain such consents, approvals, orders or
authorizations, or to make such registrations, declarations,
filings or agreements would not have a Material Adverse Effect
on O&G).
(d) Acquisition for Investment. O&G is acquiring the Shares
being purchased by it for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution
thereof, and O&G has no present intention or plan to effect any
distribution of Shares; provided that the disposition of O&G's property
shall at all times be and remain within its control and subject to the
provisions of this Agreement and the
25
Registration Rights Agreement. O&G is an "Accredited Investor" within
the meaning of Rule 501(a) of Regulation D under the Act.
(e) Brokers or Finders. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from O&G in connection with any of the
transactions contemplated by the Transaction Documents.
(f) Proxy Statement. The information to be supplied by O&G for
inclusion in the Proxy Statement shall not, on the date the Proxy
Statement (or any amendment thereof or supplement thereto) is first
mailed to stockholders of the Company and at the time of the Stockholder
Meeting, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact
necessary in order to make such statements made in Proxy Statement not
false or misleading. If at any time prior to Stockholder Meeting any
event relating to O&G or any of its Affiliates, officers or directors
should be discovered by O&G which should be set forth in a Supplement to
the Proxy Statement, O&G shall promptly inform the Company.
ARTICLE IV
[Intentionally Omitted]
ARTICLE V
Covenants and Additional Agreements
-----------------------------------
SECTION 5.01 Pre-Closing Activities. From and after the date of this
Agreement until the Closing, each of the Company and Purchasers shall act with
good faith towards each other, and shall use all commercially reasonable efforts
to take or cause to be taken all actions necessary, proper or advisable to
consummate the transactions contemplated by the Transaction Documents and
neither the Company nor any Purchaser will take any action that would prohibit
or materially impair its ability to consummate the transactions contemplated by
the Transaction Documents.
SECTION 5.02 Covenants of the Company. During the period from the date
of this Agreement and continuing until the Closing, the Company agrees as to
itself and the Subsidiaries that, except as provided in Section 5.02 of the
Disclosure Schedule, or to the extent that Purchasers otherwise consent in
writing:
(a) Ordinary Course. The Company will conduct its business in
the ordinary course in substantially the same manner as presently
conducted and the Company will use commercially reasonable efforts to
keep available the services of the current officers and employees and to
preserve the relationships with customers, suppliers and others having
business dealings with the Company.
26
(b) Other Transactions. The Company will not, nor will it permit
any of the Subsidiaries to, do any of the following (except as otherwise
specifically contemplated herein or in any other Transaction Document):
(i) amend its Articles of Organization, By-laws or other
organizational documents (except for immaterial amendments to
the Articles of Organization or By-laws of any Subsidiaries,
provided such amendments in no way materially and adversely
affect Purchasers or the rights granted or to be granted to the
Purchasers under any Transaction Document);
(ii) declare or pay any cash or non-cash dividend or
make any cash or non-cash distribution with respect to any
securities of the Company (other than payment of dividends in
kind pursuant to the Series B Preferred Stock);
(iii) redeem or otherwise acquire any shares of its
capital stock or issue any capital stock (except upon exercise
of options issued or agreed to be issued prior to the date
hereof under a Company Stock Plan) or any option, warrant or
right relating thereto;
(iv) incur any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities,
obligations or indebtedness, other than in the ordinary course
of business consistent with past practice and as permitted under
the Credit Facility;
(v) permit, allow or suffer any assets or properties of
the Company to be subject to any Lien other than Permitted
Liens;
(vi) guarantee or otherwise become contingently liable
for any obligation of any third party other than in the ordinary
course of business;
(vii) make any change in any method of accounting or
accounting practice or policy, except as may be required by
GAAP;
(viii) enter into any agreement or take any action in
violation of the terms of this Agreement or any of the other
Transaction Documents;
(ix) settle any material tax audit, make or change any
tax election or amend any Tax Returns; or
(x) agree, whether in writing or otherwise, to do any of
the foregoing.
(c) Employee Benefits. Except in the ordinary course of business
and consistent with past practice (which shall include normal periodic
performance reviews and related benefit increases and the increases
approved at the December 8, 1999 meeting of the Board of Directors) or
pursuant to the existing terms of any collective bargaining agreement,
the Company will not, nor will it permit any of the Subsidiaries to (i)
increase in any manner the
27
compensation of any of the officers or other employees of the Company or
its Subsidiaries; (ii) adopt, amend, terminate, or increase liability
with respect to any Company Plan or Company Benefit Arrangement or
commit to do so; or (iii) enter into, or negotiate, any collective
bargaining agreement with respect to employees of the Company or its
Subsidiaries except as required by law, in which case the Company or
such Subsidiary shall first notify Purchasers.
SECTION 5.03 HSR. Upon the terms and subject to the conditions set forth
in this Agreement, each of the parties agrees 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 all necessary filings required pursuant to the HSR Act as
soon as commercially practicable after the date of this Agreement, and shall use
their best efforts to obtain the early termination of the waiting period
thereunder, provided that neither the Company nor any Purchaser shall be
required to agree to dispose of or hold separate any material portion of its
business or assets.
SECTION 5.04 [Intentionally Omitted]
SECTION 5.05 Stockholder Approvals; Proxy Statement.
(a) The Company shall call a meeting of its stockholders (the
"Stockholder Meeting") for the purpose, among others, of obtaining
stockholder approvals for: (i) an amendment to the Articles of
Organization increasing the number of authorized shares of Common Stock
to at least as many shares of Common Stock as are necessary to
consummate the transaction contemplated hereby and (ii) the issuance and
sale (the "Issuance") of the Shares to Purchasers and the exchange of
the Series B Preferred Stock for shares of Common Stock as contemplated
by Section 6.03(c) (the "Stockholder Meeting Proposals"). The
Stockholder Meeting shall be held as soon as practicable but in no event
later than the Outside Date. For purposes of this Agreement,
"Stockholder Approvals" shall mean, as to clause (i), the affirmative
vote of the holders of a majority of the shares of the Equity Securities
entitled to vote thereon and, as to clause (ii), the affirmative vote of
the holders of a Disinterested Majority of the Equity Securities
entitled to vote thereon. Where so required by applicable Massachusetts
law or the Articles of Organization, Stockholder Approvals shall mean
the separate vote of each class of stock entitled to vote thereon.
(b) The Company will prepare and file with the SEC a proxy
statement relating to the Stockholder Meeting (as amended or
supplemented and including documents incorporated by reference therein,
the "Proxy Statement") and shall use its reasonable best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy
Statement to be cleared by the SEC. The Company shall notify Purchasers
of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the
Proxy Statement or for additional information and shall supply
Purchasers and their counsel with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement.
The Company shall give Purchasers and their counsel the opportunity to
review the Proxy Statement prior to its being filed with the SEC and
shall give Purchasers and their counsel the opportunity to review all
amendments and supplements to the Proxy Statement and all responses to
requests
28
for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. Each of the Company and Purchasers
agrees to use reasonable best efforts, after consultation with the other
party hereto, to respond promptly to all such comments of and requests
by the SEC. After the Proxy Statement has been cleared by the SEC, the
Company shall mail the Proxy Statement to the stockholders of the
Company. If at any time prior to the Stockholder Meeting there shall
occur any event that should be set forth in an amendment or supplement
to the Proxy Statement, the Company will prepare and mail to its
stockholders such an amendment or supplement.
(c) The Proxy Statement will not, at the date mailed to the
Company's stockholders and at the date of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply as to
form in all material respects with the provisions of the Exchange Act
and the rules and regulations thereunder, except that no representation
is made by the Company with respect to statements made therein as to
information concerning Purchasers or their Affiliates supplied in
writing by Purchasers or any of their Affiliates specifically for
inclusion in the Proxy Statement.
(d) Unless this Agreement has been terminated (i) pursuant to
Section 7.01(d)(ii) (based upon a failure of the condition set forth in
Section 6.02(d)), or (ii) pursuant to Section 7.01(d)(iii) based upon
the existence of a Superior Transaction Proposal that the Board intends
to accept, the Board and the Special Committee shall recommend that the
Company's stockholders approve the Stockholder Meeting Proposals and the
Company shall use its best efforts to obtain the necessary approvals by
its stockholders of the Stockholder Meeting Proposals.
SECTION 5.06 Stock Exchange Listing. The Company shall use its
commercially reasonable efforts to cause Purchasers to receive, prior to
Closing, assurance from the American Stock Exchange (the "Exchange"), in a form
reasonably satisfactory to the Purchasers, that: (a) in accordance with the
rules of the Exchange, all Shares will be eligible for listing on the Exchange;
and (b) consummation of the transactions contemplated herein or in any other
Transaction Document will not cause any securities of the Company already listed
on the American Stock Exchange to lose their listing privileges.
SECTION 5.07 Transaction Proposals.
(a) For purposes of this Agreement, "Transaction Proposal" means
any inquiry, proposal or offer from any Person (other than a Person that
is an Affiliate of the Purchasers) relating to (i) any purchase or other
acquisition from the Company of assets representing 20% or more of the
net revenues, net income or profits of the Company and its Subsidiaries,
taken as a whole, (ii) any purchase or other acquisition of any class of
securities of the Company for a purchase price in excess of $20 million,
or (iii) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving the Company (or any subsidiary whose business constitutes 20%
or more of the net revenues, net income or assets of the Company and its
subsidiaries, taken as a whole). For purposes of this
29
Section 5.07, separate Transaction Proposals by Affiliates or by Persons
in a "group" (as defined in the rules promulgated under Section 13 of
the Exchange Act), as well as separate Transaction Proposals that are
adopted by the Company as part of a plan of financing or capitalizing
the Company shall be aggregated and treated as a single proposal for
purposes of determining whether such proposal or proposals exceed the
thresholds set forth in this Section 5.07(a).
(b) At least ten (10) days prior to either (x) accepting any
Transaction Proposal or (y) any change by the Board or the Special
Committee in their respective recommendations concerning the Stockholder
Meeting Proposals (if following the receipt of any Transaction
Proposal), the Company shall advise Purchasers orally and in writing of
such Transaction Proposal and the material terms and conditions of such
Transaction Proposal and the identity of the Person making any such
Transaction Proposal. During such ten day period, the Company shall
negotiate in good faith to determine whether Purchasers can or are
willing to make a proposal that is superior to the Transaction Proposal.
Subject to complying with the foregoing provisions of this Section 5.07,
the Special Committee and its representatives and advisors on behalf of
the Company may solicit Transaction Proposals and furnish or cause the
Company to furnish information with respect to the Company and its
Subsidiaries to any Person and may participate in discussions or
negotiations regarding any Transaction Proposal.
SECTION 5.08 Access and Information.
(a) Access. From the date hereof until the Closing (and in any
event subject to the provisions of Section 5.09(a)), the Company shall
permit Purchasers (and their designated representatives) to visit and
inspect any of the properties of the Company and the Subsidiaries,
including the books and records of the Company and the Subsidiaries (and
to make extracts and copies therefrom), and to consult with respect to
and discuss the affairs, businesses, finances, operations and accounts
of the Company and the Subsidiaries with the officers, directors,
employees, affiliates and agents of such entities, all at such
reasonable times and as often as Purchasers may reasonably request.
(b) Information. The Company covenants that so long as any
Purchaser owns shares of Common Stock equal in number to at least 5% of
the Shares sold to it on the Closing Date, the Company will deliver to
such Purchaser the following:
(i) As soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, (A) a consolidated
statement of income and consolidated statements of changes in
financial position and cash flows of the Company and the
Subsidiaries for such quarterly period and for the period from
the beginning of the current fiscal year to the end of such
quarterly period, and (B) a consolidated balance sheet of the
Company and the Subsidiaries as at the end of such quarterly
period, setting forth in each case, in comparative form, figures
for the corresponding periods in the preceding fiscal year and
corresponding figures for the budget for such quarterly period,
all in reasonable detail and certified by an authorized
financial officer of the Company, subject to changes resulting
from year-end adjustments; provided, however, that delivery
pursuant to clause (iii) below of a
30
copy of the Quarterly Report on Form 10-Q of the Company for
such quarterly period filed with the SEC shall be deemed to
satisfy the requirements of this clause (i);
(ii) As soon as practicable and in any event within 120
days after the end of each fiscal year, (A) a consolidated
statement of income and consolidated statements of changes in
financial position and cash flows of the Company and the
Subsidiaries for such year, and (B) a consolidated balance sheet
of the Company and the Subsidiaries as of the end of such year,
setting forth in each case, in comparative form, corresponding
consolidated figures from the preceding annual audit and
corresponding figures for the budget for such fiscal year, all
in reasonable detail together with an opinion directed to the
Company of independent public accountants of recognized standing
selected by the Company; provided, however, that delivery
pursuant to clause (iii) below of a copy of the Annual Report on
Form 10-K of the Company for such fiscal year filed with the SEC
shall be deemed to satisfy the requirements of this clause (ii);
(iii) Promptly upon transmission thereof, copies of all
financial statements, proxy statements, notices and reports as
it shall send to its public stockholders and copies of all
registration statements (without exhibits), other than on Form
S-8 or any similar successor form, and all reports which it
files with the SEC (or any governmental body or agency
succeeding to the functions of the SEC);
(iv) Promptly upon receipt thereof, copies of all
reports submitted to the Company by independent public
accountants in connection with each annual, interim or special
audit of the books of the Company or any Subsidiary made by such
accountants, including the comment letter submitted by such
accountants to management in connection with their annual audit;
and
(v) With reasonable promptness, such other financial
data as any Purchaser may reasonably request.
SECTION 5.09 Confidentiality and Publicity.
(a) Confidentiality. Each of the Purchasers recognizes and
acknowledges that it has in the past, currently has, and in the future
may possibly have, access to certain confidential information of the
Company. Each Purchaser agrees that it will not disclose confidential
information with respect to the Company to any Person for any purpose or
reason whatsoever, except to authorized representatives of such
Purchaser and to counsel and other advisers, provided, however, that
such advisers (other than counsel) agree to the confidentiality
provisions of this subsection 5.09(a), unless (i) such information is
publicly known or becomes known to the public generally through no fault
of any of the Purchasers, (ii) is independently developed by the
Purchasers without the use of the Company's confidential information,
(iii) is disclosed without similar restrictions to a third party by the
Company or a Subsidiary, or (iv) disclosure is required by law
(including securities law disclosure requirements and stock
31
exchange rules), or the order of any governmental authority under color
of law, or to enforce its rights under this Agreement; provided,
however, that prior to disclosing any information pursuant to this
Section 5.09(a), a Purchaser shall, if reasonably possible, give prior
written notice thereof to the Company and provide the Company with the
opportunity to contest such disclosure.
(b) Publicity. Prior to Closing, the Company and Purchasers will
consult with each other before issuing any press release or otherwise
making any public statements with respect to the transactions
contemplated hereby and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be
required by law or by obligations pursuant to any listing agreement with
any securities exchange.
SECTION 5.10 Restrictions. Each Purchaser covenants and agrees with the
Company that such Purchaser will not dispose of any of such Purchaser's shares
of the Shares except pursuant to (a) an effective registration statement under
the Act or (b) an applicable exemption from registration under the Act. In
connection with any sale by a Purchaser pursuant to clause (b) of the preceding
sentence, such Purchaser shall furnish to the Company an opinion of counsel
reasonably satisfactory to the Company to the effect that such exemption from
registration is available in connection with such sale.
SECTION 5.11 Further Assurances. Following the Closing Date, the Company
shall, and shall cause each of the Subsidiaries to, from time to time, execute
and deliver such additional instruments, documents, conveyances or assurances
and take such other actions as shall be necessary, or otherwise reasonably be
requested by Purchasers, to confirm and assure the rights and obligations
provided for in this Agreement and the Transaction Documents and render
effective the consummation of the transactions contemplated hereby and thereby.
SECTION 5.12 Directors' and Officers' Indemnification and Insurance.
(a) The provisions with respect to indemnification that are set
forth in the bylaws of the Company shall not be amended, repealed or
otherwise modified for a period of six years from the Closing Date in
any manner that would affect adversely the rights thereunder of
individuals who are or, at any time prior to the Closing Date, were
directors, officers, employees or agents of Company with respect to
claims arising from facts or events that occurred at or prior to the
Closing.
(b) Prior to the Closing, the Company shall have offered each
director of the Company the opportunity to enter into an indemnification
agreement in a form reasonably acceptable to such director (the
"Indemnification Agreements").
(c) For a period of six years after the Closing Date, the
Company shall maintain in effect the directors' and officers' liability
insurance policies maintained by the Company immediately prior to the
Closing; provided, however, that the Company may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are not materially less advantageous with respect to
claims arising from facts or events which occurred at or before the
Closing; provided further, however, that, in no event shall the
32
Company be required to expend in any one year in excess of 125% of the
annual premium currently paid by the Company for such coverage, which
current premium amount is set forth on the Disclosure Schedule and if
the premium for such coverage exceeds such amount, the Company shall
purchase a policy with the greatest coverage available for such 125% of
the annual premium.
(d) If the Company 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 all or substantially all of its properties and
assets to any Person, then and in each such case, proper provision shall
be made so that the successors and assigns of the Company assume the
obligations set forth in this Section 5.12.
(e) The foregoing provisions of Section 5.12 are obligations of
the Company and not of any of the Purchasers.
SECTION 5.13 Shareholders Agreement. Each of the parties agrees (i) that
they will enter into the Shareholders Agreement, (ii) that the Shareholders
Agreement shall not become effective prior to the Closing and (iii) that the
Exchange Agreement to be entered into by and between the Company and holders of
Series B Preferred Stock shall not restrict or impede the parties thereto from
considering or accepting any Superior Transaction Proposal.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01 Conditions to Each Party's Obligations. The obligations of
the Company and each Purchaser to consummate the transactions contemplated to
occur at the Closing shall be subject to the satisfaction prior to the Closing
of each of the following conditions, each of which may be waived only if it is
legally permissible to do so:
(a) HSR and Other Approvals. Any applicable waiting period under
the HSR Act relating to the transactions contemplated hereby shall have
expired or been terminated, and all other material authorizations,
consents, orders or approvals of, or regulations, declarations or
filings with, or expirations of applicable waiting periods imposed by,
any Governmental Entity (including, without limitation, any foreign
antitrust filing) necessary for the consummation of the transactions
contemplated hereby, shall have been obtained or filed or shall have
occurred.
(b) No Litigation, Injunctions, or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining order,
investigation, suit, proceeding, preliminary or permanent injunction or
other order shall have been enacted, entered, promulgated, enforced or
issued by any Governmental Entity that presents a substantial risk of
the restraint or prohibition of the transactions contemplated by this
Agreement or any of the Transaction Documents or the obtaining of
material damages or other relief from any one or more of the Purchasers
in connection therewith.
33
(c) Stockholder Approvals. The Stockholder Approvals have been
obtained.
(d) Management Agreement Amendment. The management agreement by
and among the Company, TSC and Xxxxxx X. Tutor dated January 17, 1997,
as amended on December 23, 1998 and December 31, 1999 (the "Management
Agreement Amendment"), shall be in full force and effect.
SECTION 6.02 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the transactions contemplated to occur
at the Closing shall be subject to the satisfaction or waiver thereof by the
Company prior to the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Purchaser that are qualified as to materiality shall
be true and correct, and those that are not so qualified shall be true
and correct in all material respects, as of the date of this Agreement
and as of the time of the Closing as though made at and as of such time,
except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and
warranties that are qualified as to materiality shall be true and
correct, and those that are not so qualified shall be true and correct
in all material respects, on and as of such earlier date) and the
Company shall have received a certificate signed by an authorized
officer of each Purchaser to such effect.
(b) Performance of Obligations of Purchasers. Each Purchaser
shall have performed or complied in all material respects with all
obligations and covenants required to be performed or complied with by
such Purchaser under this Agreement, and the Company shall have received
a certificate signed by the chief executive officer and chief financial
officer of each Purchaser to such effect.
(c) Closing Deliveries. Purchasers shall have delivered to the
Company on or before the Closing the following:
(i) The Registration Rights Agreement, to be dated as of
the date of the Closing, in substantially the form of Exhibit
6.02(c)(i), executed by Purchasers;
(ii) The Shareholders Agreement, to be dated as of the
date of the Closing, substantially in the form of Exhibit
6.02(c)(ii), executed by Purchasers;
(iii) Executed and conformed copies of such other
certificates, letters and documents as the Company may
reasonably request and as are customary for transactions such as
those contemplated by this Agreement;
(iv) $10 million by TSC by wire transfer of immediately
available funds as its share of the Purchase Price;
34
(v) $10 million by O&G by wire transfer of immediately
available funds as its share of the Purchase Price;
(vi) $20 million by National Union by wire transfer of
immediately available funds as its share of the Purchase Price;
and
(vii) a Certificate of the Secretary or Assistant
Secretary of each of the Purchasers dated as of the Closing Date
certifying: (1) that attached thereto is a true and complete
copy of the By-Laws, or comparable organization document, of
such Purchaser as in effect on the date of such certification;
(2) that attached thereto is a true and complete copy of all
resolutions adopted by the Board of such Purchaser authorizing
the execution, delivery and performance of the Agreement, and
that all such resolutions are in full force in effect and are
all the resolutions adopted in connection with the transactions
contemplated by this Agreement; (3) that attached thereto is a
true and complete copy of such Purchasers' articles of
incorporation, or comparable organization document, as in effect
on the date of such certification; and (4) to the incumbency and
specimen signature of certain officers of the Company.
(d) Bring Down of Fairness Opinion. The Special Committee shall
have affirmed its recommendation to the Board that the Company execute
and perform this Agreement after the delivery of a "bring down" fairness
opinion by the Special Committee's financial advisor in a form
reasonably satisfactory to the Special Committee as of a date no earlier
than three days prior to the Closing.
SECTION 6.03 Conditions to the Obligations of Purchasers. The
obligations of each Purchaser to consummate the transactions contemplated to
occur at the Closing shall be subject to the satisfaction or waiver thereof
prior to the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified
as to materiality shall be true and correct, and those that are not so
qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the time of the Closing as though made
at and as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality
shall be true and correct, and those that are not so qualified shall be
true and correct in all material respects, on and as of such earlier
date), and Purchasers shall have received a certificate signed by the
chief executive officer and chief financial officer of the Company to
such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed or complied in all material respects with all obligations
and covenants required to be performed or complied with by the Company
under this Agreement, and Purchasers shall have received a certificate
signed by the chief executive officer and chief financial officer of the
Company to such effect.
35
(c) Series B Preferred Stock. Holders of the Series B Preferred
Stock shall have agreed to exchange no less than 100% of the then
outstanding face amount of those securities (including accrued but
unpaid dividends) in exchange for Common Stock at an exchange price of
$5.50 per share of Common Stock. In addition, the holders of the Series
B Preferred Stock shall have approved the amendments, revisions and
waivers to the certificate of vote for the Series B Preferred Stock and
the Stock Purchase and Sale Agreement, dated as of July 24, 1996, by and
among Xxxxxxx X. Xxxx & Associates, L.P., PB Capital Partners, L.P., and
Perini Corporation, as amended (the "Series B Purchase Agreement"), set
forth on Exhibit 6.03(c).
(d) By-Law Amendments. The By-Laws shall have been amended and
restated in accordance with Exhibit 6.03(d) and such amendments (the
"By-Law Amendment") shall have been approved and made effective by the
Board, the Executive Committee and the holders of the Series B Preferred
Stock, subject to Closing.
(e) Due Diligence. Each Purchaser (other than TSC) shall be
fully satisfied in its sole discretion with the results of its review
of, and its due diligence investigations with respect to, the business,
operations, affairs, prospects, properties, assets, existing and
potential liabilities, obligations, profits and conditions (financial or
otherwise) of the Company (including the Disclosure Schedule). A
Purchaser shall be deemed to be so satisfied unless it notifies the
Company in writing at or prior to 11:59 p.m., Eastern Time, on the date
that is fourteen (14) calendar days after the date of this Agreement
(the "Diligence Termination Time") that it is terminating this Agreement
pursuant to Section 7.01(c)(iv) because it is not so satisfied. Until
the Closing, the Company shall (and shall cause each of the Subsidiaries
to) cooperate promptly and fully with Purchasers' officers, employees,
counsel, accountants and other authorized representatives (the
"Representatives") and shall afford such Representatives reasonable
access during normal business hours to all of its (1) sites, properties,
books, contracts and records and personnel and advisers (who will be
instructed by the Company to cooperate), (2) such additional financial
and operating data and other information as to its business and
properties as the Purchasers may from time to time reasonably request,
including without limitation, access upon reasonable request to the
Company's Representatives, major customers, vendors, suppliers and
creditors for due diligence inquiry. The Company shall (and shall cause
each of the Subsidiaries to) furnish promptly to the Purchasers all
information concerning its business, properties and personnel as the
Purchasers or their Representatives may reasonably request on or before
the Diligence Termination Time; provided that any review will be
conducted in a way that will not interfere unreasonably with the conduct
of the Company's business. The Purchasers will keep all information and
documents obtained pursuant to this Section 6.03(e) on a confidential
basis subject to Section 5.09(a).
(f) Poison Pill. The Rights Agreement shall be in full force and
effect and not have been otherwise amended, modified or supplemented on
or after the date of this Agreement; provided, however, that the Board
shall have amended or waived provisions of the Rights Agreement such
that (i) neither the execution nor the delivery of any Transaction
Document nor the fulfillment of the terms of any Transaction Document by
the Company or any of the Purchasers nor the issuance of Shares as
herein and therein contemplated will cause there
36
to be a Stock Acquisition Date or a Distribution Date and (ii) the
Purchasers will not be deemed to be Adverse Persons (as those terms are
defined in the Rights Agreement).
(g) Credit Facility. The bank loan syndicate representing the
lenders to the Company pursuant to the Amended and Restated Credit
Agreement, dated as of January 17, 1997, among the Company, the Banks
listed therein and Xxxxxx Guaranty Trust Company of New York, as Agent,
as amended from time to time (the "Credit Facility"), shall have agreed
to convert the Credit Facility to a term loan and revolving credit
facility, substantially in accordance with the terms set forth on
Exhibit 6.03(g)
(h) Closing Deliveries. The Company shall have delivered to
Purchasers on or before the Closing the following:
(i) Opinion of Xxxxxxx, Procter & Xxxx LLP, dated as of
the Closing Date, in form reasonably satisfactory to Purchasers;
(ii) The Registration Rights Agreement, executed by the
Company;
(iii) The Shareholders Agreement, executed by the
Company;
(iv) Certificate of the Secretary or Assistant Secretary
of the Company dated as of the Closing Date certifying: (i) that
attached thereto is a true and complete copy of the By-Laws of
the Company as in effect on the date of such certification; (ii)
that attached thereto is a true and complete copy of all
resolutions adopted by the Board authorizing the execution,
delivery and performance of the Agreement, the issuance, sale
and delivery of the Shares, and that all such resolutions are in
full force in effect and are all the resolutions adopted in
connection with the transactions contemplated by this Agreement
and the Transaction Documents; (iii) that attached thereto is a
true and complete copy of the Articles of Organization as in
effect on the date of such certification; and (iv) to the
incumbency and specimen signature of certain officers of the
Company;
(v) Certificates representing the number of the shares
of Common Stock to be purchased, as described in Section 2.02;
and
(vi) Executed and conformed copies of such other
certificates, letters and documents as Purchasers may reasonably
request and as are customary for transactions such as those
contemplated by this Agreement and the Transaction Documents.
(i) Tax Matters. The Company shall have received an opinion in
the form of Exhibit 6.03(i) hereto, from the Company's independent tax
advisors that a "change in ownership" within the meaning of Section 382
of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder, shall not occur as a result of (i)
37
the sale of 9,411,765 shares of Common Stock for $40 million,
(ii) the exchange of 100% of the Series B Preferred Stock for
Common Stock at a price of $5.50 per share, or (iii) any other
transaction or occurrence prior to the Closing.
(j) Corporate Proceedings. All corporate proceedings of the
Company in connection with the transactions contemplated by this
Agreement and the Transaction Documents, and all documents and
instruments incident thereto, shall be satisfactory in form and
substance to Purchasers and its counsel, and Purchasers and its counsel
shall have received all such documents and instruments, or copies
thereof, certified or requested, as may be reasonably requested. The
Special Committee of the Board shall have recommended the execution and
performance of this Agreement and the Transaction Documents to the full
Board after the delivery of a fairness opinion by the Special
Committee's financial advisor in a form reasonably satisfactory to the
Special Committee and the full Board shall have approved such execution
and performance.
(k) Material Adverse Effect. 6.65 No event, change or
development shall exist or have occurred since the date hereof which,
individually or in the aggregate with other events, changes or
developments, has had or is reasonably likely to have a Material Adverse
Effect on the Company and the Subsidiaries, taken as a whole; provided,
however, that Material Adverse Effect with respect to this Section
6.03(k) shall not include (i) changes in general industry, economic,
regulatory, political or stock market conditions that affect the Company
(or the markets in which the Company competes) in a manner not
disproportionate to the manner in which such conditions affect other
companies in the industries or markets in which the Company competes;
(ii) any circumstances or events (including, without limitation, any
loss of personnel, loss of customers, loss of suppliers or the delay or
cancellation of any orders for products) arising primarily out of or
resulting primarily from actions contemplated by Company and the
Purchasers in connection with this Agreement and/or the transactions
contemplated hereby; or (iii) changes in GAAP.
(l) Chapter 110F. The Issuance of the Shares hereunder shall
have been exempted from the provisions of Chapter 110F of the
Massachusetts General Laws.
(m) Listing. The Shares shall have been approved for listing on
the American Stock Exchange, subject only to official notice of
issuance, as required.
(n) Fundamental Corporate Changes. Except as specifically
contemplated hereby, the Company shall not have caused or permitted (i)
any change to the composition of the Executive Committee of the Board,
or (ii) any change to be made to the duties, rights and responsibilities
of the Chairman. Xxxxxx X. Tutor shall be serving as Chairman of the
Company.
(o) Additional Conditions.
(i) As to TSC, O&G and National Union shall have
delivered at the Closing their respective portions of the
Purchase Price, each of O&G and
38
National Union shall have executed and delivered the
Shareholders Agreement at the Closing.
(ii) As to O&G, TSC and National Union shall have
delivered at the Closing their respective portions of the
Purchase Price, each of TSC and National Union shall have
executed and delivered the Shareholders Agreement at the
Closing.
(iii) As to National Union, O&G and TSC shall have
delivered at the Closing their respective portions of the
Purchase Price, each of O&G and TSC shall have executed and
delivered the Shareholders Agreement at the Closing.
(p) Certain Events. There shall not be in effect on the Closing
Date (i)any suspension or limit of trading in securities generally on
the American Stock Exchange (including automatic halt in trading
pursuant to market-decline triggers other than those in which solely
program trading is temporarily halted), (ii) the imposition generally of
minimum or maximum prices on such exchange or on The Nasdaq Stock Market
or additional material governmental restrictions, in either case not in
force on the date of this Agreement, by such exchange or by order of the
SEC or the National Association of Securities Dealers or any court or
other governmental authority, (iii) the declaration of any general
banking moratorium by either Federal or New York State authorities, or
(iv) any material adverse change in the financial or securities markets
in the United States or in political, financial or economic conditions
in the United States or any outbreak or escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis, the effect of any of which of the items referred to
in clauses (i), (ii), (iii) and (iv) is such as to make it, in
reasonable judgment of any Purchaser, impracticable or inadvisable to
acquire the Shares on the terms and in the manner contemplated by this
Agreement.
ARTICLE VII
Termination
-----------
SECTION 7.01 Termination. This Agreement may be terminated at any time
prior to the Closing, whether before or after the Stockholder Approvals have
been obtained:
(a) by mutual written consent of all of the Purchasers and the
Company;
(b) by any Purchaser or the Company:
(i) if the Closing shall not have occurred prior to
April 5, 2000, sixty days from the date of this Agreement (the
"Outside Date"); provided, however, that the right to terminate
this Agreement pursuant to this clause (i) shall not be
available to any party whose failure to fulfill any obligation
under this Agreement results in the failure of the Closing to
occur; and provided further, that
39
the Outside Date shall be extended by no more than sixty (60)
days in the event that the conditions to the Purchasers'
obligations to close cannot be satisfied due to events that are
not within the control of, and have not been caused by, the
Company or the Special Committee, for which purposes delays
caused by review or comments by the SEC shall not be deemed to
have been within the control of or caused by the Company or the
Special Committee; or
(ii) if the Stockholder Approvals shall not have been
obtained notwithstanding the holding of a vote on the
Stockholder Meeting Proposals at the Stockholder Meeting
(including any adjournment or postponement) contemplated by
Section 5.05 (provided that the right to terminate this
Agreement under this Section shall not be available to any party
seeking termination who at the time is in breach of or has
failed to fulfill its obligations under this Agreement); or
(iii) if there shall be any statute, law, regulation or
rule that makes consummating the transactions contemplated
hereby illegal or if any court or other Governmental Entity of
competent jurisdiction shall have issued a judgment, order,
decree or ruling, or shall have taken such other action
restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated hereby and such judgment,
order, decree or ruling shall have become final and
non-appealable (provided that, the party seeking to terminate
pursuant to this Section shall have used commercially reasonable
efforts to have any such order, decree, ruling or other action
vacated or lifted);
(c) by any Purchaser:
(i) if the Company shall have failed to perform in any
material respect any of its obligations hereunder or shall have
breached in any respect any representation or warranty contained
herein qualified by materiality or shall have breached in any
material respect any representation or warranty not so
qualified, and the Company has failed to perform such obligation
or cure such breach, within 30 days of its receipt of written
notice thereof from such Purchaser, and such failure to perform
shall not have been waived in accordance with the terms of this
Agreement; or
(ii) if the Board or any committee thereof withdraws or
modifies (or publicly announces its intention to do so, or
resolves to do so) in a manner adverse to Purchasers (as
determined by any Purchaser in its reasonable judgment) its
approval or recommendation of this Agreement or the transactions
contemplated hereby or approves or recommends a Transaction
Proposal; or
(iii) if any of the conditions set forth in Section 6.01
(other than Section 6.01(c)) or 6.03 shall become impossible to
fulfill (other than as a result of any breach by such Purchaser
of the terms of this Agreement) and shall not have been waived
in accordance with the terms of this Agreement; or
40
(iv) if any Purchaser (other than TSC) is not satisfied
with the Company (including as to any matters contemplated by
the Disclosure Schedules or the Filed Company SEC Documents) as
a result of its due diligence review and has given the notice in
the manner required by Section 6.03(e);
(d) by the Company:
(i) if any of the Purchasers shall have failed to
perform in any material respect any of their obligations
hereunder or shall have breached in any respect any
representation or warranty contained herein qualified by
materiality or shall have breached in any material respect any
representation or warranty not so qualified, and Purchasers have
failed to perform such obligation or cure such breach, within 30
days of its receipt of written notice thereof from the Company,
and such failure to perform shall not have been waived in
accordance with the terms of this Agreement; or
(ii) if any of the conditions set forth in Section 6.01
(other than Section 6.01(c)) or 6.02 shall become impossible to
fulfill (other than as a result of any breach by the Company of
the terms of this Agreement) and shall not have been waived in
accordance with the terms of this Agreement; or
(iii) upon ten (10) days written notice to Purchasers,
if all of the following conditions have been met: (x) the
Company has complied with the terms of Section 5.07, (y) the
Company has received a Transaction Proposal that the Special
Committee has concluded, based on the advice of a
nationally-recognized investment banking firm (which shall
include Xxxxxxxx), is superior to the terms set forth herein (a
"Superior Transaction Proposal"), and (z) the Special Committee
determines in good faith, after consultation with outside
counsel, that it is advisable to do so in order to comply with
its fiduciary duties to the Company's stockholders under
applicable law.
SECTION 7.02 Effect of Termination. In the event of termination of this
Agreement by either the Company or any Purchaser as provided in Section 7.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of either Purchaser or the Company, other
than the provisions of this Section 7.02, Section 5.09(a) and Article IX and
except to the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
SECTION 7.03 Termination by One Purchaser. Notwithstanding the
provisions of this Article VII, the exercise by any one Purchaser of its
termination rights under Section 7.01 shall relieve such Purchaser of all
obligations under this Agreement (other than those set forth in this Section
7.03, Section 5.09(a) and Section 9.08) but shall not result in the termination
of this Agreement if, within five Business Days of receipt of such termination
notice by the other Purchasers, one or more of the other Purchasers shall agree
to an amendment to Exhibit 2.01 pursuant to which all Shares proposed to be
purchased under this Agreement are
42
purchased by the other Purchasers (and provide a copy of such amended Exhibit
2.01 to the Company).
ARTICLE VIII
Indemnification
---------------
SECTION 8.01 Indemnification of Purchasers. The Company covenants and
agrees to defend, indemnify and hold harmless each of the Purchasers, their
Affiliates (other than the Company and any of its Subsidiaries), and their
respective officers, directors, partners, employees, agents, advisers and
representatives (collectively, the "Purchaser Indemnitees") from and against,
and pay or reimburse the Purchaser Indemnitees for, any and all Indemnifiable
Losses resulting from or based on (or allegedly resulting from or based on):
(a) any litigation or claims (including by any stockholders of
the Company in connection with any derivative actions, but not including
any litigation or claims brought or made by any of the Purchaser
Indemnitees under this clause (a)) resulting from or based on (or
allegedly resulting from or based on) any of the transactions
contemplated by the Transaction Documents, provided that the indemnity
provided in this clause (a) shall not include (i) losses resulting from
or based on the acts or omissions of Purchaser Indemnitees following the
Closing, or (ii) claims resulting from or based on a breach by any of
the Purchasers of its obligations, representations, warranties,
agreements or covenants under this Agreement; or (iii) claims resulting
from any contract, obligation or other agreement between a third party
claimant (other than a stockholder, whether common or preferred,
bondholder, lender, director or officer of the Company (or an Affiliate
of any of the foregoing)) and any Purchaser; provided, however, that in
no such case shall this Section 8.01(a) be construed to limit the
indemnity rights that a Purchaser Indemnitee may have in any
other Transaction Document; or
(b) any breach by the Company of any representation, warranty,
covenant or obligation of the Company hereunder or under any other
Transaction Document.
The Company shall reimburse the Purchaser Indemnitees for any legal or other
expenses incurred by such Purchaser Indemnitees in connection with investigating
or defending any such Indemnifiable Losses as such expenses are incurred.
Notwithstanding the foregoing provisions of this Section 8.01, the Company shall
not be liable to a Purchaser Indemnitee in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or omission made in the Proxy Statement, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by such Purchaser Indemnitee (or its Affiliates),
specifically for use in the preparation thereof.
SECTION 8.02 Indemnification Procedures. Promptly after receipt by a
Purchaser Indemnitee of notice of the commencement of any action or the written
assertion of any claim, such Purchaser Indemnitee shall, if a claim in respect
thereof is to be made against the Company, as the case may be (the "Indemnifying
Person"), notify the Indemnifying Person in
42
writing of the commencement or the written assertion thereof. Failure by a
Purchaser Indemnitee to so notify the Indemnifying Person shall relieve the
Indemnifying Person from the obligation to indemnify such Purchaser Indemnitee
only to the extent that the Indemnifying Person suffers actual and material
prejudice as a result of such failure but in no event shall such failure to
notify the Indemnifying Person (i) constitute prejudice suffered by the
Indemnifying Person if it has otherwise received notice of the actions giving
rise to such obligation to indemnify or (ii) relieve it from any liability or
obligation that it may otherwise have to such Purchaser Indemnitee under this
Agreement. In case any such action or claim shall be brought or asserted against
any Purchaser Indemnitee and it shall notify the Indemnifying Person of the
commencement or assertion thereof, the Indemnifying Person shall be entitled to
participate therein but the defense of such action or claim shall be conducted
by counsel to the Purchaser Indemnitee, provided, however, that the Indemnifying
Person shall not, in connection with any one such action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all Purchaser Indemnitees, except to
the extent that local counsel, in addition to regular counsel, is required in
order to effectively defend against such action or proceeding and provided
further that a Purchaser Indemnitee shall not enter into any settlement of any
such claim without the prior consent of the Company, such consent not to be
unreasonably withheld or delayed.
SECTION 8.03 Survival of Representations, Warranties and Covenants.
Except as provided in clauses (a), (b) or (c) of this Section 8.03, the
representations, warranties, covenants, and agreements included in this
Agreement shall survive for a period of three (3) years: (a) the obligations set
forth in Sections 5.08 (Access and Information), 5.09(b) (Publicity) and 5.12
(Directors' and Officers' Indemnification and Insurance), shall survive for the
periods specified therein for the performance of the covenants set forth
therein; (b) the representations set forth in Sections 3.01(n) (Taxes), 3.01(o)
(Employee Benefit Plans and Related Matters; ERISA) and 3.01(p) (Environmental
Laws) shall survive until the date that is six (6) months after the expiration
of the longest applicable federal or state statute of limitations; and (c) the
obligations set forth in Sections 5.09(a) (Confidentiality), and 5.10
(Restrictions), and Articles VIII (Indemnification) and IX (Miscellaneous) shall
survive indefinitely.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
43
SECTION 9.02 Specific Enforcement. Purchasers, on the one hand, and the
Company, on the other, acknowledge and 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 the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, this being in addition to any
other remedy to which they may be entitled at law or equity.
SECTION 9.03 Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto) and the other Transaction Documents contain the entire
understanding of the parties with respect to the transactions contemplated
hereby.
SECTION 9.04 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 of the counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
SECTION 9.05 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be validly given, made or served, if in writing and
delivered personally, by telecopy (except for legal process) or sent by
registered mail, postage prepaid, if to:
The Company:
Perini Corporation
00 Xx. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Band, President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
TSC:
Xxxxx-Xxxxxx Corp.
Attn: Xxxxxx X. Tutor
00000 Xxxxx Xxxxxx
00
Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
National Union:
National Union Fire Insurance Company of
Pittsburgh, PA.
c/o AIG Global Investment Corp.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxx
Facsimile: (000) 000-0000
with a copy to:
American International Group, Inc.
Law Department
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
O&G:
O&G Industries, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx; Xxxxxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
Murtha, Cullina, Xxxxxxx & Xxxxxx
000 Xxxxxx Xxxxxx
City Place I
Hartford, Connecticut 06103-3469
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
45
or to such other address or telex number as any party may, from time to time,
designate in a written notice given in a like manner.
SECTION 9.06 Amendments. This Agreement may be amended as to Purchasers
and their successors and assigns (determined as provided in Section 9.07), and
the Company may take any action herein prohibited, or omit to perform any act
required to be performed by it, if the Company shall obtain the written consent
of Purchasers. This Agreement may not be waived, changed, modified, or
discharged orally, but only by an agreement in writing signed by the party or
parties against whom enforcement of any waiver, change, modification or
discharge is sought or by parties with the right to consent to such waiver,
change, modification or discharge on behalf of such party.
SECTION 9.07 Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns. Prior to the Closing Date, National
Union may assign all of its rights and obligations to American International
Group, Inc. ("AIG") or any other person the equity of which is, directly or
indirectly, 100% owned by AIG, without the consent of the other parties hereto,
and may assign up to 50% of the interest to be acquired by it pursuant to this
Agreement to a third party, subject to the written consent of the Company and
TSC, which shall not be unreasonably withheld (and, in either such event, such
assignee shall become a "Purchaser" hereunder). Except as provided in the
preceding sentence, no party may assign any of its rights under this Agreement
without the written consent of the other parties.
SECTION 9.08 Expenses and Remedies.
(a) All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the
party incurring such expense, except as set forth in the next four
paragraphs.
(b) Notwithstanding Section 9.08(a), (i) if a Purchaser
terminates this Agreement pursuant to Section 7.01(c)(i) (due to
material breach of any covenant or agreement or an intentional and
willful breach of any representation or warranty by the Company) or
(c)(ii), or (ii) if the Company terminates this Agreement pursuant to
Section 7.01(d)(ii) (by virtue of a failure of the condition set forth
in Section 6.02(d)) or 7.01(d)(iii), the Company shall pay TSC a
termination fee of $750,000 (the "Termination Fee") within ten (10) days
of such termination, which Termination Fee shall be deemed to reimburse
Purchasers for their legal, accounting and other out-of-pocket expenses
as well as the damages they will have suffered by virtue of such
termination.
(c) Notwithstanding Section 9.08(a), (i) if a Purchaser or the
Company terminates this Agreement pursuant to Section 7.01(b)(i) or
(ii), (ii) if a Purchaser terminates this Agreement pursuant to Section
7.01(c)(i) (for reasons other than as provided in Section 9.08(b)) or
(c)(iii) (for failures of the conditions set forth in 6.03(a), 6.03(b),
6.03(d), 6.03(f), 6.03(g) (provided that no amount shall be payable if
the failure is not due to any fault of the Company), 6.03(h), 6.03(i),
6.03(j), 6.03(k), 6.03(l), 6.03(m), or 6.03(n)), or (iii) the Company
terminates this Agreement pursuant to Section 7.01(d)(ii) (other than
for failure of a condition set forth in
46
section 6.02(d)), the Company shall reimburse Purchasers for the
reasonable out-of-pocket expenses (including reasonable fees and
expenses of legal counsel) incurred by Purchasers in connection with
this Agreement or the matters contemplated hereby (the "Purchasers'
Expenses"), which reimbursable amount shall not to exceed $600,000 in
the aggregate.
(d) Notwithstanding Section 9.08(a), if (i) either Purchaser or
the Company terminates this Agreement pursuant to any provision of
Section 7.01 (other than a termination for which a Termination Fee was
paid pursuant to Section 9.08(b) and other than a termination by the
Company pursuant to Section 7.01(d)(i)), and (ii) during the period
ending twelve (12) months after termination of this Agreement, the
Company enters into an agreement relating to a Transaction Proposal,
then immediately prior to consummation of such transaction, the Company
shall pay the Termination Fee; provided, however, that the Company shall
receive a credit for any Purchasers' Expenses paid pursuant to Section
9.08(c) and it being understood that if the Termination Fee is paid
pursuant to Section 9.08(b) it shall not be required to be paid
subsequently under this Section 9.08(d).
(e) Notwithstanding Section 9.08(a), upon the occurrence of the
Closing, the Company shall reimburse the Purchasers for the Purchasers'
Expenses, which reimbursable amount shall not be subject to the limit
set forth in Section 9.08(c).
SECTION 9.09 Transfer of Shares.(a) Each Purchaser understands and
agrees that the Shares have not been registered under the Securities Act or the
securities laws of any state and that they may be sold or otherwise disposed of
only in one or more transactions registered under the Securities Act and, where
applicable, such laws or as to which an exemption from the registration
requirements of the Securities Act and, where applicable, such laws is
available. Each Purchaser acknowledges that except as provided in the
Registration Rights Agreement, it has no right to require the Company to
register the Shares. Each Purchaser understands and agrees that each certificate
representing shares of Common Stock shall bear the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
ACT OR SUCH LAWS."
and Purchaser agrees to transfer shares of Common Stock only in accordance with
the provisions of such legends. After termination of the requirement that all or
part of such legend be placed upon a certificate, the Company shall, upon
receipt by the Company of evidence reasonably satisfactory to it that such
requirement has terminated and upon the written request of the holders of the
Shares issue certificates for the Shares that do not bear such legend.
SECTION 9.10 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the
00
Xxxxx xx Xxx Xxxx, except to the extent that Massachusetts law mandatorily
governs. Each of the Company and Purchasers irrevocably submits to the personal
exclusive jurisdiction of the United States District Court for the Southern
District of New York for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby (and, to
the extent permitted under applicable rules of procedure, agrees not to commence
any action, suit or proceeding relating hereto except in such court). Each of
the Company and Purchasers further agree that service of any process, summons,
notice or document hand delivered or sent by registered mail to such party's
respective address set forth in Section 9.10 will be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence. Each of the Company and Purchasers irrevocably
and unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the Southern
District of New York, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in such court that any such action, suit or
proceeding brought in such court has been brought in an inconvenient forum.
SECTION 9.11 Third Party Beneficiaries. As provided in Section 5.12, the
directors of the Company are the intended beneficiaries of that section of this
Agreement. Except as provided in Section 5.12, nothing contained in this
Agreement is intended to confer upon any person or entity other than the parties
hereto and their respective successors and permitted assigns, any benefit, right
or remedies under or by reason of this Agreement.
SECTION 9.12 Mutual Drafting. This Agreement is the mutual product of
the parties hereto, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of each of the parties, and shall not be
construed for or against any party hereto.
SECTION 9.13 Further Representations. Each party to this Agreement
acknowledges and represents that it has been represented by its own legal
counsel in connection with the transactions contemplated by this Agreement, with
the opportunity to seek advice as to its legal rights from such counsel. Each
party further represents that it is being independently advised as to the tax
consequences of the transactions contemplated by this Agreement and is not
relying on any representation or statements made by the other party as to such
tax consequences.
[remainder of page intentionally left blank]
48
IN WITNESS WHEREOF, each Purchaser and the Company have caused this
Agreement to be duly executed as of the day and year first above written.
PERINI CORPORATION XXXXX-XXXXXX CORPORATION
By: By:
Name: Name:
Title: Title:
O&G INDUSTRIES, INC. NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA.
By:
Name: By:
Title: Name:
Title:
49
Exhibit 2.01
Purchase and Sale of Shares
---------------------------
Xxxxx-Xxxxxx Corporation 2,352,942
O&G Industries, Inc. 2,352,941
National Union Fire Insurance Company of Pittsburgh, PA. 4,705,882
================================================================================
TOTAL 9,411,765
50
Exhibit 6.02(c)(i)
Form of Registration Rights Agreement
-------------------------------------
[to be attached]
51
Exhibit 6.02(c)(ii)
Form of Shareholders Agreement
------------------------------
[to be attached]
52
Exhibit 6.03
Required Amendments and Revisions
Related to Series B Preferred Stock
-----------------------------------
1. Deletion or waiver of Section 7.2 of the Series B Purchase Agreement in
its entirety.
2. Deletion or waiver of Section 7.3 of the Series B Purchase Agreement in
its entirety.
3. Replacement of Section 7(b) of the Series B Certificate of Vote with:
"On and after the Closing (as defined in the Securities Purchase
Agreement, dated January __, 2000, no action on the part of Corporation
shall constitute a 'Special Default'."
4. Deletion of Section 13 of the Series B Certificate of Vote in its
entirety.
5. Deletion or waiver of Section 7.20 of the Series B Purchase Agreement.
53
Exhibit 6.03(d)
Terms of Amendment to By-Laws
-----------------------------
[to be attached]
54
Exhibit 6.03(g)
Terms of Amendment to Credit Facilities
---------------------------------------
[to be attached]
55
Exhibit 6.03(i)
Form of KPMG Opinion Regarding NOLs
-----------------------------------
[to be attached]
56
