Exhibit 2
EXECUTION VERSION
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
among
▇▇▇▇▇ GROUP LTD.,
▇▇▇▇▇ ACQUISITION CORP.
and
BAYCORP HOLDINGS, LTD.
Dated as of September 30, 2005
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER
SECTION 1.01 The Offer 6
SECTION 1.02 Company Action 8
ARTICLE II
THE MERGER
SECTION 2.01 The Merger 10
SECTION 2.02 Effective Time 10
SECTION 2.03 Effect of the Merger 10
SECTION 2.04 Certificate of Incorporation; By-laws 10
SECTION 2.05 Directors and Officers 11
SECTION 2.06 Conversion of Securities 11
SECTION 2.07 Treatment of Options 11
SECTION 2.08 Dissenting Shares 12
SECTION 2.09 Surrender of Shares; Stock Transfer Books 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01 Organization and Qualification;
Subsidiaries 15
SECTION 3.02 Certificate of Incorporation and By-laws 15
SECTION 3.03 Capitalization. 15
SECTION 3.04 Authority Relative to the Transactions 17
SECTION 3.05 No Conflict; Required Filings and Consents 18
SECTION 3.06 Permits; Compliance 19
SECTION 3.07 SEC Filings; Financial Statements 19
SECTION 3.08 Absence of Certain Changes or Events 22
SECTION 3.09 Absence of Litigation 22
SECTION 3.10 Employee Benefit Plans 23
SECTION 3.11 Labor and Employment Matters 26
SECTION 3.12 Real Property; Title to Assets 27
SECTION 3.13 Intellectual Property 28
SECTION 3.14 Taxes 30
SECTION 3.15 Environmental Matters 31
SECTION 3.16 Material Contracts 32
SECTION 3.17 Insurance 34
SECTION 3.18 Certain Business Practices 35
SECTION 3.19 Interested Party Transactions 35
i
SECTION 3.20 Offer Documents; Schedule 14D-9. 36
SECTION 3.21 Opinion of Financial Advisor 36
SECTION 3.22 Brokers 37
SECTION 3.23 Section 203 of the DGCL Not Applicable;
Other Statutes 37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 4.01 Corporate Organization 37
SECTION 4.02 Authority Relative to the Transactions 37
SECTION 4.03 No Conflict; Required Filings and Consents 38
SECTION 4.04 Financing 39
SECTION 4.05 Offer Documents; Proxy Statement 39
SECTION 4.06 Brokers 39
SECTION 4.07 Ownership of Company Common Stock 39
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company Pending
the Merger 40
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Stockholders' Meeting 44
SECTION 6.02 Proxy Statement 44
SECTION 6.03 Company Board Representation; Section
14(f) 45
SECTION 6.04 Access to Information; Confidentiality 46
SECTION 6.05 No Solicitation of Transactions 46
SECTION 6.06 Employee Benefits Matters 49
SECTION 6.07 Directors' and Officers' Indemnification
and Insurance 50
SECTION 6.08 Notification of Certain Matters 51
SECTION 6.09 Further Action; Reasonable Best Efforts 51
SECTION 6.10 Subsequent Financial Statements 52
SECTION 6.11 Public Announcements 52
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Merger 53
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination 53
SECTION 8.02 Effect of Termination 55
SECTION 8.03 Fees and Expenses 56
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SECTION 8.04 Amendment 57
SECTION 8.05 Waiver 57
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations,
Warranties and
Agreements 58
SECTION 9.02 Notices 58
SECTION 9.03 Certain Definitions 59
SECTION 9.04 Severability 63
SECTION 9.05 Entire Agreement; Assignment 63
SECTION 9.06 Parties in Interest 63
SECTION 9.07 Specific Performance 63
SECTION 9.08 Governing Law 63
SECTION 9.09 Waiver of Jury Trial 63
SECTION 9.10 Headings 63
SECTION 9.11 Counterparts 63
SECTION 9.12 Company Disclosure Schedule 63
ANNEX A Conditions to the Offer
ANNEX B Surviving Corporation Employment Agreement -
▇▇▇▇▇▇
ANNEX C Surviving Corporation Employment Agreement -
Callendrello
iii
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF
MERGER, dated as of September 30, 2005 (this "Agreement"),
is by and among ▇▇▇▇▇ GROUP LTD., a Bahamas corporation
("Parent"), ▇▇▇▇▇ ACQUISITION CORP., a Delaware corporation
and a wholly owned subsidiary of Parent ("Purchaser"), and
BAYCORP HOLDINGS, LTD., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent,
Purchaser and the Company have each determined that it is in
the best interests of their respective stockholders for
Parent to acquire the Company upon the terms and subject to
the conditions set forth herein (the "Acquisition");
WHEREAS, in furtherance of such Acquisition, it is
proposed that Purchaser shall, and Parent shall cause
Purchaser to, make a cash tender offer (the "Offer") to
acquire all the issued and outstanding shares of Company
common stock, par value $0.01 per share ("Shares") for
$14.19 per Share (such amount, or any greater amount per
Share paid pursuant to the Offer, being the "Per Share
Amount"), net to the seller in cash, upon the terms and
subject to the conditions of this Agreement and the Offer;
WHEREAS, the Company's Board of Directors (the
"Company Board") has established a special committee of
independent directors (the "Special Committee") to consider
the Acquisition, and the Special Committee has engaged a
financial advisor to assist the Special Committee;
WHEREAS, based on the recommendations of its
Special Committee, the Company Board has unanimously
approved the Offer and resolved to recommend that holders of
Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition,
the Boards of Directors of Parent, Purchaser and the Company
have each approved this Agreement and declared that it is
fair and in the best interests of their respective
stockholders and approved the Offer and the merger (the
"Merger") of Purchaser with and into the Company in
accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), following the consummation of the
Offer and upon the terms and subject to the conditions set
forth herein;
WHEREAS, in order to induce Parent and Purchaser
to enter into this Agreement, certain stockholders of the
Company (the "Stockholders") have entered into Stockholder
Support Agreements, dated as of September 13, 2005 (the
"Stockholder Support Agreements"), providing that, among
other things, the Stockholders will (i) tender their Shares
into the Offer and (ii) vote the Shares owned of record and
beneficially by them in favor of the Merger, if applicable,
and the other transactions contemplated by this Agreement;
and
WHEREAS, on and as of the date hereof, the parties
to the Agreement and Plan of Merger dated as of September
13, 2005 (the "Original Agreement") have agreed to amend and
restate the Original Agreement in full to read as set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, Parent, Purchaser
and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer
(a) Subject to the conditions of this Agreement
and provided that this Agreement shall not have been
terminated in accordance with its terms pursuant to Article
VIII and none of the events set forth in paragraphs (a)
through (k) of Annex A hereto shall have occurred or be
existing, Purchaser shall, and Parent shall cause Purchaser
to, (i) "commence" (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) the Offer as soon as practicable following
the earlier to occur of (x) the affirmative recommendation
of the Vermont Department of Public Service to the Vermont
Public Service Board ("VPSB") that the consummation of the
transactions contemplated by this Agreement and the
conversion of the Convertible Notes be approved by the VPSB
without a public hearing and without any material adverse
conditions, or restrictions, revocations or limitations of
rights, or (y) the final approval of the VPSB, without any
material adverse conditions, or restrictions, revocations or
limitations of rights, of the consummation of the
transactions contemplated by this Agreement and the
conversion of the Convertible Notes (the "VPSB Approval"),
and (ii) cause the Offer to remain open until the twentieth
business day after such commencement of the Offer (the
"Initial Expiration Date"). Purchaser shall be obligated,
and Parent shall cause Purchaser, to accept for payment and
pay for Shares validly tendered and not properly withdrawn
pursuant to the Offer, subject only to the satisfaction of
each of the conditions set forth in Annex A hereto (the
"Offer Conditions"). At the Company's request, Purchaser
will, and Parent shall cause Purchaser to, extend the Offer
after the Initial Expiration Date for one or more periods
not to exceed an aggregate of 15 business days if the
Minimum Condition (as such term is defined in Annex A
hereto) has not been satisfied at the Initial Expiration
Date. Subject to the prior satisfaction of the Offer
Conditions, Purchaser shall, and Parent shall cause
Purchaser to, consummate the Offer in accordance with its
terms and accept for payment all Shares validly tendered and
not properly withdrawn by 9:00 A.M. Eastern Time on the next
business day after the expiration of the Offer. Purchaser
expressly reserves the right to waive any Offer Condition,
or increase the Per Share Amount payable in the Offer and to
make any other changes in the terms and conditions of the
Offer; provided, however, that, without the consent of the
Company, Purchaser shall not, and Parent shall not permit
Purchaser to, (i) decrease the Per Share Amount or change
the form of consideration payable in the Offer, (ii) reduce
the number of Shares subject to the Offer, (iii) impose
conditions to the Offer in addition to the Offer Conditions,
(iv) reduce or waive the Minimum Condition, or (v) change
the Offer in a manner adverse to the holders of the Shares.
Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (i) extend the Offer for one or more
periods of not more than 5 business days each beyond the
Initial Expiration Date, if, at any scheduled expiration of
the Offer, any of the Offer Conditions shall not be
satisfied or waived or (ii) extend the Offer for any period
required by any rule, regulation or interpretation of the
Securities and Exchange Commission (the "SEC") or the staff
thereof, applicable to the Offer (provided that Purchaser
shall
2
keep the Company reasonably informed of Purchaser's or
Parent's contact with the SEC or the staff thereof with
respect to the Offer). In addition, if, on the Initial
Expiration Date, the sole Offer Condition remaining
unsatisfied is the failure to have received the VPSB
Approval, then Purchaser shall, and Parent shall cause
Purchaser to, extend the Offer from time to time until the
earlier to occur of (i) November 30, 2005 and (ii) the fifth
business day after receipt of the VPSB Approval. The Per
Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, upon the terms and
subject to the conditions of the Offer. Purchaser shall,
and Parent shall cause Purchaser to, pay for all Shares
validly tendered and not properly withdrawn promptly
following the acceptance of Shares for payment pursuant to
the Offer. Notwithstanding the immediately preceding
sentence and subject to the applicable rules of the SEC and
the terms and conditions of the Offer, Purchaser expressly
reserves the right to delay payment for Shares in order to
comply in whole or in part with applicable Laws. Any such
delay shall be effected in compliance with SEC Rule 14e-1(c)
under the Exchange Act. Purchaser may extend the Offer
after the acceptance of Shares thereunder for a further
period of time by means of a subsequent offering period
under SEC Rule 14d-11 under the Exchange Act of not more
than 20 business days to meet the objective that there be
validly tendered, in accordance with the terms of the Offer,
prior to the expiration of the Offer (as so extended), and
not withdrawn, a number of Shares which, together with the
25,000 Shares then owned by Parent, represents at least 90%
of the then issued and outstanding Shares. If the payment
equal to the Per Share Amount in cash (the "Merger
Consideration") is to be made to a person other than the
person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books
of the Company, it shall be a condition of payment that the
certificate so surrendered shall be endorsed properly with
signature guaranteed and otherwise be in proper form for
transfer, and that the person requesting such payment shall
have paid all transfer and other Taxes required by reason of
the payment of the Merger Consideration to a person other
than the registered holder of the certificate surrendered,
or shall have established to the satisfaction of Purchaser
that such Taxes either have been paid or are not applicable.
(b) On the date of commencement of the Offer,
Purchaser and Parent shall file with the SEC a Tender Offer
Statement on Schedule TO (together with all exhibits,
amendments and supplements thereto, the "Schedule TO") with
respect to the Offer. The Schedule TO and the Schedule 13E-
3 (as defined in Section 1.03 below) shall comply in all
material respects with the provisions of the Exchange Act,
the rules and regulations promulgated thereunder and all
other applicable Laws, and shall contain or shall
incorporate by reference an offer to purchase relating to
the Offer (the "Offer to Purchase") and forms of the related
letter of transmittal and any related summary advertisement
(the Schedule TO, the Offer to Purchase and such other
documents, together with all exhibits, supplements and
amendments thereto, being referred to herein collectively as
the "Offer Documents"). Each of Parent, Purchaser and the
Company agrees to correct promptly any information provided
by it for use in the Offer Documents and any Schedule 13E-3
that shall have become false or misleading in any material
respect, and Parent and Purchaser further agree to take all
steps necessary to cause the Schedule TO and any Schedule
13E-3, as so corrected, to be filed timely with the SEC, and
the other Offer Documents, as so corrected, to be
disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws.
Parent and Purchaser shall give the Company and its counsel
a reasonable opportunity to review and comment on the Offer
Documents and any Schedule 13E-3 prior to such documents
being filed with the SEC or disseminated to holders of
Shares. Parent and Purchaser shall provide the Company and
its counsel with any
3
comments that Parent, Purchaser or their counsel may receive
from the SEC or its staff with respect to the Offer
Documents and any Schedule 13E-3 promptly after the receipt
of such comments and shall provide the Company and its
counsel with a reasonable opportunity to participate in the
response of the Parent and Purchaser to such comments.
SECTION 1.02 Company Action
(a) Subject to Section 6.05(c), the Company (i)
hereby consents to the inclusion in the Offer Documents of
the recommendation of the Company Board described in Section
3.04 and (ii) shall not withdraw or modify such
recommendation in any manner adverse to Purchaser or Parent.
The Company has been advised by its directors and executive
officers that they intend to tender all Shares beneficially
owned by them to Purchaser pursuant to the Offer and, if
applicable, their respective Stockholder Support Agreements.
(b) On the date of commencement of the Offer, the
Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, the
"Schedule 14D-9"), which shall (i) comply in all material
respects with the provisions of the Exchange Act, the rules
and regulations thereunder and all other applicable Laws and
(ii) contain the Fairness Opinion and, except as provided in
Section 6.05(c), the recommendation of the Company Board
described in Section 3.04. The Company shall disseminate
the Schedule 14D-9 to the extent required by Rule 14d-9
promulgated under the Exchange Act, and any other applicable
federal securities laws. Each of the Company, Parent and
Purchaser agrees to correct promptly any information
provided by it for use in the Schedule 14D-9 that shall have
become false or misleading in any material respect, and the
Company further agrees to take all steps necessary to cause
the Schedule 14D-9, as so corrected, to be filed timely with
the SEC and disseminated to holders of Shares, in each case
as and to the extent required by applicable federal
securities laws. The Company shall give Parent and its
counsel a reasonable opportunity to review and comment on
the Schedule 14D-9 prior to such document being filed with
the SEC or disseminated to holders of Shares. The Company
shall provide Parent and its counsel with any comments that
the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments and shall provide Parent and its
counsel with a reasonable opportunity to participate in the
response of the Company to such comments.
(c) The Company shall promptly furnish, or cause
its transfer agent to furnish, Parent and Purchaser with
mailing labels containing the names and addresses of all
record holders of Shares and with security position listings
of Shares held in stock depositories, each as of a recent
date, together with all other reasonably available listings
and computer files containing names, addresses and security
position listings of record holders and beneficial owners of
Shares. The Company shall promptly furnish, or cause its
transfer agent to furnish, Parent and Purchaser with such
additional information, including, without limitation,
updated listings and computer files of stockholders, mailing
labels and security position listings, and such other
assistance in disseminating the Offer Documents and any
Schedule 13E-3 to holders of Shares as Parent or Purchaser
may reasonably request. Subject to the requirements of
applicable Law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents
necessary to consummate the Offer or the Merger, Parent and
Purchaser shall hold in confidence the information contained
in such labels, listings and files, shall use such
information only in connection with the Transactions, and,
if this Agreement shall be terminated in
4
accordance with Section 8.01, shall deliver to the Company
all copies of such information then in their possession.
SECTION 1.03 Other Actions
(a) The Company, Purchaser and Parent, and any
other person required by SEC Rule 13e-3, shall each timely
file a Rule 13e-3 Transaction Statement on Schedule 13E-3
(together with all amendments and supplements thereto, a
"Schedule 13E-3") with the SEC.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger
Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with the DGCL, at
the Effective Time (as defined below), Purchaser shall be
merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation").
SECTION 2.02 Effective Time
As promptly as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger or certificate
of ownership and merger (in either case, the "Certificate of
Merger") with the Secretary of State of the State of
Delaware, in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL (the
date and time of such filing of the Certificate of Merger
(or such later time as may be agreed by each of the parties
hereto and specified in the Certificate of Merger) being the
"Effective Time").
SECTION 2.03 Effect of the Merger
At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of the Company and
Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities
and duties of each of the Company and Purchaser shall become
the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation; By-laws
(a) At the Effective Time, the Certificate of
Incorporation of the Company shall be amended in the Merger
to be identical to the Certificate of Incorporation of
Purchaser as in effect immediately prior to the Effective
Time (except that such Certificate of Incorporation shall be
amended to provide the name of the Surviving Corporation
shall be the name of the Company), and shall be the
Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by Law and such
Certificate of Incorporation.
(b) Unless otherwise determined by Parent prior
to the Effective Time, subject to Section 6.07, at the
Effective Time, the By-laws of Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-
laws of the Surviving Corporation
5
until thereafter amended as provided by Law, the Certificate
of Incorporation of the Surviving Corporation and such By-
laws.
SECTION 2.05 Directors and Officers
The directors of Purchaser immediately prior to
the Effective Time, together with ▇▇▇▇▇ ▇▇▇▇▇▇, shall be the
initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation
and By-laws of the Surviving Corporation, and the officers
of the Company immediately prior to the Effective Time shall
be the initial officers of the Surviving Corporation, in
each case until their respective successors are duly elected
or appointed and qualified or until their earlier death,
resignation or removal.
SECTION 2.06 Conversion of Securities
At the Effective Time, by virtue of the Merger and
without any action on the part of Purchaser, the Company or
the holders of any of the following securities:
(a) each Share issued and outstanding immediately
prior to the Effective Time (other than any Shares to
be canceled pursuant to Section 2.06(b) and any
Dissenting Shares (as defined below)) shall be canceled
and shall be converted automatically into the right to
receive an amount equal to the Merger Consideration
payable, without interest, to the holder of such Share,
upon surrender, in the manner provided in Section 2.09,
of the certificate that formerly evidenced such Share;
(b) each Share held in the treasury of the
Company and each Share owned by Purchaser, Parent or
any direct or indirect subsidiary of Parent or of the
Company immediately prior to the Effective Time shall
be canceled and retired without any conversion thereof
and no payment or distribution shall be made with
respect thereto; and
(c) each share of common stock, $.01 par value
per share, of Purchaser issued and outstanding
immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock,
$.01 par value per share, of the Surviving Corporation
("Surviving Corporation Shares").
SECTION 2.07 Treatment of Options
(a) Between the date of this Agreement and the
Effective Time, the Company shall take all necessary action
(which action shall be effective as of the Effective Time)
to (i) terminate the Company's 1996 Stock Option Plan, 2001
Non-Statutory Stock Option Plan and each stock option
agreement granted otherwise than under such plans which
shall themselves constitute separate plans, each as amended
through the date of this Agreement (collectively, the
"Company Stock Option Plans") and (ii) cancel, as of the
Effective Time, each outstanding option to purchase shares
of Company Common Stock granted under the Company Stock
Option Plans (each, a "Company Stock Option") that is
outstanding and unexercised, whether or not vested or
exercisable, as of such date (in each case, without the
creation of additional liability to the Company or any
Subsidiary).
(b) As of the Effective Time, each holder of a
Company Stock Option immediately prior to the Effective Time
shall be entitled to receive an amount of cash, without
interest, equal to the product of (i) the total number of
shares of Company Common Stock
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subject to such Company Stock Option multiplied by (ii) the
excess, if any, of the Merger Consideration over the
exercise price per share of such Company Stock Option (with
the aggregate amount of such payment to the holder to be
rounded to the nearest cent), less applicable withholding
taxes, if any, required to be withheld with respect to such
payment. No holder of a Company Stock Option that has an
exercise price per Share that is equal to or greater than
the Merger Consideration shall be entitled to any payment
with respect to such cancelled Company Stock Option before
or after the Effective Time.
SECTION 2.08 Dissenting Shares
(a) Notwithstanding any provision of this
Agreement to the contrary and to the extent available under
the DGCL, Shares that are outstanding immediately prior to
the Effective Time and that are held by stockholders who
shall have neither voted in favor of the Merger nor
consented thereto in writing and who shall have demanded
properly, in writing, appraisal for such Shares and
otherwise perfected their rights of dissent and appraisal in
accordance with Section 262 of the DGCL (collectively, the
"Dissenting Shares") shall not be converted into, or
represent the right to receive, the Merger Consideration.
Such stockholders shall be entitled to receive payment of
the appraised value of such Shares held by them in
accordance with the provisions of such Section 262, except
that all Dissenting Shares held by stockholders who shall
have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares
under such Section 262 shall thereupon be deemed to have
been converted into, and to have become exchangeable for, as
of the Effective Time, the right to receive the Merger
Consideration, without any interest thereon, upon surrender,
in the manner provided in Section 2.09, of the certificate
or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt
notice of any demands for appraisal received by the Company,
withdrawals of such demands, and any other instruments
served pursuant to the DGCL and received by the Company and
(ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the
DGCL. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such
demands.
SECTION 2.09 Surrender of Shares; Stock Transfer
Books
7
(a) Promptly following the Effective Time, Parent
shall make available to the Surviving Corporation for
deposit with a bank or trust company designated by Parent
before the date of acceptance of Shares for payment pursuant
to the Offer and reasonably acceptable to the Company (the
"Paying Agent"), a cash amount equal to the aggregate Merger
Consideration to which holders of Shares shall be entitled
upon consummation of the Merger, to be held for the benefit
of and distributed to such holders in accordance with this
Section. The Paying Agent shall hold such funds (the
"Payment Fund") for delivery as contemplated by this Section
and upon such additional terms as may be agreed upon by the
Paying Agent, the Company and Parent. If for any reason
(including losses) the Payment Fund is inadequate to pay the
cash amounts to which holders of Shares shall be entitled
under the terms of this Agreement, Parent shall in any event
remain liable, and shall make available to the Surviving
Corporation additional funds, for the payment thereof. The
Payment Fund shall not be used for any purpose except as
expressly provided in this Agreement. Earnings on the
Payment Fund, if any, shall belong solely to the Surviving
Corporation and holders of Shares shall have no right to
such earnings.
(b) Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each
person who was, at the Effective Time, a holder of record of
Shares entitled to receive the Merger Consideration pursuant
to Section 2.06(a) a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of
loss and title to the certificates evidencing such Shares
(the "Certificates") shall pass, only upon proper delivery
of the Certificates to the Paying Agent) and instructions
for use in effecting the surrender of the Certificates
pursuant to such letter of transmittal. Upon surrender to
the Paying Agent of a Certificate, together with such letter
of transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions,
the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share
formerly evidenced by such Certificate, and such Certificate
shall then be canceled. No interest shall accrue or be paid
on the Merger Consideration payable upon the surrender of
any Certificate for the benefit of the holder of such
Certificate. If the payment equal to the Merger
Consideration is to be made to a person other than the
person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books
of the Company, it shall be a condition of payment that the
certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and
other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder
of the certificate surrendered, or shall have established to
the satisfaction of Purchaser that such taxes either have
been paid or are not applicable. If any holder of Shares is
unable to surrender such holder's Certificates because such
Certificates have been lost, stolen, mutilated or destroyed,
such holder may deliver in lieu thereof an affidavit and
indemnity bond in form and substance and with surety
reasonably satisfactory to the Surviving Corporation. Each
of Parent, Purchaser, the Surviving Corporation and the
Paying Agent shall be entitled to deduct and withhold from
any amounts otherwise payable pursuant to this Agreement in
respect of Shares such amount as it is required to deduct
and withhold with respect to the making of such payment
under the Code or any applicable Tax Law. To the extent
that amounts are so withheld, such withheld amounts shall be
treated for purposes of this Agreement as having been paid
to the holder of the Shares in respect of which such
deduction and withholding was made.
(c) At any time following the ninth month after
the Effective Time, the Surviving Corporation shall be
entitled to require the Paying Agent to deliver to it any
funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without
limitation, the remainder of the Payment Fund and all
interest and other income received by the Paying Agent in
respect of all funds made available to it), and, thereafter,
such holders shall be entitled to look solely to the
Surviving Corporation (subject to abandoned property,
escheat and other similar Laws) only as general creditors
thereof with respect to any Merger Consideration that may be
payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any
holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar Law.
(d) At the close of business on the day of the
Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further
registration of transfers of
8
Shares on the records of the Company. From and after the
Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares except as otherwise
provided herein or by applicable Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Purchaser to enter
into this Agreement, the Company hereby represents and
warrants to Parent and Purchaser that:
SECTION 3.01 Organization and Qualification;
Subsidiaries
(a) Each of the Company and each subsidiary of
the Company (each a "Subsidiary") is a corporation, limited
liability company or other entity duly formed, validly
existing and in good standing under the laws of the
jurisdiction of its formation and has the requisite power
and authority and all necessary governmental approvals to
own, lease and operate its properties and to carry on its
business as it is now being conducted. Each of the Company
and each Subsidiary is duly qualified or licensed as a
foreign corporation or limited liability company to do
business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or
operated by it or the nature of its business makes such
qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing
that would not have a Company Material Adverse Effect.
(b) A true and complete list of all the
Subsidiaries, together with the jurisdiction of formation of
each Subsidiary and the percentage of the outstanding equity
interests of each Subsidiary owned by the Company, each
other Subsidiary and each other holder of equity, is set
forth in Section 3.01(b) of the Company Disclosure Schedule
(the "Company Disclosure Schedule"). The Company Disclosure
Schedule was prepared by the Company and delivered by the
Company to Parent and Purchaser on September 13, 2005 in
connection with the Original Agreement and remains unchanged
and is hereby re-delivered as of the date hereof. The
Company Disclosure Schedule continues to be complete, true
and accurate as of the date hereof. Except as disclosed in
Section 3.01(b) of the Company Disclosure Schedule, the
Company does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or
other business association or entity.
SECTION 3.02 Certificate of Incorporation and By-laws
The Company has heretofore furnished to Parent a
complete and correct copy of the Certificate of
Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each
Subsidiary. Such Certificates of Incorporation, By-laws or
equivalent organizational documents are in full force and
effect. Neither the Company nor any Subsidiary is in
violation of any of the provisions of its Certificate of
Incorporation, By-laws or equivalent organizational
documents.
SECTION 3.03 Capitalization.
(a) The authorized capital stock of the Company
consists of (i) 4,000,000 shares of common stock, par value
$0.01 per share
9
("Company Common Stock") and (ii) 1,000,000 shares of
preferred stock, par value $0.01 per share ("Company
Preferred Stock"). As of September 12, 2005, (i) 571,364
Shares are issued and outstanding, all of which are validly
issued, fully paid and nonassessable. 528,641 Shares are
reserved for future issuance pursuant to outstanding Company
Stock Options (the "Company Stock Awards") granted pursuant
to the Company Stock Option Plans. As of the date of this
Agreement, no shares of Company Preferred Stock or
restricted shares of the Company's capital stock are issued
and outstanding. Except as set forth in Section 3.03(a) of
the Company Disclosure Schedule, there are no options,
warrants or other rights, agreements, arrangements or
commitments of any character that are binding on the Company
or any Subsidiary and that relate to the issued or unissued
capital stock of the Company or any Subsidiary or that
obligate the Company or any Subsidiary to issue or sell any
shares of capital stock of, or other equity interests in,
the Company or any Subsidiary. Section 3.03(a) of the
Company Disclosure Schedule sets forth the following
information with respect to each Company Stock Award
outstanding as of the date of this Agreement: (i) the name
of the Company Stock Award recipient; (ii) the particular
plan pursuant to which such Company Stock Award was granted;
(iii) the number of Shares subject to such Company Stock
Award; (iv) the exercise or purchase price of such Company
Stock Award; (v) the date on which such Company Stock Award
was granted; (vi) the applicable vesting schedule; (vii) the
date on which such Company Stock Award expires; and
(viii) whether the exercisability of or right to repurchase
of such Company Stock Award will be accelerated in any way
by the transactions contemplated by this Agreement, and
indicates the extent of acceleration. The Company has made
available to Parent accurate and complete copies of all
Company Stock Option Plans pursuant to which the Company has
granted the Company Stock Awards that are currently
outstanding and the forms of all stock award agreements
evidencing such Company Stock Awards. The Company does not
presently have and has not previously maintained an employee
stock purchase plan. All Shares subject to issuance as
aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully
paid and nonassessable. There are no outstanding
contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or
make any investment (in the form of a loan, capital
contribution or otherwise) in, any Subsidiary or any other
person. Except as set forth in Section 3.03(a) of the
Company Disclosure Schedule, there are no commitments or
agreements of any character to which the Company is bound
obligating the Company to accelerate the vesting of any
Company Stock Award as a result of the Offer or the Merger.
All outstanding Shares, all outstanding Company Stock
Awards, and all outstanding shares of capital stock of each
Subsidiary have been issued and granted in compliance in all
material respects with (i) all applicable securities laws
and other applicable Laws and (ii) all requirements set
forth in applicable contracts.
(b) Each outstanding share of capital stock or
equity interest of each Subsidiary is duly authorized,
validly issued, fully paid and nonassessable, and, except as
set forth in Section 3.03(b) to the Company Disclosure
Schedule, each share that is owned directly or indirectly by
the Company is owned by the Company or another Subsidiary
free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements,
limitations on the Company's or any Subsidiary's voting
rights, charges and other encumbrances of any nature
whatsoever.
10
SECTION 3.04 Authority Relative to the Transactions
The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the
Transactions. The execution and delivery by the Company of
this Agreement and the consummation by the Company of the
Transactions have been duly and validly authorized by all
necessary corporate action, and no other corporate
proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions
(other than, with respect to the Merger, the approval and
adoption of this Agreement by the holders of a majority of
the then outstanding shares of Company Common Stock, if and
to the extent required by applicable Law, and the filing and
recordation of appropriate merger documents as required by
the DGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties
thereto, constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without
limitation, all Laws relating to fraudulent transfers),
reorganization, moratorium or similar Laws affecting
creditors' rights generally and subject to the effect of
general principles of equity (regardless of whether
considered in a proceeding at law or in equity). The
Company Board, at a meeting duly called and held, and upon
the recommendation of the Special Committee comprised solely
of independent directors, has unanimously (i) determined
that this Agreement and the transactions contemplated
hereby, including each of the Offer and the Merger
(collectively, the "Transactions"), are fair to, and in the
best interests of, the holders of Shares, (ii) approved,
adopted and declared advisable this Agreement and the
Transactions (such approval and adoption having been made in
accordance with the DGCL, including, without limitation,
Section 203 thereof) and (iii) resolved, subject to Section
6.05(c), to recommend that the holders of Shares accept the
Offer and tender their Shares pursuant to the Offer, and, if
required, approve and adopt this Agreement and the
Transactions. To the knowledge of the Company, no state
takeover statute (other than Section 203(a) of the DGCL and
New Hampshire RSA 421-A) is applicable to the Merger or the
other Transactions.
SECTION 3.05 No Conflict; Required Filings and
Consents
(a) The execution and delivery by the Company of
this Agreement do not, and the performance by the Company of
this Agreement will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws or any equivalent
organizational documents of the Company or any Subsidiary,
(ii) assuming that all consents, approvals, authorizations
and other actions described in Section 3.05(b) have been
obtained or taken and all filings and obligations described
in Section 3.05(b) have been made or fulfilled, conflict
with or violate any statute, law, ordinance, regulation,
rule, code, executive order, injunction, judgment, decree or
other order, including those promulgated, interpreted or
enforced by a Governmental Authority ("Law") applicable to
the Company or any Subsidiary or by which any property or
asset of the Company or any Subsidiary is bound or affected,
or (iii) except as set forth in Section 3.05(a) of the
Company Disclosure Schedule, result in any breach of or
constitute a default (or an event which, with notice or
lapse of time or both, would become a default) under, or
give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation
of a lien or other encumbrance on any property or asset of
the Company or any Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except,
with respect to clause (iii), for any such conflicts,
11
violations, breaches, defaults or other occurrences which
would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) Except as set forth in Section 3.05(b) of the
Company Disclosure Schedule, the execution and delivery by
the Company of this Agreement do not, and the performance by
the Company of this Agreement will not, require any consent,
approval, authorization or permit of, or filing with or
notification to, any United States federal, state, county or
local or non-United States government, governmental,
regulatory or administrative authority, agency,
instrumentality or commission or any court, tribunal, or
judicial or arbitral body, including without limitation, the
Federal Trade Commission, the United States Department of
Justice, the IRS, the SEC, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the
Federal Energy Regulatory Commission and all state
regulatory agencies having jurisdiction over the Company and
its Subsidiaries, (a "Governmental Authority"), except for
(i) any applicable requirements of the Exchange Act, the
rules of the American Stock Exchange and state takeover
laws, (ii) the filing and recordation of appropriate merger
documents as required by the DGCL, (iii) where the failure
to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would
not, individually or in the aggregate have a Company
Material Adverse Effect and (iv) the VPSB Approval.
SECTION 3.06 Permits; Compliance
(a) Each of the Company and the Subsidiaries is
in possession of all material franchises, grants,
authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of
any Governmental Authority, necessary for each of the
Company or the Subsidiaries to own, lease and operate its
properties or to carry on its business as it is now being
conducted or presently contemplated to be conducted (the
"Company Permits") and Section 3.06(a) of the Company
Disclosure Schedule lists each of the Company Permits. No
suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened.
(b) Each of the Company and its Subsidiaries is
in substantial compliance with (i) all Laws applicable to
the Company or each such Subsidiary or by which any property
or asset of the Company or each such Subsidiary is bound or
affected, or (ii) all notes, bonds, mortgages, indentures,
contracts, agreements, leases, licenses, Company Permits,
franchises or other instruments or obligations to which the
Company or each such Subsidiary is a party or by which the
Company or each such Subsidiary or any property or asset of
the Company or each such Subsidiary is bound. Except as set
forth in Section 3.06(b) of the Company Disclosure Schedule,
there are no proceedings pending before any Governmental
Authority or, to the Company's knowledge, any pending or
threatened inquiries or investigations or threatened
proceeding by any Governmental Authority, with respect to
the Company or any of its Subsidiaries.
SECTION 3.07 SEC Filings; Financial Statements
(a) The Company has filed or furnished, as the
case may be, all forms, reports and documents required to be
filed or furnished by it with the SEC since January 1, 2002,
and has heretofore made available to Parent (i) its Annual
Reports on Form 10-K, as amended, for the fiscal years ended
December 31, 2002, 2003 and 2004, respectively, (ii) its
Quarterly Reports on Form 10-Q for the periods ended March
31, 2005 and June 30, 2005, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether
annual or special) held since January 1,
12
2002 and (iv) all other forms, reports and other
registration statements (other than Quarterly Reports on
Form 10-Q not referred to in clause (ii) above) filed by the
Company with the SEC since January 1, 2002 (the forms,
reports and other documents referred to in clauses (i),
(ii), (iii) and (iv) above being, collectively, the "Company
SEC Reports"). The Company SEC Reports (i) were prepared in
accordance with either the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and
regulations promulgated thereunder and (ii) did not, at the
time they were filed, or, if amended or supplemented, as of
the date of such amendment or supplement, contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
No Subsidiary is required to file any form, report or other
document with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any notes thereto) contained in
the Company SEC Reports was prepared in accordance with
United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited interim statements, the
omission of footnotes and otherwise as permitted by Form 10-
Q of the SEC) and each fairly presents, in all material
respects, the consolidated financial position, results of
operations and cash flows of the Company and its
consolidated Subsidiaries as at the respective dates thereof
and for the respective periods indicated therein, except as
otherwise noted therein.
(c) Neither the Company nor any Subsidiary has
any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required
to be reflected, reserved for or disclosed in a consolidated
balance sheet of the Company and its consolidated
Subsidiaries, including the notes thereto, prepared as of
the date of this Agreement in accordance with GAAP and
consistent with the consolidated balance sheet of the
Company and the consolidated Subsidiaries as at December 31,
2004, including the notes thereto (the "2004 Balance
Sheet"), except for (i) liabilities and obligations that are
reflected, reserved for or disclosed in the 2004 Balance
Sheet or in the consolidated balance sheet of the Company
and the consolidated Subsidiaries as at June 30, 2005,
including the notes thereto, (ii) liabilities and
obligations that are incurred in the ordinary course of
business consistent with past practice since June 30, 2005,
or (iii) as set forth in Section 3.07(c) of the Company
Disclosure Schedule.
(d) The Company has heretofore furnished to
Parent complete and correct copies of all amendments and
modifications that have not been filed by the Company with
the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC
and are currently in effect.
(e) The Company has heretofore furnished to
Parent all comment letters received by the Company from the
SEC or the staff thereof and all responses to such comment
letters filed by or on behalf of the Company and all written
correspondence with the American Stock Exchange, in each
case, since January 1, 2002, and all filings or written
communications related to the Company's 2003 tender offer
for Shares with the SEC, the American Stock Exchange and the
Company's Stockholders.
13
(f) To the Company's knowledge, except as
disclosed in the Company SEC Reports or as disclosed in
Section 3.07(f) of the Company Disclosure Schedule, each
director and executive officer of the Company has filed with
the SEC on a timely basis all statements required by Section
16(a) of the Exchange Act and the rules and regulations
promulgated thereunder since January 1, 2002.
(g) The Company has timely filed and made
available to Parent all certifications and statements
required by (x) Rule 13a-14 or Rule 15d-14 under the
Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) with respect to any Company
SEC Report. The Company maintains disclosure controls and
procedures required by Rule 13a-15 or Rule 15d-15 under the
Exchange Act; such controls and procedures are effective to
provide reasonable assurance that all material information
concerning the Company and its Subsidiaries is made known on
a timely basis to the individuals responsible for the
preparation of the Company's SEC filings and other public
disclosure documents. The Company has made available to
Parent, complete and correct copies of, all written
descriptions of, and all policies, manuals and other
documents promulgating, such disclosure controls and
procedures. As used in this Section 3.07, the term (i)
"file" shall be broadly construed to include any manner in
which a document or information is furnished, supplied or
otherwise made available to the SEC and (ii) documents filed
with the SEC by the Company and publicly available via the
SEC's ▇▇▇▇▇ system shall be considered to have been made
available by the Company to the Parent.
(h) The Company maintains and will continue to
maintain a system of accounting in accordance with GAAP.
The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company has made
available to Parent complete and correct copies of, all
written descriptions of, and all policies, manuals and other
documents promulgating, such internal accounting controls.
(i) Since January 1, 2002, neither the Company
nor any Subsidiary nor, to the Company's knowledge, any
Representative of the Company or any Subsidiary, has
received or otherwise had or obtained knowledge of any
complaint, allegation, assertion or claim, whether written
or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any
Subsidiary or their respective internal accounting controls,
including any complaint, allegation, assertion or claim that
the Company or any Subsidiary has engaged in questionable
accounting or auditing practices. No attorney representing
the Company or any Subsidiary, whether or not employed by
the Company or any Subsidiary, has reported evidence of a
material violation of securities laws, breach of fiduciary
duty or similar violation by the Company or any of its
officers, directors, employees or agents to the Company
Board or any committee thereof or to any director or officer
of the Company. Except as set forth in Section 3.07(i) of
the Company Disclosure Schedule, since January 1, 2002,
there have been no internal investigations regarding
14
accounting or revenue recognition discussed with, reviewed
by or initiated at the direction of the chief executive
officer, chief financial officer, general counsel, the
Company Board or any committee thereof.
(j) To the knowledge of the Company, no employee
of the Company or any Subsidiary has provided or is
providing information to any law enforcement agency
regarding the commission or possible commission of any crime
or the violation or possible violation of any applicable
Law. Neither the Company nor any Subsidiary nor any officer
or, to the Company's knowledge, any employee, contractor,
subcontractor or agent of the Company or any such Subsidiary
has been discharged, demoted, suspended, threatened,
harassed or in any other manner discriminated against an
employee of the Company or any Subsidiary in the terms and
conditions of employment because of any act of such employee
described in 18 U.S.C. 1514A(a).
SECTION 3.08 Absence of Certain Changes or Events
Since December 31, 2004, except as disclosed in
the Company SEC Reports filed prior to the execution of this
Agreement, and except as set forth in Section 3.08 of the
Company Disclosure Schedule, or as expressly contemplated by
this Agreement, (a) the Company and the Subsidiaries have
conducted their businesses only in the ordinary course and
in a manner consistent with past practice, (b) there has not
been any Company Material Adverse Effect and (c) none of the
Company or any Subsidiary has taken any action that, if
taken after the date of this Agreement, would constitute a
breach of any of the covenants set forth in Section 5.01.
SECTION 3.09 Absence of Litigation
Except as set forth in the Company SEC Reports or
in Section 3.09 of the Company Disclosure Schedule, there is
no litigation, suit, claim, action, proceeding or
investigation (which investigation has been communicated to
the Company or of which the Company has knowledge) (an
"Action") pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary, or any
property or asset of the Company or any Subsidiary, before
any Governmental Authority, except for Actions that, if
determined adversely to the Company or any Subsidiary would
not result in losses and expenses (including reasonable
expenses of counsel) in excess of $50,000 or otherwise be
material to the Company. Except as set forth in Section
3.09 of the Company Disclosure Schedule, neither the Company
nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company,
continuing investigation by, any Governmental Authority, or
any order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority.
SECTION 3.10 Employee Benefit Plans
(a) Section 3.10(a) of the Company Disclosure
Schedule lists all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) and all bonus, stock option,
stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, retention,
termination, severance or other contracts or agreements, to
which the Company or any Subsidiary is a party, with respect
to which the Company or any Subsidiary has any obligation or
which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or
former employee, officer or director of the Company or any
Subsidiary (collectively, the "Plans"). For each Plan, the
Company has furnished or made available to Parent a true and
15
complete copy of each Plan document and where such Plan is
unwritten, a written description of the material terms
thereof, and has delivered or made available to Parent a
true and complete copy of the following: (i) each trust or
other funding arrangement prepared in connection with a
Plan, (ii) each summary plan description and summary of
material modifications (or a description of any material
oral communications) provided by the Company or any
Subsidiary to any current or former employees, officers,
directors, or other beneficiaries or their dependents or
spouses of the Company or any Subsidiary concerning the
extent of the benefits provided under each Plan, (iii) the
most recently filed Internal Revenue Service ("IRS") Form
5500 for each Plan required to file such report, (iv) the
most recently received IRS determination letter or IRS
prototype opinion letter for each Plan that has received
such IRS determination letter or IRS prototype opinion
letter and (v) the most recently prepared actuarial report
or financial statement in connection with each Plan required
to prepare or distribute such actuarial report or financial
statement. Except as disclosed in Section 3.10(a) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary has any express or implied commitment (i) to
create, incur liability with respect to or cause to exist
any other employee benefit plan, program or arrangement,
(ii) to enter into any contract or agreement to provide
compensation or benefits to any individual, or (iii) to
modify, change or terminate any Plan, other than with
respect to a modification, change or termination required by
this Agreement, the Transactions or ERISA, the Code or to
otherwise comply with applicable law.
(b) Except as disclosed in Section 3.10(b) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary (including any entity that during the past six
years was a Subsidiary) has now or at any time contributed
to, sponsored, or maintained (i) a pension plan (within the
meaning of Section 3(2) of ERISA) subject to Section 412 of
the Code or Title IV of ERISA, (ii) a multiemployer plan
(within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a "Multiemployer Plan"), or (iii) a single employer pension
plan (within the meaning of Section 4001(a)(15) of ERISA)
for which the Company or any Subsidiary could incur
liability under Section 4063 or 4064 of ERISA (a "Multiple
Employer Plan"). Except as disclosed in Section 3.10(b) of
the Company Disclosure Schedule, no Plan exists that (A)
provides for the payment of separation, severance,
termination or similar-type benefits to any person, (B)
obligates the Company or any Subsidiary to pay separation,
severance, termination or similar-type benefits solely or
partially as a result of any transaction contemplated by
this Agreement, or (C) could result in the payment to any
present or former employee, director or consultant of the
Company or any Subsidiary of any money or other property or
accelerate or provide any other rights or benefits to any
current or former employee of the Company or any Subsidiary
as a result of the consummation of the Transactions (whether
alone or in connection with any subsequent event). There is
no contract, plan or arrangement (written or otherwise)
covering any current or former employee of the Company or
any Subsidiary that, individually or collectively, could
give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the
Code. Except to the extent required under ERISA Section 601
et. seq. and Code Section 4980B, none of the Plans provides
for or promises retiree medical, retiree disability or
retiree life insurance benefits to any current or former
employee, officer or director of the Company or any
Subsidiary. Each of the Plans is subject only to the Laws
of the United States or a political subdivision thereof.
16
(c) Except as disclosed in Section 3.10(c) of the
Company Disclosure Schedule, each Plan is now and always has
been operated in all material respects in accordance with
its terms and the requirements of all applicable Laws
including, without limitation, ERISA and the Code. Except
as disclosed in Section 3.10(c) of the Company Disclosure
Schedule, the Company and the Subsidiaries have performed
all obligations required to be performed by them under, are
not in any respect in default under or in violation of, and
have no knowledge of any default or violation by any party
to, any Plan. No Action is pending or, to the knowledge of
the Company, threatened with respect to any Plan (other than
routine claims for benefits in the ordinary course) and
except as disclosed in Section 3.10(c) of the Company
Disclosure Schedule, no fact or event exists, to the
Company's knowledge, that could reasonably be expected to
give rise to any such Action. Except as disclosed in
Section 3.10(c) of the Company Disclosure Schedule, no
operational or plan failure (within the meaning of Rev.
Proc. 2003-44) exists or has existed with respect to any
Plan that is intended to be qualified under Section 401(a)
of the Code.
(d) Except as disclosed in Section 3.10(d) of the
Company Disclosure Schedule, each Plan that is intended to
be qualified under Section 401(a) of the Code has timely
received a favorable determination letter or prototype
opinion letter from the IRS covering all of the provisions
applicable to the Plan for which determination letters or
prototype opinion letters are currently available that the
Plan is so qualified and each trust established in
connection with any Plan which is intended to be exempt from
federal income taxation under Section 501(a) of the Code is
so exempt, and no fact or event exists that could reasonably
be expected to result in the revocation of such exemption.
(e) There has not been any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975
of the Code) with respect to any Plan. Except as disclosed
in Section 3.10(e) of the Company Disclosure Schedule,
neither the Company nor any Subsidiary has incurred any
liability under, arising out of or by operation of Title IV
of ERISA (other than liability for premiums to the Pension
Benefit Guaranty Corporation arising in the ordinary
course), including, without limitation, any liability in
connection with (i) the termination or reorganization of any
employee benefit plan subject to Title IV of ERISA, or (ii)
the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and no fact or event exists which could
reasonably be expected to give rise to any such liability.
(f) All contributions, premiums or payments
required to be made with respect to any Plan have been made
on or before their due dates. All such contributions have
been fully deducted for income tax purposes and no such
deduction has been challenged or disallowed by any
Governmental Authority and no fact or event exists which
could reasonably be expected to give rise to any such
challenge or disallowance.
(g) Except as disclosed in Section 3.10(g) of the
Company Disclosure Schedule, all directors, officers,
management employees, and technical and professional
employees of the Company and the Subsidiaries are under
written obligation to the Company and the Subsidiaries to
maintain in confidence all confidential or proprietary
information acquired by them in the course of their
employment and to assign to the Company and the Subsidiaries
all inventions made by them within the scope of their
employment during such employment and for a reasonable
period thereafter, and none of the Transactions shall
adversely affect the Company's rights thereunder.
17
(h) Except as disclosed in Section 3.10(h) of the
Company Disclosure Schedule, the Company and the
Subsidiaries are in compliance with the requirements of the
Workers Adjustment and Retraining Notification Act and any
similar state or local law ("WARN") and have no liabilities
pursuant to WARN determined without regard to any
terminations of employment that occur on or after the
Effective Time.
(i) Prior to or in connection with the execution
of this Agreement, the Company confirms (i) that certain
retention and incentive agreement, dated as of December 3,
2001, by and between the Company and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.,
and (ii) that certain retention and incentive agreement,
dated as of November 30, 2001, by and between the Company
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ (together, the "Retention and
Incentive Agreements"), have each been terminated and no
further amount are or will become due and payable in
connection therewith.
SECTION 3.11 Labor and Employment Matters
(a) Section 3.11(a) of the Company Disclosure
Schedule lists all employees of the Company and the
Subsidiaries and designates each employee by the correct
employer and business division for which the employee
primarily performs services.
(b) Except as disclosed in Section 3.11(b) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary is a party to any collective bargaining agreement
or other labor union contract applicable to persons employed
by the Company or any Subsidiary, nor, to the knowledge of
the Company, are there any activities or proceedings of any
labor union to organize any such employees. Except as
disclosed in Section 3.11(b) of the Company Disclosure
Schedule, as of the date hereof, there are no unfair labor
practice complaints pending against the Company or any
Subsidiary before the National Labor Relations Board or any
other Governmental Authority or any current union
representation questions involving employees of the Company
or any Subsidiary. As of the date hereof, there is no
strike, controversy, slowdown, work stoppage or lockout
occurring, or, to the knowledge of the Company, any threat
thereof in writing, by or with respect to any employees of
the Company or any Subsidiary.
(c) The Company and its Subsidiaries are in
compliance in all material respects with all applicable Laws
relating to the employment of labor, including those related
to wages, hours, immigration and naturalization, collective
bargaining and the payment and withholding of taxes and
other sums as required by the appropriate Governmental
Authority and have withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet
due to such Governmental Authority all amounts required to
be withheld from employees of the Company or any Subsidiary
and are not liable for any arrears of wages, taxes,
penalties or other sums for failure to comply with any of
the foregoing. The Company and its Subsidiaries have paid
in full to all employees or adequately accrued for in
accordance with GAAP consistently applied all wages,
salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees and there
is no claim with respect to payment of wages, salary or
overtime pay that has been asserted or is now pending or
threatened before any Governmental Authority with respect to
any persons currently or formerly employed by the Company or
any Subsidiary. Neither the Company nor any Subsidiary is a
party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority relating to
employees or employment practices. Except as disclosed in
Section 3.11(c) of the Company Disclosure Schedule, there is
no charge or proceeding
18
with respect to a violation of any occupational safety or
health standards that has been asserted or is now pending
or, to the knowledge of the Company, threatened with respect
to the Company. Except as disclosed in Section 3.11(c) of
the Company Disclosure Schedule, there is no charge of
discrimination in employment or employment practices, for
any reason, including, without limitation, age, gender,
race, religion or other legally protected category, which
has been asserted or is now pending or threatened before the
United States Equal Employment Opportunity Commission, or
any other Governmental Authority in any jurisdiction in
which the Company or any Subsidiary has employed or employ
any person.
(d) The Company has entered into employment
agreements with each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, in substantially the forms attached hereto as
Annex B and Annex C (the "Surviving Corporation Employment
Agreements"), with such Surviving Corporation Employment
Agreements to become effective at the Effective Time,
provided however, that the effectiveness of such Surviving
Corporation Employment Agreements shall be conditioned upon
the acceptance of the Shares pursuant to the Offer and the
completion of the Merger. Upon the effectiveness of the
Surviving Corporation Employment Agreements, any other
employment agreements between the Company or any of its
Subsidiaries and Messrs. ▇▇▇▇▇▇ or Callendrello shall be
deemed terminated.
SECTION 3.12 Real Property; Title to Assets; Liens,
etc.
(a) Section 3.12(a) of the Company Disclosure
Schedule lists each parcel of real property owned by the
Company or any Subsidiary. Except as set forth in Section
3.12(a) of the Company Disclosure Schedule, each parcel of
real property owned by the Company or any Subsidiary (i) is
owned free and clear of all mortgages, pledges, liens,
security interests, conditional and installment sale
agreements, encumbrances, charges or other claims of third
parties of any kind, including, without limitation, any
easement, right of way or other encumbrance to title, or any
option, right of first refusal, or right of first offer or
adverse interest (collectively, "Liens"), other than
(A) Liens for current Taxes and assessments not yet past due
and payable or being contested in good faith, (B) inchoate
mechanics' and materialmen's Liens for construction in
progress, (C) workmen's, repairmen's, warehousemen's and
carriers' Liens arising in the ordinary course of business
of the Company or such Subsidiary consistent with past
practice and (D) all matters of record, Liens and other
imperfections of title and encumbrances that would not,
individually or in the aggregate, have a Company Material
Adverse Effect (collectively, "Permitted Liens") and (ii) is
neither subject to any governmental decree or order to be
sold nor is being condemned, expropriated or otherwise taken
by any public authority with or without payment of
compensation therefor, nor, to the knowledge of the Company,
has any such condemnation, expropriation or taking been
proposed.
(b) Section 3.12(b) of the Company Disclosure
Schedule lists (i) each parcel of real property currently
leased, subleased or licensed by the Company or any
Subsidiary and (ii) each parcel of real property currently
owned by the Company or any Subsidiary that is subject, in
whole or in part, to any lease or license in favor of any
third party or any Affiliate of the Company, together, in
each case, with the name of the lessor, the lessee and the
date of the lease, sublease, license, assignment of the
lease, any guaranty given or leasing commissions payable by
the Company or any Subsidiary in connection therewith and
each material amendment to any of the foregoing
(collectively, the "Lease Documents"). True, correct and
complete copies of all Lease Documents have been delivered
to Parent. All such
19
current leases, subleases and licenses are in full force and
effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such
leases, any existing material default or event of default
(or event which, with notice or lapse of time, or both,
would constitute a material default) by the Company or any
Subsidiary or, to the Company's knowledge, by the other
party to such lease, sublease or license.
(c) There are no contractual or legal
restrictions or other arrangements that preclude or restrict
the ability of the Company or any Subsidiary to use all or
any portion of any real property owned or leased by the
Company or any Subsidiary for the purposes for which it is
currently being used by the Company or such Subsidiary.
There are no material adverse physical conditions or, to the
Company's knowledge, material latent defects, affecting the
real property, and improvements thereon, owned or leased by
the Company or any Subsidiary.
(d) Except for Liens in favor of Purchaser or
Parent and as disclosed in Section 3.13(d) of the Company
Disclosure Schedule, each of the Company and the
Subsidiaries has good and valid title to, or, in the case of
leased properties and assets, valid leasehold or
subleasehold interests in, all of its properties and assets
(including interests in the Subsidiaries), tangible and
intangible, real, personal and mixed, used or held for use
in its business, free and clear of any Liens, except for
Permitted Liens.
(e) Section 3.12(e) of the Company Disclosure
Schedule sets forth a true and complete list of all seismic
surveys, geophysical surveys and similar data and
information compiled by or on behalf of the Company.
SECTION 3.13 Intellectual Property
(a) Section 3.13(a) of the Company Disclosure
Schedule sets forth a true and complete list of all (i)
patents and patent applications, (ii) registrations and
applications for registration of trademarks and service
marks, (iii) registrations and applications for registration
of copyrights, (iv) domain name registrations, (v) invention
or technology disclosures (other than those subject to
issued patents or pending patent applications) and (vi)
Software that the Company or a Subsidiary licenses to third
parties in the operation of their business, in each case,
included in the Owned Intellectual Property.
(b) Except as set forth in Section 3.13(b)(i) of
the Company Disclosure Schedule, the Company or a Subsidiary
is the exclusive owner of the entire and unencumbered right,
title and interest in and to the Owned Intellectual
Property, and the Company or a Subsidiary has a valid right
to use the Licensed Intellectual Property in the ordinary
course of their business as presently conducted or as
contemplated to be conducted. Except as set forth in
Section 3.13(b)(ii) of the Company Disclosure Schedule, the
Owned Intellectual Property and, to knowledge of the
Company, the Licensed Intellectual Property, are subsisting,
valid and enforceable, and have not been adjudged invalid or
unenforceable in whole or in part.
(c) The conduct by the Company and the
Subsidiaries of their business as currently conducted or as
contemplated to be conducted, and the use of the Owned
Intellectual Property and Licensed Intellectual Property in
connection therewith, do not conflict with, infringe,
misappropriate or otherwise violate the Intellectual
Property or other proprietary rights of any third party.
Except as disclosed in Section 3.13(c) of the Company
Disclosure Schedule, no Actions have been asserted or are
pending or threatened against the Company or any Subsidiary
(i) based upon or challenging or seeking to deny or restrict
the use by the
21
Company or any Subsidiary of any of the Owned Intellectual
Property or Licensed Intellectual Property, (ii) alleging
that any services provided by, processes used by, or
products manufactured or sold by the Company or any
Subsidiary infringe, misappropriate or otherwise violate the
Intellectual Property right or other proprietary right of
any third party, or (iii) alleging that the Licensed
Intellectual Property is being licensed or sublicensed in
conflict with the terms of any license or other agreement.
Except as disclosed in Section 3.13(c) of the Company
Disclosure Schedule, no Owned Intellectual Property or
Licensed Intellectual Property is subject to any outstanding
decree, order, injunction, judgment or ruling restricting
the use of such Intellectual Property or that would impair
the validity or enforceability of such Intellectual
Property. Except as disclosed in Section 3.13(c) of the
Company Disclosure Schedule and to the knowledge of the
Company, no person is engaging in any activity that
infringes the Owned Intellectual Property or Licensed
Intellectual Property.
(e) The Owned Intellectual Property and the
Licensed Intellectual Property constitutes all of the
Intellectual Property used or held for use or intended to be
used in conduct of the Company and the Subsidiaries as
presently conducted or contemplated to be conducted, and
there are no other items of Intellectual Property that are
material to the conduct of the Company and the Subsidiaries
as presently conducted or contemplated to be conducted. The
consummation of the transactions contemplated by this
Agreement will not result in the termination or impairment
of any of the Owned Intellectual Property or the Licensed
Intellectual Property or require the payment of additional
royalties or fees to third parties.
(f) The Company and the Subsidiaries have taken
reasonable steps in accordance with normal industry practice
to maintain the confidentiality of the trade secrets and
other confidential Intellectual Property used or held for
use or intended to be used by the Company or the
Subsidiaries.
(g) The consummation of the transactions
contemplated in this Agreement will not materially impair or
interrupt the Company and the Subsidiaries' access and use
of, or its right to access and use, the Company IT Systems.
The Company has taken all reasonable steps in accordance
with normal industry practice to secure the Company IT
Systems from unauthorized access or use thereof by any
person, and to provide for the continued, uninterrupted and
error-free operation of the Company IT Systems, including
employing security, maintenance, disaster recovery,
redundancy, backup, archiving and virus or malicious device
scanning/protection measures.
SECTION 3.14 Taxes
(a) The Company and the Subsidiaries have filed
all Tax Returns that they were required to file, and all
such Tax Returns were correct and complete in all material
respects. All Taxes due and owing by the Company or any
Subsidiary (whether or not shown on any Tax Return) have
been paid. Neither the Company nor any Subsidiary currently
is the beneficiary of any extension of time within which to
file any Tax Return. There are no liens for Taxes (other
than Taxes not yet due and payable) upon any of the assets
of the Company or any Subsidiary.
(b) Except as set forth in Section 3.14(b) of the
Company Disclosure Schedule, there is no dispute or claim
pending or, to the knowledge of the Company, threatened
concerning any Tax liability of the Company or any
Subsidiary.
(c) Except as set forth in Section 3.14(c) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary has waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to
a Tax assessment or deficiency.
(d) Except as set forth in Section 3.14(d) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary (i) has filed a consent under Section 341(f) of
the Code concerning collapsible corporations; (ii) is a
party to any agreement, contract, arrangement or plan that
has resulted or would result, separately or in the
aggregate, in any payment that would not be deductible
pursuant to Code section 162(m) or any "excess parachute
payment" within the meaning of Code section 280G (or any
corresponding provision of state, local or foreign Tax
law); (iii) has been a United States real property holding
corporation within the meaning of Code section 897(c)(2)
during the applicable period specified in Code section
897(c)(1)(A)(ii); (iv) is a party to or bound by any tax
allocation or sharing agreement; (v) has been a member of an
affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was
the Company) or has any liability for the Taxes of any
person other than the Company or any of its Subsidiaries
under Reg. 1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by
contract, or otherwise; (vi) has distributed stock of
another corporation or has had its stock distributed in a
transaction that was purported or intended to be governed in
whole or in part by Code section 355 or Code section 361; or
(vii) has participated in any reportable transaction within
the meaning of Code section 6707A(c)(1).
(e) Except as set forth in Section 3.14(e) of the
Company Disclosure Schedule, neither the Company nor any
Subsidiary will be required to include any item of income
in, or exclude any item of deduction from, taxable income
for any taxable period (or portion thereof) ending after the
Effective Time as a result of any (i) change in method of
accounting for a taxable period ending on or prior to the
Effective Time; (ii) closing agreement as described in Code
section 7121 (or any corresponding or similar provision of
state, local or foreign Tax law) executed on or prior to the
Effective Time; (iii) intercompany transactions or any
excess loss account described in Treasury regulations under
Code section 1502 (or any corresponding or similar provision
of state, local or foreign Tax law); (iv) installment sale
or open transaction disposition made on or prior to the
Effective Time; or (v) prepaid amount received on or prior
to the Effective Time.
(f) The accruals and reserves for Taxes reflected
in the 2004 Balance Sheet are adequate to satisfy all Taxes
accruable through such date in accordance with GAAP.
SECTION 3.15 Environmental Matters
Except as described in Section 3.15 of the Company
Disclosure Schedule, (a) none of the Company, any of the
Subsidiaries or any predecessor of any of the foregoing has
violated or is in violation of any Environmental Law except
for any such violations existing prior to the Company's
ownership of its assets and properties, of which the Company
is aware of none (other than as disclosed in Section 3.15 of
the Company Disclosure Schedule), that have been resolved,
are no longer outstanding and for which the Company and the
Subsidiaries have no further liability;
22
(b) none of the properties currently or formerly
owned, leased or operated by the Company, any Subsidiary or
any predecessor of any of the foregoing (including, without
limitation, soils and surface and ground waters) are
contaminated with any Hazardous Substance in a manner that
would reasonably be expected to give rise to an obligation
of the Company or any of the Subsidiaries to conduct any
investigation, assessment, study, remediation, removal,
closure or clean up or to notify or report any such
contamination to any Governmental Authority under any
Environmental Law; (c) none of the Company, any of the
Subsidiaries or any predecessor of any of the foregoing has
received any written notice that it is actually, potentially
or allegedly liable under any Environmental Law for any
off-site contamination by Hazardous Substances; (d) each of
the Company and each Subsidiary has all permits, licenses
and other authorizations required for their current
operations under any Environmental Law ("Environmental
Permits"); (e) each of the Company and each Subsidiary is in
compliance with all such Environmental Permits; and (f)
neither the execution of this Agreement nor the consummation
of the Transactions will require any investigation,
remediation or other action with respect to Hazardous
Substances, or any notice to or consent of Governmental
Authorities or third parties, pursuant to any applicable
Environmental Law or Environmental Permit. This Section
3.15 contains the sole and exclusive representations and
warranties of the Company with respect to environmental
matters, including without limitation all matters relating
to Environmental Laws and Environmental Permits.
SECTION 3.16 Material Contracts
(a) Subsections (i) through (xviii) of
Section 3.16(a) of the Company Disclosure Schedule list the
following types of contracts and agreements to which the
Company or any Subsidiary is a party (such contracts and
agreements as are required to be set forth in
Section 3.16(a) of the Company Disclosure Schedule being the
"Material Contracts"):
(i) each "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of
the SEC) with respect to the Company and its
Subsidiaries;
(ii) each contract and agreement, whether or not
made in the ordinary course of business, that
contemplates an exchange of consideration with
a value of more than $100,000, in the
aggregate, over the term of such contract or
agreement;
(iii) all material supply agreements;
(iv) all joint venture, partnership, strategic
alliance and business acquisition or
divestiture agreements (and all letters of
intent, term sheets and draft agreements
relating to any such pending transactions);
(v) all contracts and agreements relating to
issuances of securities of the Company or any
Subsidiary (and all letters of intent, term
sheets and draft agreements relating to any
such pending transactions);
(vi) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales
promotion, market research, marketing
consulting and advertising contracts and
agreements;
(vii) all management contracts and agreements
(excluding contracts for employment) and
contracts and agreements with other
consultants, including any
23
contracts or agreements involving the payment
of royalties or other amounts calculated based
upon the revenues or income of the Company or
any Subsidiary or income or revenues related to
any product of the Company or any Subsidiary to
which the Company or any Subsidiary is a party;
(viii) all contracts and agreements evidencing
indebtedness for borrowed money;
(ix) all contracts and agreements with any
Governmental Authority, other than those
contracts and agreements for the sale of goods
or services in the ordinary course of business;
(x) all contracts and agreements that limit, or
purport to limit, the ability of the Company or
any Subsidiary to compete in any line of
business or with any person or entity or in any
geographic area or during any period of time;
(xi) all contracts and agreements providing for
benefits under any Plan;
(xii) all material contracts or arrangements that
result in any person or entity holding a
material power of attorney from the Company or
any Subsidiary that relates to the Company, any
Subsidiary or their respective businesses other
than limited powers of attorney granted in the
ordinary course of business;
(xiii) all contracts and agreements for employment
required to be listed in Section 3.10(a) of the
Company Disclosure Schedule;
(xiv) all Lease Documents;
(xv) all contracts and agreements relating in whole
or in part to Intellectual Property pursuant to
which the Company or any Subsidiary obtains
from any third party any material Intellectual
Property rights;
(xvi) all contracts and agreements related to
professional services rendered to the Company
or any Subsidiary in connection with the Offer,
the Merger and this Agreement;
(xvii) all contracts and agreements that would
obligate the Company or any Subsidiary to make
any payment based on the consummation of the
Transactions; and
(xviii)all other contracts and agreements, whether or
not made in the ordinary course of business,
which are material to the Company, any
Subsidiary or the conduct of its and their
respective businesses, or the absence of which
would, individually or in the aggregate, have a
Company Material Adverse Effect.
(b) Each Material Contract is a legal, valid and
binding agreement of the Company or the applicable
Subsidiary, as the case may be, and, to the Company's
knowledge, of the other party(ies) thereto; (ii) neither the
Company nor any Subsidiary is in material breach or
violation of, or material default under, any Material
Contract; (iii) to the Company's knowledge, no other party
is in material breach or violation of, or material default
under, any Material Contract; (iv) the Company and the
24
Subsidiaries have not received any notice of default under
any Material Contract which remains uncured or any notice of
another party's intent to cancel or otherwise terminate a
Material Contract; and (v) except as set forth in Section
3.16(b) of the Company Disclosure Schedule, neither the
execution of this Agreement nor the consummation of any
Transaction shall constitute a default under, give rise to
cancellation rights under, or otherwise adversely affect any
of the rights of the Company or any Subsidiary under any
Material Contract. The Company has furnished or made
available to Parent true and complete copies of all Material
Contracts, including any amendments thereto.
SECTION 3.17 Insurance
(a) Section 3.17(a) of the Company Disclosure
Schedule sets forth, with respect to each insurance policy
under which the Company or any Subsidiary has been an
insured, a named insured or otherwise the principal
beneficiary of coverage at any time within the past three
years, (i) the names of the insurer, the principal insured
and each named insured, (ii) the policy number, (iii) a
brief summary of the period, scope and amount of coverage
and (iv) the premium charged. The types and amounts of
coverage provided therein are usual and customary in the
context of the businesses and operations in which the
Company and the Subsidiaries are engaged.
(b) With respect to each such insurance policy:
(i) the policy is legal, valid, binding and enforceable in
accordance with its terms and, except for policies that have
expired under their terms in the ordinary course, is in full
force and effect; (ii) neither the Company nor any
Subsidiary is in material breach or default (including any
such breach or default with respect to the payment of
premiums or the giving of notice), and no event has occurred
which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or
modification, under the policy; and (iii) to the knowledge
of the Company, no insurer on the policy has been declared
insolvent or placed in receivership, conservatorship or
liquidation.
(c) At no time subsequent to March 31, 2002 has
the Company or any Subsidiary (i) been denied any insurance
or indemnity bond coverage which it has requested, (ii) made
any material reduction in the scope or amount of its
insurance coverage, or (iii) received notice from any of its
insurance carriers that any insurance premiums will be
subject to increase in an amount materially disproportionate
to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any
insurance coverage listed in Section 3.17(a) of the Company
Disclosure Schedule will not be available in the future
substantially on the same terms as are now in effect.
SECTION 3.18 Certain Business Practices
None of the Company, any Subsidiary or, to the
Company's knowledge, any directors or officers, agents or
employees of the Company or any Subsidiary, has (i) used any
funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to political activity; (ii)
made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; (iii)
made any payment in the nature of criminal bribery; (iv)
made any payment or received any payment for the purposes of
inducing purchases/sales in violation of the Social Security
Act Section 1128 (b)(3), the "Federal Anti-kickback
Statute", or any similar state or local statute; or (v)
participated in providing financial or reimbursement
information to customers that was reported to government
reimbursement
25
agencies and that was untrue or misleading in violation of
any Federal "False Claims Act" or any state or local law
that is the equivalent thereto.
SECTION 3.19 Interested Party Transactions
Except as disclosed in the Company SEC Reports, no
director, officer or other affiliate of the Company or any
Subsidiary has or has had, directly or indirectly, (i) an
economic interest in any person that has furnished or sold,
or furnishes or sells, services or products that the Company
or any Subsidiary furnishes or sells, or proposes to furnish
or sell; (ii) an economic interest in any person that
purchases from or sells or furnishes to, the Company or any
Subsidiary, any goods or services; (iii) a beneficial
interest in any contract or agreement disclosed in Section
3.12 or 3.16 of the Company Disclosure Schedule; or (iv) any
contractual or other arrangement with the Company or any
Subsidiary; provided, however, that ownership of no more
than one percent (1%) of the outstanding voting stock of a
publicly traded corporation shall not be deemed an "economic
interest in any person" for purposes of this Section 3.19.
Since the effectiveness of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
("SOX"), neither the Company nor any Subsidiary has arranged
any outstanding "extensions of credit" to directors or
executive officers within the meaning of Section 402 of SOX.
SECTION 3.20 Offer Documents; Schedules 13E-3 and
14D-9.
None of the Schedule 14D-9, the Schedule 13E-3
nor any information supplied by the Company for inclusion in
the Offer Documents or any Schedule 13E-3 shall, at the
times the Schedule 13E-3, Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to
stockholders of the Company, as the case may be, 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 the light of the
circumstances under which they were made, not misleading.
At the respective times when they are filed with the SEC or
are first published, sent or given to stockholders, the
Schedule 14D-9 and the Schedule 13E-3 will comply as to form
in all material respects with the applicable requirements of
the Exchange Act, and the rules and regulations thereunder.
Neither the proxy statement to be sent to the stockholders
of the Company in connection with the Stockholders' Meeting
nor the information statement to be sent to such
stockholders, as appropriate (such proxy statement or
information statement, as amended or supplemented, being
referred to herein as the "Proxy Statement"), shall, at the
date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to stockholders of the Company, at
the time of the Stockholders' Meeting and at the Effective
Time, contain any statement that, at the time and in light
of the circumstances under which it was made, is false or
misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the
statements therein not false or misleading or necessary to
correct any statement in any earlier communication with
respect to the solicitation of proxies for the Stockholders'
Meeting which shall have become false or misleading.
Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information
supplied in writing by Parent, Purchaser or any of Parent's
or Purchaser's Representatives for inclusion in the
foregoing documents. The Schedule 14D-9 shall comply in all
material respects as to form with the requirements of the
Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 3.21 Opinion of Financial Advisor
The Company has received the written opinion (the
"Fairness Opinion") of ▇▇▇▇▇▇▇▇▇ & Company, Inc., dated the
date of
26
this Agreement, to the effect that, as of the date of this
Agreement, the Merger Consideration is fair, from a
financial point of view, to the Company's stockholders.
SECTION 3.22 Brokers
No broker, finder or investment banker (other than
▇▇▇▇▇▇▇▇▇ & Company, Inc.) is entitled to any brokerage,
finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished to Parent
a complete and correct copy of all agreements between the
Company and ▇▇▇▇▇▇▇▇▇ & Company, Inc. pursuant to which such
firm would be entitled to any payment relating to the
Transactions.
SECTION 3.23 Section 203 of the DGCL Not Applicable;
Other Statutes
The Company has taken all necessary actions, if
any, so that the provisions of Section 203 of the DGCL and
New Hampshire RSA 421-A will not, before the termination of
this Agreement, apply to this Agreement, the Offer, the
Merger or the other transactions contemplated hereby. No
"fair price", "merger moratorium", "control share
acquisition", or other anti-takeover or similar statute or
regulation applies or purports to apply to this Agreement,
the Offer, the Merger or the other transactions contemplated
hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this
Agreement, Parent and Purchaser hereby, jointly and
severally, represent and warrant to the Company that:
SECTION 4.01 Corporate Organization
Each of Parent and Purchaser is a corporation or
similar legal entity duly formed, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation or organization and has the requisite
corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted.
SECTION 4.02 Authority Relative to the Transactions
Each of Parent and Purchaser has all necessary corporate
power and authority to execute and deliver this Agreement,
to perform its respective obligations hereunder and to
consummate the Transactions. The execution and delivery by
Parent and Purchaser of this Agreement and the consummation
by Parent and Purchaser of the Transactions have been duly
and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of Parent or
Purchaser are necessary to authorize this Agreement or to
consummate the Transactions (other than, with respect to the
Merger, the filing and recordation of appropriate merger
documents as required by the DGCL). This Agreement has been
duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and
delivery by the Company, constitutes the legal, valid and
binding obligation of each of Parent and Purchaser,
enforceable against each of Parent and Purchaser in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to the effect of
general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
27
SECTION 4.03 No Conflict; Required Filings and
Consents
(a) The execution and delivery by Parent and
Purchaser of this Agreement do not, and the performance by
Parent and Purchaser of this Agreement will not,
(i) conflict with or violate the Certificate of
Incorporation or By-laws of either Parent or Purchaser,
(ii) assuming that all consents, approvals, authorizations
and other actions described in Section 4.03(b) have been
obtained or taken and all filings and obligations described
in Section 4.03(b) have been made or fulfilled, conflict
with or violate any Law applicable to Parent or Purchaser or
by which any property or asset of either of them is bound or
affected, or (iii) result in any breach of, or constitute a
default (or an event which, with notice or lapse of time or
both, would become a default) under, or give to others any
rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of Parent or
Purchaser pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any property
or asset of either of them is bound or affected, except,
with respect to clause (iii), for any such conflicts,
violations, breaches, defaults or other occurrences which
would not, individually or in the aggregate, have a Parent
Material Adverse Effect.
(b) The execution and delivery by Parent and
Purchaser of this Agreement do not, and the performance by
Parent and Purchaser of this Agreement will not, require any
consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority, except
(i) for applicable requirements, if any, of the Exchange
Act, and filing and recordation of appropriate merger
documents as required by the DGCL, (ii) where the failure to
obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not,
individually or in the aggregate, have a Parent Material
Adverse Effect and (iii) the VPSB Approval.
SECTION 4.04 Financing
Purchaser has, or shall have, sufficient funds to
permit Purchaser to consummate all the Transactions,
including, without limitation, acquiring all the outstanding
Shares in the Offer and the Merger.
SECTION 4.05 Offer Documents; Proxy Statement
The Offer Documents shall not, at the time the
Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as
the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which
they were made, not misleading. The information supplied by
Parent for inclusion in the Proxy Statement shall not, at
the date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to stockholders of the Company, at
the time of the Stockholders' Meeting or at the Effective
Time, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated
therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not false or misleading, or necessary to correct any
statement in any earlier communication with respect to the
solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. Notwithstanding the
foregoing, Parent and Purchaser make no representation or
warranty with respect to any information supplied by the
Company or any of its Representatives for inclusion in any
of the foregoing documents or the Offer Documents. The Offer
Documents shall comply in all material
28
respects as to form with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder.
SECTION 4.06 Brokers
No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements
made by or on behalf of Parent or Purchaser.
SECTION 4.07 Ownership of Company Common Stock
Neither Parent nor Purchaser nor any of their
respective subsidiaries or other affiliates currently owns,
or has owned during the six month period preceding the date
of this Agreement, 5% or more of the outstanding shares of
Company Common Stock.
SECTION 4.08 No Prior Operations. Purchaser is
a wholly owned subsidiary of Parent and was organized in
connection with transactions contemplated by this Agreement
and has not conducted any operations other than in
connection with this Agreement and the transactions
contemplated hereby.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company
Pending the Merger
The Company agrees that, between the date of this
Agreement and the Effective Time, except as expressly
contemplated by any other provision of this Agreement or as
set forth in Section 5.01 of the Company Disclosure
Schedule, unless Parent shall otherwise consent in writing:
(i) the businesses of the Company and its
Subsidiaries shall be conducted only in, and the
Company and its Subsidiaries shall not take any action
except in, the ordinary course of business and in a
manner consistent with past practice; and
(ii) the Company shall use all reasonable efforts
to preserve substantially intact the business
organization of the Company and the Subsidiaries, to
keep available the services of the current officers,
employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships
of the Company and the Subsidiaries with customers,
suppliers and other persons with which the Company or
any Subsidiary has significant business relations.
From the date of this Agreement until the earlier
of (i) the Effective Time and (ii) the termination of the
Agreement, neither the Company nor any Subsidiary shall,
directly or indirectly, do, or propose to do, any of the
following without the prior written consent of Parent and
except as otherwise expressly contemplated herein:
(a) amend or otherwise change its Certificate of
Incorporation or By-laws or equivalent organizational
documents;
(b) issue, sell, pledge, dispose of, grant or
encumber, or otherwise subject to any Lien, or
authorize such issuance, sale, pledge, disposition,
grant or encumbrance of, or subjection to, any such
Lien, (i) any shares of any class of capital stock of
the Company or any
29
Subsidiary, or any options, warrants, convertible
securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for
the issuance of Shares issuable pursuant to employee
stock options outstanding on the date of this Agreement
and granted under Company Stock Option Plans in effect
on the date of this Agreement) or (ii) any assets of
the Company or any Subsidiary, except in the ordinary
course of business and in a manner consistent with past
practice and except for Liens in favor of Parent or
Purchaser;
(c) declare, set aside, make or pay any dividend
or other distribution, payable in cash, stock, property
or otherwise, with respect to any of its capital stock,
except for the declaration and payment of dividends by
a wholly owned Subsidiary solely to its parent
corporation;
(d) reclassify, combine, split, subdivide or
redeem, or purchase or otherwise acquire, directly or
indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation,
by merger, consolidation, or acquisition of stock or
assets or any other business combination) any
corporation, partnership, other business organization
or any division thereof or any significant amount of
assets; (ii) incur any indebtedness, whether secured or
unsecured and whether under a new or existing credit
facility (except borrowings from Parent or Purchaser)
or issue any debt securities or assume, guarantee or
endorse, or otherwise become responsible for, the
obligations of any person, or make any loans or
advances; (iii) enter into any contract or agreement
other than in the ordinary course of business and
consistent with past practice; (iv) authorize, or make
any commitment with respect to, any capital expenditure
which is not specifically referred to in the capital
expenditure budget attached hereto as Section 5.01(e)
of the Company Disclosure Schedule (the "Company
Capital Budget") or, to the extent not included in the
Company Capital Budget, any single capital expenditure
in excess of $10,000 or capital expenditures in the
aggregate in excess of $100,000; or (v) enter into or
amend any contract, agreement, commitment or
arrangement with respect to any matter set forth in
this Section 5.01(e);
(f) (i) hire any additional employees except to
fill current vacancies or vacancies arising after the
date of this Agreement, (ii) make any offers to any
employee of an employment position other than the
employment position he or she currently holds, except
for offers of an employment position made in the
ordinary course of business and consistent with past
practice in connection with the promotion or demotion
of any employee of the Company or any of its
Subsidiaries who is not a director or officer of the
Company, (iii) increase the compensation payable or to
become payable or the benefits provided to its
directors, officers or employees, except for increases
in the ordinary course of business and consistent with
past practice in salaries or wages of employees of the
Company or any of its Subsidiaries who are not
directors or officers of the Company, (iv) grant any
new or additional retention, severance or termination
pay to, or enter into any new or additional employment,
bonus, change of control or severance agreement with,
any director, officer or other employee of the Company
or of any of its Subsidiaries, (v) establish, adopt,
enter into, terminate or amend any Plan or establish,
30
adopt or enter into any plan, agreement, program,
policy, trust, fund or other arrangement that would be
a Plan if it were in existence as of the date of this
Agreement for the benefit of any director, officer or
employee except as required by this Agreement or the
Transactions contemplated hereby, or as required by
ERISA, the Code or to otherwise comply with applicable
Law, (vi) loan or advance money or other property to
any current or former director, officer or employee of
the Company or any of its Subsidiaries, (vii) grant any
equity or equity based awards (provided that equity
awards may be transferred in accordance with the
applicable plan document or agreement) or (viii) hire
or engage any consultant to perform services for a rate
of compensation which would be in excess of $25,000 on
an annual basis or which is not terminable upon notice
of 30 days or less;
(g) effectuate a "plant closing" or "mass
layoff," as those terms are defined in WARN (determined
without regard to terminations of employment occurring
on or after the Effective Time);
(h) take any action, other than reasonable and
usual actions in the ordinary course of business and
consistent with past practice and other than actions
required to be taken in response to changes in GAAP or
in Law, with respect to accounting policies or
procedures;
(i) make, revoke or change any material Tax
election or material method of Tax accounting, file any
amended Tax Return (unless required by Law), enter into
any closing agreement relating to a material amount of
Taxes, settle or compromise any material liability with
respect to Taxes or consent to any material claim or
assessment relating to Taxes or any waiver of the
statute of limitations for any such claim or
assessment; provided, that in the case of the filing of
any amended Tax Return, the Company or the relevant
Subsidiary shall deliver a copy of such amended Tax
Return to Parent at least 30 days prior to filing for
Parent's review and consent;
(j) pay, discharge or satisfy any claim,
liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than in the
ordinary course of business and consistent with past
practice, unless such payment, discharge or
satisfaction is made in accordance with the terms of
such claim, liability or obligation as such terms exist
on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down
on lines of credit, delay or accelerate capital
expenditures, incur expenditures on research and
development, other than in the ordinary course of
business and consistent with past practice;
(l) amend or modify in any material respect, or
consent to the termination of, any Material Contract,
or amend, waive or modify in any material respect, or
consent to the termination of, the Company's or any
Subsidiary's rights thereunder;
(m) commence or settle any Action, other than the
settlement of Actions involving payments by the Company
or its Subsidiaries not to exceed $100,000 with respect
to any individual Action or $250,000 in aggregate
settlements;
31
(n) (i) abandon, sell, assign, or grant any
security interest in or to any item of the Owned
Intellectual Property, Licensed Intellectual Property
or IP Agreements, (ii) grant to any third party any
license, sublicense or covenant not to ▇▇▇ with respect
to any Owned Intellectual Property or Licensed
Intellectual Property, other than in the ordinary
course of business consistent with past practice, (iii)
develop, create or invent any Intellectual Property
jointly with any third party (other than such joint
development, creation or invention with a third party
that is in progress as of the date hereof), (iv)
disclose, or allow to be disclosed, any confidential
Owned Intellectual Property, unless such Owned
Intellectual Property is subject to a confidentiality
or non-disclosure covenant protecting against
disclosure thereof, or (v) fail to perform or cause to
be performed all applicable filings, recordings and
other acts, and pay or caused to be paid all required
fees and taxes, to maintain and protect its interest in
each and every item of the Owned Intellectual Property
and the Licensed Intellectual Property;
(o) fail to make in a timely manner any filings
with the SEC required under the Securities Act or the
Exchange Act or the rules and regulations promulgated
thereunder;
(p) enter into any contract or agreement with any
director or officer of the Company or any Subsidiary or
any of their respective affiliates (including any
immediate family member of such person) or any other
affiliate of the Company or any Subsidiary; or
(q) announce an intention, enter into any formal
or informal agreement or otherwise make a commitment,
to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Stockholders' Meeting
(a) If required by applicable Law in order to
consummate the Merger, the Company, acting through the
Company Board, shall (i) in accordance with applicable Law
and the Company's Certificate of Incorporation and By-laws,
duly call, give notice of, convene and hold an annual or
special meeting of its stockholders as promptly as
practicable following consummation of the Offer for the
purpose of considering and taking action on this Agreement
and the Merger (the "Stockholders' Meeting") and
(ii) (A) include in the Proxy Statement, and, subject to
Section 6.05(c) hereof, not subsequently withdraw or modify
in any manner adverse to Purchaser or Parent, the unanimous
recommendation of the Company Board that the stockholders of
the Company approve and adopt this Agreement and the Merger
and (B) cooperate with Purchaser and Parent, and use its
reasonable best efforts to obtain such approval and
adoption. At the Stockholders' Meeting, Parent and
Purchaser shall cause all Shares then beneficially owned by
them and their subsidiaries to be voted in favor of the
approval and adoption of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the event
that Purchaser shall acquire at least 90% of the then
outstanding Shares, the parties shall take all necessary and
appropriate action to cause the Merger to become effective,
in accordance
32
with Section 253 of the DGCL, as promptly as reasonably
practicable after such acquisition, without a meeting of the
stockholders of the Company.
SECTION 6.02 Proxy Statement
If approval of the Company's stockholders is
required by applicable Law to consummate the Merger,
promptly following consummation of the Offer, the Company
shall file the Proxy Statement with the SEC under the
Exchange Act, and shall use its best efforts to have the
Proxy Statement cleared by the SEC as promptly as
practicable. Parent, Purchaser and the Company shall
cooperate with each other in the preparation of the Proxy
Statement and in responding to any comments of the SEC with
respect to the Proxy Statement or any requests by the SEC
for any amendment or supplement thereto or for additional
information. Each of Purchaser, Parent and the Company and
its respective counsel shall have a reasonable opportunity
to review and comment on (i) the Proxy Statement, including
all amendments and supplements thereto, prior to such
documents being filed with the SEC or disseminated to
holders of Shares and (ii) all responses to requests for
additional information and replies to comments from the SEC
or the staff thereof prior to their being filed with, or
sent to, the SEC. Each of the Company, Parent and Purchaser
agrees to use its reasonable best efforts, after
consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and
to cause the Proxy Statement and all required amendments and
supplements thereto to be mailed to the holders of Shares
entitled to vote at the Stockholders' Meeting at the
earliest practicable time.
SECTION 6.03 Company Board Representation; Section
14(f)
(a) Promptly upon the purchase by Purchaser of
Shares pursuant to the Offer and from time to time
thereafter, Purchaser shall be entitled to designate up to
such number of directors, rounded up to the next whole
number, on the Company Board as shall give Purchaser
representation on the Company Board equal to the product of
the total number of directors on the Company Board (giving
effect to the directors elected pursuant to this sentence)
multiplied by the percentage that the aggregate number of
Shares beneficially owned by Purchaser or any affiliate of
Purchaser following such purchase bears to the total number
of Shares then outstanding, and the Company shall, at such
time, promptly take all actions necessary to cause
Purchaser's designees to be elected or appointed as
directors of the Company, including increasing the size of
the Company Board or securing the resignations of incumbent
directors, or both. At such times, the Company shall use
its best efforts to cause persons designated by Purchaser to
constitute the same percentage as persons designated by
Purchaser shall constitute of the Company Board of (i) each
committee of the Company Board, (ii) each board of directors
of each Subsidiary and (iii) each committee of each such
board, in each case only to the extent permitted by
applicable Law and the rules of the American Stock Exchange.
Notwithstanding the foregoing, until the Effective Time, the
Company shall use its best efforts to ensure that at least
three members of the Company Board and each committee of the
Company Board, as of the date hereof, who are not employees
of the Company shall remain members of the Company Board and
of such committees.
(b) The Company shall promptly take all actions
required pursuant to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder to fulfill its obligations
under this Section 6.03, and shall include in the Schedule
14D-9 such information with respect to the Company and its
officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill such obligations. Parent or
Purchaser shall supply to
33
the Company, and be solely responsible for, any information
with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of
Purchaser pursuant to this Section 6.03, prior to the
Effective Time, any (i) amendment of this Agreement or the
Certificate of Incorporation or By-laws of the Company or
any Subsidiary, (ii) termination of this Agreement by the
Company, (iii) extension by the Company of the time for the
performance of any of the obligations or other acts of
Parent or Purchaser, (iv) recommendation to the Company
stockholders or any modification or withdrawal of any such
recommendation in connection with this Agreement or the
Transactions or (v) waiver of any of the Company's rights
hereunder, in each case, shall require the concurrence of a
majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of
the Company or any Subsidiary. In the event that the
independent directors of the Company Board deem it advisable
in connection with the Transactions to retain outside legal
counsel, such directors shall be entitled to retain such
counsel (not to exceed two outside law firms) at the
reasonable expense of the Company.
SECTION 6.04 Access to Information; Confidentiality
(a) Subject to applicable Law and confidentiality
agreements, including that certain Nondisclosure and No-
Trading Agreement between Parent and the Company (the
"Confidentiality Agreement"), from the date of this
Agreement until the Effective Time, the Company shall (and
shall cause its Subsidiaries to): (i) provide to Parent and
Parent's Representatives access, during normal business
hours and upon reasonable notice by Parent, to the officers,
employees, agents, properties, offices and other facilities
of the Company and its Subsidiaries and to the books and
records thereof, but only to the extent that such access
does not unreasonably interfere with the business and
operations of the Company and its Subsidiaries, (ii) furnish
to Parent all monthly and quarterly statements of revenue
and expense, earnings, sales, trial balances and such other
similar statements as are regularly and customarily provided
to senior management of the Company promptly following
delivery to such senior management and (iii) furnish
promptly to Parent such information concerning the business,
properties, contracts, assets, liabilities, personnel and
other aspects of such party and its Subsidiaries as Parent
or its Representatives may reasonably request.
(b) Each party shall, and shall cause its
affiliates and Representatives to, (i) comply with the
Confidentiality Agreement as if a party thereto and (ii)
hold in strict confidence as Evaluation Material (as defined
in the Confidentiality Agreement) all nonpublic documents
and information furnished or made available by one party to
the other(s) and their respective affiliates and
Representatives.
(c) No investigation pursuant to this
Section 6.04 shall affect any representation or warranty in
this Agreement of any party hereto or any condition to the
obligations of the parties hereto or any condition to the
Offer.
SECTION 6.05 No Solicitation of Transactions
(a) The Company agrees that neither it nor any
Subsidiary nor any Representative of it or any Subsidiary
will, directly or indirectly, (i) solicit, initiate or
encourage
34
(including by way of furnishing nonpublic information), or
take any other action for the purpose of facilitating, any
inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to its
stockholders) that constitutes, or may reasonably be
expected to lead to, any Competing Transaction (as defined
below), or (ii) enter into or maintain or continue
discussions or negotiations with any person or entity for
the purpose of facilitating such inquiries or to obtain a
proposal or offer for a Competing Transaction, or (iii)
agree to, approve, endorse or recommend any Competing
Transaction or enter into any letter of intent or other
contract, agreement or commitment providing for or otherwise
relating to any Competing Transaction, or (iv) authorize or
permit any Representative of the Company or any of its
Subsidiaries to take any such action. The Company shall
notify Parent as promptly as practicable (and in any event
within twenty-four (24) hours) after the Company receives
any oral or written proposal or offer or any inquiry or
contact with any person regarding a potential proposal or
offer regarding a Competing Transaction, specifying the
material terms and conditions thereof and the identity of
the party making such proposal or offer (including material
amendments or proposed material amendments). The Company
immediately shall cease and cause to be terminated all
existing discussions or negotiations with any parties
conducted heretofore with respect to a Competing
Transaction. The Company shall not release any third party
from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party.
(b) Notwithstanding anything to the contrary in
this Section 6.05, the Company Board may furnish information
to, and enter into discussions with, a person who has made
an unsolicited, written, bona fide proposal or offer
regarding a Competing Transaction, and the Company Board has
(i) determined, in its good faith judgment (after consulting
with its financial advisor), that such proposal or offer
constitutes or could lead to a Superior Proposal (as defined
below), (ii) determined, in its good faith judgment after
consulting with its outside legal counsel (who may be the
Company's regularly engaged outside legal counsel), that, in
light of such proposal or offer, the failure to furnish such
information or enter into discussions would be inconsistent
with its fiduciary duties under applicable Law, (iii)
provided written notice to Parent of its intent to furnish
information or enter into discussions with such person prior
to taking any such action and (iv) obtained from such person
an executed confidentiality agreement on terms no less
favorable to the Company than those contained in the
Confidentiality Agreement (it being understood that such
confidentiality agreement and any related agreements shall
not include any provision calling for any exclusive right to
negotiate with such party or having the effect of
prohibiting the Company from satisfying its obligations
under this Agreement).
(c) Except as set forth in this Section 6.05(c),
neither the Company Board nor any committee thereof shall
withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent or Purchaser, the
approval or recommendation by the Company Board or any such
committee of this Agreement, the Offer, the Merger or any
other Transaction (a "Change in the Company Recommendation")
or approve or recommend, or cause or permit the Company to
enter into any letter of intent, agreement or obligation
with respect to, any Competing Transaction (except for a
confidentiality agreement as provided in Section 6.05(b)
above). Notwithstanding the foregoing, if the Company Board
determines, in its good faith judgment prior to the time of
the acceptance for payment of Shares pursuant to the Offer
and after consulting with outside legal counsel (who may be
the Company's regularly engaged outside legal counsel), that
the failure to make a Change in the Company Recommendation
would be inconsistent with its fiduciary duties under
applicable Law, the Company Board may make a Change in the
Company Recommendation
35
and/or recommend a Superior Proposal, but only (i) after
providing written notice to Parent (a "Notice of Superior
Proposal") advising Parent that the Company Board has
received a Superior Proposal, specifying the material terms
and conditions of such Superior Proposal and identifying the
person making such Superior Proposal and indicating that the
Company Board intends to effect a Change in the Company
Recommendation and (ii) if Parent does not prior to the
earlier of (A) three (3) business days after Parent's
receipt of the Notice of Superior Proposal or (B) if the
Offer, as it may be extended, does not remain open for at
least three (3) business days after Parent's receipt of the
Notice of Superior Proposal, then such time period as does
exist prior to the expiration of the Offer and before any
acceptance for payment of any Shares, make an offer that the
Company Board determines, in its good faith judgment (after
consulting with its financial advisor) to be at least as
favorable to the Company's stockholders as such Superior
Proposal. Any disclosure that the Company Board may be
compelled to make with respect to the receipt of a proposal
or offer for a Competing Transaction or otherwise in order
to comply with its fiduciary duties under applicable Law or
Rule 14d-9 or 14e-2 will not constitute a violation of this
Agreement.
(d) A "Competing Transaction" means any of the
following (other than the Transactions): (i) any merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or other similar
transaction involving the Company or any Subsidiary; (ii)
any sale, lease, exchange, transfer or other disposition of
all or substantially all of the assets of the Company or of
any Subsidiary; (iii) any sale, exchange, transfer or other
disposition in which the Company or any Subsidiary
participates (including taking any action to comply with
Section 203 of the DGCL, but excluding typical stock
transfer functions) and which results in any person
beneficially owning more than 25% of the outstanding
securities of any class of equity securities of the Company
or of any Subsidiary; or (iv) any tender offer or exchange
offer that, if consummated, would result in any person
beneficially owning more than 25% of the outstanding
securities of any class of equity securities of the Company
or of any Subsidiary.
(e) A "Superior Proposal" means an unsolicited
written bona fide offer made by a third party with respect
to a Competing Transaction (with all percentages contained
in the definition of "Competing Transaction" increased to
50% for purposes of this definition), in each case on terms
that the Company Board determines, in its good faith
judgment (after consulting with its financial advisor) and
taking into account all legal, financial, regulatory and
other aspects of the offer that it deems relevant (including
whether the person proposing such Competing Transaction is
reasonably able to finance the transaction), to be more
favorable to the Company stockholders than the Offer and
Merger.
SECTION 6.06 Employee Benefits Matters
(a) From and after the Effective Time and until
December 31 of the calendar year in which the Effective Time
occurs, employees of the Company and its Subsidiaries shall
be offered participation in employee benefit plans,
programs, policies and arrangements that are no less
favorable in the aggregate to those provided under the
applicable employee benefit plans (as defined in Section
3(3) of ERISA (excluding plans exempt under Section 201(2)
of ERISA)), programs, policies and arrangements of the
Company and its Subsidiaries in effect at the Effective Time
(collectively, "Current Plans"); provided, however, that
nothing contained in this Section 6.06(a) shall (i) obligate
or commit Parent or its subsidiaries to continue any
particular Current Plan after the Effective Time or to
maintain in effect any particular Current Plan or any level
or type of
36
benefits, (ii) obligate or commit Parent or its subsidiaries
to provide any employee of the Company or any Subsidiary
with any equity compensation pursuant to any equity
compensation plans, programs or arrangements sponsored or
provided by Parent or any of its subsidiaries or affiliates
for the benefit of its employees, or (iii) prohibit Parent
or its subsidiaries from making any changes to any Current
Plans.
(b) Parent will, or will cause the Company and
the Subsidiaries to, credit each employee of the Company and
the Subsidiaries as of the Effective Time with such number
of unused vacation days and other paid time off accrued by
each employee with the Company and the Subsidiaries prior to
the Effective Time in accordance with the Company's
personnel policies applicable to such employees on the date
hereof, copies of which have been made available to Parent;
provided that Parent may, in its sole discretion and to the
extent permitted by applicable Law, require that such
vacation and other paid time off be taken by the employee
prior to December 31, 2006.
(c) Employees of the Company and its Subsidiaries
shall receive credit for purposes of eligibility to
participate and vesting (but not for benefit accruals under
any defined benefit pension plan) under any employee benefit
plan, program or arrangement established or maintained by
the Surviving Corporation for service accrued prior to the
Effective Time with the Company or any Subsidiary under
which each employee may be eligible to participate on or
after the Effective Time to the same extent recognized by
the Company or any Subsidiary under comparable plans
immediately prior to the Effective Time; provided, however,
that such crediting of service shall not operate to
duplicate any benefit or the funding of any such benefit.
(d) With respect to the welfare benefit plans,
programs and arrangements maintained, sponsored or
contributed to by Parent or its subsidiaries immediately
prior to the Effective Time ("Parent Welfare Benefit Plans")
in which an employee of the Company and the Subsidiaries may
be eligible to participate on or after the Effective Time,
Parent shall waive, or cause its insurance carrier to waive,
any limitations on benefits relating to pre-existing
conditions (if any) with respect to participation and
coverage requirements applicable to employees of the Company
and its Subsidiaries under Parent Welfare Benefit Plans to
the same extent such limitations are waived under any
comparable plan of Parent or its subsidiaries in effect
immediately prior to the Effective Time and shall recognize,
for purposes of annual deductible and out-of-pocket limits
under its medical and dental plans, deductible and out-of-
pocket expenses paid by employees of the Company and its
Subsidiaries in the calendar year in which the Effective
Time occurs.
SECTION 6.07 Directors' and Officers' Indemnification
and Insurance
(a) The Certificate of Incorporation of the
Surviving Corporation shall contain provisions no less
favorable with respect to indemnification than are set forth
in Article Ninth of the Company's Certificate of
Incorporation as in effect on June 30, 2005, which
provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights
thereunder of individuals who, at or prior to the Effective
Time, were directors, officers, employees, fiduciaries or
agents of the Company, unless such modification shall be
required by law.
37
(b) Prior to the Effective Time, the Company will
purchase and pay for a directors' and officers' liability
insurance policy, or tail coverage under the Company's
existing directors' and officers' liability insurance
policy, providing coverage of not less than six years,
subject to substantially the same limits, terms and
conditions as the policy in force immediately prior to the
Effective Time, with respect to matters occurring prior to
the Effective Time. The total cost of the directors' and
officers' liability coverage described in the preceding
sentence shall not exceed 225% of the last annual premium
payable prior to the date of this Agreement which was
$55,000. The Company and Parent shall cooperate to seek and
obtain the insurance coverage contemplated by this Section
6.07(b) at the lowest cost for a carrier of recognized
financial standing (which shall include the Company's
current carrier). If the cost of providing and maintaining
the insurance coverage in accordance with this Section
6.07(b) would exceed the amount permitted by this Section
6.07(b), (i) the Company shall notify the covered officers
and directors and Parent of the amount of such excess and
give the covered officers and directors the opportunity to
reimburse the Company the amount of such excess, and if and
for so long as such reimbursement is made the Company,
Parent and the Surviving Corporation shall continue to
provide and maintain insurance in accordance with this
Section 6.07(b); and (ii) if and to the extent the covered
officers and directors do not reimburse the Company in
accordance with the immediately preceding clause (i), then
the Company shall provide (at no cost to the covered
officers and directors) the greatest amount of substantially
equivalent insurance obtainable at a total cost of 225% of
the last annual premium payable prior to the date of this
Agreement which was $55,000.
(c) In the event Parent or the Surviving
Corporation or any of their respective 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 Parent or the
Surviving Corporation, as the case may be, shall assume the
obligations set forth in this Section 6.07.
SECTION 6.08 Notification of Certain Matters
The Company shall give prompt notice to Parent,
and Parent shall give prompt notice to the Company, of
(a) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which could reasonably be
expected to cause any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material
respect and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply in any material
respect with or satisfy in any material respect any covenant
or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any
notice pursuant to this Section 6.08 shall not limit or
otherwise affect the remedies available hereunder to the
party giving or receiving such notice.
SECTION 6.09 Further Action; Reasonable Best Efforts
Upon the terms and subject to the conditions of
this Agreement, each of the parties hereto shall (a) make
promptly its respective filings, and thereafter make any
other required submissions, under applicable foreign,
federal or state antitrust, competition or fair trade Laws
with respect to the Transactions and (b) use its reasonable
best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws or
otherwise to consummate and make effective the Transactions,
including, without limitation, using its reasonable
38
best efforts to obtain all Permits, consents, approvals
(including the VPSB Approval), authorizations,
qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries
as are necessary for the consummation of the Transactions
and to fulfill the conditions to the Offer and the Merger;
provided that neither Purchaser nor Parent will be required
by this Section 6.09 to take any action, including entering
into any consent decree, hold separate orders or other
arrangements, that (i) requires the divestiture of any
assets of any of Purchaser, Parent, the Company or any of
their respective subsidiaries or (ii) limits Parent's
freedom of action with respect to, or its ability to retain,
the Company and the Subsidiaries or any portion thereof or
any of Parent's or its affiliates' other assets or
businesses. In case, at any time after the Effective Time,
any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
SECTION 6.10 Subsequent Financial Statements
The Company shall, if practicable, provide Parent
(a) its financial results for any period after the date of
this Agreement prior to making any such financial results
publicly available and (b) any report or document (other
than reports under Section 16 of the Exchange Act) to be
filed with the SEC after the date of this Agreement prior to
any such filing, it being understood that, in either case,
Parent shall have no liability by reason of being provided
with any such documents.
SECTION 6.11 Public Announcements
The initial press release relating to this
Agreement shall be a joint press release the text of which
has been agreed to by each of Parent and the Company.
Thereafter, unless otherwise required by applicable Law or
the requirements of the American Stock Exchange, each of
Parent and the Company shall each use its reasonable best
efforts to consult with each other before issuing any press
release or otherwise making any public statements with
respect to this Agreement, the Offer, the Merger or any of
the other Transactions.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Merger
The obligations of the Company, Parent and
Purchaser to consummate the Merger shall be subject to the
satisfaction or waiver (where permissible), at or prior to
the Effective Time, of the following conditions:
(a) Company Stockholder Approval. If required,
this Agreement and the Merger shall have been approved
and adopted by the requisite affirmative vote of the
stockholders of the Company in accordance with, and to
the extent required by, the DGCL and the Company's
Certificate of Incorporation.
(b) No Order. No Governmental Authority shall
have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, judgment, decree, executive
order or award
39
(an "Order") which is then in effect and has the effect
of making the Merger illegal or otherwise restricting,
preventing or prohibiting consummation of the Merger.
(c) Governmental Authority Approval. Any
material approval or consent of any Governmental
Authority applicable to the acceptance of the Shares
upon the completion of the Offer, the change in control
of the Company and its subsidiaries, the consummation
of the Merger or the conversion of the Convertible
Notes, including the VPSB Approval, shall have been
obtained without any material adverse conditions, or
restrictions, revocations or limitations of rights.
(d) Offer. Purchaser or its permitted assignee
shall have purchased all Shares validly tendered and
not withdrawn pursuant to the Offer, provided, however,
that this condition shall not be applicable to the
obligations of Parent or Purchaser if, in breach of
this Agreement or the terms of the Offer, Purchaser
fails to purchase any Shares that were validly tendered
and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination
This Agreement may be terminated and the Offer and
the Merger may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and
adoption of this Agreement by the stockholders of the
Company, as follows:
(a) if no Shares have been accepted for payment
pursuant to the Offer, by mutual written consent of
Parent and the Company duly authorized by the Boards of
Directors of Parent and the Company; or
(b) if no Shares have been accepted for payment
pursuant to the Offer, by either Parent or the Company
on or after November 30, 2005; provided, however, that
the right to terminate this Agreement under this
Section 8.01(b) shall not be available to any party
whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the
failure of the Shares to have been accepted for payment
on or before such date; or
(c) by either Parent or the Company if any
Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any permanent
injunction, order, decree or ruling which is then in
effect and has the effect of making consummation of the
Merger illegal or otherwise preventing or prohibiting
consummation of the Merger and such injunction, order,
decree or ruling shall have become final and non-
appealable; or
(d) if no Shares have been accepted for payment
pursuant to the Offer, by Parent if a Company
Triggering Event (as defined below) shall have
occurred; or
(e) if no Shares have been accepted for payment
pursuant to the Offer, by the Company if it enters into
a definitive agreement with respect to a Superior
Proposal (other than a confidentiality agreement as
permitted by Section 6.05(b)); provided, however, that
the Company shall
40
have first complied with the provisions of Section 6.05
hereof, including, without limitation, the provisions
of Section 6.05(c), and simultaneously with the
termination under this Section 8.01(e), the Company
shall pay Parent the aggregate amount due pursuant to
Section 8.03(b); or
(f) by Parent if due to a failure to satisfy any
Offer Condition, Purchaser shall have (i) failed to
commence the Offer as contemplated by Section
1.01(a)(i) of this Agreement, (ii) terminated the Offer
without having accepted any Shares for payment
thereunder or (iii) failed to accept Shares for payment
pursuant to the Offer within 90 days following the
commencement of the Offer, unless such action or
inaction under (i), (ii) or (iii) shall have been
caused by or resulted from the failure of Parent or
Purchaser to perform, in any material respect, any of
their material covenants or agreements contained in
this Agreement, or the material breach by Parent or
Purchaser of any of their material representations or
warranties contained in this Agreement; or
(g) by the Company, upon approval of the Company
Board, if Purchaser shall have (i) failed to commence
the Offer as contemplated by Section 1.01(a)(i) of this
Agreement, (ii) terminated the Offer without having
accepted any Shares for payment thereunder or (iii)
failed to accept Shares for payment pursuant to the
Offer within 90 days following the commencement of the
Offer, unless such action or inaction under (i), (ii)
or (iii) shall have been caused by or resulted from the
failure of the Company to perform, in any material
respect, any of its material covenants or agreements
contained in this Agreement or the material breach by
the Company of any of its material representations or
warranties contained in this Agreement.
For purposes of this Agreement, a "Company Triggering Event"
shall be deemed to have occurred if: (i) a Change in
Company Recommendation shall have occurred or the Company
Board shall have resolved to make a Change in Company
Recommendation; (ii) the Company Board shall have
recommended to the stockholders of the Company a Competing
Transaction or shall have publicly announced it intends to
do so or shall have entered into any letter of intent or
similar document or any agreement, contract or commitment
accepting any Competing Transaction; (iii) the Company shall
have failed to include in the Schedule 14D-9 the
recommendation of the Company Board in favor of holders of
Shares accepting the Offer and tendering their Shares in the
Offer; (iv) the Company Board fails to reaffirm its
recommendation in favor of holders of Shares accepting the
Offer and tendering their Shares in the Offer within five
business days after Parent requests in writing that such
recommendation be reaffirmed; (v) the Company shall have
willfully breached its obligations under Section 6.05; or
(vi) a tender offer or exchange offer for 25% or more of the
outstanding shares of capital stock of the Company is
commenced, and the Company Board fails to recommend against
acceptance of such tender offer or exchange offer by its
stockholders (including by taking no position with respect
to the acceptance of such tender offer or exchange offer by
its stockholders).
SECTION 8.02 Effect of Termination
In the event of the termination of this Agreement
pursuant to Section 8.01, this Agreement shall forthwith
become void, and there shall be no liability under this
Agreement on the part of any party hereto, except (a) as set
forth in Section 8.03 and (b) nothing herein shall relieve
any party from liability for any willful breach of any of
its representations, warranties, covenants or agreements set
forth in this Agreement prior to such
41
termination; provided, however, that the terms of Sections
6.04(b) and (c) shall survive any termination of this
Agreement.
SECTION 8.03 Fees and Expenses
(a) Except as set forth in this Section 8.03, all
Expenses (as defined below) incurred in connection with this
Agreement, the Offer and the Merger shall be paid by the
party incurring such expenses, whether or not the Offer, the
Merger or any other transaction is consummated. "Expenses",
as used in this Agreement, shall include all reasonable
out-of-pocket expenses (including, without limitation, all
reasonable fees and expenses of counsel, accountants,
auditors, investment bankers, experts and consultants to a
party hereto and its affiliates) incurred by a party or on
its behalf in connection with or related to the VPSB
Approval or the approval or consent of any other
Governmental Authority, the authorization, preparation,
negotiation, execution and performance of this Agreement,
the preparation, printing, filing and mailing of the Offer
Documents, the Schedule 14D-9 and the Proxy Statement, the
solicitation of stockholder tenders and all other matters
related to consummation of the Offer, the Merger and the
other transactions contemplated by this Agreement.
(b) The Company agrees that:
(i) if Parent shall terminate this Agreement
pursuant to Section 8.01(d); or
(ii) if (A)(1) Parent or the Company shall
terminate this Agreement pursuant to Section 8.01(b),
(2) Parent shall terminate this Agreement pursuant to
Section 8.01(f), or (3) the Company shall terminate
this Agreement pursuant to Section 8.01(g), (B) prior
to any such termination, a Competing Transaction shall
have been publicly announced with respect to the
Company and such Competing Transaction shall not have
been publicly withdrawn at the time of such termination
or an understanding, including without limitation in
the form of a letter of intent, term sheet or
otherwise, has been reached in principle (whether or
not legally binding) for a Competing Transaction (an
"Understanding"), and (C) within 12 months after such
termination, the Company enters into an agreement or
Understanding with respect to a Competing Transaction
or a Competing Transaction is consummated; or
(iii) if any person (including, without
limitation, the Company or any affiliate thereof),
other than Parent or any affiliate of Parent, shall
after the date hereof have become the beneficial owner
of more than 25% of the then-outstanding Shares, and
this Agreement shall have been terminated pursuant to
Section 8.01(b), 8.01(f) or 8.01(g); or
(iv) if the Company shall terminate this Agreement
pursuant to Section 8.01(e); or
(v) if the Company enters into an agreement or
Understanding with respect to a Competing Transaction,
or a Competing Transaction is consummated, in each case
within 12 months after the termination of this
Agreement pursuant to Section 8.01, and the Company
shall not theretofore have been required to pay to
Parent an amount equal to the amount of Parent's
Expenses pursuant to Section 8.03(b)(i), 8.03(b)(ii),
8.03(b)(iii) or 8.03(b)(iv);
42
then the Company shall pay to Parent promptly (but in any
event no later than one business day after the first of such
events shall have occurred) an amount equal to the amount of
Parent's Expenses; provided that the Company shall not be
liable for any amount of Parent's Expenses in excess of
$675,000 in the aggregate.
(c) The Company agrees that if Parent shall
terminate this Agreement pursuant to Section 8.01(f) as a
result of the failure to satisfy the conditions set forth in
paragraph (h) or (i) of Annex A hereto, then the Company
shall, whether or not any payment is made pursuant to
Section 8.03(b), reimburse Parent for all of its Expenses
(such payment to be made not later than one business day
after submission of statements therefor).
(d) The Company acknowledges that the agreements
contained in this Section 8.03 are an integral part of the
transactions contemplated by this Agreement. In the event
that the Company shall fail to pay the Fee or any Expenses
when due, the term "Expenses" shall be deemed to include the
costs and expenses actually incurred or accrued by Parent,
to the extent such accrued expenses are, in fact, paid
(including, without limitation, reasonable fees and expenses
of counsel) in connection with the collection under and
enforcement of this Section 8.03. Payment of the fees and
expenses described in this Section 8.03 shall not be in lieu
of any damages incurred in the event of willful breach of
this Agreement.
SECTION 8.04 Amendment
Subject to Section 6.03, this Agreement may be
amended by the parties hereto by action taken by or on
behalf of their respective Boards of Directors at any time
prior to the Effective Time whether prior to or after the
approval and adoption of this Agreement and the Transactions
by the stockholders of the Company, but after such approval
and adoption only to the extent permitted by applicable law.
This Agreement may not be amended except by an instrument in
writing signed by each of the parties hereto.
SECTION 8.05 Waiver
Subject to Section 6.03, at any time prior to the
Effective Time, any party hereto may (a) extend the time for
the performance of any obligation or other act of any other
party hereto, (b) waive any inaccuracy in the
representations and warranties of any other party contained
herein or in any document delivered pursuant hereto and
(c) waive compliance with any agreement of any other party
or any condition to its own obligations contained herein.
Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party or parties
entitled to grant such extension or waiver.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations,
Warranties and Agreements
The representations, warranties and agreements in
this Agreement and in any certificate delivered pursuant
hereto shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Section 8.01, as
the case may be, except that the agreements set forth in
Articles I and II and Sections 3.22, 4.06, 6.04(b), 6.06,
6.07 and 8.03 and this Article IX shall survive the
Effective Time.
43
SECTION 9.02 Notices
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by telecopy or by registered
or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this
Section 9.01):
if to Parent or Purchaser:
▇▇▇▇▇ Group Ltd.
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Bahamas
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Bird, LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ III
if to the Company:
BayCorp Holdings, Ltd.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
McLane, Graf, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (overnight zip code
03101)
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Esq.
44
SECTION 9.03 Certain Definitions
(a) For purposes of this Agreement:
"affiliate" of a specified person means a person
who, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under
common control with, such specified person.
"beneficial owner", with respect to any Shares,
has the meaning ascribed to such term under Rule 13d-
3(a) of the Exchange Act.
"business day" means any day on which the
principal offices of the SEC in Washington, D.C. are
open to accept filings, or, in the case of determining
a date when any payment is due, any day on which banks
are not required or authorized to close in The City of
New York.
"Code" means the United States Internal Revenue
Code of 1986, as amended.
"Company IT Systems" means computer systems,
networks, hardware, software, databases, Internet web
sites and equipment used to process, store, maintain
and operate data, information and functions used in
connection with the operation of the Company and its
Subsidiaries.
"Company Material Adverse Effect" means any event,
circumstance, change or effect that, individually or in
the aggregate with all other events, circumstances,
changes and effects, is or is reasonably likely (a) to
be materially adverse to (i) the business, condition
(financial or otherwise), assets, liabilities, or
results of operations of the Company and the
Subsidiaries taken as a whole or (ii) the ability of
the Company to consummate the transactions contemplated
by this Agreement; provided, however, that the
foregoing shall not include any event, circumstance,
change or effect resulting from (A) changes in general
economic conditions that do not have a materially
disproportionate effect (relative to other industry
participants) on the Company or its Subsidiaries, (B)
general changes in the industries or in the prices of
commodities in which the Company and the Subsidiaries
operate, except those events, circumstances, changes or
effects that adversely affect the Company and its
Subsidiaries to a greater extent than they affect other
entities operating in such industries, (C) changes in
the trading price of the Shares between the date hereof
and the Effective Time (it being understood that any
fact or development giving rise to or contributing to
such change in the trading price of the Shares may be
the cause of a Company Material Adverse Effect), or (D)
changes in Law or GAAP, or (b) to prevent or materially
delay consummation of any of the Transactions or
otherwise prevent or materially delay the Company from
performing its obligations under this Agreement.
"Company Restricted Stock Award" means each Share
outstanding immediately prior to the Effective Time
that is subject to a repurchase option, risk of
forfeiture or other condition under the Company Stock
Option Plans or any applicable restricted stock
purchase agreement or other agreement with the Company.
45
"control" (including the terms "controlled by" and
"under common control with") means the possession,
directly or indirectly, or as trustee or executor, of
the power to direct or cause the direction of the
management and policies of a person, whether through
the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or
otherwise.
"Convertible Notes" means, collectively, that
certain convertible note, in the principal amount of
$10.25 million, dated March 15, 2005, among the
Company, Great Bay Power Marketing, Inc., Great Bay
Hydro Corporation, BayCorp Ventures, LLC, Nacogdoches
Gas, LLC, Great Bay Hydro Maine, LLC, Great Bay Hydro
▇▇▇▇▇▇, LLC and Parent, together with that certain
convertible note, in the principal amount of $10
million, dated May 24, 2005, among the Company, Great
Bay Power Marketing, Inc., Great Bay Hydro Corporation,
BayCorp Ventures, LLC, Nacogdoches Gas, LLC, Great Bay
Hydro Maine, LLC, Great Bay Hydro ▇▇▇▇▇▇, LLC and
Parent.
"Enterprise Licenses" means all agreements between
the Company or a Subsidiary and a third party under
which affiliates of the Company take the benefit of
rights to or licenses of Software, portions of Company
IT Systems or services relating to any of the
foregoing.
"Environmental Laws" means any United States
federal, state or local laws, regulations and
enforceable governmental orders relating to pollution
or protection of the environment, human health and
safety (as relating to exposure to Hazardous
Substances), or natural resources, including, without
limitation the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. 9601 et
seq. ("CERCLA"), and the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq. ("RCRA").
"Hazardous Substances" means those hazardous or
toxic substances, chemicals, wastes and pollutants
defined in or regulated under any Environmental Law,
including, without limitation, RCRA hazardous wastes
and CERCLA hazardous substances.
"Intellectual Property" means (i) patents, patent
applications and statutory invention registrations,
(ii) Trademarks, (iii) copyrights, including
registrations and applications for registration
thereof, (iv) Software and (v) confidential and
proprietary information, including trade secrets, know-
how, technology, processes, products and methods.
"IP Agreements" means all agreements to which the
Company or a Subsidiary is a party governing (i)
licenses of Intellectual Property by third parties to
the Company or a Subsidiary, (ii) licenses of
Intellectual Property by the Company or Subsidiary to
third parties, (iii) the rights between the Company or
a Subsidiary and third parties relating to the
development, ownership or use of Intellectual Property
and (iv) or the right to manufacture, sell or
distribute any product or process of the Company or a
Subsidiary or a third party.
46
"knowledge of the Company" and the "Company's
knowledge" and words of similar import mean the actual
knowledge, after due inquiry, of any executive officer
of the Company, including due inquiry of the
appropriate employees of its Subsidiaries.
"Licensed Intellectual Property" means all
Intellectual Property licensed to the Company or a
Subsidiary pursuant to the IP Agreements.
"Owned Intellectual Property" means all
Intellectual Property owned by the Company and its
Subsidiaries.
"Parent Material Adverse Effect" means any event,
circumstance, change or effect that, individually or in
the aggregate with all other events, circumstances,
changes and effects, is or is reasonably likely (a) to
be materially adverse to (i) the business, condition
(financial or otherwise), assets, liabilities, or
results of operations of Parent and its subsidiaries
taken as a whole or (ii) the ability of Parent to
consummate the transactions contemplated by this
Agreement; provided, however, that the foregoing shall
not include any event, circumstance, change or effect
resulting from (x) changes in general economic
conditions that do not have a materially
disproportionate effect (relative to other industry
participants) on Parent or its subsidiaries, or (y)
general changes in the industries or in the prices of
commodities in which Parent and its subsidiaries
operate, except those events, circumstances, changes or
effects that adversely affect Parent and its
subsidiaries to a greater extent than they affect other
entities operating in such industries or (b) to prevent
or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this
Agreement.
"person" means an individual, corporation,
partnership, limited partnership, limited liability
company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3)
of the Exchange Act), trust, association or entity or
government, political subdivision, agency or
instrumentality of a government.
"Representative" means, with respect to any
person, such person's officers, directors, employees,
accountants, auditors, attorneys, consultants, legal
counsel, agents, investment banker, financial advisor
and other representatives.
"Software" means computer software and programs in
any form, including source code, object code,
encryption keys and other security features, all
versions, conversions, updates, patches, corrections,
enhancements and modifications thereof and all related
documentation, developer notes, comments and
annotations thereto.
"subsidiary" or "subsidiaries" of the Company, the
Surviving Corporation, Parent or any other person means
an affiliate controlled by such person, directly or
indirectly, through one or more intermediaries.
"Tax Returns" means any return, declaration,
report, election, claim for refund or information
return or other statement, form or disclosure relating
to, filed or required to be filed with any Governmental
Authority or taxing authority, including any schedule
or attachment thereto, and including any amendment
thereof.
47
"Tax" or "Taxes" means any federal, state, local
or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty or addition
thereto, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed
to the Tax liability of any other person.
"Trademarks" means trademarks, service marks,
domain name registrations, trade dress, logos, and
other source identifiers, including registrations and
applications for registration thereof.
(b) The following terms have the meaning set
forth in the Sections set forth below:
Defined Term Location of
Definition
Action 3.09
Agreement Preamble
Certificate of Merger 2.02
Certificates 2.11(b)
Change in the Company Recommendation 6.05(c)
Company Preamble
Company Board Recitals
Company Capital Budget 5.01(e)
Company Common Stock 3.03(a)
Company Disclosure Schedule 3.01(b)
Company Permits 3.06(a)
Company Preferred Stock 3.03(a)
Company SEC Reports 3.07(a)
Company Stock Awards 3.03(a)
Company Stock Option 2.07(a)
Company Stock Option Plans 2.07(a)
Company Triggering Event 8.01
Competing Transaction 6.05(d)
Confidentiality Agreement 6.04(a)
Current Plans 6.06(a)
DGCL Recitals
Dissenting Shares 2.09(a)
Effective Time 2.02
Environmental Permits 3.15
ERISA 3.10(a)
ESPP 2.08
ESPP Date 2.08
Exchange Act 1.01(a)
Expenses 8.03(a)
48
Location of
Defined Term Definition
Fairness Opinion 3.25
Fee 8.03(b)
GAAP 3.07(b)
Governmental Authority 3.05(b)
HSR Act 1.01(a)
Initial Expiration Date 1.01(a)
IRS 3.10(a)
Law 3.05(a)
Lease Documents 3.12(b)
Liens 3.12(a)
Material Contracts 3.17(a)
Merger Recitals
Merger Consideration 1.01(a)
Minimum Condition Annex A
Multiemployer Plan 3.10(b)
Multiple Employer Plan 3.10(b)
Non-U.S. Benefit Plan 3.10(i)
Notice of Superior Proposal 6.05(c)
Offer Recitals
Offer Conditions 1.01(a)
Offer Documents 1.01(b)
Offer to Purchase 1.01(b)
Order 7.01(b)
Original Agreement Recitals
Parent Preamble
Parent Welfare Benefit Plans 6.06(d)
Paying Agent 2.11(a)
Payment Fund 2.11(a)
Permitted Liens 3.12(a)
Per Share Amount Recitals
Plans 3.10(a)
Proxy Statement 3.24
Purchaser Preamble
Schedule TO 1.01(b)
Schedule 13E-3 1.03
Schedule 14D-9 1.02(b)
SEC 1.01(a)
Securities Act 3.07(a)
Shares Recitals
Stock Unit 2.07(d)
Stockholder Support Agreements Recitals
Stockholders Recitals
Stockholders' Meeting 6.01(a)
Subsidiary 3.01(a)
Superior Proposal 6.05(e)
49
Location of
Defined Term Definition
Surviving Corporation 2.01
Surviving Corporation Shares 2.06(c)
Transactions 3.04
VPSB 1.01
VPSB Approval 1.01
WARN 3.10(h)
Warrant 2.10
2004 Balance Sheet 3.07(c)
SECTION 9.04 Severability
If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner
materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the
Transactions be consummated as originally contemplated to
the fullest extent possible.
SECTION 9.05 Entire Agreement; Assignment
This Agreement and the Confidentiality Agreement
constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject
matter hereof. This Agreement shall not be assigned
(whether pursuant to a merger, by operation of law or
otherwise), except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any
affiliate of Parent; provided that no such assignment shall
relieve the assigning party of its obligations hereunder if
such assignee does not perform such obligations.
SECTION 9.06 Parties in Interest
This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement,
other than Section 6.07 (which is intended to be for the
benefit of the persons covered thereby and may be enforced
by such persons).
SECTION 9.07 Specific Performance
The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law
or equity.
SECTION 9.08 Governing Law
This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in
that State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined
exclusively in the Chancery Court of the State of Delaware
(or other appropriate
50
state court in the State of Delaware or any federal court
sitting in the State of Delaware). The parties hereto
hereby (a) submit to the exclusive jurisdiction of any such
state or federal court sitting in the State of Delaware for
the purpose of any Action arising out of or relating to this
Agreement brought by any party hereto and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from
attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is
improper, or that this Agreement or the Transactions may not
be enforced in or by any of the above-named courts.
SECTION 9.09 Waiver of Jury Trial
Each of the parties hereto hereby waives to the
fullest extent permitted by applicable Law any right it may
have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in
connection with this Agreement or the Transactions. Each of
the parties hereto (a) certifies that no Representative of
any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation,
seek to enforce that foregoing waiver and (b) acknowledges
that it and the other hereto have been induced to enter into
this Agreement and the Transactions, as applicable, by,
among other things, the mutual waivers and certifications in
this Section 9.09.
SECTION 9.10 Headings, etc
The descriptive headings contained in this
Agreement are included for convenience of reference only and
shall not affect in any way the meaning or interpretation of
this Agreement. As used herein, any reference in the
singular shall include the plural and vice versa, and any
reference to a gender shall include all genders. The terms
"include" and "including" and derivatives of such terms
shall mean "including without limitation" whether by
enumeration or otherwise.
SECTION 9.11 Counterparts
This Agreement may be executed and delivered
(including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 9.12 Company Disclosure Schedule
The Company has or may have set forth information
in the Company Disclosure Schedule in a Section thereof that
corresponds to the Section of this Agreement to which it
relates. A matter set forth in one Section of the Company
Disclosure Schedule need not be set forth in any other
Section of the Company Disclosure Schedule so long as its
relevance to the latter Section of the Company Disclosure
Schedule or Section of the Agreement is readily apparent on
the face of the information disclosed in the Company
Disclosure Schedule to the person to which such disclosure
is being made. The fact that any item of information is
disclosed in the Company Disclosure Schedule shall not be
construed to mean that such information is required to be
disclosed by this Agreement. The inclusion of any item in
any Section of the Company Disclosure Schedule (i) does not
represent a determination by the Company that such item is
"material" and (ii) does not represent a determination by
the Company that such item did not arise in the ordinary
course of business.
51
IN WITNESS WHEREOF, Parent, Purchaser and the
Company have caused this Agreement to be executed as of the
date first written above by their respective officers
thereunto duly authorized.
▇▇▇▇▇ GROUP LTD.
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇ ACQUISITION CORP.
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
BAYCORP HOLDINGS, LTD.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: President
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment any
Shares tendered pursuant to the Offer, and may extend,
terminate or amend the Offer, subject to the terms of the
Agreement and any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act, if (i)
immediately prior to the expiration of the Offer, there
shall not have been validly tendered and not withdrawn a
number of Shares that, when added to 25,000 Shares already
owned by Parent, constitutes sixty-six and two-thirds
percent (66 2/3%) of the then issued and outstanding Shares
(the "Minimum Condition"), (ii) any material approval or
consent of any Governmental Authority applicable to the
acceptance for payment of the Shares, including the VPSB
Approval, shall not have been obtained free of any material
adverse conditions or restrictions, or any revocations or
limitations of any material rights, or (iii) at any time on
or after the date of this Agreement and prior to the
expiration of the Offer, any of the following conditions
shall exist and be continuing as of such date:
(a) there shall have been instituted or be pending
any Action before any Governmental Authority (i) challenging
or seeking to make illegal, materially delay, or otherwise,
directly or indirectly, restrain or prohibit or make
materially more costly, the making of the Offer, the
acceptance for payment of any Shares by Parent, Purchaser or
any other affiliate of Parent, or the consummation of any
other Transaction, or seeking to obtain material damages in
connection with any Transaction, (ii) seeking to prohibit or
limit the ownership or operation by the Company, Parent or
any of their subsidiaries of all or any of the business or
assets of the Company, Parent or any of their subsidiaries
that is material to either Parent and its subsidiaries or
the Company and the Subsidiaries, in either case, taken as a
whole, or to compel the Company, Parent or any of their
subsidiaries, as a result of the Transactions, to dispose of
or to hold separate all or any portion of the business or
assets of the Company, Parent or any of their subsidiaries
that is material to either Parent and its subsidiaries or
the Company and the Subsidiaries, in each case, taken as a
whole, (iii) seeking to impose or confirm any material
limitation on the ability of Parent, Purchaser or any other
affiliate of Parent to exercise effectively full rights of
ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to
the Offer or otherwise on all matters properly presented to
the Company's stockholders, including, without limitation,
the approval and adoption of this Agreement and the
Transactions, (iv) seeking to require divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares, or
(v) which otherwise would prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent
or materially delay the Company from performing its
obligations under this Agreement or would have a Company
Material Adverse Effect;
(b) any Governmental Authority or court of
competent jurisdiction shall have issued an order, decree,
injunction or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting or
materially delaying or preventing the Transactions and such
order, decree, injunction, ruling or other action shall have
become final and non-appealable;
(c) there shall have been any statute, rule,
regulation, legislation or interpretation enacted,
promulgated, amended, issued or deemed applicable by a
Governmental Authority to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any
Transaction, by any United States or non-United States
legislative body or Governmental Authority with appropriate
jurisdiction, that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(d) any Company Material Adverse Effect shall have
occurred;
(e) there shall have occurred (i) a declaration of
a banking moratorium or any suspension of payments in
respect of banks in the United States or Bahamas, (ii) any
limitation (whether or not mandatory) by any government or
Governmental Authority, on the extension of credit by banks
or other lending institutions in the United States or
Bahamas, (iii) a declaration of war by the United States
Congress;
(f) (i) it shall have been publicly disclosed, or
Purchaser shall have otherwise learned, that beneficial
ownership (determined for the purposes of this paragraph as
set forth in Rule 13d-3 promulgated under the Exchange Act)
of 25% or more of the then-outstanding Shares has been
acquired after the date hereof by any person, other than
Parent or any of its affiliates, or (ii)(A) the Company
Board, or any committee thereof, shall have withdrawn or
modified, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer, the Merger, or the
Agreement, or approved or recommended any Competing
Transaction or any other acquisition of Shares other than
the Offer and the Merger or (B) the Company Board, or any
committee thereof, shall have resolved to do any of the
foregoing;
(g) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
shall cease to be an employee of the Company or its
Subsidiaries or the Company or either of Messrs. ▇▇▇▇▇▇ or
Callendrello shall fail to have executed the Surviving
Corporation Employment Agreements as contemplated by Section
3.11(d) of the Agreement;
(h) the representations and warranties of the
Company in the Agreement shall not be true and correct as of
the date of such determination (except for representations
and warranties that relate to a specific date or time, which
need only be true and correct as of such date or time),
unless the inaccuracies under the representations and
warranties (without giving effect to any Company Material
Adverse Effect or materiality qualifiers or standards
contained in the representations and warranties) taken
together in their entirety would not result in a Company
Material Adverse Effect;
(i) the Company shall have failed to perform in
any material respect any obligation or to comply in any
material respect with any material agreement or material
covenant of the Company required to be performed or complied
with by it under the Agreement prior to such determination;
(j) the Agreement shall have been terminated in
accordance with its terms; or
(k) Purchaser and the Company shall have agreed
that Purchaser shall terminate the Offer or postpone the
acceptance for payment of Shares thereunder.
2
The foregoing conditions are for the sole benefit of
Purchaser and Parent and may be asserted by Purchaser or
Parent regardless of the circumstances giving rise to any
such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their
sole discretion. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such
right with respect to particular facts, events and other
circumstances shall not be deemed a waiver with respect to
any other facts, events and circumstances; and each such
right shall be deemed an ongoing right that may be asserted
at any time and from time to time.
The capitalized terms used in this Annex A shall have the
meanings ascribed to them in the Agreement to which it is
annexed.
3