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Exhibit 3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of October 16, 1997, by and
among BTR plc, an English public limited company ("Parent"), BTR Acquisition
Corporation, a Delaware corporation and a subsidiary of Parent (the
"Purchaser"), and Exide Electronics Group, Inc., a Delaware corporation (the
"Company").
WHEREAS, as a condition and inducement to Parent's willingness to
enter into this Agreement, Parent has requested that the Company approve, and
the Company has approved, the Parent entering into Stockholder Agreements, dated
the date hereof, with certain holders of capital stock of the Company (the
"Stockholder Agreements");
WHEREAS, the Board of Directors of the Company has approved the
foregoing agreements and the transactions contemplated thereby;
WHEREAS, the respective Boards of Directors of Parent, the Purchaser
and the Company have approved the acquisition of the Company by Parent on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to
cause the Purchaser to make a tender offer (as it may be amended from time to
time as permitted under this Agreement, the "Offer") to purchase (i) all of the
shares of Common Stock, par value $.01 per share, of the Company (the "Common
Shares" or "Shares") (including the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement dated as of November 25,
1992 between the Company and First Union National Bank of North Carolina, as
Rights Agent, as amended (the "Rights Agreement")) at a price per Common Share
of $29.00 net to the Seller in cash (such price, as it may hereafter be
increased, the "Common Share Offer Price") and (ii) all of the warrants (the
"Warrants", which Warrants together with the Shares are hereinafter defined as
the "Securities") to purchase Shares pursuant to the Warrant Agreement (the
"Warrant Agreement"), dated as of March 13, 1996, by and between the Company and
Firststar Trust
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Company, formerly named American Bank National Association, as warrant agent, at
a price per Common Share purchasable upon exercise of such Warrant of $15.525
net to the seller in cash (such price, as it may hereafter be increased, the
"Warrant Offer Price" and, together with the Common Share Offer Price, the
"Securities Offer Prices"), in each case, upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved this Agreement, the Offer and the Merger (as hereinafter
defined), has determined that the Offer and the Merger are fair and in the best
interests of the Company's shareholders (the "Shareholders") and is recommending
that the Shareholders accept the Offer and tender all their Shares and adopt and
approve the Merger Agreement;
WHEREAS, the respective Boards of Directors of Parent, the Purchaser
and the Company have approved the merger of the Purchaser with and into the
Company, as set forth below (the "Merger"), in accordance with the General
Corporation Law of the State of Delaware (the "GCL") and upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding Security not owned directly or indirectly by Parent or the Company
will be converted into the right to receive the Securities Offer Price
applicable thereto in cash;
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
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SECTION 1.01 The Offer.
(a) So long as none of the events set forth in clauses (a)
through (i) of Annex I hereto (as hereinafter provided) shall have occurred or
exist, the Purchaser shall, and Parent shall cause the Purchaser to, commence
(within the meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) as promptly as practicable after the date hereof,
but in any event not later than October 22, 1997, the Offer for all outstanding
Securities at the Securities Offer Price applicable to such Securities, net to
the seller in cash. The initial expiration date for the Offer shall be the
twentieth business day from and after the date the Offer is commenced, including
the date of commencement as the first business day in accordance with Rule 14d-2
under the Exchange Act (the "Initial Expiration Date"). As promptly as
practicable, the Purchaser shall file with the Securities and Exchange
Commission (the "SEC") the Purchaser's Tender Offer Statement on Schedule 14D-1
(together with any supplements or amendments thereto, the "Offer Documents"),
which shall contain (as an exhibit thereto) the Purchaser's Offer to Purchase
(the "Offer to Purchase") which shall be mailed to the holders of Securities
with respect to the Offer. The obligation of Parent to accept for payment or pay
for any Securities tendered pursuant to the Offer will be subject only to the
satisfaction or waiver (which waiver is restricted only to the extent set forth
in the next succeeding sentence) of the conditions set forth in Annex I hereto.
Without the prior written consent of the Company, the Purchaser shall not
decrease the price per Security or change the form of consideration payable in
the Offer, decrease the number of Shares or Warrants sought to be purchased in
the Offer, change the conditions set forth in Annex I, waive or reduce the
Minimum Condition (as defined in Annex I) to lower than fifty percent of the
fully diluted Common Shares, impose additional conditions to the Offer or amend
any other term of the Offer in any manner adverse to the holders of any
Securities, provided, however, that if all of the conditions to the Offer are
then satisfied or waived, the Parent, in order to permit the Merger to become
effective without a meeting of Shareholders in accordance with Section 253 of
the GCL, shall have the right (i) to extend the Offer for a period or periods
aggregating up to ten business days from the then effec-
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tive Expiration Date; provided, that prior to any such extensions referred to in
this clause (i), Parent and the Purchaser shall deliver to the Company a written
notice that all conditions set forth on Annex I hereto are permanently deemed to
be satisfied except for a failure of the Minimum Condition to occur or any other
such conditions the failure of which to be satisfied results from an intentional
breach hereof by the Company, and (ii) thereafter to extend the Offer with the
prior written consent of the Company; and provided further that Parent may
extend the Offer to the extent required by law or regulation. Subject to the
terms of the Offer and this Agreement and the satisfaction or waiver (which
waiver is restricted only to the extent set forth in the immediately preceding
sentence) of all the conditions of the Offer set forth in Annex I hereto as of
any expiration date, Parent will accept for payment and pay for all Securities
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after such expiration date of the Offer. Subject to Section 8.01, if the
conditions set forth in Annex I hereto are not satisfied or, waived by the
Parent, as of the Initial Expiration Date (or any subsequently scheduled
expiration date), Parent will extend the Offer from time to time for the
shortest time periods which it reasonably believes are necessary until the
consummation of the Offer. Each of Parent and the Purchaser shall use its
reasonable best efforts to avoid the occurrence of any event specified in Annex
I or to cure any such event that shall have occurred.
(b) The Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given to the Shareholders,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Parent or the
Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and the Purchaser, on the one
hand, and the Company, on the other hand, agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have
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become false or misleading in any material respect and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to Shareholders, in each case as
and to the extent required by applicable federal securities laws.
SECTION 1.02 Company Actions.
(a) The Company shall promptly file with the SEC and mail to
the holders of Securities a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (together with any amendments or supplements
thereto, the "Schedule 14D-9"). The Schedule 14D-9 will set forth, and the
Company hereby represents, that the Board, at a meeting duly called and held,
has (i) determined that the Offer and the Merger are fair to and in the best
interests of the Company and its Shareholders, (ii) approved the Offer and the
Merger in accordance with Section 203 of the GCL, and (iii) resolved to
recommend acceptance of the Offer and approval and adoption of the Merger and
this Agreement by the Company's Shareholders (in accordance with the
requirements of the Company's certificate of incorporation and of applicable
law); provided, however, that such recommendation and approval may be withdrawn,
modified or amended to the extent that the Board determines reasonably and in
good faith that it is necessary under applicable law to do so in the exercise of
its fiduciary obligations after being advised with respect thereto by outside
counsel.
(b) The Schedule 14D-9 will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given to the Shareholders,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company with
respect to information supplied by the Parent or Purchaser in writing for
inclusion in the Schedule 14D-9. Each of the Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree promptly to correct any
information provided by either of them
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for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the Shareholders, in each case as and to the extent required by
applicable federal securities law.
(c) In connection with the Offer, the Company will furnish the
Purchaser with such information and assistance as the Purchaser or its agents or
representatives may reasonably request in connection with communicating the
Offer to the record and beneficial holders of the Securities, including, without
limitation, its stockholders list, security position listings and non-objecting
beneficial owners list.
SECTION 1.03 Directors.
(a) Subject to compliance with applicable law, promptly upon
the payment by the Purchaser for Securities pursuant to the Offer, and from time
to time thereafter, Parent shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board as is equal to the
product of the total number of directors on the Board (determined after giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that the aggregate number of Common Shares beneficially owned by
Parent or its affiliates bears to the total number of Shares then outstanding,
and the Company shall, upon request of Parent, promptly take all actions
necessary to cause Parent's designees to be so elected, including, if necessary,
seeking the resignations of one or more existing directors; provided, however,
that prior to the Effective Time (as defined in Section 2.02), the Board shall
always have at least three members who are neither officers, directors,
stockholders or designees of the Purchaser or any of its affiliates ("Purchaser
Insiders"). If the number of directors who are not Purchaser Insiders is reduced
below three for any reason prior to the Effective Time, the remaining directors
who are not Purchaser Insiders (or if there is only one director who is not a
Purchaser Insider, the remaining director who is not a Purchaser Insider) shall
be entitled to designate a person (or persons) to fill such vacancy (or
vacancies) who is not an officer, director, stock-
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holder or designee of the Purchaser or any of its affiliates and who shall be a
director not deemed to be a Purchaser Insider for all purposes of this
Agreement.
(b) The Company's obligations to appoint Parent's designees to
the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section
1.03 and shall include in the Schedule 14D-9 such information with respect to
the Company and its officers and directors as is required under such Section and
Rule in order to fulfill its obligations under this Section 1.03. Parent will
supply any information with respect to itself and its officers, directors and
affiliates required by such Section and Rule to the Company.
(c) From and after the election or appointment of Parent's
designees pursuant to this Section 1.03 and prior to the Effective Time, any
amendment or termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or the Purchaser or waiver of any of the Company's rights hereunder,
or any other action taken by the Board in connection with this Agreement, will
require the concurrence of a majority of the directors of the Company then in
office who are not Purchaser Insiders.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the GCL, at the Effective Time (as
defined in Section 2.02) the Purchaser shall be merged with and into the
Company. Following the Merger, the separate corporate existence of the Purchaser
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). At the option of Parent and provided that such
amendment does not delay the
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Effective Time, the Merger may be structured so that, and this Agreement shall
thereupon be amended to provide that, the Company shall be merged with and into
the Purchaser or another direct or indirect wholly-owned subsidiary of Parent,
with the Purchaser or such other subsidiary of Parent continuing as the
Surviving Corporation; provided, however, that the Company shall be deemed not
to have breached any of its representations and warranties herein if and to the
extent such breach would have been attributable to such election.
SECTION 2.02 Effective Time; Closing. As soon as practicable after
the satisfaction or waiver of either the Second Step Conditions or the One-Step
Conditions described in Article VII hereof, the Company shall execute in the
manner required by the GCL and deliver to the Secretary of State of the State of
Delaware a duly executed and verified certificate of merger, or, if permitted, a
certificate of ownership and merger, and the parties shall take such other and
further actions as may be required by law to make the Merger effective. The time
the Merger becomes effective in accordance with applicable law is referred to as
the "Effective Time."
SECTION 2.03 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the GCL.
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) The certificate of incorporation of the Company (or such
other subsidiary of Parent if Parent exercises its option pursuant to the last
sentence of Section 2.01 hereof), as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation, until thereafter amended in accordance with the provisions thereof
and hereof and applicable law.
(b) Subject to the provisions of Section 6.07 of this
Agreement, the by-laws of the Purchaser in effect at the Effective Time shall be
the by-laws of the Surviving Corporation, until thereafter amended in accordance
with the provisions thereof and hereof and applicable law.
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SECTION 2.05 Directors. Subject to applicable law, the directors of
the Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
SECTION 2.06 Officers. The officers of the Company immediately prior
to the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.07 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
(a) each Share issued and outstanding immediately prior to the Effective Time
(other than any Shares held by Parent, the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger
and without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than Dissenting Shares (as defined in Section 3.01)) shall be
converted into the right to receive in cash the Securities Offer Price
applicable thereto (the "Merger Price"), and (b) in accordance with Section
14(m) of the Warrant Agreement, (i) the Warrant Agreement and each of the
Warrants, if any, which has not been purchased by Parent in the Offer shall
terminate and (ii) each holder of a Warrant, if any, which has not been
purchased by Parent in the Offer, without having to take any other action than
the surrendering of such Warrant to the Surviving Corporation, shall receive in
respect of each Common Share that may have been acquired upon exercise of such
Warrant an amount (the "Warrant Spread Amount") equal to the amount (if any) by
which the Merger Price applicable to one Common Share exceeds the exercise price
per share of such Warrant pursuant to the Warrant Agreement, in each case,
payable to the holder thereof, without interest thereon, upon surrender of the
certificate formerly representing such Security.
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SECTION 2.08 Conversion of Purchaser Common Stock. At the Effective
Time, each share of common stock, par value $.01 per share, of the Purchaser
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and become the number of validly issued, fully paid and
nonassessable shares of common stock, par value $.01 per share, of the Surviving
Corporation equal to the number of shares of Common Stock outstanding on a fully
diluted basis immediately prior to the Effective Time.
SECTION 2.09 Company Option Plans.
(a) Parent and the Company shall take all actions necessary so
that, immediately prior to the earlier of (1) the acceptance for payment and
purchase of Securities by the Purchaser pursuant to the Offer and (2) the
Effective Time, (A) each outstanding option to purchase Common Shares (an
"Option") granted under the Company's 1995 Employee Stock Option and Restricted
Stock Plan, 1995 Directors Plan, 1989 Stock Option Plan and Non-Employee
Directors Stock Option Plan (collectively, the "Option Plans"), whether or not
then exercisable or vested, shall become fully exercisable and vested, (B) each
Option which is then outstanding shall be cancelled and (C) in consideration of
such cancellation, and except to the extent that Parent or the Purchaser and the
holder of any such Option otherwise agree, immediately following consummation of
the Offer, the Company shall pay to such holders of Options an amount in respect
thereof equal to the product of (1) the excess of the Merger Price over the
exercise price thereof and (2) the number of Common Shares subject thereto (such
payment to be net of taxes required by law to be withheld with respect thereto);
provided that the foregoing shall be subject to the obtaining of any necessary
consents of holders of Options, it being agreed that the Company and Parent will
use their reasonable best efforts to obtain any such consents.
(b) Parent and the Company shall take all actions necessary so
that, immediately prior to the Effective Time, each outstanding right to
purchase Common Shares (an "ESPP Option")
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granted under the Company's Employee Stock Purchase Plan, as amended ("ESPP"),
shall be cancelled and in consideration of such cancellation, and except to the
extent that Parent or the Purchaser and the holder of any such ESPP Option
otherwise agree, immediately prior to the Effective Time, the Company shall pay
to such holders of ESPP Options an amount in respect thereof equal to the
product of (A) the excess of the Merger Price over the Offering Price (as
defined in the ESPP) thereof and (B) the number of Common Shares subject thereto
(such payment to be net of taxes required by law to be withheld with respect
thereto); provided that the foregoing shall be subject to the obtaining of any
necessary consents of holders of ESPP Options, it being agreed that the Company
and Parent will use their reasonable best efforts to obtain any such consents
and to terminate the ESPP in connection therewith. The number of shares subject
to an ESPP Option immediately prior to the Effective Time shall be deemed to
equal that number of Common Shares that would be purchased on the last day of
the then-current Purchase Period (as defined in the ESPP) assuming that they
were purchased at the Offering Price and that the holder of such ESPP Option did
not exercise his or her right to withdraw from participation in the ESPP after
the Effective Time.
SECTION 2.10 Shareholders' Meeting.
(a) If required by the Company's certificate of incorporation
and/or applicable law in order to consummate the Merger, the Company, acting
through the Board, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its Shareholders (the "Special Meeting") as soon as
practicable following the acceptance for payment of and payment for
Securities by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
statement relating to the Merger and this Agreement and use its best
efforts (x) to obtain and furnish the information required to be included
by the SEC in the
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Proxy Statement (as hereinafter defined) and, after consultation with
Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and cause a definitive proxy statement
(the "Proxy Statement") to be mailed to its Shareholders and (y) to obtain
the necessary approvals of the Merger and this Agreement by its
Shareholders; and
(iii) subject to the fiduciary obligations of the Board
under applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that Shareholders vote in favor
of the approval of the Merger and the adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all
of the Shares then owned by it, the Purchaser or any of its other subsidiaries
in favor of the approval of the Merger and the adoption of this Agreement.
SECTION 2.11 Merger Without Meeting of Shareholders. Notwithstanding
Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the outstanding shares of each outstanding
class of capital stock of the Company pursuant to the Offer, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of and payment
for Securities by the Purchaser pursuant to the Offer without a meeting of
Shareholders, in accordance with Section 253 of the GCL.
SECTION 2.12 Earliest Consummation. Each party hereto shall use its
reasonable best efforts to consummate the Merger as soon as practicable. If the
conditions set forth in Annex I hereto are satisfied, or (subject to the fifth
sentence of Section 1.01(a)), waived, the Purchaser shall consummate the Offer
and accept for payment Securities tendered therein and thereafter effectuate the
Merger subject to the proviso in the fourth sentence of Section 1.01(a);
provided, that if the conditions set forth in Annex II hereto are satisfied
prior to the satisfaction of the conditions set forth in Annex I hereto,
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the parties shall consummate the Merger as promptly as practicable.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES AND WARRANTS
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in accordance
with Section 262 of the GCL, if such Section 262 provides for appraisal rights
for such Shares in the Merger ("Dissenting Shares"), shall not be converted into
the right to receive the Merger Price as provided in Section 2.07, unless and
until such holder fails to perfect or withdraws or otherwise loses his right to
appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the Merger Price, if any, to which
such holder is entitled, without interest or dividends thereon. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of Shares and, prior to the Effective Time, Parent shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 3.02 Payment for Securities.
(a) From and after the Effective Time, a bank or trust company
mutually acceptable to Parent and the Company (pursuant to an agreement
satisfactory to Parent and the Company) shall act as paying agent (the "Paying
Agent") in effecting the payment of (i) the Merger Price in respect of
certificates (the "Share Certificates") that, prior to the Effective Time,
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represented Shares entitled to payment of the Merger Price pursuant to Section
2.07, and (ii) the applicable consideration in respect of certificates (the
"Warrant Certificates" and, together with the Share Certificates, the
"Certificates") that, prior to the Effective Time, represented Warrants entitled
to payment therefor pursuant to Section 2.07. At the Effective Time, Parent or
the Purchaser shall deposit, or cause to be deposited, in trust with the Paying
Agent the aggregate Merger Price and Warrant Spread Amount to which holders of
Securities shall be entitled at the Effective Time pursuant to Section 2.07. The
funds so deposited shall be invested by the Paying Agent as directed by Parent
in obligations of, or guaranteed by, the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by ▇▇▇▇▇'▇ Investor Services or
Standard & Poor's Corporation, respectively, or in certificates of deposit, bank
repurchase agreements or bankers, acceptances of commercial banks with capital
exceeding $100 million, in each case with maturities not exceeding seven days.
All earnings thereon shall inure to the benefit of the Surviving Corporation.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of Certificates that immediately prior to the
Effective Time represented Securities (other than Share Certificates
representing Dissenting Shares and Certificates representing Securities held by
Parent or the Purchaser, any wholly-owned subsidiary of Parent or the Purchaser,
in the treasury of the Company or by any wholly-owned subsidiary of the Company)
a form of letter of transmittal which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery of the Certificates to the Paying Agent and instructions for use
in surrendering such Certificates and receiving the aggregate Merger Price or
aggregate Warrant Spread Amount, as applicable, in respect thereof. Upon the
surrender of each such Certificate, the Paying Agent shall pay the holder of
such Certificate (i) in respect of Shares, the Merger Price multiplied by the
number of Shares formerly represented by such Certificate, and (ii) in respect
of Warrants, the Warrant Spread Amount multiplied by the number of shares of
Common Stock that may have been acquired upon exercise of the Warrant formerly
represented by such Certificate, in each case in consideration therefor, and
such Certificate
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shall forthwith be cancelled. Until so surrendered, each such Certificate (other
than Share Certificates representing Dissenting Shares and Certificates
representing Securities held by Parent or the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company) shall represent solely the right to
receive the aggregate Merger Price or the aggregate Warrant Spread Amount, as
applicable, relating thereto. No interest or dividends shall be paid or accrued
on the Merger Price or the Warrant Spread Amount, as applicable. If the Merger
Price (or any portion thereof) or the Warrant Spread Amount (or any portion
thereof), as applicable, is to be delivered to any person other than the person
in whose name the Certificate formerly representing Shares or Warrants
surrendered therefor is registered, it shall be a condition to such right to
receive such Merger Price or the Warrant Spread Amount, as applicable, that the
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person surrendering such Certificates shall pay
to the Paying Agent any transfer or other taxes required by reason of the
payment of the Merger Price or the Warrant Spread Amount, as applicable, to a
person other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such tax has been paid or
is not applicable.
(c) Promptly following the date which is 90 days after the
Effective Time, the Paying Agent shall deliver to the Surviving Corporation all
cash, Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Security may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Price or Warrant Spread Amount, as
applicable, relating thereto, without any interest or dividends thereon.
(d) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of any Securities which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time,
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Certificates formerly representing Securities are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and cancelled in
return for the payment of the aggregate Merger Price or Warrant Spread Amount,
as applicable, relating thereto, as provided in this Article III, subject to
applicable law in the case of Dissenting Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser that
except (I) as specifically set forth in the SEC Reports (as defined below) and
(II) as set forth in the section of the Company Disclosure Statement
corresponding to the section of this Article IV (or any other section of such
Company Disclosure Statement so long as it is reasonably evident from the
matters disclosed on such schedule that they are or should be applicable to
another section hereof or of the Company Disclosure Statement) delivered to
Parent or the Purchaser prior to the execution hereof (the "Company Disclosure
Statement"), provided that the exception set forth in clause (I) shall not be
deemed in any way to apply to the representations and warranties covered by
Sections 4.01, 4.03, 4.04, 4.06, 4.07, 4.17 or 4.18, to the first sentence of
Section 4.13 or to the definition of Material Adverse Effect on the Company:
SECTION 4.01 Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries (the
"Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The Company
and each of its Subsidiaries has the requisite corporate power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary,
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except where the failures to have such power or authority, or the failures to be
so qualified, licensed or in good standing, individually, and in the aggregate,
would not have a Material Adverse Effect on the Company. The term "Material
Adverse Effect on the Company", as used in this Agreement, means any change in
or effect on the business, results of operations, assets or condition (financial
or otherwise) of the Company or any of its Subsidiaries that is materially
adverse to the Company and its Subsidiaries taken as a whole except for any
change or effect resulting from general economic or financial market conditions.
SECTION 4.02 Certificate of Incorporation and By-Laws. The Company
has heretofore made available to Parent and the Purchaser a complete and correct
copy of the certificate of incorporation and the by-laws, each as amended to the
date hereof, of the Company.
SECTION 4.03 Capitalization. The authorized capital stock of the
Company consists of 30,000,000 Common Shares and 2,000,000 shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"). As of the close of
business on October 15, 1997, there were 1,000,000 shares of Series G
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"Series G Shares") issued and outstanding (on which dividends in arrears
aggregated $1,272,049 as of such date), and the Company had no other shares of
Preferred Stock issued or outstanding. As of the close of business on October
15, 1997, there were 10,745,802 Common Shares issued, of which 322,462 were
owned by the Company or a wholly owned Subsidiary of the Company. The Company
has no shares of capital stock reserved for issuance, except that, as of October
15, 1997, there were (i) 894,502 Common Shares reserved for issuance pursuant to
Options outstanding on the date hereof pursuant to the Option Plans, (ii)
200,000 shares of Series F Preferred Stock reserved for issuance upon exercise
of the Rights, (iii) 309,283 Common Shares reserved for issuance upon exercise
of Warrants pursuant to the Warrant Agreement, (iv) 243,594 Common Shares
reserved for issuance upon exercise of ESPP rights (of which approximately
89,000 would be issued if there were an issuance as of September 30, 1997) and
(v) 1,000,000 Common Shares reserved for issuance upon conversion of the Series
G Shares. Since October 15, 1997, the Company has
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not issued any shares of capital stock except pursuant to the exercise of
Options, ESPP Options or Warrants or conversion of Series G Shares, in each
case, outstanding as of such date and in accordance with their terms. All the
outstanding Series G Shares and Common Shares are, and all Common Shares which
may be issued pursuant to the exercise of outstanding Options and Warrants and
the conversion of Series G Shares will be, when issued in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and
nonassessable. There are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company or any of its subsidiaries issued and
outstanding. Except as set forth in this Section 4.03, except pursuant to the
Company's Employee Stock Purchase Plan and except for the Merger, there are no
existing options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or unissued
capital stock of the Company or any of its subsidiaries, obligating the Company
or any of its subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any of its subsidiaries or securities
convertible into or exchangeable for such shares or equity interests or
obligations of the Company or any of its subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except (i) as contemplated by the Merger contemplated
by this Agreement or the Rights Agreement, (ii) the Warrants and the Series G
Shares, and (iii) the Company's obligations under the Option Plans, there are no
outstanding contractual obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Common Shares or the capital stock
of the Company or any of its subsidiaries. Each of the outstanding shares of
capital stock of each of the Company's Significant Subsidiaries (within the
meaning of Regulation S-X under the Exchange Act) is duly authorized, validly
issued, fully paid and nonassessable, and such shares of the Company's
Significant Subsidiaries as are owned by the Company or by a subsidiary of the
Company are owned in each case free and clear of any lien, claim, option,
charge, security interest, limitation, encumbrance and restriction of any kind
(any of the foregoing being a "Lien"), except for those which are
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immaterial. Section 4.03 of the Company Disclosure Statement contains a complete
list as of the date hereof of each Significant Subsidiary of the Company and
sets forth with respect to each of the Company's Significant Subsidiaries its
name and jurisdiction of organization and, with respect to each Significant
Subsidiary of the Company that is not wholly owned by the Company or another
Subsidiary, the percentage of shares of capital stock or share capital owned by
the Company or a Subsidiary.
SECTION 4.04 Authority Relative to this Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized and approved by the Board and no other corporate proceedings on the
part of the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of the Merger and this Agreement by holders of
the Shares to the extent required by the Company's certificate of incorporation
and by applicable law). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement by Parent and the Purchaser,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity. The Board of Directors of the
Company has, by a unanimous vote at a meeting of such Board duly held on October
15, 1997, approved and adopted this Agreement, the Offer, the Merger, the
Stockholder Agreements and the other transactions contemplated hereby and
thereby, determined that the Securities Offer Price to be received by the
holders of Securities pursuant to the Offer and the Merger is fair to the
holders of the Securities and recommended that the holders of Securities approve
and adopt this Agreement, the Merger and the other transactions contemplated
hereby and tender
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their Securities pursuant to the Offer.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will (i)
conflict with or violate the certificate of incorporation or by-laws of the
Company or the comparable organizational documents of any of its Subsidiaries,
(ii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to the Company or its subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a violation or 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 any loss of any material benefit, or the creation
of any Lien on any of the property or assets of the Company or any of its
subsidiaries (any of the foregoing referred to in clause (ii) or this clause
(iii) being a "Violation") pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties may be bound or affected, except in the case of the foregoing clauses
(ii) or (iii) for any such Violations which, individually and in the aggregate,
would not have a Material Adverse Effect on the Company.
(b) None of the execution and delivery of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, or any administrative,
governmental or regulatory authority, agency, commission, tribunal or body,
domestic, foreign or supranational
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(a "Governmental Entity"), except for (i) compliance with any applicable
requirements of the Exchange Act, (ii) the filing of a certificate of merger,
or, if permitted, a certificate of ownership and merger, pursuant to the GCL,
(iii) applicable state takeover and environmental statutes, (iv) compliance with
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act") and any requirements of any foreign or supranational Antitrust Laws (as
hereinafter defined) and (v) Consents the failure of which to obtain or make,
individually and in the aggregate, would not have a Material Adverse Effect on
the Company or materially adversely affect the ability of the Company to
consummate the transactions contemplated hereby.
SECTION 4.06 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports,
schedules, registration statements and definitive proxy statements required to
be filed by the Company with the SEC since September 30, 1996 until the date
hereof (the "SEC Reports"). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended, and the rules and regulations of the SEC
promulgated thereunder applicable, as the case may be, to such SEC Reports, and
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
(b) The consolidated balance sheets as of September 30, 1996
and 1995 and the related consolidated statements of income, common shareholders'
equity and cash flows for each of the three years in the period ended September
30, 1996 (including the related notes and schedules thereto) of the Company
contained in the Company's Form 10-K for the year ended September 30, 1996
included in the SEC Reports present fairly, in all material respects, the
consolidated financial position and the consolidated results of operations and
cash flows of the Company and its consolidated subsidiaries as of the dates or
for the periods presented therein in conformity with United States generally
accepted accounting principles ("GAAP") applied on a
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consistent basis during the periods involved except as otherwise noted therein,
including the related notes.
(c) The consolidated balance sheets and the related statements
of income and cash flows (including in each case the related notes thereto) of
the Company contained in the Forms 10-Q for the periods ended June 30, 1997 and
March 31, 1997 and December 31, 1996 included in the SEC Reports (collectively,
the Quarterly Financial Statements) have been prepared in accordance with the
requirements for interim financial statements contained in Regulation S-X. The
Quarterly Financial Statements reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly and do present fairly,
in all material respects, the consolidated financial position, results of
operations and cash flows of the Company for all periods presented therein in
conformity with GAAP applied on a consistent basis during the periods involved
except as otherwise noted therein, including the related notes.
(d) The Company and its Subsidiaries have no liabilities or
obligations of any nature (whether absolute, accrued, contingent, unmatured,
unaccrued, unliquidated, unasserted, conditional or otherwise) except for
liabilities or obligations (i) reflected or reserved against on the balance
sheet as at June 30, 1997 (including the notes thereto) included in the
Quarterly Financial Statements, (ii) incurred in the ordinary course of business
consistent with past practice since such date, or (iii) which, individually and
in the aggregate, would not have a Material Adverse Effect on the Company.
SECTION 4.07 Information. None of the information supplied by the
Company in writing specifically for inclusion or incorporation by reference in
(i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement or
(iv) any other document to be filed with the SEC or any other Governmental
Entity in connection with the transactions contemplated by this Agreement (the
"Other Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Proxy Statement, at the
date it or any amendment or supplement is mailed to Shareholders, at the time of
the Special Meeting and at the Effective Time, contain any untrue
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statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder, except that no
representation is made by the Company with respect to statements made therein
based on information supplied by Parent or the Purchaser in writing specifically
for inclusion in the Proxy Statement.
SECTION 4.08 Litigation. As of the date hereof, there is no suit,
action or proceeding pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries that, individually
or in the aggregate, would have a Material Adverse Effect on the Company, nor is
there any judgment, decree, injunction or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries that would
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
SECTION 4.09 Compliance with Applicable Laws. To the best knowledge
of the Company, the Company and its subsidiaries are in compliance with all
laws, regulations and orders (except with respect to environmental matters) of
any Governmental Entity applicable to it or such subsidiaries, except for such
failures so to comply which, individually and in the aggregate, would not have a
Material Adverse Effect on the Company. To the best knowledge of the Company,
the business operations of the Company and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity, except for possible violations which, individually or in the aggregate,
would not have a Material Adverse Effect on the Company.
SECTION 4.10 Employee Benefit Plans.
(a) Section 4.10 of the Company Disclosure Statement includes
a complete list of all material bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance, incentive, or other employee
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benefit plans, programs and agreements providing benefits to any employee or
former employee of the Company and its subsidiaries sponsored or maintained by
the Company or any of its subsidiaries or to which the Company or any of its
subsidiaries contributes or is obligated to contribute (collectively, the
"Plans"). Without limiting the generality of the foregoing, the term "Plans"
includes all employee welfare benefit plans within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder ("ERISA") and all employee pension benefit plans within
the meaning of Section 3(2) of ERISA.
(b) With respect to each Plan, the Company has made available
to Parent a true, correct and complete copy of: (i) all plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (iii) the current summary plan description, if any; (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any.
(c) The Company and each of its subsidiaries has complied, and
is now in compliance, in all material respects with all provisions of ERISA, the
Code and all laws and regulations applicable to the Plans. With respect to each
Plan that is intended to be a "qualified plan" within the meaning of Section
401(a) of the Code ("Qualified Plans"), the IRS has issued a favorable
determination letter, and to the knowledge of the Company nothing has occurred
at the date hereof that would reasonably be expected to cause the loss of such
qualification.
(d) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, for any period through the date hereof have been timely made
or paid in full or, to the extent not required to be made or paid on or before
the date hereof, have been fully reflected in the financial statements of the
Company included in the SEC Reports
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to the extent required under generally accepted accounting principles.
(e) No Plan is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code. There does not now exist, nor do any
circumstances exist that could result in, any liability under (i) Title IV of
ERISA, (ii) section 302 of ERISA, (iii) sections 412 and 4971 of the Code, or
(iv) the continuation coverage requirements of section 601 et seq. of ERISA and
section 4980B of the Code, that would be a liability of the Company or any of
its subsidiaries following the Closing.
(f) Except as provided in Section 2.09 hereof, or as set forth
in Section 4.10 of the Company Disclosure Statement, the execution of, and
performance of the transactions contemplated in, this Agreement will not, either
alone or upon the occurrence of subsequent events, result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee or former employee of the Company or any
of its subsidiaries.
(g) There are no pending actions, claims or lawsuits which
have been asserted, instituted or, to the knowledge of the Company, threatened
in connection with any of the Plans (other than routine claims for benefits).
(h) The Company has terminated its Severance Compensation Plan
After Change of Control adopted in 1989 and no employee of the Company or any of
its Subsidiaries has any rights thereunder.
SECTION 4.11 Intellectual Property.
(a) Except as would not, individually and in the aggregate,
have a Material Adverse Effect on the Company, (i) the Company and each of its
Subsidiaries owns, has the right to acquire or is licensed or otherwise has the
right to use (in each case, clear of any liens or encumbrances of any kind), all
Intellectual Property (as defined below) used in or necessary for
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the conduct of its business as currently conducted, including the items listed
in Section 4.11 of the Company Disclosure Statement, (ii) no claims are pending
or, to the knowledge of the Company, threatened that the Company or any of its
subsidiaries is infringing on or otherwise violating the rights of any person
with regard to any Intellectual Property and (iii) to the knowledge of the
Company, no person is infringing on or otherwise violating any right of the
Company or any of its Subsidiaries with respect to any Intellectual Property
owned by and/or licensed to the Company or its subsidiaries.
(b) For purposes of this Agreement, "Intellectual Property"
shall mean patents, copyrights, trademarks (registered or unregistered), service
marks, brand names, trade dress, trade names, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing; and trade secrets and rights in any
jurisdiction to limit the use or disclosure thereof by any person.
SECTION 4.12 Environmental Matters. Except for the matters described
in the reports set forth on Section 4.12 of the Company Disclosure Statement or
except as would not reasonably be expected to have a Material Adverse Effect on
the Company, (i) to the knowledge of the Company, no real property currently or
formerly owned or operated by the Company or any current subsidiary thereof has
been contaminated with any Hazardous Substances to an extent or in a manner or
condition now requiring investigation, removal, corrective action, or
remediation, or that could be reasonably likely to result in liability of, or
costs to, the Company or any of its Subsidiaries, under any Environmental Law,
(ii) no judicial or administrative proceeding is pending or to the knowledge of
the Company threatened relating to liability for any off-site disposal or
contamination, (iii) there is currently no civil, criminal, or administrative
action, suit, demand, hearing, notice of violation, investigation, notice or
demand letter, or request for information pending, or to the knowledge of the
Company, threatened, under any Environmental Law against the Company or any of
its Subsidiaries, the Company and its subsidiaries have not received in writing
any claims or notices alleging liability under any Environmental Law, and the
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Company has no knowledge of any circumstances that would reasonably be expected
to result in such claims (iv) the Company and each of its Subsidiaries are
currently in compliance, and within the period of applicable statutes of
limitation, have complied, with all applicable Environmental Laws, and (v) no
property or facility currently or, to the Company's knowledge as of the date
hereof, formerly owned or operated by the Company or any of its subsidiaries is
listed or proposed for listing on the National Priorities List or the
Comprehensive Environmental Response, Compensation and Liability Information
System, both promulgated under the Comprehensive Environmental Response,
Compensation & Liability Act, as amended, or on any comparable state or foreign
list established under any Environmental Law. "Environmental Law" means any
applicable (in the United States, Finland or Mexico) federal, national, state or
local law, regulation, order, decree or judicial opinion, agency requirement
having the force and effect of law and relating to noise, odor, Hazardous
Substances, pollution, human health and safety or the protection of the
environment. "Hazardous Substance" means any pollutant, contaminant or toxic or
hazardous substance or constituent that is defined or regulated by or under
authority of any Environmental Law, including without limitation any petroleum
products, asbestos or polychlorinated biphenyls, and any other substance that
can give rise to liability under any Environmental Law. The Company has
previously made available to Purchaser and Parent or its representatives copies
of all of its material environmental reports.
SECTION 4.13 Material Adverse Change.
(a) Since June 30, 1997, there has not been any change, or any
development that is reasonably likely to result in a change, in the business,
results of operations, assets or condition (financial or otherwise) of the
Company or any of its subsidiaries that is materially adverse, or is reasonably
expected to be materially adverse, to the Company and its Subsidiaries taken as
a whole, except for any change resulting from general economic or financial
market conditions. Since June 30, 1997, the Company and its Subsidiaries have
conducted their businesses only in the ordinary course of business consistent
with past practices and there has not been, directly or
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indirectly:
(i) any payment or granting by the Company or any of its
Subsidiaries of any increase in compensation to any director or executive
officer of the Company or, except in the ordinary course of business and
consistent with past practice or as required under employment agreements
in effect as of or prior to the date of this Agreement, any employee of
the Company or its Subsidiaries;
(ii) any granting by the Company or any of its Subsidiaries to any
such director, executive officer or employee of any increase in severance
or termination pay, except as required under employment, severance or
termination agreements or plans in effect as of the date of this
Agreement;
(iii) any entry by the Company or any of its Subsidiaries into any
employment, severance or termination agreement with any such director or
executive officer, or, except in the ordinary course of business
consistent with past practice, employee;
(iv) any adoption or increase in payments to or benefits under any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement or other employee benefit plan for or with any employees of the
Company or any of its Subsidiaries;
(v) any change in accounting methods, principles or practices by the
Company or any of its Subsidiaries materially affecting their assets,
liabilities or business, except insofar as may have been required by
change in GAAP; or
(vi) agreed to do any of the things described in the preceding
clauses (i) through (v).
SECTION 4.14 Certain Approvals. The Board has taken appropriate
action such that, assuming the accuracy of Parent's representation in Section
5.06 of this Agreement, the provisions
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of Section 203 of the GCL will not apply to any of the transactions contemplated
by this Agreement and the Stockholder Agreements.
SECTION 4.15 Opinion of Financial Advisor. The Company has received
the written opinion of Lazard Freres & Co., LLC ("Lazard Freres") to the effect
that the Common Share Offer Price is fair to the holders of the Common Shares
from a financial point of view.
SECTION 4.16 Rights Agreement. Assuming the accuracy of Parent's
representation in Section 5.06 of this Agreement, neither the execution nor the
delivery of this Agreement nor commencement of the Offer will result in a
"Distribution Date" (as defined in the Rights Agreement). The Company has
irrevocably taken all actions necessary to make the Rights inapplicable to (a)
the Offer and the Merger effective immediately prior to the acceptance for
payment of any Securities by the Purchaser pursuant to the Offer and in
accordance with the terms of this Agreement and (b) the Stockholder Agreements
and the transactions contemplated thereby, including the Parent's exercise of
options to acquire Common Shares and the grant of the irrevocable proxies to the
Parent.
SECTION 4.17 Brokers. Except for the engagement of Lazard Freres (a
copy of whose engagement letter previously has been delivered by the Company to
the Parent), none of the Company, any of its subsidiaries, or any of their
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated by this Agreement.
SECTION 4.18 Taxes. Except to the extent that failures, individually
or in the aggregate, would not have a Material Adverse Effect on the Company,
(i) the Company has filed all Tax Returns that it was required to file and all
such Tax Returns were correct and complete in all respects, (ii) all Taxes owed
by the Company (whether or not shown on any Tax Return) have been paid, except
for Taxes as set forth on the balance sheet dated as of June 30, 1997 or which
have arisen after June 30,
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1997 in the ordinary course of the Company's trade or business and (iii) there
are no liens on any of the assets of the Company that arose in connection with
any failure (or alleged failure) to pay any Tax.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
SECTION 5.01 Organization and Qualification. Parent is a corporation
duly organized, validly existing and in good standing under English law and each
material subsidiary of Parent is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Parent and each of its material
subsidiaries (including the Purchaser) has the requisite corporate power and
authority to own, operate or lease its properties and to carry on its business
as it is now being conducted, and is duly qualified or licensed to do business,
and is in good standing, in each jurisdiction in which the nature of its
business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent", as used in this Agreement, means any change
in or effect on the business, operations or financial condition of Parent or any
of its subsidiaries that would be materially adverse to Parent and its
subsidiaries taken as a whole.
SECTION 5.02 Authority Relative to this Agreement. Each of Parent
and the Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution
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and delivery of this Agreement by Parent and the Purchaser and the
consummation by Parent and the Purchaser of the transactions contemplated hereby
have been duly and validly authorized and approved by the Boards of Directors of
Parent and the Purchaser and by Parent as stockholder of the Purchaser and no
other corporate proceedings on the part of Parent or the Purchaser are necessary
to authorize or approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of Parent and the Purchaser and, assuming the due and valid authorization,
execution and delivery by the Company, constitutes a valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms, except that such enforceability (i) may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
SECTION 5.03 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement by
Parent or the Purchaser, the consummation by Parent or the Purchaser of the
transactions contemplated hereby or compliance by Parent or the Purchaser with
any of the provisions hereof will (i) conflict with or violate the
organizational documents of Parent or the Purchaser, (ii) conflict with or
violate any statute, ordinance, rule, regulation, order, judgment or decree
applicable to Parent or the Purchaser, or any of their subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a Violation pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or the Purchaser, or any of their
respective subsidiaries, is a party or by which any of their respective
properties or assets may be bound or affected, except in the case of the
foregoing clauses (ii) and (iii) for any such Violations which would not have a
Material Adverse Effect on Parent or materially adversely affect the ability of
Parent or the Purchaser to consummate the transactions contemplated hereby.
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(b) None of the execution and delivery of this Agreement by
Parent and the Purchaser, the consummation by Parent and the Purchaser of the
transactions contemplated hereby or compliance by Parent and the Purchaser with
any of the provisions hereof will require any Consent of any Governmental
Entity, except for (i) compliance with any applicable requirements of the
Exchange Act, (ii) the filing of a certificate of merger, or, if permitted, a
certificate of ownership and merger, pursuant to the GCL, (iii) applicable state
takeover and environmental statutes, (iv) compliance with the HSR Act and any
requirements of any foreign or supranational Antitrust Laws, and (v) Consents
the failure of which to obtain or make would not have a Material Adverse Effect
on Parent or materially adversely affect the ability of Parent or the Purchaser
to consummate the transactions contemplated hereby.
SECTION 5.04 Information. None of the information supplied or to be
supplied by Parent and the Purchaser in writing specifically for inclusion in
(i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement or
(iv) the Other Filings will, at the respective times filed with the SEC or such
other Governmental Entity and, in addition, in the case of the Proxy Statement,
at the date it or any amendment or supplement is mailed to Shareholders, at the
time of the Special Meeting and 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 made therein, in
light of the circumstances under which they were made, not misleading.
SECTION 5.05 Financing. Parent or the Purchaser has available the
funds necessary to consummate the Offer and the Merger and the transactions
contemplated hereby on a timely basis.
SECTION 5.06 Parent Not an Interested Stockholder or an Acquiring
Person. As of the date of this Agreement, (a) neither Parent nor any of its
affiliates is an "Interested Stockholder" as such term is defined in Section 203
of the GCL, or an "Acquiring Person" as such term is defined in the Rights
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Agreement, and (b) neither Parent nor Purchaser beneficially owns any Shares or
Warrants.
SECTION 5.07 Brokers. None of Parent, Purchaser, or any of their
respective subsidiaries, officers, directors or employees, has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated by this
Agreement for or with respect to which the Company is or might be liable.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as required
by this Agreement or with the prior written consent of Parent, during the period
from the date of this Agreement to the Effective Time, the Company will, and
will cause each of its Subsidiaries to, conduct its operations only in the
ordinary course of business consistent with past practice and will use its
reasonable best efforts, and will cause each of its Subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of its Subsidiaries, to keep available the services of its and
their present officers and key employees, and to preserve the good will of those
having business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise required by this Agreement or as set forth in
Section 6.01 of the Company Disclosure Statement, the Company will not, and will
not permit any of its Subsidiaries to, prior to the Effective Time, without the
prior written consent of Parent:
(a) adopt any amendment to its charter or by-laws or
comparable organizational documents or the Rights Agreement (except that the
Company may, upon notice to the Parent, lower the threshold in determining who
is an "Acquiring Person" thereunder to not less than 10%);
(b) except for issuances of capital stock of the Company's
Subsidiaries to the Company or a wholly-owned
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Subsidiary of the Company, issue, reissue or sell, or authorize the issuance,
reissuance or sale of (i) additional shares of capital stock of any class, or
securities convertible into capital stock of any class, or any rights, warrants
or options to acquire any convertible securities or capital stock, other than
the issuance of Common Shares (and the related Rights), in accordance with the
terms of the instruments governing such issuance on the date hereof, pursuant to
the exercise of Options or ESPP Options outstanding on the date hereof, pursuant
to the exercise of the Warrants or pursuant to the conversion of shares of
Series G Stock outstanding on the date hereof, in each case, as contemplated by
Section 4.03, or (ii) any other securities in respect of, in lieu of, or in
substitution for, Common Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly owned subsidiaries, except for,
in accordance with the terms of the instrument governing the Series G Shares on
the date hereof, a semi-annual dividend on the Series G Shares not in excess of
$0.80 per Series G Share, including, without limitation, all current and accrued
and unpaid dividends on the Series G Shares;
(d) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(e) except for (A) increases in salary, wages and benefits of
non-executive officers or employees of the Company or its Subsidiaries in the
ordinary course of business consistent with past practice, (B) increases in
salary, wages and benefits granted to officers and employees of the Company or
its subsidiaries in conjunction with new hires, promotions or other changes in
job status in the ordinary course of business consistent with past practice, or
(C) increases in salary, wages and benefits to employees of the Company pursuant
to collective bargaining agreements entered into in the ordinary course of
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business consistent with past practice, (i) increase the compensation or fringe
benefits payable or to become payable to its directors, officers or key
employees (whether from the Company or any of its subsidiaries), or (ii) pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units) or (iii) grant any severance or
termination pay to (except pursuant to existing agreements, plans or policies
and as required by such agreements, plans or polices), or (iv) enter into any
employment or severance agreement with, any director, officer or other key
employee of the Company or any of its subsidiaries or (iv) establish, adopt,
enter into, or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any directors, officers or current or former employees
(any of the foregoing being an "Employee Benefit Arrangement"), except in each
case to the extent required by applicable law or regulation; provided, however,
that nothing herein will be deemed to prohibit the payment of benefits as they
become payable;
(f) acquire, sell, lease or dispose of any assets (other than
inventory) or securities which are material to the Company and its Subsidiaries,
taken as a whole, or enter into any commitment to do any of the foregoing or
enter into any material commitment or transaction outside the ordinary course of
business consistent with past practice other than transactions between a wholly
owned subsidiary of the Company and the Company or another wholly owned
subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term debt or incur
or assume any short-term debt, except that the Company and its subsidiaries may
incur, assume or pre-pay debt in the ordinary course of business consistent with
past practice under existing lines of credit and except for a contemplated $3
million line of credit to be offered by Bank of America with respect to the
Company's operations in Brazil, (ii) assume, guarantee, endorse or otherwise
become liable or responsible
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(whether directly, contingently or otherwise) for the obligations of any other
person except in the ordinary course of business consistent with past practice,
or (iii) make any loans, advances or capital contributions to, or investments
in, any other person except in the ordinary course of business consistent with
past practice and except for loans, advances, capital contributions or
investments between any wholly owned subsidiary of the Company (for these
purposes including any foreign subsidiary wholly owned by the Company other than
a de minimus percentage of shares owned by officers and directors of such
subsidiary) and the Company or another wholly owned subsidiary of the Company
(for these purposes including any foreign subsidiary wholly owned by the Company
other than a de minimus percentage of shares owned by officers and directors of
such subsidiary); or
(h) agree in writing or otherwise to take any of the
foregoing actions.
SECTION 6.02 Access to Information. From the date hereof until the
Effective Time, the Company will, and will cause its Subsidiaries, and each of
its and their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to, provide Parent
and the Purchaser and their respective officers, employees, counsel, advisors
and representatives (collectively, the "Parent Representatives") reasonable
access (subject, however, to existing confidentiality and similar non-disclosure
obligations and the preservation of attorney client and work product
privileges), during normal business hours and upon reasonable notice, to the
offices and other facilities and to the books and records of the Company and its
Subsidiaries, as will permit Parent and the Purchaser to make inspections of
such as either of them may reasonably require (other than environmental testing)
and will cause the Company Representatives and the Company's subsidiaries to
furnish Parent, the Purchaser and the Parent Representatives to the extent
available with such other information with respect to the business and
operations of the Company and its subsidiaries as Parent and the Purchaser may
from time to time reasonably request. Unless otherwise required by law, Parent
and the Purchaser will, and will cause the Parent Representatives to, hold any
such information in confidence until
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such time as such information otherwise becomes publicly available through no
wrongful act of Parent, the Purchaser or the Parent Representatives. In the
event of termination of this Agreement for any reason, Parent and the Purchaser
will, and will cause the Parent Representatives to, return to the Company all
copies of written information furnished by the Company or any of the Company
Representatives to Parent or the Purchaser or the Parent Representatives and
destroy all memoranda, notes and other writings prepared by Parent, the
Purchaser or the Parent Representatives based upon or including the information
furnished by the Company or any of the Company Representatives to Parent or the
Purchaser or the Parent Representatives (and Parent will certify to the Company
that such destruction has occurred). In addition, Parent will comply with the
terms of the Confidentiality Agreement (as hereinafter defined).
SECTION 6.03 Reasonable Best Efforts. Subject to the terms and
conditions herein provided and to applicable legal requirements, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, in the case of the Company,
consistent with the fiduciary duties of the Company's Board of Directors (as
described in Section 6.08 hereof), and to assist and cooperate with the other
parties hereto in doing, as promptly as practicable, all things necessary,
proper or advisable under applicable laws and regulations to ensure that the
conditions set forth in Annex I and Article VII are satisfied and to consummate
and make effective the transactions contemplated by the Offer and this
Agreement.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or the Purchaser or any of
their respective subsidiaries, should be discovered by the Company or Parent, as
the case may be, and which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
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necessary action.
SECTION 6.04 Consents.
(a) Each of the parties will use its reasonable best efforts
to obtain as promptly as practicable all Consents of any Governmental Entity or
any other person required in connection with, and waivers of any Violations that
may be caused by, the consummation of the transactions contemplated by the Offer
and this Agreement.
(b) In furtherance and not in limitation of the foregoing,
Parent shall use its reasonable best efforts to resolve such objections, if any,
as may be asserted with respect to the transactions contemplated by this
Agreement under any antitrust, competition or trade regulatory laws, rules or
regulations of any domestic or foreign government or governmental authority or
any multinational authority ("Antitrust Laws").
(c) Any party hereto shall promptly inform the others of any
material communication from the United States Federal Trade Commission, the
Department of Justice or any other domestic or foreign government or
governmental or multinational authority regarding any of the transactions
contemplated by this Agreement. If any party or any affiliate thereof receives a
request for additional information or documentary material from any such
government or authority with respect to the transactions contemplated by this
Agreement, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request. Parent will
advise the Company promptly in respect of any understandings, undertakings or
agreements (oral or written) which Parent proposes to make or enter into with
the Federal Trade Commission, the Department of Justice or any other domestic or
foreign government or governmental or multinational authority in connection with
the transactions contemplated by this Agreement.
SECTION 6.05 Public Announcements. So long as this Agreement is in
effect, Parent, the Purchaser and the Company
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agree to use reasonable efforts to consult with each other before issuing any
press release or otherwise making any public statement with respect to the
transactions contemplated by this Agreement.
SECTION 6.06 Employee Benefit Arrangements.
(a) Parent agrees that the Company will honor and, from and
after the Effective Time, Parent will cause the Surviving Corporation to honor,
all Employee Benefit Arrangements to which the Company or any of its
subsidiaries is presently a party; provided, however, that nothing contained in
this Section 6.06(a) shall limit or restrict the Surviving Corporation's right
on or after the Effective Time to amend, modify or terminate any Employee
Benefit Arrangement in accordance with the terms thereof and applicable law.
(b) Parent intends that the Surviving Corporation would
provide, for a period of at least two years from the Effective Time, employees
of the Company and its subsidiaries (excluding employees covered by collective
bargaining agreements) cash compensation employee benefit and incentive
compensation and similar plans and programs as would provide compensation and
benefits which in the aggregate are substantially similar to those provided to
such employees as of the date hereof; provided, however, that it is understood
that after the Effective Time it is not intended that any party hereto would
issue shares of capital stock of any entity pursuant to any such plan or
program; any substitute plan or program may be based on criteria other than
stock performance.
SECTION 6.07 Indemnification.
(a) Parent agrees that all rights to indemnification now
existing in favor of any employee, agent, director or officer of the Company and
its subsidiaries as provided in their respective charters or by-laws, in an
agreement between any such person and the Company or one of its Subsidiaries, or
otherwise in effect on the date hereof shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time; provided that in the
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event any claim or claims are asserted or made within such six-year period, all
rights to indemnification in respect of any such claim or claims shall continue
until final disposition of any and all such claims. Parent also agrees to
indemnify all directors and officers of the Company ("Indemnified Parties") to
the fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers or directors of
the Company or any of its Subsidiaries or as trustees or fiduciaries of any plan
for the benefit of employees occurring prior to the Effective Time including,
without limitation, the transactions contemplated by this Agreement. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter, including, without limitation, the transactions
contemplated by this Agreement, occurring prior to, and including, the Effective
Time, Parent will pay as incurred such Indemnified Party's reasonable legal and
other expenses of counsel selected by the Indemnified Party and reasonably
acceptable to Parent (including the cost of any investigation and preparation)
incurred in connection therewith; provided, however, that Parent shall not, in
connection with any one such action or proceeding or separate but substantially
similar actions or proceedings arising out of the same general allegations be
liable for fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all Indemnified Parties. Parent
shall be entitled to participate in the defense of any such action or proceeding
and counsel selected by the Indemnified Party, shall, to the extent consistent
with their professional responsibilities, cooperate with Parent and any counsel
designated by Parent. Parent shall pay all reasonable expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.07.
(b) Parent agrees that the Company and, from and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company; provided
that the Surviving Corporation may substitute therefor policies
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of at least the same coverage containing terms and conditions which are no less
advantageous and provided that such substitution shall not result in any gaps or
lapses in coverage with respect to matters occurring prior to the Effective
Time; and provided, further, that the Surviving Corporation shall not be
required to pay an annual premium in excess of 300% of the last annual premium
paid by the Company prior to the date hereof and if the Surviving Corporation is
unable to obtain the insurance required by this Section 6.07(b) it shall obtain
as much comparable insurance as possible for an annual premium equal to such
maximum amount.
SECTION 6.08 No Solicitation.
(a) The Company represents and warrants to, and covenants and
agrees with, Parent and Purchaser that neither the Company nor any of its
Subsidiaries has any agreement, arrangement or understanding with any potential
acquiror that, directly or indirectly, would be violated, or require any
payments, by reason of the execution, delivery and/or consummation of this
Agreement. The Company shall, and shall cause its Subsidiaries and use its best
efforts to cause its and their officers, directors, employees, investment
bankers, attorneys and other agents and representatives to, immediately cease
any existing discussions or negotiations with any person (including a "person"
as defined in Section 13(d)(3) of the Exchange Act) other than Parent or
Purchaser (a "Third Party") heretofore conducted with respect to any Acquisition
Transaction (as hereinafter defined). The Company shall not, and shall cause its
Subsidiaries and use its best efforts to cause its and their officers,
directors, employees, investment bankers, attorneys and other agents and
representatives not to, directly or indirectly, (x) solicit, initiate, continue,
facilitate or encourage (including by way of furnishing or disclosing non-public
information) any inquiries, proposals or offers from any Third Party with
respect to, or that could reasonably be expected to lead to, any acquisition or
purchase of a material portion of the assets (other than in the ordinary course
of business) or business of, or any significant equity interest in (including by
way of a tender offer), or any amalgamation, merger, consolidation or business
combination with, or any recapitalization or restructur-
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ing, or any similar transaction involving, the Company or any of its
Subsidiaries (the foregoing being referred to collectively as an "Acquisition
Transaction"), or (y) negotiate, explore or otherwise communicate in any way
with any Third Party with respect to any Acquisition Transaction or enter into,
approve or recommend any agreement, arrangement or understanding requiring the
Company to abandon, terminate or fail to consummate the Offer and/or the Merger
or any other transaction contemplated hereby. Notwithstanding anything to the
contrary in the foregoing, the Company may, prior to the purchase of Shares
pursuant to the Offer, in response to an unsolicited written proposal with
respect to an Acquisition Transaction involving the acquisition of all of the
Shares (or all or substantially all of the assets of the Company and its
Subsidiaries) from a Third Party (i) furnish or disclose non-public information
to such Third Party and (ii) negotiate, explore or otherwise communicate with
such Third Party, in each case only if (a) after being advised by (x) its
outside counsel with respect to its fiduciary obligations and (y) Lazard Freres
with respect to the financial terms of any such proposed Acquisition
Transaction, the Board of Directors of the Company determines reasonably and in
good faith by a majority vote that taking such action is necessary in the
exercise of its fiduciary obligations under applicable law (the proposal with
respect to an Acquisition Transaction meeting the requirements of this clause
(a), a "Superior Proposal"), (b) prior to furnishing or disclosing any
non-public information to, or entering into discussions or negotiations with,
such Third Party, the Company receives from such Third Party an executed
confidentiality agreement with terms no less favorable in the aggregate to
Company than those contained in the Confidentiality Agreement (except that no
"standstill provisions" shall be required from any person that at the date
hereof has commenced a tender offer for Securities of the Company), but which
confidentiality agreement shall not provide for any exclusive right to negotiate
with the Company or any payments by the Company and (c) the Company advises
Parent of all such non-public information delivered to such Third Party
concurrently with such delivery; provided, however, that Company shall not, and
shall cause its affiliates not to, enter into a definitive agreement with
respect to a Superior Proposal unless (x) the Company concurrently terminates
this Agreement in accordance with the terms hereof and pays any
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Termination Fee required under Section 8.03(b) and agrees to pay any other
amounts required under such Section 8.03(b), and (y) such agreement permits the
Company to terminate it if it receives a Superior Proposal, such termination and
related provisions to be on terms no less favorable to the Company, including as
to fees and reimbursement of expenses, as those contained herein.
(b) The Company shall promptly (but in any event within one
day of the Company becoming aware of same) advise Parent of the receipt by the
Company, any of its subsidiaries or any of the Company's bankers, attorneys or
other agents or representatives of any inquiries or proposals relating to an
Acquisition Transaction and any actions taken pursuant to Section 6.08(a). The
Company shall promptly (but in any event within one day of the Company becoming
aware of same) provide Parent with a copy of any such inquiry or proposal in
writing and a written statement with respect to any such inquiries or proposals
not in writing, which statement shall include the identity of the parties making
such inquiries or proposal and the material terms thereof. The Company shall,
from time to time, promptly (but in any event within one day of the Company
becoming aware of same) inform Parent of the status and content of and material
developments (including the calling of meetings of the Board to take action with
respect to such Acquisition Transaction) with respect to any discussions
regarding any Acquisition Transaction with a Third Party. For the avoidance of
doubt, the Company agrees that it will not enter into any agreement with respect
to a Superior Proposal unless and until Parent has been given notice of the
identity of the parties making such Superior Proposal, the material terms
thereof and material developments referred to in the preceding sentence at least
two business days prior to the entering into such agreement.
SECTION 6.9 Notification of Certain Matters. Parent and the Company
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time or (ii)
to cause any material covenant, condition or agreement hereunder not to be
complied with or satisfied in
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all material respects and (b) any failure of the Company or Parent, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder in any material respect; provided,
however, that no such notification shall affect the representations or
warranties of any party or the conditions to the obligations of any party
hereunder.
SECTION 6.10 State Takeover Laws. The Company shall, upon the
request of the Purchaser, take all reasonable steps to assist in any challenge
by the Purchaser to the validity or applicability to the transactions
contemplated by this Agreement, including the Offer and the Merger and by the
Stockholder Agreements of any state takeover law.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect the
Merger If the Offer Shall Have Been Consummated. The respective obligations of
Parent, the Purchaser and the Company to consummate the Merger if the Offer
shall have been consummated are subject to the satisfaction or waiver in writing
by each party hereto, at or before the Effective Time, of each of the following
conditions (the "Second Step Conditions") (and shall not be subject to the
One-Step Conditions (as defined herein)):
(a) Shareholder Approval. The Shareholders shall have duly
approved the transactions contemplated by this Agreement, to the extent required
pursuant to the requirements of the Company's certificate of incorporation and
applicable law.
(b) Purchase of Securities. The Purchaser shall have accepted
for payment and paid for Securities pursuant to the Offer in accordance with the
terms hereof; provided, that this condition shall be deemed to have been
satisfied with respect to Parent and the Purchaser if the Purchaser fails to
accept for payment or pay for Securities pursuant to the Offer in violation of
the terms of the Offer.
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(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger.
SECTION 7.02 Conditions to Each Party's Obligation to Effect the
Merger If the Offer Shall Not Have Been Consummated. The respective obligations
of the parties to consummate the Merger if the Offer shall not have been
consummated are subject to the satisfaction, or waiver in writing by the party
specified below, at or before the Effective Time, of each of the following
conditions set forth in paragraphs (a), (b) and (c) of this Section 7.02 (the
"One-Step Conditions") (and shall not be subject to the Second Step Conditions):
(a) Conditions to Each Party's Obligations. The respective
obligations of Parent, the Purchaser and the Company to consummate the Merger if
the Offer shall not have been consummated are subject to the satisfactions, or
waiver in writing by each party hereto, at or before the Effective Time, of each
of the following conditions:
(i) Shareholder Approval. The Shareholders shall have duly
approved the transactions contemplated by this Agreement, pursuant to the
requirements of the Company's certificate of incorporation and applicable law.
(ii) Injunctions; Illegality. The consummation of the Merger shall
not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger.
(iii) Antitrust. The expiration or termination of all applicable
waiting periods relating to the Merger under the HSR Act and applicable
antitrust laws of Belgium, ▇▇▇▇▇▇▇, ▇▇▇▇▇,
-▇▇-
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Sweden, if applicable, shall have occurred.
(b) Additional Conditions to Parent and the Purchaser's
Obligation to Effect the Merger if the Offer shall not have been Consummated.
The obligation of Parent and Purchaser to effect the Merger prior to
consummation of the Offer is also subject to the satisfaction, or waiver in
writing by Parent and the Purchaser, at or before the Effective Time of each of
the additional conditions set forth in Annex II hereto.
(c) Additional Conditions to the Company's Obligation to
Effect the Merger if the Offer shall not have been Consummated. The obligation
of the Company to effect the Merger prior to consummation of the Offer is also
subject to the satisfaction, or waiver in writing by the Company, at or before
the Effective Time of each of the additional conditions set forth in Annex III
hereto.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, whether or not approval thereof by the Shareholders has been obtained:
(a) by the mutual written consent of Parent and the
Company; or
(b) by the Company if the Company is not in material breach of
any of its representations, warranties, covenants or agreements contained in
this Agreement and if (i) the Purchaser fails to commence the Offer as provided
in Section 1.01 hereof, (ii) the Purchaser shall not have accepted for payment
and paid for Securities pursuant to the Offer in accordance with the terms
thereof on or before April 30, 1998 or (iii) the Purchaser fails to purchase
validly tendered Securities in violation of the terms of the Offer or this
Agreement; or
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(c) by Parent or the Company if (i) the Offer is terminated or
withdrawn pursuant to its terms without any Securities being purchased
thereunder and (ii) the One-Step Conditions shall not have been satisfied;
provided, however, that Parent may terminate this Agreement pursuant to this
Section 8.01(c) only if Parent's or the Purchaser's termination or withdrawal of
the Offer is not in violation of the terms of this Agreement or the Offer; or
(d) by Parent or the Company if any court or other
Governmental Entity shall have issued, enacted, entered, promulgated or enforced
any order, judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, injunction, ruling or other action shall have become final and
nonappealable; or
(e) by the Company if, prior to the purchase of Securities
pursuant to the Offer in accordance with the terms of this Agreement, (i) there
shall have occurred, on the part of Parent or Purchaser, a material breach of
any representation or warranty, covenant or agreement contained in this
Agreement which is not curable or, if curable, is not cured within five business
days after written notice of such breach is given by the Company to the party
committing the breach or (ii) the Company (A) enters into a definitive agreement
with respect to a Superior Proposal and (B) pays any Termination Fee and agrees
to pay any other amounts required under Section 8.03(b); or
(f) by Parent if, prior to the purchase of Securities pursuant
to the Offer in accordance with the terms of this Agreement, (i) there shall
have occurred, on the part of the Company, a breach of any representation,
warranty, covenant or agreement contained in this Agreement which individually,
or in the aggregate if not cured would be reasonably likely to have a Material
Adverse Effect on the Company and which is not curable or, if curable, is not
cured within the later of (x) 5 business days after written notice of such
breach is given by Parent to the Company and (y) the satisfaction of all
conditions to the Offer not related to such breach or (ii) if the Board of
Directors of the Company or committee thereof shall have
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withdrawn or modified (or shall have resolved to withdraw or modify) in a manner
adverse to Parent, its approval or recommendation of this Agreement or any of
the transactions contemplated hereby (it being agreed that, for all purposes of
this agreement, including Annex I hereto, the public disclosure of the fact that
the Company has supplied a third party with information regarding the Company
shall not by itself be deemed a withdrawal or modification in a manner adverse
to Parent of the Board's approval or recommendation of this Agreement or the
transactions contemplated hereby) and the Board of Directors and such committee
shall not have fully reinstated such approval or recommendations within two
business days or shall have recommended (or resolved to recommend) an
Acquisition Transaction (other than the Offer and Merger) to the Shareholders
and at least two business days shall have passed since such recommendation (or
resolution); or
(g) by Parent if it is not in material breach of its
obligations hereunder or under the Offer and no Securities shall have been
purchased pursuant to the Offer on or before April 30, 1998.
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 have no effect, without any liability on the part of any party
or its directors, officers or stockholders, other than the provisions of this
Section 8.02, Section 8.03 and the last sentence of Section 6.02, which shall
survive any such termination. Nothing contained in this Section 8.02 shall
relieve any party from liability for any breach of this Agreement or the
Confidentiality Agreement.
SECTION 8.03 Fees and Expenses.
(a) Whether or not the Merger is consummated, all costs and
expenses incurred in connection with the Offer, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(b) In the event this Agreement is terminated pursuant to
Section 8.01(c), 8.01(e)(ii) or 8.01(f), then the
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Company shall promptly reimburse Parent for the documented fees and expenses of
Parent and the Purchaser related to this Agreement, the transactions
contemplated hereby and any related financing (subject to a maximum of $1.0
million) and in the event this Agreement is terminated pursuant to 8.01(e)(ii),
then the Company shall promptly pay Parent a Termination Fee of $15.0 million by
wire transfer of same day funds to an account designated by the Parent as a
condition of such termination.
(c) In the event that (i) any person shall have publicly
disclosed a proposal regarding an Acquisition Transaction and (ii) following
such disclosure, either (x) April 30, 1998 occurs without the Minimum Condition
being satisfied or the requisite stockholder approval of the Merger being
obtained (other than as a result of a material breach hereof by Parent or the
Purchaser that has not been cured within the time period set forth in Article
VIII of this Agreement) or (y) the Company breaches any of its material
obligations hereunder and does not cure such breach within the time period set
forth in Article VIII of this Agreement or (z) the Agreement is terminated
pursuant to Section 8.01(f)(ii), and (iii) not later than six months after any
such termination the Company shall have entered into an agreement for an
Acquisition Transaction, or an Acquisition Transaction shall have been
consummated, then the Company shall promptly, but in no event later than
immediately prior to, and as a condition of, entering into such definitive
agreement, or, if there is no such definitive agreement then immediately upon
consummation of the Acquisition Transaction, pay Parent a Termination Fee of
$15.0 million which amount shall be payable by wire transfer of same day funds
to an account designated by the Parent.
(d) The Company acknowledges that the agreements contained in
Section 8.03(b) and (c) are an integral part of the transactions contemplated in
this Agreement, and that, without these agreements, Parent and Purchaser would
not enter into this Agreement; accordingly, if the Company fails to promptly pay
the amount due pursuant to Section 8.03(b) and (c), and, in order to obtain such
payment, Parent or Purchaser commences a suit that results in a judgment against
the Company for the fee and expenses set forth in Section 8.03(b) and (c), the
Company shall
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pay to Parent its costs and expenses (including reasonable attorneys' fees) in
connection with such suit. No termination of this Agreement pursuant to Article
VIII or otherwise shall prejudice the ability of a non-breaching party from
seeking damages from any other party for any breach of this Agreement,
including, without limitation, reasonable attorneys' fees and the right to
pursue any remedy at law or in equity.
SECTION 8.04 Amendment. Subject to Section 1.03(c), this Agreement
may be amended by the Company, Parent and the Purchaser at any time before or
after any approval of this Agreement by the Shareholders but, after any such
approval, no amendment shall be made which decreases the Merger Price or the
Warrant Spread Amount or which adversely affects the rights of the Shareholders
hereunder without the approval of such Shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of all the parties.
SECTION 8.05 Extension; Waiver. Subject to Section 1.03(c), at any
time prior to the Effective Time, the parties hereto may (i) extend the time for
the performance of any of the obligations or other acts of any other party
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein by any other party or in any document, certificate or writing
delivered pursuant hereto by any other party or (iii) waive compliance with any
of the agreements of any other party or with any conditions to its own
obligations; provided, that, the Minimum Condition may not be waived by the
Purchaser, without the consent of the Company, so as to require to be validly
tendered and not withdrawn prior to the Expiration Date that number of Common
Shares which represents less than 50% of the outstanding Common Shares on a
fully diluted basis on the date of purchase (not taking into account the
Rights), it being understood that the other conditions set forth in Annexes I
and II may be waived by Purchaser without the consent of the Company. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
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MISCELLANEOUS
9.
SECTION 9.01 Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. For the avoidance of doubt and notwithstanding the
foregoing, the agreements set forth in Section 3.02 and Section 6.07 shall
survive the Effective Time indefinitely (except to the extent a shorter period
of time is explicitly specified therein).
SECTION 9.02 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the
instruments referred to herein) and the letter agreement, by and between Parent
and the Company, dated August 29, 1997 (the "Confidentiality Agreement"),
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
SECTION 9.03 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.04 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties as follows:
If to Parent or the Purchaser:
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BTR plc
BTR House
Carlisle Place
London, SW 1P 1BX
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
General Counsel
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇-▇▇▇▇
with copies to:
BTR Incorporated
Stamford Harbor Park
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Vice President, General
Counsel and Secretary
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the Company:
Exide Electronics Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Vice President, Chief
Administrative Officer and
General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
-▇▇-
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Silk, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.05 Governing Law; Jurisdiction. (a) This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(b) In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
State of Delaware or any Delaware state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a federal or state court sitting in
the State of Delaware. Each of Parent and the Purchaser hereby irrevocably
designates The Corporation Trust Company in Delaware as its authorized agent,
respectively, to accept and acknowledge on its behalf service of any process
which may be served in any suit, action or proceeding in Delaware. Each of
Parent and the Purchaser hereby irrevocably (i) consents and agrees to process
being served in any suit, action or proceeding brought in the federal court
located in the State of Delaware or any Delaware state court by serving a copy
thereof upon the agent designated in the preceding sentence and (ii) agrees that
such service of process shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and shall, to the fullest
extent permitted by law, be taken and be held to be valid personal service upon
and personal delivery to Parent
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and Purchaser, as the case may be.
SECTION 9.6 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.06.
SECTION 9.7 Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
SECTION 9.9 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except with
respect to Sections 1.03(c), 2.09 and 6.07, nothing in this Agreement, express
or implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
SECTION 9.10 Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any person, shall mean
any other person directly or indirectly
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controlling, controlled by, or under common control with, that person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
applied to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
person, whether through the ownership of voting securities, by contract or
otherwise;
(b) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "subsidiary" or "subsidiaries" means, with
respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
(d) the term "Tax" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), 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.
(e) the term "Tax Return" means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
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SECTION 9.11 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its respective officer thereunto duly authorized,
all as of the day and year first above written.
BTR PLC
By: ___________________________________
Name:
Title:
BTR ACQUISITION CORPORATION
By: ___________________________________
Name:
Title:
EXIDE ELECTRONICS GROUP, INC.
By: ___________________________________
Name:
Title:
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58
Annex I
Conditions to the Offer. Notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or pay for any
tendered Securities, unless there are validly tendered and not withdrawn prior
to the expiration date for the Offer (the "Expiration Date") that number of
Common Shares which represent at least 80% of the outstanding Common Shares on a
fully diluted basis on the date of purchase (not taking into account the Rights)
(the "Minimum Condition"). Furthermore, notwithstanding any other provisions of
the Offer, the Purchaser shall not be required to accept for payment or pay for
any tendered Securities until expiration of all applicable waiting periods under
the HSR Act and applicable antitrust statutes in Belgium, Germany, Ireland,
Italy, Mexico and Sweden, if applicable, and may, subject to the terms of the
Merger Agreement, amend the Offer or postpone the acceptance for payment of
tendered Securities if at any time on or after October 16, 1997 and before the
expiration of the Offer, any of the following events (each, an "Event") shall
occur:
(a) any order, preliminary or permanent injunction, decree,
judgment or ruling in any suit, action or proceeding is entered that (i)
makes illegal or otherwise directly or indirectly restrains or prohibits
the acquisition by Parent or Purchaser of any Shares under the Offer or
the making or consummation of the Offer or the Merger, the performance by
the Company of any of its material obligations under the Merger Agreement
or the consummation of any purchase of Shares contemplated by the Merger
Agreement or related agreements, (ii) prohibits or limits the ownership or
operation by the Company, Parent or any of their respective subsidiaries
of a material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, or compels the Company or Parent to dispose of or hold separate any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, as a result of the Offer or the Merger, (iii) imposes material
limitations on the ability of Parent or Purchaser to acquire or hold, or
exercise full rights of ownership of, any Shares accepted for payment
pursuant to the Offer, including, without limitation, the right to vote
such Shares on all matters properly presented to the shareholders of the
Company or (iv) prohibits Parent or any of its subsidiaries from
effectively controlling in any material respect the business or operation
of the Company and its subsidiaries, taken as a whole; or
(b) any Law is enacted, entered, enforced, promulgated or
deemed applicable to the Offer or the Merger, or any other action is taken
by any governmental entity, other than the application to the Offer or the
Merger of
59
applicable waiting periods under the HSR Act, that results, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(iv) or paragraph (a) above; or
(c) any Material Adverse Effect on the Company (as
defined in the Merger Agreement) has occurred; or
(d) (i) the Board of Directors of the Company or any committee
thereof withdraws or modifies in a manner adverse to Parent or Purchaser
its approval or recommendation of the Offer, the Merger or the Merger
Agreement and does not fully reinstate such approval or recommendation
within two business days of such withdrawal or modification, or approves
or recommends any Acquisition Proposal or (ii) the Company enters into any
agreement to consummate any Acquisition Proposal or (iii) the One-Step
Conditions have been satisfied or waived; or
(e) any of the representations and warranties of the Company
set forth in the Merger Agreement that are qualified as to Material
Adverse Effect (as defined in the Merger Agreement) are not true and
correct, or any such representations and warranties that are not so
qualified are not true and correct in any respect (when taken together
with all other failures of such representations and warranties to be true
and correct) that would have a Material Adverse Effect on the Company, in
each case at the date of the Merger Agreement or at the scheduled
expiration of the Offer (as though made as of such date, except that those
representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date) which have
been not been cured within the time period specified in Article VIII of
the Merger Agreement; or
(f) the Company and the Purchaser and Parent shall have
reached an agreement that the Offer or the Merger Agreement be terminated,
or the Merger Agreement shall have been terminated in accordance with its
terms; or
(g) the Company shall have breached or failed to perform in
any material respect any of its material
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obligations, covenants or agreements under the Merger Agreement; or
(h) there shall have occurred, and continued to exist, (i) any
general suspension of, or limitation on prices for, trading in securities
on the Nasdaq National Market, (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States or
Great Britain, (iii) a commencement of a war, armed hostilities or other
national or international crisis directly involving the United States or
Great Britain (other than an action involving United Nations' personnel or
support of United Nations' personnel) or (iv) in the case of any of the
foregoing clauses (i) through (iii) existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
or
(i) it shall have been publicly disclosed, or Purchaser shall
have otherwise learned after the date of the Merger Agreement that
beneficial ownership (determined for the purposes of this paragraph as set
forth in Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
the then outstanding Shares has been acquired by any person, other than
Parent or any of its affiliates.
The foregoing conditions are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived (except that
the Minimum Condition may not be waived or amended without the consent of the
Company so as to require to be validly tendered and not withdrawn prior to the
Expiration Date that number of Common Shares which represents less than 50% of
the outstanding Common Shares on a fully diluted basis on the date of purchase
(not taking into account the Rights)) by Parent or the Purchaser in whole or in
part at any time and from time to time in their reasonable discretion. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
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61
The capitalized terms used in this Annex I shall have the meanings
set forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
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Annex II
Parent and Purchaser's One-Step Conditions
(a) Order; Injunction. There shall not be entered and in
effect any order, preliminary or permanent injunction, decree, judgment or
ruling in any suit, action or proceeding that (i) prohibits or limits the
ownership or operation by the Company, Parent or any of their respective
subsidiaries of a material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, or compels the Company or Parent to
dispose of or hold separate any material portion of the business or assets
of the Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, as a result of the Merger, (ii) imposes
material limitations on the ability of Parent or Purchaser to acquire or
hold, or exercise full rights of ownership of, the Company's common stock,
including, without limitation, the right to vote such common stock on all
matters properly presented to the Shareholders of the Company, or (iii)
prohibits Parent or any of its subsidiaries from effectively controlling
in any material respect the business or operation of the Company and its
subsidiaries, taken as a whole.
(b) Law. There shall have been no Law enacted, entered,
enforced, promulgated or deemed applicable to the Merger, or any other
action taken by any governmental entity, other than the application to the
Merger of applicable waiting periods under the HSR Act and under
applicable antitrust statutes in Belgium, Germany, Ireland, Italy, Mexico
and Sweden, if applicable, that results, directly or indirectly, in any of
the consequences referred to in clauses (i) through (iii) of paragraph (a)
above, which remains in effect at the Effective Time.
(c) Material Adverse Effect. No Material Adverse
63
Effect on the Company (as defined in the Merger Agreement) shall have
occurred and be in effect at the Effective Time.
(d) Representations and Warranties. None of the
representations and warranties of the Company set forth in the Merger
Agreement that are qualified as to Material Adverse Effect (as defined in
the Merger Agreement) shall not be true and correct, and no such
representations and warranties that are not so qualified shall not be true
and correct in any respect (when taken together with all other failures of
such representations and warranties to be true and correct) that would
have a Material Adverse Effect on the Company, in each case at the date of
the Merger Agreement or as of the Effective Time (as though made as of
such date, except that those representations and warranties that address
matters only as of a particular date shall remain true and correct as of
such date) which have been not been cured within the time period specified
in Article VIII of the Merger Agreement.
(e) Breach of Covenants. The Company shall not be in breach of
or failing to perform in any material respect any of its material
obligations, covenants or agreements under the Merger Agreement.
(f) Economic Conditions. There shall not have occurred, and
continued to exist, (i) any general suspension of, or limitation on prices
for, trading in securities on the Nasdaq National Market, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or Great Britain, (iii) a
commencement of a war, armed hostilities or other national or
international crisis directly involving the United States or Great Britain
(other than an action involving United Nations' personnel or support of
United Nations' personnel) or (iv) in the case of any of the foregoing
clauses (i) through (iii) existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof.
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Annex III
Company's One-Step Conditions
(a) Representations and Warranties. None of the
representations and warranties of Parent or the Purchaser set forth in the
Merger Agreement that are qualified as to Material Adverse Effect (as
defined in the Merger Agreement) shall not be true and correct, and no
such representations and warranties that are not so qualified shall not be
true and correct in any respect (when taken together with all other
failures of such representations and warranties to be true and correct)
that would have a Material Adverse Effect on Parent, in each case at the
date of the Merger Agreement or as of the Effective Time (as though made
as of such date, except that those representations and warranties that
address matters only as of a particular date shall remain true and correct
as of such date).
(b) Breach of Covenants. Neither Parent nor the Purchaser
shall be in breach of or failing to perform in any material respect any of
its respective material obligations, covenants or agreements under the
Merger Agreement.