EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 22, 2000
BETWEEN
MILPI ACQUISITION CORP.
AND
PLM INTERNATIONAL, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER...............................................................................................1
Section 1.1 The Offer........................................................................................1
Section 1.2 Company Action...................................................................................3
Section 1.3 Directors........................................................................................4
ARTICLE II THE MERGER.............................................................................................5
Section 2.1 The Merger.......................................................................................5
Section 2.2 Closing..........................................................................................6
Section 2.3 Effective Time of the Merger.....................................................................6
Section 2.4 Effect of the Merger.............................................................................6
ARTICLE III THE SURVIVING CORPORATION.............................................................................6
Section 3.1 Certificate of Incorporation.....................................................................6
Section 3.2 By-laws..........................................................................................7
Section 3.3 Board of Directors; Officers.....................................................................7
ARTICLE IV CONVERSION OF SHARES...................................................................................7
Section 4.1 Merger Consideration.............................................................................7
Section 4.2 Stockholders' Rights at the Effective Time.......................................................8
Section 4.3 Surrender and Exchange of Share Certificates.....................................................8
Section 4.4 No Further Rights................................................................................9
Section 4.5 Dissenting Shares................................................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF COMPANY..............................................................10
Section 5.1 Organization and Qualification..................................................................10
Section 5.2 Capitalization..................................................................................10
Section 5.3 Authority Relative to this Agreement and the Transactions.......................................11
Section 5.4 No Conflicts, Required Filings and Consents.....................................................11
Section 5.5 Reports and Financial Statements; Liabilities...................................................12
Section 5.6 Litigation......................................................................................13
Section 5.7 Absence of Certain Changes or Events............................................................13
Section 5.8 Employee Benefit Plans..........................................................................15
Section 5.9 Labor Relations.................................................................................17
Section 5.10 Taxes..........................................................................................17
Section 5.11 Compliance with Applicable Laws................................................................18
Section 5.12 Voting Requirements............................................................................19
Section 5.13 Assets of Company and Its Subsidiaries.........................................................19
Section 5.14 Material Contracts.............................................................................19
Section 5.15 Intellectual Property..........................................................................21
Section 5.16 Interested Party Transactions..................................................................21
Section 5.17 Environmental Matters..........................................................................22
Section 5.18 Restrictions on Business Activities............................................................23
Section 5.19 Certain Business Practices.....................................................................23
Section 5.20 Insurance......................................................................................23
Section 5.21 Brokers; Expenses..............................................................................23
Section 5.22 Board Approval.................................................................................24
Section 5.23 Opinion of Company's Fairness Opinion Advisor..................................................24
Section 5.24 Investment Company.............................................................................24
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................25
Section 6.1 Organization and Qualification..................................................................25
Section 6.2 Authority Relative to this Agreement and the Transactions.......................................25
Section 6.3 No Conflicts, Required Filings and Consents.....................................................25
Section 6.4 Litigation......................................................................................26
Section 6.5 Brokers.........................................................................................26
Section 6.6 Financing.......................................................................................26
ARTICLE VII CONDUCT OF BUSINESS PENDING THE MERGER...............................................................26
Section 7.1 Conduct of Company Pending the Merger...........................................................26
Section 7.2 Conduct of Company's Affiliates (Excluding its Subsidiaries)
Pending the Merger.............................................................................28
Section 7.3 Special Meeting.................................................................................29
Section 7.4 Further Action; Consents; Filings...............................................................29
Section 7.5 Escrow..........................................................................................30
Section 7.6 Company Stock Options...........................................................................30
ARTICLE VIII ADDITIONAL AGREEMENTS...............................................................................31
Section 8.1 Access to Information; Confidentiality..........................................................31
Section 8.2 Proxy Statement.................................................................................32
Section 8.3 Related Agreement...............................................................................32
Section 8.4 Public Announcements............................................................................33
Section 8.5 Indemnification of Company's Directors and Officers.............................................33
Section 8.6 Notice of Breaches and Certain Events...........................................................33
Section 8.7 Transfer and Gains Taxes and Certain Other Taxes and Expenses...................................34
Section 8.8 Acquisition Proposals...........................................................................34
Section 8.9 Cash Balance....................................................................................36
Section 8.10 Severance Policy...............................................................................36
Section 8.11 Health Benefits................................................................................37
ARTICLE IX CONDITIONS PRECEDENT..................................................................................37
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Section 9.1 Conditions to Each Party's Obligation to Effect the Merger......................................37
ARTICLE X Termination, Amendment and Waiver......................................................................38
Section 10.1 Termination....................................................................................38
Section 10.2 Effect of Termination..........................................................................39
Section 10.3 Fees and Expenses..............................................................................39
Section 10.4 Amendment......................................................................................40
Section 10.5 Waiver.........................................................................................40
Section 10.6 Liquidated Damages.............................................................................40
ARTICLE XI GENERAL PROVISIONS....................................................................................41
Section 11.1 Non-Survival of Representations, Warranties and Agreements.....................................41
Section 11.2 Notices........................................................................................41
Section 11.3 Specific Performance...........................................................................42
Section 11.4 Entire Agreement...............................................................................42
Section 11.5 Assignments; Parties in Interest...............................................................42
Section 11.6 Governing Law..................................................................................42
Section 11.7 Headings; Disclosure...........................................................................43
Section 11.8 Certain Definitions and Rules of Construction..................................................43
Section 11.9 Counterparts...................................................................................49
Section 11.10 Severability..................................................................................49
Section 11.11 Litigation....................................................................................49
Exhibit 1.1 Conditions to the Offer
Exhibit 3.3 Officers of the Surviving Corporation
Exhibit 5.1 Affiliates of Company
Exhibit 5.2 Company Stock Options
Exhibit 5.5 Liabilities of Company and Its Subsidiaries
Exhibit 5.8 Benefit Plans of Company and Its ERISA Affiliates
Exhibit 5.14 Contracts of Company and Its Affiliates
Exhibit 5.15 Intellectual Property Rights of Company and Its Subsidiaries
Exhibit 7.1 Conduct of Business Pending the Merger
Exhibit 7.1(a)(iii)(A) Transition Services and Employment Agreement (▇▇▇▇)
Exhibit 7.1(a)(iii)(B) Transition Services and Employment Agreement (▇▇▇▇▇)
Exhibit 7.1(a)(iii)(C) Transition Services, Employment and Consulting Agreement (Santo)
Exhibit 7.5 Escrow Agreement
Exhibit 8.9 Cash Balance
Exhibit 8.10 Severance Policy
Exhibit 9.1 Material Third Party Consents
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of
December 22, 2000, is entered into by and between MILPI ACQUISITION CORP., a
Delaware corporation ("BUYER"), and PLM INTERNATIONAL, INC. a Delaware
corporation ("COMPANY"). Capitalized terms used in this Agreement and not
defined in context shall have the meanings ascribed to them in Section
11.8(a).
WHEREAS, the respective Boards of Directors of Buyer and Company
have approved this Agreement, the Offer and the Merger and deem it advisable
and in the best interests of their respective stockholders to consummate the
Offer and the Merger on the terms and conditions set forth herein; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, as a condition and inducement to Buyer's willingness to enter into
this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, Steel Partners II, L.P., Steel
Partners L.L.C. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ are entering into a voting and
tender agreement (the "RELATED AGREEMENT") pursuant to which they, among
other things, agree to tender their shares of Company Common Stock pursuant
to the Offer, grant to Buyer the Related Option, and vote their shares of
Company Common Stock in favor of the Merger;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article X and that none of the events set forth in
EXHIBIT 1.1 hereto shall have occurred or be existing, Buyer shall, on or before
the third Business Day following the later of (1) receipt from Company of the
materials described in the first sentence of Section 1.2(a), and (2) receipt
from Company of its Schedule 14d-9 in a form that satisfies the requirements of
all applicable Law, commence (within the meaning of Rule 14d-2(a) of the
Securities Act) an offer (the "OFFER") to purchase any and all outstanding
shares of the common stock of Company, par value $.01 per share ("COMPANY COMMON
STOCK"), for a purchase price of $3.46 per share (subject to appropriate
adjustment in the event of any stock splits, reverse stock splits, combinations,
stock dividends, recapitalizations, redenominations of share capital and similar
events), less any dividends declared or paid after the date hereof and on or
before the Offer Completion Date (the "OFFER PRICE"), net to the seller thereof,
in cash, subject to reduction for any applicable withholding taxes and, but only
if such payment is to be made other than to the registered holder of the Company
Common Stock, any applicable stock transfer taxes payable by
such holder. The Offer will be made pursuant to an offer to purchase and
related letter of transmittal containing the terms and conditions set forth
in this Agreement. The initial expiration date of the Offer shall be the 25th
Business Day from and after the date the Offer is commenced (the "INITIAL
EXPIRATION DATE"). The obligation of Buyer to accept for payment, purchase
and pay for any shares of Company Common Stock tendered pursuant to the Offer
shall be subject, except as provided in Section 1.1(b), only to the
satisfaction of (i) the condition that at least 50.1% of the then outstanding
shares of Company Common Stock (including any shares of Company Common Stock
owned by Buyer, or any Affiliate of Buyer, on the date such shares are
purchased pursuant to the Offer) have been validly tendered and not withdrawn
prior to the expiration of the Offer (the "MINIMUM CONDITION"), and (ii) the
other conditions set forth in EXHIBIT 1.1 hereto; PROVIDED, HOWEVER, that
Buyer expressly reserves the right to waive any of the conditions to the
Offer (other than the Minimum Condition) and to make any changes in the terms
or conditions of the Offer (other than the Minimum Condition) in its sole
discretion, subject to Section 1.1(b). Notwithstanding the previous sentence,
Buyer may waive the Minimum Condition so long as (x) it has irrevocably
waived all other conditions to the Offer (and may, as a legal matter,
irrevocably waive such conditions and otherwise purchase shares of Company
Common Stock pursuant to the Offer), (y) Buyer has irrevocably exercised or
irrevocably committed to exercise the Related Option, and (z) the shares of
Company Common Stock acquired pursuant to the Offer and through such Related
Option exercise would satisfy the Minimum Condition.
(b) Without the prior written consent of Company, Buyer
shall not (i) decrease the Offer Price, (ii) decrease the percentage of shares
of Company Common Stock sought in the Offer, (iii) change the form of
consideration payable in the Offer, (iv) impose any conditions to the Offer in
addition to the Minimum Condition and the conditions set forth in EXHIBIT 1.1
hereto, (v) except as provided below or as required by any rule, regulation,
interpretation or position of the SEC applicable to the Offer, change the
expiration date of the Offer, or (vi) otherwise amend or change any material
term or condition of the Offer in a manner adverse to the holders of shares of
Company Common Stock. Notwithstanding anything in this Agreement to the
contrary, without the consent of Company, Buyer shall have the right to extend
the Offer beyond the Initial Expiration Date in any of the following events: (A)
from time to time, but in no event later than the date that is 60 days from the
Initial Expiration Date, if, at the Initial Expiration Date (or the extended
expiration date of the Offer, if applicable), any of the conditions to the Offer
(other than the Minimum Condition, to which this clause does not apply) shall
not have been satisfied or waived, until such conditions are satisfied or
waived, (B) for any period required by any rule, regulation, interpretation or
position of the SEC or the staff thereof applicable to the Offer or any period
required by applicable Law, (C) if all conditions to the Offer other than the
Minimum Condition are satisfied or waived, for one or more periods not to exceed
ten Business Days each (but no more than an aggregate of 30 Business Days for
all such extensions), or (D) if all conditions to the Offer are satisfied or
waived but the number of shares of Company Common Stock validly tendered and not
withdrawn is less than 90% of the then outstanding shares of Company Common
Stock, for an aggregate period not to exceed 20 Business Days (for all such
extensions), provided that Buyer shall accept and promptly pay for all shares of
Company Common Stock tendered prior to the date of such extension pursuant to
this clause (D) (the "OFFER CONDITIONS SATISFACTION DATE") and shall waive any
condition to the consummation of the Merger (other than the condition in Section
9.1(c)) that may fail to be satisfied during such extension. In addition, Buyer
shall, if requested by Company, from time to
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time extend the Offer if, at the Initial Expiration Date (or any extended
expiration date of the Offer, including pursuant to this sentence, if
applicable), any of the following have not been satisfied: (1) the Minimum
Condition, (2) the HSR Condition, (3) the conditions set forth in clause (a),
clause (b), clause (g) or clause (h) of EXHIBIT 1.1 hereto, and/or (4)
provided that such conditions can be satisfied by Company on or before the
40th Business Day following the Initial Expiration Date, and provided that
Company immediately ceases, and does not subsequently enter into, any
discussions or negotiations with any Person concerning an Acquisition
Proposal pursuant to Section 8.8(a), the conditions set forth in clause
(c)(ii), clause (d), clause (e) or clause (j) of EXHIBIT 1.1 hereto, for one
or more periods not to exceed ten Business Days each (but for no longer than
an aggregate of 40 Business Days after the Initial Expiration Date). Upon
prior satisfaction or waiver of all of the conditions to the Offer and
subject to the terms and conditions of this Agreement, Buyer shall accept for
payment, purchase and pay for, in accordance with the terms of the Offer, all
shares of Company Common Stock validly tendered and not withdrawn pursuant to
the Offer as soon as reasonably practicable after the Offer Conditions
Satisfaction Date and then, solely to the extent purchasable and payable
pursuant to the terms of this Agreement but not previously purchased or paid
for, again after the expiration of the Offer.
(c) As soon as reasonably practicable on the date of
commencement of the Offer, Buyer shall file or cause to be filed with the SEC a
Tender Offer Statement on Schedule TO (together with any amendments or
supplements thereto, the "SCHEDULE TO") with respect to the Offer. Buyer agrees
that the Schedule TO will comply as to form and content in all material respects
with the applicable provisions of the federal securities Laws, will 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 with they were made, not
misleading, and will contain the offer to purchase and form of the related
letter of transmittal (such Schedule TO and such documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "OFFER DOCUMENTS"). Buyer and Company each agree to
correct promptly any information provided by it for use in the Offer Documents
if and to the extent that such information shall have become false or misleading
in any material respect and to supplement the information provided by it
specifically for use in the Schedule TO or the other Offer Documents to include
any information that shall become necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Buyer agrees to take all steps necessary to cause the Offer
Documents as so corrected or supplemented to be filed with the SEC and
disseminated to holders of shares of Company Common Stock, in each case, as and
to the extent required by applicable federal securities Laws. Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents prior to their being filed with the SEC. Buyer agrees to
provided to Company and its counsel any comments or other communications that
Buyer or its counsel may receive from the SEC with respect to the Offer
Documents promptly after receipt thereof.
Section 1.2 COMPANY ACTION.
(a) Company shall cause its transfer agent promptly to
furnish Buyer with a list of Company's shareholders, mailing labels and any
available listings or computer files containing the names and addresses of all
record holders of shares of Company Common Stock and lists of securities
positions of shares of Company Common Stock held in stock depositories.
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Company shall also provide to Buyer such additional information (including
updated lists of shareholders, mailing labels and lists of securities
positions), and such other assistance, as Buyer or its agents may reasonably
request in connection with the Offer. Subject to the requirements of
applicable Law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the
transactions contemplated hereby, including the Offer, the Merger, the
Related Option and the purchase of shares of Company Common Stock
contemplated by the Offer (collectively, the "TRANSACTIONS"), Buyer and its
Affiliates and agents shall (i) hold in confidence the information contained
in any such lists, labels, listings or files, (ii) use such information only
in connection with the Offer and the Merger, and (iii) if this Agreement is
terminated, deliver to Company all copies of, and any extracts or summaries
from, such information then in their possession or control.
(b) As soon as reasonably practicable on the date of
commencement of the Offer, Company shall file with the SEC and disseminate to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities Laws, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "SCHEDULE 14D-9") that shall reflect the Company Board Approval.
Company and Buyer each agree to correct promptly any information provided by it
for use in the Schedule 14D-9 if and to the extent that such information shall
have become false or misleading in any material respect and to supplement the
information provided by it specifically for use in the Schedule 14D-9 to include
any information that shall become necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Company
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
or supplemented to be filed with the SEC and disseminated to holders of shares
of Company Common Stock, in each case, as and to the extent required by
applicable federal securities Laws. Buyer and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior to its
being filed with the SEC. Company agrees to provide to Buyer and its counsel any
comments or other communications that Company or its counsel may receive from
the SEC with respect to the Schedule 14D-9 promptly after receipt thereof. Buyer
and Company each agree to provide promptly such information necessary for the
preparation of the exhibits and schedules to the Schedule 14D-9 and the Offer
Documents which the party responsible therefor shall reasonably request.
Section 1.3 DIRECTORS.
(a) Promptly following the purchase of, and payment for, a
number of shares of Company Common Stock that satisfies the Minimum Condition,
and from time to time thereafter, Buyer shall be entitled to designate the
number of directors, rounded up to the next whole numbers, on the Board of
Directors of Company that equals the product of (i) the total number of
directors on the Board of Directors of Company (giving effect to the election of
any additional directors pursuant to this Section 1.3), and the percentage that
the voting power of the shares of Company Common Stock beneficially owned by
Buyer (including the shares of Company Common Stock paid for pursuant to the
Offer or the Related Option), upon such acceptance for payment, bears to the
total voting power of all of the shares of Company Common Stock then
outstanding, and Company shall take all action within its power to cause Buyer's
designees to be elected or appointed to the Board of Directors of Company,
including by increasing the number of directors and by seeking and accepting
resignations of incumbent
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directors. At such time, Company will also, upon request of Buyer, use
commercially reasonable efforts to cause individual directors designated by
Buyer to constitute the number of members, rounded up to the next whole
number, on (i) each committee of the Board of Directors of Company other than
any such committee of such Board of Directors established to take action
under this Agreement, and (ii) each Board of Directors (or similar body) of
each Subsidiary of Company, and each committee thereof, that represents that
same percentage as such individuals represented on the Board of Directors of
Company. Notwithstanding the foregoing, in the event that Buyer's designees
are to be appointed or elected to the Board of Directors of Company, until
the Effective Time, such Board of Directors shall have at least one director
who (x) is a director on the date of this Agreement or otherwise not an
Affiliate of Buyer, and (y) is not an officer of Company or any of its
Subsidiaries (the "CONTINUING DIRECTOR"). Company shall maintain, for so long
as the Continuing Director shall serve as a Director, a policy of directors'
and officers' liability insurance covering such Continuing Director, and the
Surviving Corporation shall thereafter purchase tail coverage lasting for six
years for such policy of directors' and officers' liability insurance.
(b) Company's obligations to appoint the designees of
Buyer to its Board of Directors shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. Company shall promptly take
all actions and shall include in the Schedule 14D-9 (or an amendment thereof or
an information statement pursuant to Rule 14f-a if Buyer has not theretofore
designated directors) all such information with respect to Company and its
officers and directors as Section 14(f) and Rule 14f-1 require in order to
fulfill its obligations under this Section 1.3. Buyer shall supply to Company,
and be solely responsible for, any information with respect to themselves and
their nominees, officers, directors and Affiliates required by Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of the designees
of Buyer pursuant to this Section 1.3 and until the Effective Time, the approval
of the Continuing Director shall be required to authorize (and such
authorization shall constitute the authorization of Company's Board of Directors
and no other action on the part of Company, including any action by any other
directors of Company, shall be required to authorize) (i) any termination of
this Agreement by Company, (ii) any amendment of this Agreement requiring action
by Company's Board of Directors, (iii) any amendment of the certificate of
incorporation or by-laws of Company or any of its Subsidiaries, (iv) any
extension of time for performance of any obligation or action hereunder or under
the Offer by Buyer, or (v) any waiver of compliance with, or enforcement of, any
of the agreements or conditions contained in this Agreement, or under the Offer
for the benefit of Company and any material transaction with Buyer or any
Affiliate thereof.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the conditions of
this Agreement (including Section 7.3), at the Effective Time, Buyer shall file
with the Secretary of State of the State of Delaware a certificate of merger
(the "CERTIFICATE OF MERGER"), and shall be merged with and into Company (the
"MERGER") and the separate existence of Buyer shall thereupon
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cease. Company shall continue as the surviving corporation in the Merger
(thereafter referred to as the "SURVIVING CORPORATION") under the laws of the
State of Delaware under the name "PLM International, Inc." Throughout this
Agreement, the term "COMPANY" shall refer to such entity prior to the Merger
and the term "SURVIVING CORPORATION" shall refer to it in its status as the
surviving corporation in the Merger.
Section 2.2 CLOSING. The closing of the Merger (the "CLOSING") shall
take place as promptly as practicable (and in any event within two business
days) after satisfaction or waiver of the conditions set forth in Article IX.
The Closing shall be held at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another place is agreed to in writing
by the parties hereto. The date on which the Closing occurs is referred to
herein as the "CLOSING DATE".
Section 2.3 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective upon the filing with the Secretary of State of the State of Delaware
of the Certificate of Merger, or at such later time as is specified therein,
with respect to the Merger pursuant to and in compliance with this Agreement and
Section 251 of the General Corporation Law of the State of Delaware (the
"DELAWARE LAW"). The Certificate of Merger shall be filed immediately following
the commencement of the Closing. When used in this Agreement, the term
"EFFECTIVE TIME" shall mean the time at which the Certificate of Merger becomes
effective in accordance with the Delaware Law.
Section 2.4 EFFECT OF THE MERGER. The Merger shall, from and after the
Effective Time, have all the effects provided by applicable Law. If, at any time
after the Effective Time, the Surviving Corporation shall consider or be advised
that any further deeds, conveyances, assignments or assurances in Law or any
other acts are necessary, desirable or proper to vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation the title to any property or
rights of Company or Buyer, by reason or as a result of the Merger, or otherwise
to carry out the purposes of this Agreement, Company and Buyer agree that the
Surviving Corporation and its proper officers and directors shall execute and
deliver all such deeds, conveyances, assignments and assurances in Law and do
all things necessary, desirable or proper to vest, perfect or confirm title to
such property or rights in the Surviving Corporation and otherwise to carry out
the purposes of this Agreement, and that the proper officers and directors of
the Surviving Corporation are fully authorized in the name of each of Company
and Buyer or otherwise to take any and all such action.
ARTICLE III
THE SURVIVING CORPORATION
Section 3.1 CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Company shall be amended at the Effective Time to be identical
with the certificate of incorporation of Buyer and shall be the certificate of
incorporation of the Surviving Corporation until thereafter duly amended.
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Section 3.2 BY-LAWS. The by-laws of Company shall be amended as of the
Effective Time to be identical with the by-laws of Buyer and shall be the
by-laws of the Surviving Corporation until thereafter duly amended.
Section 3.3 BOARD OF DIRECTORS; OFFICERS. The members of the Board of
Directors of the Surviving Corporation following the Merger shall be the
directors of Buyer immediately prior to the Effective Time, and such directors
shall continue in office until the earlier of their respective death,
resignation or removal and the time that their respective successors are duly
elected or appointed and qualified. The officers of the Surviving Corporation
following the Merger shall be the officers listed on SCHEDULE 3.3 hereto, and
such officers shall continue in office until the earlier of their respective
death, resignation or removal and the time that their respective successors are
duly elected or appointed and qualified.
ARTICLE IV
CONVERSION OF SHARES
Section 4.1 MERGER CONSIDERATION.
(a) As of the Effective Time, by virtue of the Merger and
without any action on the part of any stockholder of Company or Buyer:
(i) Each share of common stock, par value
$.01 per share, of Buyer that is issued and outstanding immediately prior to
the Effective Time shall be automatically converted without any further
action into one fully paid and non-assessable share of common stock, par
value $.01 per share, of the Surviving Corporation, and shall constitute the
only issued and outstanding capital stock of the Surviving Corporation
following the Merger.
(ii) Each share of the Company Common Stock
that is owned by Company as treasury stock shall be canceled and shall cease
to exist, and no cash, securities or other consideration shall be delivered
in exchange therefor.
(iii) Each share of Company Common Stock, other
than the shares canceled pursuant to Section 4.1(a)(ii), that is issued and
outstanding immediately prior to the Effective Time shall be converted into
the right to receive from Buyer cash in the amount of $3.46 (the "MERGER
CONSIDERATION").
(b) If, at any time during the period between the date
of this Agreement and the Effective Time, Company changes the number of
shares of Company Common Stock issued and outstanding as a result of a stock
split, reverse stock split, stock dividend, recapitalization, redenomination
of share capital or other similar transaction with an effective date or
record date, as applicable, prior to the Effective Time, the Merger
Consideration shall be appropriately adjusted.
(c) In connection with the Merger:
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(i) At the Effective Time, without any
action on the part of the holder thereof, each outstanding option to purchase
shares of Company Common Stock granted under any Company stock option plan,
including any stock option plan intended to be qualified under Section 423 of
the Code (each such option a "COMPANY STOCK OPTION" and each such plan a
"COMPANY STOCK OPTION PLAN") which remains as of such time unexercised in
whole or in part, shall be converted into the vested right to receive from
Buyer, pursuant to Section 4.3, cash in an amount equal to the excess, if
any, of the Merger Consideration over the exercise price of such Company
Stock Option (the "COMPANY STOCK OPTION CONSIDERATION").
(ii) The Board of Directors of Company (or
a duly appointed committee thereof responsible for the administration of the
Company Stock Option Plans in accordance with the terms of each such plan)
shall, prior to or as of the Effective Time, take all necessary actions,
pursuant to and in accordance with the terms of the Company Stock Option
Plans and the instruments evidencing the Company Stock Options, to provide
for the conversion of the Company Stock Options in accordance with
subparagraph (i) above.
Section 4.2 STOCKHOLDERS' RIGHTS AT THE EFFECTIVE TIME. On and after
the Effective Time, the certificates that immediately prior to the Effective
Time represented shares of Company Common Stock (the "CERTIFICATES") shall cease
to represent any rights with respect to Company Common Stock and shall only
represent the right to receive the Merger Consideration.
Section 4.3 SURRENDER AND EXCHANGE OF SHARE CERTIFICATES.
(a) On or before the Closing Date, Buyer shall provide to a
paying agent designated by it (the "PAYING AGENT") sufficient cash to allow the
Merger Consideration and the Company Stock Option Consideration to be paid to
the holders of each share of Company Common Stock and each Company Stock Option
then entitled to be so paid.
(b) On the Closing Date, Buyer shall instruct the Paying Agent
to mail to each Person who was a holder of record of shares of Company Common
Stock or to each holder of Company Stock Options (pursuant to a list to be
provided by Company) immediately prior to the Effective Time (i) a letter of
transmittal, (ii) instructions for use in effecting the surrender of the
Certificates nominally representing Company Common Stock in exchange for the
Merger Consideration, and (iii) instructions for use in effecting the surrender
of the instruments nominally evidencing the Company Stock Options in exchange
for the Company Stock Option Consideration.
(c) After the Closing, each holder of a Certificate or of a
Company Stock Option shall surrender and deliver such Certificate or Company
Stock Option to the Paying Agent together with a duly completed and executed
transmittal letter. Upon such surrender and delivery, the holder shall receive
the Merger Consideration or the Company Stock Option Consideration, as
applicable. Until so surrendered and exchanged, each Certificate formerly
representing an outstanding share of Company Stock Common Stock shall, after the
Effective Time, be deemed for all purposes to evidence only the right to receive
the Merger Consideration as provided in Section 4.1(a)(iii), and each Company
Stock Option shall, after the Effective Time, be deemed for all purposes to
evidence only the right to receive the Company Stock Option Consideration as
provided in Section 4.1(c)(i).
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(d) At the Effective Time, the stock transfer books of Company
shall be closed and no transfer of shares of Company Common Stock shall be
recorded thereafter, other than transfers of shares of Company Common Stock that
have occurred prior to the Effective Time. In the event that, after the
Effective Time, Certificates are presented for transfer to the transfer agent
for Company or the Surviving Corporation, they shall be delivered to the Paying
Agent and exchanged for the Merger Consideration as provided for in this Section
4.3.
(e) Any Merger Consideration that remains undistributed to the
holders of Company Common Stock or Company Stock Options as of the Effective
Time after twelve months have elapsed following the Effective Time shall be
delivered to the Surviving Corporation by the Paying Agent, upon demand, and any
such holders who have not previously complied with this Section 4.3 shall
thereafter look only to the Surviving Corporation for payment of their claim for
the Merger Consideration or Option Consideration.
(f) Neither the Paying Agent, nor either of Company or Buyer
shall be liable to any holder of shares of Company Common Stock with respect to
any Merger Consideration or Company Stock Option Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar Law.
(g) In the event any Certificates or Company Stock Options
shall have been lost, stolen or destroyed, the Paying Agent shall deliver the
Merger Consideration or Company Stock Option Consideration to which the holder
thereof is entitled in exchange for such lost, stolen or destroyed Certificates
or Company Stock Options only upon the making of an affidavit of that fact by
the record holder thereof and the delivery of such bond as the Paying Agent may
reasonably require.
(h) No transfer taxes shall be payable by any holder of
Company Common Stock in respect of the payment of the Merger Consideration under
this Section 4.3, except that if any Merger Consideration is to be paid to any
Person other than the record holder of such Company Common Stock, it shall be a
condition of such payment that the Person requesting such payment shall first
pay to the Surviving Corporation any transfer taxes payable by reason thereof,
or of any prior transfer of such surrendered Certificate, or establish to the
satisfaction of the Surviving Corporation that such taxes have been paid or are
not payable.
Section 4.4 NO FURTHER RIGHTS. From and after the Effective Time,
holders of Certificates theretofore evidencing shares of Company Common Stock
shall cease to have any rights as stockholders of Company, except as provided
herein or by Law.
Section 4.5 DISSENTING SHARES. Notwithstanding Section 4.1, shares of
Company Common Stock 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
the Delaware Law, shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect, withdraws or otherwise loses
its right to appraisal. If, after the Effective Time, such holder fails to
perfect, withdraws or loses its right to appraisal, such shares of Company
Common Stock shall be treated as if they had been converted as of the Effective
Time into a right to receive the Merger Consideration.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Buyer that, except (other than with
respect to any representation or warranty relating to the accuracy or
completeness of any Exhibit hereto) as disclosed in the Company Disclosure
Schedule which has been delivered to Buyer prior to the execution of this
Agreement (the "COMPANY DISCLOSURE SCHEDULE"):
Section 5.1 ORGANIZATION AND QUALIFICATION. Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Each of Company's Affiliates (a list of which is set forth in
EXHIBIT 5.1 hereto together with the jurisdiction of its organization, each
state in which it is qualified or otherwise licensed to do business and the
identity of the holder of its capital stock or other equity interests (excluding
capital stock and other equity interests that are publicly traded)) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and, if applicable, in good standing under the laws of the
jurisdiction in which it was formed. Each of Company and its Affiliates has the
requisite corporate power and authority to carry on its business as it is now
being conducted and is duly qualified or licensed to do business, and, if
applicable, is in good standing, in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified, licensed or in good standing, or to have such power and authority,
when taken together with all other such failures would not have a Company
Material Adverse Effect. Company has heretofore made available to Buyer a
complete and correct copy of the certificate of incorporation, by-laws or other
governing documents, each as amended to the date hereof, of Company and each of
its Affiliates. In each case where one of Company's Subsidiaries is a manager or
general partner of one of Company's Affiliates, the Company entity that is the
manager or general partner (a) has observed all corporate formalities, (b) has
not co-mingled any of its funds with those of Company's Affiliates (excluding
its Subsidiaries), and (c) has reasonably sufficient capital to conduct its
business as presently conducted. Company is not a manager or general partner of
any Person.
Section 5.2 CAPITALIZATION.
(a) The authorized capital stock of Company consists of
50,000,000 shares of Company Common Stock and 10,000,000 shares of preferred
stock, par value $.01 per share (the "COMPANY PREFERRED STOCK"). As of September
30, 2000, (a) 7,448,510 shares of Company Common Stock were issued and
outstanding, all of which were validly issued, fully paid and non-assessable,
(b) an aggregate of 774,216 shares of Company Common Stock were reserved for
issuance under stock options to be issued pursuant to Company Stock Option
Plans, and (c) no shares of Company Preferred Stock were issued or outstanding.
As of September 30, 2000, there were outstanding Company Stock Options to
purchase 601,000 shares of Company Common Stock, a list of which Company Stock
Options, together with their respective exercise prices, is set forth on EXHIBIT
5.2 hereto. Between September 30, 2000 and December 14, 2000, Company Stock
Options were exercised for 106,000 shares of Company Common Stock, as a result
of which, as of December 14, 2000, 7,554,510 shares of Company Common Stock were
issued and outstanding, all of which were validly issued, fully paid and
non-assessable. Except
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as set forth on the Company Disclosure Schedule, no Company Stock Options
will be subject to accelerated vesting or exercisability in connection with
the execution and delivery of this Agreement or the Merger. No shares of
capital stock of Company or any of its Subsidiaries have been issued between
September 30, 2000 and the date hereof other than pursuant to the exercise or
conversion of any Company Stock Options. Since September 30, 2000 through the
date hereof, no options to purchase shares of Company Common Stock have been
granted.
(b) Except as set forth in this Section 5.2, there are no
preemptive or other outstanding rights, options, warrants, conversion rights
(including pursuant to convertible securities), stock appreciation rights,
redemption rights, repurchase rights, employee stock purchase rights or plans,
agreements, arrangements, calls, commitments or rights of any kind relating to
the issued or unissued capital stock of Company or any of its Subsidiaries or
obligating Company or any of its Subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, Company or any of its
Subsidiaries. All shares of capital stock of Company and its Subsidiaries
subject to issuance pursuant to Company Stock Options or the Related Option,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and, if applicable, non-assessable. Without limiting the generality of the
foregoing, neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any of its Affiliates (excluding its Subsidiaries) has adopted a
shareholder rights plan or similar plan or arrangement. As of the date of this
Agreement, there are no outstanding contractual obligations of Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of, or other equity interests in, Company or any of its
Subsidiaries or to provide material funds to, or make any material investment
(in the form of a loan, capital contribution or otherwise) in, any Person.
Section 5.3 AUTHORITY RELATIVE TO THIS AGREEMENT AND THE TRANSACTIONS.
Company has all necessary power and authority to execute and deliver this
Agreement and the Related Agreement, to perform its obligations hereunder and
thereunder and to consummate the Transactions. The execution and delivery of
this Agreement and the Related Agreement by Company, and the consummation by
Company of the Transactions, have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of
Company are necessary to authorize the execution and delivery of this Agreement
or the Related Agreement or to consummate the Transactions other than, with
respect to the Merger, the adoption of this Agreement by the affirmative vote of
the holders of a majority of the outstanding shares of Company Common Stock
entitled to be voted at the Special Meeting and the filing and recordation of
appropriate merger documents as required by the Delaware Law. This Agreement and
the Related Agreement have been duly and validly executed and delivered by
Company and, assuming the due authorization, execution and delivery by the other
parties hereto and thereto, constitutes a legal, valid and binding obligation of
Company, enforceable against Company in accordance with its terms.
Section 5.4 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Company does not, and the performance of this Agreement and consummation of the
Transactions by Company will not (i) conflict with or violate the certificate of
incorporation, by-laws or other governing documents of Company or any of its
Affiliates, (ii) assuming the consents, approvals, authorizations and
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waivers specified in Section 5.4(b) have been received and the waiting
periods referred to therein have expired, and any condition precedent to such
consent, approval, authorization or waiver has been satisfied, conflict with
or violate any Law applicable to Company or any of its Affiliates or by which
any property or asset of Company or any of its Affiliates is bound or
affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien or other encumbrance on
any property or asset of Company or any of its Affiliates pursuant to, any
contract, agreement, note, bond, mortgage, indenture, credit agreement,
lease, license, permit, franchise or other instrument or obligation to which
Company or any of its Affiliates is a party or by which Company or any of its
Affiliates, or any property or asset of Company or any of its Affiliates, is
bound or affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences of the type
referred to above which would not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by
Company does not, and the performance of this Agreement by Company will not,
require any consent, approval, authorization, waiver or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic,
foreign or supranational (a "GOVERNMENTAL ENTITY"), except for applicable
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), the Securities Act of 1933, as amended (the "SECURITIES ACT"), state
securities or "blue sky" laws ("BLUE SKY LAWS"), the pre-merger notification
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"), such filings, approvals, consents and waivers as may be
required under other Merger Control Laws, filing and recordation of the
Certificate of Merger as required by the Delaware Law, and filings required by
the rules of the American Stock Exchange or any other stock exchange or market,
except where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not have a Company
Material Adverse Effect.
Section 5.5 REPORTS AND FINANCIAL STATEMENTS; LIABILITIES.
(a) Company and each of its Affiliates that is so required
have filed with the SEC all forms, reports, schedules, registration statements,
definitive proxy statements, information statements and other filings (the "SEC
REPORTS") required to be filed by them with the SEC since January 1, 1998. As of
their respective dates, each of the SEC Reports complied in all material
respects with the requirements of the Exchange Act and the Securities Act, as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such SEC Reports. As of their respective dates (subject to any amendments
filed after such dates but prior to the date hereof) and as of the date any
information from such SEC Reports has been incorporated by reference, 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 therein, in light of the circumstances under which they were made,
not misleading. Company and each of its Affiliates that is so required have
filed all material contracts and agreements and other documents or instruments
required to be filed as exhibits to the SEC Reports.
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(b) The consolidated balance sheets of Company as of
December 31, 1999, 1998 and 1997 and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the three-year period ended December 31, 1999 (including the related notes and
schedules thereto) contained in Company's Form 10-K for the year ended December
31, 1999 (the "COMPANY FINANCIAL STATEMENTS") present fairly, in all material
respects, the consolidated financial position and the consolidated results of
operations, retained earnings and cash flows of 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 consistent basis during the periods involved except as otherwise noted
therein, including in the related notes.
(c) The consolidated balance sheets and the related
statements of operations and cash flows (including, in each case, the related
notes and schedules thereto) of Company contained in its Form 10-Q for the
quarterly period ended September 30, 2000 (the "COMPANY QUARTERLY FINANCIAL
STATEMENTS") have been prepared in accordance with the requirements for interim
financial statements contained in Regulation S-X, which do not require all the
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with GAAP. The
Company Quarterly Financial Statements reflect all adjustments necessary to
present fairly in accordance with GAAP (except as indicated and for normal
year-end audit adjustments, which will not be material), in all material
respects, the consolidated financial position, results of operations and cash
flows of Company and its consolidated Subsidiaries for all periods presented
therein.
(d) As of December 8, 2000, except for those liabilities
that are set forth in EXHIBIT 5.5 hereto and SCHEDULE 5.5 hereto (which Exhibit
and Schedule shall specify the party to whom such liabilities accrue), and
except for liabilities that do not exceed $10,000 individually or $100,000 in
the aggregate, neither Company nor any of its Subsidiaries has outstanding any
indebtedness, obligations or liabilities of any nature whatsoever (whether
absolute, accrued, contingent or otherwise, and whether due or to become due or
asserted or unasserted), and, to Company's knowledge, there is no basis for the
assertion of any claim or liability of any nature whatsoever against Company or
any of its Subsidiaries.
Section 5.6 LITIGATION. Except as fully disclosed in the SEC Reports
and except for the ▇▇▇▇ Action and the ▇▇▇▇▇▇▇ Action, there is no civil,
criminal or administrative suit, action or proceeding pending or, to the
knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or, to the knowledge of Company, any of its other Affiliates that
is reasonably expected to have a Company Material Adverse Effect, nor is there
any judgment, decree, injunction or order of any Governmental Entity or
arbitrator outstanding against Company, any of its Subsidiaries or, to the
knowledge of Company, any of its other Affiliates having, or which is reasonably
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
Section 5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as fully disclosed in the SEC Reports, in the
Company Financial Statements, in the Company Quarterly Financial Statements or
as permitted by Section 7.1(a) for events after the date hereof, since September
30, 2000, Company and each of its Subsidiaries has
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conducted its business only in the ordinary course and in a manner consistent
with past practice and since such date there has not been (i) any Company
Material Adverse Effect, (ii) other than the declaration of a distribution in
partial liquidation paid on November 3, 2000, any declaration, setting aside
or payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of Company's or its Subsidiaries' capital stock
or other equity interests, (iii) except for exercises of Company Stock
Options, any redemption, purchase or other acquisition of any of Company's or
any of its Subsidiaries' capital stock or other equity interests, (iv) any
split, combination or reclassification of any of Company's or its
Subsidiaries' capital stock or other equity interests, or, except with
respect to Company Stock Options, any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in substitution
for shares of Company's or its Subsidiaries' capital stock or other equity
interests, (v) any granting by Company or any of its Subsidiaries to any
officer of Company or any of its Subsidiaries of any increase in compensation
or any rights with respect to compensation in the event of a "change in
control" (however defined) of Company, except in the ordinary course of
business consistent with past practice or as required under employment
agreements in effect as of September 30, 2000, (vi) any granting by Company
or any of its Subsidiaries to any officer or any group or class of employees
of Company or any of its Subsidiaries of any increase in severance or
termination pay, except as required under employment, severance or
termination agreements or plans in effect as of September 30, 2000 or as
previously disclosed to Buyer, (vii) any entry by Company or any of its
Subsidiaries into any employment, severance or termination agreement with any
officer of Company or any of its Affiliates, or any increase in benefits
available under or establishment of any Benefit Plan except in the ordinary
course of business consistent with past practice or as previously disclosed
to Buyer, or (viii) any material change in accounting methods, principles or
practices by Company, except insofar as may have been required by a change in
GAAP.
(b) Except as fully disclosed in the SEC Reports of
Company's Affiliates (excluding its Subsidiaries) or as permitted by Section 7.2
for events after the date hereof, since September 30, 2000, each of such
Affiliates has conducted its business only in the ordinary course and in a
manner consistent with past practice and since such date there has not been any
circumstance, event or occurrence or series of circumstances, events or
occurrences which individually or in the aggregate with all other circumstances,
events or occurrences would be reasonably likely to have a material adverse
effect on the business, assets, operations, financial condition, revenues or
results of operations of any of such Affiliates, other than any material adverse
effect caused by conditions resulting from (i) the announcement of the Offer or
the pendency of the consummation of this Agreement, (ii) the taking of any
action contemplated by this Agreement, or (iii) the cessation of the employment
with Company, for whatever reason, of any or all of ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇; PROVIDED, HOWEVER, that for purposes of determining whether such a
material adverse effect has occurred, the parties will not consider (1) the ▇▇▇▇
Action or the results or effects thereof (but only if Company abides by the
ruling of any court with jurisdiction over the ▇▇▇▇ Action, or, without the
consent of Buyer, does not modify the settlement of the ▇▇▇▇ Action as currently
proposed), or (2) any claim brought or that could be brought by Marubeni America
Corporation ("MARUBENI") or its Affiliates arising out of or relating to any
breach of, or claim for indemnification under, the Asset Purchase Agreement,
dated May 24, 2000, as amended, among Marubeni, PLM Financial Services, Inc.,
PLM Equipment Growth Fund, PLM Equipment Growth Fund II, PLM Equipment Growth
Fund III, PLM Equipment Growth Fund IV, PLM Equipment Growth Fund V, PLM
Equipment Growth
-▇▇-
▇▇▇▇ ▇▇, ▇▇▇ Equipment Growth Fund VII and Professional Lease Management
Income Fund I, LLC, unless Company has knowledge as of the date hereof of the
circumstance, event or occurrence or series of circumstances, events or
occurrences giving rise to such claim.
Section 5.8 EMPLOYEE BENEFIT PLANS.
(a) EXHIBIT 5.8 hereto sets forth a complete and correct
list of all existing (i) "employee benefit plans", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
(ii) any other material pension plans or employee benefit arrangements or
payroll practices (including severance pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other
incentive compensation, stock option or stock purchase arrangements or policies)
maintained, or contributed to, by Company, its Subsidiaries or any trade or
business (whether or not incorporated) which is treated with Company or its
Subsidiaries as a single employer under Section 414(b), (c), (m) or (o) of the
Code (an "ERISA AFFILIATE") with respect to current or former employees of
Company, its Subsidiaries or their ERISA Affiliates (all such plans,
arrangements or practices that currently exist or have been in existence at any
time during the last three years are hereinafter referred to as the "BENEFIT
PLANS"). Each Benefit Plan is in writing and Company has previously made
available to Buyer a true and complete copy of each existing Benefit Plan
document, including all amendments thereto, and a true and complete copy of each
material document, if any, prepared in connection with each such Benefit Plan,
including a copy of (A) each trust or other funding arrangement, (B) each
summary plan description and summary of material modifications, (C) the most
recently filed Form 5500, including all attachments thereto, (D) the most
recently received IRS determination letter for each such Benefit Plan, and (E)
the most recently prepared actuarial report and financial statement in
connection with each such Benefit Plan. Neither Company nor any of its
Subsidiaries has any express or implied commitment to (X) create or incur
material liability with respect to or cause to exist any other employee benefit
plan, program or arrangement, (Y) enter into any material contract or agreement
to provide compensation or benefits to any individual, or (Z) materially modify,
change or terminate any Benefit Plan, other than with respect to a modification,
change or termination required by ERISA or the Code or a merger of a previously
acquired 401(k) or welfare plan.
(b) No "accumulated funding deficit" as defined in Section
412 of the Code exists with respect to any Benefit Plan, whether or not waived.
No "reportable event" within the meaning of Section 4043 of ERISA, and no event
described in Section 4062 or 4063 of ERISA has occurred with respect to any
Benefit Plan. Neither Company nor any ERISA Affiliate of Company has (i) engaged
in, or is a successor corporation or parent corporation to an entity that has
engaged in, a transaction described in sections 4069 or 4212(c) of ERISA, or
(ii) incurred or reasonably expects to incur (A) any material liability under
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA, or (B) any material liability under Section 4971 of the Code that in
either case could become a liability of the Surviving Corporation or Buyer or
any of its Affiliates after the Effective Time. As of September 30, 2000, there
was no material unfunded liability under any of the Benefit Plans, computed
using reasonable actuarial assumptions and determined as if all benefits under
such Benefit Plans were vested and payable
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as of such date. No event has occurred since September 30, 2000 which would
cause Company to believe that as of the date of this Agreement there is any
such material unfunded liability.
(c) Each of the Benefit Plans intended to qualify under
Section 401(a) of the Code has received a favorable determination letter (or
opinion letter in the case of a prototype plan) from the IRS that such Benefit
Plan is so qualified or is within the remedial amendment period for applying for
such a determination letter, and nothing has occurred with respect to the
operation of any such Benefit Plan which, either individually or in the
aggregate, would cause the loss of such qualification or the imposition of any
material liability, penalty or tax under ERISA or the Code.
(d) There has been no non-exempt prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) with
respect to any Benefit Plan. Company, its Subsidiaries and their ERISA
Affiliates are not currently liable for any excise tax or penalty in connection
with any Benefit Plan arising under the Code or ERISA, including but not limited
to Section 4971, 4972, 4975, 4979, 4980, 4980B or 4980D of the Code or Section
502 of ERISA, and to the knowledge of Company no fact or event exists which
could give rise to any liability except, in each case, for any such liability
which would not have a Company Material Adverse Effect.
(e) All contributions and premiums required by Law or by
the terms of any Benefit Plan or any agreement relating thereto have been timely
made (without regard to any waivers granted with respect thereto) in all
material respects.
(f) The liabilities of each Benefit Plan that has been
terminated or otherwise wound up have been fully discharged in material
compliance with applicable Law.
(g) There has been no violation of ERISA with respect to
the filing of applicable returns, reports, documents and notices regarding any
of the Benefit Plans with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such notices or documents to the participants or
beneficiaries of the Benefit Plans which, either individually or in the
aggregate, could result in a material liability to Company or any of its
Subsidiaries.
(h) To the knowledge of Company, there are no pending
legal proceedings which have been asserted or instituted against any of the
Benefit Plans or their assets, Company, any of its Subsidiaries, any ERISA
Affiliate, or the plan administrator or any fiduciary of any of the Benefit
Plans with respect to the operation of such plans (other than routine,
uncontested benefits claims).
(i) Each of the Benefit Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable
Laws. All amendments and actions required to bring each of the Benefit Plans
into conformity in all material respects with all of the applicable provisions
of ERISA and other applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by Law to be made or taken
until a date after the Closing Date.
(j) Company, its Subsidiaries and their ERISA Affiliates
do not maintain and have no liability under a welfare benefit plan providing
continuing benefits after the termination
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of employment (other than as required by Section 4980B of the Code and at the
former employee's own expense). Company, its Subsidiaries and each of their
ERISA Affiliates have complied in all material respects with the notice and
continuation requirements of Section 4980B of the Code and the regulations
thereunder. Company, its Subsidiaries and their ERISA Affiliates do not
maintain, sponsor or contribute to, and to the knowledge of Company have
never maintained, sponsored or contributed to, any benefit plan subject to
Title IV of ERISA, including but not limited to a multiple employer plan
subject to Sections 4063 and 4064 of ERISA or a multiemployer plan as defined
in Section 4001(a)(3) of ERISA, and no fact or event exists which could give
rise to any liability under Title IV of ERISA.
(k) Neither the execution and delivery of this Agreement
nor the consummation of the Transactions will (i) result in any material payment
(including severance, unemployment compensation or golden parachute) becoming
due to any director, employee or independent contractor of Company or its
Affiliates, (ii) materially increase any benefits otherwise payable under any
Benefit Plan, or (iii) result in the acceleration of the time of payment or
vesting of any such benefits to any material extent other than vesting of
Company Stock Options in accordance with their terms or this Agreement. No
payments or benefits under any Benefit Plan or other agreement of Company or its
Subsidiaries will be considered an excess parachute payment of Section 280G of
the Code or result in a deduction limitation under Section 162(m) of the Code.
(l) To the knowledge of Company, all individuals providing
services to Company, its Subsidiaries and their ERISA Affiliates have been
properly characterized and treated as being either an employee or an independent
contractor of such Person.
Section 5.9 LABOR RELATIONS. There are no labor controversies pending
or threatened with respect to Company or its Subsidiaries, and neither Company
nor any of its U.S. Subsidiaries is a party to any collective bargaining
agreement with any labor union or other representative of employees. No non-U.S.
Subsidiary of Company is a party to any collective bargaining agreement with any
labor union or other representative of employees or any works' council or
similar entity under applicable Laws. To the knowledge of Company, there is no
pending or threatened union organization activity by or among any of its or its
Subsidiaries' employees.
Section 5.10 TAXES. Company, each of its Subsidiaries and, to the
knowledge of Company, each of its Affiliates have duly filed all material
federal, state, local and foreign income, franchise, excise, real and personal
property and other Tax returns and reports (including, but not limited to, those
filed on a consolidated, combined or unitary basis) required to have been filed
by them prior to the date hereof. All of the foregoing returns and reports of
Company, its Subsidiaries and, to the knowledge of Company, its other Affiliates
are true and correct in all material respects, and Company, its Subsidiaries
and, to the knowledge of Company, its other Affiliates have paid or, prior to
the Closing Date will pay, all Taxes owed (whether or not shown as being due on
such returns or reports). Company, its Subsidiaries and, to the knowledge of
Company, its other Affiliates have paid and will pay all installments of
estimated taxes due on or before the Closing Date. Company and its Subsidiaries
and, to the knowledge of Company, its other Affiliates have paid or made
adequate provision in accordance with GAAP in the SEC Reports, the Company
Financial Statements and the Company Quarterly
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Financial Statements for all Taxes payable in respect of all periods ending
on or prior to the date of this Agreement and will have paid or provided for
all Taxes payable in respect of all periods covered thereby. The sum of all
income Taxes payable by Company and its Subsidiaries in respect of all
periods ending on or prior to December 31, 2000 will not be greater than
$9,600,000 unless the taxable income of Company and its Subsidiaries in
respect of December 2000 exceeds $200,000, in which case such $9,600,000 will
be increased by 39% of the amount by which such December 2000 taxable income
exceeds $200,000. As of the date hereof, all deficiencies proposed as a
result of any audits have been paid or settled. Company, each of its
Subsidiaries and, to the knowledge of Company, each of its Affiliates has
paid, collected or withheld, or caused to be paid, collected or withheld, all
amounts of Tax required to be paid, collected or withheld, other than such
Taxes for which adequate reserves in the SEC Reports, the Company Financial
Statements and the Company Quarterly Financial Statements have been
established or which are being contested in good faith, except as would not
have a Company Material Adverse Effect. Neither Company nor any of its
Subsidiaries has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency. There are no claims, Tax audits or assessments pending against
Company, any of its Subsidiaries or, to the knowledge of Company, any of its
Affiliates, and neither Company nor any of its Subsidiaries nor, to the
knowledge of Company, any of its other Affiliates has been notified (formally
or informally) in writing of any proposed Tax claims or assessments against
any of them. There are no Liens or other encumbrances on any of the assets of
Company or its Subsidiaries that arose out of the failure to pay any Taxes.
Neither Company nor any of its Subsidiaries nor, to the knowledge of Company,
any of its other Affiliates (i) has been a member of a consolidated group
filing a consolidated federal income Tax return (other than a consolidated
group of which Company is the common parent), or (ii) has any liability for
Taxes of any other Person (other than Company and its Subsidiaries) arising
from the application of Treasury Regulations section 1.1502-6 promulgated
under the Code or any analogous Law, as a transferee or successor by contract
or otherwise. No consent under Section 341(f) of the Code has been filed with
respect to Company, any of its Subsidiaries or, to the knowledge of Company,
any of its Affiliates. Except as set forth in the Company Disclosure
Schedule, there is no contract, agreement, plan or arrangement covering any
Person that, individually or collectively, would give rise to the payment of
any amount that would not be deductible by Buyer, Company or any of the
Affiliates of Company by reason of Section 280G of the Code.
Section 5.11 COMPLIANCE WITH APPLICABLE LAWS. Company, its Subsidiaries
and, to the knowledge of Company, its other Affiliates hold all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities ("PERMITS") necessary for them to own, lease or operate their
properties and assets and to carry on their businesses substantially as now
conducted or presently intended to be conducted, except for such permits,
licenses, variances, exemptions, orders and approvals the failure of which to
hold would not have a Company Material Adverse Effect. The Permits are valid and
in full force and effect except as would not have a Company Material Adverse
Effect. Except as set forth in the SEC Reports filed prior to the date hereof,
the businesses of each of Company, its Subsidiaries and, to the knowledge of
Company, its other Affiliates have not been, and are not being, conducted in
violation of any Permit or any Law, arbitration award, agency requirement,
license or permit of any Governmental Entity (a "GOVERNMENTAL REGULATION"),
except for violations or possible violations that, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse Effect
or prevent or materially burden or materially impair the ability of
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Company to consummate the Transactions. Except as set forth in the SEC
Reports filed prior to the date hereof, no material investigation or review
by any Governmental Entity with respect to Company, any of its Subsidiaries
or, to the knowledge of Company, any of its other Affiliates is pending or,
to Company's knowledge, threatened, nor has any Governmental Entity indicated
an intention to conduct any such investigation or review. No material change
is required in Company's, any of its Subsidiaries' or, to the knowledge of
Company, any of its other Affiliates' operations, properties or procedures to
comply with any Permit or Governmental Regulation, and Company has not
received any notice or communication of any material noncompliance with any
Permit or Governmental Regulation that has not been cured as of the date
hereof, except as would not have a Company Material Adverse Effect.
Section 5.12 VOTING REQUIREMENTS. In the event Section 253 of the
Delaware Law is inapplicable and not available to effectuate the Merger, the
affirmative vote of the holders of a majority of the Company Common Stock
outstanding as of the record date for the Special Meeting is the only vote of
the holders of any class or series of Company's capital stock or other
securities necessary to adopt this Agreement and to approve the Merger on behalf
of Company.
Section 5.13 ASSETS OF COMPANY AND ITS SUBSIDIARIES. Company and each
of its Subsidiaries has good and valid title to all of its material properties
and assets, free and clear of all Liens and other encumbrances, except liens for
Taxes not yet due and payable and for which adequate reserves are reflected on
the balance sheets contained in the Company Quarterly Financial Statements. All
leases, easements, licenses, rights of way, and other rights pursuant to which
Company or any of its Subsidiaries lease from others or otherwise have the right
to use material real or personal property, individually or in the aggregate
material to the business of Company ("PROPERTY RIGHTS"), are valid and binding
and are in full force and effect and enforceable against Company or its
Subsidiaries and the other parties thereto, as applicable, in accordance with
their respective terms and there is not, with respect to Company or its
Subsidiaries or, to Company's knowledge, with respect to the other parties
thereto, any existing default or event of default (or event which with notice or
lapse of time, or both, would constitute a default or event of default) under
any such Property Right, except where the lack of such validity and
effectiveness or the existence of such default or event of default does not and
will not constitute a Company Material Adverse Effect. Company has made
available to Buyer true and accurate copies of the documents creating or
reflecting the Property Rights. No consent of any Person is needed in order for
each Property Right to continue in full force and effect in accordance with its
terms without penalty, acceleration or rights of early termination by reason of
the consummation of the Transactions, except for consents the absence of which
would not have a Company Material Adverse Effect. The tangible and intangible
assets owned or leased by Company and its Subsidiaries are all of the assets
used in their respective businesses or necessary for them to conduct their
respective businesses as presently conducted. All material items of tangible
property used by Company or its Subsidiaries in their businesses are in operable
condition and adequate for the purposes used (normal wear and tear excepted).
Section 5.14 MATERIAL CONTRACTS.
(a) As of December 8, 2000, neither Company nor any of its
Subsidiaries is a party or is subject to any contract, note, bond, mortgage,
indenture, credit agreement, lease, license, agreement, understanding,
instrument, bid or proposal (excluding any contract or
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arrangement that is or is associated with a Benefit Plan), or any amendment
or modification thereto (collectively, "CONTRACTS"), that (i) is required to
be described in or filed as an exhibit to any SEC Report that is not so
described in or filed as required by the Securities Act or the Exchange Act,
as the case may be, (ii) was made other than in the ordinary course of
business or the performance of which will extend over a period greater than
30 days, (iii) obligates Company or any of its Subsidiaries to sell or
deliver any product or service at a price that does not cover the cost
(including labor, materials and production overhead) plus the customary
profit margin associated with such product or service, (iv) constitutes an
employment, consulting, non-competition, severance, golden parachute, change
in control or indemnification agreement, (v) constitutes an advertising,
public relations, franchise, distributorship or sales agency agreement, (vi)
involves a commitment or payment in excess of $10,000 for the future purchase
of services or equipment, (vii) is among any stockholders (or other
equityholders) of Company or any of its Subsidiaries or grants any right of
first refusal or is for a partnership or joint venture or the acquisition,
sale or lease of any assets or capital stock (or other equity interests) of
Company or any of its Subsidiaries or involves a sharing of profits or
constitutes a shareholder rights or similar plan, (viii) constitutes a
mortgage, pledge, conditional sales contract, security agreement, factoring
agreement or other similar agreement with respect to any real or tangible
person property of Company or any of its Subsidiaries, (ix) constitutes a
loan agreement, credit agreement, promissory note, guarantee, subordination
agreement, letter of credit or any similar type of agreement, (x) is between
Company or any of its Subsidiaries and any Governmental Entity, (xi) relates
to the discharge, storage or removal of Hazardous Materials, (xii) involves a
retainer with any attorneys, accountants, actuaries, appraisers, investment
bankers or other professional advisors, or (xiii) commits Company or any of
its Subsidiaries to enter into any of the foregoing agreements.
(b) As of December 8, 2000, none of Company's Affiliates
is a party or is subject to any Contract that (i) is required to be described in
or filed as an exhibit to any SEC Report that is not so described in or filed as
required by the Securities Act or the Exchange Act, as the case may be, (ii)
constitutes an employment, consulting, non-competition, severance, golden
parachute, change in control or indemnification agreement, or (iii) commits any
of Company's Affiliates to enter into any of the foregoing agreements.
(c) A list of all Contracts described in Section 5.14(a)
or 5.14(b) to which Company or any of its Affiliates is a party, or by which any
of them is bound, is set forth in EXHIBIT 5.14 hereto. All such Contracts to
which Company or any of its Affiliates is a party, or by which any of them is
bound, are valid and binding and are in full force and effect and enforceable
against Company, its Affiliates and, to the knowledge of Company, the other
party or parties thereto in accordance with their respective terms, and no
consent of any Person is needed in order for each such contract to continue in
full force and effect in accordance with its terms without penalty, acceleration
or rights of early termination by reason of the consummation of the
Transactions, except for any failure to be in full force and effect or failure
to obtain a consent that would not, in the aggregate with all other such
failures, have a Company Material Adverse Effect. No current or previous party
to any such Contract to which Company or any of its Affiliates is a party or by
which Company or any of its Affiliates is bound has given any notice of, or made
any claim with respect to, any breach or default thereunder. Neither Company nor
any of its Affiliates is in violation or breach of or default in any material
respect under any such Contract to which it is a party or by which it is bound,
nor, to Company's knowledge, is any
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other party to any such Contract in violation or breach of or default in any
material respect under any such Contract.
Section 5.15 INTELLECTUAL PROPERTY.
(a) Company and its Subsidiaries, directly or indirectly,
own, license or otherwise have legally enforceable rights to use, or can acquire
on reasonable terms and without material expense, all patents, trademarks, trade
names, service marks, copyrights and any applications therefor, technology,
know-how, computer software and applications and tangible or intangible
proprietary information or materials, that are material to and used in the
business of Company and its Subsidiaries as presently conducted ("INTELLECTUAL
PROPERTY RIGHTS"). A list of all of the Intellectual Property Rights is set
forth in EXHIBIT 5.15 hereto.
(b) In the case of Intellectual Property Rights owned by
Company or one of its Subsidiaries, either Company or one of its Subsidiaries
owns such Intellectual Property Rights free and clear of any material Liens and
other encumbrances. Company or one of its Subsidiaries has an adequate right to
the use of the Intellectual Property Rights or the material covered thereby in
connection with the services or products in respect of which such Intellectual
Property Rights are being used. The manufacture, sale, licensing or use of any
of the services or products of Company or any of its Subsidiaries as now
manufactured, sold, licensed or used or proposed for manufacture, sale,
licensing or use by Company or any of its Subsidiaries in the ordinary course of
Company's business as presently conducted does not infringe on any copyright,
patent, trade ▇▇▇▇, service ▇▇▇▇ or trade secret of a third party where such
infringement would have a Company Material Adverse Effect. The use by Company or
any of its Subsidiaries of any trademarks, service marks, trade names, trade
secrets, copyrights, patents, technology or know-how and applications used in
the business of Company and any of its Subsidiaries as presently conducted does
not infringe on any other Person's trademarks, service marks, trade names, trade
secrets, copyrights, patents, technology or know-how and applications where such
infringement would have a Company Material Adverse Effect. Except as set forth
in the Company Disclosure Schedule, Company has not received any information
challenging the ownership by Company or any of its Subsidiaries or the validity
of any of the Intellectual Property Rights. All registered patents, trademarks,
service marks and copyrights held by Company and its Subsidiaries are valid and
subsisting, except to the extent any failure to be valid and subsisting does not
constitute a Company Material Adverse Effect. To the knowledge of Company, there
is no material unauthorized use, infringement or misappropriation of any of the
Intellectual Property Rights by any third party, including any employee or
former employee of Company or any of its Subsidiaries. No Company Intellectual
Property Right is subject to any known outstanding decree, order, judgment, or
stipulation restricting in any manner the licensing thereof by Company or any of
its Subsidiaries, except to the extent any such restriction does not constitute
a Company Material Adverse Effect.
Section 5.16 INTERESTED PARTY TRANSACTIONS. Since December 31, 1998, or
as described in the SEC Reports, no event has occurred that would be required to
be reported by Company pursuant to Item 404 of Regulation S-K promulgated by the
SEC. Except as expressly set forth in the SEC Reports or the Company Disclosure
Schedule, there are no material agreements, arrangements, understandings or
commitments of any kind (including indebtedness for borrowed money or the
deferred purchase price of property or services, obligations evidenced by notes,
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bonds, indentures or similar instruments, guarantees, financial support or keep
whole arrangements, or interest rate agreements, currency hedging agreements or
similar hedging instruments) between or involving Company or any one or more of
its Subsidiaries on the one hand, and any of Company's Affiliates (excluding its
Subsidiaries), on the other hand.
Section 5.17 ENVIRONMENTAL MATTERS. Except as disclosed in the SEC
Reports:
(a) Company and its Affiliates (i) are in compliance with
all Environmental Laws, and are not subject to any asserted liability or, to
Company's knowledge, any unasserted liability (including liability with respect
to current or former Affiliates or operations), under any Environmental Laws,
(ii) hold or have applied for all Environmental Permits required for their
properties or operations, except where the failure to hold or have applied for
such Environmental Permits would not have a Company Material Adverse Effect, and
(iii) are in compliance with their respective Environmental Permits, except
where the failure to be in compliance would not have a Company Material Adverse
Effect.
(b) Neither Company nor any of its Affiliates has received
any written notice, demand, letter, claim or request for information alleging
that Company or any of its Affiliates is or may be in violation of, or liable
under, any Environmental Law.
(c) Neither Company nor any of its Affiliates (i) has
entered into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with Environmental
Laws, Environmental Permits or the investigation, sampling, monitoring,
treatment, remediation, removal or cleanup of Hazardous Materials and, to the
knowledge of Company and its Affiliates, no investigation, litigation or other
proceeding is pending or threatened in writing with respect thereto, or (ii) has
received any written notice asserting that it is an indemnitor in connection
with any threatened or asserted claim by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous Materials.
(d) None of the real property now or, to the knowledge of
Company, previously owned or leased by Company or any of its Affiliates is
listed on or, to the knowledge of Company, proposed for listing on the "National
Priorities List" under CERCLA, as updated through the date hereof, or any
similar state or foreign list of sites requiring investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended as of the date hereof.
"ENVIRONMENTAL LAWS" means any applicable federal, state, local,
foreign or supranational statute, Law, ordinance, regulation, rule, code,
treaty, writ or order and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree, judgment, stipulation, injunction, permit, authorization, policy,
opinion or agency requirement, in each case having the force and effect of Law,
relating to the pollution, protection, investigation or restoration of the
environment, health and safety or natural resources, including those relating to
the use, handling, presence, transportation,
-22-
treatment, storage, disposal, release, threatened release or discharge of
Hazardous Materials or noise, odor, wetlands, pollution, contamination or any
injury or threat of injury to Persons or property or to the siting,
construction, operation, closure and post-closure care of waste disposal,
handling and transfer facilities.
"ENVIRONMENTAL PERMITS" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"HAZARDOUS MATERIALS" means (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls, or (ii) any chemical, material or other
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any Environmental Law.
Section 5.18 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no Contract,
judgment, injunction, order or decree binding upon Company or any of its
Subsidiaries or any of their properties which has had or could reasonably be
expected to have the effect of prohibiting or materially impairing (i) any
material business practices of Company, any of its Subsidiaries or, to the
knowledge of Company or its Subsidiaries, Buyer or its Affiliates, or (ii) the
conduct of any material business by Company, any of its Subsidiaries or, to the
knowledge of Company or its Subsidiaries, Buyer or its Affiliates, as currently
conducted by Company and its Subsidiaries.
Section 5.19 CERTAIN BUSINESS PRACTICES. Neither Company nor any of its
Subsidiaries nor any director, officer, employee or agent of Company or any of
its Subsidiaries has in any material respect (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful payments relating to
political activity, (ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political party or
campaign or violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended, (iii) consummated any transaction, made any payment, entered into
any agreement or arrangement or taken any other action in violation of Section
1128B(b) of the Social Security Act, as amended, or (iv) made any other unlawful
payment.
Section 5.20 INSURANCE. Company has adequate insurance covering all of
the customarily insurable liabilities, including product liability, director and
officer liability, and general and casualty liabilities, with financially secure
insurers. Company has purchased, or will purchase on or before the date on which
Company shall have caused Buyer's designees to be appointed to Company's Board
of Directors pursuant to Section 1.3, tail coverage lasting for six years for
each of the policies of directors' and officers' liability insurance maintained
by Company with respect to claims arising from facts, circumstances, occurrences
or events that occurred, or will occur, on or before such date; PROVIDED,
HOWEVER, that Company will not pay more than $743,000 for such insurance.
Section 5.21 BROKERS; EXPENSES. Except for Imperial Capital, LLC
("COMPANY'S FAIRNESS OPINION ADVISOR"), whose fees shall be paid by Company, no
agent, broker, finder, investment banker or other firm or Person is or will be
entitled to any broker's or finder's fee or other similar commission or fee in
connection with the Transactions based upon arrangements made by or on behalf of
Company. Company has provided to Buyer a good faith estimate and
-23-
description of the expenses of Company and its Subsidiaries that Company
expects to incur or has incurred in connection with the Transactions.
Section 5.22 BOARD APPROVAL. The Board of Directors of Company, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way (the
"COMPANY BOARD APPROVAL"), has duly (i) determined that this Agreement and the
Transactions (including the Offer, the Merger and the Related Option) are
advisable, fair to and in the best interests of Company and its stockholders,
(ii) approved and adopted this Agreement, the Related Agreement and the
Transactions (including the Offer, the Merger and the Related Option), (iii)
resolved to recommend that the shareholders of Company accept the Offer, tender
their shares of Company Common Stock pursuant to the Offer and approve and adopt
this Agreement and the Merger, (iv) consented to the inclusion of this Company
Board Approval in the Offer Documents, the Schedule 14D-9 and, if applicable,
the Proxy Statement, and (v) directed that, if applicable, this Agreement and
the Merger be submitted for consideration by Company's stockholders at the
Special Meeting. The Company Board Approval constitutes approval of this
Agreement and the Transactions (including the Offer, the Merger and the Related
Option) for purposes of Section 203 of the Delaware Law so that consummation of
the Transactions (including the Offer, the Merger and the Related Option) will
not cause Buyer or any of its Affiliates to become an interested stockholder of
Company for purposes of Section 203 of the Delaware Law. To the knowledge of
Company, except for Section 203 of the Delaware Law (the restriction on business
combinations of which has been rendered inapplicable), no state takeover statute
is applicable to the Transactions (including the Offer, the Merger and the
Related Option). The Company Board Approval constitutes approval of this
Agreement and the Transactions (including the Offer, the Merger and the Related
Option) for purposes of Article 11 of the certificate of incorporation, as
amended, of Company (and of any similar provision of the certificate of
incorporation, by-laws or other governing documents of any of Company's
Affiliates) so that neither the consummation of the Transactions (including the
Offer, the Merger and the Related Option), nor any other presently contemplated
transaction or Business Combination (as defined in such Article 11) involving
Buyer or any of its Affiliates, on the one hand, and Company or any of its
Affiliates, on the other hand, will cause Buyer or any of its Affiliates to
become an interested stockholder of Company pursuant to such Article 11 (or such
other similar provision).
Section 5.23 OPINION OF COMPANY'S FAIRNESS OPINION ADVISOR. Company has
received the opinion ("COMPANY'S FAIRNESS OPINION") of Company's Fairness
Opinion Advisor, dated the date of this Agreement, to the effect that, as of
such date, the Merger and the Offer, individually and collectively, are fair to
the holders of Company Common Stock from a financial point of view, a copy of
which opinion has been provided to Buyer. Company has been authorized by
Company's Fairness Opinion Advisor to permit the inclusion of Company's Fairness
Opinion (and references thereto) in the Offer Documents, the Schedule 14D-9 and,
if applicable, the Proxy Statement.
Section 5.24 INVESTMENT COMPANY. None of Company and its Affiliates is,
or is controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Company that, except as disclosed in
the Buyer Disclosure Schedule which has been delivered to Company prior to the
execution of this Agreement (the "BUYER DISCLOSURE SCHEDULE"):
Section 6.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Buyer has the requisite corporate power and authority to carry on
its business as it is now being conducted and is duly qualified or licensed to
do business, and, if applicable, is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified, licensed or in good standing, or to have such power
and authority, when taken together with all other such failures would not have a
Buyer Material Adverse Effect.
Section 6.2 AUTHORITY RELATIVE TO THIS AGREEMENT AND THE TRANSACTIONS.
Buyer has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions to which it is a party. The execution and delivery of this
Agreement by Buyer, and the consummation by Buyer of the Transactions, have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Buyer are necessary to authorize the
execution and delivery of this Agreement or to consummate the Transactions other
than, with respect to the Merger, the filing and recordation of appropriate
merger documents as required by the Delaware Law. This Agreement has been duly
and validly executed and delivered by Buyer and, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes a legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms.
Section 6.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Buyer does
not, and the performance of this Agreement and consummation of the Transactions
by Buyer will not (i) conflict with or violate the certificate of incorporation,
by-laws or other governing documents of Buyer, as applicable, (ii) assuming the
consents, approvals, authorizations and waivers specified in Section 5.4(b) have
been received and the waiting periods referred to therein have expired, and any
condition precedent to such consent, approval, authorization or waiver has been
satisfied, conflict with or violate any Laws applicable to Buyer or its
Subsidiaries or by which any property or asset of Buyer or any of its
Subsidiaries is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
or other encumbrance on any property or asset of Buyer or any of its
Subsidiaries pursuant to, any note, bond, mortgage, indenture or credit
agreement, or, to Buyer's knowledge as of the date of this Agreement, any other
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Buyer or any of its Subsidiaries is a party or by which
Buyer or any of its Subsidiaries, or any property or asset of Buyer or any of
its Subsidiaries, is bound or affected, except in the case of clauses (ii) or
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(iii) for any such conflicts, violations, breaches, defaults or other
occurrences of the type referred to above which would not have a Buyer Material
Adverse Effect.
(b) The execution and delivery of this Agreement by Buyer does
not, and the performance of this Agreement by Buyer will not, require any
consent, approval, authorization, waiver or permit of, or filing with or
notification to, any Governmental Entity, except for applicable requirements of
the Exchange Act, the Securities Act, Blue Sky Laws, the HSR Act, such filings,
filings, approvals, consents and waivers as may be required under the Merger
Control Laws, filing and recordation of the Certificate of Merger as required by
Delaware Law, and filings required by the rules of the American Stock Exchange
or any other stock exchange or market, and except where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not have a Buyer Material Adverse Effect.
Section 6.4 LITIGATION. As of the date hereof, there is no civil,
criminal or administrative suit, action or proceeding pending or, to the
knowledge of Buyer, threatened against or affecting Buyer or any of its
Subsidiaries that, if adversely determined against Buyer or any of its
Subsidiaries, would materially impair or delay the parties' ability to
consummate the Transactions.
Section 6.5 BROKERS. No agent, broker, finder, investment banker or
other firm or Person is or will be entitled to any broker's or finder's fee or
other similar commission or fee in connection with the Transactions based upon
arrangements made by or on behalf of Buyer.
Section 6.6 FINANCING. Buyer has sufficient funds to pay the liquidated
damages as provided by Section 10.6. Buyer will have, prior to the expiration of
the Offer or the Merger, as applicable, sufficient funds to consummate the
Transactions, including the payment in full of the Offer Price and/or the Merger
Consideration for all shares of Company Common Stock validly tendered in the
Offer or outstanding at the Effective Time.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 7.1 CONDUCT OF COMPANY PENDING THE MERGER.
(a) From and after the date hereof until the date on which
Company shall have caused Buyer's designees to be appointed to Company's Board
of Directors pursuant to Section 1.3, except as contemplated by this Agreement
or unless Buyer shall otherwise agree in writing, Company covenants and agrees
that it shall, and shall cause its Subsidiaries to, (i) carry on their
respective businesses in the usual, regular and ordinary course in substantially
the same manner as heretofore conducted and, except as provided below, use
commercially reasonable efforts to conduct their businesses in a manner
consistent with the budgets and plans heretofore made available to Buyer, (ii)
use commercially reasonable efforts to preserve intact their present business
organizations, keep available the services of their employees and consultants
and preserve their relationships and goodwill with customers, suppliers,
licensors, licensees, distributors, investors and others having business
dealings with them, and (iii) use commercially reasonable efforts to protect the
Intellectual Property Rights to the end that its and its
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Subsidiaries' goodwill and on-going businesses shall not be impaired in any
material respect as of the Closing Date. Without limiting the generality of
the foregoing, except as expressly contemplated by this Agreement or as set
forth on EXHIBIT 7.1 hereto or unless Buyer shall otherwise agree in writing,
prior to the date on which Company shall have caused Buyer's designees to be
appointed to Company's Board of Directors pursuant to Section 1.3, Company
shall not and shall not permit its Subsidiaries to:
(i) Declare, set aside, or pay any dividends
on, or make any other distributions (including partnership distributions) in
respect of, any of its capital stock or other equity interests, other than
dividends and distributions by any direct or indirect Subsidiary of Company
to its parent; split, combine or reclassify any of its capital stock or other
equity interests or, other than pursuant to the exercise or conversion of
Company Stock Options, issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; or purchase, redeem or otherwise acquire, other than pursuant
to the exercise or conversion of Company Stock Options, any shares of capital
stock or other equity interests of Company or any of its Subsidiaries or any
other equity securities thereof or any rights, warrants or options to acquire
any such shares or other securities other than purchases, redemptions or
acquisitions of equity securities of wholly owned Subsidiaries of Company or
rights, warrants or options to acquire such securities.
(ii) Grant, award, modify or enter into any
compensation or change of control arrangement with any employee of Company or
any of its Subsidiaries.
(iii) Modify or enter into any employment,
consulting or other service agreement with any Person or otherwise hire any
new employees, consultants or other agents; PROVIDED, HOWEVER, that Company
may, within 15 days of the date hereof, enter into (A) a Transition Services
and Employment Agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, (B) a Transition Services and
Employment Agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and (C) a Transition Services,
Employment and Consulting Agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case in the
form attached hereto as EXHIBIT 7.1(a)(III)(a), EXHIBIT 7.1(a)(III)(B), and
EXHIBIT 7.1(a)(III)(C), respectively.
(iv) Except for issuances of capital stock or
other equity interests of a Subsidiary of Company to Company or a wholly
owned Subsidiary of Company, issue, deliver, sell, pledge, dispose of or
otherwise encumber any shares of Company's or any of its Subsidiaries'
capital stock or other equity interests, including any Company Stock Options,
any other voting securities of Company or its Subsidiaries or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares or voting securities (other than the issuance of Company Common Stock
upon the exercise of Company Stock Options) or amend the terms of any such
securities, rights, warrants or options or take any action to accelerate the
vesting thereof (other than any amendments in connection with the
acceleration of vesting of currently outstanding Company Stock Options or
necessary to enable Company to pay off all outstanding Company Stock Options
on or before the Effective Date).
(v) Amend the certificate of incorporation,
by-laws or other governing documents of Company or any of its Subsidiaries.
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(vi) Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets or
equity interests of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof, or any assets that are material, individually or in the
aggregate, to Company or any of its Subsidiaries.
(vii) Subject to a Lien or other encumbrance or
sell, lease, license or otherwise dispose of any of its material properties
or assets or any Intellectual Property Rights, except in the ordinary course
of business consistent with past practices and except transactions between a
wholly owned Subsidiary of Company and Company or another wholly owned
Subsidiary of Company, or adopt a plan of complete or partial liquidation.
(viii) Incur or modify any indebtedness for
borrowed money or the deferred purchase price of any property or services
(excluding trade payables and other accrued current liabilities arising in
the ordinary course of business) or guarantee any such indebtedness of
another Person; issue or sell any debt securities of Company or any of its
Subsidiaries; guarantee any debt securities of another Person (other than
indebtedness to, guarantees of, or issuances or sales to Company or a wholly
owned Subsidiary of Company); enter into any "keep well" or other agreement
to maintain any financial condition of another Person; or enter into any
capital lease obligations.
(ix) Make any loans, advances or capital
contributions to, or investments in, any other Person, other than to Company
or any direct or indirect Subsidiary of Company, or, except in an amount or
amounts not to exceed $300,000 in the aggregate, settle or compromise any
material claims or litigation.
(x) Except in the ordinary course of business
in an amount or amounts not to exceed $50,000 in the aggregate, make any
capital expenditures, whether or not pursuant to plan.
(xi) Take any action that would cause any of
Company's representations and warranties herein to become untrue in any
material respect.
(xii) Authorize, or commit or agree to take,
any of the foregoing actions.
(b) Company shall promptly provide Buyer with copies of all
filings made by it or its Affiliates with any Governmental Entity in connection
with this Agreement and the Transactions contemplated hereby.
(c) Company shall, before filing a material amended Tax
return, changing any material method of Tax accounting or settling or
compromising any material Tax litigation, Tax claim, income Tax or other Tax
liability of Company or any of its Affiliates, consult with Buyer and its
advisors as to the positions and elections that will be taken or made with
respect to such matter and shall not enter into any such settlement or
compromise without the consent of Buyer.
Section 7.2 CONDUCT OF COMPANY'S AFFILIATES (EXCLUDING ITS
SUBSIDIARIES) PENDING THE MERGER. From and after the date hereof until the date
on which Company shall have caused
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Buyer's designees to be appointed to Company's Board of Directors pursuant to
Section 1.3, Company shall cause its Affiliates (excluding its Subsidiaries)
to (a) carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, (b)
other than the repurchase of units to the extent permitted by any settlement
of the ▇▇▇▇ Action, refrain from acquiring or agreeing to acquire by merging
or consolidating with, or by purchasing a substantial portion of the assets
or equity interests of, or by any other manner, any other Person or division
thereof, or any assets that are material, individually or in the aggregate,
to such Affiliate, (c) refrain from making any capital expenditures other
than in connection with the repair, maintenance or improvement of currently
held assets, (d) only for those Affiliates whose governing documents permit
or are currently being amended (subject to court approval in the ▇▇▇▇ Action)
to permit reinvestment of proceeds into the purchase of additional equipment,
refrain from declaring, setting aside or making any distributions in respect
of its equity interests except in the ordinary course consistent with past
practice, and (e) refrain from adopting any shareholder rights plan or
similar plan or arrangement. Notwithstanding anything in this Agreement to
the contrary, in no event shall Company be required to take any action to
cause any of its Affiliates (other than its Subsidiaries) to take any action
or refrain from taking any action solely to the extent that the taking of
such action by Company would violate any fiduciary duties under applicable
Law or the governing documents of such Affiliate owed by Company as a manager
or general partner of such Affiliate.
Section 7.3 SPECIAL MEETING.
(a) If required by applicable Law in order to consummate
the Merger, Company shall take all actions necessary, in accordance with
applicable Law and its certificate of incorporation and by-laws, to convene a
special meeting of its stockholders (the "SPECIAL MEETING") as promptly as
reasonably practicable following the date on which Buyer completes the purchase
of the shares of Company Common Stock pursuant to the Offer (the "OFFER
COMPLETION DATE"), for the purpose of considering and taking action upon the
Merger and this Agreement. Subject to Section 8.8(b), Company's Board of
Directors shall recommend approval of the Merger and this Agreement and shall
take all lawful action to solicit and obtain such approval.
(b) If Buyer shall acquire at least 90% of the outstanding
shares of Company Common Stock, pursuant to the Offer or otherwise, the parties
agree, subject to satisfaction or (to the extent permitted hereunder) waiver of
all conditions to the Merger, to take all necessary and appropriate action to
cause the Merger to be effective as soon as reasonably practicable after the
Offer Completion Date without the Special Meeting.
Section 7.4 FURTHER ACTION; CONSENTS; FILINGS.
(a) Upon the terms and subject to the conditions hereof,
each of the parties hereto shall use commercially reasonable efforts to take, or
cause to be taken, all appropriate actions and do, or cause to be done, all
things necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective as promptly as practicable the Transactions and to
cooperate with each other in connection with the foregoing. Without limiting the
generality of the foregoing, each of the parties agrees to take all appropriate
actions to obtain from Governmental Entities any Governmental Authorizations
required to be obtained or made
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by Buyer, Company or any of their Subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation
of the Transactions, and to make all necessary filings, and thereafter make
any other required submissions, that are required under (i) the Exchange Act,
the Securities Act or the Blue Sky Laws, (ii) the HSR Act or any other Merger
Control Laws, and (iii) any other applicable Law. The parties hereto shall
cooperate with each other in connection with the making of all such filings,
including by providing copies of all such documents to the nonfiling party
and its advisors prior to filing and, if requested, by accepting all
reasonable additions, deletions or changes suggested by the nonfiling party
or its advisors in connection therewith.
(b) Each of Buyer and Company shall file, as soon as
practicable after the commencement of the Offer, notifications under the HSR
Act. Buyer and Company shall, and shall cause their Subsidiaries who are
required to do so to, file any other applications or notices required under
other Merger Control Laws, respond as promptly as practicable to all inquiries
or requests that may be made pursuant to any Merger Control Laws for additional
information or documentation, and respond as promptly as practicable to all
inquiries and requests received from any Governmental Entity in connection with
antitrust matters or matters relating to Permits. Each of Buyer and Company, to
the extent applicable, further agrees to file contemporaneously with the filing
of the applications any requests for waivers of applicable Governmental
Authorizations as may be available and to expeditiously prosecute such waiver
requests and diligently submit any additional information or amendments for
which any Governmental Entity may ask with respect to such waiver requests. The
parties shall cooperate with each other in connection with the making of all
such filings or responses, including providing copies of all such documents to
the other parties and its advisors prior to filing or responding.
(c) Prior to the date on which Company shall have caused
Buyer's designees to be appointed to Company's Board of Directors pursuant to
Section 1.3, Company shall, and shall cause its Subsidiaries to, use
commercially reasonable efforts to assist Buyer in its integration of the
acquisition of Company, including the prompt and orderly transition of
employees, customers and suppliers of Company's and its Affiliates' businesses
and providing assistance to Buyer in connection with the integration of
Company's and its Affiliates' lines of business and services with those of
Buyer.
Section 7.5 ESCROW. Buyer and Company have entered into an Escrow
Agreement, in the form attached as EXHIBIT 7.5 hereto (the "ESCROW AGREEMENT"),
with Bank of San Francisco (the "ESCROW AGENT"). Buyer has delivered to the
Escrow Agent cash in the amount of $1,200,000, and Company has delivered to the
Escrow Agent cash in the amount of $1,700,000, each of which the Escrow Agent
will hold, pursuant to the Escrow Agreement, in an interest-bearing account with
an institution the deposits in which are insured by an agency of the United
States or, upon joint instructions of Buyer and Company, invested in securities
issued by the United States or any department or agency thereof. Buyer and
Company acknowledge and agree that the Escrow Agent will release and pay over
such amounts, including the proceeds and income derived (directly or indirectly)
therefrom, to Buyer and/or Company solely as provided in the Escrow Agreement.
Section 7.6 COMPANY STOCK OPTIONS. In connection with the
Transactions:
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(a) At the Offer Conditions Satisfaction Date, without any
action on the part of the holder thereof, each unvested Company Stock Option
which remains as of such time unexercised in whole or in part shall be
automatically and immediately vested and fully exercisable.
(b) In the event any holder of any Company Stock Options
exercises any Company Stock Options or surrenders any Company Stock Options to
Company (which may take the form of a letter to Company requesting a cash out of
such holder's Company Stock Options pursuant to this Section 7.6(b)), in either
case on or after the Offer Conditions Satisfaction Date and before the Effective
Time, Company shall pay to such holder cash in an amount equal to the excess, if
any, of the Offer Price over the exercise price of such Company Stock Option.
(c) The Board of Directors of Company (or a duly appointed
committee thereof responsible for the administration of the Company Stock Option
Plans in accordance with the terms of each such plan) shall, prior to or as of
the Offer Conditions Satisfaction Date, take all necessary actions, pursuant to
and in accordance with the terms of the Company Stock Option Plans and the
instruments evidencing the Company Stock Options, to provide for the accelerated
vesting described in Section 7.6(a).
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.1 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) From the date hereof until the Closing or the earlier
termination of this Agreement in accordance with its terms, Company shall, and
shall cause its Affiliates to, afford to Buyer and Buyer's accountants, counsel
and other representatives full and reasonable access during normal business
hours (and at such other times as the parties may mutually agree) to their
properties, books, contracts, commitments, records and personnel and, during
such period, furnish promptly to Buyer (a) a copy of each report, schedule and
other document filed or received by them pursuant to the requirements of the
Exchange Act and the Securities Act, and (b) all other information concerning
their business, properties and personnel as Buyer may reasonably request,
including information regarding customers, suppliers and personnel and the
opportunity to meet with such Persons to discuss their business and relations
with Company or its Affiliates. Company shall, and shall cause its Affiliates
to, permit Buyer full access to the Intellectual Property Rights. Buyer shall
conduct its review in a manner reasonably calculated not to disrupt Company's or
its Affiliates' business and operations. No investigation pursuant to this
Section 8.1 shall limit any representation or warranty of Company.
(b) Buyer shall hold, and shall cause its employees,
agents and representatives to hold, in confidence all "Confidential Information"
in accordance with the terms of the Confidentiality Agreement, dated November
23, 1999, between Buyer and Imperial Capital, LLC (the "CONFIDENTIALITY
AGREEMENT"), which shall remain in full force and effect in accordance with the
terms thereof, including in the event of any termination of this Agreement.
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(c) Company shall hold, and shall cause its employees,
agents and representatives to hold, in confidence, unless compelled to disclose
by non-appealable judicial or administrative process or, in the opinion of its
counsel, by applicable Law, all documents and information concerning Buyer or
any of its Affiliates furnished to Company or any of its Affiliates in
connection with the Transactions, except to the extent that such information can
be shown to have been (i) previously known to Company, (ii) in the public domain
through no fault of Company, or (iii) later lawfully acquired by Company from
other sources not under a confidentiality obligation to Buyer or any of its
Affiliates.
Section 8.2 PROXY STATEMENT.
(a) If required by applicable Law in order to consummate
the Merger, Company shall prepare a proxy statement satisfying all requirements
of the Exchange Act for the purposes of holding the Special Meeting. Such proxy
statement in the form mailed by Company to its stockholders, together with any
and all amendments or supplements thereto, are herein referred to as the "PROXY
STATEMENT."
(b) If applicable, Buyer will furnish Company with such
information concerning it and its Subsidiaries as is necessary in order to cause
the Proxy Statement, insofar as it relates to Buyer and its Subsidiaries, to
comply with applicable Law. Buyer agrees to promptly advise Company if, at any
time prior to the Special Meeting, any information provided by it in the Proxy
Statement is or becomes incorrect or incomplete in any material respect and to
provide Company with the information needed to correct such inaccuracy or
omission. Buyer will furnish Company with such supplemental information as may
be necessary in order to cause the Proxy Statement, insofar as it relates to
Buyer and its Subsidiaries, to comply with applicable Law after the mailing
thereof to the stockholders of Company.
(c) If applicable, Company will include in the Proxy
Statement such information concerning Company and its Subsidiaries as is
necessary in order to cause such Proxy Statement, insofar as it relates to
Company and its Subsidiaries, to comply with applicable Law. If, at any time
prior to the Special Meeting, any information included or incorporated by
reference by Company in the Proxy Statement is or becomes incorrect or
incomplete in any material respect, Company shall correct such inaccuracy or
omission. Company will include or incorporate such supplemental information
as may be necessary in order to cause the Proxy Statement, insofar as it
relates to Company and its Subsidiaries, to comply with applicable Law after
the mailing thereof to the stockholders of Company.
(d) If required by applicable Law in order to consummate
the Merger, Company shall (i) promptly file with the SEC, use commercially
reasonable efforts to have cleared with the SEC and thereafter mail to its
stockholders, as promptly as practicable after the Offer Completion Date, the
Proxy Statement and all other proxy materials necessary or appropriate for the
Special Meeting, (ii) use commercially reasonable efforts to obtain the
necessary approvals by its stockholders of this Agreement and the Merger, and
(iii) otherwise comply with all legal requirements applicable to stockholders
meetings.
Section 8.3 RELATED AGREEMENT. Simultaneously with the execution and
delivery of this Agreement and as material consideration for the execution and
delivery of this Agreement by
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Buyer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, Steel Partners II, L.P., Steel Partners
L.L.C. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ are entering into the Related Agreement
pursuant to which they, among other things, agree to tender their shares of
Company Common Stock pursuant to the Offer, grant to Buyer the Related
Option, and vote their shares of Company Common Stock in favor of the Merger.
Section 8.4 PUBLIC ANNOUNCEMENTS. On or before the Closing Date,
neither Buyer nor Company shall (nor shall they permit any of their respective
Affiliates to), without prior consultation with the other parties and such other
parties' review of and consent to any public announcement concerning the
Transactions, issue any press release or make any public announcement with
respect to Transactions during such period, and Buyer and Company shall, to the
extent practicable, allow the other parties reasonable time to review and
comment on such release or announcement in advance of its issuance and use
reasonable efforts in good faith to reflect the reasonable and good faith
comments of such other party; PROVIDED, HOWEVER, that no party shall be
prevented from making any disclosure required by Law at the time so required
because of any delay on the part of another party. The parties intend that the
initial announcement of the terms of the Transactions shall be made by a joint
press release of Buyer and Company.
Section 8.5 INDEMNIFICATION OF COMPANY'S DIRECTORS AND OFFICERS. Buyer
agrees that all rights to indemnification existing as of the date hereof in
favor of any director, officer, employee or agent of Company or any of its
Subsidiaries ("INDEMNIFIED PARTIES") as provided by Law in their respective
certificates of incorporation, by-laws or other governing documents or in
indemnification agreements with Company or any of its Subsidiaries, or otherwise
in effect as of the date hereof, shall survive the Offer and the Merger and
shall continue in full force and effect. Without limiting the generality of the
foregoing, in the event any Indemnified Party is or becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter, including the Transactions, occurring prior to or at the Effective Time,
the Surviving Corporation shall, to the extent required by any such right to
indemnification existing at Law, in Company's or any of its Subsidiaries'
certificates of incorporation, by-laws or other governing documents or in any
such indemnification agreements, pay as incurred such Indemnified Party's legal
and other expenses (including the cost of any investigation and preparation)
incurred in connection therewith.
Section 8.6 NOTICE OF BREACHES AND CERTAIN EVENTS.
(a) Company shall give prompt notice to Buyer, and Buyer
shall give prompt notice to Company, of (i) any representation or warranty made
by it contained in this Agreement which, to its knowledge, has become untrue or
inaccurate in any material respect, or (ii) the failure by it, to its knowledge,
to comply with or satisfy in any material respect any covenant, condition, or
agreement to be complied with or satisfied by it under this Agreement; PROVIDED,
HOWEVER, that such notification shall not excuse or otherwise affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
(b) Company shall give prompt notice to Buyer, and Buyer
shall give prompt notice to Company, of (i) any notice or other communication
from any Person alleging that the
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consent of such Person is or may be required in connection with any of the
Transactions, (ii) any notice or other communication from any Governmental
Entity in connection with this Agreement or the Transactions, (iii) any
actions, suits, claims, investigations, orders, decrees, complaints or
proceedings commenced, or to its knowledge, threatened against, relating to
or involving or otherwise affecting Company, Buyer or any of their respective
Affiliates that relate to the consummation of the Transactions, and (iv) any
substantial damage to any material asset of Company or any of its Affiliates.
(c) Buyer shall give prompt notice to Company of the
occurrence, to its knowledge, of any of the events described in clause (c)(ii),
clause (d), clause (e), clause (f), clause (g) or clause (i) of EXHIBIT 1.1
hereto; PROVIDED, HOWEVER, that such notification shall not excuse or otherwise
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.
Section 8.7 TRANSFER AND GAINS TAXES AND CERTAIN OTHER TAXES AND
EXPENSES. Buyer agrees that the Surviving Corporation will pay all real property
transfer, gains and other similar taxes and all documentary stamps, filing fees,
recording fees and sales and use taxes, if any, and any penalties or interest
with respect thereto, payable in connection with consummation of the Merger
without any offset, deduction, counterclaim or deferment of the payment of the
Merger Consideration.
Section 8.8 ACQUISITION PROPOSALS.
(a) Company agrees that it shall not nor shall any of its
Affiliates or any of its or its Affiliates' officers, directors, employees,
agents and representatives (including any investment banker, attorney or
accountant retained by it or any of its Affiliates), directly or indirectly,
initiate, solicit, induce, encourage or knowingly facilitate (including by way
of furnishing information) any inquiries or the making of any proposal or offer
with respect to a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving, or any purchase or sale of all or any significant portion
of the assets of Company or more than 5% of the Company Common Stock or the
capital stock or other equity interests of any of its Affiliates (other than any
repurchases of limited partnership interests of Affiliates as may be required
under any settlement of the ▇▇▇▇ Action) or the assets any of its Subsidiaries
(any such proposal or offer (other than a proposal or offer made by Buyer) being
hereinafter referred to as an "ACQUISITION PROPOSAL"). Company further agrees
that neither it nor any of its Affiliates nor any of its or its Affiliates'
officers, directors, employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Affiliates) shall, directly or indirectly, have any discussion with or provide
any confidential information or data to any Person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Acquisition
Proposal or accept an Acquisition Proposal. Notwithstanding the foregoing, (A)
in the event that any of Company's Affiliates (excluding its Subsidiaries) shall
be requested to provide information to any of such Affiliate's partners or
members (or any assignee of any of such partners or members) who requests such
information in accordance with the provisions of such Affiliate's governing
documents or as provided by Law, such Affiliate shall be permitted to provide to
such Person the information requested if and only to the extent that (i) such
Affiliate, after consultation with and
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receipt of advice from Company's outside legal counsel, shall have made a
good faith determination that the requested information is required to be so
provided by Law or by such Affiliate's governing documents, (ii) prior to
providing any such information, Company notifies Buyer of such request, and
(iii) neither Company nor any of its Affiliates takes any other actions
prohibited by this Section 8.8(a), and (B) Company and its Board of Directors
shall be permitted (1) to comply with Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal, and (2) in response to
an unsolicited bona fide written Acquisition Proposal by any Person, to
engage in any discussions or negotiations with, or provide any information
to, any Person in response to an unsolicited bona fide written Acquisition
Proposal by any such Person, if and only to the extent that (i) neither the
Offer Completion Date nor the Special Meeting shall have occurred, (ii)
Company's Board of Directors, upon the advice of Company's financial advisors
and outside legal counsel, concludes in good faith that such Acquisition
Proposal could reasonably be expected to result in a Superior Proposal and,
after consultation with and receipt of advice from Company's outside legal
counsel, that the failure to take such action could reasonably be deemed to
constitute a breach of its fiduciary duties under applicable Law, (iii) prior
to providing any information or data to any Person in connection with an
Acquisition Proposal by any such Person, Company's Board of Directors
receives from such Person an executed confidentiality agreement on terms
substantially similar to those contained in the Confidentiality Agreement
(including the standstill provisions contained therein, unless Company shall
have amended the Confidentiality Agreement to modify any standstill
provisions therein to be no more restrictive of Buyer than such Person is
restricted pursuant to such confidentiality agreement), (iv) prior to
providing any information or data to any Person or entering into discussions
or negotiations with any Person, Company's Board of Directors notifies Buyer
immediately upon receipt thereof of such inquiries, proposals or offers
received by, any such information requested from, or any such discussions or
negotiations sought to be initiated or continued with, any of its
representatives indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any proposals or offers, and
(v) Company's Board of Directors uses its good faith efforts to minimize the
costs and expenses to Company associated with any such actions, so long as
such cost-minimization efforts would not prevent Company from carrying out
its fiduciary duties under applicable Law. Company agrees that it will keep
Buyer informed, on a current basis, of the status and terms of any
Acquisition Proposals and the status of any such discussions or negotiations.
Company agrees that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any Acquisition Proposal and enforce the right to
recover or cause to be destroyed all information regarding Company or its
Affiliates in the possession of such Persons and their respective Affiliates,
representatives and advisors. Company agrees that it will take the necessary
steps to promptly inform the individuals or entities referred to in the first
sentence of this Section 8.8(a) of the obligations undertaken in this Section
8.8(a) and that any breach of the provisions of this Section 8.8(a) by any
officer or director of Company or its Affiliates or any investment banker,
financial advisor, attorney, accountant or other representative of Company or
its Affiliates will be deemed a breach by Company.
(b) Except as permitted in this Section 8.8(b), neither
Company's Board of Directors nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to Buyer,
or take any action not explicitly permitted by this Agreement that would be
inconsistent with, the approval or recommendation by such Board
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of Directors or committee of the Transactions, (ii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal, or (iii)
cause Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "ACQUISITION
AGREEMENT") related to any Acquisition Proposal. Notwithstanding the
foregoing, in the event that, prior to the Offer Completion Date, Company's
Board of Directors, after consultation with and receipt of advice from
Company's financial advisors and outside legal counsel, determines in good
faith that an Acquisition Proposal constitutes a Superior Proposal and that
the failure to take such action could reasonably be deemed to constitute a
breach of its fiduciary duties under applicable Law, Company's Board of
Directors may (x) modify in any adverse manner or withdraw its approval or
recommendation of the Merger in connection with the Special Meeting, (y)
approve or recommend a Superior Proposal, and (z) if it so chooses, cause
Company to enter into an Acquisition Agreement with respect to such Superior
Proposal but, in each of the cases, only if (A) two days have elapsed
following Buyer's receipt of written notice from Company advising Buyer that
the Board of Directors of Company has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal,
identifying the Person making such Superior Proposal, and advising Buyer that
the Board of Directors of Company has determined, upon the advice of
Company's financial advisors and outside legal counsel, that it will no
longer recommend approval of the Merger, (B) Company has paid the Termination
Fee (plus the third-party fees and expenses provided in Section 10.3(b)) to
Buyer, and (C) Company has terminated this Agreement in accordance with its
terms. During the two-day period referred to in clause (A) of the immediately
preceding sentence, Buyer shall not enter into any agreement with the Person
making the Superior Proposal concerning an Acquisition Proposal with regard
to Company.
(c) During the period from the date of this Agreement
until the Effective Time or earlier termination of this Agreement, Company shall
not terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which it or any of its Affiliates is a party (other than
any involving Buyer). During such period, Company agrees to enforce, to the
fullest extent permitted under applicable Law, the provisions of any such
agreement, including by obtaining injunctions to prevent any breaches of such
agreements or to enforce specifically the terms and provisions thereof in any
court of the United States or any state thereof having competent jurisdiction.
(d) During the period from the date of this Agreement
until the Effective Time or earlier termination of this Agreement, Company shall
not enter into any shareholder rights or similar plan.
Section 8.9 CASH BALANCE. Without incurring any indebtedness, Company
shall have, on the Initial Expiration Date and on the Offer Conditions
Satisfaction Date, a minimum cash balance, when combined with any amounts
deposited with the Escrow Agent by Company pursuant to the Escrow Agreement, of
not less than the amount shown on EXHIBIT 8.9 hereto.
Section 8.10 SEVERANCE POLICY. Buyer shall maintain, with respect to
each of the employees listed on Exhibit 8.10 hereto, Company's severance policy
as in effect on the date hereof and as described in Exhibit 8.10 hereto, and
shall recognize all service of each such employee with Company at the levels set
forth on Exhibit 8.10 hereto for purposes of calculating applicable severance
amounts payable pursuant to the policy; provided, however, that Buyer
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shall have no obligation to continue the vesting of any additional benefits
for any employee under such policy and shall have no obligation to extend the
benefits of such policy to any employee not listed on Exhibit 8.10 hereto.
With respect to those severance agreements listed on Schedule 5.5 hereto,
from and after the Offer Conditions Satisfaction Date, Buyer agrees to assume
and be bound by the terms of such agreements.
Section 8.11 HEALTH BENEFITS. From and after the Effective Time, to the
extent permitted by the sponsor or other issuer thereof, Buyer shall maintain,
without change (except as required pursuant to the terms thereof), with respect
to each officer or employee of Company, Company's currently existing policies of
group health insurance for the duration of the current policy year. Buyer shall,
not later than one month prior to the end of such policy year, commence a review
and evaluation of Company's group health insurance in light of projected
insurance costs, market conditions generally, the insurance benefits provided to
employees of Affiliates of Buyer and such other considerations as Buyer may
determine.
ARTICLE IX
CONDITIONS PRECEDENT
Section 9.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Buyer shall have purchased shares of Company Common Stock
pursuant to the Offer; provided that this condition shall be deemed to have been
satisfied with respect to the obligation of Buyer to effect the Merger if Buyer
fails to accept for payment, or to pay for, shares of Company Common Stock
pursuant to the Offer in violation of the terms of the Offer or this Agreement.
(b) If required by applicable Law in order to consummate the
Merger, this Agreement and the Merger shall have been approved and adopted by
the requisite vote of the holders of Company Common Stock at the Special Meeting
in the manner required by Law and the rules of the American Stock Exchange or
any other stock exchange or market, but only if Buyer shall have used its best
efforts to satisfy such condition.
(c) The waiting period applicable to the consummation of the
Merger under the HSR Act and any other applicable Merger Control Laws shall have
expired or been terminated and any material consents from third parties listed
on EXHIBIT 9.1 hereto which are required to be received prior to the Closing
Date with respect to the Transactions shall have been received.
(d) The consummation of the Merger shall not be prohibited
by any provision of applicable Law or restrained, enjoined or prohibited by any
order, judgment, decree, injunction or ruling by a Governmental Entity of
competent jurisdiction.
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ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Company:
(a) By mutual written consent of Buyer and Company.
(b) By Buyer or Company if (i) any Governmental Entity of
competent jurisdiction shall have issued, enacted, entered, promulgated or
enforced any order, judgment, decree, injunction or ruling which, after
commercially reasonable efforts on the part of Buyer and Company to resist,
resolve or lift, permanently restrains, enjoins or otherwise prohibits the
Merger and such order, judgment, decree, injunction or ruling shall have become
final and nonappealable, or (ii) the purchase of shares of Company Common Stock
pursuant to the Offer shall not have been consummated on or before June 30,
2001, provided that the right to terminate this Agreement under this Section
10.1(b)(ii) shall not be available to any party whose failure to perform any
material covenant or obligation under this Agreement has been the cause of or
resulted in the failure of the purchase of shares of Company Common Stock
pursuant to the Offer to occur on or before such date.
(c) By Buyer or Company if the Merger shall not have been
consummated on or before the first anniversary of the date of this Agreement,
provided that the right to terminate this Agreement under this Section 10.1(c)
shall not be available to any party whose failure to perform in any material
respect any covenant or obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date.
(d) By Buyer if the Board of Directors of Company, or any
committee thereof, shall (i) modify in any adverse manner or withdraw the
Company Board Approval or any part thereof (including by amending the Schedule
14D-9), (ii) approve or recommend a Superior Proposal pursuant to Section
8.8(b), or (iii) resolve to take any of the actions specified in clauses (i) or
(ii) above.
(e) By Company if Company shall enter into any Acquisition
Agreement with any Person concerning a Superior Proposal, but only if (i)
Company's Board of Directors, after consultation with and receipt of advice from
Company's financial advisors and outside legal counsel, determines in good faith
that the proposed Acquisition Agreement constitutes a Superior Proposal and that
the failure to enter into such Acquisition Agreement could reasonably be deemed
to constitute a breach of its fiduciary duties under applicable Law, and (ii)
two days have elapsed following Buyer's receipt of written notice from Company
advising Buyer that the Board of Directors of Company has received a Superior
Proposal, specifying the material terms and conditions of such Superior
Proposal, identifying the Person making such Superior Proposal, and advising
Buyer that the Board of Directors of Company has determined, upon the advice of
Company's financial advisors and outside legal counsel, that it will no longer
recommend approval of the Merger.
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Section 10.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 10.1, this Agreement and the Related Agreement
shall forthwith terminate and there shall be no liability hereunder on the part
of any of Company, Buyer or their respective officers or directors; PROVIDED,
HOWEVER, that Sections 5.21 and 6.5 (Brokers), the second to last sentence of
Section 8.1 (Confidentiality), Section 8.8 to the extent that the Termination
Fee is required to be paid, until such Termination Fee (plus the third-party
fees and expenses provided in Section 10.3(b)) is paid, this Section 10.2,
Section 10.3 (Fees and Expenses), 10.6 (Liquidated Damages), Section 11.6
(Governing Law) and 11.11 (Litigation) shall survive the termination and remain
in full force and effect; and, provided, further, that each party shall remain
liable for any breaches prior to the termination of this Agreement with respect
to such party's covenants hereunder and representations and warranties
hereunder.
Section 10.3 FEES AND EXPENSES.
(a) Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the Transactions shall
be paid by the party incurring such expenses, except as otherwise provided in
this Section 10.3 or in Section 8.8 or Section 10.2.
(b) Buyer and Company agree that Company shall be obligated to
pay to Buyer the sum of $1,000,000 (the "TERMINATION FEE"), plus third-party
fees and expenses (including investment banking fees, financing fees,
third-party due diligence fees, accounting fees and legal fees) incurred by
Buyer in connection with this Agreement and the Transactions (which the parties
agree shall be equal to no more and no less than $500,000) solely as follows:
(i) If Buyer shall terminate this Agreement
pursuant to Section 10.1(b), provided that Buyer shall not be entitled to the
Termination Fee pursuant to this Section 10.3(b)(i) if the events or
circumstances giving rise to such termination right were beyond the control
of Company and Company used commercially reasonable efforts to attempt to
cause such events or circumstances to (A) not occur, or (B) cease to exist.
(ii) If Buyer shall terminate this Agreement
pursuant to Section 10.1(d).
(iii) Upon any breach of the Related Agreement
or any determination by a court with jurisdiction thereover that the Related
Agreement is unenforceable, but only if the court challenge was brought by a
party thereto other than Buyer.
(iv) If Company shall terminate this Agreement
pursuant to Section 10.1(e).
(v) If Buyer shall terminate this Agreement
and then, on or before the first anniversary of the date hereof, Company
enters into a definitive purchase agreement, with an Alternative Price in
excess of the Offer Price, with any Person with whom Company entered into or
otherwise initiated, solicited or conducted any discussions or negotiations
concerning an Acquisition Proposal prior to the termination of this Agreement
but after the date hereof; PROVIDED, HOWEVER, that if such definitive
purchase agreement is entered into after the six-month anniversary of the
date hereof, the parties to such definitive purchase agreement must have
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closed the transactions contemplated thereby, whether such closing occurs
before or after the first anniversary of the date hereof.
(c) The Termination Fee (plus the third-party fees and
expenses provided in Section 10.3(b)) shall be paid prior to, and shall be a
pre-condition to the effectiveness of, any termination of this Agreement by
Company pursuant to Section 10.1(e). Except as otherwise set forth in Section
10.3(b)(v), the Termination Fee (plus the third-party fees and expenses provided
in Section 10.3(b)) shall be paid within two Business Days following any
termination of this Agreement by Buyer pursuant to Section 10.1. All payments
under Section 10.3(b) shall be made by wire transfer of immediately available
funds to an account designated by Buyer.
Section 10.4 AMENDMENT. This Agreement may be amended by the parties
hereto at any time before or after approval hereof by the stockholders of
Company, but, after such approval, no amendment shall be made which under
applicable Law would require approval of Company's stockholders without the
further approval of such stockholders; PROVIDED, HOWEVER, that from and after
the date on which Company shall have caused Buyer's designees to be appointed to
Company's Board of Directors pursuant to Section 1.3 until the Effective Time,
if there is no Continuing Director, then this Agreement cannot be amended except
as required by Law. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 10.5 WAIVER. At any time prior to the Closing, the parties
hereto may, to the extent permitted by applicable Law, (a) extend the time for
the performance of any of the obligations or other acts of any other party
hereto, (b) waive any inaccuracies in the representations and warranties by any
other party contained herein or in any documents delivered by any other party
pursuant hereto, and (c) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations contained herein;
PROVIDED, HOWEVER, that from and after the date on which Company shall have
caused Buyer's designees to be appointed to Company's Board of Directors
pursuant to Section 1.3 until the Effective Time, if there is no Continuing
Director, then Company can neither waive nor extend the aforementioned items or
performances of the aforementioned actions except as required by Law. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section 10.6 LIQUIDATED DAMAGES. In the event of a breach of this
Agreement by Buyer which results in the failure of the parties to consummate the
Transactions on or before June 30, 2001, (a) Buyer shall pay to Company, as
liquidated damages, $1,000,000, and (b) neither Buyer nor any of its Affiliates
shall, for a period of twelve months following such breach, unless such action
involves an offer to purchase shares of Company Common Stock at an Alternative
Price in excess of the Offer Price, (i) acquire, publicly offer to acquire or
agree to acquire, directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights to acquire any voting securities of
Company or any of its Affiliates or, except in the ordinary course of business,
any assets of Company or any of its Affiliates, (ii) make or in any way
participate in, directly or indirectly, any solicitation of proxies (as such
terms are used in the rules of the Securities and Exchange Commission) or
consents to vote, or seek to advise or influence any Person or entity with
respect to the voting of, any voting securities of Company, (iii) make any
public announcement with respect to, or submit a proposal for, or offer of (with
or without
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conditions) any merger, consolidation, business combination, tender or
exchange offer, restructuring, recapitalization or other extraordinary
transaction involving Company or any of its securities or material assets,
(iv) form, join or in any way participate in any "group" (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) in
connection with any voting securities of Company, (v) otherwise act, alone or
in concert with others, to seek to control or influence the management, Board
or Directors or policies of Company, or (vi) have any discussions or enter
into any arrangements, understandings or agreements (whether written or oral)
with, or advise, assist or encourage, any other Person in connection with any
of the foregoing.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations and warranties in this Agreement shall not
survive the date on which Company shall have caused Buyer's designees to be
appointed to Company's Board of Directors pursuant to Section 1.3.
Section 11.2 NOTICES. All notices or other communications under this
Agreement shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by facsimile (with
confirmation of receipt), or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to Company:
PLM International, Inc.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Share LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Buyer:
MILPI Acquisition Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇ Peabody LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 11.2.
Section 11.3 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. Accordingly, the parties further agree that each party shall
be entitled to an injunction or restraining order 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 right or remedy to which such party may be entitled under
this Agreement, at Law or in equity.
Section 11.4 ENTIRE AGREEMENT. This Agreement (including the documents
and instruments referred to herein), together with the Confidentiality Agreement
and the Related Agreement, constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
Section 11.5 ASSIGNMENTS; PARTIES IN INTEREST. Neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
of the parties hereto (whether by operation of Law or otherwise) without the
prior written consent of the other parties. Subject to the foregoing, this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person not a party hereto any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement, including to confer
third party beneficiary rights, except for the provisions of Article IV and
Sections 4.1(c), 7.6, 8.10 and 8.11.
Section 11.6 GOVERNING LAW. This Agreement shall be governed in all
respects by the Laws of the State of Delaware (without giving effect to the
provisions thereof relating to conflicts of Law). The exclusive venue for the
adjudication of any dispute or proceeding arising out of this Agreement or the
performance hereof shall be the courts located in Dover County,
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Delaware, and the parties hereto and their Affiliates each consents to and
hereby submits to the jurisdiction of any court located in Dover County,
Delaware or Federal courts in Delaware.
Section 11.7 HEADINGS; DISCLOSURE. 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. Any disclosure by
Company or Buyer in any portion of its respective Disclosure Schedule shall be
deemed disclosure in each other portion of such Disclosure Schedule to which
such disclosure reasonably relates on its face.
Section 11.8 CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION.
(a) As used in this Agreement:
"ACQUISITION AGREEMENT" has the meaning set forth in Section 8.8(b).
"ACQUISITION PROPOSAL" has the meaning set forth in Section 8.8(a).
"AFFILIATE" as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with
that Person, including, with respect to Company, each of the limited liability
companies, limited partnerships and other investment programs for which Company
or any of its Subsidiaries serves, directly or indirectly, as a manager or
general partner or in any similar capacity (including Professional Lease
Management Income Fund I, LLC and the PLM Equipment Growth Fund series of
investment partnerships); for 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.
"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"ALTERNATIVE PRICE" shall mean the price per share (after giving effect
to any stock splits, reverse stock splits, combinations, stock dividends,
recapitalizations, redenominations of share capital and similar events declared,
paid or made after the date hereof) paid or offered or agreed to be paid. In
calculating the Alternative Price, (i) if any portion of the consideration is to
be paid in the form of securities or assets other than cash, the value of such
securities or assets shall be determined based upon fair market value on the day
prior to consummation of the transaction, (ii) amounts paid into escrow and
contingent payments shall be included as part of the consideration, and (iii)
the consideration shall also include the aggregate amount of (A) dividends or
other distributions declared by Company after the date hereof other than normal
recurring dividends in amounts not materially greater than currently paid, and
(B) amounts paid by Company to purchase any securities of Company after the date
hereof.
"BENEFIT PLANS" has the meaning set forth in Section 5.8(a).
"BLUE SKY LAWS" has the meaning set forth in Section 5.4(b).
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"BUSINESS DAY" shall mean any day other than Saturday, Sunday or any
other day on which commercial banks in New York, New York are authorized or
required by law to close.
"BUYER" has the meaning set forth in the preamble to this Agreement.
"BUYER DISCLOSURE SCHEDULE" has the meaning set forth in Article VI,
Introduction.
"BUYER MATERIAL ADVERSE EFFECT" shall mean any circumstance, event or
occurrence or series of circumstances, events or occurrences which individually
or in the aggregate with all other circumstances, events or occurrences would
have a material adverse effect on Buyer's ability to consummate the Transactions
(including the Offer and the Merger).
"CERCLA" has the meaning set forth in Section 5.17.
"CERTIFICATE OF MERGER" has the meaning set forth in Section 2.1.
"CERTIFICATES" has the meaning set forth in Section 4.2.
"CLOSING" has the meaning set forth in Section 2.2.
"CLOSING DATE" has the meaning set forth in Section 2.2.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMPANY" has the meaning set forth in the preamble to this Agreement.
"COMPANY BOARD APPROVAL" has the meaning set forth in Section 5.22.
"COMPANY COMMON STOCK" has the meaning set forth in Section 1.1(a).
"COMPANY DISCLOSURE SCHEDULE" has the meaning set forth in Article V,
Introduction.
"COMPANY FINANCIAL STATEMENTS" has the meaning set forth in Section
5.5(b).
"COMPANY MATERIAL ADVERSE EFFECT" shall mean any circumstance, event or
occurrence or series of circumstances, events or occurrences which individually
or in the aggregate with all other circumstances, events or occurrences would be
reasonably likely to have a material adverse effect on (i) the business, assets,
operations, financial condition, revenues or results of operations of Company
and its Subsidiaries taken as a whole (which shall not be deemed to occur unless
there is a reduction in value or damages in excess of $250,000), other than any
Company Material Adverse Effect caused or resulting from (A) the announcement of
the Offer or the pendency of the consummation of this Agreement, (B) the taking
of any action contemplated or permitted by this Agreement, or (C) the cessation
of the employment with Company, for whatever reason, of any or all of ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇, or (ii) Company's ability to consummate the
Transactions (including the Offer and the Merger). For purposes of determining
whether a Company Material Adverse Effect has occurred, the parties will not
consider (1) the ▇▇▇▇ Action or the results or effects thereof (but only if
Company abides by the
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ruling of any court with jurisdiction over the ▇▇▇▇ Action, or, without the
consent of Buyer, does not modify the settlement of the ▇▇▇▇ Action as
currently proposed), (2) the ▇▇▇▇▇▇▇ Action or the results or effects
thereof, and/or (3) any claim brought or that could be brought by Marubeni or
any of its Affiliates, or Guaranty Federal Bank, F.S.B. ("GUARANTY FEDERAL")
or any of its Affiliates, arising out of or relating to any breach of, or
claim for indemnification under, the Asset Purchase Agreement, dated May 24,
2000, among Company, Marubeni and certain of Company's former Affiliates, as
amended (or that certain agreement with Marubeni described in Section
5.7(b)), or the Stock Sale Agreement, dated October 26, 1999, as amended,
between Company and Guaranty Federal, as applicable, unless Company has
knowledge as of the date hereof of the circumstance, event or occurrence or
series of circumstances, events or occurrences giving rise to such claim.
"COMPANY PREFERRED STOCK" has the meaning set forth in Section 5.2(a).
"COMPANY QUARTERLY FINANCIAL STATEMENTS" has the meaning set forth in
Section 5.5(c).
"COMPANY STOCK OPTION" has the meaning set forth in Section 4.1(c)(i).
"COMPANY STOCK OPTION CONSIDERATION" has the meaning set forth in
Section 4.1(c)(i).
"COMPANY STOCK OPTION PLAN" has the meaning set forth in Section
4.1(c)(i).
"COMPANY'S FAIRNESS OPINION" has the meaning set forth in Section 5.23.
"COMPANY'S FAIRNESS OPINION ADVISOR" has the meaning set forth in
Section 5.21.
"CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 8.1.
"CONTINUING DIRECTOR" has the meaning set forth in Section 1.3(a).
"CONTRACTS" has the meaning set forth in Section 5.14.
"DELAWARE LAW" has the meaning set forth in Section 2.3.
"EFFECTIVE TIME" has the meaning set forth in Section 2.3.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 5.17.
"ENVIRONMENTAL PERMITS" has the meaning set forth in Section 5.17.
"ERISA" shall have the meaning set forth in Section 5.8(a).
"ERISA AFFILIATE" has the meaning set forth in Section 5.8(a).
"ESCROW AGENT" has the meaning set forth in Section 7.5.
"ESCROW AGREEMENT" has the meaning set forth in Section 7.5.
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"EXCHANGE ACT" has the meaning set forth in Section 5.4(b).
"GAAP" has the meaning set forth in Section 5.5(b).
"GOVERNMENTAL ENTITY" has the meaning set forth in Section 5.4(b).
"GOVERNMENTAL REGULATION" has the meaning set forth in Section 5.11.
"GUARANTY FEDERAL" has the meaning set forth in the definition of
Company Material Adverse Effect.
"HAZARDOUS MATERIALS" has the meaning set forth in Section 5.17.
"HSR ACT" has the meaning set forth in Section 5.4(b).
"HSR CONDITION" has the meaning set forth in EXHIBIT 1.1 to this
Agreement.
"INDEMNIFIED PARTIES" has the meaning set forth in Section 8.5.
"INITIAL EXPIRATION DATE" has the meaning set forth in Section 1.1(a).
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section
5.15(a).
"IRS" shall mean the U.S. Internal Revenue Service.
"▇▇▇▇ ACTION" means (i) the lawsuit filed as a putative class action on
January 22, 1997 in the Circuit Court of Mobile County, Mobile, Alabama, Case
No. CV-97-251, against Company and certain of its Subsidiaries, and (ii) the
lawsuit filed as a putative class action on May 28, 1997 in the San Francisco
Superior Court, San Francisco, California, Case No. 987062, and any related
matters filed under the Federal Arbitration Act in the United States District
Court for the Northern District of California.
"LAWS" shall mean any domestic (federal, state or local), foreign or
supranational law, rule, regulation, order, judgment or decree.
"LIEN" shall mean any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, preemptive
right, easement, servitude, transfer restriction under any shareholder or
similar agreement, encumbrance or any other restriction or limitation whatsoever
other than, with respect to Liens on securities, restrictions imposed by federal
and applicable state securities Laws.
"MARUBENI" has the meaning set forth in Section 5.7(b).
"MARUBENI AGREEMENT" has the meaning set forth in Section 5.7(b).
"▇▇▇▇▇▇▇ ACTION" means the lawsuit styled as ▇▇▇▇▇▇▇ v. PLM
International, Inc., U.S. District Court for the Northern District of
California, Case No. C95 02818 CW.
"MERGER" has the meaning set forth in Section 2.1.
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"MERGER CONSIDERATION" has the meaning set forth in Section
4.1(a)(iii).
"MERGER CONTROL LAWS" means the HSR Act and the Laws of any other
Governmental Entity with respect to competition, mergers or other business
combinations.
"MINIMUM CONDITION" has the meaning set forth in Section 1.1(a).
"OFFER" has the meaning set forth in Section 1.1(a).
"OFFER COMPLETION DATE" has the meaning set forth in Section 7.3(a).
"OFFER CONDITIONS SATISFACTION DATE" has the meaning set forth in
Section 1.1(b).
"OFFER DOCUMENTS" has the meaning set forth in Section 1.1(c). "OFFER
PRICE" has the meaning set forth in Section 1.1(a).
"PAYING AGENT" has the meaning set forth in Section 4.3(a).
"PERMITS" has the meaning set forth in Section 5.11.
"PERSON" shall include individuals, corporations, partnerships, limited
liability companies, 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).
"PROPERTY RIGHTS" has the meaning set forth in Section 5.13.
"PROXY STATEMENT" has the meaning set forth in Section 8.2(a).
"RELATED AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"RELATED OPTION" has the meaning set forth in the Related Agreement.
"SCHEDULE 14D-9" has the meaning set forth in Section 1.2(b).
"SCHEDULE TO" has the meaning set forth in Section 1.1(c).
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SEC REPORTS" has the meaning set forth in Section 5.5(a).
"SECURITIES ACT" has the meaning set forth in Section 5.4(b).
"SPECIAL MEETING" has the meaning set forth in Section 7.3(a).
"SUBSIDIARY" shall mean, with respect to Buyer, Company or any other
Person, any corporation, partnership, joint venture or other legal entity of
which Buyer, 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
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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,
excluding, with respect to Company, each of the limited liability companies,
limited partnerships and other investment programs for which Company or any
of its Subsidiaries serves, directly or indirectly, as a manager or general
partner or in any similar capacity (including Professional Lease Management
Income Fund I, LLC and the PLM Equipment Growth Fund series of investment
partnerships).
"SUPERIOR PROPOSAL" means a bona fide unsolicited written Acquisition
Proposal to acquire a majority of the voting power of the shares of Company
Common Stock then outstanding or all or substantially all the assets of Company
for consideration consisting of cash or securities which the Board of Directors
of Company concludes in good faith (after consultation with and receipt of
advice from Company's financial advisors and outside legal counsel), taking into
account all legal, financial, regulatory and other aspects of the proposal and
the Person making the proposal, (i) would, if consummated, result in a
transaction that is more favorable to Company's stockholders (in their
capacities as stockholders), from a financial point of view, than the
Transactions, and (ii) is reasonably capable of being completed, including a
conclusion that its financing, to the extent required, is then committed or is,
in the good faith judgment of the Board of Directors of Company (after
consultation with and receipt of advice from Company's financial advisors and
outside legal counsel), reasonably capable of being financed by the Person
making such Acquisition Proposal.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.1.
"TAX" shall mean any federal, state, local, foreign or provincial
income, gross receipts, property, sales, service, use, license, lease, excise,
franchise, employment, payroll, withholding, employment, unemployment insurance,
workers' compensation, social security, alternative or added minimum, ad
valorem, value added, stamp, business license, occupation, premium,
environmental, windfall profit, customs, duties, estimated, transfer or excise
tax, or any other tax, custom, duty, premium, governmental fee or other
assessment or charge of any kind whatsoever, together with any interest, penalty
or addition to tax imposed by any Governmental Entity.
"TERMINATION FEE" has the meaning set forth in Section 10.3(b).
"TRANSACTIONS" has the meaning set forth in Section 1.2(a).
(b) Other Rules of Construction.
(i) References in this Agreement to any
gender shall include references to all genders. Unless the context otherwise
requires, references in the singular include references in the plural and
vice versa. References to a party to this Agreement or to other agreements
described herein means those Persons executing such agreements.
(ii) The words "include", "including" or
"includes" shall be deemed to be followed by the phrase "without limitation"
or the phrase "but not limited to" in all places where such words appear in
this Agreement. The word "or" shall be deemed to be inclusive.
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(iii) This Agreement is the joint drafting
product of Buyer and Company, and each provision has been subject to
negotiation and agreement and shall not be construed for or against either
party as drafter thereof.
(iv) In each case in this Agreement where this
Agreement or a Contract is represented or warranted to be enforceable will be
deemed to include as a limitation to the extent that enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar Laws affecting the enforcement of
creditors' rights generally and to general equitable principles, whether
applied in equity or at Law.
(v) All references in this Agreement to
financial terms shall be deemed to refer to such terms as they are defined
under GAAP, consistently applied.
(vi) References in this Agreement to a
Person's "knowledge" shall be deemed to refer to such Person's actual
knowledge or, in the case of a Person that is not an individual, the actual
knowledge of such Person's officers, directors, managers, general partners
and their equivalents.
Section 11.9 COUNTERPARTS. This Agreement may be executed in two or
more counterparts which together shall constitute a single agreement.
Section 11.10 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economics or legal
substance of the Transactions are not affected in any manner materially adverse
to any party. Upon determination that any term or other provision hereof is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the Transactions are
fulfilled to the extent possible.
Section 11.11 LITIGATION. In the event of any litigation between Buyer,
Company or any third-party beneficiary hereof concerning the terms of this
Agreement or the Transactions, the prevailing party will be entitled to
reimbursement of its reasonable costs and expenses, including reasonable
attorneys fees incurred in trial, appellate and post-appellate proceedings.
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IN WITNESS WHEREOF, Buyer and Company have caused this Agreement and
Plan of Merger to be signed by their respective officers thereunto duly
authorized all as of the date first written above.
MILPI ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
PLM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman
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EXHIBIT 1.1
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement and Plan of Merger, dated as of December 22, 2000
(the "AGREEMENT"), to which this EXHIBIT 1.1 is an exhibit.
Notwithstanding any other provision of the Offer, Buyer shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange
Act (relating to the obligation of Buyer to pay for or return tendered shares of
Company Common Stock promptly after termination or withdrawal of the Offer), pay
for any tendered shares of Company Common Stock and (subject to any such rules
or regulations) may delay the acceptance for payment of, or the payment for, any
tendered shares of Company Common Stock and (except as provided in the
Agreement) may amend or terminate the Offer as to any Company Common Stock not
then paid for if (i) there are not validly tendered (and not withdrawn) prior to
the expiration date of the Offer that number of shares of Company Common Stock
that, when added to any such shares owned by Buyer or any of its Affiliates,
will at least satisfy the Minimum Condition, (ii) any applicable waiting periods
under the HSR Act or any other applicable Merger Control Laws shall not have
expired or been terminated prior to the expiration of the Offer (the "HSR
CONDITION"), or (iii) at any time on or after the date of the Agreement and
before the expiration date of the Offer, any of the following events shall have
occurred and be continuing:
(a) There shall have been instituted or be pending any action,
suit or proceeding by or on behalf of any Governmental Entity (i) subject to
Section 7.4 of the Agreement, challenging or seeking to make illegal, materially
delay or otherwise, directly or indirectly, restrain or prohibit the making of
the Offer, the acceptance for payment of any Company Common Stock by Buyer, or
the consummation of the Merger, or seeking to obtain material damages in
connection with the Offer or the Merger, (ii) subject to Section 7.4 of the
Agreement, seeking to prohibit or limit materially the ownership or operation by
Company, Buyer or any of their respective Subsidiaries of all or any of the
business or assets of Company, Buyer or any of their respective Subsidiaries
that is material to either Buyer and its Subsidiaries or Company and its
Subsidiaries, in each case taken as a whole, or to compel Company, Buyer or any
of their respective Subsidiaries as a result of the Offer or the Merger to
dispose of or to hold separate all or any portion of the business or assets of
such Person that is material to either Buyer and its Subsidiaries or Company and
its Subsidiaries, in each case taken as a whole, (iii) subject to Section 7.4 of
the Agreement, seeking to impose or confirm any limitation on the ability of
Buyer to exercise effectively full rights of ownership of any Company Common
Stock, including the right to vote any Company Common Stock acquired by Buyer
pursuant to the Offer or otherwise on all matters properly presented to
Company's stockholders, including the approval and adoption of the Agreement and
the Merger, (iv) seeking to require divestiture by Buyer of any Company Common
Stock, or (v) that otherwise would have a Company Material Adverse Effect or a
Buyer Material Adverse Effect.
(b) There shall be in effect any injunction or other order,
decree, judgment or ruling by a Governmental Entity of competent jurisdiction,
or a Law, rule or regulation shall have been promulgated or enacted by a
Governmental Entity, that, in any such case, subject to Section 7.4 of the
Agreement, (i) restrains, prevents or prohibits the making or consummation of
the Offer or of the Merger or that would make such consummation illegal, (ii)
prevents, prohibits or restricts the ownership by Buyer (or any of its
Affiliates) of any material portion of Company's business or assets or that
would substantially deprive Buyer and/or its Affiliates of the benefit of
ownership of Company's business or assets, or (iii) imposes material limitations
on the ability of Buyer to effectively acquire any shares of Company Common
Stock.
(c) (i) The Agreement or the Related Agreement shall have been
terminated in accordance with its terms, or (ii) any events shall have occurred
that gives Buyer the right to terminate either the Agreement or the Related
Agreement.
(d) Any of the representations and warranties of Company
contained in the Agreement shall not be true and correct on the date of the
Agreement and as of the date of determination as if made on the date of
determination, without taking into account any qualifications as to materiality
or Company Material Adverse Effect, except where the failure of such
representations and warranties to be true and correct, when taken together with
all such other failures, would not have a Company Material Adverse Effect;
PROVIDED, HOWEVER, that (i) the representations and warranties set forth in
Sections 5.1 through 5.3 shall be true and correct in all respects, and (ii)
such representations and warranties which are made as of a specific date need
only be true as of such date.
(e) Company shall have failed to perform or comply with all
agreements and covenants required to be performed by it under the Agreement on
or before the date of determination, except where the failure to so perform,
when taken together with all other such failures, would not have a Company
Material Adverse Effect.
(f) Any party thereto (other than Buyer) shall have failed to
perform or comply in all material respects with all agreements and covenants
required to be performed by it under the Related Agreement on or before the date
of determination.
(g) There shall have occurred any event, change, effect or
development that, individually or in the aggregate with any other event, change,
effect or development, has had or would reasonably be expected to have a Company
Material Adverse Effect.
(h) There shall have occurred and be continuing (i) any
general suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States (other than a shortening of trading hours or any coordinated trading halt
triggered solely as a result of a specified increase or decrease in a market
index), (ii) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States, (iii) any limitation (whether or not
mandatory) by any Governmental Entity on, or other event that materially and
adversely affects, the extension of credit by banks or other lending
institutions, (iv) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the United
States, or (v) in the case of any
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of the foregoing existing at the time of the execution of the Agreement, a
material acceleration or worsening thereof.
(i) The Board of Directors of Company, or any committee
thereof, shall have (i) modified in any adverse manner or withdrawn the Company
Board Approval (including by amending the Schedule 14D-9), (ii) approved or
recommended a Superior Proposal pursuant to Section 8.8(b), or (iii) resolved to
take any of the actions specified in clauses (i) or (ii) above.
(j) Company shall have a minimum cash balance of less
than the amount shown on EXHIBIT 8.9 to the Agreement.
The foregoing conditions are for the sole benefit of Buyer and may be
asserted by Buyer and, except for the Minimum Condition and otherwise subject to
the terms of the Agreement, may be waived by Buyer, in whole or in part, at any
time and from time to time, in the sole discretion of Buyer. The determination
as to whether any condition has been satisfied shall be deemed a continuing
right which may be asserted at any time and from time to time. Notwithstanding
the fact that Buyer reserves the right to assert the failure of a condition
following acceptance for payment but prior to payment in order to delay payment
or cancel their obligation to pay for properly tendered shares of Company Common
Stock, Buyer shall either promptly pay for such Company Common Stock or promptly
return such Company Common Stock. Should the Offer be terminated pursuant to any
of the foregoing provisions, all tendered shares of Company Common Stock not
theretofore accepted for payment pursuant thereto shall be returned forthwith to
the tendering shareholders.
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With the exception of Exhibit 1.1, the exhibits listed in the table
of contents to this Agreement have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The registrant agrees to furnish supplementally a copy of any
omitted exhibit to the SEC upon request.
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