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EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 13, 1998,
BY AND AMONG
NATIONAL VISION ASSOCIATES, LTD.
NW ACQUISITION CORP.
AND
NEW WEST EYEWORKS, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER 2
SECTION 1.01. The Offer 2
SECTION 1.02. Company Actions 3
ARTICLE II THE MERGER 4
SECTION 2.01. The Merger 4
SECTION 2.02. Closing 4
SECTION 2.03. Effective Time 5
SECTION 2.04. Effects of the Merger 5
SECTION 2.05. Sub's Certificate of Incorporation and Bylaws 5
SECTION 2.06. Directors and Officers 5
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES 5
SECTION 3.01. Effect on Capital Stock 5
SECTION 3.02. Exchange of Certificates 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES 8
SECTION 4.01. Representations and Warranties of the Company 8
SECTION 4.02. Representations and Warranties of Parent and Sub 20
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER 21
SECTION 5.01. Conduct of Business by the Company 21
ARTICLE VI ADDITIONAL AGREEMENTS 23
SECTION 6.01. Stockholder Approval; Preparation of Proxy Statement 23
SECTION 6.02. Access to Information; Confidentiality 24
SECTION 6.03. Best Efforts; Notification 24
SECTION 6.04. Stock Plans 25
SECTION 6.05. Company Benefits 26
SECTION 6.06. Indemnification 26
SECTION 6.07. Directors 28
SECTION 6.08. Public Announcements 29
SECTION 6.09. Stockholder Litigation 29
SECTION 6.10 Acquisition Proposals 29
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SECTION 6.11. Filings; Other Action 30
SECTION 6.12. Additional Agreements 30
SECTION 6.13. Merger Certificate 31
SECTION 6.14. Provision of Funds 31
SECTION 6.15. Employment/Change of Ownership Agreements 31
SECTION 6.16. Conversion of Convertible Preferred Stock and
Exercise of Company Warrants 31
SECTION 6.17. Stockholders' Agreement to Tender 31
ARTICLE VII CONDITIONS PRECEDENT 32
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger 32
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER 32
SECTION 8.01. Termination 33
SECTION 8.02. Effect of Termination 34
SECTION 8.03. Amendment 34
SECTION 8.04. Extension; Waiver 34
SECTION 8.05. Procedure for Termination. Amendment, Extension or Waiver 34
SECTION 8.06. Effect of Termination and Abandonment 34
ARTICLE IX GENERAL PROVISIONS 36
SECTION 9.01. Survival of Representations, Warranties and Agreements 36
SECTION 9.02. Notices 36
SECTION 9.03. Descriptive Headings 37
SECTION 9.04. Entire Agreement; Assignment 37
SECTION 9.05. Governing Law 37
SECTION 9.06. Expenses and Fees 37
SECTION 9.07. Counterparts; Effectiveness 37
SECTION 9.08. Severability; Validity; Parties in Interest 38
SECTION 9.09. Jurisdiction 38
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THIS AGREEMENT AND PLAN OF MERGER, dated as of July 13, 1998 (this
"Agreement"), by and among NATIONAL VISION ASSOCIATES, LTD., a Georgia
corporation (the "Parent"), NW ACQUISITION CORP., a Delaware corporation and a
wholly-owned subsidiary of Parent (the "Sub"), and NEW WEST EYEWORKS, INC., a
Delaware corporation (the "Company"),
RECITALS:
WHEREAS, the respective Boards of Directors of Parent and Sub have each
determined that it is advisable and in the best interest of the Parent and Sub,
respectively, to engage in a transaction whereby Parent will acquire the Company
on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company has determined that it
is advisable and in the best interest of the Company and its stockholders to
engage in a transaction whereby Parent will acquire the Company on the terms and
subject to the conditions set forth in this Agreement and that the Offer and
Merger are fair to the stockholders of the Company;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all the issued and outstanding
shares of Common Stock, par value $.01 per share, of the Company (the "Common
Stock"), at a price per share of Common Stock of $13.00 in cash, upon the terms
and subject to the conditions set forth in this Agreement; and the Board of
Directors of the Company has adopted resolutions approving the Offer and the
Merger and recommending that the Company's stockholders accept the Offer;
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub into the Company (the "Merger"), upon
the terms and subject to the conditions set forth in this Agreement, whereby
each issued and outstanding share of Common Stock not owned directly or
indirectly by Parent or the Company, except shares of Common Stock held by
persons who object to the Merger and comply with all the provisions of Delaware
law concerning the right of holders of Common Stock to dissent from the Merger
and require appraisal of their shares of Common Stock ("Dissenting
Stockholders"), will be converted into the right to receive the per share
consideration paid pursuant to the Offer; and
WHEREAS, the Company, Parent and Sub wish to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms and subject to the
conditions hereinafter set forth, and intending to be legally bound, the parties
agree as follows:
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ARTICLE I
THE OFFER
SECTION 1.01. THE OFFER. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than five business
days after the date of this Agreement, Sub shall, and Parent shall cause Sub to,
commence the Offer. The obligation of Sub to, and of Parent to cause Sub to,
commence the Offer and accept for payment, and pay for, any shares of Common
Stock tendered pursuant to the Offer shall be subject to the terms and
conditions set forth in Exhibit A (any of which may be waived by Sub in its sole
discretion, subject to limitations imposed by applicable law). Sub expressly
reserves the right to modify the terms of the Offer, except that, without the
consent of the Company, Sub shall not (i) increase the percentage of outstanding
shares of Common Stock required to be tendered pursuant to the Minimum Tender
Condition (as defined in Exhibit A), (ii) reduce the number of shares of Common
Stock subject to the Offer, (iii) reduce the price per share of Common Stock to
be paid pursuant to the Offer, (iv) modify or add to the conditions set forth in
Exhibit A, (v) except as provided in the following sentence, extend the Offer or
(vi) change the form of consideration payable in the Offer. Notwithstanding the
foregoing, Sub may, without the consent of the Company, (u) extend the Offer for
a period of not more than 20 business days beyond the date on which the Offer
would otherwise expire if on the date of such extension any of the conditions to
Sub's obligation to purchase shares of Common Stock shall not be satisfied,
until such time as such conditions are satisfied or waived (other than an
extension in order to obtain financing pursuant to the Financing Condition (as
defined in Exhibit A) for which an extension may be made only pursuant to clause
(x) below), (w) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer, (x) extend the Offer
through and including October 14, 1998 solely in order to obtain financing
pursuant to the Financing Condition, and (y) extend the Offer for any reason for
a period of not more than 10 business days beyond the latest expiration date
that would otherwise be permitted under clause (u) or (w) of this sentence.
Subject to the terms and conditions of the Offer, Sub shall, and Parent shall
cause Sub to, pay for all shares of Common Stock validly tendered and not
withdrawn pursuant to the Offer that Sub becomes obligated to purchase pursuant
to the Offer as soon as practicable after the expiration of the Offer, but no
later than as required by applicable law.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
included therein pursuant to which the offer will be made, together with any
supplements or amendments thereto, the "Offer Documents") and on such date shall
mail the Offer Documents to the Company's stockholders. The Offer Documents
shall comply as to form in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder and, on the date filed with the SEC and
on the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances
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under which they were made, not misleading, except that no representation is
made by Parent or Sub with respect to information supplied by the Company for
inclusion in the Offer Documents. Each of Parent, Sub and the Company agrees
promptly to correct 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 each of Parent and Sub further agrees to
take all steps necessary to amend or supplement the Offer Documents and to cause
the Offer Documents as so amended or supplemented to be filed with the SEC and
to be disseminated to the Company's stockholders, in each case as and to the
extent required by applicable law. Parent and Sub agree to provide the Company
and its counsel in writing with any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments. The Company agrees to share with Parent and
Sub information in its possession necessary to enable Parent and Sub to prepare
the Offer Documents.
(c) Subject to the terms and condition of the Offer, Parent shall
provide or cause to be provided to Sub on a timely basis the funds necessary to
purchase any shares of Common Stock that Sub becomes obligated to purchase
pursuant to the Offer.
SECTION 1.02. COMPANY ACTIONS. (a) The Company hereby approves of and
consents to the Offer and represents and warrants to Parent and Sub that the
Board of Directors of the Company (at a meeting duly called and held) has duly
adopted resolutions approving this Agreement, the Offer and the Merger,
determining that the terms of the Offer and the Merger are fair to, and in the
best interest of, the Company's stockholders and recommending that the Company's
stockholders accept the Offer and tender their shares pursuant to the Offer and,
if required, approve and adopt this Agreement. The Company represents and
warrants to Parent and Sub that, in connection with its consideration of this
Agreement, its Board of Directors received the written opinion of Everen
Securities, Inc. ("Everen") that the consideration to be received by the
Company's stockholders in the Offer and the Merger is fair, from a financial
point of view, to such stockholders. The Company has been or will be authorized
by Everen to include a copy of such opinion in the Offer Documents. A complete
and correct signed copy of such opinion has been delivered by the Company to the
Parent.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendations described in
paragraph (a) and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Parent or Sub for inclusion in the Schedule 14D-9. Each of the
Company, Parent and Sub agrees promptly to correct 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 the Company
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further agrees to take all steps necessary to amend or supplement the Schedule
14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and disseminated to the Company's stockholders, in each case as and
to the extent required by applicable law. The Company agrees to provide Parent
and its counsel in writing with any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments. Parent and Sub agree to share with the
Company information in their possession necessary to enable the Company to
prepare the Schedule 14D-9.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Sub promptly with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Sub may reasonably request in communicating the Offer to
the Company's stockholders. 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 Merger, Parent and Sub shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will, upon request, deliver
to the Company all copies of such information then in their possession.
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER. Upon the terms and subject to the conditions
hereof, and pursuant to Section 251 of the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company at the Effective Time of
the Merger. Following the Merger, the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Sub in accordance with the DGCL, and the separate
corporate existence of Sub shall cease. At the election of Parent, any direct or
indirect subsidiary of Parent may be substituted for Sub as a constituent
corporation in the Merger; provided that no such substitution shall affect
Parent's obligations hereunder. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 2.02. CLOSING. The closing of the Merger (the "Closing") shall
take place (i) at 10:00 a.m, on a date to be specified by the parties, which
(subject to satisfaction or waiver of the conditions set forth in Article VII)
shall be no later than the second business day after satisfaction or waiver of
the conditions set forth in Article VII (the "Closing Date"), at the offices
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of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, or
(ii) at such other place and/or on such other date as the parties hereto may
agree in writing.
SECTION 2.03. EFFECTIVE TIME. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VII, the parties
shall cause a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") to be executed and filed in the Department of
State of the State of Delaware as provided in Section 251 of the DGCL. The
Merger shall become effective (i) at the time and date of filing of the
Certificate of Merger in the Department of State of the State of Delaware or
(ii) at such other time as is agreed upon by the parties and specified in the
Certificate of Merger (such time as the Merger becomes effective is hereinafter
referred to as the "Effective Time" of the Merger).
SECTION 2.04. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the DGCL. As of the Effective Time of the Merger, Parent shall own,
directly or indirectly, all of the issued and outstanding Common Stock of the
Surviving Corporation.
SECTION 2.05. SUB'S CERTIFICATE OF INCORPORATION AND BYLAWS. At the
Effective Time, Sub's Certificate of Incorporation and By-laws shall be the
Certificate of Incorporation and By-laws of the Surviving Corporation; except
that (i) Article First of Sub's Certificate of Incorporation shall be amended to
read "The name of the Corporation is Glasses, Inc." and (ii) such other
amendments as are necessary to effectuate the provisions of Section 6.06 hereof
shall be adopted.
SECTION 2.06. DIRECTORS AND OFFICERS. At the Effective Time of the
Merger, the persons listed on Schedule 2.06 shall become the directors and
officers of the Surviving Corporation until their successors are duly elected
and qualified.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01. EFFECT ON CAPITAL STOCK. At the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the holder
of any shares of Common Stock or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each share of common stock, par
value $0.01 per share, of Sub shall be converted into and become one fully paid
and nonassessable, issued and outstanding share of common stock, par value $0.01
per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT OWNED STOCK.
Each share of Common Stock issued and held immediately prior to the Effective
Time of the Merger in the Company's treasury and each share of Common Stock that
is owned by Parent, Sub or any other
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subsidiary of Parent shall automatically be canceled and retired without payment
of any consideration therefor and cease to exist.
(c) CONVERSION OF COMMON STOCK. Subject to Section 3.01(d),
each share of Common Stock issued and outstanding immediately prior to the
Effective Time of the Merger that is not owned by the Parent or Sub or any other
subsidiary of Parent (other than shares to be canceled in accordance with
Section 3.01(b)) shall be converted into the right to receive from the Surviving
Corporation in cash, without interest, the price per share of Common Stock paid
pursuant to the Offer (the "Merger Consideration"). As of the Effective Time of
the Merger, all such shares of Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Common Stock shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration, without interest.
(d) SHARES OF DISSENTING STOCKHOLDERS. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding shares of
Common Stock held by a Dissenting Stockholder shall not be converted as
described in Section 3.01(c) but shall become the right to receive such
consideration as may be determined to be due to such Dissenting Stockholder
pursuant to the laws of the State of Delaware; provided, however, that the
shares of Common Stock outstanding immediately prior to the Effective Time of
the Merger and held by a Dissenting Stockholder who shall, after the Effective
Time of the Merger, withdraw his demand for appraisal or lose his right of
appraisal, in either case pursuant to the DGCL, shall be deemed to be converted
as of the Effective Time of the Merger into the right to receive the Merger
Consideration. The Company shall give Parent (i) prompt notice of any written
demands for appraisal of shares of Common Stock received by the Company and (ii)
the opportunity to direct all negotiations and proceedings with respect to any
such demands. The Company shall not, without the prior written consent of
Parent, voluntarily make any payment with respect to, or settle, offer to settle
or otherwise negotiate, any such demands.
SECTION 3.02. EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time of the Merger, Parent
shall select a bank or trust company to act as paying agent (the "Paying Agent")
for the payment of the Merger Consideration upon surrender of certificates
representing Common Stock. Unless Parent notifies the Company otherwise, the
Paying Agent will be Wachovia Bank, N.A.
(b) PARENT TO PROVIDE FUNDS. Subject to the provisions of this
Agreement, Parent shall take all steps necessary to enable and cause the
Surviving Corporation to provide to the Paying Agent on a timely basis, as and
when needed after the Effective Time of the Merger, funds necessary to pay for
the shares of Common Stock pursuant to Section 3.01.
(c) EXCHANGE PROCEDURE. As soon as reasonably practicable after the
Effective Time of the Merger, the Paying Agent shall mail to each record holder
of a certificate or certificates which immediately prior to the Effective Time
of the Merger represented outstanding shares of Common Stock (the
"Certificates") whose shares were converted into the right to receive the
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Merger Consideration pursuant to Section 3.01, (i) a notice and letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify, including instructions with respect
to lost certificates) and advising such holder of the effectiveness of the
Merger, and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by the Parent, together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, and such other documents as may reasonably be required by the Paying
Agent, the holder of such Certificate shall be entitled to receive in exchange
therefor the amount of cash into which the shares of Common Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
3.01, and the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Common Stock which is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.02, each Certificate shall be deemed at any
time after the Effective Time of the Merger to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
shares of Common Stock theretofore represented by such Certificate shall have
been converted pursuant to Section 3.01. No interest will be paid or will accrue
on the cash payable upon the surrender of any Certificate.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. All cash paid upon the
surrender of Certificates in accordance with the terms of this Article III shall
be deemed to have been paid in full satisfaction of all rights pertaining to the
shares of Common Stock theretofore represented by such Certificates, and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Common Stock which were outstanding
immediately prior to the Effective Time of the Merger. If, after the Effective
Time of the Merger, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article
III.
(e) NO LIABILITY. Any portion of the funds delivered to the Paying
Agent in accordance with Section 3.02(b) hereof and which remain unclaimed by
the former stockholders of the Company one year after the Effective Time shall
be delivered by the Paying Agent to Parent. Any former stockholders of the
Company who have not theretofore complied with this Article III shall thereafter
look only to Parent for payment of the Merger Consideration, without any
interest thereon. None of Parent, Sub, the Company or the Paying Agent or any
other person will be liable to any former holder of Common Shares for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
otherwise disclosed to Parent and Sub in a letter delivered to them prior to the
execution hereof (which letter shall contain appropriate references to identify
the representations and warranties herein to which the information in such
letter relates) (the "Company Disclosure Letter"), the Company represents and
warrants to Parent and Sub as follows:
(a) ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted or presently
proposed to be conducted. The Company is duly qualified as a foreign corporation
to do business, and 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 necessary, except where the failure to be so
qualified could not reasonably be expected to have individually or in the
aggregate a material adverse effect on the business, assets, liabilities,
results of operations or financial condition of the Company and the Company
Subsidiaries, taken as a whole (a "Company Material Adverse Effect"); provided,
however, that "Company Material Adverse Effect" when used in connection with
Company or any of the Company Subsidiaries shall exclude (i) items disclosed in
the Company SEC Reports prior to the date hereof and (ii) departures of
officers, directors, consultants, employees or agents of the Company or the
Company Subsidiaries resulting from the announcement or expectation of the
transactions contemplated hereby. Prior to the date hereof, a true, correct and
complete copy of the Company's Restated Certificate of Incorporation and By-Laws
have been provided by the Company to Parent.
(b) CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock and 1,140 shares of
Cumulative Preferred Stock, par value $1,000 per share (the "Senior Preferred
Stock"), 5,460 shares of Convertible 6% Cumulative Preferred Stock, par value
$1,000 per share (the "Convertible Preferred Stock"), 500,000 shares of
Preferred Stock, par value $.01 per share (the "Serial Preferred Stock" and
together with the Senior Preferred Stock and the Convertible Preferred Stock,
the "Company Preferred Shares"). As of July 1, 1998, (i) 4,887,436 shares of
Common Stock were issued and outstanding, (ii) stock options to acquire 292,500
shares of Common Stock were outstanding under all stock option plans and
agreements of the Company, (iii) warrants to acquire 156,563 shares of Common
Stock were outstanding under all warrant agreements of the Company (the "Company
Warrants"), (iv) no shares of Senior Preferred Stock were outstanding, (v) 3,960
shares of Series A Convertible Preferred Stock were outstanding and are
convertible into 471,429 shares of Common Stock, (vi) 1,500 shares of Series B
Convertible Preferred Stock were outstanding and are convertible into 178,571
shares of Common Stock and (vii) no shares of Serial Preferred Stock were
outstanding. The Company has issued no shares of Common Stock or Company
Preferred Shares, has issued no warrants and has granted no stock options since
July 1, 1998. The Company has no outstanding stock appreciation rights or stock
purchase rights. All of the issued and outstanding
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shares of Common Stock are validly issued, fully paid and nonassessable and free
of preemptive rights. Except as set forth above, as of the date of this
Agreement, there are no shares of capital stock of the Company issued or
outstanding or any options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating Company to issue,
transfer, sell, redeem, repurchase or otherwise acquire any shares of its
capital stock or securities.
(c) SUBSIDIARIES.
(i) Each of the subsidiaries of the Company (the
"Company Subsidiaries") is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate or other power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority could not
reasonably be expected to have individually or in the aggregate a Company
Material Adverse Effect. Each Company Subsidiary is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing could
not reasonably be expected to have individually or in the aggregate a Company
Material Adverse Effect.
(ii) The Company is, directly or indirectly, the
record and beneficial owner of all of the outstanding shares of capital stock or
membership interests of each of the Company Subsidiaries, there are no proxies
with respect to any such shares or membership interests, and no equity
securities or membership interests of any Company Subsidiary are or may become
required to be issued by reason of any options, warrants, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable or exercisable for, shares of any
capital stock or membership interests of any Company Subsidiary, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any Company Subsidiary is or may be bound to issue, redeem, purchase or sell
additional shares of capital stock or membership interests of any Company
Subsidiary or securities convertible into or exchangeable or exercisable for any
such shares or membership interests. All of such shares or membership interests
so owned by the Company are validly issued, fully paid and nonassessable and are
owned by it free and clear of any claim, mortgage, deed of trust, pledge, lien,
security interest, charge, encumbrance, or similar agreement of any kind or
nature whatsoever ("Lien"), restraint on alienation, or any other restriction
with respect to the transferability or assignability thereof (other than
restrictions on transfer imposed by federal or state securities laws).
(d) MATERIAL INVESTMENTS. The Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation (other than a subsidiary), partnership, joint venture or other
business association or entity which is material to the Company.
13
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has the
power to enter into this Agreement and to carry out its obligations hereunder
(subject only, with respect to the Merger, to the approval and adoption of this
Agreement and the transactions contemplated hereby by the holders of at least
fifty percent (50%) of the outstanding shares of Common Stock entitled to vote
in accordance with the DGCL and the Company's Restated Certificate of
Incorporation and By-Laws). The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the Company's Board of
Directors and, except for the approval of its stockholders (if required under
applicable law), no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the transactions contemplated hereby.
Subject to the foregoing, this Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms. The
Company has taken all action necessary so that the restrictions set forth in
Section 203 of the DGCL will not and do not apply to the Merger.
(f) CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act (the HSR Act, Securities Act and Exchange
Act, collectively, the "Governmental Requirements), state or foreign laws
relating to takeovers, if applicable, state securities or blue sky laws, and the
filing of the Certificate of Merger, no filing with, and no permit,
authorization, consent or approval of, any court, tribunal or Governmental
Person is necessary for the execution, delivery and performance of this
Agreement by the Company of the transactions contemplated by this Agreement.
Neither the execution, delivery and performance of this
Agreement by the Company, nor the consummation by the Company of the
transactions contemplated hereby, nor compliance by the Company with any of the
provisions hereof, will (i) conflict with or result in any breach of any
provisions of the Restated Certificate of Incorporation or By-Laws of Company or
the Certificate or Articles of Incorporation, as the case may be, or By-Laws of
any of the Company Subsidiaries, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default under
(or give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension or revocation), any of the terms, conditions
or provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, lease, license, contract, agreement, insurance policy, plan or other
instrument or obligation to which the Company or any of the Company Subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound or affected, (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Company, any of the Company Subsidiaries or
any of their properties or assets, (iv) result in the creation or imposition of
any Lien on any asset of the Company or any Company Subsidiary or (v) cause the
suspension, termination or revocation of any certificates of need,
accreditation, registrations, licenses, permits and other consents or approvals
of Governmental Persons, except in the case of clauses (ii), (iii), (iv) and (v)
for violations, breaches, defaults, terminations, cancellations, accelerations,
creations, impositions, suspensions or revocations which could not reasonably be
expected to have individually or in the aggregate a Company Material Adverse
Effect. "Governmental Person"
14
means any governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, agency, bureau, body or entity of the United States
of America or of any state, county, municipality or other political subdivision
located therein.
(g) COMPANY SEC REPORTS. Exclusive of the exhibits thereto,
the Company has delivered to Parent true and complete copies of each
registration statement, periodic and other reports and information or proxy
statements, including, without limitation, its Annual Reports to Stockholders
incorporated in material part by reference in certain of such reports, in the
form (including any amendments thereto) required to be filed with the SEC since
January 1, 1997 (collectively, the "Company SEC Reports"). As of the respective
dates the Company SEC Reports were filed or, if any such Company SEC Report was
amended or supplemented, as of the date such amendment or supplement was filed,
each of the Company SEC Reports (i) complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, and the
rules and regulations promulgated thereunder, and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Each of the
audited consolidated financial statements and unaudited consolidated interim
financial statements of the Company (including any related notes and schedules)
included (or incorporated by reference) in its Annual Reports on Form 10-K for
each of the fiscal years ended December 27, 1997, and December 28, 1996 and its
Quarterly Reports on Form 10-Q for all interim periods subsequent to December
27, 1997 were prepared based upon and are consistent with the books and records
of the Company and the Company Subsidiaries (which books and records are correct
and complete in all material respects) and fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company as of its date and the consolidated results of
operations and changes in financial position for the period then ended (subject
to normal year-end adjustments in the case of any unaudited interim financial
statements).
(h) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 27,
1997 (the "Company Financial Statement Date"), except as set forth in the SEC
Reports, the Company and the Company Subsidiaries have in all material respects
conducted their business in the ordinary course consistent with past practices
and there has not occurred: (i) any Company Material Adverse Effect; (ii) any
amendments or changes in the Restated Certificate of Incorporation or By-Laws of
the Company; (iii) any sale of, or material pledge of or material encumbrance
upon, property of the Company with a value in excess of $250,000; (iv) any
material change by the Company in its accounting methods, principles or
practices except as required by any change in GAAP or as a result of a change in
law; or (v) any material revaluation by Company of any of its assets, including,
without limitation, writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business.
(i) LITIGATION. Except for litigation disclosed in the Company
SEC Reports, there is no suit, action or proceeding (whether at law or equity,
before or by any federal, state or foreign commission, court, tribunal, board,
agency or instrumentality, or before any arbitrator) pending or, to the
knowledge of the Company, threatened against or affecting the Company or
15
any of the Company Subsidiaries, nor is there any judgment, decree, injunction,
rule or order of any court, tribunal, arbitrator or Governmental Person
outstanding against the Company or any of the Company Subsidiaries which could
reasonably be expected to have any such effect.
(j) ABSENCE OF UNDISCLOSED LIABILITIES. Except for liabilities
or obligations which are accrued or reserved against in the Company's financial
statements (or reflected in the notes thereto) included in the SEC Reports or
which were incurred after the Company Financial Statement Date in the ordinary
course of business and consistent with past practices, the Company and the
Company Subsidiaries do not have any material liabilities or obligations
(whether absolute, accrued, contingent or otherwise).
(k) NO DEFAULT. Neither the Company nor any of the Company
Subsidiaries is in violation or breach of, or default under (and no event has
occurred which with notice or the lapse of time or both would constitute a
violation or breach of, or a default under) any term, condition or provision of
(i) its Restated Certificate of Incorporation or By-Laws, (ii) any note, bond,
mortgage, deed of trust, security interest, indenture, license, agreement, plan,
contract, lease, insurance policy, commitment or other instrument or obligation
to which the Company or any of the Company Subsidiaries is a party or by which
they or any of their properties or assets may be bound or affected, (iii) any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or any of the Company Subsidiaries or any of their properties or assets,
or (iv) any license, permit and other consent or approval of Governmental
Persons, except in the case of clauses (ii), (iii) and (iv) above for breaches,
defaults or violations which could not reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect.
(l) TAXES.
(A) The Company and each of the Company Subsidiaries
has (i) timely filed (or has had timely filed on its behalf) or will cause to be
timely filed all material Tax Returns required by applicable law to be filed by
any of them for tax years ended prior to the date of this Agreement and all such
Tax Returns and amendments thereto are or will be true, complete, and correct in
all material respects, (ii) paid (or has had paid on its behalf) all Taxes due
or has properly accrued or reserved for all such Taxes for such periods and
(iii) accrued for all Taxes for periods commencing after the periods covered by
such Tax Returns and ending prior to the date hereof. Neither the Company nor
any Company Subsidiary is currently the beneficiary of any extension of time
within which to file any tax return.
(B) There are no material liens for Taxes upon the
assets of the Company or any of the Company Subsidiaries, except liens for taxes
not yet due.
(C) There are no material deficiencies or adjustments
for Taxes that have been proposed or assessed by any Tax Authority against the
Company or any of the Company Subsidiaries and which remain unpaid. There is no
dispute or claim concerning any liability for Taxes of the Company or any
Company Subsidiary, and no Audit of the aforesaid Tax Returns is currently
underway or threatened.
16
(D) Neither the Company nor any Company Subsidiary
has any all material Tax sharing, Tax indemnity, or similar agreements to which
the Company or any of the Company Subsidiaries is a party, is bound by, or has
any obligation or liability for Taxes.
(E) The Company and the Company Subsidiaries have not
paid, and do not expect to pay, in any taxable year commencing on or after
December 30, 1995, remuneration that would result in a disallowance of any
material amount of tax deductions under section 162(m) of the Internal Revenue
Code of 1986, as amended, and any regulations or published rulings promulgated
or issued thereunder (the "Code"). There are no changes in the tax accounting
methods subject to section 481(a) of the Code which have an ongoing material
effect on Company or any of the Company Subsidiaries. No "consent" within the
meaning of section 341(f) of the Code has been filed with respect to the Company
or any of the Company Subsidiaries.
(F) As used herein, (i) "Audit" shall mean any audit,
assessment of taxes, other examination by any Tax Authority, proceeding or
appeal of such proceeding relating to Taxes, (ii) "Taxes" shall mean all
Federal, state, local and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding and whether or not shown
on any tax return), including any interest, additions to tax, or penalties
applicable thereto, (iii) "Tax Authority" shall mean the Internal Revenue
Service and any other domestic or foreign governmental authority responsible for
the administration of any Taxes, and (iv) "Tax Returns" shall mean all Federal,
state, local and foreign tax returns, declarations, statements, reports,
schedules, forms and information returns and any amended Tax Return relating to
Taxes.
(m) TITLE TO CERTAIN PROPERTIES; ENCUMBRANCES. The Company or
the Company Subsidiaries, as the case may be, hold (i) good and marketable title
to all real and personal property purported to be owned by them and (ii) good
leasehold title to all real and personal property purported to be leased by
them, in each case free and clear of all Liens, except for: (x) any Lien for
current Taxes not yet due and payable, and (y) Liens that could not reasonably
be expected to have individually or in the aggregate a Company Material Adverse
Effect and that otherwise do not adversely effect the value or the use by the
Company or the Company Subsidiaries, as the case may be, of the property that is
the subject of such Liens. The Company has provided Parent with copies of all
real property leases to which the Company or a Company Subsidiary is a party and
has provided to Parent a list of all real property owned or leased by the
Company or a Company Subsidiary except such leases or property which
individually or in the aggregate are immaterial. No consent by or of any party
to any such lease is required in order to consummate the transactions
contemplated by this Agreement without causing a breach or violation of or
default or increased charges under such lease.
(n) COMPLIANCE WITH APPLICABLE LAW. Each of the Company and
the Company Subsidiaries is in compliance with all applicable laws, except where
the failure to be in such compliance could not reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect.
17
(o) LABOR MATTERS. Neither Company nor any of the Company
Subsidiaries is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization. There is no unfair labor practice or labor arbitration proceeding
pending or, to the knowledge of the Company, threatened against the Company or
the Company Subsidiaries relating to their business, except for any such
proceedings which could not reasonably be expected to have individually or in
the aggregate a Company Material Adverse Effect. To the knowledge of the
Company, there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of the Company or any of the Company Subsidiaries, nor, does any labor
union or organization claim to represent the employees of the Company or any of
the Company Subsidiaries. There is no labor strike, dispute, slow down, work
stoppage, or lockout actually pending or, to the knowledge of the Company,
threatened against the Company or the Company Subsidiaries. The Company has
provided Parent with all collective bargaining agreements to which the Company
or any Company Subsidiary is a party or may be bound.
(p) EMPLOYEE BENEFIT PLANS; ERISA.
(A) With respect to each of the bonus, deferred
compensation, incentive compensation, stock purchase, stock option, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, and each other employee benefit plan,
program, agreement or arrangement of the Company and the Company's Subsidiaries
(the "Company Plans") in force on or after December 30, 1995, except for
multi-employer plans as defined in Section 3(37)(A) of the Employee Retirement
Income Security Act of 1974, as amended, and any regulations or published
rulings promulgated or issued thereunder ("ERISA"), the Company has heretofore
delivered to Parent true and complete copies of each of the following documents:
(i) a copy of the Company Plans (including all amendments thereto), (ii) a copy
of the annual report and actuarial report, if required under ERISA, with respect
to each of the Company Plans that is an "employee benefit plan," as that term is
defined in Section 3(3) of ERISA (the "Company ERISA Plans"), for the last two
years, (iii) a copy of the most recent Summary Plan Description, together with
each Summary of Material Modifications, required under ERISA with respect to the
Company ERISA Plans, (iv) if the Company Plans are funded through a trust or any
third party funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements thereof,
and (v) the most recent determination letter received from the Internal Revenue
Service with respect to each Company ERISA Plan intended to qualify under
Section 401(a) of the Code.
(B) No liability under Title IV of ERISA has been
incurred by the Company, any Company Subsidiary or any company that is an
affiliate of the Company under ERISA (a "Company ERISA Affiliate") since the
effective date of ERISA that has not been satisfied in full, and no condition
exists that presents a material risk to the Company, any Company Subsidiary or
any Company ERISA Affiliate of incurring any liability under such Title (other
than liability for premiums due to the Pension Benefit Guarantee Corporation).
To the extent this representation applies to Sections 4064, 4069 or 4204 of
Title IV of ERISA, it is made not only with respect to the Company ERISA Plans
but also with respect to any employee benefit
18
plan, program, agreement or arrangement subject to Title IV of ERISA to which
the Company, a Company Subsidiary or a Company ERISA Affiliate made, or was
required to make, contributions during the five-year period ending on the date
of this Agreement.
(C) With respect to each Company ERISA Plan which is
subject to Title IV of ERISA, the present value of accrued benefits under such
plan, based upon the actuarial assumptions used for financial reporting purposes
in either the most recent actuarial report prepared by such plan's actuary with
respect to such plan or in information disclosed to the Company by a
multiemployer plan as defined in Section 3(37)(A) of ERISA, did not exceed, as
of its latest valuation date, the then current value of the assets of such plan
allocable to such accrued benefits.
(D) No Company ERISA Plan or any trust established
thereunder has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of
the last day of the most recent fiscal year of each Company ERISA Plan ended
prior to the date of this Agreement, and all contributions required to be made
with respect thereto (whether pursuant to the terms of any Company ERISA Plan or
otherwise) on or prior to the date of this Agreement have been timely made.
(E) No ERISA Plan is a "multi-employer pension plan,"
as defined in Section 3(37)(A) of ERISA, nor is any Company ERISA Plan a plan
described in Section 4063(a) of ERISA.
(F) Except for any multiemployer plan as defined in
Section 3(37)(A) of ERISA, each of the Company Plans has been operated and
administered in all material respects in accordance with applicable laws,
including, but not limited to, ERISA and the Code except for requirements which
could not reasonably be expected to have individually or in the aggregate a
Company Material Adverse Effect.
(G) No amounts payable under the Company Plans or any
other contract, arrangement or agreement will fail to be deductible for federal
income tax purposes by virtue of Section 280G of the Code.
(H) No Company Plan provides benefits, including
without limitation death or medical benefits (whether or not insured), with
respect to current or former employees of the Company, any Company Subsidiary or
any Company ERISA Affiliate beyond such employees' retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
death benefits or retirement benefits under any "employee pension plan", as that
term is defined in Section 3(2) of ERISA, (iii) deferred compensation benefits
accrued as liabilities on the books of the Company, any Company Subsidiary or
any Company ERISA Affiliate or (iv) benefits the full cost of which is borne by
such employees or their beneficiaries.
(I) The consummation of the transactions contemplated
by this Agreement will not (i) entitle any current or former employee or officer
of the Company, any Company Subsidiary or any Company ERISA Affiliate to
severance pay, unemployment
19
compensation or any other payment, except as expressly provided in this
Agreement, or (ii) accelerate the time of payment or vesting, or increase the
amount, of any compensation due any such employee or officer.
(q) INTELLECTUAL PROPERTY. The Company and the Company
Subsidiaries, as the case may be, have the lawful right to use all intellectual
property currently used in any of their businesses, and no such use infringes
upon the lawful rights of any other person, except as could not reasonably be
expected to have individually or in the aggregate a Company Material Adverse
Effect. No person is using any intellectual property in a manner which infringes
upon the lawful rights of the Company or any Company Subsidiary, except as could
not reasonably be expected to have individually or in the aggregate in a Company
Material Adverse Effect.
(r) INSURANCE. The Company and each Company Subsidiary has
provided true and correct copies of insurance policies maintained by the Company
and Company Subsidiaries. Such policies are in full force and effect, all
premiums due on such policies have been paid, and neither the Company nor any
Company Subsidiary has received any notice of cancellation with respect hereto.
Neither the Company nor any Company Subsidiary has any obligation, liability or
indebtedness for premiums or for retroactive premium adjustments for any period
through the date hereof which obligation, liability or indebtedness could
reasonably be expected to have individually or in the aggregate a Company
Material Adverse Effect. There are no claims by the Company or any of the
Company Subsidiaries under any of the Company's insurance policies as to which
any insurance company is denying liability or defending under a reservation of
rights clause, in each case except as could not reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect.
(s) BROKERS. No broker, finder or investment banker (other
than ▇.▇. ▇▇▇▇▇▇▇ & Company, Inc. ("▇.▇. ▇▇▇▇▇▇▇ & Company") and Everen) is
entitled to any brokerage, finder's fee or other fee or commission payable by
the Company in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Company.
(t) CUSTOMERS AND SUPPLIERS. No customer or supplier of the
Company or any Company Subsidiary with aggregate sales to the Company and the
Company Subsidiaries in the 12-month period ending December 27, 1997 of $500,000
or more has terminated its relationship with, or materially reduced its
purchases from or sales to, as the case may be, the Company or any Company
Subsidiary. The Company does not expect that any such customer or supplier will
do so as a result of the transactions contemplated by this Agreement, except as
could not reasonably be expected to have individually or in the aggregate a
Company Material Adverse Effect.
(u) GOVERNMENTAL PERMITS. The Governmental Permits obtained by
the Company have been validly acquired, are in full force and effect and, except
as could not reasonably be expected to have individually or in the aggregate a
Company Material Adverse Effect, represent all Governmental Permits necessary
under applicable law for the Company or any Company Subsidiary to carry on its
business as now being conducted and to own, occupy or
20
use its properties and assets. The Company and the Company Subsidiaries are in
compliance with all such Governmental Permits, except where the failure to so
comply could not reasonably be expected to have a Company Material Adverse
Effect. "Government Permit" means any permit, license, franchise, certificate,
authorization, approval or consent obtained from or issued by any Governmental
Person which is necessary for the Company or the Company Subsidiary to carry on
its business as now being conducted or to own, operate or use its properties and
assets.
(v) ENVIRONMENTAL MATTERS.
(A) No Hazardous Substances have been or are being
generated, used, processed, treated, stored, released, transported or disposed
of by the Company and the Company Subsidiaries, except in material compliance
with applicable Environmental Rules;
(B) to the Company's knowledge, no Hazardous
Substances are present on or under any real property owned, leased, occupied or
used by the Company or any Company Subsidiary, or in any improvement located
thereon, in quantities or at levels which require reporting or remediation under
any applicable Environmental Rule; and
(C) to the Company's knowledge, no event has occurred
and no condition exists with respect to Company or any Company Subsidiary or
their business, properties or assets which could reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect under any
applicable Environmental Rule, and neither the Company nor any Company
Subsidiary has received any notice from any Governmental Person of its intention
to impose any liability, cost or expense upon the Company under any applicable
Environmental Rule which could reasonably be expected to have individually or in
the aggregate a Company Material Adverse Effect.
As used in this Agreement, "Environmental Rule" means
any governmental rule which relates to Hazardous Substances, pollution or
protection of the environment, natural resources or public health or safety,
including without limitation any governmental rule relating to the generation,
use, processing, treatment, storage, release, transport or disposal of Hazardous
Substances and any common laws of nuisance, negligence and strict liability
relating thereto, together with all rules, regulations and orders issued
thereunder.
As used in this Agreement, "Hazardous Substance"
means any substance which constitutes, in whole or in part, a pollutant,
contaminant or toxic or hazardous substance or waste under, or the generation,
use, processing, treatment, storage, release, transport or disposal of which is
regulated by, any governmental rule, and shall specifically include without
limitation any substance which constitutes a "hazardous substance" under the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., or a "hazardous waste" under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., or constitutes asbestos, urea
formaldehyde, chlorinated biphenyls (polychlorinated or monochlorinated) or
petroleum products.
21
(w) MATERIAL AGREEMENTS. Each contract, agreement, instrument
or document involving the payment by or to the Company or any Company Subsidiary
(whether direct or indirect, fixed or contingent) of more than $250,000 over the
term thereof (a "Material Contract"), each real property lease to which the
Company is a party, each labor agreement to which the Company is a party and
each agreement, document, instrument that creates, evidences or secures any
indebtedness of $250,000 or more of the Company or any Company Subsidiary or
pursuant to which the Company or any Company Subsidiary has guaranteed
indebtedness or other obligations of $250,000 or more, and each Company ERISA
Plan (each a "Company Material Agreement") is in full force and effect and is
enforceable in accordance with its terms. The Company or the Company Subsidiary,
as the case may be, is in compliance with each Company Material Agreement,
except, in each case, for such non-compliance that could not reasonably be
expected to have a Company Material Adverse Effect. All other parties to the
Company Material Agreements are in substantial compliance with the terms thereof
except, in each case, for such non-compliance that could not reasonably be
expected to have a Company Material Adverse Effect. Other than real and personal
property leases which require consent, the Company does not expect that the
consummation of the transactions contemplated by this Agreement will have a
material adverse effect on any Company Material Agreement or the relationship of
the parties thereto, except as could not reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect.
(x) TRANSACTIONS WITH AFFILIATES. Except as disclosed in the
Company SEC Reports or specifically excluded pursuant to the last sentence of
this subsection (x):
(A) none of the customers, suppliers, distributors or
sales representatives of the Company are Affiliates of the Company;
(B) none of the properties or assets of the Company
are owned or used by or leased to any Affiliate of the Company;
(C) no Affiliate of the Company is a party to any
agreement with the Company; and
(D) any agreement between the Company and any
Affiliate of the Company contains commercially reasonable terms and conditions.
(E) As used in this Agreement, "Affiliate" means with
respect to any person, any person who directly or indirectly controls or is
controlled by, or is under common control with, such person. As used in this
definition, the term "control" shall mean, with respect to any person, the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such person, whether through ownership of voting
securities, by contract or otherwise.
It is understood and agreed that no disclosure under
this subsection (x) is required for any of the items listed in (A) through (D)
above if disclosure thereof would not be required in any of the Company SEC
Reports.
22
(y) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement, anything described
in or listed in the Company Disclosure Letter, or any other document delivered
pursuant to this Agreement, neither the Company nor any other person makes any
representation or warranty to Parent or Sub, express or implied, and the Company
and each Company Subsidiary hereby disclaims any such representation or
warranty, whether by the Company or a Company Subsidiary or any of their
respective officers, directors, employees, agents or representatives or any
other person of any document or other information. No representations,
warranties or statements of the Company contained in this Agreement or any other
document delivered pursuant to this Agreement contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
herein and therein, in light of the circumstances in which they were made, not
misleading.
(z) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in (i)
the Offer Documents, (ii) the Schedule 14D-9, or (iii) if required, the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Rule 14f-1 Statement") or
any proxy or information statement will, at the respective times the Offer
Documents, the Schedule 14D-9 and the Rule 14f-1 Statement are filed with the
SEC or first published, sent or given to the Company's stockholders or, in the
case of any proxy or information statement, at the time the proxy or information
statement is first mailed to the Company's stockholders or at the time of the
meeting of the Company's stockholders held to vote on approval and adoption of
this Agreement, if necessary, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Schedule 14D-9, the Rule 14f-1 Statement and any such proxy or information
statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub for inclusion or incorporation by reference therein.
(aa) CERTAIN EXPENSES. The Company has previously disclosed to
Parent the Company's fee arrangements with ▇.▇. ▇▇▇▇▇▇▇ & Company and Everen and
with the Company's other professional advisors, and such arrangements continue
and will continue in effect without alteration.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent
and Sub represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as it is now being
conducted or presently proposed to be conducted.
(b) AUTHORITY. Each of Parent and Sub has the power to enter
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of
23
this Agreement by each of Parent and Sub and the consummation by each of Parent
and Sub of the transactions contemplated hereby have been duly authorized by the
Board of Directors of each of Parent and Sub and by the sole Shareholder of Sub
and, no other corporate proceedings on the part of Parent or Sub are necessary
to authorize this Agreement or the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by each of Parent and
Sub and constitutes a legal, valid and binding agreement of each of Parent and
Sub, enforceable against each of Parent and Sub in accordance with its terms.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable Governmental Requirements, state or foreign laws relating to
takeovers, if applicable, state securities or blue sky laws, and the filing of
the Certificate of Merger, no filing with, and no permit, authorization, consent
or approval of, any court, tribunal or Governmental Person is necessary for the
execution, delivery and performance of this Agreement by Parent or Sub of the
transactions contemplated by this Agreement. Neither the execution, delivery and
performance of this Agreement by Parent or Sub, nor the consummation by Parent
or Sub of the transactions contemplated hereby, nor compliance by Parent or Sub
with any of the provisions hereof, will (i) conflict with or result in any
breach of any provisions of the Articles or Certificate of Incorporation or
By-Laws of Parent or Sub, as the case may be, (ii) except as previously
disclosed by Parent to the Company in writing, result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under, any of the
terms, conditions or provisions of any note, bond, mortgage, deed of trust,
security interest, indenture, lease, license, contract, agreement, insurance
policy plan or other instrument or obligation to which Parent or Sub is a party
or by which either of them or either of their properties or assets may be bound
or affected, (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or Sub or any of their properties or assets,
(iv) result in the creation or imposition of any Lien on any asset or (v) cause
the suspension, termination or revocation of any registrations, licenses,
permits and other consents or approvals of Governmental Persons, except in the
case of clauses (ii), (iii), (iv) and (v) for violations, breaches, defaults,
terminations, cancellations, accelerations, creations, impositions, suspensions
or revocations which could not reasonably be expected to have a individually or
in the aggregate a material adverse effect on the business, assets, liabilities,
results of operations or financial condition of the Parent and its subsidiaries
taken as whole (a "Parent Material Adverse Effect") or prevent the consummation
of the transactions contemplated hereby.
(d) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by Parent or Sub for inclusion or incorporation by reference in
the Offer Documents, the Schedule 14D-9, the Rule 14F-1 Statement or any proxy
or information statement will, at the respective times the Offer Documents, the
Schedule 14D-9 and the Rule 14F-1 Statement are filed with the SEC or first
published, sent or given to the Company's stockholders, or, in the case of any
proxy or information statement, at the time any proxy or information statement
is first mailed to the Company's stockholders or at the time of the meeting of
the Company's stockholders held to vote on approval and adoption of this
Agreement, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The
24
Offer Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
(e) BROKERS. No broker, investment banker, financial advisor
or other person, other than ▇▇▇▇▇▇▇▇ & Co. Inc. ("Parent's Investment Advisor"),
the fees and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
(f) FINANCING. Parent has provided to the Company a complete
and correct copy of a letter from Parent's Investment Advisor as to the ability
of Parent to finance the transactions contemplated by this Agreement (the
"Highly Confident Letter"). The Highly Confident Letter is in full force and
effect.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. CONDUCT OF BUSINESS BY THE COMPANY. From the date hereof
until the Effective Time, unless Parent shall otherwise agree in writing, or
except as set forth on Schedule 5.01 of the Company Disclosure Letter, or as
otherwise contemplated by this Agreement, the Company and the Company
Subsidiaries shall conduct their business in the ordinary course consistent with
past practice and shall use their reasonable best efforts to preserve intact
their business organizations and relationships and goodwill with third parties
and to keep available the services of their present officers and key employees,
subject to the terms of this Agreement. Without limiting the foregoing and
except as otherwise provided in this Agreement, from the date hereof until the
Effective Time, without the prior written consent of Parent, which consent shall
not be unreasonably withheld:
(a) The Company will not adopt or propose any change in its
Restated Certificate of Incorporation or By-Laws;
(b) Other than the regular quarterly dividend payable on the
Convertible Preferred Stock, the Company will not, and will not permit any
Company Subsidiary to, declare, set aside or pay any dividend or other
distribution with respect to any shares of capital stock of the Company, or
contract for or effect any repurchase, redemption or other acquisition or
investment by the Company or any Company Subsidiary of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company or any Company Subsidiary, or declare or effect any stock split,
reclassification or other change in capital structure;
25
(c) The Company will not, and will not permit any Company
Subsidiary to, enter into or consummate any joint venture, partnership, or other
similar arrangement or form any other new arrangement for the conduct of its
business or acquire or enter into any agreement or letter of intent to merge or
consolidate with any other person;
(d) The Company will not, and will not permit any Company
Subsidiary to, purchase a material amount of assets or securities of any other
person, except for asset purchases in the ordinary course of business consistent
with past practice or as described in the Company Disclosure Letter;
(e) The Company will not, and will not permit any Company
Subsidiary to, sell, lease, license or otherwise surrender, relinquish or
dispose of any assets or property which are material to the Company and the
Company Subsidiaries, taken as a whole, except (x) pursuant to existing
contracts or commitments (the terms of which have been disclosed to Parent prior
to the date hereof), or (y) in the ordinary course of business consistent with
past practice;
(f) The Company will not settle any material Audit, make or
change any material Tax election or file amended Tax Returns;
(g) The Company will not issue or grant any securities or
option or warrant to acquire any securities (except pursuant to existing
obligations), enter into any amendment of any material term of any outstanding
security of the Company or of any Company Subsidiary, incur any indebtedness,
including notes payable or capital lease obligations, or guarantee obligations
of others except pursuant to existing credit facilities or arrangements, fail to
make any required contribution to any Company ERISA Plan, take any action to
amend or terminate any Company Plan, increase compensation, bonus or other
benefits payable to any employee or former employee, consultant or agent, adopt
any other plan, program, arrangement or practice providing benefits for or
compensation to or on behalf of its employees or former employees (except as
required by applicable law), or enter into any settlement or consent with
respect to any pending litigation, except in the ordinary course of business
consistent with past practice or as otherwise permitted by this Agreement;
(h) The Company will not change any method of accounting or
accounting practice, or any practice relating to the maintenance of records, by
the Company or any Company Subsidiary, except for any such required change by
GAAP;
(i) The Company will not, and will not permit any Company
Subsidiary to, agree or commit to do any of the foregoing; and
(j) except to the extent necessary to comply with the
requirements of applicable laws and regulations, the Company will not, and will
not permit any Company Subsidiary to (i) take, or agree or commit to take, any
action that would make any representation and warranty of the Company hereunder
inaccurate in any respect at, or as of any time prior to, the Effective Time or
(ii) omit, or agree or commit to omit, to take any action necessary to prevent
any such representation or warranty from being inaccurate in any respect at any
such
26
time, provided, however that the Company shall be permitted to take or omit to
take such action which can (without any uncertainty) be cured at or prior to the
Effective Time.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT.
(a) If stockholder approval of this Agreement is required by law, the
Company will, at Parent's request, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Stockholders' Meeting") for the purpose of
approving this Agreement and the transactions contemplated by this Agreement.
The Company will, through its Board of Directors, recommend to its stockholders
approval of this Agreement and the transactions contemplated by this Agreement,
in the event a Stockholders' Meeting is required to approve the Merger.
Notwithstanding the foregoing, if Parent shall acquire such number of the
outstanding shares of Common Stock as to be able to cause the Merger to become
effective without a Stockholders' Meeting, the parties shall, at the request of
Parent, take all necessary and appropriate action to cause the Merger to become
effective without a Stockholders' Meeting in accordance with the Company's
Restated Certificate of Incorporation and Section 253 of the DGCL.
(b) If stockholder approval of this Agreement is required by law, the
Company will, at Parent's request, prepare and file a preliminary Proxy
Statement with the SEC and will use its best efforts to respond to any comments
of the SEC or its staff and to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after such filing. The Company
will notify Parent promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Proxy Statement or for additional information and will supply Parent with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement or the Merger. If at any time prior to the approval of this
Agreement by the Company's stockholders there shall occur any event that should
be set forth in an amendment or supplement to the Proxy Statement, the Company
will promptly prepare and mail to its stockholders such an amendment or
supplement. The Company will not mail any Proxy Statement, or any amendment or
supplement thereto, to which Parent reasonably objects.
(c) Sub agrees to vote, and Parent agrees to cause, all shares of
Common Stock purchased pursuant to the Offer and all other shares of Common
Stock owned by Sub or any other subsidiary of Parent to be voted in favor of the
approval of this Agreement.
SECTION 6.02. ACCESS TO INFORMATION; CONFIDENTIALITY. During the period
prior to the Effective Time of the Merger, the Company will, and will cause each
Company Subsidiary to, (a) give Parent, and Parent's officers, employees,
accountants, counsel, financial advisors and other authorized representatives,
at Parent's expense, (i) access during regular business hours to such offices,
warehouses and other properties, to such employees, agents, independent
27
accountants and to such books, records, financial and operating data, contracts
and commitments as the Company believes is reasonably necessary in light of the
transactions contemplated hereby and, during such period, the Company will, and
will cause each Company Subsidiary to, furnish promptly to Parent a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of Federal or state securities laws;
and (b) permit Parent, at its own expense, and its authorized representatives to
make such inspections of real property and the improvements thereon, including,
without limitation, environmental assessments or surveys, during regular
business hours as the Company believes is reasonably necessary in light of the
transactions contemplated hereby; provided, however, that such access shall be
conducted in such a manner as to (i) avoid any undue disruption of the normal
business operations of the Company and the Company Subsidiaries and (ii)
maintain the confidentiality of the Material, as defined in the Confidentiality
Agreement, dated March 11, 1998 (the "Confidentiality Agreement"), between
Parent and the Company, in accordance with the provisions set forth therein.
SECTION 6.03. BEST EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Offer and the Merger, and the other transactions contemplated
by this Agreement, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Persons and the
making of all necessary registrations and filings (including filings with
Governmental Persons, if any) and the taking of all reasonable steps as may be
necessary to obtain
28
an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Person, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Person vacated or reversed and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing and to the
extent possible under applicable law, the Company, Parent and Sub and their
respective Boards of Directors shall (x) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to the Offer, the Merger, this Agreement or any of the other
transactions contemplated by this Agreement, other than any such statutes or
regulations the sole effect of which is to require a filing or notice, provided
that the Company, Parent and Sub, as applicable, shall take all action necessary
to comply with such filing and notice requirements, and (y) if any state
takeover statute or similar statute or regulation becomes applicable to the
Offer, the Merger, this Agreement or any other transaction contemplated by this
Agreement, take all action necessary to ensure that the Offer, the Merger and
the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Offer, the
Merger and the other transactions contemplated by this Agreement. Nothing herein
shall require Parent or Sub to accept any financing.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
material respect, including if necessary, by amendment to the Company Disclosure
Letter (which amendments shall not affect or amend the representations and
warranties of the Company set forth herein), and (ii) any failure by it to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
notification shall impair or in any way affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
SECTION 6.04. STOCK PLANS.
(a) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans), shall adopt such resolutions or take such other
actions as are required to adjust the terms of all outstanding stock options to
purchase shares of Common Stock ("Stock Options") heretofore granted under any
stock option, program or arrangement of the Company (collectively, the "Stock
Plans") to provide that each Stock Option outstanding immediately prior to the
acceptance for payment of shares of Common Stock pursuant to the Offer, whether
or not vested, shall be canceled in exchange for a cash payment by Sub within
five business days of the day shares of Common Stock are purchased pursuant to
the Offer, an amount equal to (i) the excess, if any, of (x) the price per share
of Common Stock to be paid pursuant to the Offer over (y) the exercise price per
share of Common Stock subject
29
to such Stock Option, multiplied by (ii) the number of shares of Common Stock
for which such Stock Option may then be exercised (the "Option Consideration").
(b) All amounts payable pursuant to this Section 6.04 shall be subject
to any required withholding of taxes and shall be paid without interest. The
Company shall use its best efforts to obtain all consents of the holders of the
Stock Options as shall be necessary to effectuate the foregoing. Notwithstanding
anything to the contrary contained in this Agreement, payment shall, at Parent's
request, be withheld in respect of any Stock Option with respect to any holder
until all necessary consents with respect to such holder are obtained.
(c) The Stock Plans shall terminate as of the Effective Time of the
Merger, and the provisions in any other employee benefit, stock or other plan of
the Company providing for the issuance, transfer or grant of any capital stock
of the Company, any interest in respect of any capital stock of the Company, or
any amounts derived from the value of any capital stock of the Company shall be
deleted as of the Effective Time of the Merger, and the Company shall ensure
that following the Effective Time of the Merger no holder of a Stock Option or
any participant in any Stock Plan or other Company Plan shall have any right
thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
SECTION 6.05. COMPANY BENEFITS. Except as may be required by law,
Parent agrees, and shall cause Sub, to treat all employees of the Company or the
Company Subsidiaries no less favorably than the Parent or Sub treat its own
employees. For purposes of Parent or Sub's vacation, holiday and sick pay
benefits, Parent and Sub shall provide credit to all employees of the Company
and the Company Subsidiaries for their years of service with the Company or the
Company Subsidiaries.
SECTION 6.06. INDEMNIFICATION.
(a) The Certificate of Incorporation of the Surviving Corporation shall
contain provisions with respect to matters occurring prior to the Effective Time
that are no less favorable with respect to indemnification than are set forth in
Article VIII of the Restated Certificate of Incorporation of the Company, which
provisions shall not be amended, repealed or otherwise modified in any manner
that would have an adverse effect on the rights thereunder of individuals who as
of the date of this Agreement or at the Effective Time are directors, officers,
employees, fiduciaries or agents of the Company, unless such modification shall
be required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, indemnify and hold
harmless, and, after the Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, indemnify and hold harmless, each
present and former director, officer, employee, fiduciary and agent of the
Company and each Company Subsidiary and each fiduciary and agent of each such
director and officer (collectively, the "Indemnified Parties") against all costs
and expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and settlement amounts ("Losses") paid in connection with
any claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, criminal, administrative or
30
investigative, arising out of or pertaining to any action or omission in their
capacity as an officer, director, employee, fiduciary or agent of the Company or
any Company Subsidiary, occurring before the Effective Time, until the
expiration of the statute of limitations relating thereto (and shall pay any
expenses in advance of the final disposition of such action or proceeding to
each Indemnified Party to the fullest extent permitted under Delaware Law, upon
receipt from the Indemnified Party to whom expenses are advanced of any
undertaking to repay such advances required under Delaware Law). In the event of
any claim, action, suit, proceeding or investigation, to the extent provided in
the Company's Restated Certificate of Incorporation or the Certificate of the
Surviving Corporation, as the case may be, (i) the Company or the Surviving
Corporation, as the case may be, shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to the Company or the Surviving Corporation, promptly after
statements therefor are received, and (ii) the Company and the Surviving
Corporation shall cooperate in the defense of any such matter; provided,
however, that neither the Company nor the Surviving Corporation shall be liable
for any settlement effected without its written consent (which consent shall not
be unreasonably withheld); and provided, further, that neither the Company nor
the Surviving Corporation shall be obligated pursuant to this Section 6.06(b) to
pay the fees and expenses of more than one counsel (plus appropriate local
counsel) for all Indemnified Parties in any single action except to the extent
that two or more of such Indemnified Parties shall have conflicting interests in
the outcome of such action, in which case such additional counsel (including
local counsel) as may be required to avoid any such likely conflict may be
retained by the Indemnified Parties at the expense of the Company or the
Surviving Corporation, to the extent that payment of such expense is permitted
under the Company's Restated Certificate of Incorporation or the Certificate of
the Surviving Corporation, as the case may be; and provided further that, in the
event that any claim for indemnification is asserted or made, all rights to
indemnification in respect of such claim shall continue until the disposition of
such claim. Parent hereby guarantees the obligations of the Surviving
Corporation and, following consummation of the Offer, of the Company under this
Section 6.06(b).
(c) Parent shall cause the Surviving Corporation to, and the Surviving
Corporation shall maintain in effect for six years from the Effective Time, if
available, the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefore policies of at least the same coverage containing terms and
conditions which are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
the Surviving Corporation be required to expend pursuant to this Section 6.06(c)
more than an amount per year equal to 200% of current annual premiums paid by
the Company for such insurance. In the event that, but for the proviso to the
immediately preceding sentence, the Surviving Corporation would be required to
expend more than 200% of current annual premiums, the Surviving Corporation
shall obtain the maximum amount of such insurance obtainable by payment of
annual premiums equal to 200% of current annual premiums.
(d) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
31
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 6.06.
(e) Each of the Indemnified Parties is made a third party beneficiary
of the obligations of the Parent, Sub, Company and Surviving Corporation under
this Section 6.06.
SECTION 6.07. DIRECTORS. Promptly upon the acceptance for payment of,
and payment by Sub for, shares of Common Stock pursuant to the Offer, Sub shall
be entitled to designate such number of directors on the Board of Directors of
the Company as will give Sub, subject to compliance with Section 14(f) of the
Exchange Act, representation on such Board of Directors equal to at least that
number of directors, rounded up to the next whole number, which is the product
of (a) the total number of directors on such Board of Directors who are elected
by the holders of Common Stock pursuant to the Company's Restated Certificate of
Incorporation (giving effect to the directors elected pursuant to this sentence)
multiplied by (b) the percentage that (i) such number of shares of Common Stock
so accepted for payment and paid for by Sub plus the number of shares of Common
Stock otherwise owned by Sub or any other subsidiary of Parent bears to (ii) the
total number of shares of Common Stock outstanding, and the Company shall, at
such time, cause Sub's designees to be appointed or elected; provided, however,
that in the event that Sub's designees are to be appointed or elected to the
Board of Directors of the Company such Board of Directors shall have, until the
Effective Time of the Merger, at least three directors who are directors on the
date of this Agreement and who are not officers of the Company (the "Independent
Directors"); and provided further that, in such event, if the number of
Independent Directors shall be reduced below three for any reason whatsoever,
any remaining Independent Directors (or Independent Director, if there shall be
only one remaining) shall be entitled to designate persons to fill such
vacancies who shall be deemed to be Independent Directors for purposes of this
Agreement or, if no Independent Directors then remain, the other directors shall
designate three persons to fill such vacancies who shall not be officers,
stockholders or affiliates of the Company, Parent or Sub, and such persons shall
be deemed to be Independent Directors for purposes of this Agreement. Subject to
applicable law, the Company shall take all action requested by Parent necessary
to effect any such appointment or election, including mailing to its
stockholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the Schedule 14D-9
(provided that Sub shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect to
Sub's designees). In connection with the foregoing, the Company will promptly,
at the option of Sub, either increase the size of the Company's Board of
Directors or obtain the resignation of such number of its current directors as
is necessary to enable Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
SECTION 6.08. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
by this Agreement, including the Offer and the Merger,
32
and shall not issue any such press release or make any such public statement
prior to such consultation, except as any party may reasonably believe to be
required by applicable law, court process or by obligations pursuant to any
listing agreement with, or regulations or requirements of, any securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement will be substantially
in the form set forth in Exhibit B to this Agreement.
SECTION 6.09. STOCKHOLDER LITIGATION. The Company shall consult with
Parent in the defense or settlement of any stockholder litigation against the
Company and its directors relating to any of the transactions contemplated by
this Agreement; provided, however, that no such settlement shall be agreed to
without Parent's consent, which consent shall not be unreasonably withheld.
SECTION 6.10. ACQUISITION PROPOSALS.
(a) From the date hereof until the termination hereof, the Company and
the Company Subsidiaries will not, and will cause their respective officers,
directors, employees or other agents not to, directly or indirectly, (i) take
any action to solicit, initiate or encourage any Acquisition Proposal provided
that no public announcement made by the Company prior to the date hereof
regarding the transactions contemplated hereby or pursuant to the last sentence
of Section 6.08 shall be deemed a violation of this Section 6.10(a)(i), or (ii)
engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Company or the Company Subsidiaries, respectively,
or afford access to their respective properties, books or records to any person
in connection with an Acquisition Proposal. Nothing contained in this Section
6.10 shall prohibit the Company and its Board of Directors (or any committee
thereof) from (x) taking and disclosing a position with respect to a tender
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated by the
SEC under the Exchange Act, or (y) considering, negotiating, discussing,
approving or recommending to the stockholders of the Company a bona fide
Acquisition Proposal not solicited, initiated or encouraged in violation of this
Agreement if and only to the extent that, (A) such Board of Directors determines
in good faith upon the advice of counsel that such action is required for the
Board of Directors to comply with its fiduciary duties to stockholders imposed
by law, and (B) prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity, the Company provides
written notice to Parent to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such person or entity. Either
Parent or (provided the Company and its Board of Directors have complied with
the requirements of this Section 6.10(a)) the Company may terminate this
Agreement if the Company or its Board of Directors approves or recommends to the
Company's stockholders an Acquisition Proposal or the Board of Directors of the
Company withdraws its recommendation that the stockholders accept and approve
the transactions contemplated by this Agreement; provided that the Company or
its Board of Directors may take such actions only if the Company or such Board
of Directors has received a written opinion from the Company's investment
advisors that it reasonably believes the party making the Acquisition Proposal
has the financial ability to consummate such Acquisition Proposal on the
proposed terms and that such Acquisition Proposal may reasonably be expected to
provide a per share value greater than the Offer.
33
(b) The term "Acquisition Proposal" as used herein means any proposal
or offer from any person (other than Parent or Sub) relating to (i) any direct
or indirect acquisition or purchase of any equity interest in, or a substantial
amount of assets of, the Company or the Company Subsidiaries, (ii) any tender
offer or exchange offer (including a self-tender offer) involving the equity
securities of the Company, (iii) any merger, consolidation, recapitalization,
liquidation, business combination or similar transaction involving the Company
other than the transactions contemplated by this Agreement or (iv) any other
extraordinary transaction the consummation of which would or could reasonably be
expected to impede, interfere with, prevent or materially delay the transactions
contemplated by this Agreement.
(c) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any persons (other than each other)
conducted heretofore with respect to any of the foregoing transactions
referenced in this Section 6.10.
SECTION 6.11. FILINGS; OTHER ACTION. Subject to the terms and
conditions herein provided, as promptly as practicable, the Company, Parent and
Sub shall: (i) promptly make all filings and submissions under the HSR Act as
may be required to be made in connection with this Agreement and the
transactions contemplated hereby, (ii) use all reasonable efforts to cooperate
with each other in (A) determining which filings are required to be made prior
to the Effective Time with, and which material consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from any
Governmental Person in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (B)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations, and (iii) use all reasonable efforts to take, or
cause to be taken, all other action and do, or cause to be done, all other
things necessary or appropriate to consummate the transactions contemplated by
this Agreement. In connection with the foregoing, the Company will provide
Parent, and Parent and Sub will provide the Company, with copies of
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or any of its representatives, on the one
hand, and any Governmental Person or members of its respective staff, on the
other hand, with respect to this Agreement and the transactions contemplated
hereby. Each of Parent, Sub and the Company acknowledge that certain actions may
be necessary with respect to the foregoing in making notifications and obtaining
clearances, consents, approvals, waivers or similar third party actions which
are material to the consummation of the transactions contemplated hereby, and
each of Parent, Sub and the Company agree to take such action as is necessary to
complete such notifications and obtain such clearances, approvals, waivers or
third party actions.
34
SECTION 6.12. ADDITIONAL AGREEMENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including using all reasonable efforts to obtain all necessary
waivers, consents and approvals in connection with the Governmental
Requirements, to effect all necessary registrations and filings and to obtain
all necessary financing. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and/or directors of Parent, Sub and the Company
shall take all such necessary action.
SECTION 6.13. MERGER CERTIFICATE. Parent shall file or cause Sub to
file the Certificate of Merger referenced in Section 7.01(a) as soon as
practicable, but in no event more than two business days after the satisfaction
of the conditions set forth in Article VII.
SECTION 6.14. PROVISION OF FUNDS. Parent shall make available to Sub
all funds required to consummate the Offer and the Merger.
SECTION 6.15. EMPLOYMENT/CHANGE OF OWNERSHIP AGREEMENTS. Without
limitation, Parent and Sub agree to abide by all the terms of the Employment
Agreements and Change of Ownership Employment Agreements entered into by the
Company with certain of its employees, copies of which have previously been
provided to Parent and Sub.
SECTION 6.16. CONVERSION OF CONVERTIBLE PREFERRED STOCK AND EXERCISE OF
THE COMPANY WARRANTS. Concurrently with the execution hereof with respect to the
stockholders identified on the signature page of Exhibit E or as soon as
practicable hereafter with respect to all other holders, the Company and the
holders of the Convertible Preferred Stock will execute an agreement
substantially in the form of Exhibit C hereto and the Company and the holders of
the Company Warrants will execute an agreement substantially in the form of
Exhibit D hereto to provide that the outstanding Company Warrants and
Convertible Preferred Stock shall be exercised or converted simultaneously with
the closing of the Offer and the purchase of shares of Common Stock in the Offer
and the shares of Common Stock issuable upon such exercise or conversion shall
be tendered in the Offer. On the same day that shares of Common Stock are
purchased pursuant to the Offer, Sub shall pay to the holders of the Convertible
Preferred Stock or the Company Warrants, an amount equal to (a) in the case of
the Convertible Preferred Stock only, the price per share of Common Stock to be
paid pursuant to the Offer multiplied by the number of shares of Common Stock
into which such Convertible Preferred Stock may then be converted, and (b) in
the case of the Company Warrants only, (i) the excess, if any, of (x) the price
per share of Common Stock to be paid pursuant to the Offer over (y) the exercise
price per share of the Company Warrants, multiplied by (ii) the number of shares
of Common Stock for which such Company Warrants may then be exercised.
Notwithstanding anything to the contrary contained in this Agreement, payment
shall, at Parent's request, be withheld in respect of any Convertible Preferred
Stock or Company Warrants with respect to any holder until all necessary
consents with respect to such holder are obtained.
35
SECTION 6.17. STOCKHOLDERS' AGREEMENT TO TENDER. Concurrently with the
execution hereof, Sub and the stockholders identified on the signature page of
Exhibit E will enter into an agreement substantially in the form of Exhibit E,
whereby such stockholders will agree to tender all of the shares of Common Stock
owned or controlled by them to Sub in the Offer.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver on or prior to the Effective Time of the
Merger of the following conditions:
(a) STOCKHOLDER APPROVAL. If required by applicable law, this
Agreement shall have been approved and adopted by the affirmative vote of the
stockholders of the Company by the requisite percentage in accordance with
applicable law and the Company's Restated Certificate of Incorporation, and the
Certificate of Merger shall have been executed and delivered by the Surviving
Corporation and filed in the Department of State of the State of Delaware.
(b) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that each of
the parties shall have used its best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered.
(c) REGULATORY APPROVALS. All regulatory approvals (in
addition to any approval contemplated by the HSR Act) shall have been obtained
on terms mutually satisfactory to Parent and the Company, except for any the
failure of which to obtain would not have a material adverse effect on either
Parent or the Surviving Corporation.
(d) OFFER. Sub or its permitted assignee shall have purchased
all Common Stock validly tendered and not withdrawn pursuant to the Offer;
provided, however, that this condition shall not be applicable to the
obligations of Parent or Sub if, in breach of this Agreement or the terms of the
Offer, Sub fails to purchase any Common Stock validly tendered and not withdrawn
pursuant to the Offer.
36
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the stockholders of the Company, but prior to the Effective Time of
the Merger, in any one of the following circumstances:
(a) by mutual written consent of Parent and the Company,
except if shares of Common Stock have been purchased pursuant to the Offer;
(b) by any of Parent, Sub or the Company:
(i) if, upon a vote at a duly held Stockholders
Meeting or any adjournment thereof, any required approval of the Stockholders of
the Company shall not have been obtained;
(ii) if (x) Sub shall not have commenced the Offer
within the time required by Section 1.01 of this Agreement, (y) as the result of
the failure of any of the conditions set forth in Exhibit A to this Agreement,
the Offer shall have been terminated by Parent or expired in accordance with its
terms without Sub having purchased shares of Common Stock pursuant to the Offer
or (z) Sub shall not have purchased shares of Common Stock by October 15, 1998;
provided, however, that the passage of the period referred to in clause (z)
shall be tolled for any part thereof during which any party shall be subject to
a nonfinal order, decree, ruling or action restraining, enjoining or otherwise
prohibiting the purchase of shares of Common Stock pursuant to the Offer or the
consummation of the Merger; and provided further that the right to terminate
this Agreement pursuant to this Section 8.01(b)(ii) shall not be available to
any party whose failure to fulfill any of its obligations under this Agreement
results in the failure of any such condition;
(iii) if the Merger shall not have been consummated
on or before the date six (6) months following the date of this Agreement,
unless the failure to consummate the Merger is the result of a willful and
material breach of this Agreement by the party seeking to terminate this
Agreement; provided, however, that the passage of such period shall be tolled
for any part thereof during which any party shall be subject to a nonfinal
order, decree, ruling or action restraining, enjoining or otherwise prohibiting
the consummation of the Merger or the calling or holding of the Stockholders
Meeting; provided, further that no party shall be entitled to terminate this
Agreement pursuant to this Section 8.01(b)(iii) if shares of Common Stock have
been purchased pursuant to the Offer; or
(iv) if any Governmental Person shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the purchase of shares of Common Stock
pursuant to the Offer or the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; or
37
(c) by either Parent or the Company pursuant to Section 6.10.
SECTION 8.02. EFFECT OF TERMINATION. Subject to Section 8.06(b), in the
event of termination of this Agreement by either the Company, Parent or Sub as
provided in Section 8.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of (i) the Company,
other than the provisions of Sections 8.06 and 9.06 or (ii) on the part of
Parent or Sub, other than the provisions of Section 9.06, except to the extent
that such termination results from the material breach by Parent or Sub of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 8.03. AMENDMENT. To the extent permitted by applicable law,
this Agreement may be amended by the parties at any time before or after any
required approval of matters presented in connection with the Merger by the
stockholders of the Company; provided, however, that after any such approval,
there shall not be made any amendment that by law requires further approval by
such stockholders without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the Effective
Time of the Merger, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso of Section 8.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
SECTION 8.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. A termination of this Agreement pursuant to Section 8.01, an amendment
of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to
Section 8.04 shall, in order to be effective, require (a) in the case of Parent,
Sub or the Company, action by its Board of Directors or the duly authorized
designee of its Board of Directors and (b) in the case of the Company, action by
a majority of the members of the Board of Directors of the Company who were
members thereof on the date of this Agreement and remain as such thereafter or
the duly authorized designee of such members and approval by a majority of
Independent Directors.
SECTION 8.06. EFFECT OF TERMINATION AND ABANDONMENT.
(a) TERMINATION FEES AND EXPENSES. Parent shall be entitled to receive
from the Company a termination fee in the amount of $2,500,000 if this Agreement
is terminated or Sub does not purchase shares of Common Stock pursuant to the
Offer because the Company or its Board of Directors approves or recommends to
the Company's stockholders an Acquisition Proposal or in connection with an
Acquisition Proposal the Board of Directors of the Company
38
withdraws its recommendation that the stockholders of the Company accept and
approve the transactions contemplated by this Agreement; or
(b) The Company shall be entitled to receive from Parent a termination
fee in the amount of $2,500,000, plus Company Expenses, if this Agreement is
terminated or Sub does not purchase shares of Common Stock pursuant to the Offer
on or prior to September 30, 1998 because Parent or Sub determines that the
Financing Condition has not been met, unless Sub shall have notified the Company
in writing on or prior to September 30, 1998 that it will extend the Offer
beyond September 30, 1998 and Parent assumes the responsibility to pay the
termination fee described in the next sentence. The Company shall be entitled to
receive from Parent a termination fee in the amount of $3,500,000, plus Company
Expenses, if this Agreement is terminated or Sub does not purchase shares of
Common Stock pursuant to the Offer after September 30, 1998 and on or prior to
October 14, 1998 because the Financing Condition has not been met. "Company
Expenses" shall mean all reasonable out-of-pocket expenses and fees, including,
without limitation, fees and expenses payable to all banks, investment banking
firms and other financial institutions and their advisors and counsel, and all
fees and expenses of counsel, accountants, experts and consultants to the
Company incurred or required to be paid by the Company or any of its affiliates
in connection with the transactions contemplated by this Agreement, including
any efforts to enforce any rights under this Agreement or any other agreement
relating hereto.
(c) If Parent has received the full amount of any payment under Section
8.06(a), neither Parent nor Sub nor any of their respective directors, officers,
representatives or agents shall assert or pursue, directly or indirectly,
whether arising under tort, contract, or otherwise, any claim or cause of action
against any of the Company or any person making an Acquisition Proposal or any
of their respective directors, officers, representatives or agents based in
whole or part upon its or their receipt, consideration, recommendation or
approval of an Acquisition Proposal, including the Company's exercise of its
right of termination pursuant to this Article VIII. If Company has received the
full amount of any payment under Section 8.06(b), neither Company nor any of its
respective directors, officers, representatives or agents shall assert or
pursue, directly or indirectly, whether arising under tort, contract, or
otherwise, any claim or cause of action against any of Parent or Sub or any of
their respective directors, officers, representatives or agents based in whole
or part upon the failure of Parent and Sub to obtain financing pursuant to the
Financing Condition and the termination of this Agreement as a result thereof.
(d) It is understood and agreed by the parties hereto that the
termination fees provided for in Sections 8.06(a) and 8.06(b) are intended to
constitute liquidated damages, since the actual amount of damages which would be
sustained by Parent and Sub in the case of Section 8.06(a) and the Company in
the case of Section 8.06(b) as a result of such termination is difficult, if not
impossible, to ascertain and that the agreement of the parties with regard to
the payment of the foregoing sum as liquidated damages represents a good faith
effort by each of the parties to establish the reasonable amount of restitution
necessary to provide for recovery of all costs and expenses associated with
efforts to consummate the Offer and the Merger, including, without limitation,
opportunity costs.
39
(e) The provisions of this Article VIII shall survive termination of
this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
No representations or warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive beyond the Effective Time.
This Section 9.01 shall not limit any covenant or agreement after the Effective
Time.
SECTION 9.02. NOTICES. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand or (c) the expiration of
five business days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective parties
at the following addresses (or such other address for a party as shall be
specified by like notice):
(a) If to Parent or Sub, to:
National Vision Associates, Ltd.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President & General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Facsimile: 404-815-6555
(b) if to Company, to:
New West Eyeworks, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
40
Attention: President and Chief Executive Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 9.03. DESCRIPTIVE HEADINGS. Headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.04. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (including
the Schedules, Exhibits and other documents and instruments referred to herein
which are incorporated herein and made a part of this Agreement) (a) 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, including, without limitation, any
transaction between or among the parties hereto except the terms of the
Confidentiality Letter shall remain in full force and effect; (b) is not
intended to confer upon any other person any rights or remedies hereunder; and
(c) shall not be assigned by operation of law or otherwise.
SECTION 9.05. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
SECTION 9.06. EXPENSES AND FEES. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, subject, however, to the provisions of Section 8.06(b).
The provisions of Section 9.06 shall survive the termination of this Agreement.
SECTION 9.07. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by all of the other parties hereto.
SECTION 9.08. SEVERABILITY; VALIDITY; PARTIES IN INTEREST. If any
provision of this Agreement, or the application thereof to any person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Except as set forth in Section 6.06, nothing in this
41
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.09. JURISDICTION. Any legal action or proceeding with respect
to this Agreement or any document related hereto shall be brought by Company,
Parent or Sub in the Chancery Court of the State of Delaware or the United
States District Court for the State of Delaware, and by execution and delivery
of this Agreement or any document related hereto, each of the Company, Parent or
Sub hereby consents, for itself and in respect of its property, to this
jurisdiction of the aforesaid courts. Each of the parties hereto hereby
irrevocably waives, to the extent permitted by applicable law, any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which such party may now or hereafter have
to the bringing of any action or proceeding in such jurisdiction in respect of
this Agreement or any document related hereto.
42
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by an officer thereunto duly authorized on the day and
year first above written,
NEW WEST EYEWORKS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman of the Board
NW ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
NATIONAL VISION ASSOCIATES, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
43
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Agreement
and Plan of Merger dated July 13,1998 among National Vision Associates, Ltd., a
Georgia corporation (the "Parent"), NW Acquisition Corp., a Delaware corporation
and a wholly-owned subsidiary of Parent (the "Sub"), and New West Eyeworks,
Inc., a Delaware corporation, (the "Merger Agreement"), Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered shares of Common Stock after
the termination or withdrawal of the Offer), to pay for any shares of Common
Stock tendered pursuant to the Offer unless (i) there shall have been validly
tendered and not withdrawn prior to the expiration of the Offer that number of
shares of Common Stock which would represent at least 51% of the outstanding
shares of Common Stock as determined immediately prior to the acceptance of
shares tendered in the Offer (the "Minimum Tender Condition"), (ii) Sub shall
have received funds from a financing in an amount sufficient to consummate the
transactions contemplated by the terms of the Merger Agreement (the "Financing
Condition") and (iii) any waiting period under the HSR Act applicable to the
purchase of shares of Common Stock pursuant to the Offer and/or the Merger shall
have expired or been terminated. Furthermore, notwithstanding any other term of
the Offer or the Merger Agreement, Sub shall not be required to commence or
continue the Offer or accept for payment or, subject as aforesaid, to pay for
any shares of Common Stock not theretofore accepted for payment or paid for, and
may terminate or amend the Offer if, at any time on or after the date of the
Merger Agreement and before the acceptance of such shares for payment or the
payment therefor, any of the following conditions exists:
(a) There shall have been entered in any action or proceeding
before any Governmental Person an injunction or order, (i) prohibiting
or limiting the acquisition by Parent or Sub of any shares of Common
Stock, (ii) restraining or prohibiting or otherwise rendering
unenforceable the consummation of the Merger or any of the other
transactions contemplated by or provisions of the Merger Agreement,
(iii) prohibiting or limiting the ownership or operation by the Company
of the Company Subsidiaries or of any material portion of the business
or assets of the Company or any of the Company Subsidiaries, or to
compel the Company or the Company Subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company
or any of the Company Subsidiaries, as a result of the Merger or any of
the other transactions contemplated by the Merger Agreement, (iv)
imposing limitations on the ability of Parent or Sub to acquire or
hold, or exercise full rights of ownership of, any shares of Common
Stock, including, without limitation, the right to vote the Common
Stock purchased by Sub on all matters properly presented to the
stockholders of the Company, or (v) requiring the Company, Parent or
Sub to pay damages that reasonably can be foreseen, or are reasonably
likely, to result in a Company Material Adverse Effect; or
44
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction that is or could
reasonably be expected to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a)
above; or
(c) there shall have occurred any material adverse change, or
any development that, insofar as reasonably can be foreseen, is
reasonably likely to result in a Company Material Adverse Effect; or
(d) there shall have occurred (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 (excluding any coordinated trading halt triggered solely as a
result of a specified decrease in a market index), (ii) any material
adverse change in the financial markets, commodities markets or major
stock exchange indices in the United States, (iii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States, or (iv) a commencement of a war or armed hostilities
or other national or international calamity directly or indirectly
involving the United States; or
(e) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Sub its approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any Acquisition Proposal,
(ii) the Company shall have entered into any agreement (other than a
confidentiality agreement or engagement letter with an investment bank)
with respect to any Acquisition Proposal or (iii) the Board of
Directors of the Company or any committee thereof shall have resolved
to do any of the foregoing; or
(f) (i) any of the representations and warranties of the
Company set forth in the Merger Agreement that are qualified as to
materiality shall not be true and correct and any such representations
and warranties that are not so qualified shall not be true and correct
in any material respect, in each case as if such representations and
warranties were made as of such time; or (ii) the Company shall have
failed to perform in any material respect any obligation or to comply
in any material respect with any agreement or covenant of the Company
to be performed or complied with by it under the Merger Agreement; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms, including without limitation a termination
by Parent or the Company pursuant to Section 6.10; or
(h) Sub, Parent and the Company (with the approval of a
majority of its Independent Directors) shall have mutually agreed that
Sub shall terminate the Offer or postpone the acceptance for payment of
or payment for shares of Common Stock thereunder;
45
which, in the sole judgment of Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition
(including any action or inaction by Parent or any of its affiliates),
makes it inadvisable to proceed with such acceptance for payment or
payment,
The foregoing conditions are for the sole benefit of Sub and Parent and
may be asserted by Sub or Parent regardless of the circumstances giving rise to
such condition or may be waived by Sub and Parent in whole or in part at any
time and from time to time in their sole discretion. The failure by Parent, Sub
or any other affiliate of Parent at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances and each such right
shall be deemed an ongoing right that may be asserted at any time and from time
to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Merger Agreement.
46
EXHIBIT B
FORM OF PRESS RELEASE
47
[NATIONAL VISION ASSOCIATES, LTD. LETTERHEAD]
National Vision Associates, Ltd. and New West Eyeworks, Inc. Announce
Definitive Agreement for National Vision to Acquire New West
LAWRENCEVILLE, Ga., and TEMPE, Ariz., July 14 /PRNewswire/ -- National
Vision Associates, Ltd. (Nasdaq: NVAL) and New West Eyeworks, Inc. (Nasdaq:
NEWI) announced today that they have signed a definitive agreement for National
Vision Associates, Ltd. to acquire all the outstanding stock, options, and
warrants of New West Eyeworks for $13.00 per share of common stock or
approximately $77 million in the aggregate (including approximately $2 million
of indebtedness).
To effect the transaction, National Vision Associates, Ltd. will shortly
begin a tender offer for all shares of New West Eyeworks, Inc. As part of the
definitive agreement, certain insiders (representing 40.3% of the common stock
of New West on a fully diluted basis exclusive of outstanding stock options)
have agreed to tender their shares into the offer.
The closing of the tender offer is subject to customary conditions,
including regulatory filings, as well as completion by National Vision of a
high-yield debt offering to finance the acquisition. The agreement also provides
for certain break up fees in certain circumstances if the transaction is not
consummated. The companies expect the tender offer will be completed in
September 1998.
New West Eyeworks, headquartered in Tempe, Arizona, operates 175
full-service retail optical locations throughout 13 states, including 52 vision
centers located in ▇▇▇▇ ▇▇▇▇▇ stores. New West, which has reported positive
comparable store sales for the past 26 consecutive quarters, operates under the
Vista Optical brand (11 states) and the ▇▇▇ Optical brand (2 states). New West
offers everyday low prices for quality eyewear, contact lenses and the services
of independent doctors of optometry. In addition, the company has an established
managed care business, Vista Eyecare Network. In 1997, New West reported net
sales of $49.2 million and net income of $1.5 million, or $0.31 per share. At
March 28, 1998, New West Eyeworks had total assets of $18.1 million.
(more)
48
-2-
Currently, National Vision Associates operates 427 domestic retail optical
units. The addition of the 176 New West optical centers and the 290 Frame-n-Lens
optical centers (to be acquired pursuant to a previously announced transaction
that is expected to be completed in July), will bring National Vision's total
domestic operations to 893 locations, of which 334 are free-standing, 371 are in
Wal*Mart, and 188 are in other host concepts. This will further strengthen
National vision Associates' ranking (after giving effect to the Frame-n-Lens
transaction) as the second largest retail optical company in terms of domestic
locations and third in terms of domestic (pro forma) sales.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, chairman and chief executive officer of National Vision
Associates, stated, "We are very excited about acquiring this successful,
value-oriented optical chain. On a near-term basis, we expect the transaction to
dilute 1998 earnings between $0.08 and $0.10 per share. We also believe that, in
the long term, the combined businesses will generate significant revenue and
enhance earnings for our shareholders." ▇▇▇▇▇▇ went on to say, "▇▇▇▇▇ ▇▇▇▇ and
his management team at New West have done an outstanding job in positioning
their company as a premier provider of value retail optical goods and services.
We look forward to working with ▇▇▇▇▇ as we integrate the New West business into
our Midwest Vision and Frame-n-Lens businesses, and thereby create a national
value branded retail optical company."
New West Eyeworks chief executive officer, ▇▇▇▇▇ ▇▇▇▇, added, "This is a
unique situation in that the two companies have almost identical operating
structures and philosophies. I believe with this acquisition, National Vision
has clearly established itself as the premier value-oriented optical retailer in
the U.S. I am very excited to join National Vision in its continued expansion
and providing the finest eyecare and eyewear at the best value anywhere in the
country.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, chairman of New West's board commented, "It has been my
intention to see New West realize its full potential both strategically and
through strong shareholder value. This transaction succeeds on both fronts. It
also enables our chain of stores to participate in the consolidation of optical
retailing and managed eyecare."
In closing, ▇▇▇▇▇▇ said, "We expect our current operations to significantly
benefit from New West's managed care experience and business, as well as from
their existing and potential strategic alliances with managed care providers.
Other key benefits of the proposed transaction will be operating, advertising
and merchandising efficiencies as well as leveraged product buying power. Given
the unusual degree of similarity between the two companies, we expect the
combination will generate extensive revenue enhancing opportunities."
National Vision Associates, Ltd. was represented in the transaction by New
York-based ▇▇▇▇▇▇▇▇ & Co., Inc. New West Eyeworks, Inc. was represented by ▇. ▇.
▇▇▇▇▇▇▇ & Co. of Los Angeles, California.
National Vision Associates, Ltd. is currently the nation's fifth largest
optical company in terms of revenues and locations including 50 freestanding
locations that operate under the trade name, Midwest Vision. The Company's
retail operations offer a full line of optical goods including spectacles,
contact lenses, prescription and non-prescription sunglasses and a full line of
optical accessories. In addition, independent doctors of optometry are available
adjacent to store locations.
(more)
49
- 3 -
New West Eyeworks, Inc. is a leading retailer of specialty eyewear. the
Company's merchandising strategy centers around a "signature" value price point
for a wide selection of quality, brand name eyeglasses (frame and lenses). New
West also sells brand name contact lenses and non-prescription sunglasses and
offers customers on-site eye examinations by independent optometrists. The
stores operate under the Vista Optical brand name, other than the stores
located in Arizona and Utah, which use the ▇▇▇ Optical brand name. The
Company's optical laboratories and distribution facilities are located in
Tempe, Arizona and near Portland, Oregon.
This press release contains forward-looking statements that are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties, including but not limited to, the uncertainty as to whether the
transaction discussed in this press release will be completed. Other risks and
uncertainties are detailed from time to time in both National Vision's and New
West's periodic reports filed with the Securities and Exchange Commission,
including both company's Annual Reports for 1997 on Form 10-K and first quarter
1998 reports on Form 10-Q.
SOURCE National Vision Associates, Ltd.
-0- 07/14/98
/CONTACT: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President, CFO & Treasurer of
National Vision Associates, ▇▇▇-▇▇▇-▇▇▇▇; or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of
the Board, 216-861-4540, or ▇▇▇▇▇ ▇▇▇▇, President and CEO, ▇▇▇-▇▇▇-▇▇▇▇, both
of New West Eyeworks; or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, 404-659-4446,
for National Vision Associates/
/Web site: ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/
(NVAL NEWI)
50
EXHIBIT C
FORM OF CONVERSION AGREEMENT
51
[Name]
July __, 1998
Page 1
[The Company Letterhead]
July __, 1998
RE: CONVERSION OF CONVERTIBLE PREFERRED STOCK TO COMMON STOCK OF NEW
WEST EYEWORKS, Inc. Dear :
New West Eyeworks, Inc., a Delaware corporation (the "Company"), has
entered into an Agreement and Plan of Merger, dated as of July __, 1998, by and
among National Vision Associates, Ltd., a Georgia corporation ("Parent"), a
wholly-owned subsidiary of Parent ("Sub"), and the Company (the "Merger
Agreement"). Pursuant to the Merger Agreement, Parent proposes to cause Sub to
purchase all the issued and outstanding shares of Common Stock, par value $0.01
per share, of the Company (the "Common Stock"), at a price per share of Common
Stock of $13.00 in cash (the "Offer"), upon the terms and subject to the
conditions set forth in the Merger Agreement.
Pursuant to Section 6.16 of the Merger Agreement, the Company is
requesting that you agree to convert to Common Stock all of the ______ shares of
Series A Convertible 6% Cumulative Preferred Stock, par value $1,000 per share
("Series A Preferred Stock")/________ shares of Series B Convertible 6%
Cumulative Preferred Stock, par value $1,000 per share ("Series B Preferred
Stock"), held by you and to tender such shares of Common Stock to Sub in the
Offer. Any such conversion will occur simultaneously with the closing of the
Offer and the payment for the shares of Common Stock tendered pursuant to the
Offer. If for any reason the Offer is not closed or the shares of Common Stock
tendered pursuant to the Offer are not paid for in accordance with the terms of
the Offer, the conversion will be deemed not to have occurred. If you so agree
to convert and tender, and you deliver your Series A Preferred Stock/Series B
Preferred Stock as requested below, Sub will pay to you on the same day that
shares of Common Stock are purchased pursuant to the Offer the price per share
of Common Stock to be paid pursuant to the Offer ($13.00 per share of Common
Stock) multiplied by the number of shares of Common Stock into which your Series
A Preferred Stock/Series B Preferred Stock may then be converted (_______ shares
of Common Stock). Upon such payment, your shares of Series A Preferred
Stock/Series B Preferred Stock will be cancelled and the Common Stock issued
upon conversion will be owned by Sub. Neither Parent nor Sub shall take any of
the actions set forth in Section 1.01 (a)(i)-(v) of the Merger Agreement,
without your consent.
Until the closing of the Offer and the payment for shares of Common
Stock tendered pursuant to the Offer, the terms of the Series A Preferred
Stock/Series B Preferred Stock remain in full force and effect.
52
[Name]
July __, 1998
Page 2
If for any reason the Offer is not closed pursuant to the terms of the
Merger Agreement or the shares of Common Stock tendered pursuant to the Offer
are not paid for in accordance with the terms of the Offer, (1) the certificate
representing your shares of Series A Preferred Stock/Series B Preferred Stock
will be returned to you, (2) the conversion referenced in this letter agreement
will be deemed not to have occurred, and (3) the terms of the Series A Preferred
Stock/Series B Preferred Stock will remain in full force and effect, as if this
letter agreement never existed.
[ADD THIS PARAGRAPH FOR ALL RECIPIENTS EXCEPT ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇ AND ▇▇▇▇▇▇▇ CAPITAL PARTNERS II, MESIROW CAPITAL PARTNERS III,
MESIROW CAPITAL PARTNERS IV, MESIROW CAPITAL PARTNERS V AND MESIROW CAPITAL
PARTNERS VI] You may cancel this letter agreement at any time prior to the
closing of the Offer by written notice to the Company.
[ADD THIS PARAGRAPH FOR ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ AND ▇▇▇▇▇▇▇
CAPITAL PARTNERS III, MESIROW CAPITAL PARTNERS IV, MESIROW CAPITAL PARTNERS V
AND MESIROW CAPITAL PARTNERS VI] This letter agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon the
earlier of (i) the acquisition by Parent, through Sub or otherwise, of all the
shares of Common Stock tendered upon conversion pursuant to this letter
agreement, (ii) the termination of the Merger Agreement in accordance with its
terms, (iii) the Effective Time (as defined in the Merger Agreement), (iv) by
you, if Parent or Sub breaches any of the covenants set forth in the second
paragraph of this letter agreement, or (v) by Parent, if you breach any of your
covenants in this letter agreement.
[ADD THIS PARAGRAPH ONLY FOR RECIPIENTS THAT ARE DIRECTORS OR OFFICERS
OF THE COMPANY] Notwithstanding anything in this letter agreement to the
contrary, this letter agreement shall not prohibit, limit or effect you, solely
in your capacity as a director or officer of the Company, from taking any
actions as a director or officer, including without limitation any actions
permitted or not prohibited by the Merger Agreement with respect to any
Acquisition Proposal (as defined in the Merger Agreement) and nothing in this
letter agreement shall prohibit the Company from taking any action permitted
under Section 6.10 of the Merger Agreement.
Please indicate your agreement to comply with all of the requests of
the Company set forth herein by signing and dating the enclosed copy of this
letter and the enclosed power of attorney and returning them to ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ in the envelope provided, ALONG WITH YOUR STOCK CERTIFICATE, by
___________, 1998. If you cannot locate your stock certificate, please
immediately contact ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at 216-736-7215 so that the
appropriate arrangements can be made. The power of attorney appoints ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as your attorneys-in-fact, to
effect the tender referenced in this letter agreement. This letter agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. Please
sign and date the power of attorney and return it, along with this letter and
your stock certificate, in the envelope provided.
Very truly yours,
NEW WEST EYEWORKS, INC.
53
[Name]
July __, 1998
Page 3
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
AGREEMENT
On this ____ day of July, 1998, _____________________ agrees and
consents to all of the requests of the Company contained in this letter.
------------------------------------------
On this ___ day of July, 1998, Parent and Sub agree and consent to be
bound by all of the terms of this letter agreement.
NATIONAL VISION ASSOCIATES, LTD.
------------------------------------------
By:
Its:
SUB
------------------------------------------
By:
Its:
54
[Name]
July __, 1998
Page 4
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
signing singly, the undersigned's true and lawful attorney-in-fact to tender
your shares of Common Stock of New West Eyeworks, Inc., a Delaware corporation
(the "Company"), that will be issued upon conversion of your Series A Preferred
Stock/Series B Preferred Stock pursuant to the letter agreement between you and
the Company.
The undersigned hereby grants to each such attorney-in-fact full power
and authority to do and perform any and every act and thing whatsoever
requisite, necessary, or proper to be done in the exercise of any of the rights
and powers herein granted, as fully to all intents and purposes as the
undersigned might or could do if personally present, with full power of
substitution or revocation, hereby ratifying and confirming all that such
attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall
lawfully do or cause to be done by virtue of this Power of Attorney and the
rights and powers herein granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney
to be executed as of July __, 1998.
-------------------------------------------
[Name]
55
EXHIBIT D
FORM OF WARRANT EXERCISE AGREEMENT
56
[Name]
July __, 1998
Page 1
[The Company Letterhead]
July __, 1998
[Name and Address]
RE: EXERCISE OF WARRANT TO PURCHASE COMMON STOCK OF NEW WEST EYEWORKS,
INC.
Dear :
New West Eyeworks, Inc., a Delaware corporation (the "Company"), has
entered into an Agreement and Plan of Merger, dated as of July __, 1998, by and
among National Vision Associates, Ltd., a Georgia corporation ("Parent"), a
wholly-owned subsidiary of Parent ("Sub"), and the Company (the "Merger
Agreement"). Pursuant to the Merger Agreement, Parent proposes to cause Sub to
purchase all the issued and outstanding shares of Common Stock, par value $0.01
per share, of the Company (the "Common Stock"), at a price per share of Common
Stock of $13.00 in cash (the "Offer"), upon the terms and subject to the
conditions set forth in the Merger Agreement.
Pursuant to Section 6.16 of the Merger Agreement, the Company is
requesting that you agree to exercise the warrant held by you to purchase
_______ shares of Common Stock dated as of __________, 19__ (the "Warrant") and
to tender such shares of Common Stock to Sub in the Offer. Any such exercise
will occur simultaneously with the closing of the Offer and the payment for the
shares of Common Stock tendered pursuant to the Offer. If for any reason the
Offer is not closed or shares of Common Stock tendered pursuant to the Offer are
not paid for in accordance with the terms of the Offer, the exercise will be
deemed not to have occurred. If you so agree to exercise and tender, and you
deliver your Warrant as requested below, Sub will pay to you on the same day
that shares of Common Stock are purchased pursuant to the Offer the excess, if
any, of the price per share of Common Stock to be paid pursuant to the Offer
($13.00 per share of Common Stock) over the exercise price per share of your
Warrant ($8.00/6.11 per share of Common Stock), multiplied by the number of
shares of Common Stock for which your Warrant may then be exercised. Upon such
payment, your Warrant will be cancelled and the Common Stock issued upon
exercise will be owned by Sub. Neither Parent nor Sub shall take any of the
actions set forth in Section 1.01 (a)(i)-(v) of the Merger Agreement, without
your consent.
As may be necessary to effect the terms of this letter agreement, the
Warrant is hereby amended to allow for this form of exercise. Until the closing
of the Offer and the payment for shares of Common Stock tendered pursuant to the
Offer, the terms of the Warrant remain in full force and effect.
57
[Name]
July __, 1998
Page 2
If for any reason the Offer is not closed pursuant to the terms of the
Merger Agreement or the shares of Common Stock tendered pursuant to the Offer
are not paid for in accordance with the terms of the Offer, (1) the Warrant will
be returned to you, (2) the exercise referenced in this letter agreement will be
deemed not to have occurred, and (3) the terms of the Warrant will remain in
full force and effect, as if this letter agreement never existed.
[ADD THIS PARAGRAPH FOR ALL RECIPIENTS EXCEPT ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇ AND ▇▇▇▇▇▇▇ CAPITAL PARTNERS V AND MESIROW CAPITAL PARTNERS VI] You may
cancel this letter agreement at any time prior to the closing of the Offer by
written notice to the Company.
[ADD THIS PARAGRAPH FOR ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ AND ▇▇▇▇▇▇▇
CAPITAL PARTNERS V AND MESIROW CAPITAL PARTNERS VI] This letter agreement, and
all rights and obligations of the parties hereunder, shall terminate immediately
upon the earlier of (i) the acquisition by Parent, through Sub or otherwise, of
all the shares of Common Stock tendered upon exercise of the Warrant pursuant to
this letter agreement, (ii) the termination of the Merger Agreement in
accordance with its terms, (iii) the Effective Time (as defined in the Merger
Agreement), (iv) by you, if Parent or Sub breaches any of the covenants set
forth in the second paragraph of this letter agreement, or (v) by Parent, if you
breach any of your covenants in this letter agreement.
[ADD THIS PARAGRAPH ONLY FOR RECIPIENTS THAT ARE DIRECTORS OR OFFICERS
OF THE COMPANY] Notwithstanding anything in this letter agreement to the
contrary, this letter agreement shall not prohibit, limit or effect you, solely
in your capacity as a director or officer of the Company, from taking any
actions as a director or officer, including without limitation any actions
permitted or not prohibited by the Merger Agreement with respect to any
Acquisition Proposal (as defined in the Merger Agreement) and nothing in this
letter agreement shall prohibit the Company from taking any action permitted
under Section 6.10 of the Merger Agreement.
Please indicate your agreement to comply with all of the requests of
the Company set forth herein by signing and dating the enclosed copy of this
letter and the enclosed power of attorney and returning them to ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ in the envelope provided, along with your Warrant, by July __, 1998. If
you cannot located your Warrant, please immediately contact ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ at 216-736-7215 so that the appropriate arrangements can be made. The
power of attorney appoints ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ as your attorneys-in-fact, to effect the tender referenced in this
letter agreement. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement. Please sign and date the power of
attorney and return it, along with this letter and your Warrant, in the envelope
provided.
58
[Name]
July __, 1998
Page 3
Very truly yours,
NEW WEST EYEWORKS, INC.
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
AGREEMENT
On this ____ day of July, 1998, _____________________ agrees and
consents to all of the requests of the Company contained in this letter.
----------------------------------------
On this ____ day of July, 1998, Parent and Sub agree and consent to be
bound by all of the terms of this letter agreement.
PARENT
--------------------------------------
By:
Its:
SUB
--------------------------------------
By:
Its:
59
[Name]
July __, 1998
Page 4
POWER OF ATTORNEY
Know All by These Presents, that the undersigned hereby constitutes and
appoints each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
signing singly, the undersigned's true and lawful attorney-in-fact to tender
your shares of Common Stock of New West Eyeworks, Inc., a Delaware corporation
(the "Company"), that will be issued upon exercise of your Warrant pursuant to
the letter agreement between you and the Company.
The undersigned hereby grants to each such attorney-in-fact full power
and authority to do and perform any and every act and thing whatsoever
requisite, necessary, or proper to be done in the exercise of any of the rights
and powers herein granted, as fully to all intents and purposes as the
undersigned might or could do if personally present, with full power of
substitution or revocation, hereby ratifying and confirming all that such
attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall
lawfully do or cause to be done by virtue of this Power of Attorney and the
rights and powers herein granted.
In Witness Whereof, the undersigned has caused this Power of Attorney
to be executed as of July __, 1998.
-------------------------------------------
[Name]
60
EXHIBIT E
FORM OF STOCKHOLDERS' AGREEMENT TO TENDER
61
STOCK TENDER AGREEMENT
THIS STOCK TENDER AGREEMENT (this "Agreement") is made this ___ day of
July, 1998, by and among NATIONAL VISION ASSOCIATES, LTD., a Georgia corporation
("Parent"), NW ACQUISITION CORP., a wholly-owned subsidiary of Parent and a
Delaware corporation ("Sub"), and each of the parties listed on the signature
pages hereto (each a "Stockholder", and collectively, the "Stockholders").
WHEREAS, each of the Stockholders is, as of the date hereof, the record
and beneficial owner of the shares of common stock, par value $.01 per share
(the "Common Stock"), of New West Eyeworks, Inc., a Delaware corporation (the
"Company"), set forth opposite its name on Annex I hereto;
WHEREAS, Parent, Sub and the Company concurrently herewith are entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, for the acquisition of the
Company by Parent by means of a cash tender offer (the "Offer") by Sub for all
of the issued and outstanding shares of Common Stock and for the subsequent
merger (the "Merger") of Sub with and into the Company upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and Sub to enter
into the Merger Agreement, and in order to induce Parent and Sub to enter into
the Merger Agreement, the Stockholders have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Sub of the Merger Agreement and the mutual representations,
warranties, covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of the Stockholder. Each of
the Stockholders hereby represents and warrants to Parent and Sub, severally and
not jointly, as follows:
(a) Such Stockholder is the record and beneficial owner of the shares
of Common Stock set forth opposite its name on Annex I to this Agreement (as the
shares may be adjusted from time to time pursuant to Section 6 hereof, the
"Shares"). On the date hereof, the Shares opposite such Stockholder's name
constitute all of the Shares owned by such Stockholder (exclusive of Shares held
of record by Flag Partners, and options, warrants or preferred stock that may be
exercised for or converted into Common Stock). Such Stockholder has the
exclusive right to vote or dispose of (or exercise the voting or disposition of)
such Shares. Notwithstanding any of the terms contained in this Agreement,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ may gift to charities of his choice up to 5,000 Shares, which
Shares shall not be subject to the terms of this Agreement.
(b) Such Stockholder is an individual or is a limited partnership, as
the case may be, duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization, and such Stockholder has
all requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby, and in the case of such Stockholder that
is a
62
limited partnership, has taken all partnership action necessary to authorize the
execution, delivery and performance of this Agreement.
(c) In the case of such Stockholder that is a limited partnership, this
Agreement has been duly authorized, validly executed and delivered by such
Stockholder. Assuming this Agreement has been duly and validly authorized,
executed and delivered by Parent and Sub, this Agreement constitutes the legal,
valid and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(d) The execution and delivery of this Agreement by such Stockholder do
not, and the performance by such Stockholder of its obligations hereunder will
not, (i) conflict with, result in a violation or breach of, constitute (with or
without notice or lapse of time or both) a default under, result in or give to
any person any right of termination, cancellation, modification or acceleration
of, or result in the creation or imposition of any Lien upon any of the assets
or properties of such Stockholder under, any of the terms, conditions or
provisions of (A) the certificates or articles of incorporation or bylaws (or
other comparable charter documents) , as applicable, of such Stockholder or (B)
(x) any Law or Order of any Governmental or Regulatory Authority applicable to
such Stockholder or any of such Stockholder's respective assets or properties,
or (y) any Contract to which such Stockholder is a party or by which such
Stockholder or any of its respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) conflicts, violations, breaches,
defaults, terminations, cancellations, modifications, accelerations and
creations and impositions of Liens which, individually or in the aggregate,
could not be reasonably expected to have a material adverse effect on the
ability of such Stockholder to consummate the transactions contemplated by this
Agreement, or (ii) require any filing by such Stockholder with, or any permit,
authorization, consent or approval of, any Governmental or Regulatory Authority
or any third party other than an amendment to a Schedule 13D, 13G, Form 4 and/or
Form 5. There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Stockholder is a trustee whose consent is
required for the execution and delivery of this Agreement or the consummation by
such Stockholder of the transactions contemplated hereby.
(e) Other than the Shares subject to the Escrow and Subordination
Agreement, dated as of December 1, 1993, by and between the Company, the
Huntington Trust Company, N.A., as Escrow Agent, and ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, the Shares and the certificates representing the Shares owned by such
Stockholder are now and at all times during the term hereof will be held by such
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all Liens, proxies, voting trusts or agreements, except for
any such Liens, proxies, voting trusts or agreements arising hereunder.
SECTION 2. Representations and Warranties of Parent and Sub. Each of
Parent and Sub hereby represents and warrants to the Stockholders as follows:
(a) Parent and Sub are corporations duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation, and each of Parent and Sub has full corporate power and authority
to enter into this Agreement and to consummate the transactions
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63
contemplated hereby and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by
each of Parent and Sub and constitutes the legal, valid and binding obligation
of each of Parent and Sub, enforceable against each of them in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) The execution and delivery of this Agreement by Parent and Sub do
not, and the performance by Parent and Sub of their obligations hereunder and
the consummation of the transactions contemplated hereby will not, (i) conflict
with, result in a violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, result in or give to any person any
right of termination, cancellation, modification or acceleration of, or result
in the creation or imposition of any Lien upon any of the assets or properties
of Parent or Sub under, any of the terms, conditions or provisions of (A) the
certificates or articles of incorporation or bylaws of Parent or Sub or (B) (x)
any Law or Order of any Governmental or Regulatory Authority applicable to
Parent or Sub or any of their respective assets or properties, or (y) any
Contract to which Parent or Sub is a party or by which Parent or Sub or any of
their respective assets or properties is bound, excluding from the foregoing
clauses (x) and (y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on the ability of Parent and Sub to consummate the
transactions contemplated by this Agreement, or (ii) require any filing by
Parent or Sub with, or any permit, authorization, consent or approval of, any
Governmental or Regulatory Authority, other than a Schedule 13D filing.
(d) Securities Law Compliance. Neither Parent nor Sub will effect any
offer or sale of the Shares which offer or sale would cause any Stockholder to
violate the registration requirements of the Securities Act of 1933, as amended,
or the registration or qualification requirements of the securities laws of any
other jurisdiction.
SECTION 3. Tender of the Shares. Each of the Stockholders hereby agrees
to tender the Shares set forth opposite its name on Annex I to this Agreement
into the Offer promptly, and in any event no later than the fifteenth business
day following the commencement of the Offer pursuant to Section 1.01 of the
Merger Agreement and not to withdraw any Shares so tendered unless the Merger
Agreement is terminated or the Offer has expired; provided that if such
Stockholder shall thereafter acquire shares of Common Stock, then any such
additional shares shall be tendered on the next succeeding business day after
such acquisition. Sub hereby agrees to purchase all the Shares so tendered at
the price of $13.00 per Share, as such price may be modified in accordance with
the Merger Agreement and this Agreement; provided, however, that Sub's
obligation to accept for payment and pay for the Shares in the Offer is subject
to all the terms and conditions of the Offer set forth in the Merger Agreement
and Exhibit A thereto. Neither Parent nor Sub shall take any of the actions set
forth in Section 1.01 (a)(i) - (v) of the Merger Agreement without the consent
of the Stockholders.
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64
SECTION 4. Transfer of the Shares; Proxies and Non-Interference. Prior
to the termination of this Agreement, except as otherwise provided herein, each
Stockholder agrees severally, and not jointly, that it shall not shall, directly
or indirectly, (i) offer for sale, sell, transfer, tender, pledge, encumber,
assign, or otherwise dispose of, any or all of the Shares; (ii) enter into any
Contract, option or understanding with respect to any transfer of any or all of
the Shares or any interest therein; (iii) except as provided herein, grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
the Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares; or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of such Stockholder's obligations hereunder or the transactions contemplated
hereby.
SECTION 5. Stockholder Capacity. No person executing this Agreement,
either in his individual capacity or on behalf of a Stockholder, who is or
becomes during the term hereof a director of the Company, makes any agreement or
understanding herein in his or her capacity as such director. Each Stockholder
signs solely in his or her capacity as the owner of, or the trustee of a trust
whose beneficiaries are the owners of, such Stockholder's Shares. Without
limiting the foregoing, nothing in this Agreement shall prohibit, limit or
affect any Stockholder or any of its officers, directors, partners, employees or
agents, acting solely in their capacities as a director or officer of the
Company, from taking any action as a director or officer including, without
limitation, any actions permitted or not prohibited by the Merger Agreement with
respect to any Acquisition Proposal (as defined in the Merger Agreement) and
nothing in this Agreement shall prohibit the Company from taking any action
permitted under Section 6.10 of the Merger Agreement.
SECTION 6. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by any Stockholder, the number of Shares shall be adjusted
appropriately, and this Agreement and the rights and obligations hereunder shall
attach to any additional shares of Common Stock or other securities or rights of
the Company issued to or acquired by any such Stockholder.
SECTION 7. Acquisition Proposals. From the date hereof until the
termination hereof, each of the Stockholders will not, and will cause their
respective officers, directors, partners, employees or other agents not to,
directly or indirectly, (i) take any action to solicit, initiate or encourage
any Acquisition Proposal (as defined in the Merger Agreement) provided that no
public announcement made by the Company pursuant to the last sentence of Section
6.08 of the Merger Agreement shall be deemed a violation of this Section 7, or
(ii) engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Company or the Company Subsidiaries (as defined in
the Merger Agreement), respectively, or afford access to the properties, books
or records of the Company or any Company Subsidiary to any person in connection
with an Acquisition Proposal. Each Stockholder shall immediately cease and cause
to be terminated any existing discussions or negotiations with any persons
(other than each other, the Parent, the Sub and the Company) conducted by such
Stockholder heretofore with respect to any of the foregoing transactions
referenced in this Section 7.
SECTION 8. Voting of Shares. Each of the Stockholders agrees that,
during the time this Agreement is in effect, at any meeting of the stockholders
of the Company, however called, and in any action by written consent of the
stockholders of the Company, such Stockholder shall, to the extent
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65
applicable, (a) vote (or execute a consent in respect of) all of the Shares
owned by such Stockholder in favor of the Merger, the Merger Agreement (as
amended from time to time) and any of the transactions contemplated by the
Merger Agreement; (b) vote (or execute a consent in respect of) such Shares
against any action or agreement that would reasonably be expected to result in a
breach, in any material respect, of any covenant, representation or warranty or
any other obligation of the Company under the Merger Agreement; and (c) vote (or
execute a consent in respect of) such Shares against any action or agreement
that would reasonably be expected to impede, interfere with, delay or attempt to
discourage the Offer or Merger, including, but not limited to: (i) any
extraordinary corporate transaction (other than the Merger), such as a merger,
reorganization, recapitalization, or liquidation involving the Company or any
Company Subsidiary or any proposal made in opposition to or in competition with
the Merger, (ii) a sale or transfer of a material amount of assets of the
Company or any of its Subsidiaries; (iii) any change in the management or board
of directors of the Company, except as otherwise agreed to in writing by Parent;
(iv) any material change in the present capitalization or dividend policy of the
Company; or (v) any other material change in the corporate structure or business
of the Company or any Company Subsidiary.
SECTION 9. Further Assurances. Each of the Stockholders shall, upon
request of Parent or Sub, take such further actions as may reasonably be
necessary or desirable to carry out the provisions hereof, provided that the
Stockholders shall not be required to incur any additional costs or expenses or
receive less than the agreed price without their consent.
SECTION 10. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate immediately upon the earlier of (i)
the acquisition by Parent, through Sub or otherwise, of all the Shares, (ii) the
termination of the Merger Agreement in accordance with its terms, (iii) the
Effective Time (as defined in the Merger Agreement), (iv) by any Stockholder, if
Parent or Sub breaches any of the covenants set forth in the last two sentences
of Section 3 hereof, or (v) by Parent if any Stockholder breaches any
representation or warranty in any material respect or any covenant, but only
with respect to such breaching Stockholder; provided, however, that Section 11
shall survive any termination of this Agreement.
SECTION 11. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 12. Public Announcements. Each of the Stockholders agrees that
it will not issue any press release or otherwise make any public statement with
respect to this Agreement or the transactions contemplated hereby without the
prior consent of Parent; provided, however, that such disclosure can be made
without obtaining such prior consent if (i) the disclosure is required by law,
and (ii) the party making such disclosure has first used its best efforts to
consult with the other party about the form and substance of such disclosure.
SECTION 13. Definitions. As used in this Agreement, the following terms
shall have the meanings indicated below:
"Contract" means any agreement, lease, evidence of indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
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66
"Law" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign country
or any domestic or foreign state, county, city or other political subdivision or
of any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Order" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
SECTION 14. Miscellaneous.
(a) All notices, claims, demands and other communications hereunder
shall be in writing and shall be deemed given upon (a) confirmation of receipt
of a facsimile transmission, (b) confirmed delivery by a standard overnight
carrier or when delivered by hand or (c) the expiration of five business days
after the day when mailed by registered or certified mail (postage prepaid,
return receipt requested), addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
(A) if to any or all the Mesirow Capital Partner signatories:
[Name of Entity]
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
(B) if to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇, to:
▇▇. ▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇
[as appropriate]
c/o New West Eyeworks, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies, in the case of both (A) or (B) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.
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1375 East ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and
(C) if to Parent or Sub, to:
National Vision Associates, Ltd.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President & General Counsel
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(c) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement.
(d) This Agreement and the Merger Agreement constitute the entire
agreement, and supersede all prior agreements and understandings, whether
written and oral, among the parties hereto with respect to the subject matter
hereof.
(e) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware without giving effect to the principles
of conflicts of laws thereof.
(f) Any legal action or proceeding with respect to this Agreement or
any document related hereto shall be brought in the Chancery Court of the State
of Delaware or the United States District Court for the State of Delaware, and
by execution and delivery of this Agreement or any document related hereto, each
of the parties hereto hereby consents, for itself and in respect of its
property, to this jurisdiction of the aforesaid courts. Each of the parties
hereto hereby irrevocably waives, to the extent permitted by applicable law, any
objection, including, without limitation, any objection to the laying of
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68
venue or based on the grounds of forum non conveniens, which such party may now
or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties, and any such purported assignment shall be null and void. This
Agreement will be binding upon, inure to the benefit of and be enforceable by,
the parties and their respective successors, and the provisions of this
Agreement are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
(ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement.
(j) No amendment, modification or waiver in respect to this Agreement
shall be effective unless it shall be in writing and signed by each party
hereto; provided that Annex I hereto may be supplemented by Parent by adding the
name and other relevant information concerning any stockholder of the Company
who agrees to be bound by the terms of this Agreement without the agreement of
any other party hereto, and thereafter such added stockholder shall be treated
as a "Stockholder" for all purposes of this Agreement.
[remainder of page left blank intentionally]
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69
IN WITNESS WHEREOF, each of Parent, the Sub and the Stockholders have caused
this Agreement to be duly executed and delivered as of the date first written
above.
NATIONAL VISION ASSOCIATES, LTD.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
"SUB"
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
STOCKHOLDERS:
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
MESIROW CAPITAL PARTNERS II
By:
------------------------------------------
Name:
-------------------------------------
MESIROW CAPITAL PARTNERS III
By:
------------------------------------------
Name:
-------------------------------------
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70
MESIROW CAPITAL PARTNERS IV
By:
--------------------------------------
Name:
---------------------------------
MESIROW CAPITAL PARTNERS V
By:
--------------------------------------
Name:
---------------------------------
MESIROW CAPITAL PARTNERS VI
By:
--------------------------------------
Name:
---------------------------------
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
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71
ANNEX I
STOCKHOLDER SHARES OF COMMON STOCK HELD DIRECTLY
------------------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ 198,747
Mesirow Capital Partners II 64,519
Mesirow Capital Partners III 74,719
Mesirow Capital Partners V 333,386
Mesirow Capital Partners VI 170,135
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 833,904
---------
1,675,410
=========
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72
SCHEDULE
2.06
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION AT
EFFECTIVE TIME OF MERGER
73
SCHEDULE 2.06
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION
Directors
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Officers
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇, President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President, General Counsel and Secretary
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, Chief Financial Officer and Treasurer
74
DEFINITIONS
The following terms are defined in this Agreement as indicated below:
"accumulated funding deficiency" is defined in Section 4.01(p)(D)
"Affiliate" is defined in Section 4.01(x)(E)
"Acquisition Proposal" is defined in Section 6.10(b)
"Agreement" is defined in the first sentence
"Audit" is defined in Section 4.01(l)(F)
"Certificate of Merger" is defined in Section 2.03
"Closing Date" is defined in Section 2.03
"Common Stock" is defined in recitals
"Company Disclosure Letter" is defined in Section 4.01
"Company ERISA Plan" is defined in Section 4.01(p)(A)
"Company Expenses" is defined in Section 8.06(b)
"Company Financial Statement Date" is defined in Section 4.01(h)
"Company Material Adverse Effect" is defined in Section 4.01(a)
"Company Preferred Shares" is defined in Section 4.01(b)
"Confidentiality Agreement" is defined in Section 6.02
"consent" is defined in Section 4.01(l)(E)
"control" is defined in Section 4.01(x)(E)
"Convertible Preferred Stock" is defined in Section 4.01(b)
"Effective Time" is defined in Section 2.03
"employee pension Plan" is defined in Section 4.01(H)
75
"Environmental Rule" is defined in Section 4.01(v)(C)
"Everen" is defined in Section 1.02
"Exchange Act" is defined in Section 1.0(b)
"Financing Condition" is defined in Exhibit A
"▇.▇. ▇▇▇▇▇▇▇ & Company" is defined in Exhibit A
"GAAP" is defined in Section 4.01(g)
"Government Permits" is defined in Section 4.01(u)
"Governmental Person" is defined in Section 4.01(f)
"HSR Act" is defined in Section 4.01(f)
"hazardous substance" is defined in Section 4.01(v)(C)
"Hazardous Substance" is defined in Section 4.01(v)(C)
"Indemnified Parties" is defined in Section 6.06(b)
"Independent Directors" is defined in Section 6.07
"Losses" is defined in Section 6.06(b)
"Material Contract" is defined in Section 4.01(w)
"Merger" is defined in recitals
"Merger Consideration" is defined in Section 3.01(c)
"multi-employer pension plan" is defined in section 4.01(p)(E)
"Offer" is defined in recitals
"Offer Documents" is defined in Section 1.01(b)
"Option Consideration" is defined in Section 6.04
"Parent" is defined in the first sentence
"Parent's Investment Advisor" is defined in Section 4.02(e)
"Parent's Material Adverse Effect" is defined in Section 4.02(e)
"Paying Agent" is defined in Section 3.02(a)
"Rule 14f-1 Statement" is defined in Section 4.01(z)
"SEC" is defined in Section 1.01
"Securities Act" is defined in Section 4.01(f)
"Serial Preferred Stock" is defined in Section 4.10(b)
"Stock Options" is defined in Section 6.04
"Stock Plans" is defined in Section 6.04
"Stockholders' Meeting" is defined in Section 6.01(a)
"Sub" is defined in the first sentence
"Surviving Corporation" is defined in Section 2.01
"Taxes" is defined in Section 4.01(l)(F)
"Tax Authority" is defined in Section 4.01(l)(D)
iv