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EXHIBIT 1
Agreement and Plan of Merger dated as of October 20, 1995
by and among Company, Purchaser and Parent.
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AGREEMENT AND PLAN OF MERGER
AMONG
▇▇▇▇▇▇▇ TECHNOLOGY INCORPORATED,
DIEBOLD, INCORPORATED
AND
D-GT ACQUISITION, INCORPORATED
Dated as of October 20, 1995
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
(Not Part of the Agreement)
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Article I - THE TENDER OFFER.................................................... 2
1.01. The Offer....................................................... 2
1.02. Company Action.................................................. 6
1.03. Board of Directors and Committees;
Section 14(f)................................................. 9
ARTICLE II - THE MERGER......................................................... 11
2.01. The Merger...................................................... 11
2.02. Effective Time.................................................. 12
2.03. Certificate of Incorporation.................................... 12
2.04. By Laws......................................................... 12
2.05. Directors and Officers.......................................... 13
2.06. Further Assurances.............................................. 13
2.07. Shareholders' Meeting........................................... 14
ARTICLE III - CONVERSION OR CANCELLATION OF SHARES;
STOCK RIGHTS...................................................... 17
3.01. Conversion or Cancellation of Shares............................ 17
3.02. Exchange of Certificates; Paying Agent.......................... 18
3.03. Dissenters' Rights.............................................. 21
3.04. Transfer of Shares After the Effective
Time.......................................................... 22
3.05. Company Stock Rights............................................ 22
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE
COMPANY............................................................ 24
4.01. Organization; Qualification..................................... 24
4.02. The Company's Capitalization.................................... 25
4.03. Company Equity Investments...................................... 25
4.04. Authority Relative to this Agreement............................ 26
4.05. Consents and Approvals: No Violation............................ 27
4.06. SEC Reports: Financial Statements............................... 28
4.07. Proxy Statement; Offer Documents................................ 29
4.08. Undisclosed Liabilities......................................... 30
4.09. Absence of Certain Changes or Events............................ 31
4.10. Title, Etc. .................................................... 31
4.11. Patents, Trademarks, Etc. ...................................... 33
4.12. Insurance....................................................... 34
4.13. Employee Benefit Plans.......................................... 34
4.14. Legal Proceedings, Etc. ........................................ 36
4.15. Taxes........................................................... 36
4.16. Material Agreements............................................. 38
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4.17. Compliance with Law............................................. 39
4.18. Insider Interests............................................... 39
4.19. Accounts Receivable............................................. 39
4.20. Officers, Directors and Employees............................... 40
4.21. Environmental Protection........................................ 40
4.22. Brokers and Finders............................................. 42
4.23. No Other Representations or Warranties.......................... 42
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE PARENT
AND THE PURCHASER................................................... 43
5.01. Corporation Organization........................................ 43
5.02. Authorized Capital.............................................. 43
5.03. Corporation Authority........................................... 43
5.04. No Prior Activities............................................. 44
5.05. No Financing Contingency........................................ 45
5.06. Governmental Filings; No Violations............................. 45
5.07. Brokers and Finders............................................. 46
5.08. Offer Documents; Proxy Statement;
Other Information ............................................ 46
5.09. No Other Representations or Warranties ......................... 47
ARTICLE VI - COVENANTS OF THE PARTIES........................................... 48
6.01. Conduct of Business of the Company.............................. 48
6.02. Notification of Certain Matters................................. 51
6.03. Access to Information........................................... 52
6.04. Further Information............................................. 53
6.05. Further Assurances.............................................. 54
6.06. Interim Financial Statements.................................... 54
6.07. Fairness Opinion................................................ 55
6.08. Best Efforts.................................................... 55
6.09. Filings......................................................... 57
6.10. Public Announcements............................................ 58
6.11. Indemnity; D&O Insurance........................................ 59
6.12. Company Benefit Plans........................................... 62
6.13. Other Potential Bidders......................................... 63
6.14. Employees of the Company........................................ 65
ARTICLE VII - CONDITIONS TO THE MERGER.......................................... 66
7.01. Conditions to Each Party's
Obligation to Effect the Merger............................... 66
7.02. Conditions to the Obligations of
the Parent and the Purchaser to
Effect the Merger............................................. 67
7.03. Conditions to the Obligations of the
Company to Effect the Merger.................................. 67
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ARTICLE VIII - CLOSING.......................................................... 67
8.01. Time and Place................................................... 67
8.02. Filings at the Closing........................................... 68
ARTICLE IX - TERMINATION; AMENDMENT; WAIVER..................................... 68
9.01. Termination...................................................... 68
9.02. Effect of Termination............................................ 71
9.03. Fees and Expenses................................................ 71
ARTICLE X - MISCELLANEOUS....................................................... 73
10.01. Survival of Representations, Warranties,
Covenants and Agreements....................................... 73
10.02. Amendment and Modification....................................... 74
10.03. Waiver of Compliance; Consents................................... 74
10.04. Counterparts..................................................... 75
10.05. Governing Law.................................................... 75
10.06. Notices.......................................................... 75
10.07. Entire Agreement, Assignment, Etc. .............................. 77
10.08. Validity......................................................... 78
10.09. Headings......................................................... 78
10.10. Specific Performance............................................. 78
ANNEX A Certain Conditions to Offer
ANNEX B Form of Shareholder Tender Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of October 20, 1995, among ▇▇▇▇▇▇▇ Technology
Incorporated, a New York corporation (the "Company"), D-GT Acquisition,
Incorporated, a New York corporation (the "Purchaser"), and Diebold,
Incorporated, an Ohio corporation (the "Parent").
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of its shareholders for the Purchaser to
acquire the Company upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company, the Parent and the Purchaser desire to
make certain representations, warranties and agreements in connection with this
Agreement;
WHEREAS, in furtherance of such acquisition, the Parent
proposes to cause the Purchaser to make a tender offer to purchase all of the
issued and outstanding shares of common stock of the Company, par value $0.05
per share (the "Common Stock"), upon the terms and subject to the conditions of
this Agreement, and the Board of Directors of the Company has approved the offer
and determined to recommend that the Company's shareholders accept the offer;
and
WHEREAS, to complete such acquisition, the respective Boards
of Directors of the Parent, the Purchaser and the Company, and the Parent acting
as the sole shareholder of the Purchaser, have approved the offer and the merger
of the Purchaser with and into the Company upon the terms and subject to the
conditions of
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this Agreement, whereby each issued and outstanding share of Common Stock not
owned directly or indirectly by the Parent or the Company, except shares of
Common Stock held by persons who object to such merger and demand payment of the
value of their shares of Common Stock, will be converted into the right to
receive the same price per share of Common Stock paid pursuant to the offer;
NOW, THEREFORE, in consideration of the representations,
warranties and agreements herein contained, the parties hereto hereby agree as
follows:
ARTICLE I
THE TENDER OFFER
1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Article IX and none of the events or
conditions set forth in Annex A shall have occurred and be existing, then, not
later than the fifth business day after the date of this Agreement, the
Purchaser shall, subject to the provisions of this Agreement, commence a tender
offer (the "Offer") for all of the outstanding shares of Common Stock (the
"Shares"), at a price of $7.75 per Share, net to the seller in cash. The
Purchaser shall accept for payment and pay for all Shares that have been validly
tendered and not withdrawn pursuant to the Offer at the earliest time following
expiration of the Offer that all conditions to the Offer shall have been
satisfied or waived by the Purchaser. The obligation of the Purchaser to
commence the Offer shall be subject to the conditions set forth in Annex A
hereto and the obligation of the Purchaser to accept for payment, purchase and
pay for Shares tendered pursuant to the
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Offer shall be subject to such conditions, including the condition that a number
of Shares representing not less than two-thirds of the Shares then outstanding
on a fully diluted basis shall have been validly tendered and not withdrawn
prior to the expiration date of the Offer (the "Minimum Condition"). The
Purchaser expressly reserves the right to increase the price per Share payable
in the Offer or to make any other changes in the terms and conditions of the
Offer; provided, however, that, unless previously approved by the Company in
writing, no change may be made which decreases the price per Share payable in
the Offer, which changes the form of consideration to be paid in the Offer,
which reduces the maximum number of Shares to be purchased in the Offer, which
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or which broadens the scope of such conditions. Notwithstanding the foregoing,
the Purchaser may, without the consent of the Company, (a) extend the Offer if,
at the scheduled expiration date of the Offer, any of the conditions to the
Purchaser's obligation to purchase Shares shall not be satisfied until such time
as such conditions are satisfied, but in no event shall any such extension
continue the Offer beyond the ninetieth day following the commencement of the
Offer, (b) extend the Offer for a period of not more than 15 business days
beyond the latest expiration date that would otherwise be permitted under clause
(a) of this sentence if, on the date of such extension, more than two-thirds but
less than 90 percent of the outstanding Shares has been validly tendered and not
properly withdrawn pursuant to the Offer, or (c) extend the Offer for any reason
for
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a period of not more than 10 calendar days beyond the latest expiration date
that would otherwise be permitted under clauses (a) or (b) of this sentence. It
is agreed that the conditions set forth in Annex A are for the sole benefit of
the Parent and the Purchaser and may be asserted by the Parent or the Purchaser
regardless of the circumstances giving rise to any such condition (including any
action or inaction by the Purchaser, unless any such action or inaction by the
Purchaser would constitute a breach by the Purchaser of any of its covenants
under this Agreement) or may be waived by the Parent or the Purchaser, in whole
or in part at any time and from time to time, in its sole discretion. The
failure by the Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any reasonable determination (which shall be made in good
faith) by the Parent or the Purchaser with respect to any of the foregoing
conditions (including, without limitation, the satisfaction of such conditions)
shall be final and binding on the parties. The Company agrees that no Shares
held by the Company will be tendered in the Offer.
(b) As promptly as reasonably practicable following execution
of this Agreement, the Parent and the Purchaser shall file with the Securities
and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
with respect to the Offer, which shall contain an offer to purchase and related
letter of transmittal and summary advertisement (such Schedule 14D-1 and
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the documents therein pursuant to which the Offer will be made, together with
any supplements or amendments thereto, the "Offer Documents"). 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 holders of Shares, 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 are made, not
misleading, except that no representation is made by the Parent or the Purchaser
with respect to information supplied by the Company specifically for inclusion
in the Offer Documents. Each of the Parent, the Purchaser and the Company agrees
promptly to correct any information supplied by it specifically for inclusion 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 the Parent and the
Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
Federal securities laws. The Parent and the Purchaser agree to provide the
Company and its counsel in writing with any comments the Parent, the Purchaser
or their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
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1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board of Directors of
the Company (the "Board"), at a meeting duly called and held, has unanimously
adopted resolutions (i) determining that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, are fair to, and in the
best interests of, the shareholders of the Company, (ii) approving and adopting
this Agreement and the transactions contemplated hereby, including the Offer,
the Merger (as defined in Section 2.01), and the Shareholders Tender Agreements
of even date between the Purchaser and each of the Directors of the Company (the
"Shareholder Tender Agreements") and the transactions contemplated thereby, in
all respects and that such approval constitutes approval of the Offer, this
Agreement, the Merger and the Shareholder Tender Agreements, and the
transactions contemplated hereby and thereby, for purposes of Sections 902 and
912 of the New York Business Corporation Law (the "BCL") and similar provisions
of any other similar state statutes that might be deemed applicable to the
transactions contemplated hereby, and (iii) recommending that the shareholders
of the Company accept the Offer, tender their Shares thereunder to the Purchaser
and approve and adopt this Agreement and the Merger; provided, however, that
such recommendation may be withdrawn, modified or amended to the extent that the
Board, by a majority vote, determines in its good faith judgment, based as to
legal matters on the written opinion of legal counsel, that the Board is
required to do so for the proper discharge of its fiduciary duties. The
foregoing shall
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constitute a good faith proposal of the Parent (and the Purchaser) to acquire
the Shares, and acceptance and approval of such proposal by the Board, in
accordance with Section 912 of the BCL.
(b) The Company has been advised by each of its executive
officers who as of the date hereof is aware of the transactions contemplated
hereby and each of its Directors that each such person intends to tender
pursuant to the Offer all Shares owned by such person. The Company represents
that the Board has received the oral opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Incorporated ("DLJ") that the proposed consideration to be received by holders
of Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view and that DLJ is prepared to deliver its written opinion
that the proposed consideration to be received by holders of Shares pursuant to
the Offer and Merger is fair to such holders from financial point of view within
three days from the date of this Agreement.
(c) 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 recommendation described in
Section 1.02(a) and shall mail the Schedule 14D-9 to the shareholders of the
Company. The Schedule 14D-9 shall comply 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
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given to the Company's shareholders, and 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 in
writing by the Parent or the Purchaser specifically for inclusion or
incorporation by reference in the Schedule 14D-9. Each of the Company, the
Parent and the Purchaser agrees promptly to correct any information provided by
it for the 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
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 shareholders, in each case as and
to the extent required by applicable Federal securities laws. The Parent and its
counsel shall be given a reasonable opportunity to review and comment upon the
Schedule 14D-9 and all amendments and supplements thereto prior to their filing
with the SEC or dissemination to shareholders of the Company. The Company agrees
to provide the 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.
(d) In connection with the Offer, the Company will, and will
cause its transfer agent (the "Transfer Agent") to, furnish promptly to the
Parent and the Purchaser mailing labels containing
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the names and addresses of all record holders of Shares as of a recent date and
of those persons becoming record holders after such date, together with copies
of all lists of shareholders and security position listing and computer files
and all other information in the Company's possession and control regarding the
beneficial ownership of Shares. The Company shall promptly furnish the Parent
and the Purchaser with such additional information (including, but not limited
to, updated lists of holders of Shares and their addresses, mailing labels and
security position listings and computer files) and such other assistance as the
Parent and the Purchaser or their agents may reasonably request in communicating
the Offer to the record and beneficial holders of Shares.
1.03. Board of Directors and Committees; Section 14(f). (a)
Promptly upon acceptance for payment of, and payment for, Shares pursuant to the
Offer and from time to time thereafter, the Purchaser shall be entitled to
designate up to such number of directors, rounded up to the next whole number,
on the Board as will give the Purchaser representation on the Board equal to the
product of the number of directors on the Board (giving effect to any increase
in the number of directors pursuant to this Section 1.03) and the percentage
that such number of Shares beneficially owned by the Purchaser and its
affiliates bears to the total number of outstanding Shares, and the Company
shall, at such time, cause the Purchaser's designees to be elected or appointed,
upon request by the Purchaser. In connection with the foregoing, the Company
shall promptly, as reasonably agreed by the
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Parent and the Company, either increase the size of the Board and/or secure the
resignation of such number of its current directors as is necessary to enable
the Purchaser's designees to be elected or appointed to the Board and to cause
the Purchaser's designees to be so elected or appointed. At such times and,
subject to the last sentence of this Section 1.03(a), to the extent requested by
the Parent, the Company will use its best efforts to cause persons designated by
the Purchaser to constitute the same percentage of each committee of the Board
(other than any committee of the Board established to take action under this
Agreement) as the Purchaser's designees constitute on the Board. Notwithstanding
the foregoing, the Company, the Parent and the Purchaser shall each use its best
efforts to ensure that three of the members of the Board as of the date hereof
who are not officers, employees or affiliates of the Company (the "Independent
Directors") shall remain members of the Board until the Effective Time (as
defined in Section 2.02 hereof) and if the number of the Independent Directors
shall be reduced below three for any reason, any remaining Independent
Director(s) shall be entitled to designate independent persons to fill such
vacancies and such persons shall be deemed to be Independent Directors; or, if
no Independent Directors then remain, the other directors shall designate three
independent persons to fill such vacancies, and such persons shall be deemed to
be Independent Directors.
(b) The Company's obligation to appoint designees to the Board
shall be subject to Section 14(f) of the Exchange Act, and Rule 14f-1
promulgated thereunder. The Company shall promptly
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take all action required pursuant to such Section and Rule in order to fulfill
its obligations under this Section 1.03, including mailing to its shareholders
with the Schedule 14D-9 such information as is required under such Section and
Rule in order to fulfill its obligations under this Section 1.03. The Purchaser
will supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by such Section and Rule.
(c) Following the election or appointment of the Purchaser's
designees pursuant to this Section 1.03, any amendment of this Agreement, any
termination of this Agreement by the Company, any recommendation made by the
Board pursuant to Section 2.07(a)(ii) of this Agreement, any actions taken by
the Board pursuant to Section 6.13 of this Agreement, any extension by the
Company of the time for the performance of any of the obligations or other acts
of the Purchaser or the Parent hereunder or waiver of any of the Company's
rights or waiver by the Company of any condition hereunder, will require the
concurrence of a majority of such directors.
ARTICLE II
THE MERGER
2.01. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time, the Parent shall cause
the Purchaser to merge (the "Merger") with and into the Company and the separate
corporate existence of the Purchaser shall thereupon cease. The Company shall be
the surviving corporation
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in the Merger (the Purchaser and the Company are sometimes hereinafter referred
to as the "Constituent Corporations" and the Company is sometimes hereinafter
referred to as the "Surviving Corporation") and shall, following the Merger, be
governed by the laws of the State of New York, and the separate corporate
existence of the Company, with all its rights, privileges, immunities, powers
and franchises, of a public as well as of a private nature, shall continue
unaffected by the Merger. From and after the Effective Time, the Merger shall
have the effects specified in the BCL.
2.02. Effective Time. At the Closing contemplated in Section
8.01, the Company and the Parent will cause a Certificate of Merger (the "New
York Certificate of Merger") to be executed and filed by the Company and the
Purchaser with the Secretary of State of the State of New York as provided in
the BCL. The Merger shall become effective as of the date and at the time the
New York Certificate of Merger is duly filed with the Secretary of State of the
State of New York, and such time is hereinafter referred to as the "Effective
Time."
2.03. Certificate of Incorporation. The Restated Certificate
of Incorporation of the Company, as amended (the "Restated Certificate"), in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until duly amended in accordance
with the terms thereof and the BCL.
2.04. By-Laws. The By-Laws of the Company as in effect
immediately prior to the Effective Time shall be the By-Laws of
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the Surviving Corporation, until duly amended in accordance with the terms
thereof and the BCL.
2.05. Directors and Officers. At the Effective Time, the
directors of the Purchaser immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, each of such directors to hold office,
subject to the applicable provisions of the Restated Certificate and By-Laws of
the Surviving Corporation, until their respective successors shall be duly
elected or appointed and qualified. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
2.06. Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be
advised that any deeds, bills of sale, assignments or assurances
or any other acts or things are necessary, desirable or proper:
(a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under
any of the rights, privileges, powers, franchises, properties or assets
of either of the Constituent Corporations, or
(b) otherwise to carry out the purposes of this Agreement,
the proper officers and directors of the Surviving Corporation are hereby
authorized on behalf of the respective Constituent Corporations to execute and
deliver, in the name and on behalf of
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the respective Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and do, in the name and on behalf of the Constituent
Corporations, all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of the Constituent
Corporations and otherwise to carry out the purposes of this Agreement.
2.07. Shareholders' Meeting. (a) The Company, acting through
the Board, shall, at the Parent's request and in accordance with applicable law:
(i) duly call, give notice of, convene and hold an
annual or special meeting of its shareholders (the "Shareholders'
Meeting"), to be held as soon as practicable (provided that the
Purchaser shall have accepted for payment and paid for Shares pursuant
to the Offer) for the purpose of approving and adopting this Agreement,
the Merger and the transactions contemplated hereby and thereby;
(ii) subject to the provisions of Section 1.02(a)
(iii), the Board will include in the Proxy Statement (as defined in
Section 4.07) the recommendation of the Board that shareholders of the
Company vote in favor of the approval and adoption of this Agreement
and the Merger and the other transactions contemplated hereby and
thereby and that the cash consideration to be received by the
shareholders of the Company pursuant to the Merger is fair to such
shareholders; and
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(iii) will, as soon as practicable after the Parent's
request, prepare and file a preliminary Proxy Statement with the SEC
and, after consultation with the Parent and the Purchaser, respond
promptly to any comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof and cause the Proxy
Statement to be mailed to its shareholders at the earliest practicable
time after responding to all such comments to the satisfaction of the
staff of the SEC and to obtain the necessary approvals by its
shareholders of this Agreement.
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to this Section 2.07(a) shall not be affected by either the
commencement, public proposal, public disclosure or other communication to the
Company of any offer to acquire some or all of the Shares or all or any
substantial portion of the assets of the Company or any change in the
recommendation of the Board.
(b) The Company, the Parent and the Purchaser, as the case may
be, shall promptly prepare and file any other filings required under the
Exchange Act or any other Federal or state securities or corporate laws relating
to the Merger and the transactions contemplated herein (the "Other Filings").
Each of the parties hereto shall notify the other parties hereto promptly of the
receipt by it of any comments from the SEC or its staff and of any request of
the SEC for amendments or supplements to the Proxy Statement or by the SEC or
any other governmental officials with respect to any Other Filings or for
additional information
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and will supply the other parties hereto with copies of all correspondence
between it and its representatives, on the one hand, and the SEC or the members
of its staff or any other governmental officials, on the other hand, with
respect to the Proxy Statement, any Other Filings or the Merger. The Company,
the Parent and the Purchaser each shall use its best efforts to obtain and
furnish the information required to be included in the Proxy Statement, any
Other Filings or the Merger. If at any time prior to the time of approval of
this Agreement by the Company's shareholders there shall occur any event that
should be set forth in an amendment or supplement to the Proxy Statement, the
Company shall promptly prepare and mail to its shareholders such amendment or
supplement. The Company shall not mail the Proxy Statement or, except as
required by the Exchange Act or the rules and regulations promulgated
thereunder, any amendment or supplement thereto, to the Company's shareholders
unless the Company has first obtained the consent of the Parent to such mailing.
(c) At the meeting of shareholders, the Parent, the Purchaser
and their affiliates will vote all Shares owned by them in favor of approval and
adoption of this Agreement, the Merger, and the transactions contemplated hereby
and thereby.
(d) Notwithstanding the foregoing, in the event that the
Purchaser shall acquire at least 90 percent of then outstanding Shares, the
parties hereto agree, at the request of the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective, in accordance with
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Section 905 or 907 of the BCL, as soon as reasonably practicable after such
acquisition and satisfaction or waiver of the conditions of Article VII, without
a meeting of the shareholders of the Company.
ARTICLE III
CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS
3.01. Conversion or Cancellation of Shares. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by the Parent or any wholly-owned
subsidiary of the Parent (collectively, the "Parent Companies"), Shares held by
shareholders exercising appraisal rights pursuant to Sections 623 and 910 of the
BCL (the "Dissenting Shareholders"), and any Shares held in the treasury of the
Company) shall be converted into and represent the right to receive, without
interest, an amount in cash equal to $7.75 net or such greater amount per
share which may be paid pursuant to the Offer as it may be amended (the "Merger
Consideration") upon surrender of the certificate or certificates that,
immediately prior to the Effective Time, represented issued and outstanding
Shares (the "Certificates"). As of the Effective Time, all such
Shares shall no longer be outstanding, shall be automatically cancelled and
shall cease to exist, and each holder of a Certificate representing any such
Shares shall thereafter cease to have any rights with respect to such Shares,
except the right to receive the Merger Consideration without interest for such
Shares
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upon the surrender of such Certificate or Certificates in accordance with
Section 3.02.
(b) Each Share issued and outstanding immediately prior to the
Effective Time and owned by any of the Parent Companies, and each Share issued
and held in the Company's treasury immediately prior to the Effective Time shall
no longer be outstanding, shall be cancelled without payment of any
consideration therefor and shall cease to exist, and each holder of a
Certificate representing any such Shares shall thereafter cease to have any
rights with respect to such Shares.
(c) Each share of Common Stock, par value $1.00 per share, of
the Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully-paid and non-assessable share of
Common Stock, par value $0.05 per share, of the Surviving Corporation.
3.02. Exchange of Certificates; Paying Agent. (a) Prior to the
Closing, the Parent shall select a bank or trust company to act as paying agent
(the "Paying Agent") for the payment of the cash consideration specified in
Section 3.01 upon surrender of Certificates converted into the right to receive
cash pursuant to the Merger. From time to time at and after the Effective Time,
the Parent shall make available, or cause the Purchaser or the Surviving
Corporation to make available, to the Paying Agent immediately available funds
in amounts and at times necessary for the payment of the Merger Consideration
(the "Funds") upon surrender of Certificates pursuant to Section 3.01,
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it being understood that any and all interest earned on the Funds shall be paid
over by the Paying Agent as the Parent shall direct.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each person who was, at the Effective Time, a holder of record of a
Certificate or Certificates, other than the Company or any of the Parent
Companies, a letter of transmittal and instructions for use in effecting the
surrender, in exchange for payment in cash therefor, of the Certificates. The
letter of transmittal shall specify that delivery shall be effected, and risk of
loss and title shall pass, only upon proper delivery to and receipt of such
Certificates by the Paying Agent and shall be in such form and have such
provisions as the Parent shall reasonably specify. Upon surrender to the Paying
Agent of such Certificates, together with the letter of transmittal, duly
executed and completed in accordance with the instructions thereto and such
other documents as may be reasonably required by the Paying Agent, the Paying
Agent shall promptly pay to the persons entitled thereto, out of the Funds, a
check in the amount to which such persons are entitled pursuant to Section
3.01(a), after giving effect to any required tax withholdings, and such
Certificate shall forthwith be cancelled. No interest will be paid or will
accrue on the amount payable upon the surrender of any such Certificates. If
payment is to be made to a person other than the registered holder of the
Certificates surrendered, it shall be a condition of such payment that the
Certificates so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay
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any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificates surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent 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 to represent only the right to receive upon such surrender the amount of
cash, without interest, into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 3.01. No interest
shall accrue or be paid on any portion of the Merger Consideration.
(c) One hundred eighty days following the Effective Time, the
Surviving Corporation shall be entitled to cause the Paying Agent to deliver to
it any Funds (including any interest, dividends, earnings or distributions
received with respect thereto which shall be paid as directed by the Parent)
made available to the Paying Agent by the Parent which have not been disbursed,
and thereafter holders of Certificates who have not theretofore complied with
the instructions for exchanging their Certificates shall be entitled to look
only to the Surviving Corporation for payment as general creditors thereof with
respect to the cash payable upon due surrender of their Certificates.
(d) Except as otherwise provided herein, the Surviving
Corporation shall pay all charges and expenses, including those of the Paying
Agent, in connection with the exchange of the Merger Consideration for
Certificates.
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(e) Notwithstanding anything to the contrary in this Section
3.02, none of the Paying Agent, the Parent, the Company, the Surviving
Corporation or the Purchaser shall be liable to a holder of a Certificate
formerly representing Shares for any amount properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If Certificates are not surrendered prior to two years after the Effective Time
(or immediately prior to such earlier date on which any payment pursuant to this
Article III would otherwise escheat or become the property of any Federal, state
or local government agency or authority, court or commission), unclaimed funds
payable with respect to such Certificates shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
3.03. Dissenters' Rights. Notwithstanding the provisions of
Section 3.01 or any other provision of this Agreement to the contrary, Shares
that have not been voted in favor of the approval and adoption of the Merger and
with respect to which dissenters' rights shall have been demanded and perfected
in accordance with Sections 623 and 910 of the BCL (the "Dissenting Shares") and
not withdrawn shall not be converted into the right to receive cash at or after
the Effective Time, but such Shares shall become the right to receive such
consideration as may be determined to be due to holders of Dissenting Shares
pursuant to the laws of the State of New York unless and until the holder of
such Dissenting Shares withdraws his or her demand for such
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appraisal or becomes ineligible for such appraisal. If a holder of Dissenting
Shares shall withdraw his or her demand for such appraisal or shall become
ineligible for such appraisal (through failure to perfect or otherwise), then,
as of the Effective Time or the occurrence of such event, whichever last occurs,
such holder's Dissenting Shares shall automatically be converted into and
represent the right to receive the Merger Consideration, without interest, as
provided in Section 3.01(a). The Company shall give the Parent (i) prompt notice
of any demands for appraisal of Shares received by the Company and (ii) the
opportunity to participate in and direct all negotiations and proceedings with
respect to any such demands. The Company shall not, without the prior written
consent of the Parent, make any payment with respect to, or settle, offer to
settle or otherwise negotiate, any such demands.
3.04. Transfer of Shares After the Effective Time. No
transfers of Shares shall be made in the stock transfer books of the Surviving
Corporation at or after the Effective Time. If, after the Effective Time,
Certificates formerly representing Shares are presented to the Surviving
Corporation, they shall be cancelled and exchanged for the Merger Consideration
set forth in Section 3.01.
3.05. Company Stock Rights. (a) With respect to options to
purchase shares of Common Stock of the Company (the "Options") outstanding
pursuant to the ▇▇▇▇▇▇▇ Technology Incorporated 1988 Stock Option Plan (the
"Stock Option Plan"), the Board (or if appropriate, any committee administering
the Stock
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Option Plan) shall, as soon as practicable after the date hereof, adopt such
resolutions or take such other actions as may be required to provide that each
outstanding Option shall be accelerated so as to be fully exercisable prior to
the Effective Time, subject to the condition that the holder of each such Option
shall surrender all of such holder's outstanding and unexercised Options
(whether or not presently exercisable) in consideration of the payment at the
Effective Time of an amount of cash per share subject to each such Option equal
to the difference between the exercise price of such Option and the Merger
Consideration. Prior to the Effective Time, the Company shall use its best
efforts to procure the surrender of all outstanding Options. As to any Option
not so surrendered, the Company shall use its best efforts to obtain, prior to
the Effective Time, the consent of the holder of the Option to acquire upon
payment of the exercise price an amount of cash equal to the Merger
Consideration in lieu of each Share formerly covered thereby.
(b) With respect to outstanding options (the "Purchase Plan
Options", together with the Options, the "Company Stock Rights") to purchase
shares of the Common Stock of the Company pursuant to the ▇▇▇▇▇▇▇ Technology
Incorporated 1986 Employee Stock Purchase Plan (the "Stock Purchase Plan"), the
Company shall take all action necessary prior to the Effective Time to obtain
the agreement of eligible employees under the Stock Purchase Plan to the
cancellation of their subscription agreements thereunder in consideration of
the payment at the Effective Time of an amount of cash per share covered by
any such subscription agreement equal to
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the sum of (i) the difference between the "Purchase Price", as defined in the
Stock Purchase Plan, of each share covered by such subscription agreement and
the consideration per share described in Section 1.01(a) hereof, plus (ii) the
aggregate amount previously deducted from such eligible employee's pay pursuant
to the Stock Purchase Plan with respect to such subscription agreement. The
rights of any such eligible employee under the Stock Purchase Plan who does not
agree to the cancellation of his subscription agreement as described in this
Section 3.05(b) shall be only as set forth in the Stock Purchase Plan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent and
the Purchaser that:
4.01. Organization; Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, and has all requisite corporate power and authority to
own, lease and operate its properties and carry on its business as now being
conducted. The Company is duly qualified to do business and is in good standing
in each jurisdiction in which the nature of the Company's business or the
location of its properties makes such qualification necessary, except for any
such failure to qualify or be in good standing as shall not have a Material
Adverse Effect on the Company. The Company Disclosure Letter (as defined in
Section 4.05) identifies, and the Company has heretofore made available to the
Parent, complete and correct copies of the
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Restated Certificate and By-Laws of the Company, as currently in effect.
4.02. The Company's Capitalization. The authorized capital
stock of the Company consists solely of six million Shares. As of the close of
business on September 28, 1995, there were 2,384,707 shares of Common Stock
issued and outstanding and no Shares held in the Company's treasury. All
outstanding Shares have been duly authorized and validly issued, and, except as
provided in Section 630 of the BCL, are fully paid, nonassessable and were
issued free of preemptive rights. Except for the Company Stock Rights described
in Section 3.05 hereof and except as set forth on the Company Disclosure Letter
there are not now, and at the Effective Time there will not be, any
subscriptions, options, warrants, calls, rights, agreements or commitments
relating to the issuance, sale, delivery or transfer by the Company (including
any right of conversion or exchange under any outstanding security or other
instrument) of its Shares. There are no outstanding contractual obligations of
the Company to repurchase, redeem or otherwise acquire any outstanding Shares.
The Company Disclosure Letter contains a complete and accurate list of all
holders of Options, Purchase Plan Options and any other options or rights of any
kind to purchase or acquire shares of the Common Stock of the Company, together
with the number of such options and the terms of such options held by each such
holder.
4.03. Company Equity Investments. Except as set forth on the
Company Disclosure Letter, the Company does not own, directly or indirectly, or
have the right to acquire, any equity
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security of another entity and has not made any loan or advance to any other
entity.
4.04. Authority Relative to this Agreement. The Company has
full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly adopted by the Board, and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board and,
except for the approval of the Merger by the holders of at least two-thirds of
the outstanding Shares in accordance with the BCL, no other corporate actions on
the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, including the acquisition of
Shares pursuant to the Offer and the Merger. The Company has taken all actions
necessary to render Section 912 of the BCL to be inapplicable to such
transactions and the transactions contemplated by the Shareholder Tender
Agreements. This Agreement has been duly and validly executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Parent and the Purchaser, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors' rights generally as at the time in effect and by general
principles of equity, regardless of whether
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such enforceability is considered in a proceeding in equity or at law.
4.05. Consents and Approvals; No Violation. Except as set
forth on the Company Disclosure Letter delivered to the Company as of the date
of this Agreement (the "Company Disclosure Letter"), and except for any required
approval of the Merger by the shareholders of the Company and the filing of the
New York Certificate of Merger in accordance with the BCL, neither the
execution, delivery and performance of this Agreement by the Company nor the
consummation by it of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the Restated Certificate or
By-Laws of the Company, (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, except (A) in connection with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust of
1976, as amended (the "HSR Act"), (B) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not have a Material Adverse Effect, and (C) for any requirements which became
applicable to the Company as a result of the specific regulatory status of the
Parent or the Purchaser or as a result of any other facts that specifically
relate to the business or activities in which the Parent or the Purchaser is
or proposes to be engaged; (iii) constitute a breach or result in a default
under, or give rise to any right of termination, amendment, cancellation or
acceleration under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture,
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license, contract, agreement or other instrument or obligation of any kind to
which the Company is a party or by which the Company or any of its assets may be
bound, except for any such breach, default or right as to which requisite
waivers or consents have been obtained or which, in the aggregate, would not
have a Material Adverse Effect; or (iv) assuming compliance with the BCL and the
HSR Act, violate any order, writ, injunction, judgment, decree, law, statute,
rule, regulation or governmental permit or license applicable to the Company or
any of its assets, which violation would have a Material Adverse Effect.
For purposes of this Agreement, "Material Adverse Effect"
means a material adverse effect on the business, assets, prospects, financial
condition or results of operation of the Company or on the ability of the
Company to consummate the transactions contemplated by this Agreement.
4.06. SEC Reports; Financial Statements. The Company has filed
all required forms, reports and documents with the SEC since January 1, 1990
(collectively, the "SEC Reports"), each of which has complied in all material
respects with all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act, each as in effect on the
dates so filed. None of such forms, reports or documents, including, without
limitation, any financial statements or schedules included or incorporated by
reference therein, contained, when filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make
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the statements therein, in light of the circumstances under which they were
made, not misleading. The Company has heretofore made available or promptly will
make available to the Parent a complete and correct copy of any amendment,
documents or other instruments which previously had been filed by the Company
with the SEC pursuant to the Exchange Act. The Company has previously furnished
to the Parent audited balance sheets of the Company as of June 30th in each of
the years 1990 through 1995, and the related audited statements of income,
statements of cash flow, changes in shareholders' equity and changes in
financial position of the Company for the fiscal years then ended, together with
the respective reports thereon of Price Waterhouse LLP. The balance sheet of the
Company as of June 30, 1995 is hereinafter referred to as the "Company Balance
Sheet". Each of the balance sheets included in the financial statements referred
to in this Section 4.06 (including the related notes thereto) presents fairly
the financial position of the Company as of their respective dates, and the
other related statements included therein (including the related notes thereto)
present fairly the results of operations, the cash flows, and changes in
shareholders' equity and changes in financial position for the periods then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein.
4.07. Proxy Statement; Offer Documents. Any proxy or similar
materials distributed to the Company's shareholders in connection with the
Merger, including any amendments or supplements thereto (the "Proxy Statement"),
will comply in all
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material respects with applicable federal securities laws and will not contain
any untrue statements of a material fact required to be stated therein 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 the Parent in writing for inclusion in
the Proxy Statement. None of the information supplied by the Company in writing
for inclusion in the Offer Documents or provided by the Company in the Schedule
14D-9 will, at the respective times that the Offer Documents and the Schedule
14D-9 or any amendments or supplements thereto are filed with the SEC and are
first published or sent or given to holders of Shares, 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.
4.08. Undisclosed Liabilities. Except as set forth on the
Company Disclosure Letter or reflected in the financial statements referred to
in Section 4.06, the Company has no liability or obligation, secured or
unsecured (whether absolute, accrued, contingent or otherwise, and whether due
or to become due) except those which would not, individually or in the
aggregate, have a Material Adverse Effect.
4.09. Absence of Certain Changes or Events. Except as set
forth on the Company Disclosure Letter, since the date of the
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Company Balance Sheet (i) the business of the Company has been conducted in the
ordinary course consistent with past practice (except as otherwise contemplated
by this Agreement), (ii) there has not been any change which has had a Material
Adverse Effect, and (iii) the Company has not taken any action described in
Section 6.01.
4.10. Title, Etc. (a) The Company Disclosure Letter sets forth
a list of all of the land, which includes the buildings, structures and other
improvements located thereon (the "Real Property"), which is owned in fee by the
Company. The Company has, with respect to personal property, good, and, with
respect to real property, good, marketable and insurable, title to all of the
properties and assets which it purports to own and which are material to the
business, operation or financial condition of the Company free and clear of all
mortgages, security interests, liens, claims, charges or other encumbrances of
any nature whatsoever, except for (i) any liens, encumbrances or defects
reflected in the Company Balance Sheet; (ii) any liens, encumbrances or defects
which do not, individually or in the aggregate, materially detract from the fair
market value (free of such liens, encumbrances or defects) of the property or
assets subject thereto or materially interfere with the current use by the
Company of the property or assets subject thereto or affected thereby or
otherwise have a Material Adverse Effect; (iii) any liens or encumbrances for
taxes not delinquent or which are being contested in good faith, provided that
adequate reserves for the same have been established on the Company Balance
Sheet; (iv) any
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liens or encumbrances for current taxes and assessments not yet past due; (v)
any inchoate mechanic's and materialmen's liens and encumbrances for
construction in progress; (vi) any workmen's, repairmen's, warehousemen's and
carriers' liens and encumbrances arising in the ordinary course of business, so
long as such liens have not been filed; (vii) any liens of the type referred to
in (vi) above that have been filed, so long as such liens do not aggregate in
excess of $25,000; (viii) liens securing obligations under the Credit Agreement
(as defined in Section 6.01(b)); and (ix) with respect to Real Property, any
liens, encumbrances or defects which are matters of record, including but not
limited to, easements, quasi-easements, rights of way, land use ordinances and
zoning plans.
(b) The Company Disclosure Letter sets forth a list of all of
the leases and subleases (the "Real Property Leases") under which, as of the
date hereof, the Company has the right to occupy space. The Company has
heretofore delivered to the Parent a true, correct and complete copy of all of
the Real Property Leases, including all amendments thereto. All Real Property
Leases and material leases pursuant to which the Company leases personal
property from others are, in all material respects, valid, binding and
enforceable in accordance with their terms; the Company has not received notice
of any default by the Company under any Real Property Lease which would have a
Material Adverse Effect; there are no existing defaults, or any condition or
event which with the giving of notice or lapse of time would constitute a
default, by the Company thereunder which would have a Material Adverse Effect;
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and, with respect to the Company's obligations thereunder without qualification
and with respect to the obligations of all other parties thereto, to the
knowledge of the Company, no uncured default or event or condition on the part
of any landlord exists under any Real Property Lease which with the giving of
notice or the lapse of time would constitute a default thereunder which would
have a Material Adverse Effect.
(c) All of the land, buildings, structures and other
improvements occupied by the Company in the conduct of its business are included
in the Real Property and the Real Property Leases.
(d) The Company does not own or hold, and is not obligated
under or a party to, any option, right of first refusal or other contractual
right to purchase, acquire, sell or dispose of the Real Property and the Real
Property Leases or any portion thereof or interest therein.
4.11. Patents, Trademarks, Etc. The Company Disclosure Letter
identifies all registered trademarks, copyrights and patents owned or licensed
by the Company as of the date hereof. The Company owns, or is licensed or
otherwise has adequate right to use, all patents, patent rights, trademarks,
trademark rights, service marks, service ▇▇▇▇ rights, trade names, trade name
rights, copyrights, know-how, technology, trade secrets and other proprietary
information (collectively, the "Intellectual Property") which are material to
the conduct of the business of the Company. Except as set forth in the Company
Disclosure Letter, no claims have been asserted by any person, and the
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Company has not asserted a claim against any person, with respect to any of the
Intellectual Property owned or used by the Company or challenging or questioning
the validity or effectiveness of any license or agreement relating thereto to
which the Company is a party.
4.12. Insurance. The Company Disclosure Letter identifies all
material property, general liability and casualty insurance policies which
currently insure the Company and the Company shall use its reasonable efforts to
keep such policies in full force and effect up to the Closing Date. Such
policies are adequate in the view of the management of the Company for the
assets and operations of the Company.
4.13. Employee Benefit Plans. (a) For purposes of this Section
4.13, "Company Benefit Plans" means all employee benefit plans and arrangements
described in section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), with respect to which the Company has a liability,
whether direct or indirect, actual or contingent, and any material bonus,
incentive and similar plans maintained by the Company.
(b) The Company Disclosure Letter sets forth a list of all
Company Benefit Plans and the Company has delivered or made available to the
Parent, where applicable, accurate and complete copies of all Company Benefit
Plan texts and related agreements.
(c) Except as set forth in the Company Disclosure Letter with
respect to each Company Benefit Plan: (i) such plan has been administered and
enforced in all material respects in accordance with its terms and applicable
law; (ii) to the best of
40
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the knowledge of the Company after reasonable inquiry, no breach of fiduciary
duty or prohibited transaction has occurred; (iii) no actions, suits, claims or
disputes are pending, or to the knowledge of the Company, threatened; (iv) all
contributions and premiums due have been made on a timely basis; (v) all
contributions made or required to be made under such Company Benefit Plan meet
the requirements for deductibility under the Internal Revenue Code of 1986, as
amended, (the "Code"); and (vi) no Company Benefit Plan is a multiemployer plan
(as defined in ERISA section 3(37)), a multiple employer plan within the meaning
of the Code or ERISA, a defined benefit plan within the meaning of ERISA section
3(35), or a plan subject to section 302 of ERISA or section 412 of the Code.
(d) Except as set forth on the Company Disclosure Letter, the
consummation of the transactions contemplated by this Agreement will not (i)
entitle any individual to severance pay, or (ii) accelerate the time of payment
or vesting, or increase the amount, of compensation due to any individual. The
Company has delivered to the Parent true, correct and complete copies of each
plan, agreement or arrangement relating to the foregoing, including all
amendments thereto.
(e) The Company Disclosure Letter sets forth a description of
all obligations of the Company with respect to retiree medical and retiree life
insurance benefits under the Company Benefit Plans. The Company has delivered to
the Parent written material which is representative in all material respects of
written communications of the Company with respect to retiree
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medical and life benefits under the Company Benefit Plans, a list of which is
set forth on the Company Disclosure Letter.
(f) Each Company Benefit Plan intended to be qualified under
section 401(a) of the Code is so qualified, and each trust or other funding
vehicle related thereto is exempt from federal income tax under section 501(a)
of the Code.
(g) With respect to any insurance policy providing funding for
benefits under any Company Benefit Plan, (i) there is no material liability of
the Company in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or other actual or contingent liability, nor would
there be any such liability if such insurance policy was terminated on the date
hereof, and (ii) to the knowledge of the Company, no insurance company issuing
any such policy is in receivership, conservatorship, liquidation or similar
proceeding and, to the knowledge of the Company, no such proceeding with respect
to any insurer is imminent.
4.14. Legal Proceedings, Etc. Except as set forth on the
Company Disclosure Letter, (i) there is no claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
relating to the Company before any court or governmental or regulatory authority
or body with respect to which there is a reasonable likelihood of a
determination which would have a Material Adverse Effect, and (ii) the Company
is not subject to any outstanding order, writ, judgment, injunction or decree of
any court or governmental or regulatory authority or body.
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4.15. Taxes. Except as set forth on the Company Disclosure
Letter, (i) the Company has paid or adequately reserved for in the Company
Balance Sheet all Taxes (as defined below) required to be paid by it through the
date hereof (other than Taxes or audit adjustments which would not, in the
aggregate, have a Material Adverse Effect) and shall timely pay any Taxes
required to be paid by it after the date hereof and on or before the Effective
Time (unless the payment of such Taxes is being contested by the Company in good
faith), (ii) the Company has filed all notices, reports and returns for Taxes
("Tax Returns") that it is required to file through the date hereof and shall,
on or before the Effective Time, prepare and file, consistent with prior years
in all material respects, all Tax Returns that it is required to file after the
date hereof and on or before the Effective Time, (iii) no penalties or other
charges are due with respect to the late filing of any Tax Return, (iv) the
Company is not currently being audited by any taxing authority, (v) no extension
of time with respect to any date on which any Tax Return was or is to be filed
by the Company is in force as of the date hereof, (vi) no waiver or agreement by
the Company is in force as of the date hereof for the extension of time for the
assessment or payment of any Tax, and (vii) the Company has not agreed to make
and is not required to make any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise. "Taxes" shall mean all
taxes, levies or other assessments, including, without limitation, income,
excise, property, sales, gross receipts, employment, import and franchise
taxes and customs
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duties imposed by the United States, or any state, county, local or foreign
government, or subdivision or agency thereof, and including any interest,
penalties or additions attributable thereto.
4.16. Material Agreements. Except as set forth on the Company
Disclosure Letter and except for agreements made for the purpose of completing
the transactions contemplated by this Agreement, the Company is not as of the
date hereof a party to, or bound by, any material agreement of any kind to be
performed in whole or in part after the Effective Time. Solely for the purpose
of this Section, the term "material agreement" shall mean (i) any single
agreement which involves the payment or receipt by the Company, subsequent to
the date of this Agreement, of more than $150,000 or (ii) any agreement for
money borrowed or pursuant to which the Company has guaranteed or otherwise
agreed to be responsible for the indebtedness, obligations or liabilities of any
other Person. Except as set forth on the Company Disclosure Letter, there is no
breach or default and there are no facts which with notice or the passage of
time would constitute a breach or default under, or give rise to any right of
termination, amendment, cancellation or acceleration under, whether as a result
of the consummation of the transactions contemplated hereby or otherwise, any
obligation to be performed by any party to a material agreement to which the
Company is a party, which breach, default or right (assuming the exercise
thereof) would have a Material Adverse Effect.
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4.17. Compliance with Law. Except as set forth on the
Company Disclosure Letter, the business of the Company is not being conducted
and the properties and assets of the Company are not currently owned or operated
in violation of any law, ordinance, regulation, order, judgment, injunction,
award or decree of any governmental or regulatory entity or court or arbitrator,
except for possible violations which either individually or in the aggregate do
not, and so far as can be reasonably foreseen will not, have a Material Adverse
Effect.
4.18. Insider Interests. The Company Disclosure Letter
sets forth all material contracts, agreements with and other obligations to
officers, directors and employees or shareholders of the Company. Except as set
forth on the Company Disclosure Letter, no officer, director or shareholder of
the Company, and no entity controlled by any such officer, director or
shareholder, and no relative or spouse who resides with any such officer,
director or shareholder (i) owns, directly or indirectly, any material interest
in any person that is or is engaged in business other than on an arm's-length
basis as, a competitor, lessor, lessee, customer or supplier of the Company or
(ii) owns, in whole or in part, any tangible or intangible property that the
Company uses in the conduct of the business of the Company.
4.19. Accounts Receivable. All accounts receivable
relating to the business of the Company reflected on the Company Balance Sheet,
and all accounts receivable relating to the business of the Company arising
subsequent to the date of the Company Balance Sheet, have arisen in the ordinary
course of
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business. All items which are required by generally accepted
accounting principles to be reflected as accounts receivable on the Company
Balance Sheet and on the books of the Company are so reflected and any reserve
accounts relating thereto have been established in accordance with generally
accepted accounting principles applied in a manner consistent with the Company's
past practices.
4.20. Officers, Directors and Employees. The Company
Disclosure Letter sets forth the name and current compensation of each officer,
director or employee of the Company whose current annual rate of compensation
from the Company (including bonuses but excluding commission-only compensation)
exceeds $50,000.
4.21. Environmental Protection. Except as set forth on
the Company Disclosure Letter, the Company has obtained all material permits,
certificates, licenses, approvals and other authorizations (collectively
"Environmental Permits") relating to pollution or protection of the environment,
including those relating to emissions, discharges, releases of pollutants,
contaminants or chemicals, or industrial, toxic or hazardous substances or
wastes into the environment (including, without limitation, ambient air, surface
water, ground water, or land) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or chemicals, or industrial, toxic or
hazardous substances or wastes. Except as set forth on the Company Disclosure
Letter, the Company is in material compliance with all terms and conditions of
the Environmental Permits, and
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the Company is also in material compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in all applicable environmental laws or
contained in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder, if
any ("Pertinent Environmental Laws"). Except as set forth on the Company
Disclosure Letter, there are no past, present or future events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
materially interfere with or prevent material compliance or continued compliance
with Pertinent Environmental Laws, or which may give rise to any material common
law or legal liability, or otherwise form the basis of any material claim,
action, demand, suit, proceeding, hearing, study or investigation, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant or
chemical, or industrial, toxic or hazardous substance or waste. Except as set
forth on the Company Disclosure Letter, there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice or demand letter,
notice of violation, investigation, or proceeding pending or, to the Company's
knowledge, threatened against the Company relating in any way to any Pertinent
Environmental Laws.
4.22. Brokers and Finders. Neither the Company nor any
of its officers, directors or employees has employed any broker,
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finder or investment banker or incurred any liability for any brokerage fees,
commissions, finders' fees or investment banking fees in connection with the
transactions contemplated herein, except that the Company has employed, and will
pay the fees and expenses of, DLJ as its financial advisor, the arrangements
with which have been disclosed in writing to the Parent prior to the date
hereof.
4.23. 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 the Parent or the Purchaser, express or
implied, and the Company hereby disclaims any such representation or warranty,
whether by the Company or any of its officers, directors, employees, agents or
representatives or any other person, notwithstanding the delivery or disclosure
to the Parent or the Purchaser or any of its officers, directors, employees,
agents or representatives or any other person of any document or other
information by the Company or any of its officers, directors, employees, agents
or representatives or any other person. Any document delivered by the Company
pursuant to this Agreement is a true, correct and complete copy of such
document, and has not been modified or amended unless such amendment or
modification is included with such document.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
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THE PARENT AND THE PURCHASER
5.01. Corporation Organization. The Parent is a
corporation duly organized and validly existing and in good standing under the
laws of the State of Ohio and the Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of the State of New York.
The Parent and the Purchaser each has all requisite corporate power and
authority to own its assets and carry on its business as now being conducted or
proposed to be conducted. Each of the Parent and the Purchaser has delivered to
the Company complete and correct copies of its Certificate or Articles of
Incorporation and By-Laws or Code of Regulations, as the case may be, as in
effect on the date hereof.
5.02. Authorized Capital. The authorized capital stock
of the Purchaser consists of 100 shares of Common Stock, par value $1.00 per
share, all of which shall be outstanding as of the Effective Time. All of the
issued and outstanding shares of capital stock of the Purchaser are validly
issued, fully paid, nonassessable and free of preemptive rights and all liens.
5.03. Corporation Authority. Each of the Parent and the
Purchaser has the necessary corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement by each of the Parent and the Purchaser, the performance by
the Parent and the Purchaser of its obligations hereunder and the consummation
by the Parent and the Purchaser of the transactions contemplated hereby have
been duly authorized by its Board of Directors and no other corporate proceeding
on the part of the Parent or the
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Purchaser is necessary for the execution and delivery of this Agreement by the
Parent and the Purchaser and the performance by the Parent and the Purchaser of
its obligations hereunder and the consummation by the Parent and the Purchaser
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of the Parent and the Purchaser and, assuming the due
authorization, execution and delivery hereof by the Company, is a legal, valid
and binding obligation of the Parent and the Purchaser, enforceable against the
Parent and the Purchaser in accordance with its terms, except to the extent that
its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
5.04. No Prior Activities. The Purchaser has not
incurred, directly or indirectly, any liabilities or obligations, except those
incurred in connection with its incorporation or with the negotiation of this
Agreement, the Offer Documents, the Regulatory Filings and the consummation of
the transactions contemplated hereby and thereby. The Purchaser has not engaged,
directly or indirectly, in any business or activity of any type or kind, or
entered into any agreement or arrangement with any person or entity, and is not
subject to or bound by any obligation or undertaking, that is not contemplated
by or in connection with this Agreement, the Offer Documents, the Regulatory
Filings and the transactions contemplated hereby and thereby.
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5.05. No Financing Contingency. The Parent has sufficient
funds to consummate all of the transactions contemplated by this Agreement and
will make available to the Purchaser sufficient funds to consummate the Offer
and the Merger.
5.06. Governmental Filings; No Violations. (a) Other
than the Regulatory Filings, no notices, reports or other filings are required
to be made by the Parent or the Purchaser with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
the Parent or the Purchaser from, any governmental or regulatory authorities of
the United States, the several States or any foreign jurisdictions in connection
with the execution and delivery of this Agreement by the Parent and the
Purchaser and the consummation by the Parent and the Purchaser of the
transactions contemplated hereby, the failure to make or obtain any or all of
which could prevent, materially delay or materially burden the transactions
contemplated by this Agreement.
(b) Except as set forth on the Parent Disclosure Letter
delivered to the Company as of the date of this Agreement (the "Parent
Disclosure Letter"), neither the execution and delivery of this Agreement by the
Parent or the Purchaser nor the consummation by the Parent or the Purchaser of
the transactions contemplated hereby nor compliance by the Parent or the
Purchaser with any of the provisions hereof will: (i) conflict with or result in
any breach of any provision of its Certificate or Articles of Incorporation or
By-Laws or Code of Regulations, as the case may be, (ii) result in a violation
or breach of, or constitute (with
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or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or require any
consent under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, contract, agreement or other instrument or
obligation to which the Parent or the Purchaser is a party or by which it or any
of its properties or assets may be bound, (iii) require the creation or
imposition of any lien upon or with respect to the properties of the Parent or
the Purchaser or (iv) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Parent or the Purchaser or any of its properties
or assets, excluding from the foregoing clauses (iii) and (iv) violations,
breaches or defaults which in the aggregate, would not have a material adverse
effect on the business, financial condition or operations of the Parent or the
Purchaser or which would not prevent, materially delay or materially burden the
transactions contemplated by this Agreement.
5.07. Brokers and Finders. Neither the Parent, the Purchaser
nor any of its officers, directors or employees has employed any broker, finder
or investment banker or incurred any liability for any brokerage fees,
commissions, finders fees or investment banking fees in connection with the
transactions contemplated herein, except that the Parent has employed ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co.
5.08. Offer Documents; Proxy Statement; Other
Information. None of the information included in the Offer Documents (including
any amendments or supplements thereto) or any
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schedules required to be filed with the SEC in connection therewith and
described therein as being supplied by the Parent or the Purchaser will, at the
respective times that the Offer Documents or any amendments or supplements
thereto or any such schedules are filed with the SEC, 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. None of the
information supplied in writing by the Parent or the Purchaser specifically for
inclusion in the Proxy Statement, Schedule 14D-9 or any statement required
pursuant to Section 14(f) of the Exchange Act or any other schedules or
statements required to be filed with the SEC in connection therewith will
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 not misleading.
5.09 No Other Representations or Warranties. Except for
the representations and warranties contained in this Agreement, anything
described in or listed in the Parent Disclosure Letter, or any other document
delivered pursuant to this Agreement, neither the Parent or the Purchaser nor
any other person makes any representations or warranty to the Company, express
or implied, and the Parent and the Purchaser hereby disclaim any such
representation or warranty, whether by the Parent or the Purchaser or any of its
or their officers, directors, employees, agents or representatives or any other
person, notwithstanding the delivery or disclosure to the Company
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or any of its officers, directors, employees, agents or representatives or any
other person of any document or other information by the Parent and the
Purchaser or any of their officers, directors, employees, agents or
representatives or any other person. Any document delivered by the Parent or the
Purchaser pursuant to this Agreement is a true, correct and complete copy of
such document, and has not been modified or amended unless such amendment or
modification is included with such document.
ARTICLE VI
COVENANTS OF THE PARTIES
6.01. Conduct of Business of the Company. Except as
contemplated by this Agreement or as set forth on the Company Disclosure Letter,
during the period from the date of this Agreement to the Effective Time, the
Company will conduct its business and operations only in the ordinary and usual
course of business consistent with past practice. Without limiting the
generality of the foregoing, and, except as contemplated in this Agreement or as
set forth on the Company Disclosure Letter, prior to the Effective Time, without
the advance written consent of the Parent, the Company will not:
(a) Amend its Restated Certificate or By-Laws;
(b) (i) Create, incur or assume any indebtedness for money
borrowed, including obligations in respect of capital leases, except (A)
purchase money mortgages granted in connection with past practice, (B)
indebtedness for borrowed money incurred in the ordinary course of business not
aggregating in excess of
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$8.0 million outstanding at any time under its existing Fifth Amended and
Restated Revolving Credit and Term Loan Agreement with The Chase Manhattan Bank,
N.A. as the same may be amended from time to time ("Credit Agreement"), provided
that the proceeds thereof are not distributed to the shareholders of the
Company; or (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person; provided, however, that the Company may endorse negotiable
instruments in the ordinary course of business consistent with past practice;
(c) Declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of the Common Stock of the Company;
(d) Issue, sell, grant, purchase or redeem, or issue or sell
any securities convertible into, or options with respect to, or warrants to
purchase or rights to subscribe to, or subdivide or in any way reclassify, any
Shares, except in any case above pursuant to Company Stock Rights;
(e) (i) Increase the rate of compensation payable or to
become payable by the Company to its directors, officers or employees, whether
by salary or bonus, by more than four percent per person on an annual basis for
directors and officers of the Company and by more than four and one-half percent
in the aggregate for all other employees of the Company (excluding
commission-only compensation, the rate of which shall not be increased); or (ii)
increase the rate or term of, or otherwise
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alter, any bonus, insurance, pension, severance or other employee benefit plan,
payment or arrangement made to, for or with any such directors, officers or
employees;
(f) Enter into any agreement, commitment or transaction
(other than borrowings permitted by Section 6.01(b)), except agreements,
commitments or transactions in the ordinary course of business consistent with
past practice;
(g) Sell, transfer, mortgage, pledge, grant any security
interest or permit the imposition of any lien or other encumbrance on any asset
other than in the ordinary course of business consistent with past practice and
except pursuant to the Credit Agreement;
(h) Waive any right under any contract or other agreement
identified on the Company Disclosure Letter if such waiver would have a Material
Adverse Effect;
(i) Make any material change in its accounting methods or
practices or make any material change in depreciation or amortization policies
or rates adopted by it for accounting purposes or, other than normal writedowns
or writeoffs consistent with past practices, make any writedowns of inventory or
writeoffs of notes or accounts receivable;
(j) Make any loan or advance to any of its shareholders,
officers, directors, employees (other than advances to field sales personnel,
vacation advances, relocation advances and travel advances in each case made in
the ordinary course of business in a manner consistent with past practice) or
make any
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other loan or advance to any other person or group otherwise than in
the ordinary course of business consistent with past practice;
(k) Terminate or fail to renew, where such renewal is at the
Company's option, any contract or other agreement (excluding customer leases or
contracts), the termination or failure of which to renew would have a Material
Adverse Effect;
(l) Enter into any collective bargaining agreement;
(m) Make any addition to or modification of the Company
Benefits Plans;
(n) Take, agree to take, or knowingly permit to be taken any
action, or do or, with respect to anything within the Company's control,
knowingly permit to be done anything in the conduct of its business which would
be contrary to or in breach of any of the terms or provisions of this Agreement,
or which would cause any of the representations of the Company to be or become
untrue in any material respect; or
(o) Agree to do any of the foregoing.
6.02. Notification of Certain Matters. The Company shall give
prompt notice to the Parent of: (a) any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement; (b) any
notice or other communication from any regulatory authority in connection with
the transactions contemplated by this Agreement; and (c) any claims, actions,
proceedings or investigations commenced or, to the best of its knowledge,
threatened, involving or affecting the Company or any of its properties or
assets, which, if pending on
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the date hereof, would have been required to have been disclosed in the Company
Disclosure Letter pursuant to the provisions of Section 4.14; and (d) the
occurrence of any event having, or which insofar as can be reasonably foreseen
would have, a Material Adverse Effect.
6.03. Access to Information. (a) Between the date of
this Agreement and the Effective Time, the Company will during ordinary business
hours and upon reasonable advance notice, (i) give the Parent and the Parent's
authorized representatives all access the Parent shall reasonably request to all
of its books, records (including, without limitation, the workpapers of the
Company's outside accountants), contracts, commitments, plants, offices and
other facilities and properties, and its personnel, representatives, accountants
and agents; provided, however, that all such access shall take place after
appropriate prior consultation with the officers of the Company, (ii) permit the
Parent to make such inspections thereof as it may reasonably request (including,
without limitation, observing the Company's physical inventory of its assets),
(iii) cause its officers and advisors to furnish to the Parent its financial and
operating data and such other existing information with respect to its business,
properties, assets, liabilities and personnel (including, without limitation,
title insurance reports, real property surveys and environmental reports, if
any), as the Parent may from time to time reasonably request, (iv) take such
actions as the Parent reasonably deems appropriate to verify the existence and
condition of equipment leased by the Company to its customers, and (v)
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permit the Parent's accountants to conduct such confirmation and testing
procedures with respect to the Company's receivables as the Parent reasonably
deems appropriate; provided, however, that (A) any such investigation shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of the Company, (B) the Company shall not be required to take
any action which would constitute a waiver of the attorney-client privilege, (C)
the Company need not supply the Parent with any information which it is under a
legal obligation not to supply, and (D) until such time as the Parent and/or its
affiliates are the beneficial owners of a majority of the outstanding Shares,
any such activities by the Parent prior to the purchase by the Purchaser of
Shares pursuant to the Offer shall be for the purposes of verifying the accuracy
of representations and warranties of the Company and the compliance by the
Company with its covenants contained in this Agreement.
(b) Any information provided pursuant to this Agreement shall
be held by the Parent in accordance with and shall be subject to the terms of
the Confidentiality Agreement dated July 19, 1994 between the Company and the
Parent (the "Confidentiality Agreement").
6.04. Further Information. The Company and the Parent
shall give prompt written notice to the other of (i) any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate in
any material respect (including the Company, the Parent or the Purchaser
receiving knowledge of any fact, event or circumstance which may cause any
representation
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qualified as to knowledge to be or become untrue in any material respect) or
(ii) the failure by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Merger Agreement; provided, however, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement. The Company
acknowledges that if, after the date of this Agreement, the Company or the
Parent receives knowledge of any fact, event or circumstance that would cause
any representation or warranty that is conditioned as to the knowledge of the
Company to be or become untrue or inaccurate in any respect, the receipt of such
knowledge shall constitute a breach of the representation or warranty that is so
conditioned as of the date of such receipt.
6.05. Further Assurances. Consistent with the terms and
conditions hereof, each party hereto will execute and deliver such instruments
and take such other action as the other parties hereto may reasonably require in
order to carry out this Agreement and the transactions contemplated hereby and
thereby.
6.06. Interim Financial Statements. Within 45 days
after the end of each fiscal quarter and 90 days after the end of any fiscal
year after the date of this Agreement, and until the Effective Time, the Company
will deliver to the Parent its Form 10-QSB's or 10-KSB's, as the case may be,
for such quarter or year. The financial statements contained therein shall
fairly present their respective financial condition, results of
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operations and cash flows and changes in financial position as at the date or
for the periods indicated in accordance with generally accepted accounting
principles consistently applied in accordance with past practice, shall be
prepared in conformity with the requirements of Regulation S-X under the
Exchange Act and Item 303 of Regulation S-B and shall be accompanied by a
certificate of the principal financial officer (or independent certified public
accountant in the case of year end financials) of the Company to such effect.
6.07. Fairness Opinion. Within three business days of
the execution of this Agreement, the Company shall provide to the Parent a
signed copy of the written opinion of DLJ that the Offer is fair to the Company
shareholders from a financial point of view, which DLJ has advised the Company
it fully expects to be able to deliver at such time.
6.08. Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use their best 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
and shall use its best efforts to satisfy the conditions to the transactions
contemplated hereby and to obtain all waivers, permits, consents and approvals
and to effect all registrations, filings and notices with or to third parties or
governmental or public bodies or authorities which are necessary or desirable in
connection with the transactions contemplated by this Agreement,
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including, but not limited to, filings to the extent required under the Exchange
Act and HSR Act, and obtaining consent to the Merger from The Chase Manhattan
Bank, N.A. pursuant to the Credit Agreement. If 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 or directors of each of the parties hereto
shall take such action. Without limiting the generality of the foregoing, the
Parent as the sole shareholder of the Purchaser, and the Purchaser as a
shareholder of the Company, will consent and/or vote in favor of the
transactions contemplated hereunder, and Company, the Parent, and the Purchaser
will vigorously defend against any lawsuit or proceeding, whether judicial or
administrative, challenging this Agreement or the consummation of any of the
transactions contemplated hereby. From time to time after the date hereof,
without further consideration, the Company will, at its own expense, execute and
deliver such documents to the Parent as the Parent may reasonably request in
order to consummate such transactions. From time to time after the date hereof,
without further consideration, the Parent will, at its own expense, execute and
deliver such documents to the Company as the Company may reasonably request in
order to consummate the Merger. Notwithstanding the foregoing, a party shall not
be obligated to take any action pursuant to the foregoing if the taking of such
action or the obtaining of any waiver, consent, approval or exemption is
reasonably likely (x) to be materially burdensome to such party and its
subsidiaries taken as a whole or to impact in a materially adverse manner the
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economic or business benefits of the transactions contemplated by this Agreement
so as to render inadvisable the consummation of the transactions contemplated by
this Agreement or (y) to result in the imposition of a condition or restriction
of the type described in paragraph (iii)(a) of Annex A hereto. In connection
with and without limiting the foregoing, the Company and its Board of Directors
shall (i) 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,
and (ii) 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.
6.09. Filings. (a) The Company and the Parent will
file, or cause to be filed, as promptly as possible and, in the case of the
Parent in no event later than five business days after the date hereof, with the
United States Federal Trade Commission (the "FTC") and the Antitrust Division of
the United States Department of Justice (the "Department of Justice") pursuant
to the HSR Act the notification required by the HSR Act, including all requisite
documents, materials and information therefor, and
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request early termination of the waiting period under the HSR Act. Each of the
Company and the Parent shall furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission which is necessary under the HSR Act.
The Company and the Parent shall each keep the other apprised of the status of
any inquiries or requests for additional information made by any governmental
authority and shall comply promptly with any such inquiry or request.
(b) The Company and the Parent or the Purchaser shall make any
necessary filings with the New York State Department of Taxation and Finance and
shall furnish all supplemental information requested by said Department to
obtain, prior to the completion of the Merger, a statement of any real estate
transfer tax and transfer gains tax due pursuant to Article 31 or 31-B of the
New York Tax Law as a result of the completion of the Offer. The Company shall
pay, when due and payable, any transfer gains tax and real estate transfer tax
assessed by the New York State Department of Taxation and Finance, if
applicable, as well as all fees and charges incurred in connection with any such
filings. The Parent and the Purchaser shall cooperate in providing any documents
or affidavits necessary for any filings.
6.10. Public Announcements. The initial press release
to the transactions contemplated hereby shall be a joint press release, and
thereafter the Company and the Parent shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the transactions
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contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by law or
any listing agreement with a national securities exchange or with National
Association of Securities Dealers, Inc., or in order to carry out the fiduciary
duties of the Board, as advised by counsel.
6.11. Indemnity; D&O Insurance. (a) The Parent shall
cause all rights to indemnification by the Company now existing in favor of each
present and former director or officer of the Company (hereinafter referred to
in this Section as the "Indemnified Parties") as provided in the Company's
By-Laws to survive the Merger and to continue in full force and effect as rights
to indemnification by the Surviving Corporation for a period of at least six
years following the Effective Time.
(b) Subject to the terms set forth herein, the Surviving
Corporation shall indemnify and hold harmless, to the fullest extent permitted
under applicable law (and shall also advance expenses as incurred by an
Indemnified Party to the extent permitted under applicable law, provided the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification), each Indemnified Party against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action, alleged
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action, omission or alleged omission occurring on or prior to the Effective Time
in their capacity as director or officer (including, without limitation, any
claims, actions, suits, proceedings and investigations which arise out of or
relate to the transactions contemplated by this Agreement) for a period of six
years after the Effective Time, provided that, in the event any claim or claims
are asserted or made within such six year period, all rights to indemnification
in respect of any such claim or claims shall continue until final disposition of
any and all such claims.
(c) Any Indemnified Party wishing to claim indemnification
under this Section 6.11, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify the Surviving Corporation
thereof, but the failure to so notify shall not relieve the Surviving
Corporation of any obligation to indemnify such Indemnified Party or of any
other obligation imposed by this Section 6.11 unless and to the extent that such
failure prejudices the Parent or the Surviving Corporation; it being understood
that it shall be deemed to materially prejudice the Parent or the Surviving
Corporation, as the case may be, if, as a result of such failure to notify, the
Parent or the Surviving Corporation is not given an opportunity to assume the
defense of such claim, action, suit, proceeding or investigation within a
reasonably prompt time after such claim, action, suit, proceeding or
investigation is asserted or initiated. In the event of any such claim, action,
suit, proceeding or investigation, (i) the Surviving Corporation or the
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Parent shall have the right to assume the defense thereof and shall not be
liable to such Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by such Indemnified Party in connection
with the defense hereof, except that if the Parent or Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Party advises
that there are issues which raise conflicts of interest between the Parent or
Surviving Corporation and the Indemnified Party, the Indemnified Party may
retain counsel satisfactory to it, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Party promptly
as statements therefore are received; provided, however, that in no event shall
the Parent or Surviving Corporation be required to pay fees and expenses,
including disbursements and other charges, for more than one firm of attorneys
in any one legal action or group of related legal actions unless (A) counsel for
the Indemnified Party advises that there are issues which raise conflicts of
interest that require more than one firm of attorneys, or (B) local counsel of
record is needed in any jurisdiction in which any such action is pending, (ii)
the Parent and the Indemnified Party shall cooperate in the defense of any such
matter, and (iii) the Parent and the Surviving Corporation shall not be liable
for any settlement effected without the prior written consent of one of them
(which consent shall not be unreasonably withheld); and provided, further, that
the Parent and Surviving Corporation shall not have any obligation hereunder to
any Indemnified Party if and to the extent a court of competent jurisdiction
ultimately
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determines, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
(d) For three years after the Effective Time, the Parent
shall cause the Surviving Corporation to use its best reasonable efforts to
maintain, if available for an annual premium not in excess of $60,000, officers'
and directors' liability insurance covering the Indemnified Parties who are
presently covered by the Company's officers' and directors' liability insurance,
(copies of which have been delivered to the Parent), with respect to acts or
omissions occurring at or prior to the Effective Time, on terms no less
favorable than those in effect on the date hereof or at the Effective Time, or
if such insurance coverage is not available for an annual premium not in excess
of $60,000 to obtain the amount of coverage that is available for an annual
premium of $60,000.
(e) The covenants contained in this Section 6.11 shall
survive the Effective Time until fully discharged and are intended to benefit
each of the Indemnified Parties.
6.12. Company Benefit Plans. The Company has heretofore
delivered to the Parent a true and complete copy of the Company's employee
severance plan, as in effect on the date of this Agreement (the "Severance
Plan"). The Parent will, and will cause the Surviving Corporation to, provide
severance benefits to all of the employees of the Company as of the date of
acceptance for payment of the Shares of equal or greater value to those set
forth in the Severance Plan for a period of two years following
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the date of acceptance for payment of the Shares. The covenant set forth in the
immediately preceding sentence shall survive the Effective Time until fully
discharged and is intended to benefit all of the employees of the Company as of
the date of acceptance for payment of the Shares. The Parent will not terminate
or cause the termination of any employee or employees of the Company in a manner
that would be in violation of the federal Workers Adjustment, Retraining and
Notification Act.
6.13. Other Potential Bidders. The Company, its
affiliates and their respective officers, directors, employees, investment
bankers, attorneys and other representatives and agents shall immediately cease
any existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any acquisition of all or any material portion of the
assets of, or any equity interest in, the Company or any business combination
with the Company. Prior to the acceptance for payment of Shares, the Company,
directly or indirectly, (a) may furnish information and access, in each case
only in response to unsolicited requests therefor, to any corporation,
partnership, person or other entity or group pursuant to confidentiality
agreements that do not prohibit or restrict disclosure of any matter to the
Parent, and (b) may participate in discussions and negotiate with such entity or
group concerning any merger, sale of assets, sale of shares of capital stock or
similar transaction involving the Company or any division of the Company, only
if such entity or group to which information or access is furnished or
discussions or negotiations are held has submitted a written proposal to the
Board relating to
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any such transaction and the Board by a majority vote has determined in its good
faith judgment, based as to legal matters on the written opinion of legal
counsel, that failing to take such action would constitute a breach of the
Board's fiduciary obligations under applicable law. Except as set forth above,
neither the Company or any of its affiliates, nor any of its or their respective
officers, directors, employees, representatives or agents, shall, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than the Parent and the Purchaser, any
affiliate or associate of the Parent and the Purchaser or any designees of the
Parent and the Purchaser) concerning any merger, sale of assets, sale of shares
of capital stock or similar transaction involving the Company or any substantial
portion of the assets of the Company, or take any other action to facilitate the
making of a proposal that constitutes or could reasonably be expected to lead to
an acquisition proposal. Without limiting the foregoing, it is understood that
any violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any of its subsidiaries, shall be deemed to
be a breach of this Section 6.13 by the Company. The Company shall use its best
efforts to ensure that the officers, directors and employees of the Company and
its subsidiaries and any investment banker or other advisor or representatives
retained by the Company are aware of the restrictions set forth in the preceding
sentences, and the Company hereby represents that the Board has
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adopted resolutions directing the officers, directors and employees of the
Company and its subsidiaries to comply with such restrictions. The Company
promptly shall advise the Parent orally and in writing of any takeover proposal
and any inquiries or developments with respect thereto. Neither the Board nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the Parent or the Purchaser the approval or
recommendation by the Board of the Offer, the Merger or this Agreement or (ii)
approve or recommend, or propose to approve or recommend, any takeover proposal
or any other acquisition of Shares other than the Offer and the Merger.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Board from approving or recommending to the Company shareholders any
unsolicited tender offer or exchange offer by a third party as contemplated by
Rules 14d-9 and 14d-2 promulgated under the Exchange Act (and, in connection
therewith, withdrawing or modifying the approval or recommendation by the Board
of the Offer, the Merger or this Agreement) in the event any unsolicited
takeover proposal shall have been made by a third party if, in the good faith
judgment of the Board, based as to legal matters on the written opinion of legal
counsel, that withdrawing or modifying such approval or recommendation is
required under applicable law in the proper discharge of its fiduciary duties.
6.14. Employees of the Company. Until the Effective
Time or the date of termination of this Agreement, whichever shall occur, and
for a period of one year from the date of termination
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(if termination should occur), neither the Parent nor any affiliate of the
Parent shall directly or indirectly employ, retain or agree to employ or retain
or solicit the employment or retention of any employee of the Company as an
employee or in any other capacity other than pursuant to any general employee
solicitation program conducted by the Parent in a manner consistent with past
practices.
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. Conditions to Each Party's Obligation to Effect the
Merger. If the Offer is consummated, the respective obligations of each
party to this Agreement to consummate the Merger shall be subject to the
following conditions, which have not been waived at or prior to the Closing:
(a) The Purchaser shall have accepted for payment Shares
tendered pursuant to the Offer;
(b) This Agreement and the Merger shall have been approved
and adopted by the requisite vote or consent, if any is required, of the
shareholders of the Company required by the Company's Restated Certificate and
the BCL;
(c) Any waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have expired or been terminated; and
(d) No order, statute, rule, regulation, execution order,
stay, decree, judgment, or injunction shall have been enacted, entered, issued,
promulgated or enforced by any court or
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governmental authority which prohibits or restricts the consummation of the
Merger.
7.02. Conditions to the Obligations of the Parent and the
Purchaser to Effect the Merger. The obligation of the Purchaser and the
Parent to effect the Merger shall be further subject to satisfaction of the
conditions, unless waived by the Parent, that (i) the Company shall have
performed and complied in all material respects with the agreements and
obligations contained in this Agreement required to be performed and complied
with by it at or prior to the Effective Time, (ii) all outstanding Options shall
have been surrendered to the Company as provided in Section 3.05(a) of this
Agreement and cancelled by the Company, and (iii) the Parent shall have received
a comfort letter, in form and substance reasonably requested by the Parent, from
Price Waterhouse LLP regarding the updating of the Company's most recent
financial statements.
7.03. Conditions to the Obligations of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be further
subject to the Parent and the Purchaser having performed and complied in all
material respects with the agreements and obligations contained in this
Agreement required to be performed and complied with by each of them at or prior
to the Effective Time.
ARTICLE VIII
CLOSING
8.01. Time and Place. The closing of the Merger (the
"Closing") shall take place at the offices of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ &
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▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. local time
on a date to be specified by the parties which shall be no later than the third
business day after the date on which the last of the closing conditions set
forth in Article VII is satisfied or waived (if waivable) unless another time,
date or place is agreed upon in writing by the parties hereto. The date on which
the Closing actually occurs is herein referred to as the "Closing Date."
8.02. Filings at the Closing. At the Closing, the
Purchaser shall cause the New York Certificate of Merger to be filed and
recorded with the Secretary of State of the State of New York in accordance with
the provisions of Section 904 or 905 of the BCL, and shall take any and all
other lawful actions and do any and all other lawful things necessary to cause
the Merger to become effective.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.01. Termination. This Agreement may be terminated and the
Offer and the Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of the Parent, the Purchaser
and the Company;
(b) by the Parent and the Purchaser or the Company if any
court of competent jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or taken any
other final action restraining, enjoining or otherwise prohibiting the Merger or
the acceptance for payment
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and payment for the Shares in the Offer and such order, decree, ruling or other
action is or shall have become nonappealable;
(c) by the Parent and the Purchaser if, due to an occurrence
or circumstance which results in a failure to satisfy any of the conditions set
forth in Annex A hereto, the Purchaser shall have (A) failed to commence the
Offer within five days following the date of the initial public announcement of
the Offer, (B) terminated the Offer or (C) failed to pay for Shares pursuant to
the Offer within 75 days following the commencement of the Offer;
(d) by the Company if (i) there shall not have been a
material breach of any representation, warranty, covenant or agreement on the
part of the Company and the Purchaser shall have (A) failed to commence the
Offer within five days following the date of the initial public announcement of
the Offer, (B) terminated the Offer or (C) failed to pay for Shares pursuant to
the Offer within 75 days following the commencement of the Offer, or (ii) prior
to the purchase of Shares pursuant to the Offer, a corporation, partnership,
person or other entity or group shall have made a bona fide offer that the Board
by a majority vote, determines in its good faith judgment and in the discharge
of its fiduciary duties, based as to legal matters on the written opinion of
legal counsel, is more favorable to the Company's shareholders than the Offer
and the Merger, provided that such termination under this clause (ii) shall not
be effective until payment of the fee required by Section 9.03(b) hereof;
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(e) by the Parent and the Purchaser prior to the purchase of
Shares pursuant to the Offer, if (i) there shall have been a breach of any
representation or warranty on the part of the Company having a Material Adverse
Effect or materially adversely affecting (or materially delaying) the
consummation of the Offer, (ii) there shall have been a breach of any covenant
or agreement on the part of the Company resulting in a Material Adverse Effect
or materially adversely affecting (or materially delaying) the consummation of
the Offer, (iii) the Company shall engage in negotiations with any entity or
group (other than the Parent or the Purchaser) that has proposed a Third Party
Acquisition (as defined below), (iv) the Board shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to the
Purchaser, its approval or recommendation of the Offer, this Agreement or the
Merger or shall have recommended another offer, or shall have adopted any
resolution to effect any of the foregoing, or (v) the Minimum Condition shall
not have been satisfied by the expiration date of the Offer and on or prior to
such date an entity or group (other than the Parent or the Purchaser) shall have
made and not withdrawn a proposal with respect to a Third Party Acquisition; or
(f) by the Company if (i) there shall have been a breach of any
representation or warranty on the part of the Parent or the Purchaser which
materially adversely affects (or materially delays) the consummation of the
Offer or (ii) there shall have been a material breach of any covenant or
agreement on the part of
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the Parent or the Purchaser and which materially adversely affects (or
materially delays) the consummation of the Offer.
"Third Party Acquisition" means the occurrence of any of the
following events (i) the acquisition of the Company by merger or otherwise by
any person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) or entity other than the Parent, the Purchaser or
any affiliate thereof (a "Third Party"); (ii) the acquisition by a Third Party
of more than 30% of the total assets of the Company, taken as a whole; (iii) the
acquisition by a Third Party of 30% or more of the outstanding Shares; (iv) the
adoption by the Company of a plan of liquidation or the declaration or payment
of an extraordinary dividend; or (v) the repurchase by the Company of more than
20% of the outstanding Shares.
9.02. Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 9.01, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than the provision of this Section 9.02 and Sections 6.03(b) and 9.03 hereof.
Nothing contained in this Section 9.02 shall relieve any party from liability
for any breach of this Agreement.
9.03. Fees and Expenses. (a) In the event the Company
terminates this Agreement pursuant to Section 9.01(d)(ii), the Company shall
reimburse the Parent, the Purchaser and their affiliates (not later than one
business day after submission of statements therefore) for all actual
documented out-of-pocket fees
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and expenses, actually and reasonably incurred by any of them or on their behalf
in connection with the Offer and the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation,
attorneys' fees, fees payable to financing sources, investment bankers, counsel
to any of the foregoing, and accountants and filing fees and printing costs)
(the "Expense Reimbursement Amount"). In the event the Parent and the Purchaser
terminate this Agreement pursuant to Section 9.01(c) (but only if such
termination is based on a failure to satisfy clause (i) or clause (iii)(c), (e)
or (f) of Annex A hereto) or 9.01(e), (i) the Company shall reimburse the
Parent, the Purchaser or their affiliates for up to $250,000 of the Expense
Reimbursement Amount and (ii) such amount shall be paid to Parent, the Purchaser
or their affiliates, as directed by the Parent, together with interest thereon
at the rate of 8% per annum, in 24 consecutive monthly installments of an amount
equal to 1/24 of the lesser of $250,000 or the Expense Reimbursement Amount,
commencing on the first business day of the month immediately following the
month in which the Parent, the Purchaser or such affiliate(s) became entitled to
receive such amount. The Parent and the Purchaser have provided the Company with
an estimate of the amount of fees and expenses incurred by them through the date
of this Agreement and if the Parent, the Purchaser or their affiliates submit a
request for reimbursement hereunder, the Parent, the Purchaser or such
affiliate(s) will provide the Company in due course with invoices or other
reasonable evidence of such fees and expenses upon request.
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(b) In the event the Company terminates this Agreement
pursuant to Section 9.01(d)(ii) or in the event the Parent and the Purchaser
terminate this Agreement pursuant to 9.01(e)(ii), (iii), (iv) or (v) hereof, the
Parent and the Purchaser would suffer direct and substantial damages, which
damages cannot be determined with reasonable certainty. To compensate the Parent
and the Purchaser for such damages, the Company shall pay to the Purchaser the
amount of $1,000,000 less the Shareholder Amount (as defined below), if any, as
liquidated damages immediately upon such a termination as well as all amounts to
which the Parent and the Purchaser would be entitled pursuant to Section
9.03(a). It is specifically agreed that the amount to be paid pursuant to this
Section 9.03 represents liquidated damages and not a penalty. "Shareholder
Amount" means the aggregate amount paid by the shareholders of the Company who
are parties to Shareholder Tender Agreements to the Purchaser pursuant to
Section 12 thereof.
(c) Except as specifically provided in this Section 9.03
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
10.01. Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties and agreements of the
parties contained in Sections 2.06, 3.01, 3.02 (but only to the extent that such
Section expressly relates to actions to be taken after the Effective Time),
3.03, 3.04, 3.05, 6.05, 6.08, 6.09, 6.11, 6.12 and Article X hereof, shall
survive
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the consummation of the Offer and the Merger. The agreements of the
parties contained in Sections 6.03, 9.02, 9.03 and Article X hereof and the
representations and warranties in Sections 4.22 and 5.07 shall survive the
termination of this Agreement without termination. All other representations,
warranties, agreements and covenants in this Agreement shall not survive the
consummation of the Offer or the termination of this Agreement.
10.02. Amendment and Modification. Subject to
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of the Parent (for itself and the Purchaser) and the Company
at any time prior to the Effective Time with respect to any of the terms
contained herein executed by duly authorized officers of the respective parties
except that after the earlier of (a) the purchase by the Purchaser of more than
50% of the outstanding Shares on a fully diluted basis, and (b) the meeting of
shareholders to approve the Merger contemplated by this Agreement, the price per
Share to be paid pursuant to this Agreement to the holders of Shares shall in no
event be decreased and the form of consideration to be received by the holders
of such Shares in the Merger shall in no event be altered without the approval
of such holders.
10.03. Waiver of Compliance; Consents. At any time
prior to the Effective Time, the parties hereto may extend the time for
performance of any of the obligations or other acts or waive any inaccuracies in
the representations and warranties contained herein or in the documents
delivered pursuant hereto. Any failure of the Parent (for itself and the
Purchaser), on the
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one hand, or the Company, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived in writing by the Parent
(for itself and the Purchaser) or the Company, respectively, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of or estoppel with respect
to any subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 10.03.
10.04. Counterparts. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
10.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of laws rules.
10.06. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by registered or certified mail (return receipt requested) or by
overnight courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
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(a) If to the Company, to:
Prior to the Effective Time,
▇▇▇▇▇▇▇ Technology Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
After the Effective Time,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Nixon, Hargrave, Devans & ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) if to the Parent or the Purchaser, to:
If By Mail
Diebold, Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
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If by Courier Service or Personal Delivery
Diebold, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
with copies to:
If By Mail
Diebold, Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President and General Counsel
and
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If by Courier Service or Personal Delivery
Diebold, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President and General Counsel
and
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
10.07. Entire Agreement, Assignment Etc. This Agreement,
which hereby incorporates the Company Disclosure Letter, the Parent Disclosure
Letter, the Confidentiality Agreement and the Shareholder Tender Agreements,
embodies the entire agreement and understanding of the parties hereto in
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respect of the subject matter hereof and, except for Section 6.11 and 6.12, is
not intended to confer upon any other person any rights or remedies hereunder.
This Agreement supersedes all prior agreements and understanding of the parties
with respect to the subject matter hereof other than the Confidentiality
Agreement. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interest or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other parties hereto except that the Parent
shall have the right to assign the rights of the Purchaser to any other
(directly or indirectly) wholly-owned subsidiary of the Parent without the prior
written consent of the Company.
10.08. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
10.09. Headings. The Articles and Section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
Agreement of the parties and shall not effect in any way the meaning or
interpretation of this Agreement.
10.10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is
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accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first above written.
▇▇▇▇▇▇▇ TECHNOLOGY INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO
DIEBOLD, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
D-GT ACQUISITION, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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ANNEX A
The capitalized terms used herein have the meanings
set forth in the Agreement and Plan of Merger
to which this Annex A is attached
Notwithstanding any other provision of the Agreement and Plan
of Merger to which this Annex A is attached (the "Merger
Agreement") or the Offer, the Purchaser shall not be required to accept for
payment, purchase or pay for any Shares of the Company tendered, and may
terminate or, subject to the terms of the Merger Agreement, amend the Offer and
may postpone the acceptance for payment of any Shares, if prior to the time of
acceptance for payment of Shares tendered pursuant to the Offer:
(i) at least two-thirds of then outstanding Shares on a fully
diluted basis shall not have been validly tendered and, if tendered,
not withdrawn immediately prior to the expiration of the Offer (the
"Minimum Condition");
(ii) any waiting period applicable to the Offer pursuant to
the HSR Act shall not have expired or been terminated;
(iii) at any time before the time of acceptance for payment for
any such Shares any of the following shall occur or exist:
(a) there shall have been instituted or be pending any
action, proceeding, application, claim or counterclaim by any
government or governmental authority or agency, domestic or
foreign, before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or
foreign, (i) challenging the acquisition by the Parent or the
Purchaser of the Shares, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or seeking to
obtain from the Parent or the Purchaser any damages that would
result in a Material Adverse Effect if such were assessed
against the Company, (ii) seeking to prohibit or materially
limit the ownership or operation by the Parent or the Surviving
Corporation of all or any material portion of the business or
assets of the Company or compel the Parent or the Surviving
Corporation to dispose of or to hold separate all or any
material portion of the business or assets of the Company, or
to impose any material limitation on the ability of the Company
or the Surviving Corporation to conduct such business or own
such assets, or (iii) seeking to impose material limitations on
the ability of the Parent (or any other affiliate of the
Parent) to acquire or hold or to exercise full rights of
ownership of the Shares, including, but not limited to,
87
the right to vote the Shares purchased by them on all matters
properly presented to the stockholders of the Company; or
(b) there shall be any statute, rule, regulation,
judgment, order or injunction enacted, promulgated, entered,
enforced or deemed applicable to the Offer, the Merger or the
Merger Agreement, or any other action shall have been taken by
any government, governmental authority or court, domestic or
foreign, other than the routine application to the Offer or the
Merger of waiting periods under the HSR Act, that has, or has a
substantial likelihood of resulting in, any of the consequences
referred to in clauses (i) through (iii) of paragraph (a)
above; or
(c) the Company shall have breached or failed to
perform in any material respect any of its obligations,
covenants or agreements contained in the Merger Agreement, or
any of the representations and warranties of the Company set
forth in the Merger Agreement shall not have been true and
correct in any material respect when made or, except for any
representations and warranties made as of a specific date,
shall have ceased to be true and correct in any material
respect as if made on and as of the scheduled expiration of the
Offer, as it may be extended from time to time (the
"Expiration Date") (or, in the case of representations
and warranties that are specifically qualified as to
materiality, shall not have been true and correct when made or
shall have ceased to be true and correct on and as of the
Expiration Date); or
(d) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for,
securities on the New York Stock Exchange, Inc. (ii) the
declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or
not mandatory), (iii) the commencement of a war, armed
hostilities or other international or national calamity
directly or indirectly involving the United States and having a
Material Adverse Effect on or materially adversely affecting
(or materially delaying) the consummation of the Offer, (iv)
any limitation (whether or not mandatory), by any U.S.
governmental authority or agency on, or any other event that,
in the judgment of the Parent, is substantially likely to
materially adversely affect, the extension of credit by banks
or other financial institutions, or (v) from the date of the
Merger Agreement through the date of termination or expiration
of the Offer, a decline of at least 25% in the Standard &
Poor's 500 Index; or
88
(e) prior to the purchase of Shares pursuant to the
Offer, the Company Board of Directors shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a
manner adverse to the Parent its approval or recommendation of
the Offer, the Merger Agreement or the Merger or shall have
recommended another offer for the purchase of the Shares,
which, in the sole judgment of the Parent in any such case, and
regardless of the circumstances (including any action or
omission by the Parent) giving rise to such condition, makes it
inadvisable to proceed with such acceptance for payment except
where as a result of the Company's receipt of an unsolicited
acquisition proposal from a third party (A) the Company issues
to its stockholders a communication that contains only the
statements permitted by Rule 14d-9(e) under the Securities
Exchange Act of 1934 (and does not otherwise withdraw, modify
or amend its approval or recommendation of the transactions
contemplated hereby) and (B) within five business days of
issuing such communication the Company publicly reconfirms its
approval and recommendation of the transactions contemplated by
the Offer and the Merger Agreement; or
(f) There shall have occurred since June 30, 1995, a
change, occurrence or circumstance in the Company's business
having a Material Adverse Effect thereon.