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AGREEMENT AND PLAN
OF MERGER
DATED AS OF
SEPTEMBER 15, 1998
BY AND AMONG
CARMEUSE LIME, INC.
DLC ACQUISITION CORP.
AND
DRAVO CORPORATION
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TABLE OF CONTENTS
ARTICLE I THE OFFER......................................... 1
Section 1.1. The Offer.................................... 1
Section 1.2. Company Action............................... 2
Section 1.3. Directors.................................... 3
ARTICLE II THE MERGER....................................... 4
Section 2.1. The Merger................................... 4
Section 2.2. Closing...................................... 4
Section 2.3. Effective Time of the Merger................. 5
Section 2.4. Articles of Incorporation.................... 5
Section 2.5. By-Laws...................................... 5
Section 2.6. Board of Directors; Officers................. 5
Section 2.7. Effects of Merger............................ 5
ARTICLE III CONVERSION OF COMMON STOCK...................... 5
Section 3.1. Conversion of Common Stock................... 5
Section 3.2. Preference Stock Unaffected.................. 5
Section 3.3. Stock Options................................ 6
Section 3.4. Closing of Company Transfer Books............ 6
Section 3.5. Exchange of Certificates..................... 6
Section 3.6. Funding of Paying Agent...................... 7
Section 3.7. Action of Shareholders....................... 7
Section 3.8. Merger Without Meeting of Shareholders....... 8
Section 3.9. No Further Ownership Rights in Common
Stock.................................................. 8
Section 3.10. Dissenting Shareholders -- Common Stock..... 8
Section 3.11. Dissenting Shareholders -- Preference
Stock.................................................. 8
Section 3.12. Assistance in Consummation of the Merger.... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.... 9
Section 4.1. Organization and Qualification............... 9
Section 4.2. Capitalization of the Company and its
Subsidiaries........................................... 9
Section 4.3. Authority Relative to this Agreement......... 10
Section 4.4. SEC Reports; Financial Statements; Title to
Assets; Liens.......................................... 11
Section 4.5. Information Supplied......................... 12
Section 4.6. Consents and Approvals; No Violations........ 12
Section 4.7. No Default................................... 13
Section 4.8. No Undisclosed Liabilities................... 13
Section 4.9. Litigation................................... 13
Section 4.10. Compliance with Applicable Law.............. 13
Section 4.11. Employee Plans.............................. 14
Section 4.12. Environmental Matters....................... 15
Section 4.13. Tax Matters................................. 18
Section 4.14. Intangible Property......................... 18
Section 4.15. Opinion of Financial Advisor................ 19
Section 4.16. Brokers..................................... 19
Section 4.17. Labor Matters............................... 19
Section 4.18. Absence of Certain Changes.................. 19
Section 4.19. Millennium.................................. 20
Section 4.20. Full Disclosure............................. 21
Section 4.21. Real Property............................... 21
Section 4.22. Contracts................................... 22
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT......................................................... 22
Section 5.1. Organization and Qualification.............................................................. 22
Section 5.2. Authority Relative to this Agreement........................................................ 22
Section 5.3. No Conflict or Violation; Consents.......................................................... 23
Section 5.4. Adequate Financing.......................................................................... 23
Section 5.5. Ownership of Common Stock................................................................... 23
Section 5.6. Full Disclosure............................................................................. 23
Section 5.7. Information Supplied........................................................................ 23
ARTICLE VI REPRESENTATIONS AND WARRANTIES REGARDING PURCHASER.............................................. 24
Section 6.1. Organization................................................................................ 24
Section 6.2. Capitalization.............................................................................. 24
Section 6.3. Authority Relative to this Agreement........................................................ 24
ARTICLE VII CONDUCT OF BUSINESS PENDING THE MERGER......................................................... 24
Section 7.1. Conduct of Business by the Company Pending the Merger....................................... 24
Section 7.2. No Solicitation............................................................................. 26
ARTICLE VIII ADDITIONAL AGREEMENTS......................................................................... 27
Section 8.1. Access and Information...................................................................... 27
Section 8.2. Indemnification............................................................................. 27
Section 8.3. HSR Act..................................................................................... 28
Section 8.4. Additional Agreements Regarding Consents and Approvals...................................... 28
Section 8.5. Takeover Statutes........................................................................... 29
Section 8.6. Benefits.................................................................................... 29
Section 8.7. Effect of Knowledge of Breach............................................................... 30
Section 8.8. Certain Deliveries.......................................................................... 30
ARTICLE IX CONDITIONS PRECEDENT............................................................................ 30
Section 9.1. Conditions to Each Party's Obligation to Effect the Merger.................................. 30
ARTICLE X TERMINATION AND FEES............................................................................. 31
Section 10.1. Termination................................................................................ 31
Section 10.2. Effect of Termination...................................................................... 31
Section 10.3. Fees and Expenses.......................................................................... 31
ARTICLE XI GENERAL PROVISIONS.............................................................................. 32
Section 11.1. Non-Survival of Representations, Warranties and Agreements................................. 32
Section 11.2. Amendment.................................................................................. 32
Section 11.3. Notices.................................................................................... 32
Section 11.4. Specific Performance....................................................................... 33
Section 11.5. Publicity.................................................................................. 33
Section 11.6. Interpretation............................................................................. 33
Section 11.7. Counterparts............................................................................... 34
Section 11.8. Entire Agreement; No Third Party Beneficiaries............................................. 34
Section 11.9. Severability............................................................................... 34
Section 11.10. Governing Law............................................................................. 34
Section 11.11. Assignment................................................................................ 34
Section 11.12. Descriptive Headings...................................................................... 34
ANNEX
I Conditions to the Offer
COMPANY DISCLOSURE SCHEDULE
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DEFINED TERMS LOCATION
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Agreement.................................... Agreement and Plan of Merger
Business Day................................. Section 1.1(a)
Closing...................................... Section 2.2
Closing Date................................. Section 2.2
Commission................................... Section 1.1(c)
Common Stock................................. Agreement and Plan of Merger
Company...................................... Agreement and Plan of Merger
Company Disclosure Schedule.................. Article IV--Representations and Warranties of the
Company
Company Representatives...................... Section 7.2(a)
Company SEC Reports.......................... Section 4.4(a)
Effective Time............................... Section 2.3
Environmental Laws........................... Section 4.12
Event........................................ Annex I--Conditions to the Offer
Exchange Act................................. Section 1.1(a)
Expiration Date.............................. Section 1.1(c)
Governmental Entity.......................... Section 4.6
HSR Act...................................... Section 4.6
Indemnified Parties.......................... Section 8.2(a)
Independent Directors........................ Section 1.3
Interested Stockholder....................... Section 4.3
Knowledge.................................... Section 11.6
Leased Property.............................. Section 4.21
Leases....................................... Section 21
Liens........................................ Section 4.21
Material Adverse Effect...................... Section 4.1(c)
Material Legal Requirements.................. Section 5.3(b)
Merger....................................... Agreement and Plan of Merger
Minimum Condition............................ Section 1.1(a)
Offer........................................ Agreement and Plan of Merger
Option....................................... Section 3.3(a)
Owned Real Property.......................... Section 4.21
Parent....................................... Agreement and Plan of Merger
Paying Agent................................. Section 3.5
PBCL......................................... Agreement and Plan of Merger
Per Share Amount............................. Agreement and Plan of Merger
Permitted Liens.............................. Section 4.21
Preference Stock............................. Section 3.2
Prohibited Result............................ Annex I(a)
Proxy Statement.............................. Section 3.7(c)
Purchaser.................................... Agreement and Plan of Merger
Release...................................... Section 4.12
Remedies..................................... Section 10.2
Schedule 14D-1............................... Section 1.1(c)
Schedule 14D-9............................... Section 1.2(c)
Securities Act............................... Section 4.3(a)
Series B Preference Stock.................... Section 3.2
Series D Preferred Stock..................... Section 3.2
Shareholders................................. Section 1.1(c)
Superior Proposal............................ Section 7.2(e)
Takeover Proposal............................ Section 7.2(d); Section 10.3(b)(ii)
Tender Offer Documents....................... Section 1.1(c)
Termination Date............................. Section 10.1(b)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of September
15, 1998, by and among Carmeuse Lime, Inc., a Delaware corporation ("Parent"),
DLC Acquisition Corp., a Pennsylvania corporation and a wholly owned subsidiary
of Parent ("Purchaser"), and Dravo Corporation, a Pennsylvania corporation (the
"Company"):
W I T N E S S E T H:
WHEREAS, the Boards of Directors of each of the Parent and the Purchaser
have determined that it is in the best interests of their respective
shareholders and the Board of Directors of the Company has determined that it is
in the best interest of the Company for the Parent to acquire the Company upon
the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser will make a
cash tender offer to acquire all issued and outstanding shares of common stock,
$1.00 par value, of the Company (the "Common Stock"), at a cash purchase price
of $13.00 per share (the "Per Share Amount"), without interest thereon, in
accordance with the terms and subject to the conditions of this Agreement (the
"Offer");
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of the Company, Parent and Purchaser have each approved the merger (the
"Merger") of Purchaser with and into the Company following consummation of the
Offer in accordance with the Pennsylvania Business Corporation Law (the "PBCL")
upon the terms and subject to the conditions set forth herein and as a result of
which the holders of Common Stock will receive the Per Share Amount for each
share of Common Stock held by them at the effective time of the Merger and the
Company will thereafter become a wholly owned subsidiary of Parent;
WHEREAS, the Board of Directors of the Company has resolved to recommend
acceptance of the Offer and the Merger to the holders of the Common Stock, has
determined that the Per Share Amount to be paid for each share of Common Stock
in the Offer and the Merger is fair to the holders of such Common Stock, and has
resolved to recommend that the holders of such Common Stock accept the Offer and
approve this Agreement and the Merger, if required by the PBCL, and each of the
transactions contemplated hereby, each upon the respective terms and subject to
the applicable conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company, intending to be legally bound hereby, agree as
follows:
ARTICLE I
THE OFFER
SECTION 1.1. THE OFFER
(a) Purchaser shall, and Parent shall cause Purchaser to, commence, within
the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder (the "Exchange Act"),
the Offer, as promptly as practical but in no event later than five (5) business
days (as such term is defined in Rule 14e-1 under the Exchange Act (a "Business
Day")) after the date of this Agreement. The Offer will be subject only to a
number of shares of Common Stock being validly tendered prior to the expiration
of the Offer and not properly withdrawn which would result in Purchaser's
ownership of such number of shares of Common Stock that represents at least a
majority of (i) the actual outstanding shares of Common Stock on a fully diluted
basis including shares issuable upon exercise of outstanding options (whether or
not exercisable) and other securities convertible into Common Stock and (ii) the
voting power of the Company's outstanding voting securities entitled to vote on
the Merger (the "Minimum Condition") and satisfaction or waiver of the further
conditions set forth in Annex I hereto, any of which conditions may be waived in
the sole discretion of Purchaser, subject in the case of the Minimum Condition
to the limitation set forth in (d) below. Assuming all of the conditions to
consummation of the Offer that have not otherwise been waived are satisfied,
Parent and Purchaser shall consummate the Offer as promptly as possible.
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(b) Upon the terms and subject to the conditions of the Offer, Purchaser
shall, and Parent shall cause Purchaser to, purchase all shares of Common Stock
which are validly tendered on or prior to the expiration of the Offer and not
timely withdrawn as promptly as practicable. Purchaser may, at any time,
transfer or assign to one or more corporations, which are direct or indirect
subsidiaries of Parent, the right to purchase all or any portion of the Common
Stock tendered pursuant to the Offer, but any such transfer or assignment shall
not relieve Parent or Purchaser of its obligations under this Agreement or
prejudice the rights of tendering holders of Common Stock to receive payment for
shares of Common Stock properly tendered and accepted for payment.
(c) The Offer shall remain open (unless the Purchaser elects to terminate
the Offer upon the occurrence of an Event (as defined in Annex I)) for a period
of twenty (20) Business Days from the commencement of the Offer (the "Expiration
Date"), unless Purchaser shall have extended the period of time for which the
Offer is open as may be permitted or required by this Agreement, or applicable
law, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by Purchaser, shall expire. On or prior
to the date the Offer is commenced, Purchaser shall file, and Parent shall cause
Purchaser to prepare and file, with the Securities and Exchange Commission (the
"Commission") a Tender Offer Statement on Schedule 14D-1 (together with all
exhibits, amendments and supplements thereto, the "Schedule 14D-1") with respect
to the Offer that shall contain (as an exhibit) or incorporate by reference the
Offer (or portions thereof) and forms of the related letter of transmittal and
summary advertisement (the "Tender Offer Documents"). The Schedule 14D-1 shall
comply in all material respects with the provisions of all applicable federal
securities laws and, on the date filed with the Commission and on the date first
published, sent or given to the holders of Common Stock (the "Shareholders"),
shall not contain any untrue statement of 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 with respect to information furnished by the Company for
inclusion in the Schedule 14D-1. Parent and Purchaser agree to promptly correct,
by preparing an amendment or supplement, any information provided by them for
use in the Tender Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and Parent and
Purchaser further agree to cause the Tender Offer Documents, as so amended or
supplemented, to be filed with the Commission and disseminated to the
Shareholders, in each case, as and to the extent required by applicable federal
securities laws. Parent and Purchaser agree to provide the Company and its
counsel with any comments Parent, Purchaser or their counsel may receive from
the Commission or its staff with respect to the Tender Offer Documents and any
amendments or supplements thereto, promptly after receipt of such comments.
(d) Purchaser shall not, without the prior written consent of the Company,
(i) decrease or change the form of the Per Share Amount, (ii) reduce the number
of shares of Common Stock sought pursuant to the Offer, (iii) amend the
conditions or impose additional conditions to the Offer, (iv) amend any term of
the Offer, (v) amend the Minimum Condition, or (vi) amend any other term of the
Offer in a manner adverse to the holders of the Common Stock. Subject to the
last sentence of paragraph (a), Purchaser may at any time, in its sole
discretion, extend the Offer.
(e) Parent shall provide or cause to be provided to Purchaser (or its
transferee or assignee pursuant to the last sentence of (b) above) on a timely
basis the funds necessary to purchase any shares of Common Stock that Purchaser
becomes obligated to purchase under this Agreement.
(f) Notwithstanding the first sentence of Section 1.1(c), Purchaser shall
extend the Offer (i) for ten Business Days beyond the initial Expiration Date if
the Minimum Condition has not then been satisfied; and (ii) on one or more
occasions, in each instance for up to ten Business Days, beyond the then
scheduled Expiration Date, but not beyond the Termination Date, if the Company,
Parent or Purchaser receives a request for additional information from a
Government Agency with respect to the Company's and Parent's filing under the
HSR Act, in which case the Offer shall be extended until the waiting period
under the HSR Act is terminated or until this Agreement is terminated in
accordance with Section 10.1.
SECTION 1.2. COMPANY ACTION
(a) The Company hereby approves of and consents to the Offer and represents
and warrants that its Board of Directors, at a meeting duly called and held on
September 14, 1998, at which a majority of the Directors were
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present either in person or by telephone: (i) duly approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, (ii) determined 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, (iii) recommended that the Shareholders accept
the Offer and tender their shares of Common Stock pursuant to the Offer and (iv)
if a meeting of the Company's shareholders is required to be called and held in
accordance with applicable law, recommended that the shareholders approve this
Agreement and the transactions contemplated hereby, including the Merger.
(b) The Company further represents that ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. has
opined to the Board of Directors of the Company to the effect that, as of the
date of this Agreement, the Per Share Amount to be received by holders of Common
Stock (other than Parent and its affiliates) pursuant to the Offer and the
Merger is fair to such holders from a financial point of view.
(c) The Company shall file with the Commission, concurrent with the filing
by Purchaser of the Schedule 14D-1, a Tender Offer Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any and all amendments or supplements
thereto, and including the exhibits thereto, the "Schedule 14D-9") with respect
to the Offer. The Schedule 14D-9 shall comply in all material respects with the
provisions of all applicable federal securities law and, on the date filed with
the Commission and on the date first published, sent or given to the
Shareholders, shall not contain any untrue statement of 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 with respect to information furnished by Parent or
Purchaser for inclusion in the Schedule 14D-9. The Company further agrees to
take all steps necessary to cause the Schedule 14D-9 to be filed with the
Commission and to be disseminated to the Shareholders, in each case as and to
the extent required by applicable federal securities laws. The Company shall
mail, or cause to be mailed, such Schedule 14D-9 to the Shareholders at the same
time and together with the Tender Offer Documents. The Schedule 14D-9 and the
Tender Offer Documents shall contain the recommendations of the Board of
Directors described in Section 1.2(a) hereof. The Company agrees promptly to
correct the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect (and each of Parent and Purchaser, with
respect to written information supplied by it specifically for use in the
Schedule 14D-9, shall promptly notify the Company of any required corrections of
such information and cooperate with the Company with respect to correcting such
information) and to amend or supplement the information contained in the
Schedule 14D-9 to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9, as so corrected, to be filed with the
Commission and disseminated to the Shareholders, in each case, as and to the
extent required by applicable federal securities laws. Purchaser and its counsel
shall be given a reasonable opportunity to review and comment on the Schedule
14D-9 before it is filed with the Commission. In addition, the Company agrees to
provide Purchaser and its counsel with any comments, whether written or oral,
that the Company or its counsel may receive from time to time from the
Commission or its staff with respect to the Schedule 14D-9, and any amendments
or supplements thereto, promptly after the receipt of such comments or
communications.
(d) In connection with the Offer, the Company, promptly upon execution of
this Agreement, shall furnish or cause to be furnished to Purchaser mailing
labels containing the names and addresses of all record holders of the Common
Stock and security position listings of shares of Common Stock held in stock
depositories, each as of a recent date, and shall promptly furnish Purchaser
with such additional information (including, but not limited to, updated lists
of Shareholders and their addresses, mailing labels and security position
listings) and such other information and assistance as Purchaser or its agents
may reasonably request for the purpose of communicating the Offer to the record
and beneficial holders of shares of Common Stock.
SECTION 1.3. DIRECTORS
Promptly upon the purchase by Purchaser, pursuant to the Offer, and in
accordance with this Agreement of such number of shares of Common Stock as
represents at least a majority of the outstanding shares of Common Stock (on a
fully diluted basis) and from time to time thereafter, Purchaser shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as will give
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Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to the product of
(a) the number of directors on the Board of Directors of the Company (after
giving effect to the appointment of such directors) and (b) the percentage that
such number of shares of Common Stock so purchased bears to the number of shares
of Common Stock outstanding; provided, that in no event shall such number of
directors be less than a majority of the total number of directors of the
Company. In connection with the foregoing, the Company shall, upon written
request by Purchaser, promptly (i) increase the size of the Board of Directors
of the Company to the extent permitted by its Articles of Incorporation and
By-Laws (and amend the Articles of Incorporation and By-Laws, if so required, to
increase the size of the Board of Directors, to allow for such additional
directors); and/or (ii) take all steps necessary and appropriate to secure the
resignations of such number of directors as is necessary to enable Purchaser's
designees to be elected to the Board of Directors of the Company (and shall hold
a Board meeting for such purpose); and (iii) cause Purchaser's designees to be
so elected; provided, however, that, in the event that Parent's designees are
appointed or elected to the Board of Directors, until the Effective Time the
Board of Directors shall have at least two directors who are directors on the
date hereof and who are neither an officer of the Company or its subsidiaries
nor a designee, stockholder, affiliate or associate (within the meaning of the
federal securities laws) of Parent (the "Independent Directors"); provided
further, that if the number of Independent Directors shall be reduced below two
for any reason, any remaining Independent Directors (or Independent Director if
there is only one) shall be entitled to fill such vacancy(ies) and if no
Independent Directors remain, the other directors shall designate one person who
shall not be either an officer of the Company or its subsidiaries or a designee,
shareholder, affiliate or associate of Parent to fill one of the vacancies which
person shall be deemed to be an Independent Director for purposes of this
Agreement and who shall be entitled to fill any remaining vacancy in the number
of Independent Directors as provided herein. At any time after the execution
hereof, at the request of Purchaser, the Company shall promptly take, at its
expense, all action necessary to effect any such election, including mailing to
all holders of record of its outstanding securities the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in form
and substance reasonably satisfactory to Purchaser and its counsel and filing
the same with the Commission. Parent or Purchaser shall supply the Company and
be responsible for any information included in the filings with the Commission
with respect to Purchaser and its nominees, officers, directors and affiliates
required by said Section 14(f) and Rule 14f-1 of the Exchange Act.
Notwithstanding anything in this Agreement to the contrary, upon consummation of
the Offer and prior to the Effective Time, in addition to any other approval of
the directors required by applicable law or the Articles of Incorporation or
By-Laws of the Company, the affirmative vote of a majority of the Independent
Directors shall be required (i) to amend or terminate this Agreement by the
Company, (ii) to waive any of the Company's rights or to exercise any of its
remedies hereunder, (iii) to extend the time for performance of Purchaser's
obligations hereunder or (iv) to take any other action by the Company in
connection with this Agreement required to be taken by the Board of Directors of
the Company, whether or not such Independent Directors constitute a quorum.
ARTICLE II
THE MERGER
SECTION 2.1. THE MERGER
Upon the terms and subject to the conditions hereof, at the Effective Time,
Purchaser shall be merged into the Company and the separate existence of
Purchaser shall thereupon cease, and the Company, as the surviving corporation
in the Merger, shall by virtue of the Merger continue its corporate existence
under the laws of the Commonwealth of Pennsylvania with all of its rights,
privileges, immunities, powers and franchises unaffected thereby.
SECTION 2.2. CLOSING
The closing (the "Closing") of the Merger shall take place at the offices
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation in Pittsburgh, Pennsylvania at
10:00 a.m. on the second Business Day after the conditions set forth in Article
IX have been satisfied (or, to the extent permitted by applicable law, waived by
the parties entitled to the
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benefits thereof), or at such other place, time and date as shall be agreed
between the Parent and the Company (the "Closing Date").
SECTION 2.3. EFFECTIVE TIME OF THE MERGER
The Merger shall become effective at the date and time (the "Effective
Time") when properly executed Articles of Merger are duly filed with the
Department of State of the Commonwealth of Pennsylvania, which filing shall be
made as soon as practicable following fulfillment of the conditions set forth in
Article IX hereof, or at such time thereafter as is provided in such Articles of
Merger.
SECTION 2.4. ARTICLES OF INCORPORATION
The Articles of Incorporation of the Company shall, after the Effective
Time, be the Articles of Incorporation of the Company and thereafter may be
amended in accordance with their terms and as provided by applicable law.
SECTION 2.5. BY-LAWS
The By-laws of Purchaser as in effect at the Effective Time shall, after
the Effective Time, be the By-laws of the Company.
SECTION 2.6. BOARD OF DIRECTORS; OFFICERS
The directors of Purchaser immediately prior to the Effective Time shall,
after the Effective Time, be the directors of the Company and the officers of
the Company immediately prior to the Effective Time shall, after the Effective
Time, be the officers of the Company, in each case until their respective
successors are duly elected and qualified.
SECTION 2.7. EFFECTS OF MERGER
The Merger shall have the effects set forth in Section 1929 of the PBCL.
ARTICLE III
CONVERSION OF COMMON STOCK
SECTION 3.1. CONVERSION OF COMMON STOCK
At the Effective Time, by virtue of the Merger and without any action on
the part of any Shareholder:
(a) All shares of Common Stock issued and outstanding immediately
prior to the Effective Time which are held by the Company or any subsidiary
of the Company, and any shares of Common Stock issued and outstanding
immediately prior to the Effective Time owned by Parent, Purchaser or any
other subsidiary of Parent, shall be canceled.
(b) Each remaining share of Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of Common Stock
with respect to which the provisions of Section 3.10 are applicable) shall
automatically be canceled and extinguished and be converted into and become
solely a right to receive the Per Share Amount in cash, without interest.
(c) Each share of capital stock of Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted and exchanged
into one validly issued, fully paid and nonassessable share of Common Stock
of the Company.
SECTION 3.2. PREFERENCE STOCK UNAFFECTED
Each issued and outstanding share of the Company's $2.475 Cumulative
Convertible Series B Preference Stock, par value $1.00 per share ("Series B
Preference Stock"), and Series D Cumulative Convertible
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Changeable Preference Stock, par value $1.00 per share ("Series D Preferred
Stock"), (together, the "Preference Stock") shall remain outstanding and
unaffected by the Merger unless redeemed or converted pursuant to the terms and
conditions of the Company's Articles of Incorporation and the applicable
statement of designation preferences and rights for such Preference Stock.
SECTION 3.3. STOCK OPTIONS
(a) Subject to paragraph (b) below, each option (an "Option") to purchase
Common Stock issued by the Company which is outstanding at the Effective Time
shall be canceled by virtue of the Merger, without consideration except as
provided in this Section 3.3(a), and shall cease to exist. Each holder of an
Option, whether or not such Option is immediately exercisable, shall be entitled
to receive at the Effective Time, for each share of Common Stock issuable on
exercise of such Option, an amount in cash equal to the excess of (x) the Per
Share Amount over (y) the per share exercise price of the Option as in effect
immediately prior to the Effective Time. No consideration shall be payable with
respect to any Option if the exercise price of such Option exceeds the Per Share
Amount.
(b) The consideration due under this Section 3.3 shall be payable without
interest after (x) verification by the Paying Agent of the ownership and terms
of the particular Option by reference to the Company's records and (y) delivery
in the manner provided in Section 3.5 of a written instrument duly executed by
the owner of the Option, in a form to be provided by the Paying Agent promptly
after the Effective Time, setting forth (i) the aggregate number of shares of
Common Stock acquirable by such Option holder upon exercise of all Options held
by such holder, whether or not such Options are immediately exercisable, the
respective issue dates of each Option and the exercise price of each Option;
(ii) a representation by the person that he or she is the owner of all Options
described pursuant to clause (i), and that none of those Options has expired or
ceased to be exercisable; and (iii) a consent to the treatment of such Options
pursuant to this Section 3.3 in full satisfaction of all rights relating to such
Options.
SECTION 3.4. CLOSING OF COMPANY TRANSFER BOOKS
At the Effective Time, the stock transfer books of the Company shall be
closed with respect to Common Stock issued and outstanding immediately prior to
the Effective Time and no further transfer of such Common Stock shall thereafter
be made on such stock transfer books. If, after the Effective Time, valid
certificates previously representing such Common Stock are presented to the
Company or the Paying Agent, they shall be exchanged as provided in Section 3.5.
SECTION 3.5. EXCHANGE OF CERTIFICATES
Prior to the Effective Time, Purchaser shall, and Parent shall cause
Purchaser to, designate a bank or trust company to act as agent (the "Paying
Agent") for the Shareholders to receive the funds necessary to effect the
exchange for cash of certificates which, immediately prior to the Effective
Time, represented Common Stock entitled to payment pursuant to Section 3.1(b).
As soon as practicable after the Effective Time, the Paying Agent shall mail a
transmittal form to each holder of record of certificates theretofore
representing such Common Stock advising such holder of the procedure for
surrendering to the Paying Agent such certificates. If a check for the Per Share
Amount is to be issued in the name of a person other than the person in whose
name the certificates for Common Stock surrendered for exchange are registered
on the books of the Company, it shall be a condition of the exchange that the
person requesting such exchange shall pay to the Paying Agent all transfer or
other taxes required by reason of the issuance of such check in the name of a
person other than the registered owner of the certificates surrendered, or shall
establish to the satisfaction of the Paying Agent that such taxes have been paid
or are not applicable. Upon the surrender and exchange of a certificate
theretofore representing Common Stock, the holder shall be paid by check,
without interest thereon, the Per Share Amount for each share of Common Stock
theretofore represented by such certificate and to which he or she is entitled
hereunder, less only such amount required to be withheld under applicable backup
withholding federal income tax regulations, and such certificate shall forthwith
be canceled. Until so surrendered and exchanged, each such certificate shall
represent solely the right to receive the Per Share Amount into which the Common
Stock it theretofore represented shall have been converted pursuant to Section
3.1, without interest, and the Company shall not be required to pay the holder
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thereof the Per Share Amount to which such holder otherwise would be entitled.
Notwithstanding the foregoing, neither the Paying Agent nor any party hereto
shall be liable to a holder of certificates theretofore representing Common
Stock for any amount paid to a public official pursuant to any applicable
abandoned property, escheat or similar laws. If any certificates representing
any Common Stock shall not have been surrendered immediately prior to such date
on which any payment in respect thereof would otherwise escheat to or become the
property of any governmental authority of applicable jurisdiction, the payment
in respect of such certificates shall, to the extent permitted by applicable
law, become the property of the Company, free and clear of all claims or
interest of any person previously entitled thereto. Parent shall use reasonable
and customary efforts to locate holders of record of Common Stock who are
entitled to receive the Per Share Amount for their shares but who have not
surrendered their certificates for exchange in accordance with this Section 3.5
within six (6) months after the Effective Time. In the case of any lost,
mislaid, stolen or destroyed certificate, the holder of such certificate may be
required, as a condition precedent to delivery to such holder of the Per Share
Amount, to deliver to Purchaser a bond in such reasonable sum as security for or
a reasonable indemnity agreement as indemnity against any claim that may be made
against Parent, Purchaser or the Company with respect to the certificate alleged
to have been lost, mislaid, stolen or destroyed.
SECTION 3.6. FUNDING OF PAYING AGENT
Parent shall transmit by wire, or other acceptable means to the Paying
Agent, at or prior to the Effective Time funds required for the exchange of all
Common Stock and cancellation of all Options in accordance with this Agreement.
The Paying Agent shall agree to hold such funds in trust and deliver such funds
(in the form of checks of the Paying Agent) in accordance with this Section and
Sections 3.3 and 3.5. Any portion of such funds which has not been paid to
Shareholders or holders of outstanding Options pursuant to Section 3.3 or 3.5
within six months after the Effective Time shall promptly be paid to the party
which provided such funds, and thereafter holders of certificates representing
the right to receive the cash into which Common Stock or Options formerly
represented by such certificates shall have been converted pursuant to Section
3.1(b) or 3.3 who have not theretofore complied with Section 3.3 or 3.5 shall
look solely to the Parent for payment of the amount of cash to which they are
entitled pursuant to this Agreement.
SECTION 3.7. ACTION OF SHAREHOLDERS
(a) If required by applicable law to approve the Merger, the Company shall
take all action necessary in accordance with the PBCL and its Articles of
Incorporation and By-Laws to convene a meeting of its shareholders promptly
after the consummation of the Offer to consider and vote upon this Agreement and
the Merger. If a meeting of the Company's shareholders is to be called, the
Company shall, if and to the extent requested by Purchaser but subject to the
fiduciary duties of the Independent Directors, use all reasonable efforts to
solicit from such shareholders proxies in favor of the adoption of this
Agreement and shall take all other action reasonably necessary, or which
otherwise may be reasonably requested by Purchaser, to secure a vote of such
shareholders in favor of adoption of this Agreement.
(b) At any such meeting, Purchaser shall vote or cause to be voted all of
the Common Stock then owned by it or its subsidiaries in favor of adoption of
this Agreement and the Company shall vote or cause to be voted all securities
entitled to vote at such meeting with respect to which proxies in the form
distributed by the Company have been given, and not voted against the adoption
of this Agreement, in favor of adoption of this Agreement.
(c) If necessary, the Company shall file with the Commission, and shall use
all reasonable efforts to have processed to completion by the Commission, in
each case at the earliest practicable date, a proxy statement or information
statement, as Purchaser shall designate (the "Proxy Statement"), with respect to
the adoption by the Company's shareholders of this Agreement in form and
substance reasonably satisfactory to Purchaser and its counsel. The information
provided by Purchaser and the Company, respectively, for use in the Proxy
Statement shall be true and correct in all material respects and shall not omit
to state any material fact necessary in order to make such information and the
Proxy Statement not misleading as of the date of the Proxy Statement. The Proxy
Statement shall contain the determination and recommendation of the Board of
Directors of the Company referred to in Section 1.2.
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SECTION 3.8. MERGER WITHOUT MEETING OF SHAREHOLDERS
Notwithstanding Section 3.7, in the event that Purchaser shall acquire at
least 80% or more of the outstanding shares of each class of the Company, the
parties hereto agree to take all necessary and appropriate action, to cause the
Merger to become effective as soon as practicable after the expiration of the
Offer without a meeting of shareholders of the Company in accordance with
Section 1924(b)(ii) of the PBCL.
SECTION 3.9. NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK
From and after the Effective Time, the holders of Common Stock which was
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Common Stock except as otherwise provided in this
Agreement or by law. All cash paid upon the surrender of certificates in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to Common Stock of the Company.
SECTION 3.10. DISSENTING SHAREHOLDERS -- COMMON STOCK
Notwithstanding anything in this Agreement to the contrary, shares of
Common Stock that are issued and outstanding immediately prior to the Effective
Time and that are held by Shareholders who (i) have not voted such shares in
favor of the Merger and (ii) have delivered timely a written demand for
appraisal of such shares in the manner provided in Chapter 15 of the PBCL shall
not be canceled and converted into the right to receive the Per Share Amount
described in Section 3.1(b), unless and until such Shareholder shall have failed
to perfect, or effectively shall have withdrawn or lost, such Shareholder's
right to appraisal and payment under the PBCL, but rather, such Shareholders
shall be entitled to payment of the fair value of their shares determined and
payable in accordance with the provisions of Chapter 15, Subchapter D of the
PBCL. If such Shareholder shall have so failed to perfect, or effectively shall
have withdrawn or lost such right, the Common Stock owned by such Shareholder
shall thereupon be deemed to have been canceled and converted as described in
Section 3.1(b) at the Effective Time, and each share of Common Stock owned by
such Shareholder shall represent solely the right to receive the Per Share
Amount, without interest. From and after the Effective Time, no Shareholder who
has demanded appraisal rights as provided in Subchapter D of the PBCL shall be
entitled to vote his or her shares of Common Stock for any purpose or to receive
payment of dividends or other distributions with respect to such shares (except
dividends and other distributions payable to Shareholders of record at a date
which is prior to the Effective Time). The Company shall give Purchaser prompt
notice of all written demands received by it for appraisal of Common Stock and
shall not settle or compromise any such demand without the prior written consent
of Purchaser.
SECTION 3.11. DISSENTING SHAREHOLDERS -- PREFERENCE STOCK
Notwithstanding anything in this Agreement to the contrary, shares of
Preference Stock that are issued and outstanding immediately prior to the
Effective Time and that are held by holders of shares of Preference Stock who
(i) have not voted such shares in favor of the Merger and (ii) have delivered
timely a written demand for appraisal of such shares in the manner provided in
Chapter 15 of the PBCL, unless and until such shareholder shall have failed to
perfect, or effectively shall have withdrawn or lost, such shareholder's right
to appraisal and payment under the PBCL, shall be entitled to payment of the
fair value of their shares determined and payable in accordance with the
provisions of Chapter 15, Subchapter D of the PBCL. If such shareholder shall
have so failed to perfect, or effectively shall have withdrawn or lost such
right, the Preference Stock owned by such shareholder shall remain outstanding
and unaffected by the Merger. From and after the Effective Time, no shareholder
who has demanded appraisal rights as provided in Subchapter D of the PBCL shall
be entitled to vote his or her shares of Preference Stock for any purpose or to
receive payment of dividends or other distributions with respect to such shares
(except dividends and other distributions payable to shareholders of record at a
date which is prior to the Effective Time). The Company shall give Purchaser
prompt notice of all written demands received by it for appraisal of Preference
Stock and shall not settle or compromise any such demand without the prior
written consent of Purchaser.
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SECTION 3.12. ASSISTANCE IN CONSUMMATION OF THE MERGER
Each of Parent, Purchaser and the Company shall provide all reasonable
assistance to, and shall cooperate with, each other to bring about the
consummation of the Offer, the Merger, and the other transactions contemplated
by this Agreement as soon as possible in accordance with the terms and
conditions of this Agreement. Parent shall cause Purchaser to perform all of its
obligations in connection with this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as follows
(which representations and warranties are qualified by the disclosure schedule
delivered by the Company to Parent prior to the date of this Agreement, a copy
of which is attached hereto (the "Company Disclosure Schedule"), and by the
Company SEC Reports (as defined in Section 4.4(a)):
SECTION 4.1. ORGANIZATION AND QUALIFICATION
(a) The Company and each of its subsidiaries is a corporation duly
organized, validly existing and subsisting under the laws of the jurisdiction of
its incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
businesses as now being conducted.
(b) Except as set forth in Section 4.1(b) of the Company Disclosure
Schedule, the Company has no subsidiaries and does not own, directly or
indirectly, beneficially or of record, any shares of capital stock or other
security of any other entity or any other investment in any other entity.
(c) The Company has heretofore made available to Parent accurate and
complete copies of its Articles of Incorporation and Bylaws (or similar
governing documents), as currently in effect, of the Company and each of its
subsidiaries. Each of the Company and its subsidiaries is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing has not had and would not reasonably be expected to have a Material
Adverse Effect (as defined below) on the Company. When used in connection with
any party to this Agreement, the term "Material Adverse Effect" means a material
adverse effect on (i) the business, financial condition or results of operations
of such party and its subsidiaries, taken as whole, except effects that are (x)
generally applicable in the United States economy and/or the economy in any
other region of the world which do not have a disproportionate effect on such
party and its subsidiaries (as the case may be) or, (y) relate to the securities
market in general, or (z) relate to such party's industry in general or (ii) the
ability of such party to consummate the transactions contemplated hereby without
unreasonable delay; provided, however, that (I) the institution of a lawsuit by
a shareholder of Parent or the Company challenging this Agreement or the
transactions contemplated hereby (or any threat to do so) shall not be deemed to
be a Material Adverse Effect, and (II) with respect to the Company, the
commencement, public proposal, public disclosure or communication to the Company
of any Takeover Proposal shall not be deemed to be a Material Adverse Effect.
SECTION 4.2. CAPITALIZATION OF THE COMPANY AND ITS SUBSIDIARIES
(a) The authorized capital stock of the Company consists of: (i) 35,000,000
shares of Common Stock, par value $1.00 per share, of which, as of August 5,
1998, 14,718,508 shares were issued and outstanding, and (ii) (x) 1,878,870
shares of Series B Preference Stock, of which 16,000 shares are issued and
outstanding; (y) 200,000 shares, of Series C Preferred Stock, par value $ 1.00
per share, of which no shares are issued and outstanding; and (z) 200,000 shares
of Series D Preferred Stock, of which 200,000 shares are issued and outstanding.
All of the issued and outstanding shares of Common Stock and Preference Stock
have been duly authorized, validly issued, and are fully paid, nonassessable and
free of preemptive rights. As of August 5, 1998, 1,373,300 shares of Common
Stock were reserved for issuance and issuable upon or otherwise deliverable in
connection with the exercise of outstanding options granted by the Company to
purchase shares of Common Stock issued pursuant to the Company stock incentive
plans listed on Section 4.2(a) of the Company Disclosure Schedule (the "Company
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Stock Incentive Plans") and 1,651,456 shares of Common Stock were reserved for
issuance and issuable upon conversion of the Preference Stock in accordance with
its terms. Since August 5, 1998, except as set forth on Section 4.2(a) of the
Company Disclosure Schedule, no shares of the Company's capital stock have been
issued otherwise than pursuant to the exercise of options granted by the Company
to purchase shares of Common Stock already in existence on such date, and, since
July 23, 1998, no options to purchase shares of the Company Common Stock have
been granted. Except as set forth above in this Section 4.2(a), there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company or its subsidiaries convertible into
or exchangeable for shares of capital stock or voting securities of the Company,
(iii) no options or other rights to acquire from the Company or its
subsidiaries, and no other contract, understanding, arrangement or obligation
(whether or not contingent) of the Company or its subsidiaries to issue or sell,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company and (iv) no
equity equivalents, or interests in the ownership or earnings, of the Company or
its subsidiaries (including stock appreciation rights) (collectively, the
"Company Securities"). There are no contracts, understandings, arrangements or
obligations (whether or not contingent) of the Company or its subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities. Except as set
forth in Section 4.2(a) of the Company Disclosure Schedule, there are no
stockholder agreements, voting trusts or other agreements or understandings to
which the Company is a party or to which it is bound relating to the voting of
any shares of capital stock of the Company.
(b) Except as set forth in Section 4.2(b) of the Company Disclosure
Schedule, (i) all of the outstanding capital stock of the Company's subsidiaries
is validly issued, fully paid and nonassessable and is owned beneficially and of
record by the Company, directly or indirectly, free and clear of any Lien and
(ii) there are no securities of the Company or its subsidiaries convertible into
or exchangeable for, no options or other rights to acquire from the Company or
its subsidiaries, and no other contract, understanding, arrangement or
obligation (whether or not contingent) of the Company or its subsidiaries to
issue or sell any capital stock or other ownership interests in, or any other
securities of, any subsidiary of the Company. There are no contracts,
understandings, arrangements or obligations (whether or not contingent) of the
Company or its subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests in any
subsidiary of the Company. There are no stockholder agreements, voting trusts or
other agreements or understandings to which the Company or its subsidiaries is a
party or to which it is bound relating to the voting of any shares of capital
stock of any subsidiary of the Company.
(c) The Company has no bonds, debentures, notes or other instruments or
evidence of indebtedness having the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) on any
matters on which holders of the Company's outstanding securities may vote issued
or outstanding.
(d) The Company is not subject to a "rights agreement," poison pill, or
similar obligation. That certain Shareholders Rights Agreement, dated April 14,
1986, by and between the Company and PNC Bank, N.A., as Rights Agent, has
expired in accordance with its terms, no longer has any force or effect
whatsoever and the rights issued thereunder have expired. The Company has not
declared a dividend on its Common Stock since May 1987.
SECTION 4.3. AUTHORITY RELATIVE TO THIS AGREEMENT
(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company (the "Company Board") and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby (other than, with respect
to the Merger, the approval and adoption of the Merger by the affirmative vote
of the holders of a majority of the votes cast by the then outstanding shares of
Common Stock and Preference Stock, voting together as a single class, voting at
the meeting of the Company stockholders referred to in Section 3.7 hereof). Such
approval and adoption is the only vote of the holders of any class or series of
the Company's capital stock necessary (under Pennsylvania law, the Company's
charter or otherwise) to approve the Merger and this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and
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delivered by the Company and constitutes a valid, legal and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefore may
be brought.
(b) The Company Board has, by a majority vote of its directors, duly and
validly approved, and taken all corporate actions required to be taken by the
Company Board for the consummation of the transactions contemplated hereby
(including, without limitation, the Merger) and resolved to recommend that the
stockholders of the Company approve and adopt the Merger. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been (i) duly authorized by the Board
of Directors of the Company prior to Parent or Purchaser becoming an "Interested
Stockholder" as defined in Section 2553 of the Pennsylvania Law and, (ii)
approved in such a manner as to avoid the application of Subchapter F of Chapter
25 of the Pennsylvania Law. The Company has taken all necessary corporate action
so that no "business combination," "fair price," "control share acquisition" or
"moratorium" statute or other similar statute or regulation of any state "blue
sky" or securities law statute (including, without limitation, the provisions of
Section 2538 and Subchapters F, G, H, I and J of Chapter 25 of the Pennsylvania
Law) (each, a "Takeover Statute") or any applicable anti-takeover provision in
the Company's Articles of Incorporation or By-Laws is applicable to the Company
or the transactions contemplated hereby.
(c) The Company Common Stock is listed on the New York Stock Exchange (the
"NYSE"). None of the Preference Stock is currently registered under the
Securities Act (as defined below) nor listed on any national securities exchange
and, with the exception of the Common Stock into which the Series D Preference
Stock is convertible, the Preference Stock has no registration rights. The
Common Stock underlying the Series D Preference Stock is subject to a
Registration Rights Agreement dated September 21, 1988.
SECTION 4.4. SEC REPORTS; FINANCIAL STATEMENTS; TITLE TO ASSETS; LIENS
(a) The Company has filed all required forms, reports and documents with
the Commission since January 1, 1995, 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 Securities Exchange Act of 1934, as
amended (the "Exchange Act"), each as in effect on the dates such forms, reports
and documents were filed. The Company has heretofore delivered to Parent, in the
form filed with the Commission (including any amendments thereto), (i) its
Annual Reports on Form 10-K for each of the fiscal years ended December 31,
1995, 1996 and 1997, (ii) all definitive proxy statements relating to the
Company's meetings of stockholders (whether annual or special) held since
January 1, 1995 and (iii) all other reports or registration statements filed by
the Company with the Commission since January 1, 1995 (the "Company SEC
Reports"). 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 the statements therein, in
light of the circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the Company SEC
Reports complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in conformity with generally accepted
accounting principles, consistently applied ("GAAP") (except, in the case of
unaudited consolidated quarterly statements, which have been prepared in
accordance with the instructions to Form 10-Q of the Commission and Article 10
of Regulation S-X) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto), and fairly present the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject, in the case of the unaudited interim
financial statements, to normal, recurring year-end adjustments). Since December
31, 1997, except as set forth in the Company SEC Reports, there has not been any
change, or any application or request for any change, by the Company or any of
its subsidiaries in accounting principles, methods or policies for financial
accounting or tax purposes. The financial statements of the Company have been
prepared from, and are in accordance with, the books and records of the Company
and its subsidiaries in all material respects.
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(b) The Company and its subsidiaries have good and marketable title to
their assets, except where failure to have such good and marketable title to
such assets would not have a Material Adverse Effect on the Company. Section
4.4(b) of the Company Disclosure Schedule sets forth a list of all Liens on the
assets of the Company and its subsidiaries except Permitted Liens and Liens that
do not have a Material Adverse Effect on the Company.
SECTION 4.5. INFORMATION SUPPLIED
None of the information supplied or to be supplied by the Company for
inclusion or incorporation by reference in (i) Schedule 14D-1 to be filed with
the Commission by Parent and/or Purchaser in connection with the Offer will, at
the time the Schedule 14D-1 is filed with the Commission contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) the Proxy Statement will, at the date mailed to stockholders of the Company
and at the times of the meetings of stockholders of the Company to be held in
connection with the Merger, 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. If at any time prior to the Effective Time, any
event with respect to the Company, its officers and directors or any of its
subsidiaries should occur which is required to be described in an amendment of,
or a supplement to, the Schedule 14D-1 or the Proxy Statement, the Company shall
promptly so advise Parent and such event shall be so described, and such
amendment or supplement (which Purchaser and Parent shall have a reasonable
opportunity to review) shall be promptly filed with the Commission and, as and
to the extent required by law, disseminated to the stockholders of the Company.
The Proxy Statement, insofar as it relates to the meeting of the Company's
stockholders to vote on the Merger, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made with respect to
statements made or incorporated by reference therein based on information
supplied by Parent specifically for inclusion or incorporation by reference in
such document.
SECTION 4.6. CONSENTS AND APPROVALS; NO VIOLATIONS
Except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the Securities Act, the
Exchange Act, state securities or blue sky laws, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the filing and recordation
of the Articles of Merger as required by the PBCL and as otherwise set forth in
Section 4.6 to the Company Disclosure Schedule, no filing with or notice to, and
no permit, authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by the
Company of this Agreement or the consummation by the Company of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. Except as set forth in Section
4.6 to the Company Disclosure Schedule, and assuming all filings, notifications,
permits, authorizations, consents and approvals referred to in the immediately
preceding sentence are duly and timely obtained or made, neither the execution,
delivery and performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the respective certificate or articles
of incorporation or bylaws (or similar governing documents) of the Company or
any of its subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of indemnification, termination, amendment, cancellation or
acceleration or Lien) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their respective properties or assets
may be bound, or (iii) violate any order, writ, injunction, decree, law,
statute, rule or regulation applicable to the Company or any of its subsidiaries
or any of their respective properties or assets, except in the case of (ii) and
(iii) for violations, breaches or defaults which, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect on the Company.
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SECTION 4.7. NO DEFAULT
Neither the Company nor any of its subsidiaries is in default or violation
(and no event has occurred which with or without due notice or the lapse of time
or both would constitute a default or violation) of any term, condition or
provision of (i) its articles of incorporation or bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is now a party or by which any of them or any of their respective
properties or assets may be bound or (iii) any order, writ, injunction, decree,
law, statute, rule or regulation applicable to the Company, its subsidiaries or
any of their respective properties or assets, except in the case of (ii) and
(iii) for violations, breaches or defaults which, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect on the Company.
SECTION 4.8. NO UNDISCLOSED LIABILITIES
Except as and to the extent disclosed by the Company in the Company SEC
Reports and for any liabilities or obligations arising out of matters disclosed
in Section 4.8 of the Company Disclosure Schedule, none of the Company or its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, and whether due or to become due or asserted
or unasserted, which would be required by GAAP to be reflected in, reserved
against or otherwise described in the consolidated financial statements of the
Company (including the notes thereto) as of the date of such Company SEC
Reports, other than any such liabilities or obligations which, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.9. LITIGATION
Except as publicly disclosed by the Company in the Company SEC Reports, or
disclosed in Section 4.9 of the Company Disclosure Schedule, there is no suit,
claim, action, proceeding or investigation pending or, to the Knowledge of the
Company, threatened against the Company or any of its subsidiaries or any of
their respective properties or assets which (a) individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect on the Company or (b) questions the validity of this Agreement or any
action to be taken by the Company in connection with the consummation of the
transactions contemplated hereby. Except as publicly disclosed by the Company in
the Company SEC Reports, none of the Company or its subsidiaries is subject to
any outstanding order, writ, injunction or decree which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect on the Company.
SECTION 4.10. COMPLIANCE WITH APPLICABLE LAW
Except as publicly disclosed by the Company in the Company SEC Reports or
disclosed in Section 4.10 of the Company Disclosure Schedule, the Company and
its subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on the Company. Except as publicly
disclosed by the Company in the Company SEC Reports, the Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply, individually or in the aggregate, has not had
and would not reasonably be expected to have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company in the Company SEC Reports,
the businesses of the Company and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity, except
for violations or possible violations which, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company. Except as publicly disclosed by the Company in the
Company SEC Reports, no investigation or review by any Governmental Entity with
respect to the Company or its subsidiaries is pending or, to the Knowledge of
the Company, threatened, nor, to the Knowledge of the Company, has any
Governmental Entity indicated an intention to conduct the same, other than, in
each case, those the outcome of which, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse
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Effect on the Company. No representation or warranty is made in this Section
4.10 with respect to Environmental Laws (as defined and addressed in Section
4.12(a)).
SECTION 4.11. EMPLOYEE PLANS
(a) Section 4.1l(a) of the Company Disclosure Schedule lists, with respect
to the Company or any of its subsidiaries (or their respective predecessors) or
any trade or business (whether or not incorporated) (y) currently or formerly
under common control (within the meaning of Section 4001(b) of ERISA) with the
Company or (z) which together with the Company is or was treated as a single
employer under Section 414(t) of the Internal Revenue Code of 1986, as amended
(the "Code") (the "Controlled Group"), all (i) "employee benefit plans," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), (ii) all other severance pay, salary continuation, annual
or long-term incentive, stock, phantom stock, stock appreciation right or stock
option, retirement, pension, profit sharing or deferred compensation plans,
contracts, programs, funds, or arrangements of any kind, (iii) all other
employee compensation or benefit plans, contracts, programs, funds, arrangements
(whether written or oral, qualified or nonqualified, funded or unfunded, foreign
or domestic, currently effective or terminated) which the Company or any of the
Controlled Group maintains, is a party to, contributes to or has any obligation
to or liability for or which cover its or their employees or former employees,
(iv) all trust, escrow or similar agreements or other funding arrangements (the
"Funding Arrangements") related to the plans, contracts, programs, funds or
arrangements described in clauses (i) through (iii) (the "Employee Benefit
Plans") whether or not funded to which the Company or any of the Controlled
Group has or is required to make payments, transfers or contributions except
Employee Benefit Plans mandated by law ("Statutory Plans"). Neither the Company,
nor any of the Controlled Group has any liability with respect to any plan,
contract, program, fund, arrangement or practice of the type described in this
Section 4.11(a) other than the Employee Benefit Plans and the Funding
Arrangements.
(b) Copies of the following materials have been delivered or made available
to Parent: (i) all current and prior plan documents for each Employee Benefit
Plan or Funding Arrangement, or in the case of an unwritten Employee Benefit
Plan or Funding Arrangement, a written description thereof, (ii) all
determination letters from the Internal Revenue Service with respect to any of
the Employee Benefit Plans or Funding Arrangements, (iii) all current and prior
summary plan descriptions, summaries of material modifications, annual reports,
and summary annual reports, (iv) all current and prior trust agreements,
insurance contracts, and other documents relating to the funding or payment of
benefits under any Employee Benefit Plan or Funding Arrangement, and (v) any
other documents, forms or other instruments relating to any Employee Benefit
Plan or Funding Arrangement reasonably requested by Parent. All financial
information furnished with respect to any Employee Benefit Plan or Funding
Arrangement is true and accurate in all material respects.
(c) As of the date hereof, except for exceptions which, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company, (i) all payments required to be made by
or under any Employee Benefit Plan, any Funding Arrangement, or any collective
bargaining agreement have been made; (ii) the Company and its subsidiaries have
performed all obligations required to be performed by them under any Employee
Benefit Plan or Funding Arrangement; (iii) the Employee Benefit Plans and
Funding Arrangements have been administered in compliance with their terms and,
if applicable, the requirements of ERISA, the Code and other applicable laws;
(iv) there are no actions, suits, arbitrations or claims (other than routine
claims for benefit) pending or, to the Knowledge of the Company, threatened with
respect to any Employee Benefit Plan or Funding Arrangement; (v) the Company and
its subsidiaries have no liability as a result of any "prohibited transaction"
(as defined in Section 406 of ERISA and Section 4975 of the Code) for any excise
tax or civil penalty; and (vi) except as set forth in the Company SEC Reports,
or in Section 4.11(c) of the Company Disclosure Schedule, the assets of each
Funding Arrangement for each Employee Benefit Plan required to be funded equal
or exceed the vested and unvested projected benefit liabilities under such
Employee Benefit Plan.
(d) If and to the extent applicable, no Employee Benefit Plan has or has
incurred an accumulated funding deficiency within the meaning of Section 302 of
ERISA or Section 412 of the Code, nor has any waiver of the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code been requested of
or granted
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by the Internal Revenue Service with respect to any Employee Benefit Plan or
Funding Arrangement, nor has any lien in favor of any such plan arisen under
Section 412(n) of the Code or Section 302(f) of ERISA.
(e) Except for exceptions which, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company, the Company and its subsidiaries have not incurred any unsatisfied
withdrawal liability with respect to any Multiemployer Plan, as defined in ERISA
("Multiemployer Plan"). Except as set forth in Section 4.11(e) of the Company
Disclosure Schedule, no withdrawal liability would be assessed upon partial or
complete withdrawal from any Multiemployer Plan to which the Company or any of
the Controlled Group is obligated to contribute or guarantees contributions
other than any such withdrawal liability which has not had and would not
reasonably be expected to have a Material Adverse Effect on the Company.
(f) Except for exceptions which, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company, each of the Employee Benefit Plans which is intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified,
and each trust created thereunder is exempt from tax under the provisions of
Section 501(a) of the Code.
(g) Except as set forth on Section 4.11(g) of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby either alone or together
with the occurrence or nonoccurrence of any other event or condition will (i)
result in any payment becoming due, or increase the amount of compensation or
benefit due, to any current or former employee of the Company or any of the
Controlled Group; (ii) increase any compensation or benefits otherwise payable
under any Employee Benefit Plan or Funding Arrangement; or (iii) result in the
acceleration of the time of payment or vesting of any such compensation or
benefits.
(h) Except as disclosed on Section 4.11(h) of the Company Disclosure
Schedule and for exceptions which, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company, with respect to any insurance policy providing funding for benefits
under any Employee Benefit Plan, there is no liability of the Company in the
nature of a retroactive rate adjustment, loss sharing arrangement, or other
actual or contingent liability, there will be no such liability arising wholly
or partially out of events occurring prior to the execution of this Agreement,
nor would there be any such liability if the Company canceled such policy as of
the date hereof.
SECTION 4.12. ENVIRONMENTAL MATTERS
(a) As used in this Agreement:
(i) "Environmental Law" means any applicable federal, state or local
law, statute, code, ordinance, rule, regulation or other governmental
requirement from any U.S. or foreign jurisdiction concerning the Release
(as defined herein), handling, storage, processing, transportation,
manufacture, distribution, treatment, disposal, permitting, remediation or
other use of any solid waste, industrial waste or Hazardous Substance (as
defined herein), or concerning the protection of the health or safety of
employees or the public, including, by way of example but not limitation,
the Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. sec. 9601 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. sec. 1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. sec. 6901 et seq.), the Clean Water Act (33 U.S.C. sec. 1251),
the Clean Air Act (42 U.S.C. sec. 7401), the Toxic Substances Control Act
(15 U.S.C. sec. 2601 et seq.), and the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. sec. 136 et seq.), the Mine Safety and Health Act
(30 U.S.C. sec. 801 et seq.) and the Occupational Safety and Health Act (29
U.S.C. sec. 651 et seq.), and the regulations promulgated pursuant to each
of them.
(ii) "Environmental Claim" means any written notice of violation,
action, claim, lien, demand, order, injunction, judgment, decree, ruling,
assessment or arbitration award or directive (conditional or otherwise) by
any Governmental Entity or any person for personal injury (including
sickness, disease or death), tangible or intangible property damage,
diminution in value, damage to the environment or natural resources,
nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions resulting from or
based upon (a) the existence, or the continuation of the existence, of a
Release
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(including, without limitation, sudden or non-sudden accidental or
non-accidental Release) of, or exposure to, any Hazardous Substance, odor,
audible noise, or any solid or industrial waste; (b) the transportation,
storage, treatment or disposal of solid waste, industrial waste or
Hazardous Substances, in connection with the past or present operations of
any person, any of its subsidiaries or, to the Knowledge of such person,
any of their respective predecessors or assigns; or (c) the violation, or
alleged violation, of any Environmental Laws, orders, injunctions,
judgments, decrees, rulings, assessments, arbitration awards, Environmental
Permits or ruling, order or decision of any court, arbitrator or
Governmental Entity relating to such person and its environmental matters.
(iii) "Environmental Permit" means any permit, approval,
authorization, license, variance, registration, permit application,
notification, program development and implementation, or permission
required under any applicable Environmental Law.
(iv) "Hazardous Substance" means any substance, material or waste
which is regulated (A) under any Environmental Law or (B) by any applicable
Governmental Entity in the jurisdictions in which a person or any
subsidiary or any of their respective predecessors or assigns conducts or
has conducted business, or (C) by the United States, including, without
limitation, any material or substance which is defined as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous
waste" or "restricted hazardous waste," "subject waste," "pollutant,"
"contaminant," "toxic waste," "toxic substance" or "residual waste" under
any Environmental Law, including, but not limited to, radioactive
materials, petroleum products, asbestos and polychlorinated biphenyls.
(v) "Property" means, with respect to any person, any land, facility
or operations currently or previously owned or otherwise used by such
person, any of its subsidiaries or any of their respective predecessors.
(vi) "Release" means, with respect to any person, any intentional or
unintentional, continuous or intermittent release, spill, emission,
seepage, leaking, pumping, uncontrolled loss, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the environment, or any
building surface, or onto or from any Property of such person, of any
Hazardous Substance, including the movement of any Hazardous Substance
through or in the air, soil, surface water, ground water or otherwise.
(vii) "Remedial Action" means, with respect to any person, all
actions, including, without limitation, any capital expenditures, required
or voluntarily undertaken by such person to (i) clean up, remove, treat, or
in any other way address any Hazardous Substance or any other material
required pursuant to applicable Environmental Law or Environmental Permit;
(ii) prevent the Release or threat of Release, or minimize the further
Release of any Hazardous Substance or any other material required pursuant
to applicable Environmental Law or Environmental Permit; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and
care including the conduct of risk assessments and negotiation with
applicable Governmental Entities regarding any Hazardous Substance or any
other material required pursuant to applicable Environmental Law or
Environmental Permit; or (iv) bring the Properties of such person into
compliance with all applicable Environmental Laws and Environmental
Permits.
(b) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, the Company and each of its
subsidiaries and, to the Knowledge of the Company, each other permitted user of
a Property and its use of and operations at each Property is in compliance with
all applicable Environmental Laws and Environmental Permits, except where the
failure to so be in compliance, individually or in the aggregate, has not had
and would not reasonably be expected to have a Material Adverse Effect on the
Company.
(c) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, neither the Company nor any of
its subsidiaries or, to the Knowledge of the Company, any of their respective
predecessors or any other user of a Property, has received any written
communication from a court, Governmental Entity or any other person that alleges
that the Company or any such subsidiary or predecessor or other person is not in
compliance, with any Environmental Law or Environmental Permit or has liability
thereunder, and, to the Knowledge of the Company, there is no basis for any such
allegation except with
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respect to failures to so be in compliance which, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect on the Company.
(d) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, (i) none of the Properties or
operations of the Company or any of its subsidiaries or, to the Knowledge of the
Company, any of their respective predecessors, is the subject of any
investigation by any Governmental Entity, whether federal, state, local or
foreign, with respect to (A) any Environmental Law or Environmental Permit, (B)
any Remedial Action or (C) any Environmental Claim, which in each case,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on the Company and (ii) the Company and each of
its subsidiaries have filed all notices, obtained all Environmental Permits and
conducted all Remedial Actions required under all Environmental Laws and
Environmental Permits, except where the failure to file such notices, obtain
such Environmental Permits or take such Remedial Actions, individually or in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect on the Company. The Company and each of its subsidiaries are in
compliance with the terms and conditions of each of their Environmental Permits,
except for any such noncompliance which, individually and in the aggregate, has
not had and would not reasonably be expected to have, a Material Adverse Effect
on the Company, and, except as disclosed in Section 4.12 of the Company
Disclosure Schedule, to the Knowledge of the Company, no change in the facts or
circumstances reported or assumed in the application for or granting of any such
Environmental Permit exists.
(e) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, the Company and each of its
subsidiaries and, to the Knowledge of the Company, each of their respective
predecessors, have filed all notices required to be filed by them under all
Environmental Laws and Environmental Permits reporting any Release, except where
failure to file such notices, individually or in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse Effect on the
Company.
(f) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, neither the Company nor any of
its subsidiaries has any contingent liabilities with respect to its business or,
to the Knowledge of the Company, that of its predecessors, in connection with
any Hazardous Substance or Environmental Law or Environmental Permit which,
individually or in the aggregate, have had or would reasonably be expected to
have a Material Adverse Effect on the Company.
(g) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, underground storage tanks are
not located on or under any Property for which the Company or any of its
subsidiaries would be responsible or potentially responsible under any
Environmental Law or Environmental Permit and there have been no Releases of
Hazardous Substances on, in or under any Property for which the Company or any
of its subsidiaries would be responsible or potentially responsible under any
Environmental Law or Environmental Permit that in either case, individually or
in the aggregate, have had or would reasonably be expected to have a Material
Adverse Effect on the Company.
(h) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, none of the Company, any of its
subsidiaries or, to the Knowledge of the Company, any of their respective
predecessors or any other user of a Property, is subject to any judicial,
administrative or arbitral actions, suits, proceedings (public or private),
written claims or governmental proceedings alleging the violation of any
Environmental Law or Environmental Permit, and, to the Knowledge of the Company,
there is no basis for any such claim or proceeding that, individually or in the
aggregate, have had or would reasonably be expected to have a Material Adverse
Effect on the Company.
(i) Except as disclosed in any Company SEC Report or as disclosed in
Section 4.12 of the Company Disclosure Schedule, none of the Company, any of its
subsidiaries or, to the Knowledge of the Company, any of their respective
predecessors or any other permitted user of a Property of the Company or any of
its subsidiaries, as a result of their respective past and current operations,
has caused or permitted any Hazardous Substances to remain or be disposed of,
either on or under any Property of the Company or any of its subsidiaries or on
any real property, otherwise than in compliance with all applicable
Environmental Laws and Environmental Permits, in a manner that, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on the Company.
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SECTION 4.13. TAX MATTERS
Except as disclosed in Section 4.13 of the Company Disclosure Schedule or
as disclosed in any Company SEC Report:
(a) Subject to such exceptions which, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company, (i) the Company and each of its subsidiaries, and each
affiliated group (within the meaning of Section 1504 of the Code) of which the
Company or any of its subsidiaries is or has been a member, has timely filed all
federal income tax returns and all other Tax (as defined below) returns and
reports required to be filed by it, (ii) all such Tax returns are complete and
correct in all respects and (iii) the Company, and each of its subsidiaries paid
(or the Company has paid on its subsidiaries behalf) all Taxes due in respect of
the taxable periods covered by such Tax returns. The Company has previously
delivered to Parent copies of all U.S. federal income Tax returns filed by the
Company and each of its subsidiaries for their taxable years ended in 1995 and
1996. The liability for Taxes reflected on the balance sheet dated July 31,
1998, of the Company is sufficient for the payment of all unpaid Taxes that are
accrued or applicable for any period ended on or before July 31, 1998, except
for any deficiency which has not had and would not reasonably be expected to
have a Material Adverse Effect on the Company. For purposes of this Agreement,
(1) "Tax" or "Taxes" shall mean all taxes, charges, fees, imposts, levies,
gaming or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) and shall include any transferee liability in respect of taxes and
any liability in respect of taxes imposed by contract, tax sharing agreement,
tax indemnity agreement or any similar agreement and (2) "Tax returns" shall
mean any report, return, document, declaration or any other information or
filing required to be supplied to any taxing authority or jurisdiction (foreign
or domestic) with respect to Taxes, including without limitation, information
returns, any document with respect to or accompanying payments of Taxes or
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return document, declaration or other
information.
(b) Subject to such exceptions which, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company, no deficiencies for any Taxes have been proposed,
asserted or assessed against the Company or any of its subsidiaries that have
not been fully paid or adequately provided for in the appropriate financial
statements of the Company and its subsidiaries.
(c) Subject to such exceptions which, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company, no issues relating to Taxes have been raised in writing
by the relevant taxing authority (whether federal, state, local or other) during
any pending audit or examination. The federal income Tax returns of the Company
and each of its subsidiaries consolidated in such Tax returns have been reviewed
by the Internal Revenue Service for all years through its fiscal year ended
December 31, 1984.
(d) None of the Company or any of its subsidiaries has taken or agreed to
take any action that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.
(e) None of the Company or any of its subsidiaries is a party to or is
bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes (including any advance
pricing agreement, closing agreement or other agreement relating to Taxes with
any taxing authority).
(f) The Company and each of its subsidiaries are not currently, have not
been within the last five years, and do not anticipate becoming a "United States
real property holding company" within the meaning of Section 897(c) of the Code.
SECTION 4.14. INTANGIBLE PROPERTY
Subject to such exceptions which, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect
on Company, the Company and its subsidiaries own or possess
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adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
service marks, trade secrets, applications for trademarks and for service marks,
know-how and other proprietary rights and information used or held for use in
connection with the business of the Company and its subsidiaries as currently
conducted or as contemplated to be conducted, and, except as set forth in the
Company SEC Reports, or Section 4.14 of the Company Disclosure Schedule, the
Company has no Knowledge of any assertion or claim challenging the validity or
enforceability of any of the foregoing which, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse Effect on the
Company. Except as disclosed in Section 4.14 of the Company Disclosure Schedule
or in any Company SEC Report and subject to such exceptions which, individually
or in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company, there have been no claims made or
notices that the manufacture and sale of any of the Company's products infringes
the patents of any third party. To the Knowledge of the Company, each of the
federal, state and international registrations pertaining to the proprietary
rights and information owned by the Company and its subsidiaries is valid and in
full force and effect and all required filings in association with such
registrations have been properly made and all required fees have been paid,
except where the failure to be in full force and effect, to have made the
required filings or to have paid the required fees has not had and would
reasonably not be expected to have a Material Adverse Effect on the Company.
SECTION 4.15. OPINION OF FINANCIAL ADVISOR
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (the "Company Financial Advisor") has delivered
to the Company's Board its opinion, dated the date of this Agreement, to the
effect that, as of such date, the Per Share Amount is fair to the holders of the
Common Stock from a financial point of view, and such opinion has not been
withdrawn or adversely modified.
SECTION 4.16. BROKERS
No broker, finder or investment banker (other than the Company Financial
Advisor) is entitled to any brokerage, finder's or other fee or commission or
expense reimbursement in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company or any of
its affiliates. The fees and commissions payable to the Company Financial
Advisor, as contemplated by this Section, shall not exceed the aggregate amount
set forth in that certain letter dated December 1, 1997 from the Company
Financial Advisor to the Company, a true and current copy of which has been
provided for Parent.
SECTION 4.17. LABOR MATTERS
Except as set forth in Section 4.17 of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries is a party to any employment,
severance compensation, labor or collective bargaining agreement and there are
no employment, severance compensation, labor or collective bargaining agreements
which pertain to employees of the Company or any of its subsidiaries. No labor
organization or group of employees of the Company or any of its subsidiaries has
made a pending written demand for recognition or certification. There is no
labor strike, slowdown or stoppage pending or, to the Knowledge of the Company,
threatened against or involving the Company or any of its subsidiaries which
would have or would reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.18. ABSENCE OF CERTAIN CHANGES
Since December 31, 1997 and except as set forth in the Company SEC Reports
and Section 4.18 of the Company Disclosure Schedule, the Company and its
subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances
or facts which has had or is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of Company Common Stock, or any
repurchase, redemption or other acquisition by the Company or
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any of its subsidiaries of any amount of outstanding shares of capital
stock or other securities of, or other ownership interests in, the Company
or any of its subsidiaries;
(c) any amendment of any material term of any outstanding security of
the Company or any of its subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of
its subsidiaries of any indebtedness from any third party for borrowed
money other than guarantees by the Company for the benefit of any of its
subsidiaries and other than in the ordinary course of business and in
amounts and on terms consistent with past practices;
(e) any creation or assumption by the Company or any of its
subsidiaries of any Lien on any material asset other than in the ordinary
course of business consistent with past practices;
(f) any making of any loan, advance or capital contribution to or
investment in any person other than loans, advances or capital
contributions to or investments in wholly-owned subsidiaries or to
employees of the Company made in the ordinary course of business consistent
with past practices;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or
any of its subsidiaries which, individually or in the aggregate, has had or
is reasonably likely to have a Material Adverse Effect on the Company;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any of its subsidiaries relating to its
assets or business (including, without limitation, the acquisition or
disposition of any assets) (other than transactions and commitments
contemplated by this Agreement) inconsistent with the Company's 1998
Strategic and Annual Operating Plan dated February 18, 1998 (the "1998
Plan"), which was disclosed to Parent and Purchaser prior to the date of
this Agreement, or any relinquishment by the Company or any of its
subsidiaries of any material contract, license or right;
(i) any change in any method of accounting or accounting principle or
practice by the Company or any of its subsidiaries, except for any such
change required by GAAP or Regulation S-X promulgated under the Exchange
Act ("Regulation S-X"); or
(j) any (i) grant by the Company or any of its subsidiaries of any
severance or termination pay to, or entry into any employment, termination
or severance arrangement with, any director, officer or employee of the
Company or any subsidiaries other than any such grant or arrangement to or
with any employee of any subsidiary of the Company in the ordinary course
in an amount not exceeding an amount equal to the annual compensation plus
expenses relating to "COBRA" and out-placement benefits of such employee;
(ii) entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with
any director, officer or employee of the Company or any of its
subsidiaries, (iii) increase in benefits payable under any existing
severance or termination pay policies or employment agreements or (iv)
increase in compensation, bonus or other benefits payable to directors,
officers or employees of the Company or any of its subsidiaries, other than
in the ordinary course of business.
SECTION 4.19. MILLENNIUM
(a) The Company is in the process of conducting an inventory and assessment
of all software, computers, network equipment, technical infrastructure,
production equipment and other equipment and systems that are material to the
operation of its business and the businesses of its subsidiaries and that rely
on, utilize or perform date or time processing ("Systems").
(b) Any failure of any of the Company's Systems to be Year 2000 Complaint
has not had and is not reasonably expected to have a Material Adverse Effect on
the Company.
(c) "Year 2000 Compliant" means a System will at all times: (i)
consistently and accurately handle and process date and time information and
data values before, during and after January 1, 2000, including but not limited
to accepting date input, providing date output, and performing calculations on
or utilizing dates or
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portions of dates; (ii) function accurately and in accordance with its
specifications without interruption, abnormal endings, degradation, change in
operation or other impact, or disruption of other Systems, resulting from
processing date or time data with values, before, during and after January 1,
2000; (iii) respond to and process two-digit date input in a way that resolves
any ambiguity as to century; and (iv) store and provide output of date
information in ways that are unambiguous as to century.
SECTION 4.20. FULL DISCLOSURE
None of the representations or warranties of the Company contained in this
Article 4 nor any of the disclosures contained in the Company Disclosure
Schedule 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 contained herein or therein, in light of the circumstances under
which they are to be made, not misleading, subject to such exceptions which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on the Company. The documents
furnished by the Company pursuant to this Agreement are in all material respects
true and correct copies of such documents.
SECTION 4.21. REAL PROPERTY
(a) Section 4.21(a) of the Company Disclosure Schedule lists all material
real property owned by the Company or any of its subsidiaries (the "Owned Real
Property"). The Company has good and marketable title in fee simple to the Owned
Real Property and, except as indicated in Section 4.21(a) of the Company
Disclosure Schedule, the Owned Real Property and all mineral reserves located
thereon are owned free and clear of any charge, claim, community property
interest, equitable interest, lien, option, pledge, security interest, mortgage,
lease, license, easement, right of first refusal or other encumbrance ("Liens")
other than for Permitted Liens.
(b) Section 4.21(b) of the Company Disclosure Schedule contains a list of
all leases and subleases (the "Leases"), with respect to all material real
property leased by the Company or any of its subsidiaries (the "Leased
Property").
(c) The Company and its Subsidiaries have the mineral reserves disclosed in
pages 1-7 of the 1997 Form 10-K. There are no material zoning or land use
restrictions or covenants which would materially inhibit the surface or
subsurface mining or quarrying process where such mineral reserves are located.
(d) The Liens affecting the Owned Real Property or Leased Property do not
and will not, with respect to each Owned Real Property or Leased Property,
individually or in the aggregate, materially impair the Company's or its
subsidiary's ability to use the Owned Real Property or Leased Property in the
operation of the Company's or its subsidiary's business as presently conducted.
To the Knowledge of the Company, the Company or its subsidiary has access to
public roads, streets or the like or valid easements over private streets, roads
or other private property for such ingress to and egress from the Owned Real
Property and the Leased Property, except as would not materially impair the
Company's or its subsidiary's ability to use any such Owned Real Property or
Leased Property in the operation of the Company's or its subsidiary's business
as presently conducted or for the purposes for which such Owned Real Property or
Leased Property is held by the Company or its subsidiary.
(e) Neither the Company nor any of its subsidiaries has received any notice
of any violation of any applicable building, zoning, land use or other similar
statutes, laws, ordinances, regulations, permits or other requirements in
respect of the Owned Real Property and the Leased Property, and to the Knowledge
of the Company, there does not exist any such violations which adversely affect
the ability of the Company and its subsidiaries to use the Owned Real Property
or Leased Property in the manner and scope in which it is now being used except
for violations which have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company. Neither the Company nor any of its
subsidiaries has received any notice that any, and to the Knowledge of the
Company, no operations on or uses of the Owned Real Property and the Leased
Property constitute non-conforming uses under any applicable building, zoning,
land use or other similar statutes, laws, ordinances, regulations, permits or
other requirements other than (i) non-conforming uses that are legal non-
conforming uses, (ii) non-conforming uses that have been conducted with
sufficient continuity so as to preserve the right to continue the existing
operations and uses and any similar operations and uses for such property in the
future, and (iii) non-conforming uses which, individually and in the aggregate,
have not had and would not
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reasonably be expected to have, a Material Adverse Effect on the Company.
Neither the Company nor any of its subsidiaries has Knowledge of or has received
notice of any pending or contemplated condemnation, eminent domain or rezoning
proceeding affecting the Owned Real Property or the Leased Property.
(f) Neither the Company nor any of its subsidiaries has received any notice
from any insurance carrier regarding defects or inadequacies in the Owned Real
Property or Leased Property which, if not corrected, would result in termination
of the Company's or its subsidiaries' insurance coverage or any material
increase in the cost thereof, and the Company has no Knowledge of any such
defects or inadequacies.
(g) "Permitted Liens" means, with respect to any asset, (i) covenants,
conditions, restrictions, encroachments, encumbrances, easements, rights of way,
licenses, grants, building or use restrictions, exceptions, reservations,
limitations or other imperfections of title (other than a Lien securing any
indebtedness) with respect to such asset which, individually or in the
aggregate, do not materially detract from the value of, or materially interfere
with the present occupancy or use of, such asset and the continuation of the
present occupancy or use of such asset or the use or occupancy for which such
asset is held by a person; (ii) unfiled mechanic's, materialmen's and similar
Liens with respect to amounts not yet due and payable or which are being
contested in good faith through appropriate proceedings; (iii) Liens for taxes
not yet delinquent or which are being contested in good faith through
appropriate proceedings; and (iv) Liens securing rental payments under capital
lease arrangements.
SECTION 4.22. CONTRACTS
Section 4.22 of the Company Disclosure Schedule sets forth a list of all
material sales contracts and agreements to which the Company or any subsidiary
is a party (the "Material Contracts"). All such contracts and agreements are in
full force and effect and are binding on the parties thereto. No default by the
Company or any of its subsidiaries has occurred thereunder, and to the Knowledge
of the Company, no default by the other contracting parties has occurred
thereunder, other than defaults which, individually and in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect
on the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
SECTION 5.1. ORGANIZATION AND QUALIFICATION
Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power to
carry on its business as it is now being conducted or currently proposed to be
conducted.
SECTION 5.2. AUTHORITY RELATIVE TO THIS AGREEMENT
Parent has the corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder. The submission of the Offer, the
negotiation, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by Parent's Board
of Directors. This Agreement constitutes a valid and binding obligation of
Parent enforceable in accordance with its terms except as enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought. No other
corporate proceedings on the part of Parent are necessary to authorize this
Agreement and the transactions contemplated hereby.
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SECTION 5.3. NO CONFLICT OR VIOLATION; CONSENTS
(a) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby by
Parent will, directly or indirectly (with or without notice or lapse of time)
(i) contravene, conflict with, or result in a violation of (A) any provision of
the Certificate of Incorporation or By-Laws of Parent, or (B) any resolution
adopted by the board of directors or the shareholders of Parent; or (ii)
contravene, conflict with, or result in a violation of, or give any Governmental
Entity or other person the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or obtain any relief under, any
material order, permit, regulation, statute or rules ("Material Legal
Requirements") to which Parent, its subsidiaries, or any of the assets owned or
used by Parent or its subsidiaries, may be subject;
(b) Except as referred to herein or in connection, or in compliance, with
the provisions of the HSR Act, the Securities Act, the Exchange Act, the
Exon-▇▇▇▇▇▇ Act, filing of the Articles of Merger and the environmental,
corporation, securities or blue sky laws or regulations of the various states,
no consent, approval, or authorization of, or registration or filing with, any
Governmental Entity or any other person is required for the execution and
delivery of this Agreement by the Parent and the Purchaser or the consummation
of the Offer and the Merger.
SECTION 5.4. ADEQUATE FINANCING
Parent has adequate funds to consummate the Offer and the Merger and
perform its other obligations under this Agreement, to refinance the existing
indebtedness of the Company and its subsidiaries and to satisfy the reasonably
anticipated working capital requirements of the Company and its subsidiaries
after the Closing.
SECTION 5.5. OWNERSHIP OF COMMON STOCK
Neither Parent nor Purchaser beneficially owns or otherwise has an interest
in any Common Stock or Preference Stock.
SECTION 5.6. FULL DISCLOSURE
None of the representations or warranties of Parent or Purchaser contained
in this Article 5 or Article 6 contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they are to be made, not misleading, subject to such
exceptions which, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect on Parent.
SECTION 5.7. INFORMATION SUPPLIED
None of the information supplied or to be supplied by Parent for inclusion
or incorporation by reference into (i) the Company's Schedule 14D-9 or, if
necessary (ii) the Proxy Statement will at the time they are filed with the
Commission contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements,
therein not misleading. If at any time prior to the Effective Time, any event
with respect to Parent, its officers and directors or any of its subsidiaries
should occur which is required to be described in an amendment to the Schedule
14D-1, 14D-9 or Proxy Statement, Parent shall promptly so advise the Company and
such event shall be so described, and such amendment or supplement (which if not
prepared by the Company shall be reviewed by the Company) shall be promptly
filed with the Commission and, as and to the extent required by law,
disseminated to the shareholders of the Company.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES REGARDING PURCHASER
Parent and Purchaser jointly and severally represent and warrant to the
Company as follows:
SECTION 6.1. ORGANIZATION
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania. Purchaser has not
engaged in any business (other than certain organizational matters) since it was
incorporated.
SECTION 6.2. CAPITALIZATION
The authorized capital stock of Purchaser consists of 20,000,000 shares of
Common Stock, par value $0.01 per share, of which 14,718,508 shares are validly
issued and outstanding, fully paid and nonassessable and are owned by Parent
free and clear of all liens, charges, claims, security interests or
encumbrances.
SECTION 6.3. AUTHORITY RELATIVE TO THIS AGREEMENT
Purchaser has the corporate power to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by its Board of Directors and sole shareholder, and no other
corporate proceedings on the part of Purchaser are necessary to authorize this
Agreement and the transactions contemplated hereby. Except as referred to herein
or in connection, or in compliance, with the provisions of the HSR Act, the
Securities Act, the Exchange Act, the Exon-▇▇▇▇▇▇ Act, filing of the Articles of
Merger, and the environmental, corporation, securities or blue sky laws or
regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any Governmental Entity is necessary for
the consummation by Purchaser of the Offer, the Merger or the transactions
contemplated by this Agreement, other than filings, registrations,
authorizations, consents or approvals as will be timely made or obtained or the
failure to make or obtain would not prevent the consummation of the transactions
contemplated hereby.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 7.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER
Prior to the Effective Time, unless Parent shall otherwise agree in
writing:
(a) the business of the Company and its subsidiaries shall be
conducted only in the ordinary and usual course and in compliance with all
applicable Material Legal Requirements and, to the extent consistent
therewith, each of the Company and its subsidiaries shall use its
commercially reasonable efforts to preserve its business organization
intact and to maintain its existing relations with customers, suppliers,
employees, creditors and business partners;
(b) the Company shall not, directly or indirectly, amend its or any of
its subsidiaries', articles or certificate of incorporation or bylaws or
similar organizational documents;
(c) the Company shall not, and it shall not permit any of its
subsidiaries to: (i) (A) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to the
Company's capital stock or that of any of its subsidiaries (other than
regularly scheduled dividends on the Preference Stock in accordance with
the terms of the Preference Stock) or (B) redeem, purchase or otherwise
acquire directly or indirectly any of the Company's capital stock (or
options, warrants, calls, commitments or rights of any kind to acquire any
shares of capital stock) or that of any of its subsidiaries, other than
redemptions of Preference Stock required by the Company's Articles of
Incorporation; (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable for,
or options, warrants, calls, commitments or rights of any kind to acquire,
any shares of capital stock of any class of the Company
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or any of its subsidiaries, other than Common Stock issuable upon the
exercise of the Options, or upon the conversion of the Series B Preferred
or Series D Preferred outstanding on the date hereof; or (iii) split,
combine or reclassify the outstanding capital stock of the Company or of
any of its subsidiaries;
(d) the Company shall not, and it shall not permit any of its
subsidiaries to, acquire or agree to acquire, or dispose of or agree to
dispose of, any material assets other than in the ordinary course of
business, either by purchase, merger, consolidation, sale of shares in any
of its subsidiaries or otherwise;
(e) the Company shall not, and it shall not permit any of its
subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose
of, or encumber any of the Owned Real Property or Leased Property (except
for mortgages on such real property existing on the date hereof) or, other
than in the ordinary course of business, intellectual properties;
(f) neither the Company nor any of its subsidiaries shall: (i) grant
any increase in the compensation payable or to become payable by the
Company or any of its subsidiaries to any of its officers, directors or key
employees, except for (A) increases in the ordinary course of business
consistent with past practices or to the extent required by any contract,
and (B) payment immediately prior to consummation of the Offer, of a pro
rata portion of the 1998 target award under the Company's Annual Incentive
Plan for which amounts have been accrued on the Company's financial
statements, or (ii) (A) adopt any new, (B) grant any award under any, or
(C) amend or otherwise increase, or accelerate the payment or vesting of
the amounts payable or to become payable under, any existing employee
benefit or compensation plan other than as contemplated by this Agreement
or in accordance with the provisions of such benefit plan; or (iii)
increase the number of directors of the Company, enter into or modify or
amend any existing employment or severance agreement with or, grant any
severance or termination rights to any officer, director or employee of the
Company or any of its subsidiaries or terminate any of the employees of the
Company other than in the ordinary course of business; or (iv) enter into
or modify in any material respect any collective bargaining agreement;
(g) neither the Company nor any of its subsidiaries shall modify,
amend or terminate in any material respect any of its Material Contracts or
waive, release or assign any material rights or claims;
(h) neither the Company nor any of its subsidiaries shall: (i) incur
or assume any indebtedness other than indebtedness with respect to working
capital in amounts consistent with past practice; (ii) materially modify
any existing indebtedness or obligation; (iii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other person (other than a
subsidiary), other than immaterial amounts in the ordinary course of
business consistent with past practice; (iv) make any loans, advances or
capital contributions to, or investments in, any other person (other than
to wholly owned subsidiaries of the Company or customary advances to
employees in accordance with past practice); or (v) enter into any material
commitment or transaction other than in the ordinary course of business;
(i) neither the Company nor any of its subsidiaries shall change any
of the accounting methods, practices or policies used by it, unless
required by generally accepted accounting principles or SEC rules and
regulations;
(j) the Company shall not, and it shall not permit any of its
subsidiaries to, make or agree to make any capital expenditures, except for
capital expenditures that are not materially inconsistent with the 1998
Plan;
(k) the Company shall not, and it shall not permit any of its
subsidiaries to, make any material tax election (unless required by law) or
settle or compromise any material income tax liability;
(l) the Company shall not, and it shall not permit any of its
subsidiaries to, (i) waive the benefits of, or agree to modify in any
material manner, any confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a party, or (ii) pay,
discharge or satisfy any legal proceeding, other than a payment, discharge
or satisfaction, (A) involving payments by the Company or its subsidiaries
of less than $100,000 in the aggregate, or (B) for which liabilities are
fully reflected on or are fully reserved against in the Company's most
recent consolidated financial statements (or the notes thereto) included in
the
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Company SEC Reports, in each case in complete satisfaction, and with a
complete release, of such matter with respect to all parties to such
matter;
(m) the Company shall not, and it shall not permit any of its
subsidiaries to, make any payment or incur any liability or obligation for
the purpose of obtaining any consent from any third party to the
transactions contemplated hereby; and
(n) neither the Company nor any of its subsidiaries shall enter into
an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to
do any of the foregoing.
SECTION 7.2. NO SOLICITATION
(a) The Company shall, and shall cause its subsidiaries, officers,
directors, employees, counsel, investment bankers, financial advisers,
accountants, other representatives and agents (collectively, the "Company
Representatives") to immediately as of the date hereof cease any discussions or
negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as defined below). The Company shall not, and shall not authorize or
permit any Company Representative to, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal; (ii) participate
in any discussions or negotiations regarding any Takeover Proposal; or (iii)
enter into any agreement with respect to any Takeover Proposal; provided,
however, that, if at any time prior to the Effective Time, the Board of
Directors of the Company determines in good faith, in consultation with its
legal counsel, that it is necessary to do so in order to comply with its
fiduciary duties, the Company may, in response to an unsolicited Takeover
Proposal, and subject to compliance with Section 7.2(c), (x) furnish information
with respect to the Company to any person pursuant to a confidentiality
agreement and (y) participate in negotiations regarding such Takeover Proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any Company Representative
shall be deemed to be a breach of this Section 7.2(a) by the Company.
(b) Neither the Board of Directors of the Company nor any committee thereof
shall: (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors or
such committee of this Agreement or the Offer or the Merger; (ii) approve or
recommend, or propose to approve or recommend, any Takeover Proposal; or (iii)
cause the Company to enter into any agreement with respect to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the
Effective Time the Board of Directors of the Company determines in good faith,
in consultation with its legal counsel as to legal matters, that it is necessary
to do so in order to comply with its fiduciary duties, the Board of Directors of
the Company may withdraw or modify its approval or recommendation of this
Agreement, the Offer and the Merger, approve or recommend a Superior Proposal
(as defined below) or cause the Company to enter into an agreement with respect
to a Superior Proposal, but in each case only at a time that is after the fifth
Business Day following Parent's receipt of written notice advising Parent that
the Board of Directors of the Company has received a Superior Proposal.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 7.2, the Company shall promptly advise Parent orally
of any request for information or of any Takeover Proposal (including the terms
of such Takeover Proposal).
(d) "Takeover Proposal" means any inquiry, proposal or offer from any
person relating to any: (A) merger, consolidation or similar transaction
involving the Company, (B) sale, lease or other disposition directly or
indirectly by merger, consolidation, share exchange or otherwise of assets of
the Company or its subsidiaries outside the ordinary course of business
representing 10% or more of the consolidated assets of the Company and its
subsidiaries, (C) issue, sale, or other disposition of (including by way of
merger, consolidation, share exchange or any similar transaction) securities (or
options, rights or warrants to purchase, or securities convertible into, such
securities) representing 20% or more of the voting power of the Company or (D)
transaction in which any person shall acquire beneficial ownership (as such term
is defined in Rule 13d-3 under the Exchange Act), or the right to acquire
beneficial ownership or any "group" (as such term is defined under the Exchange
Act) shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of more than 20% of the
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outstanding Common Stock, in each case, other than the transactions with Parent
contemplated by this Agreement.
(e) "Superior Proposal" means any bona fide written offer for a Takeover
Proposal to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 20% of the outstanding Common Stock on a fully
diluted basis or all or substantially all the assets of the Company and
otherwise on terms which the Board of Directors of the Company determines in its
good faith judgment in consultation with a financial advisor of nationally
recognized reputation that the consideration offered pursuant to such Takeover
Proposal is more favorable to the Shareholders than the Offer and the Merger
from a financial point of view.
ARTICLE VIII
ADDITIONAL AGREEMENTS
SECTION 8.1. ACCESS AND INFORMATION
The Company and its subsidiaries shall (a) afford to Parent and its
accountants, counsel and other representatives full access during normal
business hours (and at such other times as the parties may mutually agree)
throughout the period prior to the Effective Time to all of their properties,
books, contracts, commitments, records and personnel, and (b) during such
period, furnish promptly to Parent (i) a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal or
state securities laws, and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request. Parent shall hold,
and shall cause its employees and agents to hold, in confidence all such
information in accordance with the terms of the Confidentiality Agreement dated
April 28, 1998 between Parent and the Company.
SECTION 8.2. INDEMNIFICATION
(a) Until, and after, the Effective Time, the Purchaser's Bylaws shall
contain indemnification and limitation of liability provisions which are
substantially identical to the indemnification and limitation of liability
provisions of Article XVII of the By-laws of the Company, and such provisions
shall not be amended, repealed or otherwise modified in any manner that would
make any of such provisions less favorable to the directors, officers and
employees of the Company than pertain to such persons on the date hereof.
Without limiting the foregoing, from the Effective Time and for a period of six
years after the Effective Time, Parent shall, (i) indemnify, defend and hold
harmless the present and former officers, directors, employees and agents of the
Company and its subsidiaries and of Purchaser (collectively, the "Indemnified
Parties"), from and against, and pay or reimburse the Indemnified Parties for,
all losses, obligations, expenses, claims, damages or liabilities resulting from
third-party claims (and involving claims by or in the right of the Company) and
including interest, penalties, out-of-pocket expenses and attorneys' fees
incurred in the investigation or defense of any of the same or in asserting any
of their rights hereunder resulting from or arising out of actions or omissions
of such Indemnified Parties occurring on or prior to the Effective Time
(including, without limitation, the transactions contemplated by this Agreement)
to the fullest extent permitted or required under (A) applicable law, (B) the
articles of incorporation or by-laws of the Company or Purchaser in effect on
the date of this Agreement, including, without limitation, provisions relating
to advances of expenses incurred in the defense of any action or suit, or (C)
any indemnification agreement between the Indemnified Party and the Company; and
(ii) advance to any Indemnified Parties expenses incurred in defending any
action or suit with respect to such matters, in each case to the extent such
Indemnified Parties are entitled to indemnification or advancement of expenses
under the Company's or Purchaser's articles of incorporation and by-laws in
effect on the date hereof and subject to the terms of such articles of
incorporation and by-laws; provided, however, that in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect of each such claim shall continue until final
disposition of such claim.
(b) Any Indemnified Party wishing to claim indemnification under Section
8.2(a) shall provide notice to the Parent promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and the
Indemnified Party shall permit the Parent (at its expense) to assume the defense
of any claim or
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any litigation resulting therefrom; provided, however, that (i) counsel for the
Parent who shall conduct the defense of such claim or litigation shall be
reasonably satisfactory to the Indemnified Party and the Indemnified Party may
participate in such defense at such Indemnified Party's expense, and (ii) the
omission by any Indemnified Party to give notice as provided herein shall not
relieve the Parent of its indemnification obligation under this Agreement,
except to the extent that such omission results in a failure of actual notice to
the Parent, and the Parent is actually prejudiced as a result of such failure to
give notice. In the event that the Parent does not accept the defense of any
matter as above provided, or counsel for the Indemnified Parties advises the
Indemnified Parties in writing that there are issues that raise conflicts of
interest between the Parent and the Indemnified Parties, the Indemnified Parties
may retain counsel satisfactory to them, and the Parent shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received; provided, however, that the Parent shall not
be liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld); provided, further, however, that
the Parent shall not be responsible for the fees and expenses of more than one
counsel for all of the Indemnified Parties. In any event, the Parent and the
Indemnified Parties shall cooperate in the defense of any action or claim. The
Parent shall not, in the defense of any such claim or litigation, except with
the consent of the Indemnified Party, consent to entry of any judgment or enter
into any settlement that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party or that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such claim or litigation.
(c) This Section 8.2 is intended for the benefit of, and to grant third
party rights to, persons entitled to indemnification under this Section 8.2 and
the benefits of Article XVII of the By-laws of the Company, whether or not
parties to this Agreement, and each of such persons shall be entitled to enforce
the covenants contained in this Section 8.2.
(d) If Parent or the Company, as the case may be, or any of their
respective successors or assigns (i) reorganizes or consolidates with or merges
into any other person and is not the resulting, continuing or surviving
corporation or entity of such reorganization, consolidation or merger, or (ii)
liquidates, dissolves or transfers all or substantially all of its properties
and assets to any person or persons, then, and in such case, proper provision
will be made so that the successors and assigns of Parent or the Company assume
all of the obligations of Parent or the Company, as the case may be, as set
forth in this Section 8.2.
(e) Parent shall use commercially reasonable efforts for a period of six
years after the Effective Time to provide officers' and directors' liability
insurance in respect of acts or omissions occurring prior to the Effective Time,
including but not limited to the transactions contemplated by this Agreement,
covering each person currently covered by the Company's existing officers' and
directors' liability insurance policy, or who becomes covered by such policy
prior to the Effective Time, on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof, provided
that in satisfying its obligation under this paragraph (e), Parent shall not be
obligated to pay premiums in excess of 150% of the amount per annum the Company
paid in 1997, and provided further that Parent shall nevertheless be obligated
to provide such coverage as may be obtained for such amount.
SECTION 8.3. HSR ACT
The Company and Parent shall use their best efforts to file as soon as
practicable notifications under the HSR Act in connection with the Offer, the
Merger and the transactions contemplated by this Agreement and to respond as
promptly as practicable to any inquiries received from the Federal Trade
Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters. The
Company and Parent agree to coordinate and, to the extent not inconsistent with
their respective legal obligations, cooperate with each other in making all such
filings and responses.
SECTION 8.4. ADDITIONAL AGREEMENTS REGARDING CONSENTS AND APPROVALS
(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
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proper or advisable under applicable law to consummate and make effective the
transactions contemplated by this Agreement, including using all reasonable
efforts to obtain all necessary waivers, consents and approvals, to effect all
necessary registrations and filings (including, but not limited to, filings
under the HSR Act and with all applicable Governmental Agencies) and to lift any
injunction or other legal bar to the Offer and the Merger (and, in such case, to
proceed with the Offer and the Merger as expeditiously as possible) subject,
however, in the case of this Agreement, to the appropriate vote (if required) of
the Company's shareholders. Notwithstanding the foregoing, without Parent's
prior written consent, the Company shall not obtain any consent that will affect
Parent or the Company to either of their economic detriment, including any
modification of any Material Contract or Company license or permit. Each party
shall promptly inform the other of any communication with, and any proposed
understanding, undertaking, or agreement with, any Governmental Entity regarding
any such filing or any such transaction. Neither party shall participate in any
meeting with any Governmental Entity in respect of any such filing,
investigation, or other inquiry without giving the other party notice of the
meeting and, to the extent permitted by such Governmental Entity, the
opportunity to attend and participate.
(b) Parent and the Company shall cooperate in the preparation, execution
and filing of all returns, applications or other documents regarding any real
property transfer, stamp, recording, documentary or other taxes and any other
fees and similar taxes which may become payable in connection with the Offer or
the Merger.
(c) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of Parent or the Company shall take all such necessary
action.
SECTION 8.5. TAKEOVER STATUTES
If any "business combination," "fair price," "control share acquisition" or
"moratorium" statute or other similar statute or regulation or any state "blue
sky" or securities law statute shall become applicable to the transactions
contemplated hereby, the Company and the Board of Directors of the Company
shall, to the extent consistent with applicable law, grant such approvals and
take such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of such statute or
regulations on the transactions contemplated hereby; provided, that this Section
8.5 shall not require the Company to seek to amend its Articles of Incorporation
to opt out of Subchapter E of Chapter 25 of the PBCL.
SECTION 8.6. BENEFITS
(a) Until at least December 31, 1999, Parent will cause the Company (and
its successors or assigns) to maintain, at its option, either (i) the employee
benefit plans of the Company and its subsidiaries in effect on the date of this
Agreement or (ii) other benefits to employees of the Company and its
subsidiaries that are not materially less favorable in the aggregate to such
employees than those in effect on the date of this Agreement; provided, however,
that the Company will not maintain any plan or arrangement that provides for
issuance of securities of the Company.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
consummation of the Merger, the Company may pay eligible participants a pro rata
portion (from January 1, 1998 through the Effective Time) of the 1998 target
award under the Company's Annual Incentive Plan, for which amounts have been
accrued on the Company's financial statements through such date.
(c) Parent acknowledges the existence of those certain agreements between
the Company and various employees and former employees of the Company set forth
in Section 8.6(c) of the Company Disclosure Schedule, and Parent agrees that
after the Effective Time such agreements shall continue to be an obligation of
the Company and shall remain in full force and effect.
(d) Until at least March 31, 2000, Parent or its affiliates shall maintain
the Company's Pittsburgh, Pennsylvania office.
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SECTION 8.7. EFFECT OF KNOWLEDGE OF BREACH
(a) Notwithstanding anything to the contrary contained in this Agreement,
including, without limitation, the Company's failure to disclose any matter
required to be disclosed on the Company Disclosure Schedule, Parent and
Purchaser agree that no representation or warranty made by the Company in this
Agreement shall be deemed to be inaccurate or incorrect, and the Company shall
not be deemed to be in breach of this Agreement, if the Parent, Purchaser or its
representatives had actual knowledge on the date hereof of any such undisclosed
matter or that any such representation or warranty was inaccurate or incorrect.
(b) The Company shall give prompt notice to Parent and Parent shall give
prompt notice to the Company of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time, (ii) any
material failure of the Company, or the Parent as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder, (iii) any notice of, or other communication relating
to, a default or event which, with notice or lapse of time or both, would become
a default, received by it or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or agreement
material to the business, financial condition, or results of operations of it
and its subsidiaries taken as a whole to which it or any of its subsidiaries is
a party or is subject, (iv) 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, or (v) any
material adverse change in business, financial condition or results of
operations of it and its subsidiaries taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the delivery
of any notice pursuant to this Section 8.7(b) shall not cure such breach or
non-compliance or limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 8.8. CERTAIN DELIVERIES
After consummation of the Offer and prior to the Merger, the Company shall
deliver or cause to be delivered to Parent and Purchaser (i) a certificate of
the Company, signed by the Company's President and Chief Executive Officer and
by the Company's Senior Vice President and Chief Financial Officer, to the
effect that (a) all of the representations and warranties of the Company
contained in this Agreement are true and correct on the Closing Date in all
respects, expect for such breaches which, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect,
and (b) the Company has performed in all material respects all obligations and
complied with all material agreements and covenants to be performed or complied
with by it under the Agreement, other than failures to perform or comply which
have not had and would not reasonably be expected to have, a Material Adverse
Effect; and (ii) an opinion of counsel as to such matters regarding this
Agreement, the Company and the Merger as Parent and Purchaser may reasonably
request.
ARTICLE IX
CONDITIONS PRECEDENT
SECTION 9.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) The Offer shall have been consummated in accordance with its
terms.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(c) This Agreement shall have been adopted by the requisite vote of
the Company's shareholders or, if permitted by Section 1924(b)(1)(ii) of
the PBCL, by the Board of Directors of the Company.
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(d) No preliminary or permanent injunction or other order by any
federal or state court in the United States which prevents the consummation
of the Merger shall have been issued and remain in effect (each party
agreeing to use its best efforts to have any such injunction lifted).
ARTICLE X
TERMINATION AND FEES
SECTION 10.1. TERMINATION
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval by the Company's shareholders:
(a) by mutual consent of the Board of Directors of Parent and the
Board of Directors of the Company;
(b) by either Parent or the Company if the Offer shall not have been
consummated on or before 90 days from date of Agreement (the "Termination
Date") (provided the terminating party is not otherwise in material breach
of its representations, warranties or obligations under this Agreement);
(c) by the Company if any of the conditions specified in Section 9.1
have not been satisfied or waived by the Company at such time as such
condition is no longer capable of satisfaction;
(d) by Parent if any of the conditions specified in Section 9.1 have
not been satisfied or waived by Parent at such time as such condition is no
longer capable of satisfaction;
(e) by the Company, if Parent or Purchaser shall have breached or
failed to perform in any material respect any of its representations,
warranties or covenants contained in this Agreement, which breach or
failure to perform (i) would give rise to a failure of condition set forth
in Section 9.1 or Annex I, and (ii) cannot be or has not been cured within
thirty (30) days after the giving of notice to Parent of such breach;
(f) by the Company, in connection with entering into an agreement for
a Superior Proposal as expressly permitted by Section 7.2, provided the
Company has complied with all provisions thereof, including the notice
provisions therein.
SECTION 10.2. EFFECT OF TERMINATION
In the event of termination of this Agreement by either Parent or the
Company, as provided in Section 10.1, this Agreement shall forthwith become void
and of no further force and effect; provided, however, that each of the parties
shall be entitled to pursue, exercise and enforce any and all remedies, rights,
powers and privileges available to it at law or in equity for any breach of this
Agreement ("Remedies") which occurred prior to such termination unless Parent is
entitled to payment of the fee provided for in Section 10.3(b), in which case
this Agreement shall be of no further force or effect, the Company shall have no
other or further obligation to Parent or Purchaser (except payment of such fee)
and neither Purchaser nor Parent shall have any Remedies against Company or any
subsidiary under this Agreement.
SECTION 10.3. FEES AND EXPENSES.
(a) Except as provided in subsection (b) below, whether or not the Merger
is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) (i) If either (A)(i) the Company receives a bona fide Takeover Proposal
at any time after the date of this Agreement and prior to the termination of
this Agreement, (ii) this Agreement terminates prior to the consummation of the
Offer for any reason (other than a breach of this Agreement by Parent or
Purchaser), and (iii) by the date which is six months after the date of
termination of this Agreement, either (1) a Takeover Proposal with a third party
is consummated, or (2) the Company enters into an agreement for a Takeover
Proposal with a third party which is thereafter consummated, or (B) the Company
terminates this Agreement pursuant to
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Section 10.1(f), then, in either event, the Company shall pay to Parent, by wire
transfer of immediately available funds, within two days after the consummation
of the Takeover Proposal or Superior Proposal, as the case may be, a fee of
$9,500,000 (the "Topping Fee").
(ii) For the purposes of subparagraph (b)(i)(A)(iii) of this Section 10.3
only, the term "Takeover Proposal" shall mean any proposal or offer from any
person relating to any: (A) merger, consolidation or similar transaction
involving the Company, (B) sale, lease or other disposition directly or
indirectly by merger, consolidation, share exchange or otherwise of assets of
the Company or its subsidiaries outside the ordinary course of business
representing 10% or more of the consolidated assets of the Company and its
subsidiaries, (C) issue, sale, or other disposition of (including by way of
merger, consolidation, share exchange or any similar transaction) securities (or
options, rights or warrants to purchase, or securities convertible into, such
securities) representing 20% or more of the voting power of the Company or (D)
transaction in which any person shall acquire beneficial ownership (as such term
is defined in Rule 13d-3 under the Exchange Act), or the right to acquire
beneficial ownership or any "group" (as such term is defined under the Exchange
Act) shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of more than 50% of the outstanding Common Stock, in each
case, other than the transactions with Parent and Purchaser contemplated by this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
All representations and warranties set forth in this Agreement shall
terminate at the Effective Time. All covenants and agreements set forth in this
Agreement shall survive in accordance with their terms.
SECTION 11.2. AMENDMENT
This Agreement may be amended by the parties hereto, by or pursuant to
action taken by their respective Boards of Directors, at any time before or
after approval hereof by the shareholders of the Company, but, after such
approval, no amendment shall be made which changes the Per Share Amount or which
in any way materially adversely affects the rights of such shareholders, without
the further approval of such shareholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
SECTION 11.3. NOTICES
All notices, demands or other communications to be given or delivered under
or by reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been given (a) when delivered personally to the recipient, (b)
when sent to the recipient by telecopy (receipt electronically confirmed by
sender's telecopy machine) if during normal business hours of the recipient,
otherwise on the next Business Day, or (c) one Business Day after the date when
sent to the recipient by reputable same day or next day courier service (charges
prepaid). Such notices, demands and other communications shall be sent to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to the Company:
Dravo Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief Executive Officer
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With a copy to:
▇▇▇▇▇▇▇▇ Ingersoll Professional Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent or Purchaser:
Carmeuse Lime, Inc.
▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Carmeuse Lime, Inc.
▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 11.4. SPECIFIC PERFORMANCE
The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 11.5. PUBLICITY
Each party's initial press release with respect to the execution of this
Agreement has been previously approved by the other parties. Following such
initial press releases, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or other public announcement with respect to
the Offer, the Merger, this Agreement or the other transactions between the
parties contemplated hereby without the prior consultation of the other parties,
except as may be required by law or by any listing agreement with a national
securities exchange or trading market.
SECTION 11.6. INTERPRETATION
The language used in this Agreement shall be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party. Any references to any federal,
state, local or foreign statute or law shall also refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
Unless the context otherwise requires: (a) a term has the meaning assigned to it
by this Agreement; (b) including means "including but not limited to"; (c) "or"
is disjunctive but not exclusive; (d) words in the singular include the plural,
and in the plural include the singular; (e) "$" means the currency of the United
States of America; (f) "person" means any individual or entity; and (g)
"Knowledge" of any person that is an entity (or similar language) means the
actual knowledge of its executive officers after reasonable investigation. When
a reference is made in this Agreement to Sections or paragraphs, such reference
shall be to a Section or paragraphs of this Agreement unless otherwise
indicated.
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SECTION 11.7. COUNTERPARTS
This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
two or more counterparts have been signed by each of the parties and delivered
to the other parties.
SECTION 11.8. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES
This Agreement and the Confidentiality Agreement between the parties dated
April 28, 1998: (a) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) other than the provisions of
Section 8.2, nothing expressed or implied in this Agreement is intended or will
be construed to confer upon or give to any person other than the parties hereto
any rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.
SECTION 11.9. SEVERABILITY
In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 11.10. GOVERNING LAW
This Agreement and the legal relations between the parties hereto will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to the choice of law principles thereof.
SECTION 11.11. ASSIGNMENT
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties,
except Purchaser may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
SECTION 11.12. DESCRIPTIVE HEADINGS
The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunder duly authorized
all as of the date first written above.
ATTEST: CARMEUSE LIME, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------- --------------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary Title: Chairman
ATTEST DLC ACQUISITION CORP.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------- --------------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary Title: Chairman
ATTEST: DRAVO CORPORATION
/s/ ▇▇▇▇ ▇. BELLISARO /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------- --------------------------------------------
By: ▇▇▇▇ ▇. Bellisaro By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: President and Chief Executive Officer
Carmeuse S.A. hereby unconditionally and jointly and severally guarantees
the obligations of Parent and Purchaser under this Agreement.
ATTEST CARMEUSE S.A.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------- --------------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director Title: Administrateor Delegue
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ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) promulgated under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
shares of Common Stock promptly after termination or withdrawal of the Offer),
pay for, and (subject to any such rules or regulations) may delay the acceptance
for payment of any tendered shares of Common Stock and (except as provided in
this Agreement) amend or terminate the Offer as to any shares of Common Stock
not then paid for if (i) the Minimum Condition is not satisfied, (ii) any
applicable waiting period under the HSR Act or the Exon-▇▇▇▇▇▇ Act shall not
have expired or been terminated prior to the expiration of the Offer or (iii) at
any time after the date of this Agreement and before the time of acceptance of
payment for any such shares (whether or not any shares have theretofore been
accepted for payment or paid for pursuant to the Offer) of Common Stock any of
the following events (each, an "Event") shall have occurred (each of paragraphs
(a) through (h) providing a separate and independent condition to Purchaser's
obligations pursuant to the Offer):
(a) there shall be pending or in effect an injunction or other order,
decree, judgment or ruling by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission of
competent jurisdiction or a statute, rule, regulation, executive order or
other action shall have been promulgated, enacted, or taken by a
governmental authority or a governmental, regulatory or administrative
agency or commission of competent jurisdiction which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership or
operation by Parent (or any of its affiliates or subsidiaries) of any
portion of its or the Company's business or assets which is material in
light of the size and scope of the business of the Company and its
subsidiaries taken as a whole, or compels Parent (or any of its affiliates
or subsidiaries) to dispose of or hold separate any portion of its or the
Company's business or assets which is material to the business of the
Company and its subsidiaries taken as a whole, (iii) imposes material
limitations on the ability of Parent effectively to acquire or to hold or
to exercise full rights of ownership of the Common Stock, including,
without limitation, the right to vote the Common Stock purchased by
Purchaser on all matters properly presented to the shareholders of the
Company, or (iv) imposes any material limitations on the ability of Parent
or any of its affiliates or subsidiaries effectively to control in any
material respect the business and operations of the Company and its
subsidiaries (each of clauses (i) through (iv) being referred to as a
"Prohibited Result"); or
(b) an action or a proceeding shall have been commenced by a
Governmental Entity under federal or state antitrust laws or any other
applicable law before any court or any governmental or other administrative
or regulatory authority or agency, domestic or foreign, which would
reasonably be expected to have a Prohibited Result; or
(c) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market for a period in excess of 24 hours
(excluding suspensions or limitations resulting solely from physical damage
or interference with such exchanges not related to market conditions), (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (iv) any
limitation (whether or not mandatory) by any United States governmental
authority on the extension of credit generally by banks or other financial
institutions, (v) a change in general financial, bank or capital market
conditions which materially and adversely affects the ability of financial
institutions in the United States to extend credit or syndicate loans, or
(vi) in the case of any of the foregoing existing at the time of the
execution of this Agreement, a material acceleration or worsening thereof;
or
(d) the representations and warranties of the Company contained in the
Agreement shall not be true and correct on and as of the Expiration Date,
with the same force and effect as if made on and as of the Expiration Date,
in all respects, except for such breaches which, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company; or
41
(e) the Company shall have failed to perform in all material respects
any obligation or to comply with any material agreement or covenant to be
performed or complied with by it under the Agreement, which failure to
perform has had or would reasonably be expected to have a Material Adverse
Effect on the Company; or
(f) the Company shall have failed to obtain any consent from any
third-party required to be obtained by it in order to permit consummation
of the Offer, other than those consents the failure of which to obtain
would not have and would not reasonably be expected to have, a Material
Adverse Effect on the Company;
(g) the Agreement shall have been terminated by the Company or Parent
in accordance with its terms; or
(h) the Offer shall not have been consummated by the Termination Date.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to such Event (not including any action or inaction by Parent) or
may be waived by Parent or Purchaser in whole at any time or in part from time
to time in its reasonable discretion. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right and may be
asserted at any time and from time to time.
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