1
Exhibit 2
CONFORMED COPY
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AGREEMENT AND PLAN OF MERGER
dated as of February 9, 1997
among
WESTINGHOUSE ELECTRIC CORPORATION,
G ACQUISITION CORP.
and
▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY
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TABLE OF CONTENTS
ARTICLE I
Page
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The Merger
SECTION 1.01. The Merger............................................................ 3
SECTION 1.02. Closing............................................................... 3
SECTION 1.03. Effective Time........................................................ 4
SECTION 1.04. Effects of the Merger................................................. 4
SECTION 1.05. Certificate of Incorporation and
By-laws.......................................................... 4
SECTION 1.06. Directors............................................................. 4
SECTION 1.07. Officers.............................................................. 4
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock............................................... 5
SECTION 2.02. Exchange of Certificates.............................................. 7
ARTICLE III
Related Transactions
SECTION 3.01. Restructuring Agreements.............................................. 10
SECTION 3.02. Ancillary Agreements.................................................. 11
SECTION 3.03. Restructuring of Assets and
Assumption of Liabilities........................................ 11
SECTION 3.04. Company Distribution.................................................. 11
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of
the Company...................................................... 11
SECTION 4.02. Representations and Warranties of
Parent and Sub................................................... 39
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TABLE OF CONTENTS
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ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business................................................... 48
SECTION 5.02. No Solicitation....................................................... 54
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Registration
Statements and the Proxy
Statement-Prospectus; Company
Stockholders Meeting; Parent
Shareholders Meeting............................................. 55
SECTION 6.02. Letters of the Company's Accountants.................................. 56
SECTION 6.03. Letters of Parent's Accountants....................................... 57
SECTION 6.04. Access to Information;
Confidentiality.................................................. 57
SECTION 6.05. Reasonable Best Efforts............................................... 58
SECTION 6.06. Stock Options......................................................... 59
SECTION 6.07. Fees and Expenses..................................................... 59
SECTION 6.08. Public Announcements.................................................. 59
SECTION 6.09. Affiliates............................................................ 60
SECTION 6.10. NYSE Listing.......................................................... 60
SECTION 6.11. Stockholder Litigation................................................ 60
SECTION 6.12. Cooperation with Respect to Internal
Revenue Service Rulings and Tax
Opinions of Counsel.............................................. 60
SECTION 6.13. Indebtedness.......................................................... 61
SECTION 6.14. Distribution Agreement................................................ 61
SECTION 6.15. Employee Matters...................................................... 62
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's
Obligation to Effect the Merger.................................. 63
SECTION 7.02. Conditions to Obligations of Parent
and Sub.......................................................... 65
SECTION 7.03. Conditions to Obligation of the
Company.......................................................... 68
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ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination........................................................... 69
SECTION 8.02. Effect of Termination................................................. 72
SECTION 8.03. Amendment............................................................. 72
SECTION 8.04. Extension; Waiver..................................................... 72
SECTION 8.05. Procedure for Termination,
Amendment, Extension or Waiver................................... 73
ARTICLE IX
Alternative Transaction
SECTION 9.01. Circumstances......................................................... 73
SECTION 9.02. Alternative Per Share Merger
Consideration.................................................... 73
ARTICLE X
General Provisions
SECTION 10.01. Survival of Representations and
Warranties....................................................... 74
SECTION 10.02. Notices............................................................... 74
SECTION 10.03. Definitions........................................................... 75
SECTION 10.04. Interpretation........................................................ 78
SECTION 10.05. Counterparts.......................................................... 78
SECTION 10.06. Entire Agreement; No Third-Party
Beneficiaries.................................................... 78
SECTION 10.07. Governing Law......................................................... 79
SECTION 10.08. Assignment............................................................ 79
SECTION 10.09. Disclosure Schedules.................................................. 79
SECTION 10.10. Severability.......................................................... 79
SECTION 10.11. Enforcement........................................................... 80
ANNEX A - Agreement and Plan of Distribution
ANNEX B - Tax Disaffiliation Agreement
ANNEX C - Post-Closing Covenants Agreement
ANNEX D - Retained Business
ANNEX E - Affiliate Letter
SCHEDULE 5.01 (a)(vii) - Capital Expenditures
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CONFORMED COPY
AGREEMENT AND PLAN OF MERGER dated as of
February 9, 1997, among WESTINGHOUSE ELECTRIC
CORPORATION, a Pennsylvania corporation ("Parent"),
G ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of Parent ("Sub"), and
▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY, a Delaware
corporation (the "Company").
WHEREAS the Board of Directors of the Company has approved an
Agreement and Plan of Distribution in the form of Annex A attached hereto with
such changes as may be made in accordance with Section 6.14 (the "Distribution
Agreement"), which will be entered into prior to the Effective Time (as defined
in Section 1.03) subject to the issuance of the Tax Rulings (as such term is
defined in Section 10.03), pursuant to and subject to the terms of which
(a) the assets and businesses of the Company and its subsidiaries (as defined
in Section 10.03) will be restructured as a result of which (i) all the assets
of the Company and its subsidiaries, other than the Retained Assets (as defined
in Section 10.03), will be held by ▇▇▇▇▇▇▇ Broadcasting Company, a Delaware
corporation and a wholly owned subsidiary of the Company ("GBC"), or one or
more of GBC's subsidiaries and (ii) all the liabilities of the Company and its
subsidiaries, other than the Retained Liabilities (as defined in
Section 10.03), will be assumed by GBC or one or more of GBC's subsidiaries,
(b) GBC will be recapitalized in accordance with Article II of the Distribution
Agreement and (c) following such restructuring and recapitalization, the
Company will distribute (the "Company Distribution") to each holder of record
of shares of Class A Common Stock, $.01 par value, of the Company ("Company
Class A Common Stock") and Class B Common Stock, $.01 par value, of the Company
("Company Class B Common Stock" and, together with the Company Class A Common
Stock, "Company Common Stock") a number of shares of Common Stock, $.01 par
value, of GBC ("New GBC Common Stock") equal to one-third of the number of
shares of Company Common Stock held by such holder;
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company have, and Parent acting as the sole stockholder of Sub has,
approved the merger of Sub with and into the Company (the "Merger") following
the Restructuring (as defined in Section 3.03) and the Company Distribution,
and otherwise upon the terms and subject to
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the conditions set forth in this Agreement, whereby each issued and outstanding
share of Company Common Stock, other than shares owned directly or indirectly by
the Company, will be converted into the right to receive the Per Share Merger
Consideration (as defined in Section 2.01(c));
WHEREAS as a condition of the willingness of Parent to enter
into this Agreement, those individuals and trusts set forth on Schedule A
attached to the Stockholder Agreement (as defined below) and the trustees of
the Trust (as defined in the Stockholder Agreement)(collectively, the
"Principal Stockholders"), have entered into a Stockholder Agreement dated as
of the date hereof (the "Stockholder Agreement") with Parent, which provides,
among other things, that, subject to the terms and conditions thereof, each
Principal Stockholder will vote his, her or its shares of Company Common Stock
and the shares of Company Common Stock held by any trust of which such
Principal Stockholder is a trustee (including the Trust) in favor of the Merger
and the approval and adoption of this Agreement;
WHEREAS the Board of Directors of the Company has approved
the terms of the Stockholder Agreement solely for the purpose of rendering
Section 203 of the DGCL (as defined in Section 1.01) inapplicable to the
transactions contemplated hereby;
WHEREAS it is the intention of the parties to this Agreement
that (a) the Company Distribution shall qualify as a transaction described in
Section 355 of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be immediately preceded by a transfer of assets and related liabilities
that qualifies as a transaction described in Section 351 or
Section 368(a)(1)(D) of the Code, (b) the recapitalization of GBC and certain
other transactions that are part of the Restructuring shall be tax-free
transactions under the Code and (c) the Merger shall qualify as a
"reorganization" within the meaning of Section 368(a)(1)(B) of the Code;
WHEREAS it is currently anticipated that Parent will effect a
distribution (the "Parent Distribution") of the Common Stock of a subsidiary
formed for the purpose, which it is currently anticipated will own Parent's
Thermo King, Power Generation, Energy Systems and Government Operations
business units, to its shareholders during the third quarter of 1997, and it
is the intention of the
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parties to this Agreement that the Merger will be consummated prior to the
Parent Distribution; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. (a) Upon the terms and subject
to the conditions set forth in this Agreement, and in accordance with the
Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and
into the Company at the Effective Time. Following the Effective Time, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of Sub in accordance with the DGCL.
(b) At the election of Parent, any direct wholly owned
subsidiary of Parent may be substituted for Sub as a constituent corporation in
the Merger. In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect such substitution.
SECTION 1.02. Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which (subject to satisfaction or waiver of the
conditions set forth in Sections 7.01, 7.02 and 7.03) shall be no later than
the third New York Stock Exchange ("NYSE") trading day after satisfaction or
waiver of the conditions set forth in Section 7.01, at the offices of Cravath,
Swaine & ▇▇▇▇▇, Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
unless another time, date or place is agreed to in writing by the
parties hereto.
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SECTION 1.03. Effective Time. Subject to the provisions of
this Agreement, as soon as practicable on or after the Closing Date the parties
shall file with the Secretary of State of the State of Delaware a certificate
of merger or other appropriate documents (in any such case, the "Certificate of
Merger") executed in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the DGCL to
consummate the Merger. The Certificate of Merger shall specify that the Merger
shall become effective at 12:01 a.m. on the day following the Closing Date or
at such other time as Parent and the Company shall agree should be specified in
the Certificate of Merger (the time the Merger becomes effective being
hereinafter referred to as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have
the effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws.
(a) The Restated Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be amended as of the Effective
Time so that Article I thereof shall read in its entirety as follows: "The name
of this Corporation is G Corp. (the "Corporation").", and, as so amended, such
Restated Certificate of Incorporation shall be the certificate of incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
(b) The By-laws of Sub, as in effect at the Effective Time,
shall be the by-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub immediately
prior to the Effective Time shall be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be. The
directors of Sub shall be apportioned among the classes of the board of
directors of the Surviving Corporation so that the number of directors in each
class shall be as nearly equal as possible.
SECTION 1.07. Officers. The officers of Sub immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
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successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share
of capital stock of Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of Common Stock, par value
$.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of Company
Common Stock that is owned by the Company or by any subsidiary of the
Company shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to
Section 2.02(e), each issued and outstanding share of Company Common
Stock (other than shares to be canceled in accordance with
Section 2.01(b)) shall be converted into the right to receive that
number (subject to the proviso to this sentence and to Section 9.02,
the "Per Share Merger Consideration") of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock, par value
$1.00 per share, of Parent ("Parent Common Stock") equal to the
quotient, rounded to the nearest thousandth, or if there shall not be
a nearest thousandth, the next higher thousandth, of (i) the quotient
of (x) $1,550,000,000 divided by (y) the number (the "Outstanding
Number") of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares to be
canceled in accordance with Section 2.01(b)), divided by (ii) the
Market Price (as defined below) of Parent Common Stock on the date on
which the Effective Time shall occur; provided, however, that in the
event that the product of the Per Share Merger Consideration multiplied
by the
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Outstanding Number would exceed 110,000,000 (the "Maximum Number of
Shares"), then the Per Share Merger Consideration shall mean the
highest number (after taking into account the rounding provision of
this sentence) that would not result in the product of such number
multiplied by the Outstanding Number exceeding 110,000,000. The
"Market Price" of Parent Common Stock on any date means the average of
the daily closing prices per share of Parent Common Stock as reported
on the NYSE Composite Transactions List (as reported by the Wall
Street Journal or, if not reported thereby, by another authoritative
source mutually selected by Parent and the Company) for the 15
consecutive full NYSE trading days (the "Averaging Period")
immediately preceding the third full NYSE trading day prior to such
date; provided that (A) if the Board of Directors of Parent declares a
dividend on the outstanding shares of Parent Common Stock having a
record date after the Effective Time but an ex-dividend date (based on
"regular way" trading on the NYSE of shares of Parent Common Stock
(the "Ex-Date")) that occurs during the Averaging Period, then for
purposes of computing the Market Price, the closing price on the
Ex-Date and any trading day in the Averaging Period after the Ex-Date
will be adjusted by adding thereto the amount of such dividend and
(B) if the Board of Directors of Parent declares a dividend on the
outstanding shares of Parent Common Stock having a record date before
the Effective Time and an Ex-Date that occurs during the Averaging
Period, then for purposes of computing the Market Price, the closing
price on any trading day before the Ex-Date will be adjusted by
subtracting therefrom the amount of such dividend. For purposes of
the immediately preceding sentence, the amount of any non- cash
dividend will be the fair market value thereof on the payment date for
such dividend as determined in good faith by mutual agreement of
Parent and the Company. As of the Effective Time, all such shares of
Company Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Per Share Merger Consideration and any
cash in lieu of fractional shares of Parent Common Stock to be issued
or paid in consideration therefor upon surrender of such
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certificate in accordance with Section 2.02, without interest.
SECTION 2.02. Exchange of Certificates. (a) Exchange
Agent. As of the Effective Time, Parent shall enter into an agreement with
such bank or trust company as may be designated by Parent and shall not have
been reasonably disapproved of by the Company (the "Exchange Agent"), which
shall provide that Parent shall deposit with the Exchange Agent as of the
Effective Time, for the benefit of the holders of shares of Company Common
Stock, for exchange in accordance with this Article II, through the Exchange
Agent, certificates representing the shares of Parent Common Stock (such shares
of Parent Common Stock, together with any dividends or distributions with
respect thereto with a record date after the Effective Time and any cash
payable in lieu of any fractional shares of Parent Common Stock, being
hereinafter referred to as the "Exchange Fund") issuable pursuant to
Section 2.01 in exchange for outstanding shares of Company Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Parent shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Company Common Stock (the
"Certificates") whose shares were converted into the right to receive the Per
Share Merger Consideration pursuant to Section 2.01, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Parent and the Company may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Per Share Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Parent Common Stock, and cash and dividends or other distributions, if any,
which such holder has the right to receive pursuant to the provisions of this
Article II, and the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of
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ownership of Company Common Stock which is not registered in the transfer
records of the Company, a certificate representing the proper number of shares
of Parent Common Stock may be issued to a person other than the person in whose
name the Certificate so surrendered is registered if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such issuance shall pay any transfer or other Taxes (as defined in
Section 10.03) required by reason of the issuance of shares of Parent Common
Stock to a person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that such Tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender shares of Parent Common Stock and
cash and dividends or other distributions, if any, which the holder thereof has
the right to receive in respect of such Certificate pursuant to the provisions
of this Article II. No interest will be paid or will accrue on any cash payable
to holders of Certificates pursuant to the provisions of this Article II. Parent
shall pay the charges and expenses of the Exchange Agent in connection with the
exchange of Certificates for certificates representing shares of Parent Common
Stock and cash and dividends or other distributions.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.02(e), and all such dividends,
other distributions and cash in lieu of fractional shares of Parent Common
Stock shall be paid by Parent to the Exchange Agent and shall be included in
the Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificate representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Parent Common Stock
to which such holder is entitled pursuant to Section 2.02(e) and the amount of
dividends or other distributions with a record date after
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the Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
such surrender and with a payment date subsequent to such surrender payable with
respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock.
All shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II (including any
cash paid pursuant to this Article II) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to the shares of Company
Common Stock theretofore represented by such Certificates, subject, however, to
the Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have
been declared or made by the Company on such shares of Company Common Stock in
accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided in this
Article II, except as otherwise provided by law.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or other distribution of
Parent shall relate to such fractional share interests and such fractional
share interests will not entitle the owner thereof to vote or to any rights of
a shareholder of Parent.
(ii) Notwithstanding any other provision of this Agreement,
each holder of shares of Company Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all Certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Parent Common Stock
multiplied by the closing price of a share of Parent Common Stock on
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the NYSE Composite Transactions List (as reported by the Wall Street Journal or,
if not reported thereby, by another authoritative source mutually selected by
Parent and the Company) on the Closing Date.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of the Certificates
for six months after the Effective Time shall be delivered to Parent, upon
demand, and any holders of the Certificates who have not theretofore complied
with this Article II shall thereafter look only to Parent for payment of their
claim for the shares of Parent Common Stock and cash and dividends or other
distributions, if any, pursuant to this Article II.
(g) No Liability. None of Parent, Sub, the Company or the
Exchange Agent shall be liable to any person in respect of any shares of Parent
Common Stock or any cash or dividends or other distributions from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificate shall not have been
surrendered prior to seven years after the Effective Time (or immediately prior
to such earlier date on which any shares of Parent Common Stock, any cash or
any dividends or other distributions payable to the holder of such Certificate
pursuant to this Article II would otherwise escheat to or become the property
of any Governmental Entity (as defined in Section 4.01(d))), any such shares,
cash, dividends or other distributions shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Parent, on a
daily basis. Any interest and other income resulting from such investments
shall be paid to Parent.
ARTICLE III
Related Transactions
SECTION 3.01. Restructuring Agreements. Prior to the
Company Distribution, the Company shall (a) execute and deliver the
Distribution Agreement, a Tax Disaffiliation Agreement in the form of Annex B
attached hereto with such
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changes as may be approved by Parent and the Company (the "Tax Disaffiliation
Agreement") and a Post-Closing Covenants Agreement in the form of Annex C
attached hereto with such changes as may be approved by Parent and the Company
(the "Post-Closing Covenants Agreement"), (b) cause GBC to execute and deliver
the Distribution Agreement, the Tax Disaffiliation Agreement and the
Post-Closing Covenants Agreement and (c) cause each GBC Subsidiary which Parent
shall designate to execute and deliver the Post-Closing Covenants Agreement.
Prior to the Company Distribution, Parent will execute and deliver the Tax
Disaffiliation Agreement and the Post-Closing Covenants Agreement.
SECTION 3.02. Ancillary Agreements. Prior to the Company
Distribution, the Company shall, and the Company shall cause GBC (and, if
applicable, one or more of its subsidiaries) to, execute and deliver the
Ancillary Agreements (as defined in the Distribution Agreement, and, together
with this Agreement, the Stockholder Agreement, the Distribution Agreement, the
Tax Disaffiliation Agreement and the Post-Closing Covenants Agreement, the
"Transaction Agreements").
SECTION 3.03. Restructuring of Assets and Assumption of
Liabilities. Prior to the Company Distribution and pursuant to the terms of
the Distribution Agreement, the Company and its subsidiaries will consummate
the restructuring of the assets and businesses of the Company and its
subsidiaries and the related assumption of liabilities by GBC and its
subsidiaries contemplated by Article IV of the Distribution Agreement and cause
GBC to be recapitalized as contemplated by Article II of the Distribution
Agreement (collectively, the "Restructuring").
SECTION 3.04. Company Distribution. Prior to the Effective
Time, and pursuant to the terms of Article II of the Distribution Agreement, the
Company will effect the Company Distribution.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Company.
As used in this Agreement, (i) any reference to the Company and its
subsidiaries means the Company and each of its subsidiaries (including for this
purpose, at any time prior to the Effective Time, the GBC Companies (as
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defined below)), (ii) any reference to the "Retained Business" means the
Company's businesses included in its cable networks segment excluding certain
businesses as described in Annex D hereto, (iii) any reference to the "Retained
Company" and its subsidiaries or the Surviving Corporation and its subsidiaries
or the "Retained Companies" means the Company and its subsidiaries, other than
GBC and its subsidiaries (determined after giving effect to the transactions
contemplated by Article IV of the Distribution Agreement), (iv) any reference to
the "Retained Subsidiaries" means the direct and indirect subsidiaries of the
Company included in the Retained Business, (v) any reference to GBC and its
subsidiaries or the "GBC Companies" means GBC and its subsidiaries (determined
after giving effect to the transactions contemplated by Article IV of the
Distribution Agreement) and (vi) any reference to "GBC Subsidiaries" means the
direct and indirect subsidiaries of GBC (determined after giving effect to the
transactions contemplated by Article IV of the Distribution Agreement).
Except as set forth with respect to a specifically identified
representation and warranty on the disclosure schedule delivered by the Company
to Parent simultaneously with the execution of this Agreement (the "Company
Disclosure Schedule"), the Company represents and warrants to Parent and Sub as
follows:
(a) Organization, Standing and Corporate Power. Each of the
Company and GBC is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. Each
Retained Subsidiary is, and each other subsidiary of the Company that
will be a significant subsidiary (as defined in Section 10.03) of GBC
as of the Closing Date is, a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization as set forth in Section 4.01(b) of the
Company Disclosure Schedule. Each of the Company, the Retained
Subsidiaries and GBC is, and each other subsidiary of the Company that
will be a significant subsidiary of GBC as of the Closing Date is, duly
qualified or licensed to do business and in good standing in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the
aggregate would not
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have a material adverse effect (as defined in Section 10.03) on the
Retained Companies or on the GBC Companies or impair the ability of the
Retained Companies or the GBC Companies to consummate the transactions
contemplated by, or to satisfy their obligations under, the Transaction
Agreements. Each of the Company and each Retained Subsidiary has, and
GBC and each other subsidiary of the Company that will be a significant
subsidiary of GBC as of the Closing Date has, the requisite corporate
or other power, as the case may be, and authority to carry on its
businesses as they are now being or will be conducted at the Effective
Time. The Company has delivered or made available to Parent prior to
the execution of this Agreement complete and correct copies of its
Restated Certificate of Incorporation and By-laws and the certificates
of incorporation and by-laws (or comparable organizational documents)
of each of the Retained Subsidiaries and each other subsidiary of the
Company that will be a significant subsidiary of GBC as of the Closing
Date, in each case as amended to the date hereof.
(b) Subsidiaries. Section 4.01(b) of the Company Disclosure
Schedule sets forth a true and complete list of each subsidiary of the
Company that indicates which subsidiaries are Retained Subsidiaries.
Except as set forth in Section 4.01(b) of the Company Disclosure
Schedule, all the outstanding shares of capital stock of, or other
ownership interests in, each of the Retained Subsidiaries have been
validly issued and are fully paid and nonassessable and are owned
directly or indirectly by the Company, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens"). Except for the capital
stock of its subsidiaries and except as set forth in Section 4.01(b) of
the Company Disclosure Schedule, the Company does not own, directly or
indirectly, as of the date of this Agreement, and the Retained Company
will not own, directly or indirectly, as of the Effective Time, any
capital stock or other ownership interest in any corporation,
partnership, limited liability company, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the
Company consists of 300,000,000 shares of Company Class A Common
Stock, 150,000,000 shares of
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Company Class B Common Stock and 100,000,000 shares of preferred stock,
$.01 par value, of the Company ("Company Preferred Stock"). At the
close of business on January 31, 1997, (i) 44,957,557 shares of Company
Class A Common Stock were issued and outstanding, (ii) 51,407,868
shares of Company Class B Common Stock were issued and outstanding,
(iii) no shares of Company Preferred Stock were issued and outstanding,
(iv) 300,300 shares of Company Class A Common Stock were held by the
Company in its treasury, (v) 5,512,500 shares of Company Class A Common
Stock were reserved for issuance pursuant to the Company s Amended and
Restated 1991 Stock Option and Incentive Plan and the Company s Amended
and Restated 1993 Stock Option and Incentive Plan (the "Company Stock
Plans") and (vi) 51,407,868 shares of Company Class A Common Stock were
reserved for issuance upon conversion of Company Class B Common Stock
in accordance with the terms of the Company's Restated Certificate of
Incorporation. Except as set forth above, at the close of business on
January 31, 1997, no shares of capital stock or other voting securities
of the Company were issued, reserved for issuance or outstanding. There
are no outstanding stock appreciation rights or rights (other than
options to acquire Company Class A Common Stock granted under the
Company Stock Plans ("Employee Stock Options")) to receive shares of
Company Common Stock on a deferred basis granted under the Company
Stock Plans or otherwise. Section 4.01(c) of the Company Disclosure
Schedule sets forth a complete and correct list, as of January 31,
1997, of the holders of all Employee Stock Options, the number of
shares subject to each such option and the exercise prices thereof. All
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outstanding shares of capital stock of the Company are, and all shares
which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. There are no notes, bonds, debentures or other indebtedness
(as defined in Section 10.03) of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company may vote.
Except as set forth above and except as set forth in Section 4.01(c)
of the Company Disclosure Schedule, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any
of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of the Company or of any of
the Retained Subsidiaries or obligating the Company or any of its
subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as set forth in Section 4.01(c) of the Company
Disclosure Schedule, there are no outstanding contractual obligations
of the Company or any of the Retained Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company
or any of its subsidiaries. There are no outstanding contractual
obligations of the Company or any of the Retained Subsidiaries to vote
or to dispose of any shares of the capital stock of the Company or any
of its subsidiaries. As of the date of this Agreement, the Principal
Stockholders are the record owners of a number of shares of Company
Common Stock that in the aggregate constitutes not less than 60% of
the votes entitled to be cast at the Company Stockholders Meeting (as
defined in Section 6.01(b)).
(d) Authority; Noncontravention. Each of the Company, the
Retained Subsidiaries and the GBC Companies has the requisite
corporate or other power and authority to execute, deliver and perform
each Transaction Agreement to which it is or will be a party and to
consummate the transactions contemplated thereby (other than, with
respect to the Merger, the approval
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and adoption of this Agreement by the affirmative vote of the holders
of a majority of the voting power of all outstanding shares of Company
Class A Common Stock and Company Class B Common Stock, voting together
as a single class, at the Company Stockholders Meeting (the "Company
Stockholder Approval"), and, with respect to the Company Distribution,
formal declaration of the Company Distribution by the Company's Board
of Directors). The execution, delivery and performance by the Company
and GBC of each Transaction Agreement and the consummation by the
Company and GBC of the Restructuring, the Company Distribution and the
Merger and of the other transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the
Company and GBC, and no other corporate proceedings on the part of the
Company or GBC are necessary to authorize any Transaction Agreement or
for the Company or GBC to consummate the Restructuring, the Company
Distribution, the Merger or the other transactions so contemplated
(other than, with respect to the Merger, the Company Stockholder
Approval, and, with respect to the Company Distribution, formal
declaration of the Company Distribution by the Company's Board of
Directors). The execution, delivery and performance by each Retained
Subsidiary and each GBC Subsidiary of each Transaction Agreement to
which it will be a party and the consummation by it of the
transactions contemplated thereby has been, or prior to the execution
and delivery of the Distribution Agreement will be, duly authorized by
all necessary corporate or other action on the part of such entity and
all necessary action on the part of its stockholders, if required, and
no other corporate or other proceedings on the part of such entity are
or will be necessary to authorize any Transaction Agreement to which
it will be a party or for it to consummate the transactions so
contemplated. This Agreement has been duly executed and delivered by
the Company and, assuming this Agreement constitutes a valid and
binding obligation of Parent and Sub, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. Each Transaction Agreement (other than
this Agreement) to which the Company, any Retained Subsidiary or any
GBC Company will be a party when executed and delivered will, assuming
that such Transaction Agreement will constitute a valid and
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binding obligation of Parent, if Parent will be a party thereto,
constitute a valid and binding obligation of such entity, enforceable
against such entity in accordance with its terms. Except as set forth
in Section 4.01(d) of the Company Disclosure Schedule, none of the
execution, delivery or performance by the Company, the Retained
Subsidiaries and the GBC Companies of each Transaction Agreement to
which any of them is or will be a party or the consummation by the
Company, the Retained Subsidiaries and the GBC Companies of the
transactions contemplated thereby will conflict with, or result in a
violation or breach of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation or loss of a
material benefit under, or result in the creation of any Lien upon any
of the properties or assets of the Company, any Retained Subsidiary or
any GBC Company under, (i) the Restated Certificate of Incorporation
or Restated By-laws of the Company or the certificate of incorporation
or by-laws (or comparable organizational documents) of any Retained
Subsidiary or any GBC Company, (ii) any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, contract,
agreement, obligation, understanding, commitment or other arrangement
(a "Contract") or of any license, franchise, permit, concession,
certificate of authority, order, approval, application or registration
from, of or with a Governmental Entity (as defined below) (a "Permit")
to which the Company, any Retained Subsidiary or any GBC Company is a
party or by which any of their respective properties or assets may be
bound or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company,
any Retained Subsidiary or any GBC Company or their respective
properties or assets, other than any such conflicts, violations,
breaches, defaults, rights or Liens (A) relating to (x) Contracts the
parties to which consist solely of Parent or any of its subsidiaries,
on the one hand, and the Company or any of its subsidiaries, on the
other hand, and (y) Contracts executed by Parent or one of its
subsidiaries on behalf of the Company or a subsidiary of the Company,
and (B) in the case of clause (ii) or
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(iii), that individually or in the aggregate would not (x) have a
material adverse effect on the Retained Companies or on the GBC
Companies, (y) impair in any material respect the ability of the
Retained Companies or the GBC Companies, as the case may be, to
consummate the transactions contemplated by, or to satisfy their
obligations under, the Transaction Agreements or (z) delay in any
material respect or prevent the consummation of any of the
transactions contemplated by the Transaction Agreements. Except for
consents, approvals, orders, authorizations, registrations,
declarations or filings as may be required under, and other applicable
requirements of, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act of 1933, as amended (the
"Securities Act"), the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and any foreign competition laws,
filings under state securities or "blue sky" laws, filings with the
NYSE, approvals of and filings with the Federal Communications
Commission or any successor entity (the "FCC") under the
Communications Act of 1934 (the "Communications Act") and the filing
of the Certificate of Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of
other jurisdictions in which the Company is qualified to do business
and other consents, approvals, orders, authorizations, registrations,
declarations, filings and agreements expressly provided for in the
Transaction Agreements, no consent, approval, order or authorization
of, or registration, declaration or filing with, any federal, state or
local government, or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to
the Company, any Retained Subsidiary or any GBC Company in connection
with the execution, delivery or performance by the Company, any
Retained Subsidiary or any GBC Company of each Transaction Agreement
to which any of them is or will be a party or the consummation by the
Company, any Retained Subsidiary or any GBC Company of the
transactions contemplated thereby (except where the failure to obtain
such consents, approvals, orders or authorizations, or to make such
registrations, declarations or filings, would not, individually or in
the aggregate, have a material adverse effect on the
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Retained Companies or on the GBC Companies or impair the ability of
the Retained Companies or the GBC Companies, as the case may be, to
consummate the transactions contemplated by, or to satisfy their
obligations under, the Transaction Agreements).
(e) SEC Documents; Undisclosed Liabilities. The Company has
filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission
(the "SEC") since January 1, 1995 (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents except as set forth in
Section 4.01(e) of the Company Disclosure Schedule, and none of the
SEC Documents when filed contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to
the extent that information contained in any SEC Document has been
revised or superseded by a later filed SEC Document, none of the SEC
Documents 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 therein, in light of the circumstances
under which they were made, not misleading. The financial statements
of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal recurring year- end audit
adjustments). Except as set forth in the
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Filed SEC Documents (as defined in Section 4.01(h)), and except for
liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most
recent consolidated balance sheet included in the Filed SEC Documents,
neither the Company nor any of its subsidiaries has any material
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be recognized or
disclosed on a consolidated balance sheet of the Company and its
consolidated subsidiaries or in the notes thereto.
(f) Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or
incorporation by reference in (i) the registration statement on
Form S-4 to be filed with the SEC by Parent in connection with the
issuance of shares of Parent Common Stock in the Merger (the "Parent
Form S-4") or the registration statement on Form 10 to be filed with
the SEC by GBC in connection with the distribution of shares of New
GBC Common Stock in the Company Distribution (the "GBC Form 10" and,
together with the Parent Form S-4, the "Registration Statements")
will, at the time the Registration Statements become effective under
the Securities Act or the Exchange Act, as applicable, at the time of
any post-effective amendments or supplements thereto, at the Effective
Time and at the time of the Parent Shareholders Meeting (as defined in
Section 6.01(c)), if applicable, in the case of the Parent Form S-4,
or at the time of the Company Stockholders Meeting and the Time of
Distribution (as defined in the Distribution Agreement), in the case
of the GBC Form 10, 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 or (ii) the
proxy statement-prospectus relating to the Company Stockholders
Meeting and, if the Parent Shareholder Approval (as defined in
Section 4.02(c)) is required by the applicable rules of the NYSE, the
Parent Shareholders Meeting (the "Proxy Statement-Prospectus") will,
at the date it is first mailed to the Company's stockholders or, if
applicable, Parent's shareholders, or at the time of the Company
Stockholders Meeting or, if applicable, the Parent Shareholders
Meeting, contain any untrue statement of a material fact or omit to
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state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The GBC Form 10 and the
Proxy Statement-Prospectus 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 by the Company with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Sub
specifically for inclusion or incorporation by reference in the GBC
Form 10 or the Proxy Statement-Prospectus.
(g) Retained Business Financial Statements. (i) Included
in Section 4.01(g) of the Company Disclosure Schedule is a combined
and combining balance sheet of the Retained Companies as of
December 31, 1996 (including the notes thereto, the "Retained Business
Balance Sheet") and a combined and combining operating income
statement for the year ended December 31, 1996 (including the notes
thereto, and together with the Retained Business Balance Sheet, the
"Retained Business Financial Statements"). There has been no change
in the combined financial position of the Retained Companies since
December 31, 1996 except for changes that individually or in the
aggregate have not had and would not reasonably be expected to have a
material adverse effect on the Retained Companies. The Retained
Business Balance Sheet fairly presents in all material respects the
combined financial position of the Retained Business as of
December 31, 1996, and the operating income statement included in the
Retained Business Financial Statements fairly presents in all material
respects the results of operations of the Retained Business for the
year ended December 31, 1996, in each case after giving effect to the
Restructuring and the Company Distribution (assuming that the
Restructuring and the Company Distribution had occurred on
December 31, 1996 and January 1, 1996, respectively) and in accordance
with GAAP applied on a basis consistent with the most recent audited
financial statements of the Company included in the Filed SEC
Documents, except as indicated in the notes thereto. Except as
contemplated by this Agreement, at December 31, 1996 none of the
Retained Companies had, and since such date none of the Retained
Companies has
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incurred, any liabilities or obligations of any nature (whether
absolute, accrued, contingent or otherwise) except liabilities or
obligations (a) which are accrued or reserved against in the Retained
Business Balance Sheet, (b) for current or deferred Taxes with respect
to current operations, (c) which were incurred after December 31, 1996
in the ordinary course of business, or (d) which would not in the
aggregate have a material adverse effect on the Retained Companies or
have been discharged or paid in full prior to the date hereof and
taking into account, in the case of contingent liabilities, both the
probability of the realization of the contingency and the likely
resultant liability. The Retained Companies do not have any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) with respect to any former or discontinued
business of the Company or any of its subsidiaries (other than any
liabilities or obligations that constitute Assumed Liabilities (as
defined in the Distribution Agreement)).
(ii) Except for the excluded assets described in
Section 4.01(g) of the Company Disclosure Schedule (the "Excluded
Assets"), the Retained Business includes all the Company's right,
title and interest (including minority interests) in and to (x) all
assets of the Company, any of the Retained Subsidiaries or any of the
GBC Companies that are used in or that are being held for use in the
Retained Business as presently conducted and (y) whether or not
included within the assets set forth in clause (x) above, all assets
(including, without limitation, capital stock and partnership and
ownership interests) reflected on the Retained Business Balance Sheet,
except those disposed of in the ordinary course of business since the
date of the Retained Business Balance Sheet).
(h) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to
the date of this Agreement (as amended to the date of this Agreement,
the "Filed SEC Documents") or in Section 4.01(h) of the Company
Disclosure Schedule or as otherwise expressly contemplated by the
Transaction Agreements, since the date of the most recent audited
financial statements included in the Filed SEC Documents, the Company
and its subsidiaries have conducted the Retained Business
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23
only in the ordinary course of business consistent with past practice,
and there has not been (i) any event, change or development which
individually or in the aggregate has had or would reasonably be
expected to have a material adverse effect on the Retained Companies
or on the GBC Companies or would impair the ability of the Retained
Companies or the GBC Companies, as the case may be, to consummate the
transactions contemplated by, or to satisfy their obligations under,
the Transaction Agreements, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of the Company's capital stock, other
than regular quarterly cash dividends, (iii) any split, combination or
reclassification of any of the Company's capital stock or any issuance
or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock, (iv) (x) any granting by the Company or any of its subsidiaries
to any employee who will be a Retained Employee (as defined in the
Distribution Agreement) of any increase in compensation, except for
increases in the ordinary course of business consistent with past
practice, (y) any granting by the Company or any of its subsidiaries
to any such employee of any increase in severance or termination pay,
except in the ordinary course of business consistent with past
practice or as was required under any employment, severance or
termination agreements in effect as of the date of the most recent
audited financial statements included in the Filed SEC Documents, or
(z) any entry by the Company or any of its subsidiaries into any
employment, consulting, severance, termination or indemnification
agreement with any such employee, (v) any damage, destruction or loss,
whether or not covered by insurance, that has had or would reasonably
be expected to have a material adverse effect on the Retained
Companies or on the GBC Companies or (vi) except insofar as may have
been disclosed in the Filed SEC Documents or required by a change in
GAAP, any change in accounting methods, principles or practices by the
Company materially affecting the assets, liabilities or businesses of
the Retained Companies.
(i) Title to Assets. (i) The Company and its subsidiaries
have, and as of the Effective Time the Retained Companies will have,
good and valid title to
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all assets reflected on the Retained Business Balance Sheet or
thereafter acquired, except those sold or otherwise disposed of for
fair value since the date of the Retained Business Balance Sheet in
the ordinary course of business consistent with past practice and not
in violation of this Agreement, in each case free and clear of all
Liens except Permitted Liens (as defined below). Section 4.01(i) of
the Company Disclosure Schedule sets forth a true and complete list of
all assets properly categorized as plant, property and equipment
reflected on the Retained Business Balance Sheet.
All the material tangible personal property to be owned by
any Retained Company as of the Effective Time has been maintained in
all material respects in accordance with the past practice of the
Company and its subsidiaries and generally accepted industry practice,
is in good working order (normal wear and tear excepted) and is
suitable in all material respects for the purposes for which it is
being used. All personal property to be leased by any Retained
Company as of the Effective Time is in all material respects in the
condition required of such property by the terms of the lease
applicable thereto during the term of the lease and upon the
expiration thereof.
(ii) As of the Effective Time, the Retained Companies will
not own in fee any real property or interests in real property.
Section 4.01(i) of the Company Disclosure Schedule sets forth a
complete list of all leases of real property or interests in real
property other than those which constitute Ancillary Agreements to
which any of the Retained Companies will be a party as of the
Effective Time (individually, a "Leased Property") and identifies any
material base leases and reciprocal easement or operating agreements
relating thereto. The Company and its subsidiaries have, and as of
the Effective Time the Retained Companies will have, good and valid
title to the lease hold estates in all Leased Property, in each case
free and clear of all Liens except for Permitted Liens.
(iii) Except for the Excluded Assets and except as expressly
contemplated by one or more of the Transaction Agreements, as of the
Effective Time none of the GBC Companies will use in the conduct of
any of
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its businesses or own or have rights to use any assets or property,
whether tangible or intangible, which are also used in the conduct of
the Retained Business. As of the Effective Time, no GBC Company will
be a party to any Contract with any Retained Company (other than the
Transaction Agreements), including, without limitation, any Contract
providing for the furnishing of services or rental of real or personal
property to or from, or otherwise relating to the business or
operations of, the Retained Companies or pursuant to which any
Retained Company may have any obligation or liability. As of the
Effective Time, no Retained Company will have any liability or
obligation of any nature (whether accrued, absolute, contingent or
other wise) in any way relating to the business, operations,
indebtedness, assets or liabilities of any of the GBC Companies.
(iv) "Permitted Liens" shall mean those Liens (A) referred
to in Section 4.01(i) of the Company Disclosure Schedule, (B) for
Taxes not yet due or payable or being contested in good faith,
(C) that constitute easements, covenants, rights-of-way and other
similar matters of record, (D) that constitute mechanics', carriers',
workers' or like liens incurred in the ordinary course of business
consistent with past practices, (E) which constitute other
imperfections of title or encumbrances which do not individually or in
the aggregate materially impair the continued use and operation of the
assets to which they relate in the Retained Business as presently
conducted or (F) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and social security, retirement and other
similar legislation relating to amounts not yet due or payable.
(j) Litigation. Except as disclosed in the Filed SEC
Documents and as set forth in Section 4.01(j) of the Company
Disclosure Schedule, there is no suit, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries that
individually or in the aggregate would reasonably be expected to
(i) have a material adverse effect on the Retained Companies or on the
GBC Companies, (ii) impair the ability of the Retained Companies or
the GBC
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26
Companies, as the case may be, to consummate the transactions
contemplated by, or to satisfy their obligations under, the
Transaction Agreements or (iii) delay in any material respect or
prevent the consummation of any of the transactions contemplated by
the Transaction Agreements, nor is there any judgment, order, decree,
statute, law, ordinance, rule or regulation of any Governmental Entity
or arbitrator outstanding against the Company or any of its
subsidiaries having, or which would reasonably be expected to have,
any effect referred to in clause (i), (ii) or (iii) above.
(k) Absence of Changes in Benefit Plans. Except (i) as
disclosed in the Filed SEC Documents, (ii) for normal increases in the
ordinary course of business consistent with past practice or as
required by law or (iii) as contemplated by the Distribution
Agreement, since the date of the most recent audited financial
statements included in the Filed SEC Documents, there has not been any
adoption or amendment in any material respect by any of the Retained
Companies of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other material plan providing material
benefits to any current or former employee, officer or director of, or
consultant to, the Company or any of its subsidiaries who, at the
Effective Time, will be a Retained Employee. Except as disclosed in
the Filed SEC Documents or Section 4.01(k) of the Company Disclosure
Schedule, there exist no consulting, employment, severance or
termination agreements currently in effect between the Company or any
of its subsidiaries and any current or former employee, officer or
director of the Company or any of its subsidiaries who, at the
Effective Time, will be a Retained Employee.
(l) ERISA Compliance. (i) Section 4.01(l) of the Company
Disclosure Schedule lists each "employee pension benefit plan" (as
defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) (a "Pension Plan"), each "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA) (a
"Welfare Plan"), each bonus, stock ownership,
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27
stock purchase, stock option, stock bonus, restricted stock, deferred
compensation plan or arrangement and each other employee fringe
benefit plan or arrangement maintained, contributed to or required to
be maintained or contributed to by the Company or any of its
subsidiaries or any other person or entity that, together with the
Company, is or was treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code (each, a "Commonly Controlled Entity")
which is currently in effect for the benefit of any current or former
employees, officers, directors or independent contractors of (x) any
of the Retained Companies or (y) GBC or any of its subsidiaries, in
each case except for any plan, arrangement or policy in respect of
which all liabilities will be Assumed Liabilities (the "Benefit
Plans"). The Company has delivered or made available to Parent true,
complete and correct copies of (x) the two most recent annual reports
on Form 5500 filed with the Internal Revenue Service with respect to
each Benefit Plan (if any such report was required), (y) the most
recent summary plan description for each Benefit Plan for which such
summary plan description is required and (z) each currently effective
trust agreement, insurance or group annuity contract and each other
funding or financing arrangement relating to any Benefit Plan.
(ii) Each Benefit Plan has been administered and operated
in compliance with its terms, the terms of each applicable collective
bargaining agreement and the applicable provisions of ERISA, the Code
and all other applicable laws except where the failure to be in
compliance would not have a material adverse effect on the Retained
Companies. Neither the Company, any of its subsidiaries nor any
Commonly Controlled Entity has any liability related to any Benefit
Plan (other than (x) claims for benefits in the ordinary course and
(y) claims for contributions in the ordinary course) which would have
a material adverse effect on the Retained Companies.
(iii) Consummation of the transactions contemplated by the
Transaction Agreements will not give rise to any liability (including
any withdrawal liability under Title IV of ERISA) with respect to any
Benefit Plan under the terms of such Benefit Plan, ERISA, the Code or
any other applicable law which would
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have a material adverse effect on the Retained Companies.
(iv) Except as set forth in Section 4.01(l) of the Company
Disclosure Schedule or as provided in this Agreement or in the
Distribution Agreement, no Retained Employee will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Benefit Plan or under any
employment, severance, termination or compensation agreement or as a
result of the transactions contemplated by the Transaction Agreements.
(v) All Benefit Plans covering foreign employees comply in
all material respects with applicable local law, except where the
failure to so comply would not have a material adverse effect on the
Retained Companies. The Company and its subsidiaries have no unfunded
liabilities in any amount with respect to any Benefit Plan covering
foreign employees that would have a material adverse effect on the
Retained Companies.
(vi) As of the Effective Time, (A) the Retained Companies
will employ only employees who are Retained Employees and (B) the
Retained Companies will not sponsor, or have any liability with
respect to, any Benefit Plan or Retained Employee other than as
provided in this Agreement, the Distribution Agreement or the
Post-Closing Covenants Agreement.
(m) Taxes. Except as set forth in Section 4.01(m) of the
Company Disclosure Schedule:
(i) As used in this Agreement, "Treasury Regula tions" refer
to the Treasury Department regulations promulgated under the Code;
(ii) No Liens for Taxes exist with respect to any of the
assets or properties of any of the Retained Companies, except for
statutory Liens for Taxes not yet due or payable or that are being
contested in good faith;
(iii) All federal, state and local, domestic and foreign,
material Tax Returns required to be filed by or on behalf of any of
the Retained Companies, or any consolidated, combined, affiliated or
unitary group of
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which any of the Retained Companies is or has ever been a member
(together, a "Company Affiliated Group"), have been timely filed or
requests for extensions have been timely filed and any such extensions
have been granted and have not expired;
(iv) Each such Tax Return was complete and correct in all
material respects;
(v) All material Taxes with respect to taxable periods
covered by such Tax Returns and all other material Taxes for which any
of the Retained Companies is liable (together, the "Relevant Taxes")
have been paid in full, or reserves therefor have been established in
accordance with GAAP on the balance sheet contained in the Filed SEC
Documents;
(vi) All U.S. Federal income Tax Returns filed by or on
behalf of each Company Affiliated Group have been examined by and
settled with the Internal Revenue Service, or the statute of
limitations with respect to the relevant Tax liability has expired,
for all taxable periods through and including the period ended on the
date on which the Effective Time occurs;
(vii) All Relevant Taxes due with respect to any completed
and settled audit, examination or deficiency litigation with any Tax
Authority have been paid in full;
(viii) There is no audit, examination, deficiency, or refund
litigation pending with respect to any Relevant Taxes and during the
past three years no Tax Authority has given written notice of the
commencement of any audit, examination or deficiency litigation, with
respect to any Relevant Taxes;
(ix) None of the Retained Companies is bound by any currently
effective private ruling, closing agreement or similar agreement with
any Tax Authority relating to a material amount of Taxes;
(x) To the best knowledge of the Company, none of the
Retained Companies shall be required to include in a taxable period
ending after the Effective Time, any taxable income attributable to
income that economically accrued in a prior taxable period as a result
of
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Section 481 of the Code, the installment method of accounting or any
comparable provision of state or local Tax law;
(xi) To the best knowledge of the Company, (A) no person has
made with respect to any of the Retained Companies, or with respect to
any property held by any of the Retained Companies, any consent under
Section 341 of the Code, (B) no material amount of property of the
Retained Companies is "tax exempt property" within the meaning of
Section 168(h) of the Code, (C) no material amount of assets of the
Retained Companies are subject to a lease under Section 7701(h) of the
Code, and (D) none of the Retained Companies is a party to any
material lease made pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect prior to the date of
enactment of the Tax Equity and Fiscal Responsibility Act of 1982;
(xii) None of the Retained Companies has been a member for
any taxable period ending after 1991 of any affiliated, consolidated,
combined or unitary group for purposes of filing Tax Returns or paying
Taxes other than the group of which it is presently a member;
(xiii) To the best knowledge of the Company, immediately
following the Merger, none of the Retained Companies will have any
material amount of income or gain that has been deferred under
Treasury Regulation Section 1.1502-13, or any material excess loss
account in another Retained Company under Treasury Regulation
Section 1.1502-19; and
(xiv) The Company is not aware of any action that it has
taken which would disqualify the Company Distri bution as a
transaction described in Section 355 of the Code and/or as part of a
transaction described in Section 368(a)(1)(D) of the Code or
disqualify the Merger as a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code.
(xv) There are no material undisclosed liabili ties in
respect of the Benefits Plans that individually or in the aggregate
would have a material adverse effect on the GBC Companies.
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(n) Voting Requirements. The Company Stockholder Approval
is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve and adopt this Agreement
and approve the other Transaction Agreements and the transactions
contemplated hereby and thereby.
(o) State Takeover Statutes. The Board of Directors of the
Company has approved the terms of this Agreement and the other
Transaction Agreements and the consummation of the Merger and the
other transactions contemplated by this Agreement and the other
Transaction Agreements (solely, in the case of the Stockholder
Agreement, for the purpose of rendering Section 203 of the DGCL
inapplicable to the Merger and the other transactions contemplated
hereby), and such approval is sufficient to render inapplicable to the
Merger and the other transactions contemplated by this Agreement and
the other Transaction Agreements the provisions of Section 203 of the
DGCL. To the best of the Company's knowledge, no other state takeover
statute or similar statute or regulation applies or purports to apply
to the Merger, this Agreement, the other Transaction Agreements or any
of the transactions contemplated by this Agreement or the other
Transaction Agreements and no provision of the Restated Certificate of
Incorporation or Restated By-laws of the Company or certificate of
incorporation or by-laws (or comparable organizational documents) of
any Retained Subsidiary or any GBC Company would, directly or
indirectly, restrict or impair the ability of Parent to vote, or
otherwise to exercise the rights of a stockholder with respect to,
shares of any Retained Company that may be acquired or controlled by
Parent.
(p) Labor Matters. Neither the Company nor any of the
Retained Subsidiaries is the subject of any suit, action or proceeding
which is pending or, to the knowledge of the Company, threatened,
asserting that the Company or any Retained Subsidiary has committed an
unfair labor practice (within the meaning of the National Labor
Relations Act or applicable state statutes) or seeking to compel the
Company or any Retained Subsidiary to bargain with any labor
organization as to wages and conditions of employment, in any such
case, that is reasonably expected to result in a material liability of
the Retained Companies. No
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strike or other labor dispute involving the Company or any of the
Retained Subsidiaries is pending or, to the knowledge of the Company,
threatened, and, to the knowledge of the Company, there is no activity
involving any employees of the Company or its subsidiaries who, as of
the Effective Time, will be Retained Employees seeking to certify a
collective bargaining unit or engaging in any other organizational
activity, except for any such dispute or activity which would not have
a material adverse effect on the Retained Companies. Except as set
forth in Section 4.01(p) of the Company Disclosure Schedule, neither
the Company nor any of the Retained Subsidiaries is a party to, or
bound by, any collective bargaining agreement or other Contract with a
labor union or labor organization. The Company and the Retained
Subsidiaries have complied in all material respects with all laws
relating to wages, hours, collective bargaining and the payment of
social security and similar Taxes, and no person has, to the knowledge
of the Company, asserted that the Company or any Retained Subsidiary
is liable in any material amount for any arrears of wages or any Taxes
or penalties for failure to comply with any of the fore going.
(q) Brokers. No broker, investment banker, financial
advisor or other person, other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., the fees and
expenses of which will be paid by GBC, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by the Transaction
Agreements based upon arrangements made by or on behalf of the Company
or any of its subsidiaries. The Company has furnished to Parent true
and complete copies of all agreements under which any such fees or
expenses may be payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees may be
payable.
(r) Opinion of Financial Advisor. The Company has received
the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., dated the date of this Agreement,
to the effect that, as of such date, the consideration to be received
by the Company's stockholders in the Merger is fair to such
stockholders from a financial point of view, and a
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signed copy of such opinion has been delivered to Parent.
(s) Compliance with Applicable Laws. The Company and its
subsidiaries have, and as of the Effective Time each of the Retained
Companies will have, in effect all Permits necessary for them to own,
lease or operate their properties and assets and to carry on the
Retained Business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults
under Permits which lack or defaults individually or in the aggregate
would not have a material adverse effect on the Retained Companies.
Except as disclosed in the Filed SEC Documents, the Company and its
subsidiaries are in compliance with all judgments, orders, decrees,
statutes, laws, ordinances, rules and regulations of any Governmental
Entity applicable to them, except for possible noncompliance which
individually or in the aggregate would not have a material adverse
effect on the Retained Companies or on the GBC Companies or impair the
ability of the Retained Companies or the GBC Companies, as the case
may be, to consummate the transactions contemplated by, or to satisfy
their obligations under, the Transaction Agreements. Nothing in this
Section 4.01(s) shall relate to compliance with or Permits under
Environmental Laws (as defined in Section 4.01(t)), which is the
subject of Section 4.01(t).
(t) Environmental Matters. (i) Except as disclosed in the
Filed SEC Documents, the Company and its subsidiaries are in
compliance with all applicable Environmental Laws, which compliance
includes the pos session of permits and governmental authorizations re
quired under applicable Environmental Laws ("Environmental Permits")
and compliance with the terms and conditions thereof, in each case
with respect to the Retained Business, except where such
non-compliance individually or in the aggregate would not result in a
material adverse effect on the Retained Companies.
(ii) Except as disclosed in the Filed SEC Docu ments or as
set forth in Schedule 4.01(t) of the Company Disclosure Schedule,
there are no Environmental Claims (as defined below) pending or, to
the knowledge of the Company, threatened against the Company or any
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of its subsidiaries, in each case with respect to the Retained
Business, that would reasonably be expected to result in a material
adverse effect on the Retained Companies.
(iii) Except as disclosed in the Filed SEC Documents or as
set forth in Section 4.01(t) of the Company Disclosure Schedule, the
properties presently or, to the knowledge of the Company, formerly
owned, leased or operated by the Company or its subsidiaries
(including groundwater under the properties) (the "Properties") do not
contain any Hazardous Substance (as defined below) other than as
permitted under applicable Environmental Law, do not, and have not,
contained any underground storage tanks and have not been used as a
disposal site; provided, however, that with respect to Properties
formerly owned, leased or operated by the Company or its subsidiaries,
such representation is limited to the period prior to the disposition
of such Properties by the Company or its subsidiaries;
(iv) Except as disclosed in the Filed SEC Documents or as set
forth in Section 4.01(t) of the Company Disclosure Schedule, no
Hazardous Substance has been disposed of or transported from any of
the Properties during the time any such Property was owned, leased or
operated by the Company or any of its subsidiaries, other than as
permitted under applicable Environmental Law;
(v) Except as disclosed in the Filed SEC Documents or as set
forth in Section 4.01(t) of the Company Disclosure Schedule, the
Company and the Retained Subsidiaries have not become obligated,
whether by operation of law or through contractual agreement, to
indemnify any other person or otherwise to assume liability for any
claim brought pursuant to any Environmental Law;
(vi) Except as disclosed in the Filed SEC Documents or as set
forth in Section 4.01(t) of the Company Disclosure Schedule, all
rights to contractual indemnification for the benefit of the Company
or any Retained Subsidiary relating to any Retained Liability
resulting from any claim under Environmental Law are freely
transferable and enforceable in connection with the Merger; and
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(vii) As used in this Agreement:
(A) the term "Environmental Claim" means any claim,
action, investigation or written notice to the Company or any
of its subsidiaries by any per son alleging potential
liability (including, with out limitation, potential
liability for investi gatory costs, cleanup costs,
governmental response costs, natural resource damages,
personal injuries or penalties) arising out of, based on or
result ing from (a) the presence, or release into the
environment, of any Hazardous Substance at any location,
whether or not owned or operated by the Company or any of its
subsidiaries or (b) circum stances forming the basis of any
violation or alleged violation of any applicable
Environmental Law;
(B) the term "Environmental Laws" means all
federal, state and local, domestic and foreign, laws and
regulations, as in effect and as interpreted as of the date
of this Agreement, relating to pollution, protection of the
environ ment, including, without limitation, laws and
regulations relating to emissions, discharges, releases or
threatened releases of Hazardous Sub stances, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
Hazardous Sub stances; and
(C) the term "Hazardous Substance" means chemicals,
pollutants, contaminants, hazardous wastes, toxic substances,
polychlorinated biphenyls, radon, asbestos and oil and
petroleum products, by-products and fractions.
(u) Intellectual Property. As used herein, "Intellectual
Property" means domestic and foreign patents, patent applications,
written invention disclosures to be filed or awaiting filing
determinations, trademark and service ▇▇▇▇ applications, registered
trademarks, registered service marks, registered copyrights,
trademarks, service marks and trade names. Section 4.01(u) of the
Company Disclosure Schedule sets forth a list of all material
registered Intellectual Property in which the Company
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or any of its subsidiaries has an interest as of the date hereof and
which is used in connection with the Retained Business as currently
conducted. Except as set forth in Section 4.01(u) of the Company
Disclosure Schedule, the Company and its subsidiaries own or have the
right to use, and as of the Effective Time the Retained Companies will
own or have the right to use, all material Intellectual Property and
material trade secrets, inventions, know-how, formulae, processes,
procedures, research records, computer software (other than any
licensed third party software), records of inventions, test
information, market surveys, marketing know-how and unregistered
copyrights ("Technology") used in connection with the Retained
Business as currently conducted. The Company and its subsidiaries
have used commercially reasonable measures to protect the secrecy,
confidentiality and value of any Technology used in connection with
the Retained Business. To the Company's knowledge, no Technology used
in connection with the Retained Business has been used, divulged or
appropriated for the benefit of any person other than the Retained
Companies, except where such use, divulgence or appropriation would
not individually or in the aggregate have a material adverse effect on
the Retained Companies. Except as set forth in Section 4.01(u) of the
Company Disclosure Schedule, as of the date hereof, neither the
Company nor any of its subsidiaries has made any pending claim in
writing of a violation, infringement, misuse or misappropriation by
others of rights of the Company and its subsidiaries to or in
connection with any material Intellectual Property or Technology used
in connection with the Retained Business. There are no interferences
or other contested inter partes proceedings, either pending or, to the
knowledge of the Company, threatened, in any domestic copyright
office, patent and trademark office or any other domestic Governmental
Entity relating to any pending application with respect to any
material Intellectual Property used in connection with the Retained
Business that would have a material adverse effect on the Retained
Companies. As used in this Section 4.01(u), the term "material", when
applied to Intellectual Property or Technology, means that the
Intellectual Property or Technology, as the case may be, is used in a
significant manner to conduct the Retained Business as it is currently
conducted.
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(v) Contracts. Except for (w) Contracts executed by Parent
or one of its subsidiaries on behalf of the Company or a subsidiary of
the Company, (x) Contracts the parties to which consist solely of
Parent or any of its subsidiaries, on the one hand, and the Company or
any of its subsidiaries, on the other hand, (y) the Transaction
Agreements or (z) as set forth in Section 4.01(v) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries
with respect to the Retained Business is, and none of the Retained
Companies will be as of the Effective Time, a party to or bound by any
of the following:
(i) employment Contract that has an aggregate future
liability in excess of $100,000 and is not terminable by one of the
Retained Companies by notice of not more than 60 days for a cost of
less than $100,000;
(ii) covenant not to compete (other than pursuant to any
radius restriction contained in any lease, reciprocal easement or
development, construction, operating or similar agreement);
(iii) Contract with any current or former employee, officer
or director of the Company or any of its subsidiaries (other than
employment agreements covered by clause (i) above);
(iv) lease, sublease or similar agreement with any person
(other than any of the Retained Companies) under which any of the
Retained Companies is a lessor or sublessor of, or makes available for
use to any person (other than the Retained Companies), (A) any
property of the Retained Companies or (B) any portion of the premises
otherwise occupied by any of the Retained Companies;
(v) lease, sublease or similar agreement with any person
(other than any of the Retained Companies) under which (A) any of the
Retained Companies is a lessee of, or holds or uses, any machinery,
equipment, vehicle or other tangible personal property owned by any
person or (B) any of the Retained Companies is a lessor or sublessor
of, or makes available for use by any person, any tangible personal
property owned or leased by any of the Retained Companies, in any such
case which has
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an aggregate future liability or receivable, as the case may be, in
excess of $50,000 and is not terminable by one of the Retained
Companies by notice of not more than 60 days for a cost of less than
$50,000;
(vi) (A) continuing Contract for the future purchase of
materials, supplies or equipment, (B) management, service, consulting
or other similar type of Contract or (C) advertising Contract, in any
such case which has an aggregate future liability to any person (other
than any of the Retained Companies) in excess of $50,000 and is not
terminable by one of the Retained Companies by notice of not more than
60 days for a cost of less than $50,000;
(vii) material license, option or other Contract relating in
whole or in part to the Intellectual Property set forth in Section
4.01(u) of the Company Disclosure Schedule or other material
trademarks or copyrights or computer software used primarily in con
nection with the Retained Business as currently conducted (other than
licenses for the use of readily available, off-the-shelf software);
(viii) Contract under which any of the Retained Companies has
borrowed any money from, or issued any note, bond, debenture or other
evidence of indebtedness to, any person (other than any of the
Retained Companies) or any other note, bond, debenture or other
evidence of indebtedness issued to any person (other than any of the
Retained Companies);
(ix) Contract (including so-called take-or-pay or keepwell
agreements) under which (A) any person (including any of the Retained
Companies) has directly or indirectly guaranteed indebtedness,
liabilities or obligations of any of the Retained Companies or the GBC
Companies or (B) any of the Retained Companies has directly or
indirectly guaranteed indebtedness, liabilities or obligations of any
person (in each case other than endorsements for the purpose of
collection in the ordinary course of business);
(x) Contract under which any of the Retained Companies has,
directly or indirectly, made any loan, advance, extension of credit or
capital contribution to, or investment in, any person (other than any
of the
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Retained Companies and other than to officers and employees of the
Retained Companies for travel, business or relocation expenses in the
ordinary course of business);
(xi) mortgage, pledge, security agreement, deed of trust or
other instrument granting a Lien upon any property of any of the
Retained Companies;
(xii) Contract under which any of the Retained Companies is
or may become obligated to indemnify any other person (other than any
of the Retained Companies) or otherwise to assume any material
liability with respect to liabilities relating to any current or
former business of the Company, any of its subsidiaries or any
predecessor person;
(xiii) programming agreement that has an aggregate future
liability that the Retained Companies are obligated to pay in excess
of $75,000; or
(xiv) other Contract which has an aggregate future liability
to any person (other than the Retained Companies) in excess of $75,000
and is not terminable by one of the Retained Companies by notice of
not more than 60 days for a cost of less than $75,000.
Except as set forth in Section 4.01(v) of the Company Disclosure
Schedule and subject to obtaining the consents set forth in
Section 4.01(d) of the Company Disclosure Schedule, all Contracts
listed in Section 4.01(v) of the Company Disclosure Schedule are
valid, binding and in full force and effect and are enforceable by the
Company or its relevant subsidiary (and, at the Effective Time, will
be enforceable by one of the Retained Companies) in accordance with
its terms. The Company and its subsidiaries have performed all
material obligations required to be performed by them to date under
the Contracts listed in the Company Disclosure Schedule and they are
not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any material respect thereunder and, to
the knowledge of the Company, no other party to any of the Contracts
listed in the Company Disclosure Schedule is (with or without the
lapse of time or the giving of notice, or both) in breach or default
in any material respect thereunder.
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(w) Tax Representations. The Company does not have any
reason to believe that it or any of its subsidiaries will not be able
to give appropriate representations (i) to the Internal Revenue
Service necessary to receive the Tax Rulings or (ii) to Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Company, and to Cravath,
Swaine & ▇▇▇▇▇, counsel to Parent, if opinions of counsel will be
received in lieu of any Merger Ruling pursuant to Section 7.01(g).
SECTION 4.02. Representations and Warranties of Parent and
Sub. Except as set forth with respect to a specifically identified
representation and warranty on the disclosure schedule delivered by Parent to
the Company simultaneously with the execution of this Agreement (the "Parent
Disclosure Schedule"), Parent and Sub represent and warrant to the Company as
follows:
(a) Organization, Standing and Corporate Power. Each of
Parent and Sub is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is
incorporated. Each of Parent and Sub is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed or to
be in good standing individually or in the aggregate would not have a
material adverse effect on Parent and its subsidiaries. Each of
Parent and Sub has the requisite corporate power and authority to
carry on its businesses as they are now being conducted. Parent has
delivered or made available to the Company prior to the execution of
this Agreement complete and correct copies of its Restated Articles of
Incorporation and By-laws and the Certificate of Incorporation and
By-laws of Sub, in each case as amended to the date hereof.
(b) Capital Structure. The authorized capital stock of
Parent consists of 1,100,000,000 shares of Parent Common Stock and
25,000,000 shares of preferred stock, par value $1.00 per share
("Parent Preferred Stock"). At the close of business on January 31,
1997, (i) 607,377,291 shares of Parent Common Stock were issued and
outstanding, (ii) 3,600,000 shares of Parent Preferred Stock, all
denominated as Series C Conversion
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Preferred Stock, were issued and outstanding, (iii) 3,152,752 shares
of Parent Common Stock were held by Parent in its treasury,
(iv) 88,147,350 shares of Parent Common Stock were reserved for
issuance pursuant to Parent's 1993 Long Term Incentive Plan, Parent's
1991 Long Term Incentive Plan, Parent's 1984 Long Term Incentive Plan
and Parent's Deferred Compensation and Stock Plan for Directors and
other stock-based plans and agreements (the "Parent Stock Plans"),
(v) 36,000,000 shares of Parent Common Stock were reserved for
issuance upon conversion of the Series C Conversion Preferred Stock
and (vi) 5,000,000 shares of Parent Preferred Stock, all denominated
as Series A Participating Preferred Stock (subject to increase and
adjustment as set forth in the Rights Agreement (as defined below) and
the Certificate of Designations attached as an exhibit thereto) were
reserved for issuance in connection with the rights (the "Rights") to
purchase shares of Parent Preferred Stock pursuant to the Rights
Agreement dated as of December 28, 1995, between Parent and First
Chicago Trust Company of New York, as Rights Agent (the "Rights
Agreement"). Except as set forth above, at the close of business on
January 31, 1997, no shares of capital stock or other voting
securities of Parent were issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of Parent are,
and all shares which may be issued pursuant to this Agreement will be,
when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. At the close of
business on January 31, 1997, there were no notes, bonds, debentures
or other indebtedness of Parent having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which shareholders of Parent may vote. Except
as set forth above or as otherwise contemplated by this Agreement, at
the close of business on January 31, 1997, there were no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Parent is a party or
by which it is bound obligating Parent to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of Parent or obligating Parent to
issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or
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undertaking. At the close of business on January 31, 1997, there were
no outstanding contractual obligations of Parent to repurchase, redeem
or otherwise acquire any shares of capital stock of Parent. As of the
date of this Agreement, the authorized capital stock of Sub consists
of 1,000 shares of common stock, par value $1.00 per share, all of
which have been validly issued, are fully paid and nonassessable and
are owned by Parent free and clear of any Lien.
(c) Authority; Noncontravention. Each of Parent and Sub has
the requisite corporate power and authority to execute, deliver and
perform each Transaction Agreement to which it is or will be a party
and to consummate the transactions contemplated thereby. The
execution, delivery and performance by Parent and Sub of each
Transaction Agreement to which it is or will be a party and the
consummation by Parent and Sub of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on
the part of Parent and Sub, and no other corporate proceedings on the
part of Parent or Sub are necessary to authorize any Transaction
Agreement to which it is or will be a party or for Parent or Sub to
consummate the transactions so contemplated (other than, if required
by the applicable rules of the NYSE, the affirmative vote of the
holders of a majority of the votes cast at the Parent Shareholders
Meeting to authorize the issuance of Parent Common Stock in connection
with the Merger, provided that the total number of votes cast at the
Parent Shareholders Meeting on the proposal represents more than 50%
of the outstanding shares of Parent Common Stock entitled to vote
generally in an annual election of directors (the "Parent Shareholder
Approval")). This Agreement has been duly executed and delivered by
Parent and Sub and the Stockholder Agreement has been duly executed
and delivered by Parent and, assuming this Agreement and the
Stockholder Agreement constitute a valid and binding obligation of the
Company or the Principal Stockholders, as applicable, each constitutes
a valid and binding obligation of Parent and Sub, as applicable,
enforceable against Parent and Sub, as applicable, in accordance with
its terms. Each Transaction Agreement (other than this Agreement and
the Stockholder Agreement) to which Parent will be a party when
executed and delivered will, assuming that
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such Transaction Agreement will constitute a valid and binding
obligation of each Retained Company or GBC Company party thereto,
constitute a valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms. None of the execution,
delivery or performance by Parent and Sub of each Transaction
Agreement to which either of them is or will be a party or the
consummation by Parent and Sub of the transactions contemplated
thereby will conflict with, or result in a violation or breach of, or
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or
acceleration of any obligation or loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or
assets of Parent, Sub or any of Parent's other subsidiaries under,
(i) the Restated Articles of Incorporation or By-laws of Parent, the
Certificate of Incorporation or By-laws of Sub or the certificate of
incorporation or by-laws (or comparable organizational documents) of
such other subsidiary, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, contract or other agreement, instrument,
license, franchise, permit or concession applicable to Parent, Sub or
such other subsidiary or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred
to in the following sentence, any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent, Sub or such
other subsidiary or their respective properties or assets, other than,
in the case of clauses (ii) and (iii), any such conflicts, violations,
breaches, defaults, rights or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Parent and
its subsidiaries, (y) impair in any material respect the ability of
Parent and Sub to consummate the transactions contemplated by, or to
satisfy their obligations under, the Transaction Agreements or
(z) delay in any material respect or prevent the consummation of any
of the transactions contemplated by the Transaction Agreements.
Except for consents, approvals, orders, authorizations, registrations,
declarations or filings as may be required under, and other applicable
requirements of, the Exchange Act, the Securities Act, the HSR Act and
any foreign competition laws, filings under state securities or "blue
sky" laws, filings with
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the NYSE, approvals of and filings with the FCC under the
Communications Act and the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other jurisdictions in
which the Company is qualified to do business and other consents,
approvals, orders, authorizations, registrations, declarations,
filings and agreements expressly provided for in the Transaction
Agreements, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent or Sub in connection with the
execution, delivery or performance by Parent and Sub of each
Transaction Agreement to which either of them is or will be a party or
the consummation by Parent and Sub of the transactions contemplated
thereby (except where the failure to obtain such consents, approvals,
orders or authorizations, or to make such registrations, declarations
or filings, would not, individually or in the aggregate, have a
material adverse effect on Parent and its subsidiaries or impair the
ability of Parent and Sub to consummate the transactions contemplated
by, or to satisfy their obligations under, the Transaction
Agreements).
(d) SEC Documents; Undisclosed Liabilities. Parent has
filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since January 1, 1995 (the
"Parent SEC Documents"). As of their respective dates, the Parent SEC
Documents complied in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to
such Parent SEC Documents, and none of the Parent SEC Documents when
filed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any Parent SEC Document has been revised or
superseded by a later filed Parent SEC Document, none of the Parent
SEC Documents contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
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necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of Parent included in the Parent SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except,
in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Parent and
its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the Filed
Parent SEC Documents (as defined in Section 4.02(f)), and except for
liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most
recent consolidated balance sheet included in the Filed Parent SEC
Documents, neither Parent nor any of its subsidiaries has any material
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be recognized or
disclosed on a consolidated balance sheet of Parent and its
consolidated subsidiaries or in the notes thereto.
(e) Information Supplied. None of the information supplied
or to be supplied by Parent or Sub specifically for inclusion or
incorporation by reference in (i) the Registration Statements will, at
the time they become effective under the Securities Act or the
Exchange Act, as applicable, at the time of any post-effective
amendments or supplements thereto, at the Effective Time and at the
time of the Parent Shareholders Meeting, if applicable, in the case of
the Parent Form S-4, or at the time of the Company Stockholders
Meeting and the Time of Distribution, in the case of the GBC Form 10,
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, or (ii) the Proxy
Statement-Prospectus will, at the date it is first mailed to the
Company's
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stockholders or, if applicable, Parent's shareholders, or at the time
of the Company Stockholders Meeting or, if applicable, the Parent
Shareholders Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Parent
Form S-4 will comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations
thereunder, and, if the Parent Shareholder Approval is required, the
Proxy Statement-Prospectus 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 by Parent or Sub with respect to statements made or incorporated
by reference in the Parent Form S-4 or the Proxy Statement-Prospectus
based on information supplied by the Company specifically for
inclusion or incorporation by reference therein.
(f) Absence of Certain Changes or Events. Except as
disclosed in the Parent SEC Documents filed and publicly available
prior to the date of this Agreement (as amended to the date of this
Agreement, the "Filed Parent SEC Documents"), in connection with the
Parent Distribution or as otherwise expressly contemplated by the
Transaction Agreements, since the date of the most recent audited
financial statements included in the Filed Parent SEC Documents, there
has not been any event, change or development which individually or in
the aggregate has had or would reasonably be expected to have a
material adverse effect on Parent and its subsidiaries or impair the
ability of Parent and Sub to consummate the transactions contemplated
by, or to satisfy their obligations under, the Transaction Agreements.
(g) Litigation. Except as disclosed in the Filed Parent SEC
Documents, there is no suit, action, proceeding or investigation
pending or, to the knowledge of Parent, threatened against or
affecting Parent or any of its subsidiaries that individually or in
the aggregate would reasonably be expected to (i) have a material
adverse effect on Parent and its subsidiaries, (ii) impair the ability
of Parent and Sub to consummate the transactions contemplated by, or
to
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satisfy their obligations under, the Transaction Agreements or
(iii) delay in any material respect or prevent the consummation of any
of the transactions contemplated by the Transaction Agreements, nor is
there any judgment, order, decree, statute, law, ordinance, rule or
regulation of any Governmental Entity or arbitrator outstanding
against Parent or any of its subsidiaries having, or which would
reasonably be expected to have, any effect referred to in clause (i),
(ii) or (iii) above.
(h) Taxes. (i) All federal, state and local, domestic and
foreign, material Tax Returns required to be filed by or on behalf of
any of Parent or any of its subsidiaries, or any consolidated,
combined, affiliated or unitary group of which any of Parent or any of
its subsidiaries is or has ever been a member, have been timely filed
or requests for extensions have been timely filed and any such
extensions have been granted and have not expired;
(ii) Each such Tax Return was complete and correct in all
material respects;
(iii) All material Taxes with respect to taxable periods
covered by such Tax Returns and all other material Taxes for which any
of Parent or any of its subsidiaries are liable have been paid in
full, or reserves therefor have been established in accordance with
GAAP on the balance sheet contained in the Parent Filed SEC Documents;
and
(iv) Parent is not aware of any action that it or any of its
subsidiaries has taken which would disqualify the Company Distribution
as a transaction described in Section 355 of the Code and/or as part
of a transaction described in Section 368(a)(1)(D) of the Code or
disqualify the Merger as a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code.
(i) Voting Requirements. If required by the applicable
rules of the NYSE, the Parent Shareholder Approval is the only vote of
the holders of any class or series of Parent's capital stock necessary
to authorize the issuance of Parent Common Stock in connection with
the Merger.
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(j) Brokers. No broker, investment banker, financial
advisor or other person, other than Evercore Partners Inc., the fees
and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by the
Transaction Agreements based upon arrangements made by or on behalf of
Parent or Sub.
(k) Compliance with Applicable Laws. Parent and its
subsidiaries have in effect all Permits necessary for them to own,
lease or operate their properties and assets and to carry on their
businesses as now conducted, and there has occurred no default under
any such Permit, except for the lack of Permits and for defaults under
Permits which lack or defaults individually or in the aggregate would
not have a material adverse effect on Parent and its subsidiaries.
Except as disclosed in the Filed Parent SEC Documents, Parent and its
subsidiaries are in compliance with all judgments, orders, decrees,
statutes, laws, ordinances, rules and regulations of any Governmental
Entity applicable to them, except for possible noncompliance which
individually or in the aggregate would not have a material adverse
effect on Parent and its subsidiaries.
(l) Tax Representations. Parent does not have any reason to
believe that it or any of its subsidiaries will not be able to give
appropriate representations (i) to the Internal Revenue Service
necessary to receive the Tax Rulings or (ii) to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Company, and to Cravath, Swaine &
▇▇▇▇▇, counsel to Parent, if opinions of counsel will be received in
lieu of any Merger Ruling pursuant to Section 7.01(g).
(m) Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby and
has engaged in no other business other than incident to its creation
and this Agreement and the transactions contemplated hereby.
(n) Ownership of Company Common Stock. As of the date of
this Agreement, none of Parent or any of its subsidiaries own any
shares of capital stock of the Company.
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ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct of Business
by the Company. During the period from the date of this Agreement to the
Effective Time, the Company shall, and shall cause its subsidiaries to, carry
on the Retained Business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted (including, without
limitation, not taking any actions out of the ordinary course of business to
generate cash, such as delaying payables or accelerating receivables) and in
compliance in all material respects with all applicable laws and regulations
and, to the extent consistent therewith, use all reasonable efforts to preserve
intact the current business organizations of the Retained Business, use
reasonable efforts to keep available the services of the current officers and
other key employees of the Retained Business and preserve its relationships
with those persons having business dealings with the Retained Business to the
end that the goodwill and ongoing businesses of the Retained Business shall be
unimpaired at the Effective Time. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time, the Company agrees as to itself and its subsidiaries that except for the
Restructuring and the Company Distribution or as otherwise expressly
contemplated by the Transaction Agreements:
(i) Dividends. The Company and its subsidiaries shall not
(x) declare, set aside or pay any dividends or other distributions
(whether in cash, stock or property) with respect to any of the
Company s capital stock, other than regular quarterly cash dividends
or (y) split, combine or reclassify any of the Company s capital stock
or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock.
(ii) Issuance of Securities. The Company and its
subsidiaries shall not issue, deliver, sell, pledge or otherwise
encumber any shares of capital stock of any of the Retained Companies,
any other voting securities or any securities convertible into, or any
options, warrants or rights to acquire, any such shares, voting
securities or convertible securities (other than
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(x) the issuance of Company Class A Common Stock upon the exercise of
Employee Stock Options outstanding on the date of this Agreement and
in accordance with their present terms and (y) the issuance of Company
Class A Common Stock pursuant to the conversion of Company Class B
Common Stock in accordance with the terms of the Company's Restated
Certificate of Incorporation, but only if such conversion does not
involve a violation of the Stockholder Agreement).
(iii) Governing Documents. The Company shall not amend its
Restated Certificate of Incorporation or Restated By-laws, nor shall
it permit any Retained Subsidiary to amend its certificate of
incorporation, by-laws or other comparable organizational documents.
(iv) No Acquisitions. The Company and the Retained
Subsidiaries shall not acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
capital stock or assets of, or by any other manner, any business or
any corporation, limited liability company, partnership, joint
venture, association or other business organization or division
thereof, (y) any assets that individually or in the aggregate are
material to the Retained Business or (z) any Trust Certificates (as
defined in the Stockholder Agreement).
(v) No Dispositions. The Company and its subsidiaries shall
not sell, lease, license, or otherwise encumber or subject to any Lien
or otherwise dispose of any of the properties or assets of the
Retained Business, other than in the ordinary course of business
consistent with past practice or pursuant to existing contractual
obligations set forth in the Company Disclosure Schedule.
(vi) Indebtedness. The Company and the Retained Subsidiaries
shall not (x) incur any indebtedness except in the case of the Company
for indebtedness incurred in the ordinary course of business
consistent with past practice which is either repaid or retired prior
to the Effective Time or which becomes an Assumed Liability pursuant
to the terms of the Distribution Agreement or (y) make any loans,
advances, extensions of credit or capital contributions to, or
investments in, any other person, other than to officers and
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employees of the Retained Companies for travel, business or relocation
expenses in the ordinary course of business and other than investments
in any entity that was a wholly owned Retained Subsidiary before
giving effect to such investment.
(vii) Capital Expenditures. During the period from the date
of this Agreement to the Closing Date, the Company and its
subsidiaries will continue to make capital expenditures with respect
to the Retained Business in the ordinary course of business (other
than with respect to additional NASCAR Thunder retail stores) in an
amount of up to $14,599,903 (in accordance with Schedule 5.01(a)(vii)
hereto) on an annualized basis (the "Total Expenditure Amount; any
portion of the Total Expenditure Amount not spent during the period
from January 1, 1997 to the Closing Date is referred to herein as the
"Unspent Amount"); provided, however, that the Company and its
subsidiaries shall not make or agree to make any capital expenditure
or capital expenditures relating to a single project in excess of
$100,000 without the prior written consent of Parent. The Company and
its subsidiaries shall (A) make all capital expenditures necessary to
complete the build-out and opening of the NASCAR Thunder retail store
to be located in Cincinnati and (B) make such capital expenditures as
Parent requests related to the acquisition of leases for, or the
build-out and opening of, other NASCAR Thunder retail stores (such
capital expenditures made in connection with this clause (B), the
"NASCAR Expenditures"), and in each case such capital expenditures
shall not be included in the calculation of the Total Expenditure
Amount or of the Unspent Amount.
(viii) Tax Matters. With respect to the Retained Companies,
the Company and its subsidiaries shall not make any Tax election that
would reasonably be expected to have a material adverse effect on the
Retained Companies or settle or compromise any material income Tax
liability.
(ix) Contracts. The Company and its subsidiaries shall not
enter into any programming agreements with a term of more than one
year to which any Retained Company will be a party or subject. Except
in the
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ordinary course of business or except as would not reasonably be
expected to have a material adverse effect on the Retained Companies,
the Company and the Retained Subsidiaries shall not modify, amend or
terminate any material Contract to which the Company or any Retained
Subsidiary is, or at the Effective Time will be, a party or waive,
release or assign any material rights or claims thereunder.
(x) Employee Matters. Except as required by law or in the
ordinary course of business consistent with past practice, the Company
will not, nor will it permit any of its subsidiaries to, (i) increase
the compensation of any Retained Employee, (ii) enter into any
Contract with any Retained Employee regarding his employment,
compensation or benefits, or (iii) adopt any plan, arrangement or
policy which would become a Benefit Plan or amend any Benefit Plan to
the extent such adoption or amendment would create or increase any
material liability or obligation on the part of the Retained Companies
that will not either (x) be fully performed or satisfied prior to the
Effective Time or (y) be an Assumed Liability pursuant to the
Distribution Agreement.
(xi) Accounting Policies and Procedures. The Company and the
Retained Subsidiaries shall not make any change to their accounting
methods, principles or practices, except as may be required by GAAP or
Regulation S-X promulgated by the SEC or as relates only to the GBC
Companies.
(xii) Company Distribution and Merger. The Company and its
subsidiaries shall not take or cause or permit to be taken any action
prior to the Effective Time that would disqualify the Company
Distribution as a transaction described in Section 355 of the Code or
disqualify the Merger as a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code. The Company shall use reasonable
efforts to do everything reasonably necessary to have the Company
Distribution and the Merger qualify as aforesaid.
(xiii) Liens. The Company shall not, and shall not permit
any of its subsidiaries to, create, incur, suffer to exist or assume
any Lien on any Retained Asset, except for Permitted Liens.
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(xiv) Maintenance of Properties. The Company and the
Retained Subsidiaries shall continue to maintain and repair all
property material to the operation of the Retained Business in a
manner consistent with past practice.
(xv) Intercompany Transfers. The Company shall (i) not engage
in or allow transfers of assets or liabilities or engage or enter into
other transactions between any of the Retained Companies, on the one
hand, and any of the GBC Companies, on the other hand, except as
contemplated by the Distribution Agreement, (ii) from and after the
time of execution of any Transaction Agreement, abide and cause the
GBC Companies to abide by their respective obligations under such
Transaction Agreements and (iii) not terminate or amend, or waive
compliance with any obligations under, the Distribution Agreement;
provided that nothing herein shall prohibit transfers of cash between
the Retained Companies and the GBC Companies, so long as such
transfers are properly recorded on the intercompany accounts of the
Retained Companies.
(xvi) No Change in Nature of Business. The Company and its
subsidiaries shall not make any change in their lines of business as
of the date hereof that would, based on the facts and circumstances
and conduct of the particular business, materially increase the
potential liability of any of the Retained Companies under statutes or
legal doctrines permitting the imposition of liability on a parent
corporation in respect of the liabilities of its subsidiaries.
(xvii) Authorizations. The Company and its subsidiaries
shall not authorize, or commit or agree to take, any of the foregoing
actions.
Notwithstanding anything in this Agreement to the contrary,
the Company shall cause the Closing Working Capital (as
defined in the Post-Closing Covenants Agreement) of the
Retained Business to be positive as of the Effective Time.
(b) Actions by Parent. During the period from the date of
this Agreement to the Effective Time, Parent and its subsidiaries shall not
take or cause or permit to be taken any action that would disqualify the
Company Distribution as a transaction described in Section 355 of
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the Code or disqualify the Merger as a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code. Parent shall use reasonable efforts to do
everything reasonably necessary to have the Company Distribution and the Merger
qualify as aforesaid.
(c) Other Acquisitions. During the period from the date of
this Agreement to the Effective Time, Parent and its subsidiaries shall not
make any material acquisitions except as previously discussed with the Company.
(d) Certain Services. During the period from the date of
this Agreement to the Effective Time, Parent shall continue to provide
advertising sales services and billing, collection and cash management services
to the Company and its subsidiaries that it is currently providing consistent
with past practice.
(e) Other Actions. During the period from the date of this
Agreement to the Effective Time, the Company and Parent shall not, and shall
not permit any of their respective subsidiaries to, take any action that would,
or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions to the Merger set forth in
Article VII not being satisfied.
(f) Advice of Changes. The Company and Parent shall
promptly advise the other party orally and in writing of (i) any representation
or warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or (iii) any change or
event (x) having, or which, insofar as can reasonably be foreseen, would have,
a material adverse effect on, in the case of Parent, Parent and its
subsidiaries and, in the case of the Company, the Retained Companies or the GBC
Companies, (y) having, or which, insofar as can reasonably be foreseen, would
have, the effect set forth in clause (i) above, or (z) which has
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resulted, or which, insofar as can reasonably be foreseen, would result, in any
of the conditions set forth in Article VII not being satisfied; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
SECTION 5.02. No Solicitation. (a) The Company shall not,
nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any employee, officer or director of or any investment banker, attorney
or other advisor or representative of, the Company or any of its subsidiaries
to, directly or indirectly, (i) solicit, initiate or encourage the submission
of any takeover proposal (as defined below), (ii) enter into any agreement with
respect to any takeover proposal or give any approval of the type referred to
in Section 4.01(o) with respect to any takeover proposal or (iii) participate
in any discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any takeover proposal; provided, however, that nothing
contained in the preceding portion of this sentence shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any employee, officer or director of the Company or
any of its subsidiaries or any investment banker, attorney or other advisor or
representative of the Company or any of its subsidiaries, whether or not such
person is purporting to act on behalf of the Company or any of its subsidiaries
or otherwise, shall be deemed to be a breach of this Section 5.02(a) by the
Company. For purposes of this Agreement, "takeover proposal" means any
proposal for a merger, consolidation or other business combination involving
the Company or any of its subsidiaries or any proposal or offer to acquire in
any manner, directly or indirectly, an equity interest in or any voting
securities of the Company or any of its subsidiaries or a substantial portion
of the assets of the Company and its subsidiaries taken as a whole, other than
the transactions contemplated by this Agreement.
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(b) Neither the Board of Directors of the Company nor any
committee thereof shall (x) 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 Merger or
(y) approve or recommend, or propose to approve or recommend, any takeover
proposal.
(c) The Company promptly shall advise Parent orally and in
writing of any request for information or of any takeover proposal or any
inquiry with respect to or which would reasonably be expected to lead to any
takeover proposal, the identity of the person making any such request, takeover
proposal or inquiry and all the terms and conditions thereof. The Company will
keep Parent fully informed of the status and details (including amendments or
proposed amendments) of any such request, takeover proposal or inquiry.
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Registration Statements and
the Proxy Statement-Prospectus; Company Stockholders Meeting; Parent
Shareholders Meeting. (a) As soon as reasonably practicable following the
date of this Agreement, Parent and the Company shall prepare and file with the
SEC the Proxy Statement-Prospectus, the Company shall prepare and file with the
SEC the GBC Form 10 and Parent shall prepare and file with the SEC the Parent
Form S-4, in which the Proxy Statement-Prospectus will be included as a
prospectus (in each case including the respective financial statements and pro
forma financial statements of the parties required to be set forth therein).
Each of Parent and the Company shall use all reasonable efforts to have the
Registration Statements declared effective under the Securities Act or the
Exchange Act, as applicable, as promptly as practicable after such filing. The
Company will use all reasonable efforts to cause the Proxy Statement-Prospectus
to be mailed to the Company's stockholders as promptly as practicable after it
has been cleared by the SEC. If the Parent Shareholder Approval is required by
the applicable rules of the NYSE, Parent will use all reasonable efforts to
cause the Proxy Statement-Prospectus to be mailed to Parent's shareholders
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as promptly as practicable after it has been cleared by the SEC. Each of Parent
and the Company shall also take any action (other than qualifying to do business
in any jurisdiction in which it is not now so qualified or to file a general
consent to service of process) required to be taken under any applicable state
securities laws in connection with the issuance of New GBC Common Stock in
connection with the Company Distribution, in the case of the Company, and the
issuance of Parent Common Stock in connection with the Merger, in the case of
Parent. The Company shall furnish all information concerning the Company, its
subsidiaries and the holders of the Company Common Stock and Parent shall
furnish all information concerning Parent and its subsidiaries, in each case as
may be reasonably requested in connection with any such action.
(b) The Company will, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and hold a meeting
of its stockholders (the "Company Stockholders Meeting") for the purpose of
obtaining the Company Stockholder Approval. Without limiting the generality of
the foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 6.01(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
takeover proposal. The Company will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement and the
transactions contemplated hereby.
(c) If the Parent Shareholder Approval is required by the
applicable rules of the NYSE, Parent will, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and hold a meeting
of its shareholders (the "Parent Shareholders Meeting") for the purpose of
obtaining the Parent Shareholder Approval. If so required, Parent will,
through its Board of Directors, recommend to its shareholders the authorization
of the issuance of Parent Common Stock in connection with the Merger.
SECTION 6.02. Letters of the Company's Accountants. The
Company shall use all reasonable efforts to cause to be delivered to Parent
letters of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the Company's independent public accountants,
dated a date within two business days before the date on which each
Registration Statement shall become effective and
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a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated a date within two business days before the
Closing Date, each addressed to Parent, in form and substance reasonably
satisfactory to Parent and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statements.
SECTION 6.03. Letters of Parent's Accountants. Parent shall
use all reasonable efforts to cause to be delivered to the Company letters of
KPMG Peat Marwick LLP and Price Waterhouse LLP, Parent's independent public
accountants for the relevant periods prior to the date hereof, dated a date
within two business days before the date on which each Registration Statement
shall become effective and letters of KPMG Peat Marwick LLP and Price
Waterhouse LLP dated a date within two business days before the Closing Date,
each addressed to the Company, in form and substance reasonably satisfactory to
the Company and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statements.
SECTION 6.04. Access to Information; Confidentiality.
Subject to the Confidentiality Agreement (as defined below) and upon reasonable
notice, the Company shall, and shall cause each of its subsidiaries to,
(i) afford to Parent, its subsidiaries and their employees, officers,
accountants, counsel, financial advisors and other representatives, reasonable
access during normal business hours during the period prior to the Effective
Time to all of its properties, books, Contracts, personnel and records relating
to the Retained Companies, the Retained Business, the Retained Assets or the
Retained Liabilities and (ii) furnish promptly to Parent all other information
concerning the business, properties and personnel of the Company and its
subsidiaries as Parent may reasonably request; provided, however, that such
access shall not unreasonably interfere with the normal operations of the
Company and its subsidiaries. During such period, each of Parent and the
Company shall, and shall cause each of its respective subsidiaries to, furnish
promptly to the other party a copy of each report, schedule, registration
statement and other document required to be filed by it during such period
pursuant to the requirements of U.S. Federal or state securities laws. Each
of Parent and the
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Company will hold, and will cause its respective employees, officers,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in accordance with the terms of
the Confidentiality Agreement dated as of January 8, 1997, between Parent and
the Company (the "Confidentiality Agreement").
SECTION 6.05. Reasonable Best Efforts. (a) Upon the terms
and subject to the conditions set forth in this Agreement, Parent, Sub and the
Company each agrees to use reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable and
prior to the consummation of the Parent Distribution, the Restructuring, the
Company Distribution and the Merger and the other transactions contemplated by
the Transaction Agreements, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings and the taking of all steps as may be necessary to
obtain an approval, waiver, order or authorization from, or to avoid an action
or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
waivers, consents, approvals, orders or authorizations from third parties,
(iii) the defending of any suit, action or proceeding, whether judicial or
administrative, challenging any Transaction Agreement or the consummation of
any of the transactions contemplated by any Transaction Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, the Transaction
Agreements.
(b) In connection with and without limiting the foregoing,
the Company and its Board of Directors shall (i) take all action necessary to
ensure that no state takeover statute or similar statute or regulation is or
becomes applicable to any of the Transaction Agreements or any of the
transactions contemplated thereby and (ii) if any state takeover statute or
similar statute or regulation becomes applicable to any of the Transaction
Agreements or
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any of the transactions contemplated thereby, take all action necessary to
ensure that the transactions contemplated by the Transaction Agreements may be
consummated as promptly as practicable on the terms contemplated by the
Transaction Agreements and otherwise to minimize the effect of such statute or
regulation on the transactions contemplated by the Transaction Agreements.
SECTION 6.06. Stock Options. Each Employee Stock Option
that is held by any Retained Employee, that is out standing immediately prior
to the Effective Time and that is not required to be assumed by GBC in
accordance with Article VII of the Distribution Agreement, whether or not then
vested or exercisable, shall, effective as of the Effective Time, be assumed by
Parent and become and represent an option to acquire the number of shares of
Parent Common Stock (a "Substitute Option"), rounded up to the nearest whole
share, determined in a manner that will preserve the spread between the option
exercise price and the fair market value of the Company Class A Common Stock
subject to such option and the ratio of the spread to the exercise price of
such option as provided in Section 425 of the Code and the regulations
promulgated thereunder; provided, however, that in the case of any Employee
Stock Option to which Section 421 of the Code applies by reason of its
qualification as an incentive stock option under Section 422 of the Code, the
conversion formula shall be adjusted if necessary to comply with Section 424(a)
of the Code. After the Effective Time, each Substitute Option shall be
exercisable upon the same terms and conditions as were applicable to the
related Employee Stock Option immediately prior to the Effective Time. Parent,
in its sole discretion, shall determine whether such Substitute Options shall
be issued under an existing or newly established plan of Parent, the Company or
any of their respective subsidiaries.
SECTION 6.07. Fees and Expenses. Except as provided
elsewhere herein and in the Tax Disaffiliation Agreement, whether or not the
Merger is consummated, all fees, costs and expenses incurred in connection with
the Transaction Agreements and the transactions contemplated thereby shall be
paid by the party incurring such fees, costs or expenses, except that each of
Parent and the Company shall bear and pay one-half of (i) the fees, costs and
expenses incurred in connection with filing, printing and mailing the
Registration Statements and the Proxy
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Statement-Prospectus and (ii) all filing fees incurred under the HSR Act.
SECTION 6.08. Public Announcements. Parent and Sub, on the
one hand, and the Company, on the other hand, will consult with each other
before issuing, and provide each other the opportunity to review, comment upon
and concur with, any press release or other public statements with respect to
the transactions contemplated by the Transaction Agreements, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by the Transaction Agreements shall be
in the form heretofore agreed to by the parties.
SECTION 6.09. Affiliates. Prior to the Closing Date, the
Company shall deliver to Parent a letter identifying all persons who are, at
the time the Merger is submitted for approval to the stockholders of the
Company, "affiliates" of the Company for purposes of Rule 145 under the
Securities Act. The Company shall use reasonable efforts to cause each such
person to deliver to Parent on or prior to the Closing Date a written agreement
in the form of Annex E hereto. The Company shall not register, and shall
instruct its transfer agent not to register, the transfer of any certificate
representing Company Common Stock held by a Principal Stockholder, unless such
transfer is made in compliance with the terms of the Stockholder Agreement.
SECTION 6.10. NYSE Listing. Parent shall use all reasonable
efforts to cause the shares of Parent Common Stock to be issued in the Merger
to be approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.
SECTION 6.11. Stockholder Litigation. The Company shall
give Parent the opportunity to participate in the defense or settlement of any
stockholder litigation against the Company and its directors relating to the
transactions contemplated by the Transaction Agreements; provided, however,
that no such settlement involving a remedy other than money damages that will
be an Assumed
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Liability shall be agreed to without Parent's consent, which consent shall not
be unreasonably withheld.
SECTION 6.12. Cooperation with Respect to Internal Revenue
Service Rulings and Tax Opinions of Counsel. As soon as practicable after the
date hereof, Parent and the Company shall submit to the Internal Revenue
Service a request (the "Ruling Request") for the Tax Rulings.
The initial Ruling Request and any supplements or materials
submitted to the Internal Revenue Service relating thereto (each, an "IRS
Submission") shall be prepared by the Company, shall be true and correct in all
material respects, and all material facts relating to the requested rulings
shall be disclosed to the Internal Revenue Service. The Company shall provide
Parent with a reasonable opportunity to review and comment on each IRS
Submission prior to the filing of such IRS Submission with the Internal Revenue
Service, and no IRS Submission shall be filed with the Internal Revenue Service
unless (a) the Company and Parent shall have agreed as to the contents of such
IRS Submission prior to such filing as it relates to the Merger and (b) Parent
shall have consented to the contents of such IRS Submission as it relates to
the Restructuring and/or the Company Distribution, which consent will not be
unreasonably withheld or delayed. The Company shall promptly provide Parent
with copies of each IRS Submission as filed with the Internal Revenue Service.
Neither the Company nor the Company's representatives shall conduct any
communications with the Internal Revenue Service concerning such Ruling
Request, including meetings or conferences with Internal Revenue Service
personnel, whether telephonically or in person or otherwise, without first
notifying Parent or Parent's representatives and giving Parent (or Parent's
representatives) an opportunity to participate. Parent, Sub and the Company
each agrees to use reasonable best efforts to obtain the Tax Rulings and, if
any opinions of counsel are to be obtained in lieu of one or more Merger
Rulings pursuant to the provisions of Section 7.01(g), to obtain any such
opinions.
SECTION 6.13. Indebtedness. The Company agrees that
immediately prior to the Effective Time, after giving effect to the
Restructuring and the other transactions contemplated by the Transaction
Agreements, there will not
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be outstanding any indebtedness in respect of which any of the Retained
Companies is obligated.
SECTION 6.14. Distribution Agreement. Notwith standing
anything herein to the contrary, prior to the execution of the Distribution
Agreement, the Company may, with reasonable prior notice to Parent, make such
changes to Article IV of the Distribution Agreement as it deems neces sary or
appropriate, provided that such changes do not in any respect adversely affect
Parent, any of its subsidiaries, any of the Retained Companies or the Retained
Business, or the ability of any of the parties to any of the Transaction
Agreements to consummate any of the transactions contemplated thereby. Except
as set forth in the immediately preceding sentence, none of the Transaction
Agreements will be amended in any manner without Parent's prior consent.
SECTION 6.15. Employee Matters. (a) As of the Effective
Time, the Retained Employees shall participate in the applicable employee
benefit plans or programs of CBS, Inc. on the same basis as similarly situated
employees of CBS, Inc.
(b) Parent will, or will cause the Retained Companies to,
continue to employ, with comparable compensation, as of the Effective Time, all
of the Retained Employees, including all such Retained Employees covered by any
collective bargaining agreement. Nothing herein is intended to confer upon any
Retained Employee any right to continued employment or any guaranteed level of
compensation by Parent or the Retained Companies following the Effective Time.
Any Retained Employee whose employment is involuntarily terminated within a
period of 90 days following the Effective Time shall be entitled to severance
from Parent or the Company on a basis no less favorable than the severance that
would have been provided to such individual under the applicable severance
policy or program of the Company in effect on the date of this Agreement had
such Retained Employee been terminated while covered by such policy or program.
Parent will, or will cause the Company to, give Retained Employees full credit
for purposes of eligibility and vesting (and for purposes of calculating any
severance, vacation, holiday and sick day entitlements) under any employee
benefit plans or arrangements maintained by Parent, the Company or any
subsidiary of Parent or the
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Company to the same extent recognized by the Company immediately prior to the
Effective Time.
(c) Parent agrees to honor, or cause the Company to honor,
the terms of the Company's annual incentive bonus program as in effect as of
the date hereof so that, upon completion of the calendar year in which the
Effective Time occurs, each Retained Employee who would have been entitled to a
bonus thereunder had the transactions contemplated under this Agreement and the
Distribution Agreement not been consummated shall receive an annual incentive
bonus in an amount not less than the annual bonus such Retained Employee would
have received had such transactions not been consummated (prorated to the
extent that the employment of any such Retained Employee is involuntarily
terminated by the Company prior to December 31 of the calendar year in which
the Effective Time shall occur). The Company agrees to continue to make
accruals for such bonuses in accordance with past practice and that such
accruals will be included in the Closing Balance Sheet (as defined in the
Post-Closing Covenants Agreement).
(d) During the period from the date of this Agreement
through the Closing Date, Parent and the Company will use their reasonable
efforts to agree upon those Retained Employees who also perform financial,
human resources and purchasing services for the GBC Companies to whom the GBC
Companies may offer employment without violating the restrictions contained in
Section 3.04(a) of the Post-Closing Covenants Agreement.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to
Effect the Merger. The respective obligation of each party to effect the
Merger is subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Approvals. The Company Stockholder Approval and, if
required by the applicable rules of the NYSE, the Parent Shareholder
Approval shall have been obtained.
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(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.
(c) No Injunctions or Restraints. No judgment, order,
decree, statute, law, ordinance, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or
issued by any court of competent jurisdiction or other Governmental
Entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
(d) Registration Statements. The Registration Statements
shall have become effective under the Securities Act or the Exchange
Act, as applicable, no stop order suspending the effectiveness of
either of the Registration Statements shall have been issued and no
proceedings for that purpose shall have been initiated or threatened
by the SEC.
(e) NYSE Listing. The shares of Parent Common Stock
issuable to the Company's stockholders in connection with the Merger
shall have been approved for listing on the NYSE, subject to official
notice of issuance.
(f) Pre-Merger Transactions. The transactions contemplated
by Article III, including, without limitation, the Restructuring, the
Company Distribution and the execution and delivery of the Transaction
Agreements not executed on the date hereof, shall have been
consummated in accordance with the terms of this Agreement and the
Distribution Agreement (which includes additional conditions to such
consummation).
(g) Tax Rulings. The Internal Revenue Service shall have
issued and not revoked the Tax Rulings, reasonably satisfactory in
form and substance to Parent and the Company. In the event that the
Internal Revenue Service shall have issued all of the Tax Rulings
except for one or more of the Merger Rulings, then, in lieu of each
such Merger Ruling, the con ditions of this Section 7.01(g) shall be
satisfied if, as to the Company, the Company shall have received an
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opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the
Company, and, as to Parent, if Parent shall have received an opinion
of Cravath, Swaine & ▇▇▇▇▇, counsel to Parent, in each case to the
same effect as each such Merger Ruling, reasonably satisfactory in
form and substance to the Company or Parent, as the case may be, and
dated as of the Closing Date.
(h) Alternative Transaction. If the Alternative Transaction
(as defined in Section 9.01) is to be consummated, the Parent
Distribution shall have been consummated not less than 75 days prior
to the Closing Date.
(i) No Adverse Tax Development. There shall not be
outstanding as of the Closing Date any Adverse Tax Development.
For purposes of this Section 7.01(i), an "Adverse Tax
Development" shall mean (x) the enactment of any legislation, the
passage of any ▇▇▇▇ by either House of Congress or the introduction of
a ▇▇▇▇ by any Member of Congress; (y) that has not been withdrawn or
modified so as not to be an Adverse Tax Development; and (z) with
respect to which either Parent or the Company provides the other with
an opinion of Cravath, Swaine & ▇▇▇▇▇, in the case of Parent, or
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, in the case of the Company,
to the effect that such legislation, as enacted, has, or if such ▇▇▇▇
were enacted into law with the effective date and transition rules
contained therein, such ▇▇▇▇ would have, the effect of amending the
Code so as to cause the Company Distribution to be taxable for U.S.
Federal income tax purposes to, and result in a material increase in
the U.S. Federal income tax liability of, the Company or its
stockholders; provided, however, that if the Adverse Tax Development
does not by its terms apply to contracts that are binding on the date
of this Agreement (or on a later date), and if under the terms of such
▇▇▇▇ or legislation constituting an Adverse Tax Development contracts
are considered binding despite conditions or contractual provisions
that are referred to in such ▇▇▇▇ or legislation as "customary" or
"normal" or other language to the same effect ("Customary
Conditions"), then such opinion
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shall be required to reach its conclusion on the assumption that all
conditions to the parties' obligations to effect the Merger (including
but not limited to this Section 7.01(i)) and all provisions of the
Transaction Agreements are Customary Conditions.
SECTION 7.02. Conditions to Obligations of Parent and Sub.
The obligations of Parent and Sub to effect the Merger are further subject to
satisfaction or waiver (by Parent) on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are
qualified as to materiality shall be true and correct, and the
representations and warranties of the Company set forth in this
Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date,
except to the extent such representations and warranties expressly
relate to an earlier date (in which case as of such date), and Parent
shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief financial officer of the
Company to such effect.
(b) Performance of Obligations of the Company. Each of the
Company and its subsidiaries shall have performed in all material
respects all obligations required to be performed by it under the
Transaction Agreements at or prior to the Closing Date, and Parent
shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief financial officer of the
Company to such effect.
(c) Letters from Company Affiliates. Parent shall have
received from each person identified in the letter referred to in
Section 6.09 an executed copy of an agreement in the form of Annex E
hereto.
(d) No Litigation. There shall not be pending or threatened
by any Governmental Entity any suit, action or proceeding
(i) challenging the acquisition by Parent of any shares of capital
stock of any of the Retained Companies, seeking to restrain or
prohibit the
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consummation of the Merger or any of the other transactions
contemplated by the Transaction Agreements or seeking to obtain from
the Company or Parent or any of their respective subsidiaries any
damages that are material in relation to the Retained Companies taken
as a whole or Parent and its subsidiaries taken as a whole,
(ii) seeking to prohibit or limit the ownership or operation by the
Retained Companies or by Parent or any of its subsidiaries of any
material portion of the Retained Business or of the business or assets
of Parent and its subsidiaries, taken as a whole, as applicable, or to
compel the Retained Companies or Parent or any of its subsidiaries to
dispose of or hold separate any material portion of the Retained
Business or of the business or assets of Parent and its subsidiaries,
taken as a whole, as applicable, as a result of the transactions
contemplated by the Transaction Agreements, (iii) seeking to impose
limitations on the ability of Parent to acquire or hold, or exercise
full rights of ownership of, any shares of capital stock of any of the
Retained Companies or the Surviving Corporation, (iv) seeking to
prohibit Parent and its subsidiaries from effectively controlling in
any material respect the Retained Business, or (v) which otherwise
would reasonably be expected to have a material adverse effect on the
Retained Companies or on Parent and its subsidiaries (excluding for
this purpose the Retained Companies). In addition, there shall not be
any judgment, order, decree, statute, law, ordinance, rule,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in
clauses (ii) through (iv) above.
(e) Company Distribution. The conditions to the obligations
of the Company to consummate the Company Distribution set forth in
Article VIII of the Distribution Agreement shall have been satisfied
(without giving effect to any waiver of any such condition not
approved by Parent).
(f) FCC and Other Governmental and Regulatory Consents. All
consents, approvals, orders and authorizations of, and all
registrations, declarations
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or filings with, any Governmental Entity (including, without
limitation, approvals of and filings with the FCC relating to the
transfer of licenses) required to be obtained prior to the Closing
Date in connection with the execution, delivery and performance of the
Transaction Agreements shall have been obtained or made, except where
the failure to obtain or make the same individually or in the
aggregate would not be reasonably likely to have a material adverse
effect on the Retained Companies or on Parent and its subsidiaries.
(g) Noncompetition Agreements. Each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have entered into noncompetition
agreements with Parent with substantially the terms applicable to GBC
set forth in Section 3.04 of the Post-Closing Covenants Agreement and
such agreements shall be in full force and effect.
(h) No Material Adverse Change. Except as disclosed in the
Filed SEC Documents, Section 4.01(h) of the Company Disclosure
Schedule or as otherwise expressly contemplated by the Transaction
Agreements, since the date of the most recent audited financial
statements included in the Filed SEC Documents, there shall not have
been any event, change or development which individually or in the
aggregate has had or would reasonably be expected to have a material
adverse effect on the Retained Companies or on the GBC Companies or
would impair the ability of the Retained Companies or the GBC
Companies, as the case may be, to consummate the transactions
contemplated by, or to satisfy their obligations under, the
Transaction Agreements.
SECTION 7.03. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to
satisfaction or waiver (by the Company) on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement that are
qualified as to materiality shall be true and correct, and the
representations and warranties of Parent and Sub set forth in this
Agreement that are not so qualified shall
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be true and correct in all material respects, in each case as of the
date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case as
of such date), and the Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such
effect.
(b) Performance of Obligations of Parent and Sub. Parent
and Sub shall have performed in all material respects all obligations
required to be performed by them under the Transaction Agreements at
or prior to the Closing Date, and the Company shall have received a
certificate signed on behalf of Parent by an executive officer of
Parent to such effect.
(c) FCC and Other Governmental and Regulatory Consents. All
consents, approvals, orders and authorizations of, and all
registrations, declarations or filings with, any Governmental Entity
(including, without limitation, approvals of and filings with the FCC
relating to the transfer of licenses) required to be obtained prior to
the Closing Date in connection with the execution, delivery and
performance of the Transaction Agreements shall have been obtained or
made, except where the failure to obtain or make the same individually
or in the aggregate would not be reasonably likely to have a material
adverse effect on the GBC Companies.
(d) No Material Adverse Change. Except as disclosed in the
Filed Parent SEC Documents, in connection with the Parent Distribution
or as otherwise expressly contemplated by the Transaction Agreements,
since the date of the most recent audited financial statements
included in the Filed Parent SEC Documents, there shall not have been
any event, change or development which individually or in the
aggregate has had or would reasonable be expected to have a material
adverse effect on Parent and its subsidiaries or impair the ability of
Parent and Sub to consummate the transactions contemplated by, or to
satisfy their obligations under, the Transaction Agreements.
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ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after the Company
Stockholder Approval or the Parent Shareholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
or
(b) by either Parent or the Company:
(i) if, upon a vote at a duly held Company
Stockholders Meeting or any adjournment thereof at which the
Company Stockholder Approval shall have been voted upon, the
Company Stockholder Approval shall not have been obtained;
(ii) if, upon a vote at a duly held Parent
Shareholders Meeting or any adjournment thereof at which the
Parent Shareholder Approval shall have been voted upon, the
Parent Shareholder Approval shall not have been obtained;
(iii) if the Merger shall not have been consummated
on or before February 9, 1998, unless the failure to
consummate the Merger is the result of a wilful and material
breach of any Transaction Agreement by the party seeking to
terminate this Agreement or any of its subsidiaries, and, in
the case of a termination by the Company, unless the failure
to consummate the Merger is the result of a wilful and
material breach of the Stockholder Agreement by any Principal
Stockholder; provided, however, that the passage of such
period shall be tolled for any part thereof (but not
exceeding 60 calendar days in the aggregate) during which any
party shall be subject to a nonfinal order, decree, ruling,
injunction or action restraining, enjoining or otherwise
prohibiting the consummation of the Merger or the calling or
holding of the Company Stockholders Meeting or, if the Parent
Shareholder Approval is required by the applicable rules of
the NYSE, the Parent Shareholders Meeting;
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(iv) if any Governmental Entity shall have issued an
order, decree, ruling or injunction or taken any other action
permanently enjoining, restraining or otherwise prohibiting
the Merger and such order, decree, ruling, injunction or
other action shall have become final and nonappealable; or
(v) in the event of a breach by the other party or
any of its subsidiaries of any representation, warranty,
covenant or other agreement contained in the Transaction
Agreements which (A) would give rise to the failure of a
condition set forth in Section 7.02(a) or (b) or
Section 7.03(a) or (b), as applicable, and (B) cannot be or
has not been cured within 30 days after the giving of written
notice to the breaching party of such breach (a "Material
Breach") (provided that the terminating party is not then in
Material Breach of any representation, warranty, covenant or
other agreement contained in the Transaction Agreements);
(c) by the Company in the event that the product of the Per
Share Merger Consideration determined in accordance with
Section 2.01(c) multiplied by the Outstanding Number would be greater
than the Maximum Number of Shares but for the proviso to the first
sentence of Section 2.01(c), by written notice to Parent (the "Company
Termination Intent Notice") at least two days prior to the Closing
Date that the Company is unwilling to accept the Per Share Merger
Consideration calculated in accordance with Section 2.01(c); provided,
however, that no right of termination shall arise under this
Section 8.01(c) if Parent shall have given written notice to the
Company, at any time within 24 hours of its receipt of the Company
Termination Intent Notice, that Parent elects to increase the Per
Share Merger Consideration to the Per Share Merger Consideration
calculated in accordance with Section 2.01(c) without giving effect to
the proviso to the first sentence thereof, in which case the Per Share
Merger Consideration shall be so calculated; or
(d) by the Company in the event that (i) the Merger is to be
consummated after the consummation of
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the Parent Distribution in accordance with Section 9.01, and (ii) the
product of the Per Share Merger Consideration determined in accordance
with Section 9.02 multiplied by the Outstanding Number would be
greater than the Maximum Number of Alternative Shares (as defined in
Section 9.02) but for the proviso thereto, by written notice to
Parent (the "Alternative Termination Intent Notice") at least two days
prior to the Closing Date that the Company is unwilling to accept the
Per Share Merger Consideration calculated in accordance with Section
9.02; provided, however, that no right of termination shall arise
under this Section 8.01(d) if Parent shall have given written notice
to the Company, at any time within 24 hours of its receipt of the
Alternative Termination Intent Notice, that Parent elects to increase
the Per Share Merger Consideration to the Per Share Merger
Consideration calculated in accordance with Section 9.02 without
giving effect to the proviso thereto, in which case the Per Share
Merger Consideration shall be so calculated.
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to
this Article VIII, no party to the Transaction Agreements (or any of its
directors or officers) shall have any liability or further obligation to any
other party, except as set forth in Sections 4.01(q), 4.02(j) and 6.07, the
last sentence of Section 6.04, this Section 8.02 and Article X, all of which
shall survive such termination, and except that nothing herein shall relieve
any party from liability for any material and wilful breach of any of its
representations, warranties, covenants or agreements set forth in any of the
Transaction Agreements.
SECTION 8.03. Amendment. This Agreement may be amended by
the parties at any time before or after the Company Stockholder Approval or the
Parent Shareholder Approval subject, if required by the Stockholder Agreement,
to the prior approval of the Principal Stockholders; provided, however, that
after any such approval, there shall not be made any amendment that by law
requires further approval by the stockholders of the Company without the
further approval of such stockholders. The parties agree to attempt to obtain
the Company Stockholder Approval in such a manner that in the event that the
Merger is to be consummated after the consummation of the Parent
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Distribution in accordance with Section 9.01 no further approval of the Company
s stockholders would be required. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any of
the obligations or other acts of the other parties, (b) waive any inaccuracies
in the representations and warranties of the other parties contained in the
Transaction Agreements or in any document delivered pursuant to the Transaction
Agreements or (c) subject to the proviso to the first sentence of Section 8.03,
waive compliance by the other parties with any of the agreements or conditions
contained in the Transaction Agreements. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to the Transaction Agreements to assert any of its rights under the Transaction
Agreements or otherwise shall not constitute a waiver of such rights.
SECTION 8.05. Procedure for Termination, Amendment,
Extension or Waiver. A termination of this Agreement pursuant to Section 8.01,
an amendment of this Agreement pursuant to Section 8.03 or an extension or
waiver pursuant to Section 8.04 shall, in order to be effective, require in the
case of Parent, Sub or the Company, action by its Board of Directors or, except
in the case of the Company or Sub with respect to any amendment to this
Agreement, the duly authorized designee of its Board of Directors.
ARTICLE IX
Alternative Transaction
SECTION 9.01. Circumstances. Notwithstanding any provision
of this Agreement to the contrary, in the event that (i) the Internal Revenue
Service fails to issue all of the Tax Rulings in form and substance reasonably
satisfactory to Parent and the Company and a representative of the Internal
Revenue Service has indicated that, or Parent and the Company reasonably
believe that, all of the Tax Rulings (without regard to the Merger Rulings as
to which the provisions of Section 7.01(g) shall apply) could be obtained if
the Merger was delayed until after the
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consummation of the Parent Distribution, or (ii) Parent, in its sole discretion,
determines to consummate the Parent Distribution prior to the consummation of
the transactions contemplated by this Agreement, then (and only then) (x) the
Merger shall not be consummated until after the consummation of the Parent
Distribution and (y) Parent and the Company shall attempt to obtain the Tax
Rulings based on the Merger being consummated after the Parent Distribution (the
"Alternative Transaction").
SECTION 9.02. Alternative Per Share Merger Consideration.
In the event that, as a result of the circumstances described in Section 9.01,
the Merger is to be consummated after the consummation of the Parent
Distribution, then, for all purposes of this Agreement, "Per Share Merger
Consideration" shall mean that number of duly authorized, validly issued, fully
paid and nonassessable shares of Parent Common Stock equal to the quotient,
rounded to the nearest thousandth, or if there shall not be a nearest
thousandth, the next higher thousandth, of (i) the quotient of
(x) $1,550,000,000 divided by (y) the Outstanding Number, divided by (ii) the
Market Price of Parent Common Stock on the date on which the Effective Time
shall occur; provided, however, that in the event that the product of the Per
Share Merger Consideration multiplied by the Outstanding Number would exceed
88,000,000 (the "Maximum Number of Alternative Shares), then the Per Share
Merger Consideration shall mean the highest number (after taking into account
the rounding provision of this sentence) that would not result in the product
of such number multiplied by the Outstanding Number exceeding 88,000,000.
ARTICLE X
General Provisions
SECTION 10.01. Survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time; provided, however, that the representations and warranties of the Company
contained herein shall survive the Effective Time until 11:59 p.m. (New York
City time) on the second anniversary of the Effective Time; provided, further,
that the representations and warranties of the Company set forth in
Section 4.01(m) shall not survive the Effective Time.
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This Section 10.01 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 10.02. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed)
or sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Sub, to
Westinghouse Electric Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.; and
(b) if to the Company, to
▇▇▇▇▇▇▇ Entertainment Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Delaware) ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
SECTION 10.03. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "indebtedness" means, with respect to any person, without
duplication, (i) all obligations of such person for borrowed money, or
with respect to deposits or advances of any kind to such person,
(ii) all obligations of such person evidenced by notes, bonds,
debentures or similar instruments, including warrants or rights to
acquire such instruments, (iii) all obligations of such person under
conditional sale or other title retention agreements relating to
property purchased by such person, (iv) all obligations of such person
issued or assumed as the deferred purchase price of property or
services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary
course of such person's business), (v) all capitalized lease
obligations of such person, (vi) all obligations of others secured by
any Lien on property or assets owned or acquired by such person,
whether or not the obligations secured thereby have been assumed,
(vii) all obligations of such person under interest rate or currency
hedging transactions (valued at the termination value thereof),
(viii) all letters of credit issued for the account of such person and
(ix) all guarantees and arrangements having the economic effect of a
guarantee of such person of any indebtedness of any other person;
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(c) "material adverse effect" means, when used in connection
with an entity or a group of entities, any change, effect, event or
occurrence that is materially adverse to the business, properties,
assets, financial condition, results of operations or prospects of
such entity or group, taken as a whole, other than any change, effect,
event or occurrence relating to the United States economy in general,
to United States stock market conditions in general or to the entity's
or group's industry or industries in general, and not specifically
relating to such entity or group or their respective subsidiaries;
(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(e) a "subsidiary" means, with respect to any person, any
corporation or other organization, whether incorporated or
unincorporated, of which (i) such person or any other subsidiary of
such person is a general partner or (ii) at least 50% of the
securities or other interests having by their terms ordinary voting
power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization or at least 50% of the value of the outstanding equity is
directly or indirectly owned or controlled by such person or by any
one or more of its subsidiaries, or by such person and one or more of
its subsidiaries;
(f) a "significant subsidiary" of any person means any
subsidiary of such person that constitutes a significant subsidiary
within the meaning of Rule 1-02 of Regulation S-X of the SEC;
(g) "Taxes", "Tax Return" and "Tax Authority" have the
meanings assigned thereto in the Tax Disaffiliation Agreement;
(h) "Tax Rulings" mean the rulings contained in the private
letter ruling issued by the Internal Revenue Service in response to
the Ruling Request substantially to the effect that, for U.S. Federal
income tax purposes, (i) the Company Distribution will be a
transaction described in Section 355(a) of the
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Code and the transfer of assets and liabilities to GBC immediately
preceding the Company Distribution will be a transaction described in
Section 351 or 368(a)(1)(D) of the Code; (ii) the distribution by GBC
of all the capital stock of NEI to the Company will be a transaction
described in Section 355(a) of the Code and the transfer of assets and
liabilities to NEI immediately preceding such distribution will be a
transaction described in Section 351 or 368(a)(1)(D) of the Code;
(iii) the Merger will be treated as a reorganization within the
meaning of Section 368(a) of the Code; and (iv) each of the mergers of
Opryland USA, Inc., WSM, Incorporated and Word Entertainment, Inc.
with their respective parent corporations (A) will be treated as a
reorganization within the meaning of Section 368(a) of the Code or a
liquidation within the meaning of Section 332 of the Code, taking into
account the transactions described in clause (ii) of this definition,
or (B) will not fail to qualify as a reorganization within the meaning
of Section 368(a) of the Code or a liquidation within the meaning of
Section 332 of the Code by reason of the transactions described in
clause (ii) of this definition;
(i) "Merger Rulings" shall mean the rulings described in
Section 10.03(h)(ii) and (iv);
(j) "Retained Assets" means the assets of the Company and
its subsidiaries after giving effect to the transactions contemplated
by Article IV of the Distribution Agreement; and
(k) "Retained Liabilities" has the meaning assigned thereto
in the Distribution Agreement
SECTION 10.04. Interpretation. When a reference is made in
this Agreement to an Article, Section or Annex, such reference shall be to an
Article or Section of, or an Annex to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a
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whole and not to any particular provision of this Agreement. The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such term. Any agreement, instrument or statute defined or referred to herein
or in any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein. References to a person are also to its permitted successors and assigns
and, in the case of an individual, to his heirs and estate, as applicable.
SECTION 10.05. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 10.06. Entire Agreement; No Third-Party
Beneficiaries. The Transaction Agreements (including the documents and
instruments referred to herein, the Annexes hereto, the Parent Disclosure
Schedule and the Company Disclosure Schedule) and the Confidentiality Agreement
(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 thereof and (b) except as set forth in the other
Transaction Agreements, are not intended to confer upon any person other than
the parties any rights or remedies.
SECTION 10.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
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SECTION 10.08. Assignment. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement shall be assigned,
in whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct wholly owned
subsidiary of Parent, but no such assignment shall relieve Sub of any of its
obligations under this Agreement. Any assignment in violation of the preceding
sentence shall be void. 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 10.09. Disclosure Schedules. Matters reflected on
the Company Disclosure Schedule and the Parent Disclosure Schedule are not
necessarily limited to matters required by this Agreement to be reflected
therein and the inclusion of such matters shall not be deemed an admission that
such matters were required to be reflected on the Company Disclosure Schedule
or the Parent Disclosure Schedule, as the case may be. Such additional matters
are set forth for informational purposes only and do not necessarily include
other matters of a similar nature. Capitalized terms used in the Company
Disclosure Schedule or the Parent Disclosure Schedule, as the case may be, but
not otherwise defined therein shall have the respective meanings assigned to
such terms in this Agreement.
SECTION 10.10. Severability. If any provision of this
Agreement or the application thereof to any person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby. Upon any such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original
intent of the parties.
SECTION 10.11. Enforcement. The parties agree that
irreparable damage would occur and that the parties would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were
not performed
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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 of this Agreement in any U.S. Federal court located in
the State of Delaware or in Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any U.S. Federal court located in the State of Delaware or any Delaware state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a U.S. Federal court sitting in the State of
Delaware or a Delaware state court. The provisions of this Section 10.11 shall
not apply to any of the other Transaction Agreements
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unless the terms of such Transaction Agreements expressly
state that such provisions shall apply.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION,
by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice
President,Chief
Financial Officer
G ACQUISITION CORP.,
by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President,
Secretary
▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY,
by ▇▇▇▇▇ ▇. LONDON
---------------------------
Name: ▇▇▇▇▇ ▇. London
Title: Senior Vice President,
Chief Financial &
Administrative Officer