1
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
TRIDENT INTERNATIONAL, INC.
ILLINOIS TOOL WORKS INC.
AND
ITW ACQUISITION INC.
2
AGREEMENT AND PLAN OF MERGER
INDEX
Page
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ARTICLE I.
The Offer.............................................................. -2-
Section 1.1 The Offer................................................. -2-
Section 1.2 Company Actions........................................... -4-
Section 1.3 Stockholder Mailings...................................... -6-
ARTICLE II.
The Merger............................................................. -7-
Section 2.1 The Merger................................................ -7-
Section 2.2 Closing................................................... -7-
Section 2.3 Effective Time............................................ -8-
Section 2.4 Further Assurances........................................ -8-
ARTICLE III.
Certificate of Incorporation and By-Laws; Officers and
Directors of the Surviving Corporation............................. -9-
Section 3.1 Certificate of Incorporation.............................. -9-
Section 3.2 By-Laws................................................... -9-
Section 3.3 Officers and Directors.................................... -9-
ARTICLE IV.
Conversion of Common Shares in the Merger.............................. -9-
Section 4.1 Conversion................................................ -9-
(a) Common Shares Generally................................. -9-
(b) Common Shares Held by the Parent Companies
or the Company........................................ -10-
(c) Subsidiary Stock.......................................... -10-
Section 4.2 Payment................................................... -11-
Section 4.3 Dissenting Shares......................................... -13-
Section 4.4 Closing of Transfer Records............................... -15-
Section 4.5 Employee and Other Stock Options.......................... -15-
Section 4.6 Warrants.................................................. -16-
Section 4.7 Employee Stock Purchase Plan.............................. -17-
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Page
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ARTICLE V.
Representations and Warranties.......................................... -17-
Section 5.1 Representations and Warranties of Parent
and Subsidiary........................................... -17-
(a) Corporate Organization................................... -18-
(b) Corporate Authorization.................................. -18-
(c) No Conflicts............................................. -19-
(d) Financing................................................ -20-
(e) Filings and Consents..................................... -20-
(f) Litigation............................................... -21-
(g) Offer Documents.......................................... -21-
(h) Merger Proxy Statement................................... -22-
(j) Common Shares............................................ -22-
Section 5.2 Representations and Warranties of the Company.............. -22-
(a) Corporate Organization................................... -23-
(b) Capitalization........................................... -23-
(c) Corporate Authorization and Certain Corporate
Action................................................ -25-
(d) Financial Statements and Reports......................... -26-
(e) Absence of Other Liabilities............................. -27-
(f) Absence of Certain Changes or Events..................... -27-
(g) Offer Documents.......................................... -28-
(h) Schedule 14D-9........................................... -29-
(i) Merger Proxy Statement................................... -29-
(j) Certain Agreements....................................... -30-
(k) No Conflicts............................................. -31-
(l) Filings and Consents..................................... -31-
(m) Compliance With Laws..................................... -32-
(n) Litigation............................................... -32-
(o) Employee Benefit Plans................................... -32-
(p) Taxes.................................................... -33-
(q) Health, Safety and Environmental Laws and
Regulations........................................... -34-
(r) Intellectual Property.................................... -36-
(s) Brokers and Finders...................................... -36-
(t) Year 2000 Compliance..................................... -37-
(u) Contracts................................................ -37-
(v) Labor Relations.......................................... -38-
(w) Affiliate Transactions................................... -38-
(x) Vote Required............................................ -39-
(y) Knowledge Definition..................................... -39-
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Page
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ARTICLE VI.
Covenants............................................................... -39-
Section 6.1 No Solicitation of Transactions........................... -39-
Section 6.2 Postponement of Annual Meeting............................ -41-
Section 6.3 Interim Operations of the Company......................... -42-
Section 6.4 Meetings of the Company's Stockholders.................... -44-
Section 6.5 Filings; Other Action..................................... -45-
Section 6.6 Reasonable Best Efforts................................... -45-
Section 6.7 Access.................................................... -46-
Section 6.8 Publicity................................................. -47-
Section 6.9 Directors' and Officers' Indemnification;
Insurance.............................................. -47-
Section 6.10 Registration Rights Agreement............................. -52-
Section 6.11 Fair Price Statute........................................ -52-
Section 6.12 Directors................................................. -53-
Section 6.13 Employee Benefits Matters................................. -54-
ARTICLE VII.
Conditions.............................................................. -56-
Section 7.1 Conditions to each Party's Obligations to
Effect the Merger....................................... -56-
(a) Stockholder Approval.................................... -57-
(b) Governmental Filings and Consents....................... -57-
(c) Purchase of Common Shares............................... -57-
(d) Injunction.............................................. -57-
ARTICLE VIII.
Termination and Abandonment............................................. -58-
Section 8.1 Termination............................................... -58-
Section 8.2. Procedure and Effect of Termination....................... -60-
Section 8.3. Fees and Expenses......................................... -60-
ARTICLE IX.
Miscellaneous........................................................... -64-
Section 9.1 Amendment................................................. -64-
Section 9.2 Waiver.................................................... -65-
Section 9.3 Special Fees of the Company............................... -65-
Section 9.4 Counterparts.............................................. -65-
Section 9.5 Governing Law............................................. -66-
Section 9.6 Notices................................................... -66-
Section 9.7 Entire Agreement, etc..................................... -67-
Section 9.8 Definition of "Subsidiary"................................ -67-
Section 9.9 Obligation of Parent...................................... -67-
Section 9.10 Captions.................................................. -68-
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Page
Section 9.11 Survival.................................................. -68-
Section 9.12 Parties in Interest; Assignment........................... -68-
Section 9.13 Enforcement of the Agreement.............................. -69-
Section 9.14 Severability.............................................. -69-
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT is made as of January 6, 1999 among Trident
International, Inc., a Delaware corporation (the "Company"), Illinois Tool Works
Inc., a Delaware corporation ("Parent"), and ITW Acquisition Inc., a Delaware
corporation and a direct wholly-owned subsidiary of Parent ("Subsidiary").
WHEREAS, the Company and Subsidiary (the Company and Subsidiary being
referred to in this Agreement as the "Constituent Corporations") desire for
Parent to acquire the Company through a merger of Subsidiary with and into the
Company (the "Surviving Corporation") upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, in furtherance of the acquisition contemplated by this
Agreement, Subsidiary will make an offer to purchase for cash all of the
Company's issued and outstanding shares of common stock, par value $.01 per
share ("Common Shares"), on the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the Company, Parent and Subsidiary desire to make certain
representations, warranties and agreements in connection with the merger of the
Company and Subsidiary;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I.
THE OFFER
Section 1.1 THE OFFER.
(a) As promptly as practicable (but in no event later
than five business days from and including the date of the initial public
announcement of the Offer or this Agreement), Parent shall cause Subsidiary to
commence (within the meaning of Rule 14d-2(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) an offer to purchase for cash (the
"Offer") all of the Company's issued and outstanding Common Shares at a purchase
price of $16.50 per Common Share net to the tendering stockholder in cash (the
"Per Share Amount") (without interest and less any withholding taxes required
under applicable law). The obligation of Subsidiary to accept for payment and to
pay for any Common Shares tendered shall be subject only to the conditions set
forth in Exhibit A hereto (the "Offer Conditions"), including without
limitation, the condition that the number of Common Shares validly tendered and
not withdrawn prior to the expiration date provided in the Offer (the
"Expiration Date") will represent not less than a majority of the Common Shares
outstanding on a fully diluted basis (the "Minimum Share Condition"). Any such
condition may be waived by Parent and Subsidiary.
(b) As soon as practicable on the date of commencement of
the Offer, Parent and Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") a Schedule 14D-1 (the "Schedule 14D-1") with respect to
the Offer, which Schedule 14D-1 shall include an offer to purchase and related
letter of transmittal and summary advertisement (which letter of transmittal and
summary advertisement and offer to purchase, together with
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any amendments or supplements thereto are referred to collectively herein as the
"Offer Documents"). The Company and its counsel shall be given a reasonable
opportunity to review and comment upon the Offer Documents and all amendments
and supplements thereto prior to the filing thereof with the SEC or the
dissemination thereof to the holders of Common Shares. The Company hereby
consents to the inclusion or reference in the Offer Documents of the
recommendations and other actions of the Company's Board of Directors described
in Section 1.2.
(c) Neither Parent nor Subsidiary will, without the
consent of the Company, (i) amend the Offer to decrease the Per Share Amount or
change the form of consideration to be paid in the Offer or (ii) except as
required by law or any rule, regulation or interpretation in the opinion of
counsel to Parent, or required by any position of the SEC or the staff thereof,
extend the expiration date of the Offer (which shall initially be 20 business
days after the date the Offer is commenced); provided that if the Offer
Conditions have not been satisfied, Subsidiary, without the consent of the
Company, may extend the Offer, from time to time for up to an aggregate of 10
additional business days. Notwithstanding the foregoing, if, immediately prior
to the Expiration Date of the Offer (as it may be extended), the Common Shares
tendered and not withdrawn pursuant to the Offer equal less than 90% of the
Common Shares then outstanding on a fully diluted basis, Subsidiary may, in its
sole discretion, extend the Offer notwithstanding that all conditions to the
Offer are satisfied as of such Expiration Date of the Offer; provided, however,
that under no circumstances shall any such extension, when aggregated with any
extensions made
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pursuant to the immediately preceding sentence, exceed 10 business days without
the approval of the Company.
(d) Subject to the terms and conditions of this
Agreement, Subsidiary shall, and Parent shall cause Subsidiary to, accept for
payment, and pay for, all Common Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the expiration of the Offer.
Immediately following Parent's acceptance for payment of Common Shares pursuant
to the Offer, Parent or Subsidiary will provide to the depositary for the Offer
amounts sufficient in the aggregate to provide all funds necessary for such
depositary to make payments pursuant to this Section 1.1 to all tendering
stockholders.
Section 1.2 COMPANY ACTIONS.
(a) The Company represents and warrants that:
(i) its Board of Directors (at a meeting duly
called and held) has, in light of and subject to the terms and
conditions set forth herein, unanimously approved this Agreement, the
Offer and the Merger (as defined in Section 2.1) and has resolved to
recommend acceptance of the Offer and approval and adoption of this
Agreement and the Merger by the holders of Common Shares;
(ii) the transactions contemplated by this
Agreement, including without limitation, the Offer, the Merger and the
acquisition of Common Shares by Parent and/or Subsidiary, have been
duly approved by appropriate action of the Company's Board of Directors
with the result that (A) Section 203 DGCL does not require that any
"business combination" (as that term is defined in said Section 203)
involving the Company and Parent or Subsidiary be delayed for the
three-year period
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specified therein, and (B) no right of the Company's stockholders to
acquire securities pursuant to any rights agreement will be triggered,
created or otherwise arise as a result of the Offer, the Merger or
transactions contemplated by this Agreement; and
(iii) The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC
("▇▇▇▇▇▇▇▇- ▇▇▇▇▇▇▇▇") has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the
Company's stockholders pursuant to the Offer and the Merger is fair
from a financial point of view to the public stockholders (other than
Parent and Subsidiary) of the Company (the "Fairness Opinion").
(b) The Company hereby agrees to file, as soon as
practicable after the commencement of the Offer, with the SEC a
solicitation/recommendation statement on Schedule 14D-9 (the "Schedule 14D-9")
containing the recommendation of the Company's Board of Directors that the
stockholders of the Company accept the Offer and containing a copy of the
Fairness Opinion. Parent and Subsidiary and their counsel shall be given a
reasonable opportunity to review and comment upon the Schedule 14D-9 and all
amendments and supplements thereto prior to the filing thereof with the SEC or
the dissemination thereof to the holders of Common Shares. Promptly after filing
the Schedule 14D-9 with the SEC, the Company shall deliver to Parent a copy of
the Fairness Opinion, which Parent may provide to Parent's lenders. The Company
has been authorized by ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ to permit the inclusion of the Fairness
Opinion (or any reference thereto that is reasonably acceptable to
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇) in the Offer Documents, the Schedule 14D-9 and in any proxy
statement relating to the Merger.
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(c) Notwithstanding anything contained in this Section
1.2 or elsewhere in this Agreement, if the Company's Board of Directors shall
have determined, in good faith, to withdraw, modify or amend its recommendations
to stockholders of the Company, after receiving advice from its outside counsel
that the failure to do so could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law, such withdrawal, modification
or amendment shall not constitute a breach of this Agreement.
Section 1.3 STOCKHOLDER MAILINGS. In connection with the
Offer, the Company (i) shall cause its transfer agent as promptly as possible to
furnish Parent and Subsidiary with mailing labels, security position listings
and any available listings or computer tapes or files containing the names and
addresses of record holders of the Common Shares as of the most recent
practicable date, (ii) shall furnish Subsidiary with such additional information
(including, but not limited to, updated lists of holders of Common Shares and
their addresses, mailing labels and lists of security positions and
non-objecting beneficial owner lists) and such other assistance as Subsidiary or
its agents may reasonably request in communicating the Offer to the Company's
record and beneficial stockholders, and (iii) shall furnish Parent and
Subsidiary with such other assistance as Parent and Subsidiary or their agents
may reasonably request in connection with the dissemination of the Offer
Documents to participants in the Company's employee benefit plans, if any, which
permit or require the participants to make a determination as to the Offer.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Subsidiary and their affiliates, associates,
agents and advisors, shall use the information contained in any such
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labels, listings and files only in connection with the Offer and the Merger and,
if this Agreement is terminated for any reason, shall return to the Company, or
destroy, the originals and all copies in their possession.
ARTICLE II.
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section 2.3),
Subsidiary shall be merged with and into the Company, and the separate corporate
existence of Subsidiary shall thereupon cease (the "Merger"). The Company shall
be the Surviving Corporation in the Merger and shall continue to be governed by
the laws of the State of Delaware, and the separate corporate existence of the
Company with all its rights, privileges, powers and franchises shall continue
unaffected by the Merger. The Merger shall have the effects specified in the
DGCL.
Section 2.2 CLOSING. The closing of the Merger (the "Closing")
shall take place (a) at the offices of Jenner & Block, ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., local time, as soon as practicable following the
later to occur of (i) the day of the receipt of approval of the Merger by the
Company's stockholders if such approval is required, or as soon as practicable
after completion of the Offer if such approval by stockholders is not required,
and (ii) the day on which the last of the conditions set forth in Article VII
hereof is satisfied or duly waived, or (b) at such other time and place and/or
on such other date as the Company and Parent may agree. The date on which the
Closing occurs is hereinafter referred to as the "Closing Date."
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Section 2.3 EFFECTIVE TIME. If all the conditions to the
Merger set forth in Article VII shall have been fulfilled or waived in
accordance herewith and this Agreement shall not have been terminated in
accordance with Article VIII, the parties hereto shall, on the Closing Date,
file and record an appropriate agreement of merger, certificate of merger or
certificate of ownership and merger meeting the requirements of and executed in
accordance with the DGCL. The Merger shall become effective at the time (the
"Effective Time") at which such agreement or certificate is filed with the
Secretary of State of Delaware.
Section 2.4 FURTHER ASSURANCES. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Constituent Corporations acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out and effectuate the purposes of this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of the Constituent Corporations or otherwise, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out and effectuate the purposes of
this Agreement.
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ARTICLE III.
CERTIFICATE OF INCORPORATION AND BY-LAWS;
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
Section 3.1 CERTIFICATE OF INCORPORATION. The certificate of
incorporation of the Company as amended and in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation, until duly amended in accordance with its terms and the DGCL.
Section 3.2 BY-LAWS. The by-laws of the Company in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation from and after the Effective Time, until duly amended in accordance
with their terms and the DGCL.
Section 3.3 OFFICERS AND DIRECTORS. The directors and officers
of Subsidiary immediately prior to the Effective Time shall, from and after the
Effective Time, be directors and officers, respectively, of the Surviving
Corporation until their respective successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's certificate of incorporation and by-laws.
ARTICLE IV.
CONVERSION OF COMMON SHARES IN THE MERGER
Section 4.1 CONVERSION. The manner of converting shares of the
Company and Subsidiary in the Merger shall be as follows:
(a) COMMON SHARES GENERALLY. At the Effective Time, each
Common Share issued and outstanding immediately prior to the Effective
Time (other than Dissenting Shares (as defined in Section 4.3), Common
Shares owned by the
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Company or any direct or indirect subsidiary of the Company (including
treasury shares), and Common Shares owned by Parent, Subsidiary or any
other direct or indirect subsidiary of Parent (collectively, the
"Parent Companies")) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right
to receive $16.50 in cash, or such higher price, if any, as may be
offered and paid in the Offer (the "Merger Consideration"). All Common
Shares, by virtue of the Merger and without any action on the part of
the holders thereof, shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of a
certificate representing any Common Shares shall thereafter cease to
have any rights with respect to the Common Shares other than the right
to receive the Merger Consideration, except for Dissenting Shares.
(b) COMMON SHARES HELD BY THE PARENT COMPANIES OR THE
COMPANY. At the Effective Time, each Common Share issued and
outstanding immediately prior to the Effective Time and owned by any of
the Parent Companies, and each Common Share issued and held in the
Company's treasury or held by any direct or indirect subsidiary of the
Company immediately prior to the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, shall
no longer be outstanding, shall be canceled and retired without payment
of any consideration therefor and shall cease to exist.
(c) SUBSIDIARY STOCK. At the Effective Time, each share
of capital stock of Subsidiary issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any
action on the part of Subsidiary or the
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holders of such shares, be converted into one share of common stock of
the Surviving Corporation.
Section 4.2 PAYMENT. Prior to the Effective Time, Subsidiary
shall authorize the depositary for the Offer (or one or more commercial banks
organized under the laws of the United States or any state thereof each with
capital, surplus and undivided profits of at least $100,000,000) to act as
Paying Agent hereunder with respect to the Merger (the "Paying Agent").
Immediately prior to the Effective Time, Parent will provide to the Paying Agent
amounts sufficient in the aggregate to provide all funds necessary for the
Paying Agent to make payments pursuant to Section 4.1(a) to holders (other than
any of the Parent Companies, the Company or any direct or indirect subsidiary of
the Company or holders of Dissenting Shares) of Common Shares issued and
outstanding immediately prior to the Effective Time. Pending payment of such
funds to the holders of certificates for Common Shares, such funds will be held
and may be invested by the Paying Agent as Parent directs (so long as such
directions do not impair the rights of holders of Common Shares) in direct
obligations of the United States, obligations for which the full faith and
credit of the United States is pledged to provide for the payment of principal
and interest or commercial paper rated of the highest quality by ▇▇▇▇▇'▇
Investors Services, Inc. or Standard & Poor's Corporation. Any net profit
resulting from, or interest or income produced by, such investments will be
payable to the Surviving Corporation or Parent, as Parent directs. Parent will
promptly replace any monies lost through any investment made pursuant to this
Section 4.2. Promptly after the Effective Time, the Parent shall mail or cause
to be mailed, and shall make available at the offices of the Paying Agent, to
each person who was, immediately prior
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to the Effective Time, a holder of record (other than any of the Parent
Companies, the Company or any direct or indirect subsidiary of the Company or
holders of Dissenting Shares) of issued and outstanding Common Shares a letter
of transmittal and related instructions for use in effecting the surrender of
the certificates which, immediately prior to the Effective Time, represented any
of such Common Shares in exchange for the cash payment set forth in Section
4.1(a). Upon surrender to the Paying Agent of such certificates, together with
such letter of transmittal, duly executed and completed in accordance with the
instructions thereto, the Paying Agent shall promptly pay to the persons
entitled thereto the amount in cash to which such persons are entitled pursuant
to Section 4.1(a). No interest will be paid or will accrue on the cash payable
upon the surrender of any such certificate. If payment is to be made to a person
other than the registered holder of the certificate surrendered, it shall be a
condition of such payment that the certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. One hundred eighty (180) days
following the Effective Time, Parent shall be entitled to require the Surviving
Corporation or the Paying Agent to deliver to it any funds (including any
interest received with respect thereto) which it has made available to the
Surviving Corporation or the Paying Agent and which have not been disbursed to
holders of certificates representing Common Shares outstanding immediately prior
to the Effective Time, and thereafter such holders shall be entitled to look to
the Surviving Corporation (subject to
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abandoned property, escheat and other similar laws) only as general creditors
thereof with respect to the cash payable (without interest thereon) upon due
surrender of their certificates; provided that the Surviving Corporation shall
be obligated to pay, and Parent shall cause the Surviving Corporation to be
provided with, such cash to the extent the Surviving Corporation is required by
law and this Agreement to pay such cash. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection with
the exchange of cash for Common Shares, and Parent shall reimburse the Surviving
Corporation for such charges and expenses. In the event that any certificate
representing Common Shares shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed and, if required by Parent or the Surviving
Corporation, upon the posting by such person of a bond in such amount as Parent
or the Surviving Corporation may reasonably direct as indemnity against any
claim that may be made against it with respect to such certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed certificate the
cash representing the Merger Consideration deliverable in respect thereof
pursuant to this Agreement.
Section 4.3 DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary but only to the extent required by the DGCL,
Common Shares that are issued and outstanding immediately prior to the Effective
Time and are held by holders who comply with all the provisions of Delaware law
concerning the right of holders of Common Shares to dissent from the Merger and
require appraisal of their Common Shares ("Dissenting Stockholders") shall not
be converted into the right to receive the Merger Consideration but shall be
entitled to receive such consideration as may be determined to be due such
Dissenting
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Stockholder pursuant to the law of the State of Delaware; provided, however,
that (i) if any Dissenting Stockholder shall subsequently deliver a written
withdrawal of the holder's demand for appraisal (with the written approval of
the Surviving Corporation, if such withdrawal is not tendered within 60 days
after the Effective Time), or (ii) if any Dissenting Stockholder fails to
establish and perfect the holder's entitlement to appraisal rights as provided
by applicable law, or (iii) if within 120 days of the Effective Time neither any
Dissenting Stockholder nor the Surviving Corporation has filed a petition
demanding a determination of the value of all Common Shares outstanding at the
Effective Time and held by Dissenting Stockholders in accordance with applicable
law, then such Dissenting Stockholder or Stockholders, as the case may be, shall
forfeit the right to appraisal of such shares and such shares shall thereupon be
deemed to have been converted into the right to receive, as of the Effective
Time, the Merger Consideration, without interest. The Company shall give Parent
and Subsidiary (A) prompt notice of any written demands for appraisal,
withdrawals of demands for appraisal and any other related instruments received
by the Company, and (B) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal. The Company will not, except
with the prior written consent of Parent, voluntarily make any payment with
respect to any demands for appraisal or settle or offer to settle any demand.
The Common Shares described in this Section 4.3 held by Dissenting Stockholders
who exercise and perfect their rights to appraisal under applicable Delaware law
and shall not have withdrawn, waived or otherwise forfeited such appraisal
rights are referred to herein as Dissenting Shares.
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Section 4.4 CLOSING OF TRANSFER RECORDS. At and after the
Effective Time, the stock transfer books of the Surviving Corporation and the
stock ledger of the Company shall be closed with respect to Common Shares of the
Company. If, after the Effective Time certificates representing Common Shares
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash as provided in this Article IV.
Section 4.5 EMPLOYEE AND OTHER STOCK OPTIONS. Prior to the
signing hereof, the Company has delivered to Parent Schedule 4.5 hereto
containing a list of each employee stock option and each other stock option
outstanding on the date hereof, whether or not fully exercisable ("Stock
Options"), to purchase Common Shares heretofore granted under any Company option
plan or agreement, in each case as amended to the date of this Agreement
(collectively, the "Stock Option Plans"). The Company represents and warrants
that all such Stock Options are subject to the Company's Third Amended and
Restated 1994 Stock Option and Grant Plan (the "Company's Amended and Restated
Stock Option Plan") and consist of (i) non-qualified options granted to
non-employee directors of the Company to purchase Common Shares ("Non-Employee
Director Options"), (ii) non-qualified and incentive stock options granted to
employees of the Company ("Employee Stock Options"), and (iii) non-qualified
stock options for non-employee consultants ("Consultant Stock Options"). The
Company further represents and warrants that each of such Stock Options was
granted pursuant to either (i) the form of Incentive Stock Option Agreement for
Employees appended to Schedule 4.5; (ii) the form of Non-Qualified Stock Option
Agreement for Non-Employee Directors appended to Schedule 4.5; or (iii) the form
of Non-Qualified Stock Option Agreement for Non-Employee Consultants appended to
Schedule 4.5. The Company has
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taken appropriate action to provide that, immediately prior to the acceptance of
Common Shares pursuant to the Offer, each outstanding Stock Option, whether or
not then exercisable, shall become fully exercisable and vested, and each Stock
Option shall be canceled and each holder of a Stock Option shall be entitled to
receive a cash payment from the Company equal to the product of (a) the excess,
if any, of the Per Share Amount over the per Common Share exercise price of such
Stock Option and (b) the number of Common Shares subject to such Stock Option,
which cash payment shall be treated as compensation and shall be net of any
applicable federal or state withholding tax. All Stock Options shall thereafter
be deemed canceled and of no force or effect. After the date hereof, the Company
shall not grant any additional stock options or other rights to acquire capital
stock of the Company.
Section 4.6 WARRANTS. Prior to the signing hereof, the Company
delivered to Parent Schedule 4.6 hereto containing a list of each warrant
outstanding on the date hereof, whether or not fully exercisable ("Warrants"),
to purchase Common Shares heretofore granted by the Company. At the Effective
Time, each Warrant shall no longer entitle the holder thereof to purchase Common
Shares, but instead shall entitle the holder thereof to purchase, upon exercise
of the Warrant, the Merger Consideration which the holder of the Warrant would
have been entitled to receive pursuant to the Merger if the Warrant had been
exercised immediately prior to the Effective Time. Promptly following the
consummation of the Merger, the Surviving Corporation shall execute and deliver
to each holder of a Warrant and to the Warrant Agency, if any, with respect to
the Warrants an agreement as to the rights of the holder in accordance with this
Section 4.6. After the date hereof, the
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Company shall not grant any additional warrants or other rights to acquire
capital stock of the Company.
Section 4.7 EMPLOYEE STOCK PURCHASE PLAN. The Company has
taken appropriate action to provide that, (i) the offering period pending on the
last business day prior to the date hereof under the Company's Employee Stock
Purchase Plan (the "Stock Purchase Plan") shall be terminated as of the date
hereof, (ii) each participant in the Stock Purchase Plan on the date hereof
shall be deemed to have exercised his or her Option (as defined in the Stock
Purchase Plan) on such date and shall acquire from the Company (A) such number
of whole Common Shares as his or her accumulated payroll deductions on such date
will purchase at the Option Price (as defined in the Stock Purchase Plan)
(treating the last business day prior to the date hereof as the "Exercise Date"
for all purposes of the Stock Purchase Plan) and (B) cash in the amount of any
remaining balance in such participant's account without interest, and (iii) the
Stock Purchase Plan shall be terminated effective as of the date hereof.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES OF PARENT AND
SUBSIDIARY. Parent and Subsidiary (which term, for purposes of this Article V,
includes Subsidiary and any other direct or indirect wholly-owned subsidiary or
subsidiaries of Parent that may, in accordance with this Agreement, participate
as a purchaser of Common Shares in the Offer or as a Constituent Corporation in
the Merger or that is otherwise an assignee of any rights or
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obligations of Parent or Subsidiary hereunder), jointly and severally, represent
and warrant to and agree with the Company that:
(a) CORPORATE ORGANIZATION. Each of Parent and Subsidiary
is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation with all
requisite corporate power and authority to own, lease, license and use
its properties and assets and to carry on the business in which it is
now engaged. Parent beneficially owns all of the outstanding capital
stock of Subsidiary.
(b) CORPORATE AUTHORIZATION. Parent and Subsidiary each
have all requisite corporate power and authority to execute, deliver,
and perform the transactions contemplated by this Agreement. The
execution and delivery of this agreement and the consummation by Parent
and Subsidiary of the transactions contemplated hereby have been duly
and validly authorized by requisite corporate action of Parent and
Subsidiary, and no other corporate proceedings on the part of Parent
and Subsidiary are necessary to authorize this agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by Parent and Subsidiary,
is the legal, valid, and binding obligation of Parent and Subsidiary,
and is enforceable as to them in accordance with its terms except as
enforcement may be limited by applicable bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights and
remedies generally, and except that the availability of equitable
remedies, including specific performance,
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is subject to the discretion of the court before which any proceeding
therefor may be brought.
(c) NO CONFLICTS. The execution and delivery of this
Agreement by Parent and Subsidiary do not, and the consummation of the
transactions contemplated hereby by Parent and Subsidiary will not (i)
violate or conflict with the certificate of incorporation or by-laws of
Parent or Subsidiary or (ii) constitute a breach or violation of, or a
default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license to which Parent or any of its
subsidiaries is subject, assuming compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Exchange Act and the DGCL, or (iii) constitute a breach or violation
of, a default (or an event or condition which, with notice or lapse of
time, or both, would constitute a default) under, or permit the
termination of, or cause or permit the acceleration of the maturity of,
any agreement, indenture, mortgage, bond, note or instrument to which
Parent or any of its subsidiaries is a party or by which Parent or any
of its subsidiaries is bound, which conflict, breach, violation,
default, termination or acceleration would have a material adverse
effect on the assets, financial condition or business of Parent, and
its subsidiaries, taken as a whole. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
will not require the consent or approval of any other party to any
agreement, indenture, mortgage, bond, note or instrument to which
Parent or any of Parent's subsidiaries is a party or by which Parent or
any of Parent's subsidiaries is bound where the failure to obtain any
such
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consent or approval would result in a material adverse effect on the
assets, financial condition or business of Parent and its subsidiaries,
taken as a whole, or would prevent the consummation of the transactions
contemplated hereby. Subsidiary has not, since its inception, and,
prior to the Effective Time, Subsidiary shall not, directly or
indirectly, (i) conduct or engage in any business activities of any
kind or nature, (ii) incur any liability or obligation, (iii) enter
into or become bound by any mortgage, bond, agreement, indenture, note
or other instrument, or any arrangement with any person or entity, or
(iv) become subject to or bound by any obligation or undertaking,
except in connection with the negotiation, execution, delivery and
performance of this Agreement and the transactions contemplated hereby
and any financings in connection with such transactions.
(d) FINANCING. Parent or Subsidiary (i) have available
cash, undrawn lines of credit and other resources sufficient to provide
all funds necessary for the purchase of Common Shares pursuant to the
Offer and the Merger in accordance with the terms of this Agreement and
to consummate the transactions contemplated hereby and (ii) will have
on the Expiration Date and the Effective Date sufficient funds to
purchase and pay for the Common Shares pursuant to the Offer and the
Merger, respectively.
(e) FILINGS AND CONSENTS. Other than the filings provided
for in Section 2.3 and filings pursuant to the HSR Act, the Exchange
Act, and under any applicable state, environmental, takeover, or
securities laws, there are no filings required to be made by Parent or
Subsidiary with, and there are no consents, approvals, permits or
authorizations required to be obtained by Parent or Subsidiary from
federal or state
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governmental and regulatory authorities in connection with the
execution and delivery of this Agreement by Parent or Subsidiary and
the consummation of the transactions contemplated hereby by Parent and
Subsidiary, other than such which the failure to make or obtain would
not, in the aggregate, have a material adverse effect on the assets,
financial condition or business of Parent, and its subsidiaries, taken
as a whole, or would prevent the consummation of the transactions
contemplated hereby.
(f) LITIGATION. No litigation is pending or threatened
against Parent or Subsidiary which in the reasonable opinion of Parent
would materially adversely affect their properties or business so as to
prevent them from consummating the transactions contemplated hereby.
(g) OFFER DOCUMENTS. The Offer Documents pursuant to
which the Offer will be made, including the Schedule 14D-1, will comply
as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder. The information contained
in the Offer Documents (other than information supplied in writing by
the Company expressly for inclusion in the Offer Documents) will not,
at the respective times the Schedule 14D-1 or any amendments or
supplements thereto are filed with the Commission, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading. Parent and Subsidiary will promptly correct
any statements in the Schedule 14D-1 and the Offer Documents that have
become false or misleading and take all steps necessary to cause such
Schedule 14D-1
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as so corrected to be filed with the SEC and such Offer Documents as so
corrected to be disseminated to holders of Common Shares, in each case
as and to the extent required by applicable law.
(h) MERGER PROXY STATEMENT. None of the information to be
supplied by Parent or Subsidiary expressly for inclusion in a proxy or
information statement of the Company required to be mailed to the
Company's stockholders in connection with the Merger (the "Merger Proxy
Statement"), or in any amendments or supplements thereto will, at the
respective times of (a) the mailing thereof and (b) the meeting, if
any, of stockholders to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(i) BROKERS AND FINDERS. Parent has not employed any
investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement which
would be entitled to any investment banking, brokerage, finder or
similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
(j) COMMON SHARES. Neither Parent nor Subsidiary nor any
of their respective affiliates owns any Common Shares.
Section 5.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Parent and Subsidiary that:
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(a) CORPORATE ORGANIZATION. Except as set forth in
Schedule 5.2(a), each of the Company and its operating subsidiaries is
a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation with all
requisite corporate power and authority to own, lease, license and use
its properties and assets and to carry on the business in which it is
now engaged. Each of the Company and its operating subsidiaries is in
good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted by it
require such qualification and where failure to so qualify or be in
good standing would, either singly or in the aggregate, have a Material
Adverse Effect (for purposes of Section 5.2 of this Agreement "Material
Adverse Effect" shall mean an adverse effect of $250,000 or more on the
business, assets, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole). The Company has
heretofore delivered to Parent complete and correct copies of the
Company's Certificate of Incorporation and By-Laws, each as amended and
in effect as of the date of this Agreement, and a list of the Company's
subsidiaries, each of which is wholly-owned directly or indirectly by
the Company, except as otherwise set forth therein. All shares of
capital stock of the Company's subsidiaries beneficially owned by the
Company have been validly issued and are fully paid and nonassessable.
(b) CAPITALIZATION. The authorized capital stock of the
Company consists of 35,000,000 shares of capital stock, of which
30,000,000 shares are common stock, having a par value of $0.01 per
share (and which are herein referred to as the
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Common Shares) and of which 5,000,000 shares are preferred stock, par
value $0.01 per share. As of the date hereof there are 6,446,692 Common
Shares outstanding, 718,800 Common Shares held as treasury shares and
no shares of preferred stock issued and outstanding. All of the
outstanding Common Shares have been validly issued and are fully paid
and nonassessable. As of the date hereof, the Company has no Common
Shares reserved for issuance, except that (i) an aggregate of 282,275
Common Shares (at a weighted aggregate average exercise price of
$10.79) and an additional 82,000 Common Shares (at exercise prices in
excess of $16.50) are subject to, and are reserved for issuance upon,
the exercise of Employee Stock Options; (ii) an aggregate of 133,796
Common Shares are subject to Non-Employee Director Options (at a
weighted aggregate average exercise price of $11.21); (iii) an
aggregate of 5,000 Shares are subject to, and reserved for, issuance
upon the exercise of Consultant Stock Options (at a weighted aggregate
average exercise price of $8.50); (iv) 442 Common Shares are subject
to, and reserved for, issuance pursuant to the Stock Purchase Plan; and
(v) 23,820 Common Shares are reserved for issuance under the Warrants,
at an exercise price of $1.00 per share. There are no subscriptions,
options, warrants, rights, convertible securities or other agreements
or commitments of any character obligating the Company or any operating
subsidiary to issue, sell, or purchase capital stock, warrants,
convertible securities or other rights with respect to capital stock,
except for the obligations under the Stock Option Plans, the Stock
Purchase Plan and the Warrants. There are no voting trusts or other
agreements or understandings to which the Company or any subsidiary of
the
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Company is a party with respect to the voting of the capital stock of
the Company or any of its subsidiaries. From and after the date hereof,
the Company shall not grant or award, as the case may be, any stock
options and shall not issue any additional capital stock other than
issuances pursuant to the exercise of stock options under presently
outstanding Stock Options or the exercise of presently outstanding
rights under the Stock Purchase Plan or under the Warrants.
(c) CORPORATE AUTHORIZATION AND CERTAIN CORPORATE ACTION.
The Company has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby and, subject only to approval of this Agreement by
the holders of a majority of the Common Shares outstanding and entitled
to vote if such approval is required, no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by the Company, is the
legal, valid and binding obligation of the Company, and is enforceable
as to it in accordance with its terms except as enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights and remedies generally,
and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before
which any proceeding therefor may be brought. The Company has taken
appropriate corporate action to satisfy the provisions of Section 203
of the DGCL so that the provisions thereof are not applicable to the
transactions contemplated by this Agreement.
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(d) FINANCIAL STATEMENTS AND REPORTS. The Company has
previously furnished Parent true and complete copies (with exhibits) of
its (i) Annual Report on Form 10-K for the fiscal year ended September
30, 1998 (the "1998 Annual Report"), as filed with the SEC, (ii) proxy
statements relating to all meetings of its stockholders (whether annual
or special) since January 1, 1998, and (iii) all other schedules,
reports and registration statements filed by the Company with the SEC
since September 30, 1998 (collectively, the "SEC Filings"). As of their
respective dates, the SEC Filings were prepared and filed in accordance
with the applicable rules and regulations of the SEC and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. Since September 30, 1998, the Company has filed
with the SEC all reports and registration statements and all other
filings required to be filed with the SEC under the rules and
regulations of the SEC. The audited financial statements and unaudited
interim financial statements of the Company, together with the notes
thereto, included or incorporated by reference in the 1998 Annual
Report and any other SEC Filings, respectively, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto and subject, in the case of unaudited financial statements, to
normal year-end audit adjustments) and fairly present the financial
position of the Company and its subsidiaries as at the dates thereof
and the results of their operations and changes in financial position
for the periods then ended.
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(e) ABSENCE OF OTHER LIABILITIES. Except as set forth in
Schedule 5.2(e) hereto and as and to the extent set forth on the
consolidated balance sheet of the Company and its subsidiaries at
September 30, 1998, including the notes thereto, contained in the 1998
Annual Report, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which would be required to be reflected on a
balance sheet or in the notes thereto prepared in accordance with
generally accepted accounting principles, except for liabilities or
obligations incurred in the ordinary course of business since September
30, 1998, which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as and
to the extent set forth in the SEC Filings or in Schedule 5.2(f)
hereto, since September 30, 1998, (i) there has not been any Material
Adverse Effect, (ii) the businesses of the Company and each of its
subsidiaries have been conducted only in the ordinary course and in a
manner consistent with past practices, (iii) neither the Company nor
any of its subsidiaries has incurred any material liabilities (direct,
contingent or otherwise) or engaged in any material transaction or
entered into any agreement, in each case, outside the ordinary course
of business, (iv) there has not been any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of the
Company or any of its subsidiaries which would reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect,
(v) there has not been any revaluation by the Company of any of its
material assets, including but not
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limited to writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business, (vi)
there has been no change by the Company in accounting principles,
practices or methods, (vii) there has been no declaration, setting
aside or payment of any dividend or other distribution in respect of
the shares or any direct or indirect redemption, purchase or other
acquisition by the Company of any of its shares of capital stock;
(viii) except for salary increases or other employee benefit
arrangements made in the ordinary course of business consistent with
past practice, or heretofore described in writing to Parent, there has
not been any increase in the compensation payable or to become payable
by the Company or its subsidiaries to any of their respective officers,
or any significant increase in the compensation payable to other
employees or agents of the Company or any of its subsidiaries or any
adoption of any bonus, pension, retirement, profit sharing, or stock
option plan, arrangement or agreement made to or with any of such
officers of employees; and (ix) there has not been any labor strike or
threat thereof or labor trouble or other business event or condition
which is likely to have a Material Adverse Effect.
(g) OFFER DOCUMENTS. None of the information supplied in
writing by the Company or its subsidiaries expressly for inclusion in
the Offer Documents, or in any amendments or supplements thereto will,
at the time supplied or upon the expiration of the Offer, 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
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statements therein, in light of the circumstances under which they were
made, not misleading.
(h) SCHEDULE 14D-9. The Schedule 14D-9 will comply as to
form in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder and the
information contained therein (other than information supplied in
writing by Parent or Subsidiary expressly for inclusion in the Schedule
14D-9) will not at the respective times the Schedule 14D-9 or any
amendments or supplements thereto are filed with the SEC, contain any
untrue statement of a material fact or omit to state any material fact
either 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 Company will promptly correct any statements
in the Schedule 14D-9 that have become false or misleading and take all
steps necessary to cause such Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Common Shares,
in each case as and to the extent required by applicable law.
(i) MERGER PROXY STATEMENT. The Merger Proxy Statement
and all amendments and supplements thereto will comply as to form in
all material respects with the applicable requirements of the Exchange
Act and the rules and regulations thereunder and will not, at the time
of (a) the mailing thereof and (b) the meeting, if any, of stockholders
to be held in connection with the Merger, together with any amendments
and supplements thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order
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to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied in writing by
Parent or any affiliates of Parent expressly for inclusion in the
Merger Proxy Statement.
(j) CERTAIN AGREEMENTS. Except for the agreements
disclosed in the SEC Filings prior to the date hereof or as set forth
in Schedule 5.2(j) hereto, neither the Company nor any of its
subsidiaries is party to any (i) agreements with any executive officer
or other key employee of the Company or any of its subsidiaries (A) the
benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving the Company or
any of its subsidiaries of the nature of any of the transactions
contemplated by this Agreement, (B) providing any term of employment or
compensation guarantee extending for a period longer than one year, or
(C) providing severance benefits or other benefits (which are
conditioned upon a change of control) after the termination of
employment of such employee regardless of the reason for such
termination of employment or (ii) agreement or plan, including, without
limitation, any incentive or bonus plan, stock option plan, stock
appreciation right plan or stock purchase plan, any of the benefits of
which will be materially increased, or the vesting of benefits of which
will be materially accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
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(k) NO CONFLICTS. The execution and delivery of this
Agreement by the Company do not, and the consummation of the
transactions contemplated hereby by the Company will not, (i) violate
or conflict with the amended certificate of incorporation or by-laws of
the Company, or (ii) assuming compliance with the HSR Act, the Exchange
Act and the DGCL, constitute a breach or violation of, or a default
under, any United States law, rule or regulation or any judgment,
decree, order, governmental permit or license, to which the Company or
any of its subsidiaries is subject, or (iii) constitute a breach or
violation of, a default (or an event or condition which, with notice or
lapse of time, or both, would constitute a default) under, permit the
termination of, or cause or permit the acceleration of the maturity of,
any agreement, indenture, mortgage, bond, note or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound, which conflict, breach,
violation, default, termination or acceleration would have a Material
Adverse Effect.
(l) FILINGS AND CONSENTS. Other than the filings provided
for in Section 2.3 and filings pursuant to the HSR Act, the Exchange
Act, and under any applicable state takeover or securities laws, there
are no filings required to be made by the Company with, and there are
no consents, approvals, permits or authorizations required to be
obtained by the Company from, federal or state governmental and
regulatory authorities in connection with the execution and delivery of
this Agreement by the Company and the consummation of the transactions
contemplated hereby by the Company, other than such which the failure
to make or obtain would not, in the
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aggregate, have a Material Adverse Effect, or would prevent the
consummation of the transactions contemplated hereby.
(m) COMPLIANCE WITH LAWS. Except as disclosed in the SEC
Filings or in Schedule 5.2(m) hereto, the Company and its subsidiaries
are in compliance with all applicable laws, regulations, orders,
judgments and decrees except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
(n) LITIGATION. Except as disclosed in the SEC Filings or
in Schedule 5.2(n), there is no action, suit, proceeding at law or in
equity, or any arbitration or any adversarial administrative or other
adversarial proceeding by or before (or to the best knowledge of the
Company any investigation by) any governmental or other instrumentality
or agency, pending, or, to the best knowledge of the Company,
threatened, against or affecting the Company or any of its
subsidiaries, or any of their properties or rights. Except as disclosed
in the SEC Filings or in Schedule 5.2(n), neither the Company nor any
of its subsidiaries is subject to any judgment, order, award or decree
entered in any lawsuit or proceeding which has, or is reasonably
expected to have, a Material Adverse Effect.
(o) EMPLOYEE BENEFIT PLANS. All "employee benefit plans"
("Employee Plans") as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained or contributed to by the Company and its subsidiaries are in
compliance with the applicable provisions of ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), except for instances of
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non-compliance that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. All Employee
Plans are included in the exhibits to or incorporated by reference in
the 1998 Annual Report.
(p) TAXES. The Company and each of its subsidiaries, and
any consolidated, combined, unitary or aggregate group for tax purposes
of which the Company or any of its subsidiaries is a member, has filed
or caused to be filed, or will file or cause to be filed on or prior to
the Closing Date (as defined in Section 2.2), all Tax returns and Tax
reports which are required to be filed by, or with respect to, it on or
prior to the Closing Date (taking into account any extension of time to
file granted to or on behalf of the Company or any subsidiary)
(collectively, the "Returns"). Such Returns reflect accurately all
liability for Taxes for the periods covered thereby. All Taxes payable
by, or due from, the Company or any of its subsidiaries have been fully
paid or adequately disclosed and provided for on the financial
statements of the Company and its subsidiaries in accordance with
generally accepted accounting principles. All Taxes (as defined below)
shown to be due and payable on the Returns by or with respect to the
Company or any of its subsidiaries have been, or prior to the Closing
Date will be, paid. Without limiting the generality of the foregoing,
(i) no claim for unpaid Taxes (x) to the best knowledge of the Company,
has become a lien or encumbrance of any kind against the property of
the Company or any of its subsidiaries or (y) is being asserted against
the Company or any of its subsidiaries; (ii) no audit of any Return of
the Company or any of its subsidiaries is being conducted by a Tax
authority; (iii) no extension of time is in
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effect with respect to the filing of any Return, the payment of taxes
by the Company or any of its subsidiaries or any limitations period on
the assessment of any Taxes of the Company or any of its subsidiaries;
(iv) there is no Tax deficiency or to the knowledge of the Company any
substantive basis on which any Tax deficiency might be asserted against
the Company or any of its subsidiaries in excess of the reserve for
Taxes set forth in the financial statements of the Company and its
subsidiaries as of the respective dates thereof, except for amounts, if
any, which in the aggregate would not reasonably be expected to have a
Material Adverse Effect; and (v) there are no claims for refunds of
Taxes of the Company or any of its subsidiaries pending. As used
herein, "Taxes" shall mean any taxes of any kind, including but not
limited to those on or measured by or referred to as income, gross
receipts, capital, sales, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profits taxes, customs,
duties or similar fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or
additional amounts with respect to such taxes, imposed by any
governmental authority, domestic or foreign.
(q) HEALTH, SAFETY AND ENVIRONMENTAL LAWS AND
REGULATIONS. Except as disclosed in Schedule 5.2(q) hereto, the Company
and its subsidiaries are in material compliance with all applicable
foreign, federal and state laws and regulations, as in effect on the
date hereof, relating to the protection of health, safety and the
environment (collectively, "Environmental Laws"), except for violations
of
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Environmental Laws that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing sentence, except as set forth
on Schedule 5.2(q) hereto, to the best of the Company's knowledge (i)
the Company and each of its subsidiaries have obtained all applicable
permits, licenses and other authorizations which are required to be
obtained under all applicable Environmental Laws by the Company or its
subsidiaries, except where the failure to obtain such permits, licenses
and other authorizations in the aggregate would not reasonably be
expected to have a Material Adverse Effect; (ii) the Company and each
of its subsidiaries are in compliance with all terms and conditions of
such required permits, licenses and authorizations and with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
applicable Environmental Laws, except where noncompliance in the
aggregate would not reasonably be expected to have a Material Adverse
Effect; (iii) there is no event which is reasonably likely to prevent
continued compliance with such Environmental Laws, or which would give
rise to any common law environmental liability, or which would
otherwise form the basis of any claim, action, suit or proceeding
against the Company or any of its subsidiaries based on or resulting
from the manufacture, processing, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge or release into the
environment, of any hazardous material, except where such events in the
aggregate would not reasonably be expected to have a Material Adverse
Effect, and
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(iv) the Company and its subsidiaries have no reason to believe that
any of the items listed above will be forth-coming.
(r) INTELLECTUAL PROPERTY. To the best knowledge of the
Company, the Company or a subsidiary of the Company is the owner of, or
a licensee under a valid license for, all items of intangible property
which are material to the business of the Company and its subsidiaries
as currently conducted, taken as a whole, including, without
limitation, trade names, unregistered trademarks and service marks,
brand names, software, patents and copyrights. As of the date of this
Agreement, except as disclosed in the SEC Filings or Schedule 5.2(r),
there are no claims pending or, to the Company's knowledge, threatened,
that the Company or any subsidiary is in violation of any such
intellectual property right of any third party which is reasonably
likely to have a Material Adverse Effect, and, to the Company's best
knowledge no third party is in violation of any intellectual property
rights of the Company or any subsidiary which is reasonably likely to
have a Material Adverse Effect.
(s) BROKERS AND FINDERS. Except for the fees and expenses
payable to ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, which fees and expenses are reflected in
their agreements with the Company, true and complete copies of which
have been furnished to Parent, the Company has not employed any
investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement which
would be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
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(t) YEAR 2000 COMPLIANCE. To the Company's best
knowledge, there is no impediment to the Company being year 2000
compliant by June 30, 1999 (i.e., that products, hardware, software and
other date-sensitive equipment manufactured, sold, owned, licensed or
used by the Company will be capable of correctly processing date data
(including, but not limited to, calculating, comparing and sequencing)
accurately prior to, during and after the calendar year 2000 when used,
assuming that all third party products, hardware, software and other
date-sensitive equipment used in combination therewith are capable of
properly exchanging date data). The Company has submitted inquiries to
its vendors who supply products or services to the Company in the
amount of $100,000 or more on an annual basis and to the best of the
Company's knowledge such vendors are or will be 2000 compliant no later
than December 31, 1999.
(u) CONTRACTS. Schedule 5.2(u) sets forth a list of each
contract (other than contracts listed on other schedules to this
Agreement or in the SEC Filings) of the Company providing for payments
aggregating One Hundred Thousand ($100,000) or more during the term of
the respective contract (which contracts so listed on Schedule 5.2(u)
and other schedules to this Agreement are collectively referred to as
the "Company Contracts" or individually as "Company Contract"). Each
Company Contract is valid, binding and enforceable and in full force
and effect, and such Company Contracts will continue to be valid,
binding and enforceable and in full force and effect immediately
following the consummation of the transactions contemplated hereby,
except where failure to be valid, binding and enforceable and
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in full force and effect would not have a Material Adverse Effect, and
there are no material defaults thereunder by the Company or its
subsidiaries or, to the best knowledge of the Company, by any other
party thereto. No event has occurred which either entitles, or would,
on notice or lapse of time or both, entitle the holder of any
indebtedness for borrowed money of the Company or any of its
subsidiaries to accelerate such indebtedness except as set forth in
Section 5.2(u).
(v) LABOR RELATIONS. Neither the Company nor any of its
subsidiaries is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or
its subsidiaries. There is no labor strike, slowdown or work stoppage
or lockout pending or, to the best knowledge of the Company, threatened
against the Company or any of its subsidiaries. There is no unfair
labor practice charge or other employment related complaint pending or,
to the best knowledge of the Company, threatened against the Company or
any of its subsidiaries which if decided adversely would be reasonably
likely to have a Material Adverse Effect. To the Company's best
knowledge, there is no representation claim or petition pending before
the National Labor Relations Board and no question concerning
representation exists with respect to the employees of the Company or
its subsidiaries.
(w) AFFILIATE TRANSACTIONS. Except as set forth in the
SEC Filings and as set forth in Schedule 5.2(w) hereto, from September
30, 1998, through the date of this Agreement there have been no
transactions, agreements, arrangements or understandings between the
Company or any of its subsidiaries, on the one hand, and
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any affiliates (other than wholly-owned subsidiaries) of the Company or
other persons, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act of
1933, as amended.
(x) VOTE REQUIRED. The affirmative vote of the holders of
a majority of the outstanding shares of Common Stock of the Company
entitled to vote thereon is the only vote of the holders of any class
or series of the Company's capital stock necessary to approve the
Merger.
(y) KNOWLEDGE DEFINITION. As used in this Agreement, the
phrase "to the Company's best knowledge" or any similar phrase when
modifying any representation and warranty of the Company means the
actual knowledge of those individuals identified in Schedule 5.2(y)
hereto and that (i) such person has made appropriate inquiries of the
Company's officers and responsible employees; and (ii) nothing has come
to the person's attention in the course of such investigation and
review or otherwise which would cause such person, in the exercise of
due diligence, to believe that such representation and warranty is not
true and correct in all material respects.
ARTICLE VI.
COVENANTS
Section 6.1 NO SOLICITATION OF TRANSACTIONS. The Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to any Third Party
Acquisition (as defined in Section 8.3). The Company, its subsidiaries and
affiliates and their respective officers, directors, employees, representatives
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and agents may, directly or indirectly, furnish information and access to any
Third Party (as defined in Section 8.3) (in each case only in response to a
request for such information or access made after the date hereof and with
respect to confidential information, only pursuant to an appropriate
confidentiality agreement) only if, and may participate in discussions and
negotiate with such Third Party concerning any Third Party Acquisition, only if
(i) such Third Party has submitted a bona fide
proposal to the Board relating to any such transaction, and
(ii) a majority of the Board of Directors of the
Company determines, in its good faith judgment after receiving advice
from its outside counsel, that failing to take such action could
reasonably be expected to be a breach of the directors' fiduciary
duties under applicable law.
The Company shall promptly notify Parent, if any proposal or offer, or any
inquiry or contact with any person with respect thereto, is made and shall, in
any such notice to Parent, indicate in reasonable detail the identity of the
offeror and the terms and conditions of any proposal or offer, or any such
inquiry or contact. The Company shall keep Parent promptly advised of all
developments which could reasonably be expected to culminate in the Board of
Directors withdrawing, modifying or amending its recommendation of the Offer,
the Merger and the other transactions contemplated by this Agreement, unless
with respect to a specific development the Board of Directors of the Company by
a majority vote determines in its good faith judgment, after receiving advice
from outside counsel, that notifying Parent of such development could reasonably
be expected to be a breach of the Board's fiduciary duties under applicable law.
Except as set forth in this Section 6.1, neither the Company or any
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of its affiliates, nor any of its or their respective officers, directors,
employees, representatives or agents, shall, directly or indirectly, knowingly
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any Third Party concerning any Third Party
Acquisition; provided, that nothing in this Section 6.1 shall prevent the
Company or the Board from taking, and disclosing to the Company's stockholders,
a position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer or from making such disclosure to the
Company's stockholders which, in the good faith judgment of its Board of
Directors after receiving advice from outside counsel, is required under
applicable law; provided further, that the Board shall not recommend that the
stockholders of the Company tender their Common Shares in connection with any
such tender offer unless the Board by a majority vote determines in its good
faith judgment, after receiving advice from outside counsel, that failing to
take such action could reasonably be expected to be a breach of the Board's
fiduciary duties under applicable law.
Section 6.2 POSTPONEMENT OF ANNUAL MEETING. The Company shall
as soon as possible indefinitely postpone its 1999 annual meeting of
stockholders, and shall take no action unless compelled by legal process to
reschedule such annual meeting or to call a special meeting of stockholders of
the Company except in accordance with this Agreement unless and until this
Agreement has been terminated in accordance with its terms.
Section 6.3 INTERIM OPERATIONS OF THE COMPANY. Except as set
forth in Schedule 6.3 hereto, contemplated hereby or with the written consent of
Parent or Subsidiary, during the period from the date of this Agreement to the
earlier of the New Board Date (as
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defined in Section 6.12) or the Effective Time, the Company shall, and shall
cause its subsidiaries to, conduct (except as otherwise permitted by Section
6.1) its and their business only in the ordinary course, will make no material
changes in the operations of the Company or its subsidiaries and shall use its
reasonable efforts to (i) preserve intact the business organization of the
Company and its subsidiaries, (ii) keep available the services of its and their
present officers and key employees, and (iii) preserve the good will of those
having business relationships with the Company and its subsidiaries. Except as
set forth in Schedule 6.3 hereto, contemplated hereby or with the consent of
Parent or Subsidiary, during the period from the date of this Agreement to the
earlier of the New Board Date or the Effective Time, neither the Company nor any
of its subsidiaries will: (a) amend or otherwise change its certificate of
incorporation or by-laws, as each such document is in effect on the date hereof;
(b) issue or sell, or authorize for issuance or sale, additional shares of any
class of capital stock, including Common Shares or any securities convertible
into capital stock, or grant any warrants, options, or other rights to acquire,
or incur any obligation or make any commitment for issuance of, capital stock or
any securities convertible into capital stock; (c) in the case of the Company,
declare, set aside, make or pay any dividend or other distribution with respect
to its capital stock other than if requested by Parent; (d) redeem, purchase or
otherwise acquire, or agree to redeem, purchase or otherwise acquire, directly
or indirectly, any of its capital stock, other than if requested by Parent; (e)
except in the ordinary course of business, sell, pledge, dispose of or encumber,
or agree to sell, pledge, dispose of or encumber, any material assets of the
Company or any of its subsidiaries other than in connection with discontinued
operations; (f) acquire (by merger, consolidation, or
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acquisition of stock or assets) any significant corporation, partnership or
other business organization or division thereof for a cash consideration of
$100,000 or more with respect to an acquisition, merge or consolidate with any
corporation, or enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the foregoing; (g) other than in connection
with the refinancing of outstanding indebtedness, incur any indebtedness for
borrowed money or issue any debt securities except in the ordinary course of
business and consistent with past practice or enter into or modify any contract,
agreement, commitment or arrangement with respect to any of the foregoing; (h)
take any action with respect to the grant of any severance or termination pay
other than pursuant to policies or agreements of the Company or any of its
subsidiaries in effect on the date hereof; (i) make any loans, advances or
capital contributions to, or investments (other than intercompany accounts and
short-term investments pursuant to customary cash management systems of the
Company in the ordinary course and consistent with past practices) in, any other
person other than such of the foregoing as are made by the Company to or in a
subsidiary of the Company; (j) except for salary increases or other employee
benefit arrangements made in the ordinary course of business consistent with
past practice, or heretofore described in writing to the Parent, adopt or
(except as provided in Sections 4.5 and 4.7 hereof) amend any bonus, profit
sharing, compensation, incentive, stock option, restricted stock, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund or arrangement for the benefit or welfare of any
employee; or (k) enter into any agreement to do any of the foregoing.
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Section 6.4 MEETINGS OF THE COMPANY'S STOCKHOLDERS. If the
Minimum Share Condition has been satisfied and Subsidiary has purchased and paid
for all duly tendered Common Shares pursuant to the Offer and the terms and
conditions of this Agreement and if necessary to effect the Merger, the Company
will take all action necessary in accordance with applicable law and the
Company's certificate of incorporation and by-laws to convene a meeting of
holders of Common Shares as promptly as practicable after consummation of the
Offer to consider and vote upon the approval and adoption of this Agreement.
Parent and Subsidiary will provide to the Company the information with respect
to Parent and Subsidiary required by the Exchange Act to be set forth in the
proxy statement required with respect to such meeting. The Board of Directors of
the Company shall recommend such approval and adoption, and the Company shall
take all lawful action to solicit such approval and adoption. At any such
meeting of holders of Common Shares, all of the Common Shares then owned by the
Parent Companies will be voted in favor of approval and adoption of this
Agreement. Notwithstanding this Section 6.4, in the event that Parent or
Subsidiary shall acquire at least 90% of the outstanding Common Shares, pursuant
to the Offer or otherwise, the parties hereto shall, subject to Article VII
hereof, take all necessary and appropriate action to cause the Merger to become
effective as soon as possible after such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
Section 6.5 FILINGS; OTHER ACTION. Subject to the terms and
conditions herein provided, the Company, Parent and Subsidiary shall promptly
make any required submissions
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or filings with any governmental entity, including without limitation,
preparation and filing of the Merger Proxy Statement with the SEC.
Section 6.6 REASONABLE BEST EFFORTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws, rules and regulations and otherwise to consummate and make effective the
transactions contemplated by this Agreement and shall use its reasonable best
efforts to obtain all necessary actions or non-actions, extensions, waivers,
permits, consents and approvals and to effect all registrations, filings and
notices with or to third parties or governmental or public bodies or authorities
that are necessary or desirable in connection with the transactions contemplated
by this Agreement except in each such case to the extent that the applicable
Board may determine in good faith, after receiving advice from its outside
counsel, that any such action could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law. The Company will cooperate
with Parent and Subsidiary in supplying all information reasonably requested in
connection with any due diligence investigation by Parent or its lenders.
Notwithstanding the foregoing, nothing in this Section 6.6 shall require, or be
construed to require, Parent, Subsidiary or the Company, in connection with the
receipt of any regulatory approval, to proffer or agree (i) to sell or hold
separate or agree to sell, divert or discontinue or to limit, before or after
the Effective Time any assets, businesses or interest in any assets or
businesses of Parent, the Company or any of their respective affiliates (or to
consent to any sale or agreement to sell or discontinuance or limitation by
Parent or the Company, as the case may be, of any
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of its assets or business) or (ii) to agree to any conditions relating to, or
changes or restriction in, the operations of any such asset or business which,
in either case, is reasonably likely to materially and adversely impact the
economic or business benefits to such party of the transactions contemplated by
this Agreement. In furtherance and not in limitation of the covenants of the
parties contained in this Section 6.6, if any administrative or judicial action
or proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any antitrust law, each of the parties shall cooperate
in all respects with each other and use its reasonable best efforts to contest
and resist any such action or proceeding, and to have vacated, lifted, reversed
or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts any transaction contemplated by this Agreement, and to
resolve any challenge or objection raised by any governmental authority or
private party.
Section 6.7 ACCESS. Upon reasonable notice and subject to
restrictions contained in confidentiality agreements by which the Company is
bound and except where such access to a contract or agreement would cause the
Company to be in breach of such contract or agreement, the Company shall (and
shall cause each of its subsidiaries to) afford reasonable access to Parent's
officers, employees, legal counsel, accountants, financing sources and other
authorized representatives, during normal business hours throughout the period
prior to the Effective Time, to all of its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its subsidiaries to) furnish promptly to Parent (a) a copy of each
report, schedule and other docu-
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ment filed or received by it pursuant to the requirements of federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as Parent or any of its financing sources may
reasonably request. The rights and obligations of each of Parent, Subsidiary and
the Company pursuant to the Confidentiality Agreement dated May 14, 1998 as to
the Company and May 27, 1998 as to Parent (the "Confidentiality Agreement"),
between Parent and the Company, is superseded by this Agreement and is of no
further force and effect. In the event of the termination of this Agreement for
any reason Parent and Subsidiary (i) shall promptly return to the Company, or
destroy, all originals, copies, reports and analyses of such information in
their possession, and (ii) shall not use any such information for any purposes
that would be competitive with or cause material harm to the Company.
Section 6.8 PUBLICITY. The initial press release with respect
to the execution of this Agreement shall be a joint press release, and
thereafter the Company and Parent shall consult with each other in issuing any
press releases or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto, provided that nothing herein shall prevent any party
hereto from making any public statements or any filings deemed by such party in
good faith to be required by law based on the advice of counsel to the
respective party.
Section 6.9 DIRECTORS' AND OFFICERS' INDEMNIFICATION;
INSURANCE.
(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation (the Parent and the Surviving Corporation individually, as
"Indemnifying Party"
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and collectively, the "Indemnifying Parties") to indemnify and hold harmless
each person who is now, or has been at any time prior to the date hereof, an
officer or director of the Company or any of its subsidiaries (the "Indemnified
Parties") against any losses, claims, damages, judgments, settlements,
liabilities, costs or expenses (including, without limitation, reasonable
attorneys' fees and out-of-pocket expenses) incurred in connection with any
threatened or actual claim, action, suit, proceeding or investigation ("Action")
arising out of or pertaining to acts or omissions, or alleged acts or omissions,
(including, without limitation, in connection with the Offer, the Merger and the
other transactions contemplated by this Agreement), to the fullest extent that
the Company or such subsidiaries would have been permitted, under applicable
provisions of the DGCL and the certificate of incorporation or by-laws of the
Company or the charter or by-laws of such subsidiaries as in effect as of the
date of this Agreement, to provide such indemnification. The Indemnifying
Parties and the Indemnified Parties each agree to render to each other such
assistance as may reasonably be requested in order to insure the proper and
adequate defense of any Action.
(b) In connection with the foregoing provisions of
Section 6.9(a), Parent shall cause the Surviving Corporation to advance expenses
as incurred to the fullest extent permitted under applicable law upon receipt
from the Indemnified Party to whom expenses are advanced of a written
undertaking to repay such advances as contemplated by Section 145(e) of the
DGCL.
(c) In the event of any Action;
(i) any Indemnified Party wishing to claim
indemnification under this Section 6.9 shall, upon becoming aware of
any such Action, promptly notify the
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Surviving Corporation and Parent thereof (provided that the failure to
provide such notice shall not relieve the Parent or the Surviving
Corporation of any liability or obligation it may have to such
Indemnified Party under this Section 6.9 unless such failure materially
prejudices Parent or the Surviving Corporation), and shall deliver to
Parent and the Surviving Corporation the undertaking contemplated by
Section 145(e) of the DGCL; and
(ii) Subject to receipt of the undertaking
contemplated by Section 145(e) of the DGCL, Parent shall cause the
Surviving Corporation to pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably acceptable to Parent and the Surviving Corporation.
(d) Notwithstanding anything herein to the contrary, (A)
neither Parent nor the Surviving Corporation shall be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld); (B) neither Parent nor the Surviving Corporation shall
be liable under this Section 6.9 for the fees and expenses of more than one
counsel for all Indemnified Parties in any Action, except to the extent that, in
the opinion of counsel for the Indemnified Parties (a copy of which opinion
shall be delivered to Parent), two or more of such Indemnified Parties have
conflicting interests in the outcome of such Action such that additional counsel
is required to be retained by such Indemnified Parties under applicable
standards of professional conduct; (C) after notice from the Indemnifying
Parties (or either of them) to the Indemnified Party of the election by the
Indemnifying Parties (or either of them) to assume the defense of an Action, the
Indemnifying Parties shall not be liable for any expenses subsequently incurred
by the Indemnified Party
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in connection with the defense thereof; and (D) the Indemnifying Parties shall
have the right to select their own counsel with respect to any Action and shall
have full control over the defense of any Action the defense of which has been
assumed by the Indemnifying Parties (or either of them).
(e) Unless otherwise required by law, (i) at the
Effective Time, the certificate of incorporation and bylaws of the Surviving
Corporation shall contain provisions providing for exculpation of director and
officer liability and indemnification by the Surviving Corporation of the
Indemnified Parties not less favorable to the Indemnified Parties than those
provisions providing for exculpation of director and officer liability and
indemnification by the Company of the Indemnified Parties contained in the
certificate of incorporation and bylaws of the Company as in effect on the date
of this Agreement, and (ii) for a period of six years from the Effective Time,
the Surviving Corporation and its subsidiaries shall not amend, repeal or modify
any such provisions contained in their respective certificates of incorporation
and bylaws, or other organizational documents of such subsidiaries, to reduce or
adversely affect the rights of the Indemnified Parties thereunder in respect of
actions or omissions by them occurring at or prior to the Effective Time;
(f) The Company may purchase prior to the Effective Time,
and if not so purchased then after the Effective Time Parent shall cause the
Surviving Corporation to purchase, a six-year extended reporting period
endorsement ("reporting tail coverage") under the Company's existing directors'
and officers' liability insurance coverage (or as much coverage as can be
obtained for a total not in excess of 175% of the Current Premium), provided
that such reporting tail coverage shall extend the director and officer
liability
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coverage in force as of the date hereof from the Effective Time on terms, that
in all material respects, are no less advantageous to the intended beneficiaries
thereof than the existing officers' and directors' liability insurance. "Current
Premium" shall mean the last annual premium paid prior to the date hereof for
the existing officers' and directors' liability insurance, which the Company
represents and warrants to be $162,500.
(g) Notwithstanding anything to the contrary set forth
above, with respect to Indemnified Parties who are officers and/or directors of
former subsidiaries or business units of the Company, (A) the provisions of this
Section 6.9 shall not apply to such officers and/or directors for any losses
incurred by any of them in any way arising out of, pertaining to or incurred in
connection with acts or omissions (or alleged acts or omissions) which acts or
omissions occurred after the date any such subsidiary or business unit was
disposed of by the Company and (B) in connection with actions arising out of,
pertaining to or incurred in connection with acts or omissions (or alleged acts
or omissions) which occurred prior to the date of any such subsidiary or
business unit was disposed of by the Company, any such Indemnified Party shall
first seek and exhaust all indemnification rights and remedies from the
subsidiary or the purchaser of such subsidiary or business unit (or any parent
of any of the foregoing) before such Indemnified Party may seek indemnification
from the Surviving Corporation under this Section 6.9; and
(h) If during the six year period from and after the
Effective Time the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other entity and shall not be the
continuing or surviving entity of such consolidation or merger or (ii) transfers
or conveys all or substantially all of its properties and assets to any
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entity, then, and in each such case, to the extent necessary, proper provision
shall be made so that the successors and assigns of the Surviving Corporation
assume the obligations set forth in this Section 6.9. The parties acknowledge
and agree that to the extent that the Surviving Corporation fails to comply with
its indemnification obligations pursuant to this Section 6.9, Parent shall
indemnify and hold harmless each of the Indemnified Parties to the same extent
as the Surviving Corporation was required to indemnify such indemnified Parties
hereunder.
(i) This covenant is intended to be for the benefit of,
and shall be enforceable by, each of the Indemnified Parties and their
respective heirs and legal representatives.
Section 6.10 REGISTRATION RIGHTS AGREEMENT. The Company
represents and warrants that there is no outstanding request for registration of
Common Shares pursuant to the Registration Rights Agreement filed or
incorporated by reference as Exhibit 4.3 to the 1998 Annual Report, or any other
agreement. In the event of receipt of any such request, the Company will
immediately notify Parent of such request.
Section 6.11 FAIR PRICE STATUTE. If any "fair price" or
"control share acquisition" statute or other similar statute, regulation or
provision shall become applicable to the transactions contemplated hereby, the
Company and the members of the Board of Directors of the Company shall use their
reasonable efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of such statute, regulation or provision on the
transactions
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contemplated hereby unless the Board of Directors of the Company shall have
determined in good faith, after receiving advice from its outside counsel, that
any such action could reasonably be expected to be a breach of the directors'
fiduciary duties under applicable law.
Section 6.12 DIRECTORS. Promptly upon the acquisition of a
majority of the outstanding Common Shares pursuant to the Offer, or otherwise,
so long as Parent owns a majority of the outstanding Common Shares Parent shall
be entitled upon written request to the Company, subject to applicable law, to
designate such number of directors, rounded down to the nearest whole number, to
the Board of Directors of the Company as will give Parent (or its affiliates)
representation on such Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the
Company's Board of Directors (giving effect to the directors elected pursuant to
this sentence) multiplied by the percentage that the sum of the number of Common
Shares so owned by Parent and Subsidiary bears to the number of such Common
Shares outstanding, and the Company shall, at such time, promptly use its best
efforts to cause the designees of Parent to be so elected, subject in all cases
to Section 14(f) of the Exchange Act, it being understood that the Company shall
have no obligation to comply with Section 14(f) until after the Offer is
completed. These efforts shall, if necessary, include efforts to obtain any
amendments to the by-laws of the Company regarding the number of directors, or
securing the resignation of directors, or both. The date, if any, on which a
majority of the Board of Directors consist of directors designated by Parent
pursuant to this Section 6.12 shall be hereinafter referred to as the "New Board
Date." In the event that Parent's designees are elected to the Company's Board
of Directors, until the Effective Time, the Company's Board of Directors
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shall have at least three directors who are directors on the date hereof (the
"Independent Directors"), provided that, in such event, if the number of
Independent Directors shall be reduced below three for any reason whatsoever,
any remaining Independent Directors (or Independent Director, if there be only
one remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Director then remains, the other directors shall designate
three persons to fill such vacancies who shall not be stockholders, affiliates
or associates of Parent or Subsidiary and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Notwithstanding anything
in this Agreement to the contrary, in the event that Parent's designees are
elected to the Company's Board of Directors, after the acceptance for payment of
Common Shares pursuant to the Offer and prior to the Effective Time, the
affirmative vote of a majority of the Independent Directors shall be required to
(a) amend or terminate this Agreement by the Company, (b) exercise or waive any
of the Company's rights, benefits or remedies hereunder, or (c) extend the time
for performance of Parent's and Subsidiary's respective obligations hereunder.
Section 6.13 EMPLOYEE BENEFITS MATTERS.
(a) Commencing on the consummation of the Offer and
continuing until December 31, 1999, Parent shall cause the Company and the
Surviving Corporation to continue to provide to employees of the Company and its
subsidiaries (excluding employees, if any, covered by collective bargaining
agreements), as a whole, Employee Benefits (defined below) which, in the
aggregate, are no less favorable to such employees than the Employee Benefits
provided to such employees as of the date hereof.
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(b) Parent and the Company agree that the Company and the
Surviving Corporation shall pay promptly or provide when due all compensation
and benefits required to be paid pursuant to (i) the terms of the individual
employment agreements listed on Schedule 6.13(b)(i) hereto and (ii) the terms of
the employee retention plan set forth in Schedule 6.13(b)(ii) hereto.
(c) For all Employee Benefits and the employee benefit
plans of Parent and its affiliates after the Effective Time, all service with
the Company or any of its subsidiaries prior to the Effective Time of employees
(excluding employees, if any, covered by collective bargaining agreements) shall
be treated as service with Parent and its affiliates for eligibility and vesting
purposes and for benefit accruals for purposes of severance and vacation pay to
the same extent that such service is taken into account by the Company and its
subsidiaries as of the date hereof, except to the extent such treatment will
result in duplication of benefits.
(d) From and after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, cause any pre-existing condition or
limitation and any eligibility waiting periods (to the extent such conditions,
limitations or waiting periods did not apply to the employees of the Company
under the Employee Plans in existence as of the date hereof) under any group
health plans of Parent or any of its subsidiaries to be waived with respect to
employees of the Company and their eligible dependents.
(e) "Employee Benefits" shall mean Employee Plans plus
the following benefits: severance policy for involuntary termination (other than
for cause) and vacation policy in effect on the date hereof with respect to
employees of the Company set forth in
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Schedule 6.13(e) hereto. Employee Benefits shall not include Stock Option Plans,
the Stock Purchase Plan and any other plans or program not specifically included
in the definition in the preceding sentence.
(f) Nothing herein shall require the continued employment
of any person or prevent the Company or any of its subsidiaries and/or the
Surviving Corporation from taking any action or refraining from taking any
action which the Company or any of its subsidiaries could take or refrain from
taking prior to or after the Effective Time, including, without limitation, any
action the Company or any of its subsidiaries or the Surviving Corporation could
take to terminate any plan or Employee Benefits under its terms as in effect as
of the date hereof; provided, however, that it is understood by the parties that
this subsection 6.13(f) shall not relieve Parent of its obligations under
subsection 6.13(a).
ARTICLE VII.
CONDITIONS
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT
THE MERGER. The respective obligations of Parent and Subsidiary on the one hand,
and the Company on the other, to effect the Merger are subject to the
fulfillment, at or before the Effective Time, of each of the following
conditions:
(a) STOCKHOLDER APPROVAL. If necessary to effect the
Merger, this Agreement and the Merger shall have been duly approved by
the holders of Common Shares in accordance with applicable law and the
certificate of incorporation and by-laws of the Company.
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(b) GOVERNMENTAL FILINGS AND CONSENTS. All governmental
consents, orders and approvals legally required for the consummation of
the Merger and the transactions contemplated hereby shall have been
obtained and be in effect at the Effective Time, except where the
failure to obtain any such consent would not reasonably be expected to
have a material adverse effect on Parent (assuming the Merger had taken
place), and the waiting periods under the HSR Act shall have expired or
been terminated.
(c) PURCHASE OF COMMON SHARES. Subsidiary shall have
accepted for payment and purchased Common Shares pursuant to the Offer;
provided that this condition shall not be a condition to the
obligations of Parent or Subsidiary if Subsidiary shall have failed to
purchase Common Shares in violation of the terms hereof or of the
Offer.
(d) INJUNCTION. No preliminary injunction or permanent
injunction or other order issued by any federal or state court of
competent jurisdiction in the United States prohibiting the
consummation of the Merger shall be in effect.
ARTICLE VIII.
TERMINATION AND ABANDONMENT
Section 8.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval by the
stockholders of the Company:
(a) by mutual consent of the Board of Directors of the
Parent and the Board of Directors of the Company;
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(b) by action of the Board of Directors of the Parent or
action of the Board of Directors of the Company if at least that number
of Common Shares required by the Minimum Share Condition shall not have
been purchased in the Offer on or before April 30, 1999; provided,
however, that the Board of Directors of the Parent shall have no right
pursuant to this Section 8.1(b) to terminate this Agreement after the
purchase of Common Shares pursuant to the Offer; and provided, further,
that the right to terminate this Agreement pursuant to this Section
8.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Offer to occur on or before the aforesaid date;
(c) by the Company if Subsidiary shall not have commenced
the Offer within five business days of the date of the initial public
announcement of the Offer or this Agreement;
(d) by either Parent or the Company if the Offer shall
expire or terminate in accordance with its terms without any Common
Shares having been purchased thereunder and, in the case of termination
by the Parent, the Purchaser under the Offer shall not have been
required by the terms of the Offer or this Agreement to purchase any
Common Shares pursuant to the Offer;
(e) by the Company if Parent or Subsidiary shall fail to
comply in any material respect with any of its covenants or agreements
required to be performed by it before the date of such termination and
such failure to comply shall not be cured within seven business days
following receipt by Parent from the Company of written
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notice of such failure and demand for cure; or by Parent or Subsidiary
if the Company shall fail to comply in any material respect with any of
its covenants or agreements required to be performed by it before the
date of such termination, and such failure to comply shall not be cured
within seven business days following receipt by the Company from Parent
or Subsidiary of written notice of such failure and demand for cure;
(f) by either Parent, Subsidiary or the Company, if any
court of competent jurisdiction in the United States or other
governmental agency of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action restraining,
permanently enjoining or otherwise prohibiting the consummation of the
Offer or the Merger, and such order, decree, ruling or other action
shall have become final and non-appealable; or
(g) by the Company if the Company is prepared to enter
into a binding agreement to effect a transaction on the terms specified
in a Superior Proposal (defined below) and has given Parent written
notice to that effect; provided, however, that such termination under
this Section 8.1(g) shall not be effective until the Company has made
payment to Parent of the Fee (as defined in Section 8.3(a)) required to
be paid pursuant to Section 8.3(a) and has paid to Parent $750,000 for
Expenses (as defined in Section 8.3(b)). Parent hereby agrees to refund
any excess of such $750,000 over actual Expenses.
Section 8.2. PROCEDURE AND EFFECT OF TERMINATION. In the event
of termination and abandonment of the Merger by Parent, Subsidiary or the
Company pursuant to Section
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8.1, written notice thereof shall forthwith be given to the others, and this
Agreement shall terminate and the Merger shall be abandoned, without further
action by any of the parties hereto. Subsidiary agrees that any termination by
Parent shall be conclusively binding upon Subsidiary, whether given expressly on
its behalf or not. If this Agreement is terminated as provided herein, no party
hereto shall have any liability or further obligation to any other party to this
Agreement, provided that any termination shall be without prejudice to the
rights of any party hereto arising out of breach by any other party of any
covenant or agreement contained in this Agreement, and provided, further, that
the obligations set forth in Section 8.3 shall in any event survive any
termination.
Section 8.3. FEES AND EXPENSES.
(a) In the event that:
(i) any person (including, without limitation,
the Company or any affiliate thereof) or group, other than the
Parent or any affiliate of the Parent, shall have become the
beneficial owner of more than 20% of the then outstanding
Common Shares and thereafter this Agreement shall have been
terminated pursuant to Section 8.1(b) or 8.1(d) and within 12
months of such termination a Third Party Acquisition (as
hereinafter defined) for a per Common Share consideration
having a value greater than $16.50 shall occur with such
person or group, or an affiliate of any of them; or
(ii) any person or group shall have commenced,
publicly proposed or communicated to the Company a proposal
that is publicly disclosed for a tender or exchange offer for
more than 20% (or which, assuming the
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maximum amount of securities which could be purchased, would
result in any person or group beneficially owning more than
20%) of the then outstanding Common Shares or otherwise for
the direct or indirect acquisition of the Company or all or
substantially all of its assets for per Common Share
consideration having a value greater than $16.50 and (A) the
Offer shall have remained open for at least 20 business days,
(B) the Minimum Condition shall not have been satisfied and
(C) this Agreement shall have been terminated pursuant to
Section 8.1(b) or 8.1(d); or
(iii) this Agreement is terminated pursuant to
Section 8.1(g); then the Company shall pay Parent promptly (but in no
event later than one business day after the first of such events shall
have occurred) a fee of $3,455,000 (the "Fee"), which amount shall be
payable in immediately available funds, plus all Expenses; provided
that, in the case described in clause (ii) of this Section 8.3(a), if
the Board of Directors of the Company (A) shall not have withdrawn or
modified in a manner adverse to the Subsidiary or the Parent its
approval or recommendation of the Offer, this Agreement or the Merger,
(B) shall not have approved or recommended the proposal of the person
or group referred to in clause (ii) and (C) shall not have resolved to
do any of the foregoing, the Company shall pay to Parent on such
termination all Expenses and shall pay the Fee only if, within 12
months of such termination, a Third Party Acquisition with such person
or group referred to in clause (ii), or an affiliate of any of them,
shall occur.
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(b) "Expenses" means all out-of-pocket expenses and fees
up to a maximum of $750,000 in the aggregate (including, without
limitation, fees and expenses payable to all banks, investment banking
firms, other financial institutions and other persons and their
respective agents and counsel for arranging, committing to provide or
providing any financing or services for the Offer, the Merger and any
transactions contemplated thereby or structuring the transactions and
all fees of counsel, accountants, experts, consultants and soliciting
or information firms to Parent and Subsidiary, and all printing and
advertising expenses) actually incurred or accrued by either of them or
on their behalf in connection with the transactions, including, without
limitation, litigation related thereto and the financing thereof, and
actually incurred or accrued by banks, investment banking firms, other
financial institutions and other persons and assumed by Parent or
Subsidiary in connection with the negotiation, preparation, execution
and performance of this Agreement, the structuring and financing of the
Offer, the Merger and any transactions contemplated thereby and any
litigation and any financing commitments or agreements relating
thereto.
(c) Except as set forth in this Section 8.3, all costs
and expenses incurred in connection with this Agreement and the Offer,
the Merger and any transactions contemplated hereby shall be paid by
the party incurring such expenses, whether or not any transaction is
consummated.
(d) In the event that the Company shall fail to pay the
Fee or any Expenses when due, the term "Expenses" shall be deemed to
include the costs and expenses
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actually incurred or accrued by Parent and Subsidiary (including,
without limitation, fees and expenses of counsel) in connection with
the collection under and enforcement of this Section 8.3, together with
interest on such unpaid Fee and Expenses, commencing on the date that
the Fee or such Expenses became due, at a rate equal to the rate of
interest publicly announced by The First National Bank of Chicago, from
time to time, in the City of Chicago, as such bank's Prime Rate plus
1.00%.
(e) "Third Party Acquisition" means the occurrence of any
of the following events: (i) the acquisition of the Company by merger,
consolidation or other business combination transaction by any person
other than Parent, Subsidiary or any affiliate of either of them (a
"Third Party"); (ii) the acquisition by any Third Party of, or any
divestiture or other transaction resulting in the Company owning less
than, 50% or more (in book value or market value) of the total assets
of the Company and its subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 50% or more of the outstanding Common
Shares whether by tender offer, exchange offer or otherwise; (iv) the
adoption by the Company of a plan of liquidation or a plan of
recapitalization or the declaration or payment of an extraordinary
dividend; (v) the repurchase by the Company or any of its subsidiaries
of 50% or more of the outstanding Common Shares; or (vi) a letter of
intent or similar instrument or other agreement between the Company and
a Third Party, or the public announcement by the Company of the
Company's intention or plans, to effect any of the events referred to
in clauses (i), (ii), (iii), (iv) or (v).
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(f) "Superior Proposal" shall mean a bona fide proposal
made by a Third Party to acquire a majority or more of the outstanding
Common Shares pursuant to a tender offer or a merger, or to purchase
all or substantially all of the assets of the Company, on terms which a
majority of the Board of Directors of the Company determines in its
good faith judgment (based on its financial and legal advisors) to be
more favorable to the Company and its stockholders from a financial
point of view than the transactions contemplated by this Agreement.
ARTICLE IX.
MISCELLANEOUS
Section 9.1 AMENDMENT. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto; provided, however, that after approval of the Merger by the stockholders
of the Company no amendment may be made which decreases the amount per Common
Share to be received pursuant to the Merger or otherwise adversely affects the
stockholders of the Company without the further approval of such stockholders.
Section 9.2 WAIVER. At any time prior to the Effective Time,
whether before or after any meeting of the Company's stockholders as referred to
herein, any party hereto may (a) in the case of Parent, extend the time for the
performance of any of the obligations or other acts of the Company or, subject
to the provisions contained in Section 9.1, waive compliance with any of the
agreements of the Company or with any conditions to the obligations of Parent,
or (b) in the case of the Company, extend the time for the performance of any of
the obligations or other acts of Parent or Subsidiary, or, subject to the
provisions
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contained in Section 9.1, waive compliance with any of the agreements of Parent
or Subsidiary or with any conditions to its own obligations. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party by a
duly authorized officer.
Section 9.3 SPECIAL FEES OF THE COMPANY. The Company's fee
arrangement with its investment bankers, in the form delivered previously to
Parent, shall not be modified or amended prior to the Effective Time, without
the consent of Parent. The Company represents and warrants that no potential
purchaser (other than Parent and Subsidiary) is entitled to expenses or any
"break-up," "topping" or other similar fee as a result of the execution and
delivery of this Agreement or the transactions contemplated hereby.
Section 9.4 COUNTERPARTS. For the convenience of the parties
hereto, this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement.
Section 9.5 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. Each of the Company, Parent and
Subsidiary hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware and the United
States of America located in the State of Delaware (the "Delaware Courts") for
any litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), waives any objection to the laying of venue of any such
litigation in the
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Delaware Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum. Each of
the parties hereto agrees, (a) to the extent such party is not otherwise subject
to service of process in the State of Delaware, to appoint and maintain an agent
in the State of Delaware as such party's agent for acceptance of legal process,
and (b) that service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by the United States
Postal Service constituting evidence of valid service. Service made pursuant to
(a) or (b) above shall have the same legal force and effect as if served upon
such party personally within the State of Delaware. For purposes of implementing
the parties' agreement to appoint and maintain an agent for service of process
in the State of Delaware, each such party does hereby appoint The Corporation
Trust Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, as such agent.
Section 9.6 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in writing
and delivered personally or sent by telecopier or telefax or overnight courier
or registered or certified mail, postage and charges prepaid, (and deemed given
on receipt) if to Parent or Subsidiary, addressed to Parent or Subsidiary, as
the case may be, at Illinois Tool Works Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Secretary (with a copy to Jenner &
Block, ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Ltd.), and if to the Company, addressed to the Company at Trident International,
Inc., Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief Executive Officer (with a
copy to ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, Exchange Place, Boston, MA 02109,
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III,
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P.C.), or to such other persons or addresses as may be designated in writing by
the party to receive such notice.
Section 9.7 ENTIRE AGREEMENT, ETC. This Agreement constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, with respect to the
subject matter hereof.
Section 9.8 DEFINITION OF "SUBSIDIARY". When a reference is
made in this Agreement to a subsidiary of a party, the word "subsidiary" means
any corporation more than 50% of the outstanding voting securities of which are
directly or indirectly owned by such party or any joint venture or partnership
in which such party owns a 50% or more equity interest.
Section 9.9 OBLIGATION OF PARENT. Whenever this Agreement
requires Subsidiary to take any action, such requirement shall be deemed to
include the undertaking on the part of Parent to cause Subsidiary to take such
action.
Section 9.10 CAPTIONS. The Article, section and paragraph
captions herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to modify or otherwise affect any of the
provisions hereof.
Section 9.11 SURVIVAL. The representations and warranties and
agreements in this Agreement will terminate at the Effective Time or the earlier
termination of this Agreement pursuant to Section 8.1, as the case may be,
provided that if the Merger is consummated, the agreements of the Company,
Parent and Subsidiary contained in Sections 2.4, 4.2 (but only to the extent
that such section expressly relates to action to be taken after the Effective
Time), 4.3, 4.4, 4.6, 6.9, 6.12, 6.13 and 8.2 shall survive the consummation
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of the Merger, and the provisions of Section 8.3 will in all events survive any
termination of this Agreement.
Section 9.12 PARTIES IN INTEREST; ASSIGNMENT. Except for
Section 6.9 (which is intended to be for the benefit of directors and officers
to the extent contemplated thereby), this Agreement is not intended to nor will
it confer upon any other person (other than the parties hereto) any rights or
remedies. Except as otherwise expressly provided herein, this Agreement is
binding upon and is solely for the benefit of the parties hereto and their
respective successors, legal representatives and assigns. Subsidiary shall have
the right (a) to assign to Parent or any direct or indirect wholly-owned
subsidiary of Parent any and all rights and obligations of Subsidiary under this
Agreement, including without limitation the right to substitute in its place
Parent or such a subsidiary as one of the constituent corporations in the Merger
(such subsidiary assuming all of the obligations of Subsidiary in connection
with the Merger), provided that any such assignment will not relieve Parent or
Subsidiary from any of its obligations hereunder and (b) to transfer to Parent
or to any direct or indirect wholly-owned subsidiary of Parent the right to
purchase Common Shares tendered pursuant to the Offer, provided that any such
transfer will not relieve Parent or Subsidiary from any of its obligations
hereunder.
Section 9.13 ENFORCEMENT OF THE AGREEMENT. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties hereto will
be entitled to an injunction or injunctions to prevent
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breaches of this Agreement and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.
Section 9.14 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party hereto. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated by this Agreement are consummated to
the extent possible.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of each of the parties hereto on the date
first hereinabove written.
TRIDENT INTERNATIONAL, INC.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Its President and Chief Executive Officer
----------------------------------------
ILLINOIS TOOL WORKS INC.
By W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Its Chief Executive Officer
----------------------------------------
ITW ACQUISITION INC.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Its Vice President
---------------------------------------
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EXHIBIT A
TENDER OFFER CONDITIONS
The terms with initial capitals not otherwise defined in this
Exhibit A shall have the meanings set forth in the attached Agreement and Plan
of Merger (the "Agreement").
Notwithstanding any other provision of the Offer and subject
to the terms of the Agreement, and in addition to the conditions that (i) Common
Shares constituting not less than a majority of all Common Shares outstanding on
a fully diluted basis are validly tendered (and not withdrawn) prior to the
Expiration Date (the "Minimum Share Condition") and (ii) all applicable waiting
periods under the HSR Act having expired or been terminated, Parent and
Subsidiary (collectively referred to herein as the "Purchaser") shall not be
required to accept for payment, purchase, or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) (relating to the Purchaser's
obligation to pay for or return tendered Common Shares after termination of the
offer), to pay for any Common Shares tendered, and may postpone the purchase of,
or, subject to the restriction set forth above, payment for Common Shares
tendered and to be purchased by it, if at any time prior to the time of
acceptance for payment of any such Common Shares, any of the following events
shall occur:
(a) there shall be any statute, rule, regulation or order
promulgated, enacted, entered or enforced that is applicable to the
Offer or the Merger by any United States federal or state court,
legislative body or governmental agency or other regulatory
administrative agency or commission of competent jurisdiction (each a
"Governmental Authority"), (i) restraining or prohibiting the making or
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consummation of the Offer or the transactions contemplated by the
Agreement; (ii) prohibiting or restricting Purchaser's (or any of its
affiliates) ownership or operation of all or any material portion of
the Company's business or assets; (iii) imposing material limitations
on the ability of Purchaser effectively to acquire or to hold or to
exercise full rights of ownership of the Common Shares, including,
without limitation, the right to vote the Common Shares purchased by
Purchaser on all matters properly presented to the stockholders of the
Company; (iv) requiring divestiture by Purchaser of any assets or of
any Common Shares; or (v) making the acceptance for payment or payment
for the Common Shares or consummation of the Merger illegal or
prohibiting consummation of the Offer or the Merger.
(b) any action or proceeding instituted and pending by a
Governmental Authority seeking to effect any of the activity in clause
(a) above; or
(c) there shall have occurred any change concerning the
Company and its subsidiaries taken as a whole which, in the good faith
judgment of the Purchaser, has had, or is reasonably expected to have
prior to December 31, 1999, a material adverse effect on the business,
financial condition or results of operation ("Condition") of the
Company and its subsidiaries taken as a whole (other than any changes
generally affecting the industries in which the Company operates,
including changes due to actual or proposed changes in law or
regulations, or changes relating to or arising from the transactions
contemplated by this Agreement, including the change in control
contemplated hereby), it being expressly understood that the term
"material adverse effect" for purposes of the Offer Conditions shall
mean a material
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adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, with
the parties expressly intending that the term "material adverse effect"
for purposes of the Offer Conditions be construed as an effect which is
greater than the definition of "Material Adverse Effect" as set forth
in Section 5.2(a) of the Agreement, based on the applicable facts and
circumstances; or
(d) there shall have occurred (i) any general suspension
of trading in, or limitation on prices for, securities on the New York
Stock Exchange, the Nasdaq Stock Market, the American Stock Exchange or
in the United States over-the-counter market which shall continue for
at least three business days; or (ii) the declaration of a banking
moratorium or any suspension of payments by United States governmental
authorities in respect of banks in the United States which shall
continue for at least three business days; or
(e) there shall have occurred the commencement or
escalation of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States,
and having a material adverse effect on the Offer or the Merger or the
Condition of the Company and its subsidiaries taken as a whole; or
(f) any representation or warranty of the Company in the
Agreement shall have been untrue as of the date of the Agreement or
shall have become untrue prior to acceptance for payment or payment for
Common Shares which untrue representations or warranties, if accurately
stated, would have revealed matters materially adverse to the Condition
of the Company and its subsidiaries, taken as a
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whole, or the Company shall have failed to perform or breached any of
its covenants or agreements contained in the Agreement, which failure,
breach or breaches, would materially impair or delay the ability of
Subsidiary to consummate the Offer or the ability of Parent, Subsidiary
and the Company to effect the Merger; or
(g) one or more of the following events shall have
occurred after the date of the Agreement or the Purchaser shall have
for the first time become aware after the date of the Agreement of the
occurrence of any of the following on or prior to the date of the
Agreement: (1) any person, corporation, partnership or other entity or
group (a "Person"), other than the Purchaser or its affiliates,
acquires or becomes the beneficial owner of more than 20% of the
outstanding Common Shares (other than acquisitions for bona fide
arbitrage purposes and acquisitions by Persons who are parties to any
agreement with the Purchaser with respect to their Common Shares); (2)
any Person (other than the Purchaser or its affiliates) shall have
commenced a tender or exchange offer for more than 20% of the
outstanding Common Shares or publicly proposed a Third Party
Acquisition; (3) the Company enters into, or announces that it proposes
to enter into, an agreement, including, without limitation, an
agreement in principle, providing for a merger or other business
combination involving the Company or a material portion of the assets,
business or operations of the Company and its subsidiaries taken as a
whole (other than the transactions contemplated by the Agreement), and
the Company withdraws its recommendation of the Offer or Merger; (4)
any Person (other than the Purchaser or its affiliates) is granted any
option or right, conditional or otherwise, to acquire or otherwise
become
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the beneficial owner of Common Shares which, together with all Common
Shares beneficially owned by such Person, results or would result in
such Person being the beneficial owner of more than 20% of the
outstanding Common Shares; or (5) subsequent to the commencement of the
Offer there is a public announcement with respect to a plan or
intention by the Company or any Person, other than the Purchaser or its
affiliates, to effect any of the foregoing transactions. For purposes
of this subparagraph (g), the terms "group" and "beneficial owner"
shall be defined by reference to Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder; or
(h) the Agreement shall have been terminated in
accordance with its terms.
The foregoing conditions other than the Minimum Share
Condition are for the sole benefit of the Purchaser and may be asserted
by the Purchaser or may be waived by the Purchaser in whole or in part
at any time and from time to time in its sole discretion. The failure
by the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right
shall be deemed an ongoing right and may be asserted at any time and
from time to time. Should the Offer be terminated due to any of the
foregoing provisions, all tendered Common Shares not theretofore
accepted for payment shall forthwith be returned to the tendering
stockholders.
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