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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
DATED AS OF JANUARY 17, 2000
BY AND AMONG
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING PRODUCTS, INC.,
CBP HOLDINGS, INC.
AND
CBP ACQUISITION CORP.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January
17, 2000, is entered into by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Building Products, Inc., a
Georgia corporation (the "Company"), CBP Holdings, Inc., a Georgia corporation
("Purchaser"), and CBP Acquisition Corp., a Georgia corporation and a wholly
owned subsidiary of Purchaser ("Acquisition Sub").
WHEREAS, the Board of Directors of each of Purchaser and Acquisition Sub
have approved the execution and delivery of this Agreement and have determined
that it is advisable and in the best interests of their respective shareholders,
that the Company and Acquisition Sub combine pursuant to the Merger (as
hereinafter defined) in which Acquisition Sub will merge with and into the
Company in accordance with the Georgia Business Corporation Code ("GBCC") and
upon the terms and subject to the conditions set forth herein, with the Company
being the surviving corporation;
WHEREAS, the Board of Directors of the Company (the "Board") has, in
light of and subject to the terms and conditions set forth herein, in accordance
with the recommendation of a duly-constituted special committee of independent
members of the Board (the "Special Committee"), and after considering the
long-term prospects and interests of the Company and its shareholders (i)
determined that the consideration to be paid for each Share (as hereinafter
defined) in the Merger (other than Shares held by Purchaser or any affiliate
thereof) is fair to the holders of such Shares and that the Merger is in the
best interests of such shareholders, (ii) approved and adopted this Agreement
and (iii) resolved to recommend that the holders of such Shares approve this
Agreement and the Merger upon the terms and subject to the conditions set forth
herein; and
WHEREAS, Purchaser, Acquisition Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, Purchaser, Acquisition Sub and the Company hereby agree as
follows:
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ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the GBCC, at the Effective Time (as
hereinafter defined) the Company and Acquisition Sub shall consummate a merger
(the "Merger") pursuant to which (a) Acquisition Sub shall merge with and into
the Company and the separate corporate existence of Acquisition Sub shall
thereupon cease, (b) the Company shall be the successor or the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Georgia and (c) the corporate existence of the Company with all of its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger.
Section 1.2 Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall cause (a) a Certificate of Merger to be executed and filed on the
date of the Closing (as hereinafter defined) (or on such other date as Purchaser
and the Company may agree) with the Secretary of State of Georgia in such form
as required by, and executed in accordance with the relevant provisions of, the
GBCC and (b) all other filings or recordings required by the GBCC in connection
with the Merger. Prior to the filing referred to in this Section 1.2, a closing
(the "Closing") will be held at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., Dallas, Texas time
(or such other place, date and time as the parties may agree in writing). The
Merger shall become effective at such time as such Certificate of Merger is duly
filed with the Secretary of State of Georgia, or at such later time specified in
such Certificate of Merger (the time the Merger becomes effective being referred
to herein as the "Effective Time"). Subject to the terms and conditions hereof,
unless otherwise mutually agreed upon in writing by the authorized officers of
the Company and Purchaser, the parties hereto shall use their reasonable efforts
to cause the Effective Time to occur on the first business day following the
last to occur of (i) the effective date (including expiration of any applicable
waiting period) of the last required consent of any Governmental Entity having
authority over and approving or exempting the Merger and (ii) the date on which
the shareholders of the Company approve this Agreement and the Merger to the
extent such approval is required by applicable law; or such later date within
two (2) business days thereof as may be specified by Purchaser.
Section 1.3 Effects of the Merger. At the Effective Time, the Merger
shall have the effects as set forth in the applicable provisions of the GBCC.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers and franchises of
the Company and Acquisition Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Acquisition Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
Section 1.4 Amended and Restated Articles of Incorporation and Bylaws.
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(a) The Amended and Restated Articles of Incorporation (the
"Restated Articles") of the Company in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation until amended in accordance with applicable law.
(b) The Bylaws of the Company in effect at the Effective Time
shall be the Bylaws of the Surviving Corporation until amended in
accordance with applicable law.
Section 1.5 Directors. The directors of Acquisition Sub at the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Restated Articles and the Bylaws of the Surviving
Corporation until each such director's successor is duly elected or appointed
and qualified.
Section 1.6 Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Restated Articles and the Bylaws of the Surviving
Corporation until each such officer's successor is duly elected or appointed and
qualified.
Section 1.7 Subsequent Actions. 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 Company or Acquisition Sub
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either the Company or
Acquisition Sub, all such deeds, bills of sale, assignments and assurances and
to take and do, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all rights, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
Section 1.8 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of any of Purchaser, Acquisition
Sub or the Company:
(a) Each issued and outstanding share of Common Stock, no par
value, of the Company ("Share") immediately prior to the Effective Time,
together with the associated preferred stock purchase rights (the
"Rights") issued pursuant to that certain Rights Agreement, dated as of
August 19, 1997, as amended (the "Rights Agreement"), by and between the
Company and SunTrust Bank, Atlanta, Georgia, as Rights Agent (other than
(i) any Shares to be canceled pursuant to Sections 1.8(b) and 1.8(c) and
(ii) any Dissenting Shares (as defined in Section 2.1 hereof)), shall be
canceled and extinguished and be converted into the right to receive
$15.10 in cash (the "Merger Consideration"), payable to the holder
thereof, without interest thereon, upon the surrender of the certificate
formerly representing such Share in the manner provided in Section 2.2
hereof and less any required withholding of Taxes (as hereinafter
defined). From and after the Effective Time, all such Shares shall no
longer be outstanding and shall be deemed to be canceled and retired and
shall cease to exist, and each holder of a certificate representing any
such Shares shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration therefor, without interest
thereon, upon the
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surrender of such certificate in accordance with Section 2.2 hereof, or
the right, if any, to receive payment from the Surviving Corporation of
the "fair value" of such Shares as determined in accordance with Article
13 of the GBCC.
(b) Each Share held in the treasury of the Company and each
Share owned by any Subsidiary of the Company immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on
the part of Acquisition Sub, the Company or the holder thereof, be
canceled, retired and cease to exist and no payment or distribution shall
be made with respect thereto.
(c) Each Share held by Purchaser shall be canceled.
(d) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any Shares or holders of
Common Stock, par value $0.01 per share, of Acquisition Sub ("Acquisition
Sub Common Stock"), each issued and outstanding share of Acquisition Sub
Common Stock shall be converted into one (1) validly issued, fully paid
and nonassessable share of common stock, no par value per share, of the
Surviving Corporation.
Section 1.9 Stock Options and Warrants. At or immediately prior to the
Effective Time, each outstanding stock option (an "Option") to purchase Shares
granted under any stock option plan, compensation plan or arrangement of the
Company or outstanding warrant (a "Warrant") to purchase Shares shall be
canceled and the holder of each such Option or Warrant (whether or not then
vested or exercisable) shall be paid by the Company promptly after the Effective
Time for each such Option or Warrant an amount equal to the product of (a) the
excess, if any, of the Merger Consideration over the applicable exercise price
per Share and (b) the number of Shares such holder could have purchased
(assuming full vesting and exercisability of such Option or Warrant) had such
holder exercised such Option or Warrant in full immediately prior to the
Effective Time.
Section 1.10 Shareholders' Meeting. If required by applicable law in
order to consummate the Merger, the Company, acting through the Board, shall, in
accordance with applicable law, subject to the terms and conditions of this
Agreement:
(a) as soon as reasonably practicable, duly call, give notice
of, convene and hold an annual or special meeting of its shareholders (the
"Shareholders' Meeting") for the purpose of considering and taking action
upon the approval of the Merger and the
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approval and adoption of this Agreement;
(b) except as permitted in Section 1.10(c) and 5.2 below,
include in the Proxy Statement (as hereinafter defined) the recommendation
of the Board that shareholders of the Company vote in favor of the
approval of the Merger and the approval and adoption of this Agreement;
(c) use reasonable efforts to obtain shareholder approval
(subject to the Board, after having consulted with legal counsel,
determining in good faith that the taking of such action would constitute
a breach of the Board's fiduciary obligations under applicable law);
(d) prepare and file with the Securities and Exchange
Commission ("SEC") a preliminary proxy or information statement relating
to the Merger and this Agreement and use its best efforts to obtain and
furnish the information required to be included by it in the proxy or
information statement and, after consultation with Purchaser, respond
promptly to any comments made by the SEC with respect to the preliminary
proxy or information statement, and cause a definitive proxy or
information statement, including any amendment or supplement thereto (such
proxy or information statement, together with any amendments or
supplements thereto, the "Proxy Statement") to be mailed to its
shareholders at the earliest practicable time; and
(e) incorporate into the Proxy Statement written information
provided by Purchaser concerning Purchaser and Acquisition Sub required to
be included in the Proxy Statement. The Company shall not be responsible
or liable for any untrue statement of a material fact or omission to state
a material fact required to be stated in the Proxy Statement or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, to the extent that any such untrue
statement of a material fact or omission to state a material fact was made
by the Company in reliance upon and in conformity with written information
concerning Purchaser or Acquisition Sub furnished to the Company by
Purchaser specifically for use in the Proxy Statement. Purchaser agrees
that the written information concerning Purchaser and Acquisition Sub
provided by it for inclusion in the Proxy Statement and each amendment or
supplement thereto, at the time of mailing thereof and at the time of the
meeting(s) of shareholders of the Company, will not include an 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.
ARTICLE II
DISSENTING SHARES; PAYMENT FOR SHARES
Section 2.1 Dissenting Shares.
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(a) Notwithstanding anything in this Agreement to the
contrary, any Shares held by a holder who has demanded and perfected his
demand for payment for his Shares in accordance with Article 13 of the
GBCC and as of the Effective Time has neither withdrawn nor lost his right
to such appraisal ("Dissenting Shares") shall not be converted into or
represent a right to receive the Merger Consideration pursuant to Section
1.8, but the holder thereof shall be entitled to only such rights as are
granted by the GBCC.
(b) Notwithstanding the provisions of Section 2.l(a), if any
holder of Shares who demands payment for his Shares under Article 13 of
the GBCC effectively withdraws or loses (through failure to perfect or
otherwise) his right to such payment under Article 13, then as of the
Effective Time or the occurrence of such event, whichever later occurs,
such holder's Shares shall automatically be converted into and represent
only the right to receive the Merger Consideration as provided in Section
1.8(a), without interest thereon, upon surrender of the certificate or
certificates representing such Shares pursuant to Section 2.2 hereof.
(c) The Company shall give Purchaser (i) prompt notice of any
such demands for payment under Article 13 of the fair value of any Shares,
withdrawals of such demands and any other instruments served pursuant to
the GBCC received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for payment under the
GBCC. The Company shall not voluntarily make any payment with respect to
any demands for payment and shall not, except with the prior written
consent of Purchaser, settle or offer to settle any such demands.
Section 2.2 Payment for Shares.
(a) Prior to the Effective Time, Purchaser shall designate a
bank or trust company, reasonably acceptable to the Company, to act as
paying agent in connection with the Merger (the "Paying Agent") pursuant
to a paying agent agreement providing for the matters set forth in this
Section 2.2 and otherwise reasonably satisfactory to the Company. At the
Effective Time, Purchaser shall deposit, or cause to be deposited, in
trust with the Paying Agent for the benefit of holders of Shares the
aggregate consideration to which such holders shall be entitled at the
Effective Time pursuant to Section 1.8. Such funds shall be invested as
directed by the Surviving Corporation pending payment thereof by the
Paying Agent to holders of the Shares. Earnings from such investments
shall be the sole and exclusive property of the Surviving Corporation and
no part thereof shall accrue to the benefit of the holders of the Shares.
(b) As soon as reasonably practicable after the Effective
Time, the Paying Agent shall mail to each record holder, as of the
Effective Time, of an outstanding certificate or certificates which
immediately prior to the Effective Time represented outstanding Shares
(the "Certificates"), whose Shares were converted pursuant to Section 1.8
into the right to receive the Merger Consideration (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Paying Agent and shall be
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in such form and have such other provisions not inconsistent with this
Agreement) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger Consideration
(together, the "Transmittal Documents"). Upon surrender of a Certificate
for cancellation to the Paying Agent or to such other agent or agents as
may be appointed by Purchaser, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly
represented by such Certificate, without any interest thereon, and less
any applicable withholding Taxes, and the Certificate so surrendered shall
forthwith be canceled. If payment of the Merger Consideration is to be
made to a Person (as hereinafter defined) other than the Person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
shall otherwise be in proper form for transfer, that the signatures on the
Certificate or any related stock power shall be properly guaranteed and
that the Person requesting such payment shall have paid any transfer and
other Taxes required by reason of the payment of the Merger Consideration
to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such Tax either has been paid or is not applicable. Until
surrendered in accordance with the provisions of and as contemplated by
this Section 2.2 each Certificate (other than (i) Certificates
representing Shares subject to Sections 1.8(b) and 1.8(c) and (ii)
Dissenting Shares) shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2. Upon the surrender of Certificates in
accordance with the terms and instructions contained in the Transmittal
Documents, Purchaser shall cause the Paying Agent to pay the holder of
such Certificates in exchange therefor cash in an amount equal to the
Merger Consideration multiplied by the number of Shares represented by
such Certificate (other than Certificates representing Dissenting Shares
and Certificates representing Shares held by Purchaser or in the treasury
of the Company).
(c) At the Effective Time, the stock transfer books of the
Company shall be closed and there shall not be any further registration of
transfers of any shares of capital stock thereafter on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, they shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set
forth, in this Article II. No interest shall accrue or be paid on any cash
payable upon the surrender of a Certificate or Certificates which
immediately before the Effective Time represented outstanding Shares.
(d) From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such
Shares, except as otherwise provided herein or by applicable law.
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(e) If any Certificate 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, the Surviving
Corporation shall pay or cause to be paid in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration for the Shares
represented thereby. When authorizing such payment of the Merger
Consideration in exchange therefor, the Board of Directors of the
Surviving Corporation may, in its discretion and as a condition precedent
to the payment thereof, require the owner of such lost, stolen or
destroyed Certificate to give the Surviving Corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against
the Surviving Corporation with respect to the Certificate alleged to have
been lost, stolen or destroyed.
(f) Promptly following the date which is six (6) months after
the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any cash (including any earnings and
interest received with respect thereto), Certificates and other documents
in its possession relating to the Merger, which had been made available to
the Paying Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat or similar
laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates, without
any interest thereon.
(g) The Merger Consideration paid in the Merger shall be net
to the holder of Shares in cash, subject to reduction only for any
applicable federal withholding Taxes or, as set forth in Section 2.2(b),
stock transfer Taxes payable by such holder.
(h) Notwithstanding anything to the contrary in this Section
2.2, none of the Paying Agent, Purchaser or the Surviving Corporation
shall be liable to any holder of a Certificate formerly representing
Shares for any amount properly delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If Certificates
are not surrendered prior to two (2) years after the Effective Time,
unclaimed funds payable with respect to such Certificates shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any Person
previously entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedule delivered to Purchaser prior to the
execution of this Agreement setting forth specific exceptions to the Company's
representations and warranties set forth herein (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to Purchaser as follows:
Section 3.1 Organization and Qualification, Subsidiaries.
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(a) The Company Disclosure Schedule sets forth in Section
3.1(a) a complete list of all Subsidiaries of the Company that are
corporations (identifying its jurisdiction of incorporation, each
jurisdiction in which it is qualified and/or licensed to transact
business, and the number of shares owned and percentage ownership interest
represented by such share ownership) and all of its Subsidiaries that are
general or limited partnerships, limited liability companies or other
non-corporate entities (identifying the law under which such entity is
organized, each jurisdiction in which it is qualified and/or licensed to
transact business, and the amount and nature of the ownership interest
therein). Except as noted in Section 3.1(a) of the Company Disclosure
Schedule, each of the Company and its Subsidiaries is a corporation and
each Subsidiary is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and (as to
corporations) has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its businesses as now
being conducted. Each Subsidiary of the Company which is not a corporation
has all power and authority under its governing documents and the law
under which it was organized to own, lease and operate its properties and
to carry on its businesses as now being conducted. The minute book and
other organizational documents for each of the Company and its
Subsidiaries have been made available to Purchaser for its review and,
except as disclosed in Section 3.1(a) of the Company Disclosure Schedule,
are true and complete in all material respects as in effect as of the date
of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors and
shareholders thereof. The Company has heretofore delivered or made
available to Purchaser accurate and complete copies of the Restated
Articles and Bylaws, as currently in effect, of the Company and promptly
will deliver to Purchaser, upon request, accurate and complete copies of
the certificate or articles of incorporation and bylaws, as currently in
effect, of each of its Subsidiaries. As used in this Agreement, the term
"Subsidiary" shall mean with respect to any party, any corporation or
other organization, whether incorporated or unincorporated or domestic or
foreign to the United States of which (i) such party or any other
Subsidiary of such party is a general partner or (ii) at least a majority
of the securities or other interests having by their terms ordinary voting
power to elect a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such party or by any one
or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
(b) Each of the Company and its Subsidiaries is duly qualified
or licensed and in good standing to do business in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not, individually or in aggregate,
have a Company Material Adverse Effect. As used in this Agreement, the
term "Company Material Adverse Effect" shall mean any change(s) or
effect(s) that, individually or in the aggregate, are materially adverse
to the financial condition, business
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or results of operations of the Company and its Subsidiaries, taken as a
whole, excluding in all cases: (i) events or conditions generally
affecting the industry in which the Company and its Subsidiaries operate
or arising from changes in general business or economic conditions; (ii)
any effect resulting from any change in law or GAAP, which generally
affects entities such as the Company or its Subsidiaries; (iii) events
resulting from the execution and/or announcement of this Agreement; and
(iv) any effect resulting from compliance by the Company or any of its
Subsidiaries with the terms of this Agreement.
(c) Except as set forth in Section 3.1(c) of the Company
Disclosure Schedule, neither the Company nor any Subsidiary owns (i) any
equity interest, or option to purchase such an interest, in any
corporation or other entity or (ii) marketable securities where the
Company's or Subsidiary's equity interest in any entity exceeds five
percent (5%) of the outstanding equity of such entity on the date hereof.
Section 3.2 Capitalization of the Company and its Subsidiaries.
(a) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, no par value (the "Common Stock"), and
100,000 shares of preferred stock, no par value (the "Preferred Stock").
As of the date hereof, (i) 8,694,954 shares of Common Stock are issued and
outstanding and no shares of Preferred Stock are outstanding and (ii)
10,413 shares of Common Stock have been authorized for issuance but have
not been issued. As of the date hereof, 1,189,911 shares of Common Stock
and no shares of Preferred Stock are held in the treasury of the Company.
All of the Shares have been validly issued, are fully paid, nonassessable
and have been issued free of preemptive rights. Section 3.2 of the Company
Disclosure Schedule identifies the number of shares of each class of
capital stock of the Company which are reserved and subject to any Company
Benefit Plan, indicating the name of the plan, the date of the grant, the
holder of the option, the number of shares granted, the type of option and
the exercise price thereof. Section 3.2 of the Company Disclosure Schedule
also identifies the number of shares of each class of capital stock of the
Company which are reserved and subject to any warrant of the Company,
indicating the warrant agreement, the date of the warrant, the holder of
the warrant, the number of shares subject to the warrant and the exercise
price thereof. The actions to be taken in Section 1.9 hereof with respect
to all outstanding options and warrants of the Company are permissible
under the terms of such options and warrants without any further action on
the part of the Company, Purchaser or the holders of any such options or
warrants. As of the date hereof, options to purchase 1,630,285 shares of
Common Stock were outstanding under Company Benefit Plans and warrants to
purchase 200,000 shares of Common Stock were outstanding. Except as set
forth above and except for the Rights issued pursuant to the Rights
Agreement, there are outstanding (i) no shares of capital stock or other
voting securities of the Company, (ii) no securities of the Company or any
of its Subsidiaries convertible into or exchangeable for shares of capital
stock or voting securities of the Company, (iii) no options or other
rights to acquire from the Company or any of its Subsidiaries, and no
other contract, understanding, arrangement or obligation (whether or not
contingent) of the Company or any of its Subsidiaries to issue or sell,
directly or indirectly, any capital stock, voting
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securities, securities convertible into or exchangeable for capital stock
or voting securities, or other securities of the Company or any of its
Subsidiaries, or any other ownership interests in the Company or any of
its Subsidiaries and (iv) no equity equivalents, interests in the
ownership or earnings of the Company or any of its Subsidiaries or other
similar rights (collectively, "Company Securities"). Except for the put
options relating to the capital stock of Field Marketing, Inc., there are
no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities.
(b) Except as set forth in Section 3.2 of the Company
Disclosure Schedule, all of the outstanding capital stock of, or other
ownership interests in, each Subsidiary of the Company, is owned by the
Company, directly or indirectly, free and clear of any Lien (as
hereinafter defined) or any other limitation or restriction (including any
restriction on the right to vote or sell the same, except as may be
provided as a matter of law) and is fully paid and non-assessable and was
issued free of preemptive rights. For purposes of this Agreement, "Lien"
shall mean, with respect to any asset (including, without limitation, any
security) any option, claim, mortgage, lien, pledge, charge, security
interest or encumbrance or restriction of any kind in respect of such
asset (other than rights or interests held by lessors or sublessors under
operating leases entered into in the ordinary course of business and other
than Permitted Liens). For purposes of this Agreement, "Permitted Liens"
shall mean (i) statutory Liens not yet delinquent, (ii) Liens with respect
to the properties or assets that do not, individually or in the aggregate,
materially detract from the value or interfere with the use of the
properties or assets or otherwise materially impair present business
operations at such properties, (iii) Liens for Taxes and other
governmental charges not yet delinquent or the validity of which are being
contested in good faith by appropriate actions and (iv) Liens reflected on
the 1999 Financial Statements or Section 3.2(b) of the Company Disclosure
Schedule.
(c) The Shares and the Rights constitute the only class of
equity securities of the Company or any of its Subsidiaries registered or
required to be registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(d) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party
with respect to the voting of the capital stock of the Company or any of
the Subsidiaries.
(e) Other than as set forth in the 1999 Financial Statements
or in Section 3.2(e) of the Company Disclosure Schedule, there is no
outstanding material Indebtedness (as hereinafter defined) of the Company
or any of its Subsidiaries. Except as identified in the 1999 Financial
Statements or in Section 3.2(e) of the Company Disclosure Schedule, no
such Indebtedness of the Company or its Subsidiaries contains any
restriction upon (i) the prepayment of such Indebtedness, (ii) the
incurrence of Indebtedness by the Company or its Subsidiaries,
respectively, or (iii) the ability of the
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Company or its Subsidiaries to grant any Liens on its properties or
assets. For purposes of this Agreement, "Indebtedness" shall include (i)
all indebtedness for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices and operating leases), (ii) any other indebtedness which is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of
acceptances issued or created, (v) all liabilities secured by any Lien on
any property and (vi) all guarantee obligations.
Section 3.3 Authority Relative to this Agreement, Consents and
Approvals.
(a) The Company has all the necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
Merger in accordance with the terms hereof (subject to obtaining the
necessary approval and adoption of this Agreement and approval of the
Merger by the shareholders of the Company as contemplated by Section 1.10
hereof). The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the Merger have been duly
and validly authorized by the Board and, except for obtaining the approval
of the Company's shareholders as contemplated by Section 1.10 hereof, no
other corporate action or corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery by the Company of
this Agreement and the consummation by the Company of the Merger. This
Agreement has been duly and validly executed and delivered by the Company,
and assuming due and valid authorization, execution and delivery by
Purchaser and Acquisition Sub, constitutes a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceedings may be brought).
(b) The Board has duly and validly approved, and taken all
corporate actions required to be taken by it for the consummation of, the
Merger, including, but not limited to, all actions required to satisfy the
provisions of Article VII of the Restated Articles and all actions
required to exempt this Agreement and the transactions contemplated hereby
from Sections 14-2-1131 through 14-2-1133 and 14-2-1110 through 14-2-1113
of the GBCC.
Section 3.4 SEC Reports, Financial Statements.
(a) Except as set forth on Section 3.4(a) of the Company
Disclosure Schedule, since October 31, 1998, the Company has timely filed
with the SEC all forms, reports, schedules, statements and other documents
required to be filed by it with the SEC pursuant to the Securities Act of
1933, as amended (the "Securities Act"), and the SEC's rules and
regulations promulgated thereunder and the Exchange Act and the SEC's
rules and regulations promulgated thereunder, including, without
limitation, any financial
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14
statements or schedules included therein (any such documents filed prior
to the date hereof being collectively, the "Company SEC Documents"). At
the time filed, or in the case of registration statements on their
respective effective dates, the Company SEC Documents (i) complied in all
material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, and the rules and regulations
promulgated thereunder and (ii) did not, at the time filed (or in the case
of registration statements, at the time of effectiveness), contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made,
not misleading. No Subsidiary of the Company is required to file any form,
report or other document with the SEC. The audited financial statements
dated October 31, 1999 delivered to Purchaser (the "1999 Financial
Statements") and the financial statements included in the Company SEC
Documents filed since October 31, 1998 (i) have been prepared from, and
are in accordance with, the books and records of the Company and its
Subsidiaries, (ii) complied in all material respects with applicable
accounting requirements and with the published rules and regulations of
the SEC with respect thereto, (iii) have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except as may be indicated
in the notes thereto) and (iv) fairly present, in all material respects,
the consolidated financial position and the consolidated results of
operations and cash flows (and changes in financial position, if any) of
the Company and its Subsidiaries as of the times and for the periods
referred to therein, except that any such Financial Statements that are
unaudited, interim financial statements were or are subject to normal and
recurring year end adjustments, which were not or are not expected to be
material in amount or effect.
(b) The Company has heretofore delivered or made available to
Purchaser, in the form filed with the SEC (including any amendments
thereto), (i) its Annual Reports on Form 10-K for each of the three fiscal
years ended October 31, 1996, October 31, 1997 and October 31, 1998, (ii)
all definitive proxy statements relating to the Company's meetings of
shareholders (whether annual or special) held since October 31, 1998 and
(iii) all other reports or registration statements filed by the Company
with the SEC since October 31, 1998.
(c) The Company has heretofore furnished or made available to
Purchaser a complete and correct copy of any amendments or modifications,
which have not yet been filed by the Company with the SEC, to all
agreements, documents or other instruments which previously had been filed
by the Company and are currently in effect.
Section 3.5 Proxy Statement. The Proxy Statement to be sent to the
shareholders of the Company in connection with the Shareholders' Meeting, as of
the date first mailed to the shareholders of the Company and at the time of the
Shareholders' Meeting, and the Rule 13E-3 Transaction Statement on Schedule
13E-3 (together with all amendments and supplements thereto, the "Schedule
13E-3"), at the time filed with the SEC, will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they
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were made, not misleading. The Proxy Statement and the Schedule 13E-3 will, when
filed by the Company with the SEC, comply as to form in all material respects
with the applicable provisions of the Exchange Act and the SEC rules and
regulations promulgated thereunder. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to the statements made in any
of the foregoing documents based on written information supplied by or on behalf
of Purchaser, Acquisition Sub or any of their respective affiliates specifically
for inclusion therein.
Section 3.6 Consents and Approvals; No Violations. No filing with or
notice to, and no permit, authorization, consent or approval of, any court or
tribunal or any federal, state, county or local administrative, governmental or
regulatory body, agency, authority (including a self-regulated authority),
instrumentality, commission, board or body (a "Governmental Entity") is required
on the part of the Company or any of its Subsidiaries for the execution,
delivery and performance by the Company of this Agreement or the consummation by
the Company of the Merger, except (a) in connection with the applicable
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (b) pursuant to the applicable requirements of the
Exchange Act and the SEC's rules and regulations promulgated thereunder, (c) the
filing and recordation of the Certificate of Merger pursuant to the GBCC or (d)
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings or give such notice would not have a Company Material
Adverse Effect. Except as disclosed in Section 3.6 of the Company Disclosure
Schedule, neither the execution, delivery or performance of this Agreement by
the Company nor the consummation by the Company of the Merger will (i) conflict
with or result in any breach of any provision of the respective Certificate or
Articles of Incorporation or Bylaws (or similar governing documents) of the
Company or of any its Subsidiaries, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
or require any consent pursuant to, or result in the creation of any Lien on any
asset of the Company or its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound or (iii) violate any order, writ, injunction,
decree, law, statute, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except in the case
of (ii) or (iii) for any such violations, breaches, defaults (or rights of
termination, amendment, cancellation or acceleration), Liens or failures to
obtain consents which would not, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 3.7 No Default. None of the Company or any of its Subsidiaries
is in default or violation (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation) of any term,
condition or provision of (a) its Certificate or Articles of Incorporation or
Bylaws (or similar governing documents), (b) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any of its Subsidiaries is now a party or by which any
of them or any of their respective properties or assets may be bound or (c) any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
the Company, any of its Subsidiaries or any of
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their respective properties or assets, except in the case of (b) or (c) for
violations, breaches or defaults which would not, individually or in the
aggregate, have a Company Material Adverse Effect.
Section 3.8 No Undisclosed Liabilities. Except (a) for liabilities
incurred pursuant to the terms of this Agreement, (b) for liabilities that are
accrued or reserved against in the consolidated balance sheets of the Company
included in the 1999 Financial Statements or (c) as set forth in Section 3.8 of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
has incurred any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that have, or would reasonably be expected to
have, a Company Material Adverse Effect or that would be required by GAAP to be
reflected or reserved against on a consolidated balance sheet, or in the notes
thereto, of the Company. Except as set forth in Section 3.8 of the Company
Disclosure Schedule, there is no Indebtedness of the Company and its
Subsidiaries which exceeds $50,000 and will accelerate or become due or result
in a right of redemption or repurchase on the part of the holder of such
Indebtedness (with or without due notice or lapse of time) as a result of this
Agreement or the Merger. Neither the Company nor any Subsidiary has incurred or
paid any liability since the date of the Company Balance Sheet except for such
liabilities incurred or paid (i) in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect or (ii) in
connection with the transactions contemplated by this Agreement. Except as
disclosed in the Company SEC Documents or in Section 3.8 of the Company
Disclosure Schedule, neither the Company nor any Subsidiary is directly or
indirectly liable, by guarantee, indemnity, or otherwise, upon or with respect
to, or obligated, by discount or repurchase agreement or in any other way, to
provide funds in respect to, or obligated to guarantee or assume any liability
of any Person for any amount in excess of $100,000. As used in this Section 3.8,
the term "liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
Section 3.9 Litigation. Except as disclosed in the Company SEC Documents
or in Section 3.9 of the Company Disclosure Schedule, there is no suit, claim,
complaint, action, arbitration, criminal prosecution, governmental or other
examination, investigation, hearing, administrative or other proceeding
(collectively, "Litigation") pending or, to the knowledge of the Company,
threatened against, affecting or involving the Company or any of its
Subsidiaries or any of their respective properties or assets before any
Governmental Entity which is reasonably likely to have a Company Material
Adverse Effect. Except as disclosed in the Company SEC Documents or in Section
3.9 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which is reasonably likely to have a Company Material Adverse Effect. Reserves
reflected on the 1999 Financial Statements are adequate for all Litigation
disclosed in the Company SEC Documents or in Section 3.9 of the Company
Disclosure Schedule. Section 3.9 of the Company Disclosure Schedule contains a
summary of all Litigation as of the date of this
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Agreement where the potential liability is reasonably likely to exceed $25,000
(i) to which the Company or any Subsidiary is a party or (ii) which names the
Company or any Subsidiary as a defendant or cross-defendant or for which the
Company or any Subsidiary has any potential liability.
Section 3.10 Compliance with Applicable Law. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which would not,
individually or in the aggregate, have a Company Material Adverse Effect. The
Company and its Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure so to comply would not have a Company Material
Adverse Effect. The businesses of the Company and its Subsidiaries are not being
and have not been conducted in violation of any law, ordinance or regulation of
any Governmental Entity, except for violations or possible violations which,
individually or in the aggregate, would not have a Company Material Adverse
Effect. None of the directors, officers, agents, representatives or employees of
the Company or its Subsidiaries (in their capacity as directors, officers,
agents, representatives or employees) has taken any action or made any omission
which would violate any law, ordinance or regulation of any Governmental Entity,
except for violations or possible violations which, individually or in the
aggregate, would not have a Company Material Adverse Effect. Except as set forth
in Sections 3.9 or 3.10 of the Company Disclosure Schedule or in the Company SEC
Documents, no investigation or review by any Governmental Entity with respect to
the Company or any of its Subsidiaries, or with respect to any of their
respective directors, officers, agents, representatives or employees (in regard
to actions taken or omissions made in their capacity as directors, officers,
agents, representatives or employees) is pending or, to the knowledge of the
Company, threatened. Excluded from the scope of this representation and warranty
are all matters related to Environmental Laws, Materials of Environmental
Concern or Environmental Claims; these excluded matters, to the extent subject
to a representation and warranty under this Agreement, are covered exclusively
by Section 3.12.
Section 3.11 Employee Benefit Matters.
(a) All Company Benefit Plans (as defined in Section 3.11(h))
are listed in Section 3.11 of the Company Disclosure Schedule or in the
Company SEC Documents. True and complete copies of the Company Benefit
Plans (including: (i) all trust agreements or other funding arrangements
for such Company Benefit Plans (including insurance contracts), and all
amendments thereto, (ii) with respect to any such Company Benefit Plans or
amendments, all determination letters, rulings, opinion letters,
information letters, or advisory opinions issued by the United States
Internal Revenue Service, the United States Department of Labor, or the
Pension Benefit Guaranty Corporation after December 31, 1992, (iii) annual
reports or returns, audited or unaudited financial statements, actuarial
valuations and reports and summary annual reports prepared for any Company
Benefit Plan with respect to the most recent three (3) plan years, (iv)
the most recent summary plan descriptions and any material modifications
thereto and (v) any filing or compliance action taken under Revenue
Procedures 98-22, 99-13, or 99-31) have been provided or made available to
the Purchaser. Except as set
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forth in Section 3.1l(a) of the Company Disclosure Schedule, each Company
Benefit Plan has been administered and maintained in all material respects
in compliance with its terms, with the material provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), with the
Internal Revenue Code of 1986, as amended (the "Code"), and with all other
applicable laws. Each Company Benefit Plan intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue
Service (the "IRS") to be so qualified and no event has occurred that
could reasonably be expected to adversely affect the qualified status of
such Company Benefit Plan or the tax-exempt status of any trust. All
government approvals for tax exemption of any trust applicable to a
Company Benefit Plan have been timely obtained and all such approvals as
well as all IRS determination letters applicable to a Company Benefit Plan
continue in full force and effect. Neither the Company nor any of its
Subsidiaries has engaged in a transaction with respect to any Company
Benefit Plan that, assuming the taxable period of such transaction expired
as of the date hereof, would subject the Company to a Tax imposed by
either Section 4975 of the Code or Section 502(i) of ERISA. To the
knowledge of the Company, there are no pending, nor has the Company or any
of its Subsidiaries received notice of any threatened, claims against or
otherwise involving any of the Company Benefit Plans (other than routine
claims for benefits). No Company Benefit Plan is under audit or
investigation by the IRS, the Department of Labor or the Pension Benefit
Guaranty Corporation and, to the knowledge of the Company, no such audit
or investigation is threatened. Except as listed on Section 3.11(a) of the
Company Disclosure Schedule, all contributions and other payments required
to be made as of the date of this Agreement to, or pursuant to, the
Company Benefit Plans have been made or accrued for in the 1999 Financial
Statements. Neither the Company nor any entity under "common control" with
the Company within the meaning of Section 4001 of ERISA has at any time
contributed to, or been required to contribute to, any "pension plan" (as
defined in Section 3(2) of ERISA) that is subject to Title IV of ERISA or
Section 412 of the Code, including, without limitation, any
"multi-employer plan" (as defined in Sections 3(37) and 4001(a)(3) of
ERISA) and neither the Company nor any such entity has at any time
incurred or could reasonably expect to incur any liability under Title IV
of ERISA. To the knowledge of the Company, neither the Company nor any of
its Subsidiaries nor any employee or agent thereof, has made any oral or
written representation to any participant in or beneficiary of a Company
Benefit Plan, or to any other individual or entity that is contrary to the
written or otherwise preexisting terms and provisions of any Company
Benefit Plan, which representations (in the aggregate) could reasonably
create a material liability for the Company.
(b) Except as listed on Section 3.11(b) of the Company
Disclosure Schedule or in the Company SEC Documents, the consummation of
the Merger will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any Company Benefit Plan,
employment or severance agreement, trust, loan or other compensation or
benefits agreement or arrangement that will or may result in any payment
(whether of severance pay, unemployment compensation, golden parachute or
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otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any current or former employee, officer, director, agent or
consultant of the Company or any Subsidiary. Except as listed on Section
3.11(b) of the Company Disclosure Schedule, no such payment, acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits
or obligation to fund benefits will cause a loss of tax deductions under
Section 280G of the Code.
(c) Except as listed on Section 3.11(c) of the Company
Disclosure Schedule, (i) neither the Company nor any of its Subsidiaries
maintains or contributes to any Company Benefit Plan which provides, or
has any liability to provide, life insurance, medical, severance or other
employee welfare benefits to any employee upon or with respect to periods
following his retirement or termination of employment, except as may be
required by Section 4980B of the Code and (ii) there are no restrictions
on the rights of the Company to amend or terminate any such retiree health
or benefit Plan without incurring any liability thereunder.
(d) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of
employees and former employees of the Company and their respective
beneficiaries, have been fully reflected on the 1999 Financial Statements
to the extent required by and in accordance with GAAP.
(e) To the extent a Company Benefit Plan has excluded any
individual from coverage, such exclusion is (i) consistent with the
written terms of the Company Benefit Plan, (ii) enforceable under the
terms of such Plan, (iii) consistent with the terms of any agreement with
such individual (whether written or oral) and (iv) enforceable under
applicable law.
(f) Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any administrator or fiduciary of any
Company Benefit Plan (or any agent of any of the foregoing) has engaged in
any transaction, or acted or failed to act in any manner which could
subject the Company or Purchaser to any direct or indirect liability (by
indemnity or otherwise) for breach of any fiduciary, co-fiduciary or other
duty under ERISA.
(g) Except as listed on Section 3.11(g) of the Company
Disclosure Schedule, all Company Benefit Plan documents and annual reports
or returns, audited or unaudited financial statements, actuarial
valuations, summary annual reports and summary plan descriptions issued
with respect to the Company Benefit Plans are correct and complete and
have been timely distributed to participants of the Company Benefit Plans
(as required by law).
(h) "Company Benefit Plan" means collectively, each pension,
retirement, profit-sharing, deferred compensation, stock option, employee
stock ownership, severance pay, vacation, bonus or other incentive plan,
any other written or unwritten employee program, arrangement, agreement or
understanding, whether arrived
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at through collective bargaining or otherwise, any medical, vision, dental
or other health plan, any life insurance plan or any other employee
benefit plan or fringe benefit plan, including, without limitation, any
"employee benefit plan," as that term is defined in Section 3(3) of ERISA,
maintained by, sponsored in whole or in part by, or contributed to by the
Company or any of its Subsidiaries for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries are eligible to
participate. Company Benefit Plans include (but are not limited to)
"employee benefit plans" as defined in Section 3(3) of ERISA and any other
plan, fund, policy, program, practice, custom, understanding or
arrangement providing compensation or other benefits to any current or
former officer or employee or director or independent contractor of the
Company, or any dependent or beneficiary thereof, maintained by the
Company or under which the Company has any obligation or liability,
whether or not they are or are intended to be (i) covered or qualified
under the Code, ERISA or any other applicable law, (ii) written or oral,
(iii) funded or unfunded, (iv) actual or contingent or (v) generally
available to any or all employees (or former employees) of the Company (or
their beneficiaries of dependents), including, without limitation, all
incentive, bonus, deferred compensation, flexible spending accounts,
cafeteria plans, vacation, holiday, medical, disability, share purchase or
other similar plans, policies, programs, practices or arrangements.
(i) Neither Purchaser nor the Company has any liability or
obligation with respect to any Company Benefit Plan (including any
previously adopted Company Benefit Plan) or any other employee benefit,
plan, program, arrangement or policy that covers employees of the Company,
other than those listed on Schedule 3.11 of the Company Disclosure
Schedule or reflected on the 1999 Financial Statements or listed in the
Company SEC Documents.
Section 3.12 Environmental Laws and Regulations.
(a) Except as shown on Section 3.12(a) of the Company
Disclosure Schedule, and except for such failures to comply which would
not, individually or in the, aggregate, be reasonably likely to have a
Company Material Adverse Effect, the Company and each of its Subsidiaries
(i) is and has been in full compliance with all Environmental Laws (as
defined in Section 3.12(b)) and including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern (as defined in Section
3.12(b)) or otherwise relating to the manufacture, generation, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern; (ii) has all permits, licenses,
certificates, variances, exemptions, orders, authorizations and approvals
of Governmental Entities ("Permits") required under all applicable
Environmental Laws, except for those Permits which, if the Company or a
Subsidiary did not have, such failure would not have a Company Material
Adverse Effect; and (iii) is in compliance with the
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terms and conditions of such Permits.
(b) For purposes of this Agreement, the term "Environmental
Laws" shall mean any and all codes, laws (including, without limitation,
common law), ordinances, regulations, reporting or licensing requirements,
rules, or statutes relating to pollution or protection of human health or
the environment (including ambient air, surface water, ground water, land
surface, or subsurface strata), including, without limitation (i) the
Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. Sections9601 et seq. ("CERCLA"); (ii) the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
U.S.C. Sections6901 et seq., ("RCRA"); (iii) the Emergency Planning
and Community Right to Know Act (42 U.S.C. Sections11001 et seq.);
(iv) the Clean Air Act (42 U.S.C. Sections 7401 et seq.); (v) the
Clean Water Act (33 U.S.C. I 1251 et seq.); (vi) the Toxic Substances
Control Act (15 U.S.C. I 2601 et seq.); (vii) the Hazardous Materials
Transportation Act (49 U.S.C. Sections 5101 et seq.); (viii) any
state, county, municipal or local statues, laws or ordinances similar or
analogous to the federal statutes listed in parts (i) - (vii) of this
subparagraph, (ix) any amendments to the statutes, laws or ordinances
listed in parts (i) - (viii) of this subparagraph, in existence on the
date hereof, (x) any rules, regulations, guidelines, directives, orders or
the like adopted pursuant to or implementing the statutes, laws,
ordinances and amendments listed in parts (i) - (ix) of this subparagraph
in existence on the date hereof; and (xi) any other law, statute,
ordinance, amendment, rule, regulation, guideline, directive, order or the
like now in effect relating to environmental, health or safety matters.
For purposes of this Agreement, the term "Materials of
Environmental Concern" shall mean any and all chemicals, substances,
wastes, materials, pollutants, contaminants, equipment or fixtures defined
as or deemed hazardous or toxic or otherwise regulated under any
Environmental Law, including, without limitation, RCRA hazardous wastes,
CERCLA hazardous substances, pesticides and other agricultural chemicals,
oil and petroleum products or byproducts and any constituents thereof,
lead or lead-based paints or materials, radon, asbestos or
asbestos-containing materials and polychlorinated biphenyls (PCBs).
(c) Except as shown on Section 3.12(c) of the Company
Disclosure Schedule, and except for such written communications which
would not, individually or in the aggregate, be reasonably likely to have
a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries has received any written communication whether from a
Governmental Entity, citizens group, employee or otherwise, that alleges
that the Company or any of its Subsidiaries is not in full compliance with
or is potentially liable under any Environmental Laws. In addition, no
Lien has arisen on any properties or assets of the Company or any
Subsidiary under or as a result of any Environmental Law.
(d) Except as shown on Section 3.12(d) of the Company
Disclosure Schedule, and except for such Environmental Claims which would
not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect, the Company has not received written
notice of any claim, action, cause of action, investigation or notice
(together, "Environmental Claims") alleged, filed or being
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conducted by any Person alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting
from (i) the presence, disposal, placement, burial, migration or release,
of any Materials of Environmental Concern at, on, under, to or from any
location or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law, that in either case is
pending or threatened against the Company or any of its Subsidiaries or
against any Person whose liability for any Environmental Claim the Company
or any of its Subsidiaries has retained or assumed either contractually or
by operation of law.
(e) Except as set forth in Section 3.12(e) of the Company
Disclosure Schedule, there has been no disposal, placement, burial or
release of Materials of Environmental Concern by the Company or any
Subsidiary or, to the knowledge of the Company, by any other Person, on,
in, at or from any of the properties or facilities owned or operated by
the Company or any of its Subsidiaries, except for such disposal,
placement, burial or release which would not, individually or in the
aggregate, be reasonably likely to have a Company Material Adverse Effect.
(f) Without in any way limiting the generality of the
foregoing, except as set forth in Section 3.12(f) of the Company
Disclosure Schedule and, except for any of the matters below which would
not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect, (i) there are no above ground storage
tanks, underground storage tanks, oil/water separators, water treatment
facilities or septic systems located on any property owned, leased,
operated or controlled by the Company or any of its Subsidiaries, (ii)
there is no asbestos contained in or forming part of any building,
building component, structure or office space owned, leased, operated or
controlled by the Company or any of its Subsidiaries and (iii) no PCBs or
PCB-containing items are used or stored at any property owned, leased,
operated or controlled by the Company or any of its Subsidiaries.
(g) Except as set forth in Section 3.12(g) of the Company
Disclosure Schedule, the Company and each of its Subsidiaries are not
subject to any Environmental Laws requiring the performance of site
assessment for Materials of Environmental Concern, or the removal or
remediation of Materials of Environmental Concern, or the giving of notice
to or receiving the approval of any Governmental Entity, or the recording
or delivery to other Persons of any disclosure document or statement
pertaining to environmental matters by virtue of the Merger or as a
condition to the Merger.
Section 3.13 Rights Agreement. The Company has taken all necessary action
so that the execution of this Agreement, announcement or consummation of the
Merger and announcement or consummation of the other transactions contemplated
by this Agreement do not and will not (a) cause the Rights issued pursuant to
the Rights Agreement to separate from the shares of Common Stock to which they
are attached or to be triggered or to become exercisable, (b) cause any Person
to become an Acquiring Person (as such term is defined in the Rights Agreement)
or (c) give rise to a Distribution Date or a Triggering Event (as each such term
is
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defined in the Rights Agreement). The Company has furnished to Purchaser true
and complete copies of all amendments to the Rights Agreement that fulfill the
requirements of this Section 3.13 and such amendments are in full force and
effect.
Section 3.14 Brokers. No broker, finder or investment banker (other than
Credit Suisse First Boston Corporation (the "Financial Advisor")), a true and
correct copy of whose engagement agreement has been provided to Purchaser) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of the Company.
Section 3.15 Absence of Certain Changes. Except as disclosed in Section
3.15 of the Company Disclosure Schedule or in the Company SEC Documents, since
October 31, 1998, the Company and each of its Subsidiaries have conducted their
respective businesses only in the ordinary course of business and consistent
with past practice and (a) there has not been any Company Material Adverse
Effect and (b) the Company has not taken any of the actions set forth in
paragraphs (a) through (r) of Section 5.1.
Section 3.16 Taxes. Except as set forth in Section 3.16 of the
Company Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has (i) duly
filed (or there have been filed on its behalf) with the appropriate Tax
Authorities (as hereinafter defined) all Tax Returns (as hereinafter
defined) required to be filed by it on or prior to the date of this
Agreement, and each such Tax Return is correct and complete in all
material respects and (ii) duly paid in full or, made adequate accruals
and reserves in its books and records in accordance with GAAP with full
provision (or there has been paid or such provision has been made on its
behalf for its sole benefit and recourse) for the payment of, all Taxes
for all periods ending on or prior to the date of this Agreement, except
for those Taxes being contested in good faith.
(b) There are no Liens for Taxes upon any property or assets
of the Company or any Subsidiary thereof, except for Liens for Taxes not
yet due and for which adequate reserves have been established in
accordance with GAAP with full provision made for the payment thereof.
(c) Neither the Company nor any of its Subsidiaries has made
any change in accounting methods, received a ruling from any Tax Authority
or signed an agreement with regard to Taxes reasonably likely to have a
Company Material Adverse Effect.
(d) No Audit (as hereinafter defined) by a Tax Authority is
presently pending with regard to any Taxes or Tax Returns of the Company
or any of its Subsidiaries and, to the knowledge of the Company, no such
Audit is threatened.
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(e) An Audit of each United States federal income Tax Return
of the Company or any of its Subsidiaries has been completed by the
applicable Tax Authorities (or the applicable statutes of limitation for
the assessment of Taxes for such periods have expired) for all periods
through and including 1996, and no adjustments were asserted as a result
of such Audits which have not been finally resolved and fully paid.
(f) There are no agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment or payment of
any Taxes or deficiencies against the Company or any of its Subsidiaries,
and no power of attorney applicable to either the Company or any of its
Subsidiaries with respect to any Taxes is in force.
(g) Neither the Company nor any of its Subsidiaries is a party
to, or is bound by, any agreement, arrangement or policy relating to the
allocation, indemnification or sharing of Taxes.
(h) The Company, as the common parent of an affiliated group
of corporations (as defined in Section 1504 of the Code) consisting solely
of the Company and the Subsidiaries that are "includable corporations"
(within the meaning of Section 1504(b) of the Code), has filed since 1994
a consolidated return for United States federal income Tax purposes on
behalf of itself and such Subsidiaries and neither the Company nor any of
such Subsidiaries has been a member of an affiliated group filing a
consolidated United States federal Tax Return other than the affiliated
group in which they are currently members and of which the Company is the
common parent.
(i) With respect to completed pay periods, the Company and
each of its Subsidiaries has withheld from its employees, independent
contractors, creditors, stockholders, customers and third parties, and
timely paid to the appropriate Tax Authority, proper amounts in all
material respects with all Tax withholding provisions of applicable law.
(j) No power of attorney is currently in force with respect to
any matter relating to Taxes that could affect the Company or any of its
Subsidiaries.
(k) Neither the Company nor any Subsidiary shall become
obligated in connection with the closing of the Merger for the payment of
any amount described in Section 162(m)(1) of the Code.
(l) "Audit" means any audit, assessment or other examination
relating to Taxes by any Tax Authority or any judicial or administrative
proceedings relating to Taxes. "Tax" or "Taxes" means all federal, state,
local and foreign taxes, levies, tariffs, duties (including custom duties)
and other assessments and obligations (including liability with respect to
unclaimed property) of a similar nature (whether imposed directly or
through withholding), including any interest, additions to tax, penalties
or costs applicable or related thereto, imposed, assessed or collected by
any Tax Authority. "Tax
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Authority" means the IRS and any other Governmental Entity (domestic or
foreign) responsible for the administration, assessment or collection of
any Taxes. "Tax Returns" mean all federal, state, local and foreign tax
returns (including information returns), declarations, statements,
reports, requests, schedules and forms, including other documents or
information submitted in connection therewith and any amendments thereto.
Section 3.17 Intellectual Property.
(a) Each of the Company and its Subsidiaries owns or has a
license or other right to use all intellectual property used in and
material to the conduct of its business, including, without limitation,
all patents and patent applications, trademarks, trademark registrations
and applications, copyrights and copyright registrations and applications,
service marks and service names, computer software, technology rights and
licenses, know-how, trade secrets, proprietary processes and formulae,
franchises and inventions (collectively, the "Intellectual Property"),
free and clear of all Liens.
(b) Section 3.17(b) of the Company Disclosure Schedule sets
forth a list of all license agreements (other than license agreements for
non-customized third-party software) under which the Company or any of its
Subsidiaries has granted or received the right to use any Intellectual
Property, and neither the Company nor any of its Subsidiaries is in
default under any such license.
(c) Except as disclosed in the Company SEC Documents or in
Section 3.17(c) of the Company Disclosure Schedule, no Person has a right
to receive a royalty or similar payment in respect of any item of
Intellectual Property pursuant to any contractual arrangements entered
into by the Company or any of its Subsidiaries or otherwise. To the
knowledge of the Company, no former or present employees, officers or
directors of the Company or any Subsidiary hold any right, title or
interest, directly or indirectly, in whole or in part, in or to any
Intellectual Property.
(d) There are no claims or suits pending or, to the knowledge
of the Company, threatened (i) alleging that the conduct of the Company's
or any of its Subsidiary's business infringes upon or constitutes the
unauthorized use of the proprietary rights of any third party or (ii)
challenging the ownership, use, validity or enforceability of the
Intellectual Property. To the knowledge of the Company, no Intellectual
Property of the Company or any Subsidiary is being violated or infringed
upon by any third party. There are no settlements, consents, judgments,
orders or other agreements which restrict the Company's or any of its
Subsidiary's rights to use any Intellectual Property.
(e) Except as set forth in the Company SEC Documents or in
Section 3.17(e) of the Company Disclosure Schedule, the Company has made
no binding commitments to make any material expenditure in relation to the
hardware or software or communications systems used or planned to be used
in connection with the Company's business. All material computer equipment
and systems used by any of the Company and its Subsidiaries and, to the
knowledge of the Company, any major supplier of the
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Company or its Subsidiaries recognize the advent of the year 2000 and can
correctly recognize and manipulate date information relating to dates on
or after January 1, 2000, and the operation and functionality of such
computer systems has not been adversely affected by the advent of the year
2000 or any manipulation of data featuring date information relating to
dates before, on or after January 1, 2000, in each case, except for such
failures to recognize, manipulate, operate or function as would not
reasonably be expected to have a Company Material Adverse Effect.
Section 3.18 Labor Matters.
(a) (i) There is no labor strike, dispute, slowdown, stoppage
or lockout actually pending, or to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries,
(ii) except as discussed on Section 3.18(a)(ii) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to or
bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the
Company or any of its Subsidiaries, (iii) except as disclosed on Section
3.18(a)(iii) of the Company Disclosure Schedule, none of the employees of
the Company or any of its Subsidiaries is represented by any labor
organization and the Company does not have any knowledge of any union
organizing activities among the employees of the Company or any of its
Subsidiaries, (iv) there are no written personnel policies, rules or
procedures applicable to employees of the Company or any of its
Subsidiaries, other than the Company Benefit Plans and those set forth on
Section 3.18(a)(iv) of the Company Disclosure Schedule, true and correct
copies of which have heretofore been delivered or made available to
Purchaser, (v) each of the Company and its Subsidiaries is, and has at all
times been, in compliance, in all material respects, with all applicable
laws and regulations respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational safety
and health, and is not engaged in any unfair labor practices as defined in
the National Labor Relations Act or other applicable laws, except for such
non-compliance which has not had a Company Material Adverse Effect, (vi)
there is no unfair labor practice charge or complaint against the Company
pending or, to the knowledge of the Company, threatened before the
National Labor Relations Board or any similar state or foreign agency,
(vii) there is no material pending grievance arising out of any collective
bargaining agreement or other grievance procedure and (viii) to the
knowledge of the Company, no charges with respect to or relating to the
Company are pending before the Equal Employment Opportunity Commission or
any other agency responsible for the prevention of unlawful employment
practices which, if determined adversely to the Company, would have or
could reasonably be expected to have a Company Material Adverse Effect.
(b) In any ninety (90)-day period during the twelve (12)
months ending on the date of the Agreement, (i) neither the Company nor
any of its Subsidiaries has
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effectuated a "plant closing," (as defined in the Worker Adjustment and
Retraining Notification Act (the "WARN Act")) affecting any site of
employment or one or more facilities or operating units within any site of
employment or facility of the Company and (ii) there has not occurred a
"mass layoff" (as defined in the WARN Act) affecting any site of
employment or facility of the Company or any of its Subsidiaries; nor has
the Company or any of its Subsidiaries been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to
trigger application of any similar state, local or foreign law or
regulation.
Section 3.19 Opinion of Financial Advisor. The Financial Advisor has
delivered its opinion, dated the date of this Agreement, to the Special
Committee and the Board to the effect that, as of such date, and based upon and
subject to the matters stated in the opinion, the Merger Consideration to be
received in the Merger by the holders of Shares (other than Purchaser and its
affiliates) is fair from a financial point of view to such holders. A copy of
the written opinion will be delivered to Purchaser promptly following receipt
thereof by the Special Committee.
Section 3.20 Real Property.
(a) Section 3.20 of the Company Disclosure Schedule sets forth
a complete list of all real property owned or leased by the Company or any
of its Subsidiaries or otherwise used by the Company or any of its
Subsidiaries in, and material to, the conduct of their business or
operations (collectively, together with all buildings, structures and
other improvements and fixtures located on or under the land described in
this Section 3.20 and all easements, rights and other appurtenances
thereto, the "Real Property"). The Company or its Subsidiaries has good
title to the owned Real Property and good leasehold interests in the
leased Real Property, free and clear of all Liens. Copies of (i) all
deeds, title insurance policies (including copies of exception documents
thereunder) and surveys of the Real Property and (ii) all documents
evidencing all Liens upon the Real Property, to the extent such are in the
files and records of the Company, have been furnished or made available to
Purchaser or will be furnished or made available to Purchaser as promptly
as practicable after the date of this Agreement. Except for the matters
disclosed in the Company SEC Documents or in Section 3.20 of the Company
Disclosure Schedule, there are no proceedings, claims, disputes or, to the
Company's knowledge, conditions affecting any Real Property that would
reasonably be expected to curtail or interfere with the use of such
property, nor is an action of rezoning or eminent domain pending or, to
the knowledge of the Company, threatened for all or any portion of the
Real Property.
(b) All buildings on the Real Property are free of material
title and physical defects which do not have, individually or in the
aggregate, a Company Material Adverse Effect.
(c) Each of the Company and its Subsidiaries has obtained all
appropriate certificates, licenses, permits, easements and rights of way,
including proofs of dedication, required to use and operate the Real
Property in the manner in which the Real Property is currently being used
and operated, except for such easements,
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certificates, licenses, permits or rights of way the failure of which to
have obtained does not have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) To the Company's knowledge, neither the Company nor any of
its Subsidiaries is in violation in any material respect of any applicable
building, zoning, health or other law, ordinance, regulation, contractual
restriction or covenant in respect of the use or occupation of the Real
Property or structures or their operations thereon.
Excluded from the scope of this representation and
warranty are all matters related to Environmental Laws, Materials of
Environmental Concern or Environmental Claims; these excluded matters, to
the extent subject to a representation and warranty under this Agreement,
are covered by Section 3.12.
Section 3.21 Material Contracts.
(a) Section 3.21(a) of the Company Disclosure Schedule lists
each of the following contracts and agreements of the Company and each of
its Subsidiaries (such contracts and agreements, together with all
contracts and agreements disclosed in Section 3.17(b) of the Disclosure
Schedule, being "Material Contracts"):
(i) each contract, agreement and other arrangement for
the purchase of inventory, spare parts, other materials or personal
property with any supplier or for the furnishing of services to the
Company or any of its Subsidiaries or otherwise related to the
businesses of the Company or any of its Subsidiaries under the terms
of which the Company or any of its Subsidiaries: (A) have paid or
otherwise given consideration of more than $50,000 in the aggregate
during the fiscal year ended October 31, 1999 or (B) are likely to
pay or otherwise give consideration of more than $250,000 in the
aggregate over the remaining term of such contract;
(ii) each contract, agreement and other arrangement for
the sale of inventory or other personal property or for the
furnishing of services by the Company or any of its Subsidiaries
which: (A) is likely to involve consideration of more than $50,000
in the aggregate during the fiscal year ended October 31, 1999 or
(B) is likely to involve consideration of more than $100,000 in the
aggregate over the remaining term of the contract;
(iii) all material broker, distributor, dealer,
manufacturer's representative, franchise, agency, consulting and
advertising contracts and agreements to which the Company or any of
its Subsidiaries is a party;
(iv) all management contracts (including those relating
to severance, change of control, termination or retirement) and
contracts with independent contractors or consultants (or similar
arrangements) to which the Company or any of its Subsidiaries is a
party and which provide for payments to any Person in any calendar
year in excess of $50,000;
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(v) all contracts and agreements relating to
Indebtedness of the Company or any of its Subsidiaries in
excess of $25,000 or to any direct or indirect guaranty by the
Company or any of its Subsidiaries of Indebtedness of any
other Person in excess of $25,000;
(vi) all contracts and agreements that limit
or purport to limit the ability of the Company or any of its
Subsidiaries to compete in any line of business or with any
Person or in any geographic area or during any period of time;
(vii) any exchange-traded or
over-the-counter swap, forward, future, option, cap, floor or
collar financial contract or any other interest rate or
foreign currency protection contract not included on its
balance sheet which is a financial derivative contract;
(viii) any other contract or amendment
thereto that would be required to be filed as an exhibit to a
Form 10-K filed by Company with the SEC as of the date of this
Agreement (excluding this Agreement or any other agreements
contemplated by or related to this Agreement or the Merger);
(ix) all contracts and agreements that
provide indemnification rights or obligations of the Company
or any of its Subsidiaries, which provide for potential
payments after the Effective Time to any Person in excess of
$250,000; and
(x) all other contracts and agreements,
whether or not made in the ordinary course of business, which
are material to the Company and its Subsidiaries, taken as a
whole, or to the conduct of the business of the Company and
its Subsidiaries, taken as a whole, or the absence of which
would, in the aggregate, have or reasonably be expected to
have a Company Material Adverse Effect.
(b) Each Material Contract: (i) is legal, valid and
binding on the Company or the respective Subsidiary which is a party
thereto and, to the knowledge of the Company, the other parties
thereto, and is in full force and effect and (ii) upon consummation of
the Merger, except to the extent that any consents set forth in Section
3.6 of the Company Disclosure Schedule are not obtained, shall continue
in full force and effect without penalty or other adverse consequence.
Except as set forth in Section 3.21(b) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries (x) is in
breach of, or default under, any Material Contract or (y) to the
knowledge of the Company, has repudiated or waived any material
provision thereunder.
(c) Except as shown at Section 3.21 of the Company
Disclosure Schedule,
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no other party to any Material Contract is, to the knowledge of the
Company, in material breach thereof or material default thereunder.
(d) Except as set forth in Section 3.21(d) of the
Company Disclosure Schedule, there is no contract, agreement or other
arrangement granting any Person any preferential right to purchase any
Company Securities or any properties or assets of the Company or any of
its Subsidiaries.
Section 3.22 Suppliers and Customers. Since October 31, 1998, no
material licensor, vendor, supplier, licensee or customer of the Company or any
of its Subsidiaries has canceled or otherwise modified (in a manner materially
adverse to the Company) its relationship with the Company or its Subsidiaries
and, to the Company's knowledge, (a) no such Person has notified the Company or
any of its Subsidiaries of its intention to do so and (b) the consummation of
the Merger will not affect any of such relationships in a manner that would
result in a Company Material Adverse Effect.
Section 3.23 Accounts Receivable, Inventory.
(a) The accounts receivable of the Company and its
Subsidiaries as set forth on the most recent consolidated balance sheet
included in the 1999 Financial Statements (the "Company Balance Sheet")
delivered prior to the date of this Agreement or arising since the date
thereof are valid and genuine; have arisen out of bona fide sales and
deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past
practice; and are not subject to valid defenses, set-offs or
counterclaims. The allowance for collection losses on the Company
Balance Sheet and reserves for the return of inventory have been
determined in accordance with GAAP consistently applied and, to the
knowledge of the Company, are sufficient to provide for any losses or
returns which may be sustained on realization of the accounts
receivable or return of inventory shown in the Company Balance Sheet.
(b) As of the date of the Company Balance Sheet, the
inventories shown on the Company Balance Sheet consisted in all
material respects of items of a quantity and quality usable or saleable
in the ordinary course of business. All of such inventories were
acquired in the ordinary course of business. All such inventories are
valued on the Company Balance Sheet in accordance with GAAP, applied on
a basis consistent with the Company's past practices.
Section 3.24 Insurance. Section 3.24 of the Company Disclosure Schedule
lists the Company's material insurance policies. Such policies are in adequate
amounts and cover risks customarily insured against by businesses of the type
operated by the Company and its Subsidiaries. All such policies are in full
force and effect, all premiums with respect thereto covering all periods up to
and including the date of this Agreement have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
Such policies will remain in full force and effect through the respective dates
set forth in Section 3.24 of the Company Disclosure Schedule. Except as set
forth in Section 3.24 of the Company Disclosure Schedule, there are presently no
claims for amounts exceeding in any individual case $250,000
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pending under such policies of insurance and no notices of claims in excess of
such amounts have been given by the Company or any of its Subsidiaries under
such policies.
Section 3.25 Title and Condition of Properties. The Company and its
Subsidiaries own good title, free and clear of all Liens, to all of the personal
property and assets shown on the Company Balance Sheet, except for assets which
have been disposed of to nonaffiliated third parties since the date of the
Company Balance Sheet, in the ordinary course of business. All of the machinery,
equipment and other tangible personal property and assets owned or used by the
Company or its Subsidiaries are in good condition and repair, except for
ordinary wear and tear not caused by neglect and are usable in the ordinary
course of business, except for any matter otherwise covered by this sentence
which would not have, individually or in the aggregate, a Company Material
Adverse Effect. All assets which are material to the Company's business on a
consolidated basis and held under leases or subleases by the Company or any of
its Subsidiaries are held under valid contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such contract is in full force and effect.
Section 3.26 Statements True and Correct. No representation or warranty
of the Company contained in this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 3.27 Board Recommendation. The Board, at a meeting duly called
and held, has by unanimous vote of those directors present (who constituted all
of the directors then in office) (a) determined that this Agreement and the
Merger are fair to and in the best interests of the shareholders of the Company
(other than Purchaser or any affiliate thereof) and (b) resolved to recommend
that such holders of the shares of Common Stock approve and adopt this Agreement
and approve the Merger.
Section 3.28 Required Vote. The affirmative vote of the holders of
shares of Common Stock representing a majority of all shares entitled to vote at
the Shareholders' Meeting is required to approve and adopt this Agreement and
approve the Merger. No other vote of the shareholders of the Company is required
by law, the Restated Articles, the Bylaws of the Company or otherwise in order
for the Company to consummate the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser hereby represents and warrants to the Company as follows:
Section 4.1 Organization. Each of Purchaser and Acquisition Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia. Each of Purchaser and Acquisition Sub has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
Section 4.2 Authority Relative to this Agreement. Each of Purchaser and
Acquisition Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the Merger in accordance with the terms
hereof. The execution, delivery and performance of this Agreement by Purchaser
and Acquisition Sub and the consummation of the Merger by Purchaser and
Acquisition Sub have been duly and validly authorized by the Board of Directors
of Purchaser and the Board of Directors of Acquisition Sub, and no other
corporate action or other proceedings on the part of Purchaser or Acquisition
Sub are necessary to authorize the execution and delivery by Purchaser and
Acquisition Sub of this Agreement or to consummate the Merger. This Agreement
has been duly and validly executed and delivered by Purchaser and Acquisition
Sub and, assuming due and valid authorization, execution and delivery by the
Company, constitutes a valid, legal and binding agreement of Purchaser and
Acquisition Sub, enforceable against Purchaser and Acquisition Sub in accordance
with its terms, (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought).
Section 4.3 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, state securities or blue sky
laws, the HSR Act and the filing and recordation of a Certificate of Merger as
required by the GBCC, no filing with or notice to, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary for the execution
and delivery by Purchaser or Acquisition Sub of this Agreement or the
consummation by Purchaser or Acquisition Sub of the Merger, except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings or give such notice would not have a Purchaser Material Adverse
Effect. Neither the execution, delivery or performance of this Agreement by
Purchaser or Acquisition Sub, nor the consummation by Purchaser and Acquisition
Sub of the Merger, will (a) conflict with or result in any breach of any
provision of the Certificate or Articles of Incorporation or Bylaws of Purchaser
or Acquisition Sub, (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) or require any
consent pursuant to, or result in the creation of any Lien on any asset of
Purchaser or Acquisition Sub under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Purchaser or Acquisition Sub is a party
or by which either of them or any of their respective properties or assets may
be bound or (c) violate any order, writ, injunction, decree, law, statute, rule
or regulation applicable to Purchaser or Acquisition Sub or any of their
respective properties or assets, except in the case of (b) or (c) for any such
violations, breaches, defaults (or rights of termination, amendment,
cancellation or acceleration), Liens or failures to
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obtain consents which would not individually or in the aggregate, have a
Purchaser Material Adverse Effect. As used in this Agreement, the term
"Purchaser Material Adverse Effect" shall mean any change or effect that is
materially adverse to the business, results of operations or condition
(financial or otherwise) of Purchaser or Acquisition Sub other than any change
or effect that does not affect Purchaser's or Acquisition Sub's ability to
perform its obligations under this Agreement.
Section 4.4 Proxy Statement. None of the information supplied by
Purchaser in writing for inclusion in the Proxy Statement or Schedule 13E-3
will, at the respective times filed with the SEC and first published or sent or
given to holders of Shares, and in the case of the Proxy Statement, at the time
that it or any amendment or supplement thereto is mailed to the Company's
shareholders, at the time of the Shareholders' Meeting or at the Effective Time,
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. The Schedule 13E-3 will, when filed by Purchaser with the SEC,
comply as to form in all material respects with the provisions of the Exchange
Act and the SEC's rules and regulations promulgated thereunder.
Section 4.5 Financing. Purchaser has provided the Company with complete
and correct copies of (a) a commitment letter dated December 6, 1999 from Fleet
Capital Corporation pursuant to which it has committed, subject to the terms and
conditions set forth therein, to provide a senior credit facility in an
aggregate amount of $315 million (the "Senior Commitment Letter") and (b) a
commitment letter dated January 13, 2000 from ▇.▇. ▇▇▇▇▇▇▇ & Co. pursuant to
which it has committed, subject to the terms and conditions set forth therein,
to purchase subordinated notes in an aggregate amount of $55 million
(collectively, the "Financing Commitments," and the financing to be provided
pursuant to the foregoing, the "Financing"). As of the date hereof, the
Financing Commitments have not been withdrawn. If such Financing has been
obtained at the Effective Time, Purchaser will have available $55 million in
equity for purposes of financing the Merger.
Section 4.6 Brokers. Except as set forth in a disclosure letter to be
provided separately to the Company by Purchaser, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger based upon arrangements made by or on behalf of
Purchaser.
Section 4.7 No Default. Neither Purchaser nor Acquisition Sub is in
default or violation (and no event has occurred which, with notice or the lapse
of time or both, would constitute a default or violation) of any term, condition
or provision of (a) its Articles of Incorporation or Bylaws, (b) any note, bond,
mortgage, indenture, lease, license, contract, agreement or other instrument or
obligation to which Purchaser or Acquisition Sub is now a party or by which any
of them or any of their respective properties or assets may be bound or (c) any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
Purchaser or Acquisition Sub or any of their respective properties or assets,
except in the case of (b) or (c) for violations, breaches or defaults that would
not, individually or in the aggregate, have a Purchaser Material Adverse Effect.
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Section 4.8 Litigation. Except as would not reasonably be expected to
have a Purchaser Material Adverse Effect, there is no Litigation pending or, to
the knowledge of Purchaser, threatened against, affecting or involving Purchaser
or Acquisition Sub or any of their respective properties or assets before any
Governmental Entity, and neither Purchaser nor Acquisition Sub is subject to any
outstanding order, writ, injunction or decree.
Section 4.9 Compliance with Applicable Law. Purchaser and Acquisition
Sub hold all permits, licenses, variances, exemptions, orders and approvals of
all Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Purchaser Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which would not,
individually or in the aggregate, have a Purchaser Material Adverse Effect.
Purchaser and Acquisition Sub are in compliance with the terms of the Purchaser
Permits, except where the failure so to comply would not have a Purchaser
Material Adverse Effect. The businesses of Purchaser and Acquisition Sub are not
being and have not been conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for violations or possible
violations which, individually or in the aggregate, would not have a Purchaser
Material Adverse Effect. None of the directors, officers, agents,
representatives or employees of Purchaser or Acquisition Sub (in their capacity
as directors, officers, agents, representatives or employees) has taken any
action or made any omission which would violate any law, ordinance or regulation
of any Governmental Entity, except for violations or possible violations which,
individually or in the aggregate, would not have a Purchaser Material Adverse
Effect. No investigation or review by any Governmental Entity with respect to
Purchaser or Acquisition Sub or with respect to any of their respective
directors, officers, agents, representatives or employees (in regard to actions
taken or omissions made in their capacity as directors, officers, agents,
representatives or employees) is pending or, to the knowledge of Purchaser,
threatened.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement, during the period from the date hereof until the
Effective Time, each of the Company and its Subsidiaries will conduct its
operations in the ordinary course of business consistent with past practice and
preserve intact its business organization and assets and maintain its rights and
franchises. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement, until the Effective Time the
Company will not, and the Company will not permit its Subsidiaries to, without
the prior written consent of Purchaser (which will not be unreasonably withheld
or delayed):
(a) amend or propose to amend the charter, bylaws or
other governing instruments of the Company or any of its Subsidiaries;
(b) authorize for issuance, issue, sell, deliver, or
agree or commit to issue, sell or deliver, dispose of, encumber or
pledge (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or
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otherwise) any stock of any class or any securities, except as
disclosed at Section 5.1(b) of the Company Disclosure Schedule or as
required by agreements with the Company's employees under the Company
Benefit Plans as in effect as of the date hereof, or amend any of the
terms of any such securities or agreements outstanding as of the date
hereof, except as specifically contemplated by this Agreement;
(c) split, combine or reclassify any shares of its
capital stock, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or redeem or otherwise
acquire any of its securities, except intercompany cash dividends in
the ordinary course of business;
(d) (i) incur or assume any long-term or short-term
debt or issue any debt securities, except for borrowings under existing
lines of credit in the ordinary course of business and in amounts not
in excess of an aggregate of $1,000,000 (on a consolidated basis); (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of
any other Person, except in the ordinary course of business consistent
with past practice and in amounts not material to the Company and its
Subsidiaries, taken as a whole, and except for obligations of wholly
owned Subsidiaries of the Company to the Company or to other wholly
owned Subsidiaries of the Company; (iii) make any loans, advances or
capital contributions to, or investments in, any other Person (other
than to wholly owned Subsidiaries of the Company or customary loans or
advances to employees in the ordinary course of business consistent
with past practice and in amounts not material to the maker of such
loan or advance) or make any change in its existing borrowing or
lending arrangements for or on behalf of any such Person, whether
pursuant to, a Company Benefit Plan or otherwise; (iv) pledge or
otherwise encumber shares of capital stock of the Company or any of its
Subsidiaries; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any material Lien
thereupon;
(e) adopt a plan of complete or partial liquidation
or adopt resolutions providing for the complete or partial liquidation,
dissolution, consolidation, merger, restructuring or recapitalization
of the Company or any of its Subsidiaries;
(f) (i) make any change in the compensation payable
or to become payable to any of its officers, directors, employees,
agents or consultants (other than general increases in wages to
employees in the ordinary course consistent with past practice as
disclosed in Section 5.1(f) of the Company Disclosure Schedule) or to
Persons providing management services; (ii) pay any severance or
termination cost or any bonus other than pursuant to written contracts
in effect on the date of this Agreement or disclosed in Section 5.1(f)
of the Company Disclosure Schedule or enter into or amend any severance
agreements with officers of the Company or any Subsidiary; (iii) make
any loans to any of its officers, directors, employees, affiliates,
agents or consultants; (iv) adopt, amend or terminate any new or
existing Company Benefit Plan (other than as required by applicable
law); or (v) permit a new Option Period (as such term is defined in the
Employee Stock Purchase Plan) to commence under the Employee Stock
Purchase
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Plan after the Shareholders' Meeting;
(g) acquire, sell, transfer, lease, encumber or
dispose of any assets outside the ordinary course of business or any
assets which in the aggregate are material to the Company and its
Subsidiaries, taken as a whole, or enter into any commitment or
transaction outside the ordinary course of business consistent with
past practice which would be material to the Company and its
Subsidiaries, taken as a whole;
(h) except as may be required as a result of a change
in law or in GAAP, change any of the Tax or accounting principles or
practices used by it or make any material Tax election or amend any Tax
Return previously filed or settle any material Audit;
(i) revalue in any material respect any of its
assets, including, without limitation, writing down the value of
inventory or writing-off notes or accounts receivable other than in the
ordinary course of business;
(j) (i) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership or other
business organization or division thereof or any equity interest
therein; (ii) enter into any contract or agreement other than in the
ordinary course of business consistent with past practice which would
be material to the Company and its Subsidiaries, taken as a whole;
(iii) authorize any new capital expenditure or expenditures which,
individually, is in excess of $50,000 or, in the aggregate, are in
excess of $100,000, except for the budgeted capital expenditures listed
in Section 5.1(j) of the Company Disclosure Schedule; or (iv) enter
into or amend any contract, agreement commitment or arrangement
providing for the taking of any action that would be prohibited
hereunder;
(k) discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities fully reflected or reserved
against in, or contemplated by, the consolidated 1999 Financial
Statements (or the notes thereto) of the Company and its Subsidiaries
or incurred in the ordinary course of business consistent with past
practice;
(l) permit any insurance policy naming the Company as
a beneficiary or a loss payable payee to be canceled or terminated
without notice to Purchaser, unless the Company shall have obtained a
comparable replacement policy;
(m) enter into or amend any employment contract
between the Company or any Subsidiary and any Person having a base
salary thereunder in excess of $100,000 per year (unless such amendment
is required by law) that the Company or any Subsidiary does not have
the unconditional right to terminate without liability (other than
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liability for services already rendered), at any time on or after the
Effective Time;
(n) commence or settle any Litigation other than in
accordance with past practice and, with respect to any settlement, for
an amount greater than $250,000;
(o) enter into, modify, amend or terminate any
Material Contract (including any standstill agreement, loan contract
with an unpaid balance exceeding $250,000 or any of the agreements
referred to in Section 5.10 hereof) or waive, release, compromise or
assign any material rights or claims, except in the ordinary course of
business;
(p) take any action that would adversely affect the
ability of any party to this Agreement to perform its covenants and
agreements under this Agreement;
(q) take any action that would cause an event of
default under any Material Contract;
(r) cause (or permit to exist) any circumstances that
would result in a Company Material Adverse Effect; or
(s) take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.1(a) through 5.1(r) or any
action which would make any of the representations or warranties of the
Company contained in this Agreement untrue or incorrect as of the date
when made.
Section 5.2 Acquisition Proposals. Except as hereinafter provided,
neither the Company nor any of its Subsidiaries shall, directly or indirectly,
through any officer, director, agent or otherwise, solicit, initiate or
knowingly encourage the submission of any proposal or offer from any Person (as
hereinafter defined) relating to any acquisition or purchase of all or (other
than in the ordinary course of business) a substantial portion of the assets of,
or a substantial equity interest in, the Company or any of its Subsidiaries or
any recapitalization, business combination or similar transaction with the
Company or any of its Subsidiaries (any such proposal or offer being an
"Acquisition Proposal") or participate in any negotiations regarding, or furnish
to any other Person any non-public information with respect to, or take any
other action to knowingly facilitate the making of an Acquisition Proposal.
Notwithstanding the foregoing provisions of this Section 5.2, (a) the Company
may engage in discussions or negotiations with a third party who seeks to
initiate such discussions or negotiations and may furnish such third party
information concerning the Company and its Subsidiaries, in each case only in
response to a request for such information or access which was not solicited,
initiated or knowingly encouraged by the Company or any of its affiliates, (b)
the Board or the Special Committee may take and disclose to the Company's
shareholders a position contemplated by Rule l4e-2 promulgated under the
Exchange Act and (c) following receipt of an Acquisition Proposal from a third
party, the Board or the Special Committee may withdraw or modify its
recommendation referred to in Section 1.10, but in each case referred to in the
foregoing clauses (a) through (c) only to the extent that the Board or the
Special Committee shall conclude in good faith after consultation with legal
counsel that the failure to take such action could reasonably be
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determined to be a breach of the Board's or the Special Committee's fiduciary
obligations to the Company's shareholders under applicable law. In connection
with any party's Acquisition Proposal, the Company will enter into an
appropriate confidentiality agreement with such party. The Company will
immediately cease all existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any Acquisition Proposal. From and
after the execution of this Agreement, the Company shall promptly notify
Purchaser of the receipt of any Acquisition Proposal, and, in any such notice to
Purchaser, shall indicate in reasonable detail the material terms thereof and
the identity of the other party or parties involved. Nothing in this Section 5.2
shall preclude the Company from making any disclosure to its shareholders that
is required under applicable law. As used in this Agreement, "Person" shall mean
a natural person, entity, organization or association, including, but not
limited to, a partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Entity, group acting in concert or any person acting in a
representative capacity.
Section 5.3 Access to Information.
(a) Between the date hereof and the Effective Time,
the Company will give Purchaser and its authorized representatives and
Persons providing or committed to provide Purchaser with financing for
the Merger and their representatives, reasonable access to all
employees, plants, offices, warehouses and other facilities and
properties and to all books and records of the Company and its
Subsidiaries, will permit Purchaser to make such inspections (including
any physical inspections or soil or groundwater investigations) as it
may reasonably request and will cause the Company's officers and those
of its Subsidiaries to furnish Purchaser with such financial and
operating data and other information with respect to the business and
properties of the Company and any of its Subsidiaries as Purchaser may
from time to time reasonably request.
(b) Each of the Company and the Purchaser will hold
and will cause its consultants, advisors, representatives, agents and
employees, including, without limitation, its auditors, attorneys,
financial advisors and other consultants and advisors (including
financing sources), to hold in confidence, unless compelled to disclose
by judicial or administrative process or, in the written opinion of its
legal counsel, by other requirements of law, all documents and
information concerning the other party furnished to it in connection
with this Agreement (except to the extent that such information can be
shown to have been (i) previously known by the disclosing party from
sources other than the other party, its directors, officers,
representatives or affiliates, (ii) in the public domain through no
fault of the disclosing party or its affiliates or (iii) later lawfully
acquired by the disclosing party on a non-confidential basis from other
sources who are not known by the disclosing party to be bound by a
confidentiality agreement or otherwise prohibited from transmitting the
information to the disclosing party by a contractual, legal or
fiduciary obligation) and will not release or disclose such information
to any other Person, except its auditors, attorneys, financial advisors
and
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other consultants and advisors (including financing sources) in
connection with this Agreement who need to know such information. If
the Merger is not consummated, such confidence shall be maintained and,
if requested by or on behalf of the Company or the Purchaser, the other
party hereto will, and will use all reasonable efforts to cause its
auditors, attorneys, financial advisors and other consultants, agents
and representatives to return or destroy all copies of written
information furnished by the Company or Purchaser, as applicable, for
purposes of evaluating the Merger. It is understood that each of the
parties hereto shall be deemed to have satisfied its obligation to hold
such information confidential if it exercises the same care as it takes
to preserve confidentiality for its own similar information.
(c) Prior to the consummation of the Merger, the
Company and its accountants, counsel, agents and other representatives
shall cooperate with Purchaser by providing information about the
Company which is reasonably necessary for Purchaser and its
accountants, counsel, agents and other representatives to prepare the
syndication or other materials to be delivered to potential financing
sources in connection with the Merger (the "Financing Documents") and
such other documents and information with respect to such documents as
may be reasonably requested. Notwithstanding anything in this Agreement
to the contrary, Purchaser may disclose, or cause its representatives
to disclose, and at the request of Purchaser, the Company shall
disclose, information concerning the Company and its Subsidiaries, and
their respective businesses, assets and properties, and the Merger in
the Financing Documents and to prospective financing sources in
connection with the Merger.
(d) Each party hereto agrees to give the other party
notice as soon as practicable after any determination by it of any fact
or occurrence relating to the other party which it has discovered
through the course of its investigation and which represents, or is
reasonably likely to represent, either a material breach of any
representation, warranty, covenant or agreement of the other party or
which has had or is reasonably likely to have a Company Material
Adverse Effect or a Purchaser Material Adverse Effect, as applicable.
Section 5.4 Additional Agreements; Reasonable Efforts.
(a) Prior to the consummation of the Merger upon the
terms and subject to the conditions of this Agreement, each of
Purchaser, Acquisition Sub and the Company agree to use its
commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the Merger as promptly as
practicable, including, but not limited to, (i) the preparation and
filing of all forms, registrations and notices required to be filed to
consummate the Merger and the taking of such actions as are necessary
to obtain any requisite approvals, consents, orders, exemptions or
waivers by any third party or Governmental Entity, (ii) the preparation
of any Financing Documents reasonably requested by Purchaser, (iii) the
satisfaction of the other parties' conditions to the consummation of
the Merger and (iv) obtaining consents of all third parties necessary,
proper or advisable for the consummation of the Merger. In addition, no
party hereto
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shall take any action after the date hereof that would reasonably be
expected to materially delay the obtaining of, or result in not
obtaining, any permission, approval or consent from any Governmental
Entity necessary to be obtained prior to the consummation of the
Merger.
(b) Prior to the consummation of the Merger, each
party hereto shall promptly consult with the other parties hereto with
respect to, provide any necessary information with respect to and
provide the other parties (or their counsel) copies of, all filings
made by such party with any Governmental Entity or any other
information supplied by such party to a Governmental Entity in
connection with this Agreement and the Merger. Each party hereto shall
promptly inform the other parties of any communication from any
Governmental Entity regarding the Merger. If any party hereto or
affiliate thereof receives a request for additional information or
documentary material from any such Governmental Entity with respect to
the Merger, then such party will endeavor in good faith to make, or
cause to be made, as soon as reasonably practicable and after
consultation with the other parties, an appropriate response in
compliance with such request. To the extent that transfers of Company
Permits are required as a result of execution of this Agreement or
consummation of the Merger, the Company shall use commercially
reasonable efforts to effect such transfers.
(c) Notwithstanding the foregoing, nothing in this
Agreement shall be deemed to require Purchaser to (i) enter into any
agreement with any Governmental Entity or to consent to any order,
decree or judgment requiring Purchaser to hold separate or divest, or
to restrict the dominion or control of Purchaser or any of its
affiliates over, any of the assets, properties or businesses of
Purchaser, its affiliates or the Company, in each case as in existence
on the date hereof, or (ii) defend against any Litigation brought by
any Governmental Entity seeking to prevent the consummation of the
Merger.
(d) The Company agrees to use reasonable efforts to
assist Purchaser in connection with structuring or obtaining the
Financing in connection with consummation of the Merger.
Section 5.5 Public Announcements. Each of Purchaser and the Company
agrees that it will not issue any press release or otherwise make any public
statement with respect to this Agreement or the Merger without the prior consent
of the other party, which consent shall not be unreasonably withheld or delayed;
provided, however, that such disclosure can be made without obtaining such prior
consent if (a) the disclosure is required by law or by obligations pursuant to
any listing agreement with any national securities exchange and (b) the party
making such disclosure has first used reasonable efforts to consult with the
other party about the form and substance of such disclosure.
Section 5.6 Indemnification.
(a) Purchaser agrees that all rights to
indemnification or exculpation now existing in favor of the present and
former directors, officers, employees and agents of the Company and its
Subsidiaries as provided in their respective charters or bylaws or
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otherwise in effect as of the date hereof with respect to matters
occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect and shall not be amended,
repealed or otherwise modified for a period of six and one-half (6 1/2)
years from the Effective Time in any manner that would affect adversely
the rights thereunder of individuals who prior to or at the Effective
Time were such present or former directors, officers, employees or
agents of the Company or its Subsidiaries.
(b) Purchaser shall cause the Surviving Corporation
to maintain in effect for not less than five (5) years from the
Effective Time the policies of the directors' and officers' liability
and fiduciary insurance most recently maintained by the Company
(provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions
which are not materially less favorable to the beneficiaries thereof so
long as such substitution does not result in gaps or lapses in
coverage) with respect to matters occurring prior to the Effective
Time, provided that in no event shall the Surviving Corporation be
required to expend more than an amount per year equal to 200% of the
current annual premiums paid by the Company (the "Premium Amount") to
maintain or procure insurance coverage pursuant hereto, and further
provided that if the Surviving Corporation is unable to obtain the
insurance called for by this Section 5.6(b), the Surviving Corporation
will obtain the maximum insurance coverage obtainable for the Premium
Amount per year.
(c) After the Effective Time, Purchaser and the
Surviving Corporation shall, to the fullest extent that a Georgia
corporation may now or hereafter legally indemnify its own officers and
directors, indemnify and hold harmless, each present director or
officer of the Company and each Subsidiary (collectively, the
"Indemnified Parties") against all costs and expenses (including
attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim,
action, suit, proceeding or investigation (whether asserted or
commencing before or after the Effective Time), whether civil,
criminal, administrative or investigative, arising out of or pertaining
to any action or omission in their capacity as an officer or director
occurring before or at the Effective Time (including, without
limitation, the Merger and all actions taken in contemplation of, or to
effect the Merger), for a period of six and one-half (6 1/2) years
after the date hereof. Without limiting the generality of the
foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) the Surviving Corporation or Purchaser, as the case
may be, shall pay as incurred, each Indemnified Party's legal and other
expenses (including costs of investigation and preparation), including
the fees and expenses of counsel selected by the Indemnified Party,
which counsel shall be reasonably satisfactory to the Surviving
Corporation or Purchaser, promptly after statements therefor are
received and (ii) the Surviving Corporation and Purchaser shall
cooperate in the defense of any such matter; provided, however, that
neither the Surviving Corporation nor Purchaser shall be liable for any
settlement effected without its written consent (which consent shall
not be unreasonably withheld or delayed); and provided further that
neither the Surviving Corporation nor
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Purchaser shall be obligated pursuant to this Section 5.6(c) to pay the
fees and expenses of more than one (1) counsel for all Indemnified
Parties in any single action, except to the extent that two (2) or more
of such Indemnified Parties shall have conflicting interests in the
outcome of such action; and provided further that, in the event that
any claim for indemnification is asserted or made within such six and
one-half (6 1/2) year period, all rights to indemnification in respect
of such claim shall continue until the disposition of such claim. The
parties intend, to the extent not prohibited by applicable law, that
the indemnification provided for in this Section 5.6(c) shall apply
without limitation to negligent acts or omissions of any Indemnified
Party. Any determination to be made as to whether any Indemnified Party
has met any standard of conduct imposed by law shall be made by legal
counsel reasonably acceptable to such Indemnified Party, Purchaser and
the Surviving Corporation, retained at the Surviving Corporation's
expense. The Surviving Corporation or Purchaser shall pay all expenses,
including counsel fees and expenses, that any Indemnified Party may
incur in enforcing the indemnity and other obligations provided for in
this Section 5.6. Notwithstanding the foregoing, the Purchaser and the
Surviving Corporation shall have no additional indemnification
obligations hereunder with respect to any costs that would otherwise be
covered under the Surviving Corporation's directors' and officers'
liability and fiduciary insurance policies.
(d) In the event the Surviving Corporation or
Purchaser or any of their respective successors or assigns after the
Effective Time (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all
of its properties and assets to any Person, then, and in each such
case, proper provision shall be made so that the successors and assigns
of the Surviving Corporation or Purchaser, as the case may be, shall
assume the obligations set forth in this Section 5.6.
(e) This Section 5.6 is intended to benefit the
Indemnified Parties and the other Persons otherwise covered by this
Section 5.6 and their respective heirs, executors and personal
representatives and shall be binding on the successors and assigns of
Purchaser and the Surviving Corporation. This Section 5.6 shall not
limit or otherwise adversely affect any rights any Indemnified Party or
any other Person otherwise covered by this Section 5.6 may have under
any agreement with the Company or any Subsidiary or the Company's or
any Subsidiary's respective Certificate or Articles of Incorporation or
Bylaws.
(f) In consideration for the indemnification rights
set forth herein, the Company shall request prior to the Effective Time
general releases from all directors and former directors (who were
directors at any time after October 31, 1997) and officers of the
Company and the Subsidiaries releasing the Purchaser, the Company and
the Subsidiaries and their officers, directors, employees and agents of
any claim that they or any of them may have against Purchaser, the
Company or its Subsidiaries (and their officers, directors, employees
and agents), exclusive of employment compensation obligations or
obligations arising under this Section 5.6.
Section 5.7 State Takeover Laws. The Company shall take all necessary
steps to
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exempt the Merger from, or if necessary to challenge the validity or
applicability of Sections 14-2-1131 through 14-2-1133 and 14-2-1110 through
14-2-1113 of the GBCC.
Section 5.8 Rights Agreement. The Company shall take all necessary
action (including, if required, redeeming all of the outstanding Rights (as
defined in the Rights Agreement) or amending or terminating the Rights
Agreement) so that (a) the entering into of this Agreement and consummation of
the Merger do not and will not result in any Person becoming able to exercise
any Rights under the Rights Agreement or enabling or requiring the Rights to be
separated from the shares of Common Stock to which they are attached or to be
triggered or to become exercisable and (b) no Rights are outstanding at the
Effective Time.
Section 5.9 Disclosure Schedule Supplements. From time to time after
the date of this Agreement and prior to the Effective Time, the Company will
supplement or amend the Company Disclosure Schedule with respect to any matter
hereafter arising which, if existing or occurring at or prior to the date of
this Agreement, would have been required to be set forth or described in the
Company Disclosure Schedule or which is necessary to correct any information in
a schedule or in any representation and warranty of the Company which has been
rendered inaccurate thereby. For purposes of determining the accuracy of the
representations and warranties of the Company contained in this Agreement in
order to determine the fulfillment of the conditions set forth in Article VI,
the Company Disclosure Schedule shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to exclude
any information contained in any subsequent supplement or amendment thereto.
Section 5.10 Change of Control Agreements. The Company has change of
control agreements with the Persons listed in Section 5.10 of the Company
Disclosure Schedule which provide certain benefits upon (a) consummation of the
Merger and/or (b) a termination of employment following the Effective Time.
Purchaser shall take all appropriate steps necessary to, and will, give
reasonable advance notice prior to the Effective Time of its intention to
continue employment, or not to continue employment, to each such Person. The
Company has previously made written disclosure to Purchaser of the total
estimated amount payable to such Persons for all obligations owed to them under
all contractual and Company Benefit Plan arrangements assuming that the
employment of each such Person was terminated during the year in which the
Effective Time occurred.
Section 5.11 Purchaser's Financing. Purchaser shall use its best
efforts to obtain the Financing on the terms contemplated by the Financing
Commitments (other than the terms set forth in the eighth paragraph of the
Senior Commitment Letter relating to changes in the terms of the financing
described by such Senior Commitment Letter) or alternative financing on terms no
less favorable than those set forth in the Financing Commitments (again, other
than the terms in the eighth paragraph of the Senior Commitment Letter referred
to above) (such financing, "Alternative Financing") and to satisfy the
conditions to such Financing as detailed in the Commitments delivered to the
Company pursuant to Section 4.5 hereof. In addition, Purchaser shall use its
reasonable efforts to enter into definitive agreements with respect to the
Financing or Alternative Financing prior to the mailing of the Proxy Statement,
which obligation shall in no way (i) restrict the conditions that may be imposed
in such definitive agreements with respect to
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the closing of such Financing or Alternative Financing or (ii) alter the
Company's obligation to mail the Proxy Statement to its shareholders at the
earliest practicable time. For the avoidance of doubt, obtaining Alternative
Financing shall not require Purchaser to pay greater financing or other fees
than as set forth in the Financing Commitments or require Purchaser to issue any
equity to any source of such Alternative Financing beyond what is contemplated
by the Financing Commitments.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the
Merger.
(a) The respective obligations of each party hereto
to effect the Merger is subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any and all of
which may be waived in whole or in part to the extent permitted by
applicable law:
(i) Shareholder Approval. The Merger and
this Agreement shall have been approved and adopted by the
affirmative vote of the shareholders of the Company by the
requisite vote.
(ii) Statutes, Court Orders. No statute,
rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or
enforced by any court or Governmental Entity of competent
jurisdiction which prohibits, restrains, enjoins or restricts
the consummation of the Merger; and there shall be no order or
injunction of a court of competent jurisdiction in effect
precluding consummation of the Merger.
(iii) Regulatory Approvals. All consents of,
filings and registrations with, and notifications to, all
Governmental Entities required for consummation of the Merger
shall have been obtained or made and shall be in full force
and effect and all waiting periods required by law for
consummation of the Merger shall have expired.
(iv) Consents and Approvals. Each party
hereto shall have obtained any and all consents required for
consummation of the Merger (other than those referred to in
Section 6.1(a)(iii)) or for the preventing of any default
under any contract or permit of such party which, if not
obtained or made, is reasonably likely to have, individually
or in the aggregate, a Company Material Adverse Effect or a
Purchaser Material Adverse Effect, as applicable.
(v) Purchaser Financing. Purchaser shall
have obtained the Financing on the terms contemplated by the
Financing Commitments or alternative financing on terms no
less favorable than those set forth in the
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Financing Commitments, unless the failure to obtain the
Financing was the result of a failure by Purchaser to perform
any covenant or condition contained therein or herein or the
inaccuracy of any representation or warranty of Purchaser.
(b) The obligation of the Company to effect the
Merger is also subject to the satisfaction (or waiver) at or prior to
the Closing of each of the following additional conditions:
(i) Accuracy of Representations and
Warranties. All representations and warranties made by
Purchaser and Acquisition Sub herein shall be true and correct
in all material respects (except for representations and
warranties qualified by materiality or Purchaser Material
Adverse Effect which shall be correct in all respects) when
made and as of the Effective Time, with the same force and
effect as though such representations and warranties had been
made on and as of the Effective Time, except for changes
permitted or contemplated by this Agreement and except for
representations and warranties that are made as of a specified
date or time, which shall be true and correct in all material
respects (except for representations and warranties qualified
by materiality or Purchaser Material Adverse Effect which
shall be correct in all respects) only as of such specific
date or time.
(ii) Compliance with Covenants. Purchaser
and Acquisition Sub shall have performed in all material
respects all obligations and agreements, and complied in all
material respects with all covenants, contained in this
Agreement to be performed or complied with by them prior to or
as of the Effective Time.
(iii) Officer's Certificate. The Company
shall have received a certificate of Purchaser and Acquisition
Sub, dated as of the Closing Date, signed by an executive
officer of each of Purchaser and Acquisition Sub, to evidence
satisfaction of the conditions set forth in Section 6.1(b)(i)
and (ii).
(c) The respective obligations of Purchaser and
Acquisition Sub to effect the Merger is also subject to the
satisfaction (or waiver) at or prior to the Closing of each of the
following additional conditions:
(i) Accuracy of Representations and
Warranties. All representations and warranties made by the
Company herein shall be true and correct in all material
respects (except for representations and warranties qualified
by materiality or Company Material Adverse Effect which shall
be correct in all respects and except that the representations
and warranties set forth at Section 3.2(a) shall be true and
correct in all respects) when made and as of the Effective
Time, with the same force and effect as though such
representations and
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warranties had been made on and as of the Effective Time,
except for changes permitted or contemplated by this Agreement
and except for representations and warranties that are made as
of a specified date or time, which shall be true and correct
in all material respects (except for representations and
warranties qualified by materiality or Company Material
Adverse Effect which shall be correct in all respects) only as
of such specific date or time.
(ii) Compliance with Covenants. The Company
shall have performed in all material respects all obligations
and agreements, and complied in all material respects with all
covenants, contained in this Agreement to be performed or
complied with by it prior to or as of the Effective Time
(except that the covenant set forth in Section 5.1(a) shall
have been performed in all respects).
(iii) Officer's Certificate. Purchaser shall
have received (A) a certificate of the Company, dated as of
the Closing Date, signed by an executive officer of the
Company, to evidence satisfaction of the conditions set forth
in Section 6.1(c)(i) and (ii) and (B) certified copies of
resolutions duly adopted by the Board and the Company's
shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the Merger.
(iv) Rights Agreement. A Triggering Event
(as defined in the Rights Agreement) shall not have occurred,
and the Rights shall not have become (A) non-redeemable or (B)
exercisable for capital stock of Purchaser upon consummation
of the Merger.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time notwithstanding
any requisite approval and adoption of this Agreement and approval of the Merger
by the shareholders of the Company:
(a) by mutual written consent duly authorized by the
Board of Directors of the Company and the Board of Directors of each of
Acquisition Sub and Purchaser; or
(b) by Purchaser or the Company if (i) any court or
Governmental Entity of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger (including the denial of
any consent of a Governmental Entity required for consummation of the
Merger) and such order, decree, ruling or other action is or shall have
become final and nonappealable or (ii) the Effective Time is not
occurring concurrently therewith on or before June 30, 2000 (the "Drop
Dead Date"); provided, however, that the right to
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terminate this Agreement under this Section 7.1(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 Effective Time to occur on or before such date; or
(c) by Purchaser if the Board shall have withdrawn,
modified, failed to reaffirm or changed its recommendation or approval
in respect of this Agreement or the Merger, or shall have adopted any
resolution to effect the foregoing, or shall have affirmed, recommended
or authorized entering into any other Acquisition Proposal; or
(d) by Purchaser if there shall have been a breach of
the Company's representation set forth in Section 3.2(a) or covenant
set forth in Section 5.1(c) or a material breach of any of the
Company's other representations, warranties or covenants which breach
cannot be or has not been cured within ten (10) days following receipt
of written notice of such breach; or
(e) by the Company if there shall have been a
material breach of any of Purchaser's representations, warranties or
covenants which breach cannot be or has not been cured within ten (10)
days of the receipt of written notice thereof; or
(f) by the Purchaser or the Company (provided that
the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained in this
Agreement) in the event the shareholders of Company fail to vote their
approval and adoption of this Agreement and the approval of the Merger
at the Shareholders' Meeting where such matters were presented to such
shareholders for approval and voted upon; or
(g) by the Company if, a Person or group (other than
Purchaser or any of its affiliates) shall have made a bona fide
Acquisition Proposal that the Board or the Special Committee determines
in good faith that failing to accept or recommend to the Company's
shareholders such Acquisition Proposal could reasonably be determined
to constitute a breach of the fiduciary duties of the Board or the
Special Committee to the Company's shareholders under applicable law
after consultation with (i) a nationally recognized investment banking
firm regarding the financial superiority of the Acquisition Proposal
and (ii) legal counsel; provided that such termination under this
clause (g) shall not be effective until payment of the fee required by
Section 7.3 hereof.
Section 7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, written notice thereof
shall forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than the provisions of this Section 7.2 and Sections 5.3(b), 7.3 and Article
VIII hereof. Nothing contained in this Section 7.2 shall relieve any party from
liability for any breach of this Agreement.
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Section 7.3 Fees and Expenses.
(a) Except as otherwise provided in this Section 7.3,
each of the parties hereto shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with this
Agreement and the Merger, including filing and application fees,
printing fees, and fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel, except that
the filing fee in connection with any HSR Act filing or any other
required consent or approval shall be shared equally by Purchaser and
Company.
(b) Notwithstanding the foregoing,
(i) if this Agreement is terminated by
Purchaser pursuant to Section 7.1(d),
(ii) if the Merger is not consummated as a
result of the failure of Company to satisfy any of the
conditions set forth in Section 6.1(c), or
(iii) if this Agreement is terminated by
Purchaser pursuant to Section 7.1(c) or the Company pursuant
to Section 7.1(g),
then Company shall promptly pay Purchaser the sum of (A) $1 million,
which amount represents the best estimate by the parties hereto of the
value of the management time, overhead, opportunity costs and other
unallocated costs of Purchaser incurred by or on behalf of Purchaser in
connection with this Agreement and the Merger which cannot be
calculated with certainty, plus (B) all the out-of-pocket costs and
expenses of Purchaser, including costs of counsel, investment bankers,
actuaries and accountants up to but not exceeding an additional $2
million in the aggregate.
(c) If no payment is due under Section 7.3(b) and the
Agreement is terminated or the Merger is not consummated, then the
Company shall promptly pay Purchaser all the out-of-pocket costs and
expenses of Purchaser, including costs of counsel, investment bankers,
actuaries and accountants, up to but not exceeding $2 million in the
aggregate unless
(i) the Agreement is terminated pursuant to
Section 7.1(a) or 7.1(e), or
(ii) the Merger is not consummated because
the conditions set forth at Section 6.1(a)(v) or 6.1(b) are
not satisfied.
(d) If, after the date of this Agreement and within
twelve (12) months following
(i) any termination of this Agreement
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(1) by Purchaser pursuant to Section
7.1(c) or 7.1(d),
(2) by Company pursuant to Section
7.1(g), or
(3) by either Party pursuant to Section
7.1(f) (with respect to approval of the shareholders of
the Company), or
(ii) failure to consummate the Merger by
reason of any failure of Company to satisfy the conditions
enumerated in Section 6.1(c) or Section 6.1(a)(i) (as such
section relates to approval by the shareholders of Company),
any third party shall acquire, merge with, combine with, purchase a
significant amount of assets of (including a significant amount of
assets of, or the stock of, any Subsidiary), or engage in any other
business combination with, or purchase any equity securities involving
an acquisition of 20% or more of the voting stock of, the Company on
terms that are financially superior to those of the Merger, or enter
into any letter of intent or agreement to do any of the foregoing
(collectively, a "Superior Business Combination"), such third party
that is a party to the Superior Business Combination shall pay to
Purchaser, (A) upon execution of such letter of intent or agreement
relating to such Superior Business Combination, the sum of (i) $1
million, which amount represents the best estimate by the parties
hereto of the value of the management time, overhead, opportunity costs
and other unallocated costs of Purchaser incurred by or on behalf of
Purchaser in connection with this Agreement and the Merger which cannot
be calculated with certainty, plus (ii) all the out-of-pocket costs and
expenses of Purchaser, including costs of counsel, investment bankers,
actuaries and accountants up to but not exceeding an additional $2
million in the aggregate, and (B) upon the consummation of any Superior
Business Combination that occurs within the later of 24 months from the
date hereof or 12 months from the date of such letter of intent or
agreement, an amount in cash equal to the product of $5 million and the
percentage of the Company assets or equity securities acquired in the
Superior Business Combination, which sum represents additional
compensation for Purchaser's loss (including expenses) as a result of
this Agreement and the Merger not being consummated. The amounts owed
under the preceding clauses (A) and (B) shall be reduced by any amounts
previously paid to Purchaser pursuant to subsection (b), (c) or (d) of
this Section 7.3. In the event such third party shall refuse to pay
such amounts within ten days of demand therefor by Purchaser, the
amounts shall be an obligation of Company and shall be paid by Company
promptly upon notice to Company by Purchaser.
(e) Nothing contained in this Section 7.3 shall
constitute or shall be deemed to constitute liquidated damages for the
willful breach by a party hereto of the terms of this Agreement or
otherwise limit the rights of the nonbreaching party.
Section 7.4 Amendment. Subject to applicable law, this Agreement may be
amended by action taken by the Company and Purchaser at any time before or after
approval of the Merger by the shareholders of the Company but, after any such
approval, no amendment shall be made
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which requires the approval of such shareholders under applicable law without
such approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of the parties hereto.
Section 7.5 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party, (b) waive any inaccuracies in the representations
and warranties of the other party contained herein or in any document,
certificate or writing delivered pursuant hereto or (c) waive compliance by the
other party with any of the agreements, covenants or conditions contained
herein. Any agreement on the part of any 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. The failure of either party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time.
Section 8.2 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof (including, without limitation, that certain
Confidentiality Agreement, as amended, between the Company and an affiliate of
Purchaser) and (b) shall not be assigned by operation of law or otherwise.
Section 8.3 Validity. If any provision of this Agreement, or the
application thereof to any Person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other Persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
Section 8.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (including by facsimile with
written confirmation thereof) and unless otherwise expressly provided herein,
shall be delivered during normal business hours by hand, by Federal Express,
United Parcel Service or other nationally recognized overnight commercial
delivery service, or by facsimile notice, confirmation of receipt received,
addressed as follows, or to such other address as may be hereafter notified by
the respective parties hereto:
(a) If to Purchaser or Acquisition Sub:
CBP Holdings, Inc.
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & Bird LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Company:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Building Products, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chairman and CEO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
The Special Committee
C/o ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard to
the principles of conflicts of law thereof. The parties hereto hereby agree and
consent to be subject to the exclusive jurisdiction of the United States
District Court for the District of Georgia in any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Merger. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by law, (a) any objection
that it may now or hereafter have to laying venue of any suit, action or
proceeding brought in such court and (b) any claim that any suit, action or
proceeding brought in such court has been brought in an inconvenient forum.
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Section 8.6 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 8.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Section 5.6 and this Article VIII,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 8.8 Signatures. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement. Copies of signatures
transmitted via facsimile shall constitute original signatures for all purposes
of this Agreement.
Section 8.9 Definition. For purposes of this Agreement, the term
"knowledge" shall mean with respect to the Company the actual knowledge of the
executive officers of the Company.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING PRODUCTS,
INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------
Title: Chairman & CEO
---------------------
CBP HOLDINGS, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: President
---------------------
CBP ACQUISITION CORP.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: President
---------------------
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