Exhibit 1
AGREEMENT AND
PLAN OF MERGER
by and among
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ SERVICES, INC.,
▇▇▇▇ ▇▇ HOLDING CORP.
and
▇▇▇▇ ▇▇ CORP.
February 23, 2001
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1. The Merger . . . . . . . . . . . . . . . . . . . . . . 7
2.2. Organizational Documents . . . . . . . . . . . . . . . 7
2.3. Directors and Officers . . . . . . . . . . . . . . . . 8
ARTICLE 3 CONVERSION OF SECURITIES AND RELATED MATTERS . . . . . . . 8
3.1. Capital Stock of Acquiror . . . . . . . . . . . . . . . 8
3.2. Cancellation of Treasury Stock and Acquiror Owned
Shares . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3. Conversion of Company Shares . . . . . . . . . . . . . 8
3.4. Exchange of Certificates . . . . . . . . . . . . . . . 8
3.5. Company Stock Options . . . . . . . . . . . . . . . . . 10
3.6. Deferred Compensation Plan . . . . . . . . . . . . . . 10
3.7. Capital Accumulation Plan . . . . . . . . . . . . . . . 11
3.8. Dissenting Shares. . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . 12
4.1. Corporate Existence and Power . . . . . . . . . . . . . 12
4.2. Corporate Authorization . . . . . . . . . . . . . . . . 12
4.3. Governmental Authorization . . . . . . . . . . . . . . 13
4.4. Non-Contravention . . . . . . . . . . . . . . . . . . . 13
4.5. Capitalization . . . . . . . . . . . . . . . . . . . . 13
4.6. Subsidiaries . . . . . . . . . . . . . . . . . . . . . 14
4.7. Company SEC Documents . . . . . . . . . . . . . . . . . 15
4.8. Financial Statements; No Material Undisclosed
Liabilities . . . . . . . . . . . . . . . . . . . . . . 15
4.9. Absence of Certain Changes . . . . . . . . . . . . . . 16
4.10. Litigation . . . . . . . . . . . . . . . . . . . . . . 16
4.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12. Employee Benefits . . . . . . . . . . . . . . . . . . . 17
4.13. Compliance with Laws; Licenses, Permits and
Registrations . . . . . . . . . . . . . . . . . . . . . 20
4.14. Title to Properties . . . . . . . . . . . . . . . . . . 20
4.15. Intellectual Property . . . . . . . . . . . . . . . . . 20
4.16. Finders' Fees; Opinions of Financial Advisor . . . . . 21
4.17. Labor Matters . . . . . . . . . . . . . . . . . . . . . 21
4.18. Material Contract Defaults . . . . . . . . . . . . . . 21
4.19. Required Vote; Board Approval . . . . . . . . . . . . . 22
4.20. Information to Be Supplied . . . . . . . . . . . . . . 22
4.21. Disclaimer of Other Representations and Warranties . . 23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF HOLDING AND
ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.1. Corporate Existence and Power . . . . . . . . . . . . . 23
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5.2. Corporate Authorization . . . . . . . . . . . . . . . . 23
5.3. Governmental Authorization . . . . . . . . . . . . . . 24
5.4. Non-Contravention . . . . . . . . . . . . . . . . . . . 24
5.5. Financing . . . . . . . . . . . . . . . . . . . . . . . 24
5.6. Information to Be Supplied . . . . . . . . . . . . . . 25
5.7. No Breach . . . . . . . . . . . . . . . . . . . . . . . 26
5.8. Disclaimer of Other Representations and Warranties . . 26
ARTICLE 6 COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . 26
6.1. Company Interim Operations . . . . . . . . . . . . . . 26
6.2. Stockholder Meeting . . . . . . . . . . . . . . . . . . 29
6.3. Acquisition Proposals; Board Recommendation . . . . . . 29
ARTICLE 7 COVENANTS OF HOLDING AND ACQUIROR . . . . . . . . . . . . 31
7.1. Director and Officer Liability . . . . . . . . . . . . 31
7.2. Employee Benefits . . . . . . . . . . . . . . . . . . . 33
7.3. Severance Plan. . . . . . . . . . . . . . . . . . . . . 34
7.4. Conduct of Holding and Acquiror . . . . . . . . . . . . 34
7.5. Transfer Taxes . . . . . . . . . . . . . . . . . . . . 34
7.6. Investment Banking Fee . . . . . . . . . . . . . . . . 34
7.7. Financing Arrangements . . . . . . . . . . . . . . . . 34
7.8. Contribution and Voting Agreement . . . . . . . . . . . 35
7.9. Board Member . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 8 COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY . . . . . . 35
8.1. Efforts and Assistance . . . . . . . . . . . . . . . . 35
8.2. Proxy Statement and Schedule 13E-3 . . . . . . . . . . 37
8.3. Public Announcements . . . . . . . . . . . . . . . . . 38
8.4. Access to Information; Notification of Certain
Matters . . . . . . . . . . . . . . . . . . . . . . . . 38
8.5. Further Assurances . . . . . . . . . . . . . . . . . . 39
8.6. Registration Statement . . . . . . . . . . . . . . . . 39
8.7. Disposition of Litigation . . . . . . . . . . . . . . . 40
8.8. Confidentiality Agreements . . . . . . . . . . . . . . 40
8.9. Resignation of Directors . . . . . . . . . . . . . . . 40
8.10. Senior Subordinated Notes . . . . . . . . . . . . . . . 40
ARTICLE 9 CONDITIONS TO MERGER . . . . . . . . . . . . . . . . . . . 42
9.1. Conditions to the Obligations of Each Party . . . . . . 42
9.2. Conditions to the Obligations of the Company . . . . . 42
9.3. Conditions to the Obligations of Acquiror . . . . . . . 43
ARTICLE 10 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 44
10.1. Termination . . . . . . . . . . . . . . . . . . . . . . 44
10.2. Effect of Termination . . . . . . . . . . . . . . . . . 45
10.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . 46
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 46
11.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . 46
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11.2. Survival of Representations, Warranties and
Covenants after the Effective Time . . . . . . . . . . 47
11.3. Amendments; No Waivers . . . . . . . . . . . . . . . . 47
11.4. Successors and Assigns . . . . . . . . . . . . . . . . 47
11.5. Counterparts; Effectiveness; Third Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . . 48
11.6. Governing Law . . . . . . . . . . . . . . . . . . . . . 48
11.7. Jurisdiction . . . . . . . . . . . . . . . . . . . . . 48
11.8. Enforcement . . . . . . . . . . . . . . . . . . . . . . 48
11.9. Entire Agreement . . . . . . . . . . . . . . . . . . . 48
11.10. Authorship . . . . . . . . . . . . . . . . . . . . . . 48
11.11. Severability . . . . . . . . . . . . . . . . . . . . . 49
11.12. Waiver of Jury Trial . . . . . . . . . . . . . . . . . 49
11.13. Headings; Construction . . . . . . . . . . . . . . . . 49
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into this ____ day of February 2001, by and among CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
Services, Inc., a Delaware corporation (the "Company"), ▇▇▇▇ ▇▇ Holding
Corp., a Delaware corporation ("Holding"), and ▇▇▇▇ ▇▇ Corp., a Delaware
corporation wholly owned by Holding ("Acquiror").
WHEREAS, a Special Committee of the Board of Directors of the Company
has (i) determined that the Merger (as defined herein) is advisable and in
the best interest of the Company's stockholders (other than the members of
the Buying Group (as defined herein)), and (ii) approved the Merger and
recommended approval of the Merger by the Board of Directors of the Company;
WHEREAS, the Board of Directors of the Company, subsequent to the
recommendation of the Special Committee, has (i) determined that the Merger
is advisable and in the best interest of the Company's stockholders (other
than the members of the Buying Group), and (ii) approved the Merger;
WHEREAS, the Board of Directors of each of Holding and Acquiror has
determined that the Merger is advisable and in the best interest of its
stockholders;
WHEREAS, Holding, Acquiror and certain stockholders of the Company
(the "Buying Group") have entered into a contribution and voting agreement, a
copy of which is attached hereto as Exhibit A (the "Contribution and Voting
Agreement"), pursuant to which, among other things, those stockholders have
agreed to vote their Company Shares in favor of adopting and approving this
Agreement and the Merger; and
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of the Company, Holding and Acquiror have approved and adopted this
Agreement and the transactions and other agreements contemplated hereby.
NOW, THEREFORE, in consideration of the premises and promises
contained herein, and intending to be legally bound, the parties hereto agree
as set forth below.
ARTICLE 1
DEFINITIONS
1.1. Definitions. (a) As used herein, the following terms have
the meanings set forth below:
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"Acquiror Share" means one share of common stock of Acquiror, $0.01
par value per share.
"Acquisition Proposal" means any offer or proposal (whether or not in
writing) from any Third Party regarding any of the following: (a) a
transaction pursuant to which a Third Party acquires or would acquire
beneficial ownership of more than fifteen percent (15%) of the outstanding
shares of any class of Equity Interests of the Company, whether from the
Company or pursuant to a tender offer or exchange offer or otherwise, (b) a
merger, consolidation, business combination, reorganization, sale of
substantially all assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company, or (c) any transaction which would
result in a Third Party acquiring 15% or more of the fair market value on a
consolidated basis of the assets (including, without limitation, the capital
stock of Subsidiaries) of the Company and its Subsidiaries immediately prior
to such transaction (whether by purchase of assets, acquisition of stock of a
Subsidiary or otherwise).
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Business Day" means any day, other than a Saturday, Sunday or one on
which banks are authorized by Law to close in New York, New York.
"Capital Accumulation Plan" means the Capital Accumulation Plan of
the Company as amended through the date of this Agreement.
"Code" means the U.S. Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Company Balance Sheet" means the Company's consolidated balance
sheet included in the Company 10-K relating to its year ended on December 31,
1999.
"Company Material Adverse Effect" means any material adverse effect
on (a) the business, assets, liabilities, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement or the
other agreements and transactions contemplated hereby; provided, however,
that this definition shall exclude any material adverse effect arising out of
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any change or development resulting from (v) U.S. or global general economic
or political conditions, (w) conditions generally affecting the industry in
which the Company and its Subsidiaries operate, (x) changes in U.S. or global
financial markets or conditions, (y) any generally applicable change in Law
or GAAP or interpretation of any thereof and/or (z) the announcement of this
Agreement or the transactions contemplated hereby or the Company's
performance of its obligations under this Agreement and compliance with the
covenants set forth herein.
"Company Share" means one share of common stock of the Company, $0.01
par value per share.
"Company SEC Documents" means (a) the annual report on Form 10-K of
the Company (the "Company 10-K"), for the years ended December 31, 1998 and
1999, (b) the quarterly reports on Form 10-Q of the Company for the quarters
ended March 31, June 30 and September 30, 1999 and 2000, (c) the Company's
proxy statements relating to meetings of, or actions taken without a meeting
by, the Company Stockholders, since January 1, 1999, and (d) all other
reports, filings, registration statements and other documents filed by the
Company with the SEC since January 1, 1999; in each case including all
exhibits, appendices and attachments thereto, whether filed therewith or
incorporated by reference therein.
"Company Stockholders" or "Stockholders" means the stockholders of
the Company as of the date hereof, as of the record date for the Company
Stockholder Meeting and as of the Closing Date, as applicable.
"Deferred Compensation Plan" means the Deferred Compensation Plan of
the Company, as amended and restated as of November 1, 1999, and as further
amended through the date of this Agreement.
"Equity Interest" means with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person's capital stock
or other equity interests (including, without limitation, partnership or
membership interests in a partnership or limited liability company or any
other interest or participation that confers on a Person the right to receive
a share of the profits and losses, or distributions of assets, of the issuing
Person) whether outstanding on the date hereof or issued after the date
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
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"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, administrative or
regulatory agency or commission or other governmental authority or agency,
domestic or foreign.
"Holding Material Adverse Effect" means any change or effect that
would prevent or materially impair the ability of Holding or Acquiror to
consummate the Merger and the other transactions contemplated by this
Agreement.
"Joint Venture" means, with respect to any Person, any corporation or
other entity (including a division or line of business of such corporation or
other entity) (a) of which such Person and/or any of its Subsidiaries
beneficially owns a portion of the Equity Interests that is insufficient to
make such corporation or other entity a Subsidiary of such Person, and (b)
that is engaged in the same business as such Person or its Subsidiaries or in
a related or complementary business. "Company Joint Venture" means a Joint
Venture of the Company.
"Knowledge" means, with respect to the matter in question, if any of
the executive officers of the Company listed in Section 1.1 of the Company
Disclosure Schedule has actual knowledge of the matter.
"Law" means any federal, state, local or foreign law, rule,
regulation, judgment, code, ruling, statute, order, decree, injunction or
ordinance or other legal requirement.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of an asset;
provided, however, that the term "Lien" shall not include (a) liens for
utilities and current Taxes not yet due and payable, (b) mechanics',
carriers', workers', repairers', materialmen's, warehousemen's and other
similar liens arising or incurred in the ordinary course of business or (c)
liens for Taxes being contested in good faith.
"Material Joint Venture" means a Company Joint Venture in which the
Company and the Company Subsidiaries, collectively, have invested, or
committed to invest, at least $3.0 million.
"Material Subsidiary" means a Company Subsidiary with more than $25.0
million in consolidated revenue during the Company's fiscal year ended
December 31, 2000.
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"Non-U.S. Competition Laws" means all (a) non-U.S. Laws intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade, (b) antitrust Laws by antitrust
authorities outside of the United States and (c) takeover Laws of
jurisdictions outside of the United States.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization,
including any Governmental Entity.
"Prospectus" means the prospectus included in the Registration
Statement, together with any amendments or supplements thereto.
"Proxy Statement" means the proxy statement relating to the Company
Stockholder Meeting, together with any amendments or supplements thereto.
"RCBA" means RCBA Strategic Partners, L.P., a Delaware limited
partnership and the sole stockholder of Holding as of the date hereof.
"Registration Statement" means the Registration Statement on Form S-1
or comparable form, together with any supplements thereto, registering shares
of common stock of Holding for issuance to employees of the Company under the
Securities Act.
"Schedule 13E-3" means the Statement on Schedule 13E-3 to be filed by
the Company and Holding concurrently with the filing of the Proxy Statement
pursuant to the Exchange Act, together with any amendments or supplements
thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Special Committee" means the Special Committee of the Board of
Directors appointed by resolution of the Company's Board of Directors adopted
on November 10, 2000.
"Subsidiary" means, with respect to any Person, any corporation or
other entity (including joint ventures) of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions are directly
or indirectly owned, by such Person. "Company Subsidiary" means a Subsidiary
of the Company.
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"Superior Proposal" means any of the transactions described in the
definition of Acquisition Proposal (with all of the percentages included in
the definition of Acquisition Proposal increased to 51% for purposes of this
definition) that is on terms which a majority of the disinterested members of
the Company's Board of Directors or the Special Committee determines in good
faith, after considering the advice of outside legal counsel and financial
advisors (a) represents a financially superior transaction for the Company's
Stockholders (other than Holding, Acquiror and the members of the Buying
Group and each of their respective Affiliates) to the transactions
contemplated hereby; (b) would result in a transaction, if consummated, that
would be more favorable to the Company's Stockholders (other than Holding,
Acquiror and the members of the Buying Group and each of their respective
Affiliates) (taking into account all facts and circumstances, including all
legal, financial, regulatory and other aspects of the proposal and the
identity of the offeror) than the transactions contemplated hereby; and (c)
is reasonably capable of being consummated (including, without limitation,
the availability of committed financing).
"Taxes" means all United States federal, state, local or foreign
income, profits, estimated gross receipts, windfall profits, environmental
(including taxes under Section 59A of the Code), severance, property,
intangible property, occupation, production, sales, use, license, excise,
emergency excise, franchise, capital gains, capital stock, employment,
withholding, social security (or similar), disability, transfer,
registration, stamp, payroll, goods and services, value added, alternative or
add-on minimum tax, estimated, or any other tax, custom, duty or governmental
fee, or other like assessment or charge of any kind whatsoever, together with
any interest, penalties, fines, related liabilities or additions to tax that
may become payable in respect therefore imposed by any Governmental Entity,
whether disputed or not.
"Third Party" means a Person (or group of Persons) other than
Holding, Acquiror or any of their Affiliates (excluding the Company and its
controlled Affiliates).
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Terms Section
Acquiror Preamble
Agreement Preamble
Buying Group Preamble
Certificate of Merger 2.1(b)
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Certificates 3.4(a)
Claim 7.1(b)
Closing 2.1(d)
Closing Date 2.1(d)
Commitment Letters 5.5(a)
Company Preamble
Company Employee Plans 4.12(a)
Company Intellectual Property 4.15
Company Option 3.5(a)
Company Preferred Stock 4.5(a)
Company Recommendation 6.2
Company Returns 4.11
Company Securities 4.5(b)
Company Stockholder Approval 4.19(a)
Company Stockholder Meeting 6.2
Confidentiality Agreement 8.4(a)
Contribution and Voting Agreement Preamble
CSFB 5.5(a)
Debt Offer 8.10(a)
DGCL 2.1(a)
DLJ 5.5(a)
Dissenting Shares 3.8(a)
Effective Time 2.1(b)
End Date 10.1(b)(i)
ERISA 4.12(a)
ERISA Affiliate 4.12(a)
Exchange Agent 3.4(a)
Exchange Fund 3.4(a)
Financing 5.5(a)
Financing Agreements 7.7(a)
Foreign Plan 4.12(i)
GAAP 4.8(a)
Holding Preamble
Holding Shares 3.7(a)
HSR Act 4.3
Indemnified Parties 7.1(b)
Indenture 8.10(a)
Letter of Transmittal 8.10(c)
Loan Shares 4.5(a)
Material Contracts 4.18
Merger 2.1(a)
Merger Consideration 3.3
Multiemployer Plan 4.12(b)
Notes 8.10(a)
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Offer Documents 8.10(c)
Offer to Purchase 8.10(c)
Permits 4.13(b)
Permitted Actions 6.3(a)
Phantom Shares 4.5(a)
Plan Proceeds 3.7(a)
Retirement Plan 4.12(b)
Secretary of State 2.1(b)
Share Limit 3.7(a)
Stock Fund Participant 3.7(a)
Surviving Corporation 2.1(a)
Termination Fee 10.2(b)
Transfer Taxes 7.5
Unvested CBC Stock Fund Units 3.6(b)
Vested CBC Stock Fund Units 3.6(a)
ARTICLE 2
THE MERGER
2.1. The Merger.
(a) At the Effective Time, Acquiror shall be merged with and
into the Company (the "Merger") in accordance with the terms and conditions
of this Agreement and the Delaware General Corporation Law (the "DGCL"), at
which time the separate corporate existence of Acquiror shall cease and the
Company shall continue its existence. In its capacity as the corporation
surviving the Merger, this Agreement sometimes refers to the Company as the
"Surviving Corporation".
(b) As soon as practicable on or after the Closing Date, the
Company and Acquiror will file a certificate of merger or other appropriate
documents (the "Certificate of Merger") with the Delaware Secretary of State
(the "Secretary of State") and make all other filings or recordings required
by the DGCL in connection with the Merger. The Merger shall become effective
at the time when the Certificate of Merger is duly filed with and accepted by
the Secretary of State, or at such later time as is agreed upon by the
parties and specified in the Certificate of Merger (such time as the Merger
becomes effective is referred to herein as the "Effective Time").
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 259 of the DGCL.
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(d) The closing of the Merger (the "Closing") shall be held at
the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other place as agreed by the parties) on the later
of (a) the date of the Company Stockholder Meeting, or (b) the day on which
all of the conditions set forth in Article 9 are satisfied or waived, unless
the parties hereto agree to another date. The date upon which the Closing
occurs is hereinafter referred to as the "Closing Date".
2.2. Organizational Documents. The Certificate of Merger shall
provide that at the Effective Time (a) the Company's certificate of
incorporation in effect immediately prior to the Effective Time shall be the
Surviving Corporation's certificate of incorporation and (b) the Company's
by-laws in effect immediately prior to the Effective Time shall be the
Surviving Corporation's by-laws, in each case until amended in accordance
with applicable Law.
2.3. Directors and Officers. From and after the Effective Time
(until successors are duly elected or appointed and qualified), (a)
Acquiror's directors at the Effective Time shall be the Surviving
Corporation's directors and (b) the Company's officers immediately prior to
the Effective Time shall be the Surviving Corporation's officers
ARTICLE 3
CONVERSION OF SECURITIES AND RELATED MATTERS
3.1. Capital Stock of Acquiror. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Company Share or Acquiror Share each Acquiror Share issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock, $0.01 par value per share, of the Surviving Corporation.
3.2. Cancellation of Treasury Stock and Acquiror Owned Shares.
As of the Effective Time, by virtue of the Merger and without any action on
the part of the holder of any Company Share or Acquiror Share, each Company
Share held by the Company as treasury stock or owned by Holding, Acquiror or
any Company Subsidiary immediately prior to the Effective Time shall be
canceled and retired, and no payment shall be made or consideration delivered
in respect thereof.
3.3. Conversion of Company Shares. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Company Share or Acquiror Share, each Company Share issued and outstanding
immediately prior to the Effective Time (other than (a) shares to be
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cancelled in accordance with Section 3.2 and (b) Dissenting Shares) shall be
converted into the right to receive in cash from Acquiror, without interest,
an amount equal to $_____ (the "Merger Consideration").
3.4. Exchange of Certificates.
(a) Exchange Agent. Promptly after the date hereof, Acquiror
shall appoint a bank or trust company reasonably acceptable to the Company as
an agent (the "Exchange Agent") for the benefit of holders of Company Shares
for the purpose of exchanging, pursuant to this Article 3, certificates
representing the Company Shares (the "Certificates"). Acquiror will make
available to the Exchange Agent, as needed, the Merger Consideration to be
paid in respect of Company Shares pursuant to this Article 3 (the "Exchange
Fund"), and except as contemplated by Section 3.4(f) or Section 3.4(g)
hereof, the Exchange Fund shall not be used for any other purpose. The
Exchange Agent shall invest the Merger Consideration as directed by the
Acquiror or the Surviving Corporation, as the case may be, on a daily basis.
Any interest and other income resulting from such investments shall be paid
to the Surviving Corporation.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, the Surviving Corporation shall send, or shall cause the
Exchange Agent to send, to each record holder of Certificates a letter of
transmittal and instructions (which shall be in customary form and specify
that delivery shall be effected, and risk of loss and title shall pass, only
upon delivery of the Certificates to the Exchange Agent), for use in the
exchange contemplated by this Section 3.4. Upon surrender of a Certificate
to the Exchange Agent, together with a duly executed letter of transmittal,
the holder shall be entitled to receive in exchange therefor the Merger
Consideration as provided in this Article 3 in respect of the Company Shares
represented by the Certificate (after giving effect to any required
withholding Tax). Until surrendered as contemplated by this Section 3.4,
each Certificate shall be deemed after the Effective Time to represent only
the right to receive the Merger Consideration.
(c) No Further Rights in Company Shares. All cash paid upon
surrender of Certificates in accordance with the terms hereof shall be deemed
to have been issued in full satisfaction of all rights pertaining to Company
Shares represented thereby. From and after the Effective Time, the holders
of Certificates shall cease to have any rights with respect to Company
Shares, except as otherwise provided herein or by Law. As of the Effective
Time, the stock transfer books of the Company shall be closed and there shall
be no further registration of transfers on the Company's stock transfer books
of any Company Shares, other than transfers that occurred before the
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Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Section 3.4.
(d) Alternate Endorsement. If payment of the Merger
Consideration in respect of Company Shares is to be made to a Person other
than the Person in whose name a surrendered Certificate is registered, it
shall be a condition to such payment that the Certificate so surrendered
shall be properly endorsed or shall be otherwise in proper form for transfer
and that the Person requesting such payment shall have paid any transfer and
other Taxes required by reason of such payment in a name other than that of
the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation or the Exchange
Agent that such Tax either has been paid or is not payable.
(e) Return of Merger Consideration. Upon demand by the
Surviving Corporation, the Exchange Agent shall deliver to the Surviving
Corporation any portion of the Merger Consideration made available to the
Exchange Agent pursuant to this Section 3.4 that remains undistributed to
holders of Company Shares six (6) months after the Effective Time. Holders
of Certificates who have not complied with this Section 3.4 prior to the
demand by the Surviving Corporation shall thereafter look only to the
Surviving Corporation for payment of any claim to the Merger Consideration.
(f) No Liability. None of Holding, the Surviving Corporation
or the Exchange Agent shall be liable to any Person in respect of any Company
Shares (or dividends or distributions with respect thereto) for any amounts
paid to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(g) Withholding Rights. Each of the Surviving Corporation and
Acquiror shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable hereunder to any Person any amounts which it
is required to deduct and withhold with respect to payment under any
provision of federal, state or local income tax Law. To the extent that the
Surviving Corporation or Acquiror withholds those amounts, the withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of Company Shares in respect of which deduction and
withholding was made by the Surviving Corporation or Acquiror, as the case
may be.
(h) Lost Certificates. If any Certificate has been or is
claimed to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming that a Certificate has been
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lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Person of a bond, in such reasonable amount as the Surviving
Corporation may direct, as indemnity against any claim that may be made
against it with respect to that Certificate, the Exchange Agent will deliver
in exchange for such lost, stolen or destroyed Certificate, the proper amount
of the Merger Consideration.
3.5. Company Stock Options.
(a) At the Effective Time, each option to purchase Company
Shares (each, a "Company Option") outstanding under any stock option or
compensation plan or arrangement of the Company, whether or not vested, shall
be canceled and in consideration of such cancellation, the Surviving
Corporation shall pay to each holder of a canceled Company Option, as soon as
practicable following the Effective Time, an amount per Company Share subject
to such canceled Company Option equal to the greater of (i) the excess, if
any, of (A) the Merger Consideration over (B) the exercise price per Company
Share subject to such canceled Company Option and (ii) $1.00.
(b) Prior to the Effective Time, the Company, Holding and
Acquiror shall take all commercially reasonable actions to (i) obtain all
necessary consents from the holders of Company Options and (ii) take such
other actions (including, without limitation, amending the terms of any
Company stock option or compensation plan or arrangement), necessary to give
effect to the transactions contemplated by Section 3.5(a).
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3.6. Deferred Compensation Plan.
(a) Each participant in the Deferred Compensation Plan who has
CBC Stock Fund Units (as defined in the Deferred Compensation Plan) that are
vested as of the Effective Time ("Vested CBC Stock Fund Units") and are
credited to his or her account as of the Effective Time may elect, prior to
the Effective Time, to (i) convert the value of the Vested CBC Stock Fund
Units (based upon the Merger Consideration) into any of the insurance mutual
fund alternatives provided under the Deferred Compensation Plan, (ii) receive
a cash payment on the first anniversary of the Effective Time equal to the
sum of (A) the value of the Vested CBC Stock Fund Units (based upon the
Merger Consideration) and (B) interest of 10% per annum from the period
beginning the day after the Effective Time and ending on the day immediately
prior to the first anniversary of the Effective Time; provided, however, that
if the participant's employment is terminated for cause or the participant
resigns prior to the first anniversary of the Effective Time, the participant
shall forfeit such interest, or (iii) continue to hold the Vested CBC Stock
Fund Units in his or her account under the Deferred Compensation Plan;
provided, however, that each such CBC Stock Fund Unit shall thereafter
represent the right to receive a share of common stock of Holding.
(b) Each participant in the Deferred Compensation Plan who has
CBC Stock Fund Units that are not vested as of the Effective Time ("Unvested
CBC Stock Fund Units") and are credited to his or her account prior to the
Effective Time will continue to hold the Unvested CBC Stock Fund Units in his
or her account under the Deferred Compensation Plan subject to the same
vesting provisions; provided, however, that each such CBC Stock Fund Unit
shall thereafter represent the right to receive a share of common stock of
Holding.
(c) Prior to the Effective Time, the Company, Holding and
Acquiror shall take all commercially reasonable actions (including, without
limitation, amending the terms of the Deferred Compensation Plan) necessary
to give effect to the transactions contemplated by Section 3.6(a).
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3.7. Capital Accumulation Plan.
(a) In accordance with Section 3.3, at the Effective Time, each
participant in the Company's Capital Accumulation Plan with an account
balance invested in the Company Stock Fund (as defined in the Company's
Capital Accumulation Plan) (a "Stock Fund Participant") shall receive, in
consideration for such participant's Company Shares in the Company Stock
Fund, the product of (i) the number of Company Shares held in the Company
Stock Fund at such time multiplied by (ii) the Merger Consideration (the
"Plan Proceeds"). As of the Effective Time, provided that the Registration
Statement shall have been declared effective by the SEC prior thereto, each
Stock Fund Participant may invest, pursuant to the terms of the Capital
Accumulation Plan, the Plan Proceeds in shares of the common stock of Holding
(the "Holding Shares"), based on a per share price equal to the Merger
Consideration; provided, however, that the aggregate number of Holding Shares
that all Stock Fund Participants will be entitled to purchase shall not
exceed the quotient of (i) fifty percent of the sum of the Plan Proceeds of
all Stock Fund Participants divided by (ii) the Merger Consideration (the
"Share Limit"). In the event that the Stock Fund Participants request to
purchase an aggregate number of Holding Shares in excess of the Share Limit,
the amount subscribed to by each Stock Fund Participant shall be reduced pro
rata based on the number of shares of Holding each Stock Fund Participant
initially requested to purchase.
(b) Prior to the Effective Time, the Company and Holding shall
take all commercially reasonable actions (including, without limitation,
amending the terms of the Capital Accumulation Plan) necessary to give effect
to the transactions contemplated by Section 3.7(a).
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3.8. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, Company Shares that are outstanding immediately prior to the
Effective Time and which are held by Persons who shall have properly demanded
in writing appraisal for such shares in accordance with Section 262 (or any
successor provision) of the DGCL (the "Dissenting Shares") shall not be
converted into or represent the right to receive the Merger Consideration as
provided hereunder and shall only be entitled to such rights and
consideration as are granted by Section 262 (or any successor provision) of
the DGCL. Such Persons shall be entitled to receive payment of the appraised
value of such Company Shares in accordance with the provisions of Section 262
(or any successor provision) of the DGCL, except that all Dissenting Shares
held by Persons who shall have failed to perfect or who effectively shall
have withdrawn or lost their right to appraisal of such shares under Section
262 (or any successor provision) of the DGCL shall thereupon be deemed to
have been converted into the Merger Consideration pursuant to Section 3.3
hereto as of the Effective Time or the occurrence of such event, whichever
occurs later.
(b) The Company shall give Acquiror (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands
and any other instruments served pursuant to the DGCL and received by the
Company and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal or the payment of the fair
cash value of any such shares under the DGCL. The Company shall not, except
with the prior written consent of Acquiror, make any payment with respect to
any demands for appraisal or the payment of the fair cash value of any such
shares or offer to settle or settle any such demands.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in (i) the Company Disclosure Schedule attached
hereto or (ii) the Company SEC Documents filed prior to the date hereof or
except as specifically contemplated by this Agreement, the Company represents
and warrants to Acquiror as set forth below.
4.1. Corporate Existence and Power. The Company is a
corporation, duly incorporated, validly existing and in good standing under
the Laws of the State of Delaware, and has all corporate powers and authority
required to own, lease and operate its properties and to carry on its
business as now conducted. The Company is duly qualified to do business as a
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foreign corporation and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of
its activities makes qualification necessary, except where the failure to be
qualified would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
4.2. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated hereby are
within the Company's corporate powers and, except for the Company Stockholder
Approval, have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than the Company Stockholder Approval and the
filing and recordation of the appropriate documents with respect to the
Merger in accordance with the DGCL). The Board of Directors of the Company
has approved this Agreement and has resolved to recommend that its
stockholders vote their shares in favor of the adoption of this Agreement and
the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Company, and assuming that this
Agreement constitutes the valid and binding obligation of Holding and
Acquiror, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
4.3. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby will not require any consent,
approval, action, order, authorization, or permit of, or registration or
filing with, any Governmental Entity, other than (a) the filing of (i) the
Certificate of Merger in accordance with the DGCL and (ii) the appropriate
documents with respect to the Company's qualification to do business with the
relevant authorities of other states or jurisdictions in which the Company is
qualified to do business; (b) compliance with any applicable requirements of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") and
any Non-U.S. Competition Laws; (c) compliance with any applicable
requirements of the Securities Act and the Exchange Act; (d) such as may be
required under any applicable state securities or blue sky Laws; and (e)
other consents, approvals, actions, orders, authorizations, registrations,
declarations, filings and permits which, if not obtained or made, would not
be reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect. The consummation of the Merger and the other
transactions contemplated hereby will not result in the lapse of any Permit
of the Company or its Subsidiaries or the breach of any authorization or
right to use any Permit of the Company or its Subsidiaries or other right
-16-
that the Company or any of its Subsidiaries has from a Third Party, except
where such lapses or breaches would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect.
4.4. Non-Contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
Merger and the other transactions contemplated hereby do not and will not (a)
contravene or conflict with the Company's certificate of incorporation or by-
laws, (b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
Law binding upon or applicable to the Company or its Subsidiaries or by which
any of their respective properties is bound or affected, (c) constitute a
default under (or an event that with notice or lapse of time or both could
reasonably be expected to become a default) or give rise (with or without
notice or lapse of time or both) to a right of termination, amendment,
cancellation or acceleration under any agreement, contract, note, bond,
mortgage, indenture, lease, franchise, Permit or other similar authorization
or joint venture, limited liability or partnership agreement or other
instrument binding upon the Company or any Company Subsidiary, or (d) result
in the creation or imposition of any Lien on any asset of the Company or any
Company Subsidiary, other than, in the case of clauses (b), (c) and (d), any
items that would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
-17-
4.5. Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 Company Shares and 8,000,000 shares of preferred stock, $0.01 par
value per share ("Company Preferred Stock"). As of February 19, 2001, (i)
21,678,125 Company Shares were issued and outstanding (1,380,094 Company
Shares were held in treasury), all of which have been duly authorized and
validly issued and are fully paid and nonassessable and were issued free of
preemptive or similar rights, including (x) 804,911 shares issued pursuant to
the Company's 1999 Equity Incentive Plan and 1996 Equity Incentive Plan (the
"Loan Shares") and (y) 1,781,837 shares held by the Company's Capital
Accumulation Plan, (ii) no Company Shares were held by Subsidiaries of the
Company, (iii) 2,679,893 Company Shares were issuable upon the exercise of
Company Options then outstanding, (iv) 1,841,233 Company Shares were issuable
as a result of elections made under the Company's Deferred Compensation Plan
(the "Phantom Shares"), of which 996,338 were vested, (v) ________ shares of
unissued Company Shares were reserved for issuance under Company Employee
Plans, (vi) 598,147 Company Shares were issuable upon the exercise of Company
Warrants then outstanding, and (vii) no shares of Company Preferred Stock
were issued and outstanding. Since September 30, 2000, the Company has not
declared or paid any dividend or distribution in respect of any of its Equity
Interests and has not repurchased or redeemed any shares of its Equity
Interests, and its Board of Directors has not resolved to do any of the
foregoing.
(b) As of the date hereof, except (i) as set forth in this
Section 4.5 and (ii) for changes since February 19, 2001, resulting from the
exercise of stock options outstanding on that date, the Company has not
issued, or reserved for issuance, any (x) Equity Interests of the Company,
(y) securities of the Company convertible into or exchangeable for Equity
Interests of the Company or (z) options, warrants or other rights to acquire
from the Company, or obligations of the Company to issue, any Equity
Interests of the Company or securities convertible into or exchangeable for
Equity Interests of the Company (the items in clauses (x), (y) and (z) being
referred to collectively as the "Company Securities"). There are no
outstanding agreements or other obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.
(c) Section 4.5(c) of the Company Disclosure Schedule sets forth
a complete and accurate list of all outstanding Company Options, Company
Warrants and Loan Shares as of February 19, 2001, which list sets forth the
name of the holders thereof and, to the extent applicable, the exercise price
or purchase price thereof, the number of Company Shares subject thereto, the
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governing Company Employee Plan with respect thereto and the expiration date
thereof.
4.6. Subsidiaries.
(a) Each Subsidiary of the Company (i) is a corporation duly
incorporated or an entity duly organized, and is validly existing and in good
standing under the Laws of its jurisdiction of incorporation or organization,
and has all powers and authority required to own, lease or operate its
properties and to carry on its business as now conducted, and (ii) has all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and is duly qualified to do business
as a foreign corporation or entity and is in good standing in each
jurisdiction where the character of the property owned, leased or operated by
it or the nature of its activities makes such qualification necessary, in
each case with exceptions which would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect.
(b) All of the outstanding Equity Interests in each Material
Subsidiary have been duly authorized and validly issued and are fully paid
and nonassessable and free of preemptive or similar rights. All of the
Equity Interests in each of its Material Subsidiaries are beneficially owned,
directly or indirectly, by the Company. Such Equity Interests are owned free
and clear of any Lien and free of any other limitation or restriction
(including any limitation or restriction on the right to vote, sell or
otherwise dispose of the stock or other ownership interests) and were issued
in compliance with Federal and state securities laws, in each case with
exceptions which would not be reasonably likely to have, individually or in
the aggregate, a Company Material Adverse Effect. There are no outstanding
(i) securities of the Company or any of its Material Subsidiaries convertible
into or exchangeable or exercisable for Equity Interests in any of its
Material Subsidiaries, (ii) options, warrants or other rights to acquire from
the Company or any of its Material Subsidiaries, or obligations of the
Company or any of its Material Subsidiaries to issue, any Equity Interests
in, or any securities convertible into or exchangeable or exercisable for any
Equity Interests in, any of its Material Subsidiaries or (iii) agreements,
obligations or arrangements of the Company or any of its Material
Subsidiaries to issue, sell, repurchase, redeem or otherwise acquire any
Equity Interests of any of its Material Subsidiaries.
(c) Neither the Company, any of its Material Subsidiaries nor,
to the Knowledge of the Company, any Material Joint Venture is in violation
of any provision of its articles or certificate of incorporation or bylaws or
equivalent organizational documents, in each case with exceptions which would
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not be reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
4.7. Company SEC Documents.
(a) The Company has made available to Acquiror the Company SEC
Documents. The Company has filed all reports, filings, registration
statements and other documents required to be filed by it with the SEC since
January 1, 1999. No Company Subsidiary is required to file any form, report,
registration statement or prospectus or other document with the SEC.
(b) As of its filing date, each Company SEC Document complied as
to form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No Company SEC Document filed since January 1, 1999 pursuant
to the Exchange Act contained, as of its filing date, any untrue statement of
a material fact or omitted to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading. No Company SEC Document, as amended or
supplemented, if applicable, filed since January 1, 1999 pursuant to the
Securities Act contained, as of the date on which the document or amendment
became effective, any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
4.8. Financial Statements; No Material Undisclosed Liabilities.
(a) Each of the audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company included
in the Company SEC Documents were prepared in conformity with generally
accepted accounting principles applied on a consistent basis ("GAAP") (except
as may be indicated in the notes thereto) throughout the periods involved,
and each fairly presents, in all material respects, the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations and changes in
financial position for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
(b) There are no liabilities or obligations of the Company or
any Company Subsidiary, which, individually or in the aggregate, would be
material to the Company and its Subsidiaries, taken as a whole, of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable
-20-
or otherwise and, in each case, that are required by GAAP to be set forth on
a consolidated balance sheet of the Company, other than:
(i) liabilities or obligations disclosed or provided for (A) in
the Company Balance Sheet or disclosed in the notes thereto or (B) in the
Company's consolidated balance sheet or disclosed in the notes thereto
included in the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 2000;
(ii) liabilities or obligations incurred after September 30, 2000
in the ordinary course of business consistent with past practice; and
(iii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby.
4.9. Absence of Certain Changes. Since September 30, 2000,
except as otherwise expressly contemplated by this Agreement, the Company and
each of its Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been (a) any damage,
destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of the Company or any of its Subsidiaries
that has had or would be reasonably likely to have a Company Material Adverse
Effect; (b) any amendment or change in the Company's certificate of
incorporation or by-laws; (c) any material change by the Company in its
accounting methods, principles or practices (other than changes required by
GAAP after the date of this Agreement); (d) other than in the ordinary course
of business, any sale of a material amount of assets of the Company and its
Subsidiaries; (e) any material Tax election, any material change in method of
accounting with respect to Taxes or any compromise or settlement of any
proceeding with respect to any material Tax liability or (f) any action,
event, occurrence, development or state of circumstances or facts that has
had or would be reasonably likely to have, individually or in the aggregate,
a Company Material Adverse Effect.
4.10. Litigation. There is no action, suit, claim, investigation,
arbitration or proceeding pending, or to the Knowledge of the Company
threatened, against the Company or any of its Subsidiaries or any of their
respective assets or properties before any arbitrator or Governmental Entity
that would be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect (it being understood that the mere filing of
litigation, or mere existence of litigation, by or on behalf of Company
Stockholders or any other Person, that challenges or otherwise seeks damages
with respect to the transactions contemplated hereby shall not in and of
itself be deemed to have such effect). Neither the Company nor any of its
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Subsidiaries nor any of their respective properties is or are subject to any
order, writ, judgment, injunction, decree, determination or award having, or
which would be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.11. Taxes. Except for matters which would not have or would not
be reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect, (a) all material Tax returns, statements, reports
and forms (collectively, the "Company Returns") required to be filed with any
taxing authority by, or with respect to, the Company and the Company
Subsidiaries have been filed in accordance with all applicable Laws; (b) the
Company and the Company Subsidiaries have timely paid all Taxes due and
payable whether or not shown as being due on any Company Return (other than
Taxes which are being contested in good faith and for which reserves are
reflected on the Company Balance Sheet), and, as of the time of filing, the
Company Returns correctly reflected the facts regarding the income, business,
assets, operations, activities and status of the Company and the Company
Subsidiaries; (c) the charges, accruals and reserves for Taxes with respect
to the Company and the Company Subsidiaries reflected on the Company Balance
Sheet are adequate under GAAP to cover the Tax liabilities accruing through
the date thereof; (d) there is no action, suit, proceeding, audit or claim
now proposed or pending against the Company or any Company Subsidiary in
respect of any Taxes; (e) neither the Company nor the Company Subsidiaries
are party to, bound by or have any obligation under, any tax sharing
agreement or similar contract or arrangement or any agreement that obligates
them to make any payment computed by reference to the Taxes, taxable income
or taxable losses of any other Person; (f) there are no Liens with respect to
Taxes on any of the assets or properties of the Company or the Company
Subsidiaries other than with respect to Taxes not due and payable; (g)
neither the Company nor any of the Company Subsidiaries (i) is, or has been a
member of an affiliated, consolidated, combined or unitary group, other than
one of which the Company was the common parent and (ii) has any liability
for the Taxes of any Person (other than the Company and the Company
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law), or as a transferee or successor,
by contract or otherwise; (h) no consent under Section 341(f) of the Code has
been filed with respect to the Company or any of the Company Subsidiaries;
(i) neither the Company nor any of the Company Subsidiaries has ever entered
into a closing agreement pursuant to Section 7121 of the Code; and (j)
neither the Company nor the Company Subsidiaries has agreed to make or is
required to make any adjustment under Section 481(a) of the Code by reason of
a change in accounting method or otherwise.
4.12. Employee Benefits.
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(a) Except as set forth on the Company Disclosure Schedule and
except for any Foreign Plans, neither the Company nor any ERISA Affiliate (as
defined below) maintains, administers or contributes to any material
"employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), or any material employment,
severance or similar contract, plan, arrangement or policy or any other
material plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which covers any employee or former employee or director of the
Company or any Company Subsidiary. The Company has delivered or made
available (i) current, accurate and complete copies (or to the extent no such
copy exists, an accurate description) of each Company Employee Plan (as
defined below and, if applicable, related trust agreements), (ii) all
amendments thereto and written interpretations and (iii) for the two most
recent years (A) the Form 5500 and attached schedules, (B) audited financial
statements and (C) actuarial valuation reports. The material plans (other
than the Foreign Plans) listed on Section 4.12 of the Company Disclosure
Schedule are referred to collectively herein as the "Company Employee Plans."
An "ERISA Affiliate" of any Person means any other Person which, together
with such Person, would be treated as a single employer under Section 414 of
the Code.
(b) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
(i) with respect to each Company Employee Plan (other than a plan that
constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (a
"Multiemployer Plan")), subject to Title IV of ERISA (a "Retirement Plan"),
no "accumulated funding deficiency", as defined in Section 412 of the Code
(whether or not waived and no "reportable event", as defined in Section 4043
of ERISA, has been incurred with respect to any Company Employee Plan which
is a Retirement Plan, whether or not waived, (ii) no condition exists and no
event has occurred that would constitute grounds for termination of any
Company Employee Plan which is a Retirement Plan or, with respect to any
Company Employee Plan which is a Multiemployer Plan, presents a risk of a
complete or partial withdrawal under Title IV of ERISA, (iii) neither the
Company nor any of its ERISA Affiliates has incurred any liability under
Title IV of ERISA arising in connection with the termination of, or complete
or partial withdrawal from, any plan covered or previously covered by Title
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IV of ERISA and neither the Company nor any ERISA Affiliate would be subject
to any withdrawal liability if, as of the Effective Time, the Company, the
Company Subsidiaries or any ERISA Affiliate were to engage in a complete
withdrawal (as defined in ERISA section 4203) or partial withdrawal (as
defined in ERISA section 4205) from any such Multiemployer Plan, (iv) nothing
has been done or omitted to be done and no transaction or holding of any
asset under or in connection with any Company Employee Plan has occurred that
will make the Company or any Subsidiary, or any officer or director of the
Company or any Subsidiary, subject to any liability under Title I of ERISA or
liable for any Tax pursuant to Section 4975 of the Code (assuming the taxable
period of any such transaction expired as of the date hereof) and (v) neither
the Company nor any ERISA Affiliate has engaged in, or is a successor or
parent corporation to an entity that has engaged in, a transaction described
in Section 4069 or 4212(c) of ERISA.
(c) Each Company Employee Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date, and each trust forming a part
thereof is exempt from Tax pursuant to Section 501(a) of the Code, except as
would not have or would not be reasonably likely to have, individually or in
the aggregate, a Company Material Adverse Effect. The Company has furnished
to Acquiror copies of the most recent Internal Revenue Service determination
letters with respect to each Company Employee Plan. Each Company Employee
Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and
regulations, including ERISA and the Code, which are applicable to such
Company Employee Plan, except as would not have or would not be reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
(d) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
(i) no Company Employee Plan exists that could result in the payment to any
present or former employee of the Company Subsidiaries of any money or other
property or accelerate or provide any other rights or benefits to any present
or former employee of the Company or any Company Subsidiaries as a result of
the transaction contemplated by this Agreement and (ii) there is no contract,
agreement, plan or arrangement covering any employee or former employee of
the Company that, individually or collectively, would be reasonably likely to
give rise to the payment of any amount that would not be deductible pursuant
to the terms of Sections 162(m) or 280G of the Code.
(e) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
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there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee participation or
coverage under, any Company Employee Plan which would increase the expense of
maintaining such Company Employee Plan above the level of the expense
incurred in respect thereof for the year ended December 31, 1999.
(f) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
neither the Company nor any Company Subsidiary has any obligations to provide
retiree health and life insurance or other retiree death benefits under any
Company Employee Plan, other than benefits mandated by Section 4980B of the
Code or under applicable Law, and each such Company Employee Plan may be
amended or terminated without incurring any material liability thereunder.
(g) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
(i) no Company Employee Plan is under audit or is the subject of an audit or
investigation by the Internal Revenue Service, the Department of Labor, the
Pension Benefit Guaranty Corporation or any other Governmental Entity, nor,
to the Knowledge of the Company, is any such audit or investigation
threatened or pending and (ii) with respect to any Company Employee Plan, (A)
no actions, suits or claims (other than routine claims for benefits in the
ordinary course) are pending or, to the Knowledge of the Company, threatened
and (B) no facts or circumstances exist that could reasonably be expected to
give rise to any such actions, suits or claims.
(h) Except as would not have or would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect,
with respect to each Retirement Plan, as of the Effective Time, the assets of
each such Retirement Plan are at least equal in value to the present value of
the accrued benefits (vested and unvested) of the participants in such
Retirement Plan on a termination and projected benefit obligation basis,
based on the actuarial methods and assumptions indicated in the most recent
actuarial valuation reports.
(i) Except as would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) all
contributions required to be made by the Company or any Material Subsidiary
with respect to a Foreign Plan have been timely made, (ii) each Foreign Plan
has been maintained in substantial compliance with its terms and with the
requirements of any and all applicable Laws and has been maintained, where
required, in good standing with the applicable Governmental Entity and (iii)
neither the Company nor any Material Subsidiary has incurred any obligation
in connection with the termination or withdrawal from any Foreign Plan. For
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purposes hereof, the term "Foreign Plan" shall mean any plan, program,
policy, arrangement or agreement maintained or contributed to by, or entered
into with, the Company or any Material Subsidiary with respect to employees
(or former employees) employed outside the United States.
4.13. Compliance with Laws; Licenses, Permits and Registrations.
(a) Neither the Company nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any Laws, except
for violations which would not be reasonably likely to have, individually or
in the aggregate, a Company Material Adverse Effect.
(b) The Company and each of its Subsidiaries has all permits,
licenses, easements, variances, exemptions, consents, certificates,
approvals, authorizations of and registrations (collectively, "Permits") with
and under all federal, state, local and foreign Laws, and from all
Governmental Entities required by the Company and each of its Material
Subsidiaries to carry on their respective businesses as currently conducted,
except where the failure to have the Permits would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect.
4.14. Title to Properties.
(a) The Company and each of its Subsidiaries have good title to,
or valid leasehold interests in, all their properties and assets, except for
(i) those which are no longer used or useful in the conduct of their
businesses and (ii) defects in title, easements, restrictive covenants and
similar Liens, encumbrances or impediments that, in the aggregate, would not
be reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect. All of these assets and properties, other than
assets and properties in which the Company or any of its Subsidiaries has
leasehold interests, are free and clear of all Liens, except for Liens that
would not be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
(b) Except as would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) the
Company and each of its Material Subsidiaries are in substantial compliance
with the terms of all leases of their properties or assets to which they are
a party, and all such leases are in full force and effect and (ii) the
Company and each of its Material Subsidiaries enjoy peaceful and undisturbed
possession under all such leases.
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4.15. Intellectual Property. Except as would not be reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect, the Company and each of its Subsidiaries own or have a valid license
or other right to use each trademark, service ▇▇▇▇, trade name, domain name,
mask work, invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the foregoing)
or any other similar type of proprietary intellectual property right
(collectively, the "Company Intellectual Property") necessary to carry on the
business of the Company and its Subsidiaries, taken as a whole, as currently
conducted. To the Knowledge of the Company, neither the Company nor any of
its Subsidiaries has received any written notice of infringement of or
challenge to, and there are no claims pending with respect to the rights of
others to the use of, any Company Intellectual Property that, in any such
case would be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.16. Finders' Fees; Opinions of Financial Advisor.
(a) Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, whose fees and
expenses will be borne by the Company, there is no investment banker,
financial advisor, broker, finder or other intermediary which has been
retained by, or is authorized to act on behalf of, the Company or any of its
Subsidiaries which might be entitled to any fee or commission from the
Company, Holding, Acquiror or any of their respective Affiliates upon
consummation of the Merger or the other transactions contemplated by this
Agreement. The Company has heretofore furnished to the Acquiror complete and
correct copies of all agreements between the Company or its Subsidiaries and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated pursuant to which such firm would be
entitled to any payment relating to the Merger and the other transactions
contemplated by this Agreement.
(b) The Special Committee has received the opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, dated as of the date hereof, to the effect that,
as of such date, and subject to the qualifications stated therein, the Merger
Consideration is fair to the holders of Company Shares (other than Acquiror
and the members of the Buying Group and each of their respective Affiliates)
from a financial point of view.
4.17. Labor Matters. There are no strikes, slowdowns, work
stoppages, lockouts or other material labor controversies pending or, to the
Knowledge of the Company, threatened by or between the Company or any of its
Material Subsidiaries and any of their respective employees that would be
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
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a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization.
The Company and each of its Material Subsidiaries is in compliance with all
applicable Laws, agreements, contracts, and policies relating to employment,
employment practices, wages, hours, and terms and conditions of employment
except for failures so to comply, if any, that would not be reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect.
4.18. Material Contract Defaults. To the Knowledge of the
Company, neither the Company nor any of its Material Subsidiaries is, or has
received any notice that any other party is, in default or unable to perform
in any respect under any material contracts, agreements, commitments,
arrangements, leases, licenses, policies or other instruments to which it or
any of its Material Subsidiaries is a party or by which it or any of its
Material Subsidiaries is bound ("Material Contracts"), except for those
defaults which would not be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect, and there has not occurred any
event that with the lapse of time or the giving of notice or both would
constitute such a default, except for those defaults which would not be
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company has not received written notice of the
termination of, or intent to terminate any Material Contract, except for such
notices or terminations which would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect.
4.19. Required Vote; Board Approval.
(a) Under the DGCL (including, without limitation, Section 203
thereof), the Company's certificate of incorporation and by-laws and any
other applicable Law or stock exchange rules, the only votes required of the
holders of any class or series of the Company's Equity Interests necessary to
adopt this Agreement and to approve the Merger and the other transactions
contemplated hereby are the following: (i) the approval, assuming a quorum
is present, of a majority of the Company Shares voting in person or by proxy
at such meeting, and (ii) the approval, and not the written consent, of at
least 66 2/3% of the outstanding Company Shares which are not owned by any
"interested stockholder" (as defined in Section 203 of the DGCL)
(collectively, "Company Stockholder Approval").
(b) The Special Committee and the Company's Board of Directors
has (i) determined that this Agreement and the transactions contemplated
hereby, including the Merger, are in the best interests of the Company and
its Stockholders (other than Holding, Acquiror and the members of the Buying
Group and each of their respective Affiliates), (ii) approved this Agreement
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and the transactions contemplated hereby, including the Merger and (iii)
resolved to recommend to the Company Stockholders that they vote in favor of
adopting and approving this Agreement and the Merger in accordance with the
terms hereof.
4.20. Information to Be Supplied.
(a) The information supplied or to be supplied by the Company
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement is filed with the SEC and at the
time it becomes effective under the Securities Act, 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 not
misleading and (ii) the Schedule 13E-3 will, at the time it is first filed
with the SEC and at any time it is amended or supplemented, 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 not misleading.
(b) The Proxy Statement will, at the time of the mailing thereof
and at the time of the Company Stockholder Meeting, not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholder Meeting which has become untrue or misleading.
(c) The Registration Statement and the Schedule 13E-3 (in each
case with respect to information provided by or incorporated by reference
from, the Company) and the Proxy Statement will comply as to form in all
material respects with the provisions of the Securities Act and the Exchange
Act.
(d) Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any statements made or
incorporated by reference in the Registration Statement, the Proxy Statement
or the Schedule 13E-3 based on information supplied by Holding or Acquiror
for inclusion or incorporation by reference therein.
4.21. Disclaimer of Other Representations and Warranties. The
Company does not make, and has not made, any representations or warranties in
connection with the Merger and the transactions contemplated hereby other
than those expressly set forth herein. It is understood that any data, any
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financial information or any memoranda or other materials or presentations
are not and shall not be deemed to be or to include representations and
warranties of the Company. Except as expressly set forth herein, no Person
has been authorized by the Company to make any representation or warranty
relating to the Company or any Company Subsidiary or their respective
businesses, or otherwise in connection with the Merger and the transactions
contemplated hereby and, if made, such representation or warranty may not be
relied upon as having been authorized by the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF HOLDING AND ACQUIROR
Except as disclosed in the Holding and Acquiror Disclosure Schedule
attached hereto, Holding and Acquiror, jointly and severally, represent and
warrant to the Company that:
5.1. Corporate Existence and Power. Each of Holding and Acquiror is a
corporation duly incorporated, validly existing and in good standing under
the Laws of its jurisdiction of incorporation and has all corporate powers
and authority required to own, lease and operate its properties and carry on
its business as now conducted. Each of Holding and Acquiror is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned, leased or
operated by it or the nature of its activities makes qualification necessary,
except where the failure to be qualified would not be reasonably likely to
have, individually or in the aggregate, a Holding Material Adverse Effect.
Each of Holding and Acquiror has heretofore made available to the Company
true and complete copies of its certificate of incorporation and by-laws as
currently in effect. Since the date of its incorporation, each of Holding
and Acquiror has not engaged in any activities other than in connection with
or as contemplated by this Agreement.
5.2. Corporate Authorization.
(a) The execution, delivery and performance by each of Holding
and Acquiror of this Agreement and the consummation by each of Holding and
Acquiror of the Merger and the other transactions contemplated hereby are
within the corporate powers of each of Holding and Acquiror and have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Holding or Acquiror are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
each of Holding and Acquiror and assuming that this Agreement constitutes the
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valid and binding obligation of the Company, this Agreement constitutes a
valid and binding agreement of each of Holding and Acquiror, enforceable in
accordance with its terms.
(b) The Board of Directors of each of Holding and Acquiror has
(i) determined that this Agreement and the transactions contemplated hereby,
including the Merger, are in the best interests of such company and its
stockholders, (ii) approved this Agreement and the transactions contemplated
hereby and (iii) resolved to recommend and recommended to its stockholders
that they vote in favor of adopting and approving this Agreement and the
Merger in accordance with the terms hereof. Holding, in its capacity as the
sole stockholder of Acquiror, has approved and adopted this Agreement and the
transactions contemplated hereby, including the Merger. The stockholders of
Holding have unanimously approved and adopted this Agreement and the
transactions contemplated hereby, including the Merger.
5.3. Governmental Authorization. The execution, delivery and
performance by each of Holding and Acquiror of this Agreement and the
consummation by Holding and Acquiror of the transactions contemplated hereby
will not require any consent, approval, action, order, authorization, or
permit of, or regulation or filing with, any Governmental Entity by Holding
or Acquiror other than (a) those set forth in clauses (a) through (d) of
Section 4.3 and (b) other consents, approvals, actions, orders,
authorizations, registrations, declarations, filings and permits which, if
not obtained or made, would not prevent or materially impair the ability of
Holding or Acquiror to consummate the Merger or the other transactions
contemplated by this Agreement.
5.4. Non-Contravention. The execution, delivery and performance
by Holding and Acquiror of this Agreement and the consummation by Holding and
Acquiror of the Merger and the other transactions contemplated hereby do not
and will not (a) contravene or conflict with the certificate of incorporation
or by-laws of either of Holding or Acquiror, (b) assuming compliance with the
matters referred to in Section 5.3, contravene or conflict with any provision
of Law, binding upon or applicable to either of Holding and Acquiror or by
which any of their respective properties is bound or affected, (c) constitute
a default under (or an event that with notice or lapse of time or both could
reasonably become a default) or give rise (with or without notice or lapse of
time or both) to a right of termination, amendment, cancellation or
acceleration under any agreement, contract, note, bond, mortgage, indenture,
lease, license, franchise, joint venture, limited liability or partnership
agreement or other instrument binding upon, either of Holding or Acquiror, or
(d) result in the creation or imposition of any Lien on any asset of either
of Holding or Acquiror other than, in the case of clauses (b), (c) and (d),
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any such items that would not prevent or materially impair the ability of
Holding or Acquiror to consummate the Merger or the other transactions
contemplated by this Agreement.
5.5. Financing.
(a) Acquiror has received and executed commitment letters dated
February __, 2001 from Credit Suisse First Boston ("CSFB") and DLJ Investment
Funding, Inc. ("DLJ") (collectively, the "Commitment Letters"), pursuant to
which CSFB and DLJ have committed, subject to the terms and conditions set
forth therein, to provide to the Company the amount of financing set forth in
the Commitment Letters (the "Financing"), to complete the transactions
contemplated hereby and for working capital and general corporate purposes
following the Effective Time. A true and complete copy of each of the
Commitment Letters is attached hereto as Exhibit B. The Commitment Letters
have not been amended or modified. Acquiror has fully paid any and all
commitment fees or other fees required by such Commitment Letters to be paid
as of the date hereof (and will duly pay any such fees after the date
hereof). The Commitment Letters are valid and in full force and effect and
no event has occurred which (with or without notice, lapse of time or both)
would constitute a default thereunder on the part of Holding or Acquiror.
(b) The Commitment Letters have been obtained, subject to the
terms and conditions thereof, to pay in part the aggregate Merger
Consideration pursuant to the Merger, to refinance in part any indebtedness
of the Company and its Subsidiaries that will become due as a result of the
transactions contemplated by this Agreement, to pay all related fees and
expenses, and to provide additional financing for future working capital and
general corporate needs of the Company and its Subsidiaries. The obligations
to fund the commitments under the Commitment Letters are not subject to any
conditions other than as set forth in the Commitment Letters. It is the good
faith belief of Holding and Acquiror, as of the date hereof, that the
Financing will be obtained. Each of Holding and Acquiror will use its
reasonable best efforts to cause the Financing to be completed on the terms
set forth in the Commitment Letters.
(c) The Financing, together with the other funds available to
Acquiror, will provide sufficient funds to consummate the Merger and the
other transactions contemplated hereby on the terms set forth in this
Agreement.
(d) Immediately after the consummation of the Merger, the
Surviving Corporation (i) will not be insolvent, (ii) will not be left with
unreasonably small capital, and (iii) will not have debts beyond its ability
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to pay such debts as they mature.
5.6. Information to Be Supplied.
(a) The Registration Statement will, at the time the
Registration Statement is filed with the SEC and at the time it becomes
effective under the Securities Act, 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 not misleading.
(b) The information supplied or to be supplied by Holding and
Acquiror for inclusion or incorporation by reference in (i) the Schedule 13E-
3 will, at the time it is first filed with the SEC and at any time it is
amended or supplemented, 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 not misleading, and (ii) the Proxy
Statement will, at the time of the mailing thereof and at the time of the
Company Stockholder Meeting, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Company Stockholder
Meeting which has become untrue or misleading.
(c) The Proxy Statement and the Schedule 13E-3 (in each case
with respect to information relating to Holding and Acquiror) and the
Registration Statement will comply as to form in all material respects with
the provisions of the Securities Act and the Exchange Act.
(d) Notwithstanding the foregoing, neither Holding nor Acquiror
makes any representation or warranty with respect to any statements made or
incorporated by reference in the Proxy Statement, the Registration Statement
or the Schedule 13E-3 based on information supplied by the Company for
inclusion or incorporation by reference therein.
5.7. No Breach. Each Person affiliated with the Buying Group
listed on Section 5.7 of the Holding and Acquiror Disclosure Schedule has
reviewed Article 4 of this Agreement and has no actual knowledge as of the
date hereof of any breaches of the representations or warranties contained
therein such that the condition in Section 9.3(a)(ii) would not be satisfied.
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5.8. Disclaimer of Other Representations and Warranties.
Holding and Acquiror do not make, and have not made, any representations or
warranties in connection with the Merger and the transactions contemplated
hereby other than those expressly set forth herein. It is understood that
any data, any financial information or any memoranda or other materials or
presentations are not and shall not be deemed to be or to include
representations and warranties of Holding and Acquiror. Except as expressly
set forth herein, no Person has been authorized by Holding or Acquiror to
make any representation or warranty relating to Holding or Acquiror or their
respective businesses, or otherwise in connection with the Merger and the
transactions contemplated hereby and, if made, such representation or
warranty may not be relied upon as having been authorized by Holding or
Acquiror.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees as set forth below.
6.1. Company Interim Operations. Except as set forth in the
Company Disclosure Schedule or as otherwise expressly contemplated hereby,
without the prior consent of Acquiror (which consent shall not be
unreasonably withheld or delayed), from the date hereof until the Effective
Time, the Company shall, and shall cause each of its Material Subsidiaries
to, conduct their business in all material respects in the ordinary course
consistent with past practice (with such changes as the Company determines in
good faith are necessary or advisable with respect to (w) changes in U.S. or
global economic, industry or political conditions, (x) changes in U.S. or
global financial markets or conditions, (y) any generally applicable change
in Law or interpretation of any thereof and/or (z) the announcement of this
Agreement or the transactions contemplated hereby or the Company's
performance of its obligations under this Agreement and compliance with the
covenants set forth herein), and shall use commercially reasonable efforts
to (i) preserve intact its present business organization, (ii) maintain in
effect all material Permits that are required for the Company or such
Material Subsidiary to carry on its business, (iii) keep available the
services of its present key officers and employees, and (iv) preserve
existing relationships with its material customers, lenders, suppliers and
others having material business relationships with it. Without limiting the
generality of the foregoing, except as set forth in the Company Disclosure
Schedule or as otherwise expressly contemplated by this Agreement, from the
date hereof until the Effective Time, without the prior consent of Acquiror,
the Company shall not, nor shall it permit any of its Subsidiaries, directly
or indirectly, to:
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(a) amend the Company's or any Subsidiary's certificate of
incorporation or by-laws (or equivalent organizational documents);
(b) (i) split, combine or reclassify any shares of capital stock
of the Company or amend the terms of any rights, warrants or options to
acquire its securities, (ii) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof)
in respect of its Equity Interests, or (iii) redeem, repurchase or otherwise
acquire or offer to redeem, repurchase, or otherwise acquire any of its
securities or any rights, warrants or options to acquire its securities,
except for ordinary course dividends by Company Subsidiaries or, with respect
to clause (iii) only, pursuant to the existing terms of any Company Employee
Plan or Foreign Plan or any agreement executed pursuant thereto;
(c) issue, deliver, sell, or authorize the issuance, delivery or
sale of, its Equity Interests or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, its Equity
Interests, other than, (i) in connection with directors' qualifying shares,
(ii) the issuance of Company Shares upon the exercise of stock options
granted prior to the date hereof or in accordance with their present terms,
and (iii) the issuance of Company Shares in exchange for CBC Stock Fund Units
allocated under the Deferred Compensation Plan prior to the date hereof, in
accordance with the terms of the Deferred Compensation Plan;
(d) acquire (whether pursuant to merger, stock or asset purchase
or otherwise) in one transaction or series of related transactions any
Person, any Equity Interests of any Person, any division or business of any
Person or all or substantially all of the assets of any Person for
consideration having a fair market value in excess of $5.0 million in any
single or series of related transactions or $15.0 million in the aggregate;
(e) sell, lease, encumber or otherwise dispose of any assets
which are material to the Company and its Subsidiaries, taken as a whole,
other than (i) sales in the ordinary course of business consistent with past
practice, (ii) equipment and property no longer used in the operation of the
Company's business, (iii) assets related to discontinued operations, and (iv)
contributions or other transfers of assets to any Joint Venture permitted by
Section 6.1(d) hereof; provided, however, that the consent of Acquiror to do
any of the foregoing shall not be unreasonably withheld;
(f) (i) (A) incur any indebtedness for borrowed money, except
to fund working capital in the ordinary course consistent with past practice
under the Company's existing credit facilities, (B) issue or sell any debt
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securities (except intercompany debt securities) or warrants or other rights
to acquire any debt securities of the Company or any of its Subsidiaries, (C)
make any loans, advances (other than to employees of and consultants to the
Company in the ordinary course of business) or capital contributions to, or,
except as permitted by 6.1(d), investments in, any other Person, other than
to the Company or any Subsidiary of the Company or (D) assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any Person (other than obligations of Subsidiaries and the
endorsements of negotiable instruments for collection in the ordinary course
of business consistent with past practice), or (ii) enter into or materially
amend any contract, agreement, commitment or arrangements to effect any of
the transactions prohibited by this Section 6.1(f);
(g) except in the ordinary course of business consistent with
past practice, (i) materially amend, modify or terminate any material
contract, agreement or arrangement of the Company or any of its Material
Subsidiaries or (ii) otherwise waive, release or assign any material rights,
claims or benefits of the Company or any of its Material Subsidiaries
thereunder; provided, however, that the consent of Acquiror to do any of the
forgoing shall not be unreasonably withheld;
(h) (i) except as required by Law or any existing agreement,
increase the amount of compensation of any director or executive officer of
the Company, (ii) except as required by Law, an agreement existing on the
date hereof or pursuant to a Company severance policy existing on the date
hereof, grant any severance or termination pay to any director or senior
officer of the Company or any Material Subsidiary, (iii) adopt any additional
material employee benefit plan or (iv) except as may be required by Law or as
necessary to comply with the terms of this Agreement, amend in any material
respect any Company Employee Plan or Foreign Plan; provided, however, that
the consent of Acquiror to do any of the forgoing shall not be unreasonably
withheld;
(i) materially change the Company's methods of accounting in
effect at September 30, 2000, except as required by changes in GAAP or by
Regulation S-X of the Exchange Act, as concurred in by its independent public
accountants; provided, however, that the consent of Acquiror to do any of the
forgoing shall not be unreasonably withheld;
(j) (i) settle, pay or discharge, any litigation, investigation,
arbitration, proceeding or other claim that is material to the business,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole or (ii) settle, pay or discharge any Claim
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against the Company with respect to or arising out of the transactions
contemplated by this Agreement;
(k) other than in the ordinary course of business consistent
with past practice, (i) make any material Tax election or take any position
on any Company Return filed on or after the date of this Agreement or adopt
any method therein that is materially inconsistent with elections made,
positions taken or methods used in preparing or filing similar returns in
prior periods, (ii) enter into any settlement or compromise of any
material Tax liability that in either case is material to the business of the
Company and its Subsidiaries, taken as a whole, (iii) file any amended
Company Return with respect to any material Tax, (iv) change any annual Tax
accounting period, (v) enter into any closing agreement relating to any
material Tax or (vi) surrender any right to claim a material Tax refund;
(l) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the
Merger); and
(m) agree or commit to do any of the foregoing; provided that
the limitations set forth in Sections 6.1(b) through 6.1(g) and Section
6.1(l) shall not apply to any action, transaction or event occurring
exclusively between the Company and any Company Subsidiary or exclusively
between any Company Subsidiaries.
6.2. Stockholder Meeting. Subject to Section 6.3, the Company
shall cause a meeting of its Stockholders (the "Company Stockholder Meeting")
to be duly called and held as promptly as reasonably practicable after the
date hereof for the purpose of obtaining the Company Stockholder Approval.
Subject to Section 6.3 hereto, (i) the Company's Board of Directors shall
recommend approval and adoption by its Stockholders of this Agreement and the
transactions contemplated hereby, including the Merger (the "Company
Recommendation") and (ii) the Company shall take all other reasonable lawful
action to solicit and secure the Company Stockholder Approval. The Company
Recommendation, together with a copy of the opinion referred to in Section
4.16(b), shall be included in the Proxy Statement. Holding and Acquiror or
their agents shall have the right to solicit from the Company Stockholders
proxies in favor of adoption of this Agreement and the transactions
contemplated hereby.
6.3. Acquisition Proposals; Board Recommendation.
(a) The Company agrees that it shall not, nor shall it permit
any Company Subsidiary to, nor shall it authorize or knowingly permit any
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officer, director, employee, investment banker, attorney, accountant, agent
or other advisor or representative of the Company or any Company Subsidiary,
directly or indirectly, to (i) solicit or initiate the submission of any
Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take
any other action knowingly to facilitate any inquiries or the making of any
proposal that constitutes or that would reasonably be expected to lead to any
Acquisition Proposal, (iii) grant any waiver or release under any standstill
or similar agreement with respect to any class of the Company's equity
securities or (iv) enter into any agreement with respect to any Acquisition
Proposal; provided, however, that if the Company receives an unsolicited
Acquisition Proposal from a Third Party that the Company's Board of Directors
or the Special Committee determines in good faith is or could reasonably be
expected to lead to the delivery of a Superior Proposal from that Third
Party, the Company may, subject to compliance with the other provisions of
this Section 6.3, furnish information to, and engage in discussions and
negotiations with, such Third Party with respect to its Acquisition Proposal
("Permitted Actions"). Notwithstanding the foregoing, the Board of Directors
shall not take any Permitted Actions unless the Company provides Acquiror
with reasonable advance notice thereof.
(b) Except as permitted by this Section 6.3(b), neither the
Board of Directors of the Company, the Special Committee nor any committee
thereof shall amend, withdraw, modify, change, condition or qualify in any
manner adverse to Acquiror, the Company Recommendation (it being understood
and agreed that a communication by the Board of Directors of the Company or
the Special Committee to the Company Stockholders pursuant to Rule 14d-9(f)
of the Exchange Act, or any similar communication to the Company Stockholders
in connection with the making or amendment of a tender offer or exchange
offer, shall not be deemed to constitute a withdrawal, modification,
amendment, condition or qualification of the Company Recommendation for all
purposes of this Agreement, including this Section 6.3 and Section 10.1(e)).
Notwithstanding the foregoing, in the event that the Board of Directors of
the Company or the Special Committee takes the actions set forth in Section
6.3(e), the Board of Directors of the Company or the Special Committee may
(i) withdraw or modify in any manner adverse to Acquiror, the Company
Recommendation and (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal.
(c) Unless the Company's Board of Directors or the Special
Committee has previously withdrawn, or is concurrently therewith withdrawing,
the Company Recommendation in accordance with this Section 6.3, neither the
Company's Board of Directors nor any committee thereof shall recommend any
Acquisition Proposal to the Company Stockholders. Notwithstanding the
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foregoing, nothing contained in this Section 6.3(c) or elsewhere in this
Agreement shall prevent the Company's Board of Directors or the Special
Committee from complying with Rule 14e-2 under the Exchange Act with respect
to any Acquisition Proposal or making any disclosure required by or otherwise
complying with applicable Law.
(d) The Company shall notify Acquiror promptly (but in no event
later than the next Business Day) after receipt by the Company of any
Acquisition Proposal or any request for information relating to the Company
or any of its Subsidiaries in connection with an Acquisition Proposal or for
access to the properties, books or records of the Company or any of its
Subsidiaries or any request for a waiver or release under any standstill or
similar agreement, by any Person that informs the Board of Directors of the
Company or such Subsidiary that it is considering making, or has made an
Acquisition Proposal; provided, however, that prior to participating in any
discussions or negotiations or furnishing any such information, the Company
shall receive from such Person an executed confidentiality agreement on terms
that are not materially less favorable to the Company than the
Confidentiality Agreement. The notice shall indicate the terms and
conditions of the proposal or request and the identity of the Person making
it, and the Company will promptly notify Acquiror of any material
modification of or material amendment to any Acquisition Proposal (and the
terms of such modification or amendment); provided, however, that, without
limiting what changes may be material, any change in the consideration to be
paid with respect to the Acquisition Proposal shall be deemed to be a
material modification or a material amendment. The Company shall keep
Acquiror informed, on a reasonably current basis, of the status of any
negotiations, discussions and documents with respect to such Acquisition
Proposal or request.
(e) Holding, Acquiror or the Company may terminate this
Agreement, if the Company's Board of Directors or the Special Committee,
after consultation with its financial and legal advisors, shall have
determined (i) to approve or recommend an Acquisition Proposal after
concluding that the Acquisition Proposal constitutes a Superior Proposal and
(ii) to enter into a binding agreement concerning the Acquisition Proposal;
provided, however, that the Company may not exercise its right to terminate
under this Section 6.3(e), unless (1) the Company shall have provided to
Acquiror at least three (3) Business Days' prior written notice that its
Board of Directors or the Special Committee has authorized the termination
and intends to terminate this Agreement pursuant to this Section 6.3(e),
specifying the material terms and conditions of the Acquisition Proposal, and
(2) Acquiror does not make, within three (3) Business Days of delivery of the
notice, an offer such that a majority of the disinterested members of the
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Company's Board of Directors or the Special Committee determines that the
foregoing Acquisition Proposal no longer constitutes a Superior Proposal. In
connection with the forgoing, the Company agrees that it will not enter into
an agreement which binds the Company with respect to such an Acquisition
Proposal unless (x) the Company simultaneously delivers to Acquiror the
notice contemplated by the foregoing proviso, (y) such agreement is not
binding on the Company until three (3) Business Days after delivery of the
notice set forth in this Section 6.3(e) and (z) the Company has the right
under such agreement to unilaterally terminate such agreement without any
payment or other liability or obligation of any kind prior to the termination
of this Agreement.
(f) The Company shall immediately cease, and shall cause any
party acting on its behalf to cease, and cause to be terminated any existing
discussions or negotiations with any Third Party conducted heretofore with
respect to any of the foregoing and shall request any such parties in
possession of confidential information about the Company or its Subsidiaries
that was furnished by or on behalf of the Company or its Subsidiaries to
return or destroy all such information in the possession of any such party or
the agent or advisor of any such party.
ARTICLE 7
COVENANTS OF HOLDING AND ACQUIROR
Each of Holding and Acquiror agrees as set forth below.
7.1. Director and Officer Liability.
(a) Holding, Acquiror and the Surviving Corporation agree that
the Surviving Corporation shall adopt on or prior to the Effective Time, in
its certificate of incorporation and by-laws, the same indemnification,
limitation of or exculpation from liability and expense advancement
provisions as those set forth in the Company's certificate of incorporation
and by-laws, in each case as of the date of this Agreement, and that such
provisions shall not be amended, repealed, revoked or otherwise modified for
a period of six (6) years after the Effective Time in any manner that would
adversely affect the rights thereunder of the individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the
Company or the Company Subsidiaries or are otherwise entitled to the benefit
of such provisions, unless such modification is required after the Effective
Time by applicable Law.
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(b) To the fullest extent permitted under applicable Law,
commencing at the Effective Time and continuing for six (6) years thereafter,
Holding shall, and Holding shall cause the Surviving Corporation to,
indemnify, defend and hold harmless, each present and former director,
officer or employee of the Company and each Company Subsidiary and their
respective estates, heirs, personal representatives, successors and assigns
(collectively, the "Indemnified Parties") against all costs and expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time) (each, a "Claim"), arising out of or pertaining to
any action or omission in their capacity as director or officer of the
Company or any Subsidiary of the Company or their serving at the request of
the Company or any Subsidiary of the Company as director, officer, trustee,
partner or fiduciary of another Person, pension or other employee benefit
plan or enterprise in each case occurring on or before the Effective Time
(including the transactions contemplated by this Agreement); provided,
however, that in the event any Claim or Claims for indemnification are made
within such six year period, all rights to indemnification in respect of any
such Claim or Claims shall continue until the final disposition of any and
all such Claims. Without limiting the foregoing, in the event of any Claim,
(i) Holding and the Surviving Corporation shall (x) periodically advance
reasonable fees and expenses (including attorneys fees) with respect to the
foregoing, (y) pay the reasonable fees and expenses of counsel selected by
each Indemnified Party, promptly after statements therefor are received and
(z) vigorously assist each Indemnified Party in such defense, and (ii)
Holding and the Surviving Corporation, as applicable, shall cooperate in the
defense of any matter; provided, however, that Holding and the Surviving
Corporation shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld or
delayed).
(c) For six (6) years from the Effective Time, the Surviving
Corporation shall, and Holding shall cause the Surviving Corporation to,
provide to the Company's and each Company Subsidiary's directors and officers
liability and fiduciary liability insurance protection with the same coverage
and in the same amount, and on terms no less favorable to the directors and
officers than that provided by the Company's directors' and officers'
liability insurance policies in effect on the date hereof; provided, however,
that the Surviving Corporation shall not be obligated to make premium
payments for such insurance to the extent such annual premiums exceed 250% of
the annual premiums paid as of the date hereof by the Company for such
insurance; and provided, further, that if the premiums with respect to such
insurance exceed 250% of the annual premiums paid as of the date hereof by
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the Company for such insurance, the Surviving Corporation shall be obligated
to obtain such insurance with the maximum coverage as can be obtained at an
annual premium equal to the sum of (i) 250% of the annual premiums paid by
the Company as of the date hereof plus (ii) the cumulative amount by which
the premiums paid after the Effective Time are less than the product of 250%
of the annual premiums paid by the Company as of the date hereof and the
number of years that have expired since the Effective Time.
(d) All rights to indemnification and/or advancement of expenses
contained in any agreement with any Indemnified Parties as in effect on the
date hereof with respect to matters occurring on or prior to the Effective
Time (including the transactions contemplated hereby) shall survive the
Merger and continue in full force and effect.
(e) This Section 7.1 shall survive the consummation of the
Merger and is intended to be for the benefit of, and shall be enforceable by,
the Indemnified Parties referred to herein, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
successors and assigns and the covenants and agreements contained herein
shall not be deemed exclusive of any other rights to which an Indemnified
Party is entitled, whether pursuant to Law, contract or otherwise.
(f) If the Surviving Corporation or any of it successors or
assigns (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 or conveys all or substantially all of its
properties and assets to any Person, then, and in each case, to the extent
necessary, proper provision shall be made so that the successors and assigns
of the Surviving Corporation shall assume the obligations set forth in this
Section 7.1.
(g) Nothing in this Agreement is intended to, shall be construed
to or shall release, waive or impair any rights to directors' and officers'
insurance claims under any policy that is or has been in existence with
respect to the Company or any of its officers, directors or employees, it
being understood and agreed that the indemnification provided for in this
Section 7.1 is not prior to or in substitution for any such claims under such
policies.
7.2. Employee Benefits.
(a) For twelve (12) months from the Effective Time, Holding
shall provide (or shall cause the Surviving Corporation to provide) employees
of the Company and the Company Subsidiaries with benefits under employee
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benefit plans (other than equity based compensation) that are no less
favorable in the aggregate than those currently provided by the Company and
the Company Subsidiaries to its employees. For purposes of any employee
benefit plan or arrangement maintained by Holding or the Surviving
Corporation, Holding and the Surviving Corporation shall recognize (or cause
to be recognized) service with the Company and its Subsidiaries and any
predecessor entities (and any other service credited by the Company under
similar benefit plans) for all purposes (including for vesting, eligibility
to participate, severance, and benefit accrual; provided, however, that
solely to the extent necessary to avoid duplication of benefits, amounts
payable under employee benefit plans provided by Holding or the Surviving
Corporation may be reduced by amounts payable under similar employee benefit
plans of the Company and its Subsidiaries with respect to the same periods of
service). Any benefits accrued by employees of the Company or any Company
Subsidiary prior to the Effective Time under any defined benefit pension plan
of the Company or any Company Subsidiary that employs a final average pay
formula shall be calculated based on the terms of such plan. From and after
the Effective Time, Holding and the Surviving Corporation shall waive any
pre-existing condition limitations and credit any flexible spending account
balances, deductibles and out-of-pocket expenses that are applicable and/or
covered under the Company's and its Subsidiaries' employee benefit plans, and
are incurred by the employees and their beneficiaries during the portion of
the plan year prior to participation in the benefit plans provided by Holding
and the Surviving Corporation. The provisions of this Section 7.2 shall not
create in any employee or former employee of the Company or any Company
Subsidiary any rights to employment or continued employment with Holding,
Acquiror, the Surviving Corporation or the Company or any of their respective
Subsidiaries, successors or Affiliates. The provisions of this Section 7.2
shall apply to employees of the Company or any Company Subsidiary who are on
disability or leave of absence.
(b) Participants in the Company's 401(k) plan and non-qualified
retirement plans will receive all Company contributions for the partial year
ending on the Closing Date without regard to any last day of the plan year
requirement or service requirement.
7.3. Severance Plan. For one (1) year from the Effective Time,
Holding shall provide (or shall cause the Surviving Corporation to provide)
employees of the Company and the Company's Subsidiaries with a severance plan
that is no less favorable than the plan currently applicable to the Company's
employees. Holding and the Surviving Corporation shall recognize (or cause
to be recognized) service with the Company and its Subsidiaries or any
predecessor entities (and any other services credited by the Company under
similar severance plans) for all purposes; provided, however, that solely to
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the extent necessary to avoid duplication of benefits, amounts payable under
other severance plans provided by Holding or the Surviving Corporation may be
reduced by the amounts payable under the Company's severance plan.
7.4. Conduct of Holding and Acquiror. Holding will and will take
all action necessary to cause Acquiror to perform its obligations under this
Agreement to consummate the Merger on the terms and subject to conditions set
forth in this Agreement.
7.5. Transfer Taxes. All state, local or foreign sales, use,
real property transfer, stock transfer or similar Taxes (including any
interest or penalties with respect thereto) attributable to the Merger
(collectively, the "Transfer Taxes") shall be timely paid by Holding,
Acquiror or the Surviving Corporation.
7.6. Investment Banking Fee. If the Closing shall occur,
Holding, Acquiror and the Surviving Corporation shall pay or cause to be paid
all fees and expenses due to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated from the
Company pursuant to the agreement referred to in Section 4.16(a).
7.7. Financing Arrangements.
(a) Holding and Acquiror shall use their reasonable best efforts
to obtain the Financing on the terms set forth in Commitment Letters and in
an amount at least equal to the Financing on or prior to the date of the
Company Stockholders Meeting. The Commitment Letters and the definitive
agreements contemplated thereby (along with any other document pursuant to
which Holding and Acquiror intends to obtain financing of all or a portion of
the Financing) are referred to herein collectively as the "Financing
Agreements". The Company will be afforded a reasonable opportunity to review
and comment on the representations and warranties contained in the Financing
Agreements. Holding and Acquiror shall use reasonable best efforts to ensure
that the representations and warranties contained in the Financing Agreements
shall be consistent with the Commitment Letters.
(b) Holding or Acquiror shall provide prompt written notice to
the Company of (i) RCBA 's, DLJ's or CSFB's refusal or unwillingness to
provide the financing described in the Contribution and Voting Agreement or
the Commitment Letters, as the case may be, and, in each case, the stated
reasons therefor (to the extent known).
(c) In the event that any portion of the Financing becomes
unavailable in the manner or from the sources originally contemplated,
Holding and Acquiror will use their reasonable best efforts to obtain any
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such portion from alternative sources on substantially comparable terms, if
available. Holding and Acquiror acknowledge and agree that the condition set
forth in Section 9.3(c) would be satisfied if they were able to obtain
financing on terms substantially comparable to those set forth in the draft
commitment letter of CSFB dated November 9, 2000 previously delivered to the
Company.
(d) The Company acknowledges and agrees that Holding and
Acquiror shall have the right to seek to obtain alternative debt financing
that they believe to be on more favorable terms than the terms of the
Commitment Letters so long as they simultaneously continue to use their
reasonable best efforts to obtain the Financing on the terms set forth in the
Commitment Letters.
7.8. Contribution and Voting Agreement. Holding and Acquiror
shall enforce to the fullest extent permitted by applicable Laws Sections 3.1
and 4.4 of the Contribution and Voting Agreement. Sections 3.1 and 4.4 of
the Contribution and Voting Agreement shall not be amended, modified,
terminated or waived without the prior written approval of the Company and
the Special Committee or a majority of the disinterested members of the Board
of Directors.
7.9. Board Member. Holding and Acquiror agree to cause the
initial Board of Directors of Holding after the Effective Time to include one
person who is currently employed by the Company (other than Messrs. ▇▇▇▇▇ and
White) as an active broker of the Company.
ARTICLE 8
COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY
The parties hereto agree as set forth below.
8.1. Efforts and Assistance.
(a) Subject to the terms and conditions hereof, each party will
use commercially reasonable best efforts to take, or cause to be taken, all
actions, to file, or caused to be filed, all documents and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, including, without limitation, obtaining all necessary consents,
waivers, approvals, authorizations, Permits or orders from all Governmental
Entities or other Third Parties. The Company, Holding and Acquiror shall
furnish all information required to be included in the Proxy Statement, the
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Schedule 13E-3, the Registration Statement or for any application or other
filing to be made pursuant to the rules and regulations of any Governmental
Entity in connection with the transactions contemplated by this Agreement.
Holding, Acquiror and the Company shall have the right to review in advance,
and to the extent reasonably practicable each will consult the other on, all
the information relating to the other and each of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party or any Governmental Entity in connection with
the Merger. Holding and Acquiror shall act reasonably and as promptly as
reasonably practicable.
(b) Each of the Company and Holding shall make an appropriate
filing of a notification and report form pursuant to the HSR Act with respect
to the transactions contemplated hereby promptly and shall promptly respond
to any request for additional information pursuant to the HSR Act and supply
such information. In addition, the Company and Holding shall each promptly
make any other filing that is required under any Non-U.S. Competition Law.
Holding, Acquiror and the Company shall each use their commercially
reasonable efforts to resolve objections, if any, as may be asserted by any
Governmental Entity with respect to the Merger under any antitrust or trade
or regulatory Laws or regulations of any Governmental Entity, and neither the
Company nor any of the Company Subsidiaries shall agree to do any of the
actions set forth in the foregoing clause without the prior written consent
of Acquiror. Holding and Acquiror shall reasonably consult with the Company
and, subject to being permitted by the Governmental Entity to do so, the
Company shall have the right to attend and participate in any telephone calls
or meetings that Holding or Acquiror has with any Person with regard to this
Agreement and the transactions contemplated hereby.
(c) The Company agrees to provide, and will cause its
Subsidiaries and its and their respective officers, employees and advisers to
provide, such cooperation as is reasonably necessary in connection with the
arrangement of any financing to be consummated contemporaneously with or at
or after the Closing in respect of the transactions contemplated by this
Agreement, including (i) participation in meetings, due diligence sessions
and road shows, (ii) the preparation of offering memoranda, private placement
memoranda, prospectuses and similar documents, (iii) the execution and
delivery of any commitment or financing letters, underwriting , purchase or
placement agreements, pledge and security documents, other definitive
financing documents, or other requested certificates or documents and comfort
letters and consents of accountants as may be reasonably requested by Holding
and Acquiror and taking such other actions as are reasonably required to be
taken by the Company in the Commitment Letters or any other financing
arrangements contemplated by Section 7.7 hereof; provided, however, that (A)
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the terms and conditions of any of the agreements and other documents
referred to in clause (iii) shall be consistent with the terms and conditions
of the financing required to satisfy the condition precedent set forth in
Section 9.3(d), (B) the Company shall be given a reasonable amount of time to
review and comment on the terms and conditions of any of the agreements and
other documents set forth in clause (iii) prior to the execution of those
documents, (C) the terms and conditions of such financing may not require the
payment of any commitment or other fees by the Company or any of its
Subsidiaries, or the incurrence of any liabilities by the Company or any of
its Subsidiaries, prior to the Effective Time and the obligation to make any
such payment shall be subject to the occurrence of the Closing and (D) the
Company shall not be required to provide any such assistance which would
interfere unreasonably with the business or operations of the Company or its
Subsidiaries. In addition, in conjunction with the obtaining of any such
financing, the Company agrees, at the reasonable request of Holding and
Acquiror, to call for prepayment or redemption, or to prepay, redeem and/or
renegotiate, as the case may be, any then existing indebtedness of the
Company; provided that no such prepayment or redemption shall themselves
actually be made until contemporaneously with or after the Effective Time of
the Merger.
8.2. Proxy Statement and Schedule 13E-3.
(a) Reasonably promptly after execution of this Agreement, the
Company shall prepare the Proxy Statement, file the Proxy Statement with the
SEC under the Exchange Act, and use commercially reasonable efforts to have
the Proxy Statement cleared by the SEC. Holding, Acquiror and the Company
shall cooperate with each other in the preparation of the Proxy Statement,
and the Company shall notify Acquiror of the receipt of any comments of the
SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to Acquiror reasonably promptly copies of all correspondence between
the Company or any representative of the Company and the SEC. The Company
shall give Acquiror and its counsel the opportunity to review and comment on
the Proxy Statement and any other documents filed with the SEC or mailed to
the Company Stockholders prior to their being filed with, or sent to, the
SEC or mailed to its Stockholders and shall give Acquiror and its counsel the
opportunity to review and comment on all amendments and supplements to the
Proxy Statement and any other documents filed with, or sent to, the SEC or
mailed to the Company Stockholders and all responses to requests for
additional information and replies to comments prior to their being filed
with, or sent to, the SEC or mailed to its Stockholders. Each of the
Company, Holding and Acquiror agrees to use its commercially reasonable
efforts, after consultation with the other parties hereto, to respond
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promptly to all such comments of and requests by the SEC. As promptly as
practicable after the Proxy Statement has been cleared by the SEC, the
Company shall mail the Proxy Statement to the Stockholders. Prior to the
date of approval of the Merger by the Stockholders, each of the Company,
Holding and Acquiror shall correct promptly any information provided by it
and used in the Proxy Statement that shall have become false or misleading in
any material respect, and the Company shall take all steps necessary to file
with the SEC and have cleared by the SEC any amendment or supplement to the
Proxy Statement as to correct the same and to cause the Proxy Statement as so
corrected to be disseminated to the Stockholders, in each case to the extent
required by applicable Law.
(b) Promptly following the date of this Agreement, Holding,
Acquiror and the Company shall file with the SEC, and shall use all
commercially reasonable efforts to cause any of their respective Affiliates
engaging in this transaction to file with the SEC, a Schedule 13E-3 with
respect to the Merger. Each of the parties hereto agrees to use all
commercially reasonable efforts to cooperate and to provide each other with
such information as any of such parties may reasonably request in connection
with the preparation of the Proxy Statement and the Schedule 13E-3. The
Schedule 13E-3 shall be filed with the SEC concurrently with the filing of
the Proxy Statement. Each of the Company, Holding and Acquiror agrees to use
its commercially reasonable efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by
the SEC. Each party hereto agrees promptly to supplement, update and correct
any information provided by it for use in the Schedule 13E-3 if and to the
extent that such information is or shall have become incomplete, false or
misleading.
8.3. Public Announcements. The parties shall consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and shall
not issue any such press release or make any such public statement without
the prior consent of the other parties, which shall not be unreasonably
withheld or delayed, except as may be required by applicable Law or any
listing agreement with any national securities exchange.
8.4. Access to Information; Notification of Certain Matters.
(a) From the date hereof until the Effective Time and subject to
applicable Law, the Company shall (i) give to Holding and Acquiror, their
counsel, financial advisors, auditors and other authorized representatives
reasonable access to its offices, properties, books and records; (ii) furnish
or make available to Holding and Acquiror, their counsel, financial advisors,
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auditors and other authorized representatives any financial and operating
data and other information as those Persons may reasonably request; and (iii)
instruct its employees, counsel, financial advisors, auditors and other
authorized representatives to cooperate with the reasonable requests of
Holding and Acquiror in their investigation. Any investigation pursuant to
this Section shall be conducted in a manner which will not interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries and shall be in accordance with any other existing agreements or
obligations binding on the Company or any of its Subsidiaries. Unless
otherwise required by Law, each of Holding and Acquiror will hold, and will
cause its respective officers, employees, counsel, financial advisors,
auditors and other authorized representatives to hold any nonpublic
information obtained in any investigation in confidence in accordance with
and agrees to be bound by, the terms of the confidentiality letter, dated
December 15, 2000, as amended as of the date hereof (the "Confidentiality
Agreement"), among the Company and the members of the Buying Group. No
investigations pursuant to this Section 8.4(a) shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
(b) The Company shall give prompt notice to Holding and
Acquiror, and Holding and Acquiror shall give prompt notice to the Company,
of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would reasonably be expected to cause any
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate in any material respect; (ii) any failure of the Company
or Holding and Acquiror, as the case may be, to materially comply with or
satisfy, or the occurrence or nonoccurrence of any event, the occurrence or
nonoccurrence of which would reasonably be expected to cause the failure by
such party to materially comply with or satisfy , any covenant, condition or
agreement to be complied with or satisfied by it hereunder; (iii) any notice
or other communication from any Third Party alleging that the consent of such
Third Party is or may be required in connection with the transactions
contemplated by this Agreement; and (iv) the occurrence of any event,
development or circumstance which has had or would be reasonably likely to
result in a Company or Holding Material Adverse Effect; provided, however,
that the delivery of any notice pursuant to this Section 8.4(b) shall not
limit or otherwise affect the remedies available hereunder to the party
giving or receiving such notice.
8.5. Further Assurances. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use their
respective reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all other things necessary, proper or
-49-
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and otherwise to satisfy or cause to be satisfied
all conditions precedent to its obligations under this Agreement. At and
after the Effective Time, the officers and directors of the Surviving
Corporation will be authorized to execute and deliver, in the name and on
behalf of the Company or Acquiror, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the Company or
Acquiror, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
8.6. Registration Statement.
(a) Reasonably promptly after execution of this Agreement,
Holding shall prepare and file with the SEC the Registration Statement;
provided, however, that Holding and Acquiror shall use their commercially
reasonable efforts to file the Registration Statement simultaneously with the
filings of the Schedule 13E-3 and the Proxy Statement. Holding and the
Company agree to cooperate in coordinating such simultaneous filings.
Holding shall use commercially reasonable efforts to have the Registration
Statement declared effective under the Securities Act as promptly as
practicable after the filing and to keep the Registration Statement effective
as long as is necessary to offer and sell shares of common stock of Holding
to employees of the Company. Holding and the Company shall also take any
action required to be taken under any applicable state securities or blue sky
Laws in connection with the issuance of shares of common stock of Holding.
(b) Holding and the Company shall cooperate with each other in
the preparation of the Registration Statement, and Holding shall notify the
Company of the receipt of any comments of the SEC with respect to the
Registration Statement and of any requests by the SEC for any amendment
thereto or for additional information and shall provide to the Company
reasonably promptly copies of all correspondence between Holding or any
representative of the Holding and the SEC. Holding shall give the Company
and its counsel the opportunity to review the Registration Statement prior to
its being filed with the SEC and shall give the Company and its counsel the
opportunity to review all amendments to the Registration Statement and all
responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Holding will advise
the Company, promptly after it receives notice thereof, of the time when the
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Registration Statement has become effective or any supplement or amendment
has been filed, the issuance of any stop order, or any request by the SEC for
amendment of the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information. If at any time
prior to the Effective Time, the Company or Holding discovers any information
relating to either party, or any of their respective Affiliates, officers or
directors, that should be set forth in an amendment to the Registration
Statement, so that the document will not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers any misleading information shall
promptly notify the other parties hereto and an appropriate amendment
describing the information shall be promptly filed with the SEC and, to the
extent required by Law, disseminated to the recipients of the Prospectus.
(c) Subject to compliance with applicable securities Laws,
Holding and Acquiror will use their commercially reasonable efforts to
provide adequate information and communications to the employees of the
Company concerning the proposed capitalization of Holding and any proposals
of Holding or Acquiror to allow employees of the Company to purchase shares
of common stock of Holding pursuant to the Registration Statement or to
otherwise acquire equity securities of Holding.
8.7. Disposition of Litigation. The Company will consult with
Holding with respect to any Action by any Third Party to restrain or prohibit
or otherwise oppose the Merger or the other transactions contemplated by this
Agreement and, subject to Section 6.3, will resist any such effort to
restrain or prohibit or otherwise oppose the Merger or the other transactions
contemplated by this Agreement. Holding may participate in (but not control)
the defense of any stockholder litigation against the Company and its
directors relating to the transactions contemplated by this Agreement at
Holding's sole cost and expense. In addition, subject to Section 6.3, the
Company will not voluntarily cooperate with any Third Party which has sought
or may hereafter seek to restrain or prohibit or otherwise oppose the Debt
Offer, the Merger or the other transactions contemplated by this Agreement
and will cooperate with Holding to resist any such effort to restrain or
prohibit or otherwise oppose the Debt Offer, the Merger or the other
transactions contemplated by this Agreement.
8.8. Confidentiality Agreements. The parties acknowledge that
the Company and the members of the Buying Group entered into the
Confidentiality Agreement, which Confidentiality Agreement shall continue in
full force and effect in accordance with its terms until the earlier of (a)
the Effective Time or (b) the expiration of the Confidentiality Agreement
according to its terms. Without the prior written consent of Acquiror,
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neither the Company nor any Subsidiary of the Company will waive or fail to
enforce any provision of any confidentiality or similar agreement which the
Company has entered into since November 10, 2000 in connection with a
business combination relating to the Company.
8.9. Resignation of Directors. Prior to the Effective Time, the
Company shall use its commercially reasonable efforts to deliver to Acquiror
evidence satisfactory to Acquiror of the resignation of all directors of the
Company (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and W. ▇▇▇▇▇ ▇▇▇▇▇), effective at the Effective Time.
8.10. Senior Subordinated Notes.
(a) At or prior to the Effective Time, the Company, Holding and
Acquiror will take all actions as may be necessary to (i) repurchase the
aggregate principal amount of the Company's 8-7/8% Senior Subordinated Notes
due 2006 (hereinafter referred to as the "Notes") that are tendered to the
Company on the terms set forth in Section 8.10 of the Company Disclosure
Schedule and such other customary terms and conditions as are reasonably
acceptable to Acquiror and (ii) obtain the consent of holders of such
principal amount of the Notes outstanding required pursuant to terms of the
First Supplemental Indenture dated as of May 26, 1998 between the Company and
State Street Bank and Trust Company of California, National Association, as
Trustee (the "Indenture"), to amend the terms of the Indenture in the manner
set forth in Section 8.10 of the Company Disclosure Schedule (the foregoing
clauses (i) and (ii), together the "Debt Offer"). Notwithstanding the
foregoing, in no event shall the Company be required to take any action that
could obligate the Company to repurchase any Notes or incur any additional
obligations to the holders of Notes prior to the Effective Time.
(b) The Company shall waive any of the conditions to the Debt
Offer and make any other changes in the terms and conditions of the Debt
Offer as reasonably requested by the Acquiror, and the Company shall not,
without Acquiror's prior consent, waive any material condition to the Debt
Offer, make any changes to the terms and conditions of the Debt Offer set
forth in Section 8.10 of the Company Disclosure Schedule or make any other
material changes in the terms and conditions of the Debt Offer.
Notwithstanding the immediately preceding sentence, Acquiror shall not
request that the Company make any change to the terms and conditions of the
Debt Offer which decreases the price per Note payable in the Debt Offer,
changes the form of consideration payable in the Debt Offer (other than by
adding consideration) or imposes conditions to the Debt Offer in addition to
those set forth in Section 8.10 of the Company Disclosure Schedule which are
materially adverse to holders of the Notes (it being agreed that a request by
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Acquiror that the Company waive any condition in whole or in part at any time
and from time to time in its sole discretion shall not be deemed to be
materially adverse to any holder of Notes), unless such change was previously
approved in writing by the Special Committee or a majority of the
disinterested members of the Board of Directors of the Company.
(c) Promptly following the date of this Agreement, Holding,
Acquiror and the Company shall prepare an offer to purchase the Notes (or
portions thereof) and forms of the related letter of transmittal (the "Letter
of Transmittal") (collectively, the "Offer to Purchase") and summary
advertisement, as well as other information and exhibits (collectively, the
"Offer Documents"). Holding, Acquiror and the Company shall cooperate with
each other in the preparation of the Offer Documents. All mailings to the
holders of Notes in connection with the Debt Offer shall be subject to the
prior review, comment and reasonable approval of Acquiror. Provided that
this Agreement shall not have been terminated in accordance with Section 10.1
, the Company shall, promptly after request of Acquiror (but in no event
earlier than twenty calendar days after the date hereof), commence the Debt
Offer and cause the Offer Documents to be mailed to the holders of the Notes
as promptly as practicable following execution of this Agreement. The
Company, Holding and Acquiror agree promptly to correct any information in
the Offer Documents that shall be or have become false or misleading in any
material respect.
(d) In connection with the Debt Offer, if requested by Acquiror,
the Company shall promptly furnish Acquiror with security position listings,
any non-objecting beneficial owner lists and any available listings or
computer files containing the names and addresses of the beneficial owners
and/or record holders of Notes, each as of a recent date, and shall promptly
furnish Acquiror with such additional information (including but not limited
to updated lists of Noteholders, mailing labels, security position listings
and non-objecting beneficial owners lists) and such other assistance as
Acquiror or its agents may reasonably require in communicating the Debt Offer
to the record and beneficial holders of Notes.
ARTICLE 9
CONDITIONS TO MERGER
9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Holding and Acquiror to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) the Company Stockholder Approval shall have been obtained;
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(b) any applicable waiting period or required approval under the
HSR Act, Non-U.S. Competition Law or any other similar applicable Law
required prior to the completion of the Merger shall have expired or been
earlier terminated or received;
(c) no Governmental Entity of competent authority or
jurisdiction shall have issued any Law or taken any other action then in
effect, which restrains, enjoins or otherwise prohibits or makes illegal the
consummation of the Merger; provided, however, that the parties hereto shall
use their commercially reasonable efforts to have any such Law or other legal
restraint vacated; and
(d) the Registration Statement shall have been declared by the
SEC and continue to be effective.
9.2. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) (i) each of Holding and Acquiror shall have performed in all
material respects all of its obligations hereunder required to be performed
by it at or prior to the Effective Time, (ii) (A) the representations and
warranties of Holding and Acquiror contained in this Agreement that are
qualified by reference to a Holding Material Adverse Effect shall be true and
correct when made and at and as of the Effective Time, as if made at and as
of such time, and (B) all other representations and warranties of Holding and
Acquiror shall have been true and correct in all material respects when made
and at and as of the Effective Time as if made at and as of such time, and
(iii) the Company shall have received a certificate signed by the Chief
Executive Officer or President of each of Holding and Acquiror to the
foregoing effect;
(b) each of Holding and Acquiror shall have obtained or made all
consents, approvals, actions, orders, authorizations, registrations,
declarations, announcements and filings contemplated by Section 5.3, which if
not obtained or made (i) would render consummation of the Merger illegal or
(ii) (assuming the Effective Time had occurred) would be reasonably likely to
have, individually or in the aggregate, a Holding Material Adverse Effect or
a Company Material Adverse Effect; and
(c) Holding and Acquiror shall have caused the valuation firm
which has delivered a solvency letter to the financial institutions providing
the Financing (or, if no such letter has been provided thereto, a valuation
firm reasonably acceptable to the Company) to have delivered to the Company a
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letter addressed to the Special Committee and the Board of Directors in form
and substance reasonably satisfactory to the Special Committee as to the
solvency of the Company and its Subsidiaries after giving effect to the
Merger, the financing arrangements contemplated by Acquiror with respect to
the Merger and the other transactions contemplated hereby.
9.3. Conditions to the Obligations of Acquiror . The obligations
of Acquiror to consummate the Merger are subject to the satisfaction of the
following further conditions:
(a) (i) the Company shall have performed in all material
respects all of its obligations hereunder required to be performed by it at
or prior to the Effective Time, (ii) (A) the representations and warranties
of the Company contained in this Agreement that are qualified by reference to
a Company Material Adverse Effect shall be true and correct when made and at
and as of the Effective Time, as if made at and as of such time, and (B) all
other representations and warranties of the Company shall have been true and
correct in all material respects when made and at and as of the time of the
Effective Time, as if made as of such time, and (iii) Acquiror shall have
received a certificate signed by the Chief Executive Officer or Chief
Financial Officer of the Company to the foregoing effect;
(b) the Company shall have obtained or made all consents,
approvals, actions, orders, authorizations, registrations, declarations,
announcements and filings contemplated by Section 4.3 which if not obtained
or made (i) would render consummation of the Merger illegal or (ii) would be
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect; provided, however, that this condition shall be
deemed satisfied if the failure of this condition is due to willful breach by
Holding or Acquiror of any covenant or willful failure to perform any
agreement or a willful breach by Holding or Acquiror of any representation or
warranty contained in any of the agreements related to the Financing;
(c) the funding contemplated by the Commitment Letters shall
have been obtained on substantially the terms set forth in the Commitment
Letters or the funding of the alternative financing contemplated by Section
7.7 shall have been obtained; and
(d) the consents of the holders of the Notes required by Section
8.10(a) shall have been obtained.
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ARTICLE 10
TERMINATION
10.1. Termination. This Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time by written notice,
whether before or after the Company Stockholder Approval shall have been
obtained:
(a) by mutual written agreement of Holding, Acquiror and the
Company, in each case duly authorized by the Boards of Directors or a duly
authorized committee thereof;
(b) by either Acquiror or the Company, if
(i) the Merger shall not have been consummated by July 20, 2001
(the "End Date"); provided, however, that the right to terminate this
Agreement under this Section 10.1(b)(i) shall not be available to any party
whose breach of any provision of this Agreement has resulted in the failure
of the Merger to occur on or before the End Date;
(ii) there shall be any Law that makes consummation of the Merger
illegal or otherwise prohibited or any judgment, injunction, order or decree
of any Governmental Entity having competent jurisdiction enjoining the
Company or Acquiror from consummating the Merger is entered and the judgment,
injunction, judgment, order or decree shall have become final and
nonappealable and, prior to that termination, the parties shall have used
reasonable best efforts to resist, resolve or lift, as applicable, the Law,
judgment, injunction, order or decree; or
(iii) at the Company Stockholder Meeting (including any
adjournment or postponement thereof), the Company Stockholder Approval shall
not have been obtained;
(c) by the Company, (i) if a breach of any representation,
warranty, covenant or agreement on the part of Holding or Acquiror set forth
in this Agreement shall have occurred which would cause any of the conditions
set forth in Section 9.2(a) not to be satisfied, and such condition shall be
incapable of being satisfied by the End Date; or (ii) as contemplated by
Section 6.3(e); provided, however, that termination of this Agreement
pursuant to this clause (ii) shall not be effective until the Termination Fee
has been paid to Acquiror in accordance with Section 10.2(b);
(d) by Acquiror if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement shall have occurred which would cause any of the
conditions set forth in Section 9.3(a) not to be satisfied, and such
condition is incapable of being satisfied by the End Date; or
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(e) by Acquiror if the Board of Directors of the Company or the
Special Committee shall (i) (A) amend, withdraw, modify, change, condition or
qualify the Company Recommendation in a manner adverse to Holding and
Acquiror; (B) approve or recommend to the Company Stockholders an Acquisition
Proposal (other than by Holding, Acquiror or their Affiliates); or (C)
approve or recommend that the Company Stockholders tender their Company
Shares in any tender or exchange offer that is an Acquisition Proposal (other
than by Holding, Acquiror or their Affiliates); (ii) deliver any notice
pursuant to Section 6.3(e) that it intends to terminate this Agreement and
such notice is not unconditionally withdrawn prior to the third Business Day
following such delivery; (iii) in the case of the Board of Directors, the
Special Committee or any other duly authorized committee thereof, approve a
resolution or agree to do any of the foregoing (it being understood and
agreed that the delivery of notice pursuant to Section 6.3(e) and any
subsequent public announcement of such notice shall not entitle Acquiror to
terminate this Agreement pursuant to this Section 10.1(e), provided such
notice is unconditionally withdrawn prior to the third Business Day following
delivery and the Company has previously unconditionally terminated any
agreement entered into in connection with the related Acquisition Proposal);
or (iv) any Person or group (other than Holding, Acquiror or their
Affiliates) acquires beneficial ownership of a majority of the outstanding
Company Shares.
10.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 10.1
(including any termination by way of Section 6.3), there shall be no
liability or obligation on the part of Holding, Acquiror, the Company or any
of their respective officers, directors, Stockholders, agents or Affiliates,
except no such termination shall relieve any party hereto of any liability or
damages resulting from any willful breach of this Agreement; provided that
the provisions of Sections 8.3, 8.8, 10.2 and 10.3 and Article 11 of this
Agreement, shall remain in full force and effect and survive any termination
of this Agreement.
(b) In the event that this Agreement is terminated by Acquiror
pursuant to Section 10.1(e) or by the Company pursuant to Section
10.1(c)(ii), the Company shall pay to RCBA by wire transfer of immediately
available funds to an account designated by RCBA on the next Business Day
following such termination a cash amount equal to the sum of $7,500,000 plus
all reasonable and documented out-of-pocket expenses and fees incurred by
Holding and its stockholders on or prior to the termination of this Agreement
in connection with the transactions contemplated by this Agreement; provided,
however, that the aggregate amount of expenses and fees to be paid by the
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Company shall not exceed $3,000,000 (collectively, the "Termination Fee").
This Section 10.2(b) is intended to be for the benefit of, and shall be
enforceable by, RCBA.
(c) In the event that (i) this Agreement is terminated pursuant
to Sections 10.1(b)(iii) or 10.1(d), (ii) an Acquisition Proposal (with all
percentages included in the definition of Acquisition Proposal increased to
51% for purposes of this definition) has been made prior to the Company
Stockholder Meeting or such termination (and, in the case of Section 10.1(d),
prior to the breach giving rise to termination) and (iii) a transaction
contemplated by an Acquisition Proposal (with all percentages included in the
definition of Acquisition Proposal increased to 51% for purposes of this
definition) is completed or a definitive agreement is executed by the parties
thereto with respect to an Acquisition Proposal (with all percentages
included in the definition of Acquisition Proposal increased to 51% for
purposes of this definition) within twelve (12) months from the date this
Agreement is terminated, the Company shall pay to RCBA by wire transfer of
immediately available funds to an account designated by RCBA on the next
Business Day following the closing of the transaction contemplated by such
Acquisition Proposal, a cash amount equal to the Termination Fee.
10.3. Fees and Expenses. Except as otherwise specifically
provided herein, all fees and expenses incurred in connection herewith and
the transactions contemplated hereby shall be paid by the party incurring
expenses, whether or not the Merger is consummated.
ARTICLE 11
MISCELLANEOUS
11.1. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to Holding or Acquiror, to:
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as a party may hereafter specify
for the purpose by notice to the other parties hereto. Each notice, request
or other communication shall be effective only (a) if given by facsimile,
when the facsimile is transmitted to the facsimile number specified in this
Section and the appropriate facsimile confirmation is received or (b) if
given by overnight courier or personal delivery when delivered at the address
specified in this Section.
11.2. Survival of Representations, Warranties and Covenants after
the Effective Time. The representations and warranties contained herein and
in any certificate or other writing delivered pursuant hereto shall not
survive the Effective Time or the termination of this Agreement. The
covenants contained in Articles 2, 3, 7 and 11 shall survive the Effective
Time.
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11.3. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time, if, and only if, the amendment or waiver is in
writing and signed, in the case of an amendment, by the Company, Holding and
Acquiror or in the case of a waiver, by the party against whom the waiver is
to be effective; provided, however, that after the Company Stockholder
Approval, no such amendment or waiver shall, without the further approval of
the Company Stockholders, be made that would require such approval under any
applicable Law. Notwithstanding the foregoing, any amendment or waiver
agreed to by the Company shall be effective only if authorized or approved in
writing by the Special Committee or a majority of the members of the Board of
Directors not affiliated with the Buying Group.
(b) At any time prior to the Effective Time, any party hereto
may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts of such party and (b)
waive any inaccuracies in the representations and warranties of such party
contained herein or in any document delivered pursuant hereto; provided,
however, that any extension or waiver agreed to by the Company shall be
effective only if authorized or approved in writing by the Special Committee
or a majority of the members of the Board of Directors not affiliated with
the Buying Group. No such extension or waiver shall be deemed or construed
as a continuing extension or waiver on any occasion other than the one on
which such extension or waiver was granted or as an extension or waiver with
respect to any provision of this Agreement not expressly identified in such
extension or waiver on the same or any other occasion. No failure or delay
by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by Law.
11.4. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that all or any
of the rights or obligations of Holding or Acquiror may be assigned to any
direct or indirect wholly-owned Subsidiary of such party (which assignment
shall not relieve such assigning party of its obligations hereunder);
provided, further, that other than with respect to the foregoing proviso, no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties
hereto. Any purported assignment in violation hereof shall be null and void.
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11.5. Counterparts; Effectiveness; Third Party Beneficiaries.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by all
of the other parties hereto. Except as set forth in Section 7.1 and Section
10.2(b), no provision of this Agreement is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
11.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal Laws of the State of Delaware
applicable to contracts executed and fully performed within the state of
Delaware.
11.7. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that 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 transactions contemplated hereby
shall be brought in the United States District Court for the District of
Delaware or, if such court does not have jurisdiction over the subject matter
of such proceeding or if such jurisdiction is not available, in the Court of
Chancery of the State of Delaware, County of New Castle, and each of the
parties hereby consents to the exclusive jurisdiction of those courts (and of
the appropriate appellate courts therefrom) in any suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by Law, any objection
which it may now or hereafter have to the laying of the venue of any suit,
action or proceeding in any of those courts or that any suit, action or
proceeding which is brought in any of those courts has been brought in an
inconvenient forum. Process in any suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the
jurisdiction of any of the named courts. Without limiting the foregoing,
each party agrees that service of process on it by notice as provided in
Section 11.1 shall be deemed effective service of process.
11.8. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are
entitled at Law or in equity.
11.9. Entire Agreement. This Agreement (together with the
exhibits and schedules hereto) and the Confidentiality Agreement constitute
the entire agreement between the parties with respect to the subject matter
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hereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof.
11.10. Authorship. The parties agree that the terms and language
of this Agreement were the result of negotiations between the parties and, as
a result, there shall be no presumption that any ambiguities in this
Agreement shall be resolved against any party. Any controversy over
construction of this Agreement shall be decided without regard to events of
authorship or negotiation.
11.11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
11.12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
11.13. Headings; Construction. The headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. In this Agreement (a)
words denoting the singular include the plural and vice versa, (b) "it" or
"its" or words denoting any gender include all genders, (c) the word
"including" shall mean "including without limitation," whether or not
expressed, (d) any reference herein to a Section, Article, Paragraph, Clause
or Schedule refers to a Section, Article, Paragraph or Clause of or a
Schedule to this Agreement, unless otherwise stated, and (e) when calculating
the period of time within or following which any act is to be done or steps
taken, the date which is the reference day in calculating such period shall
be excluded and if the last day of such period is not a Business Day, then
the period shall end on the next day which is a Business Day.
***
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
▇▇▇▇ ▇▇ HOLDING CORP. CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ SERVICES, INC.
By: ________________________ By:_____________________________
Its:________________________ Its:____________________________
▇▇▇▇ ▇▇ CORP.
By: ________________________
Its: _______________________
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