EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
KUONI REISEN HOLDING AG,
DIAMOND HOLDING DELAWARE, INC.,
DIAMOND ACQUISITION SUBSIDIARY MISSOURI, INC.
AND
INTRAV, INC.
Dated as of
July 16, 1999
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TABLE OF CONTENTS
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Page
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ARTICLE I - TERMS OF THE MERGER 1
1.1 The Merger 1
1.2 Effective Time 1
1.3 Merger Consideration 2
1.4 Shareholders' Rights upon Merger 2
1.5 Dissenting Shares 3
1.6 Surrender and Exchange of Shares 3
1.7 Options and Warrants 5
1.8 Articles of Incorporation 5
1.9 By-Laws 5
1.10 Other Effects of Merger 5
1.11 Further Adjustments 6
1.12 Additional Actions 6
ARTICLE II - REPRESENTATIONS, WARRANTIES AND CERTAIN
COVENANTS OF TARGET 6
2.1 Organization and Good Standing 6
2.2 Capitalization 7
2.3 Subsidiaries 7
2.4 Authorization; Binding Agreement 8
2.5 Governmental Approvals 9
2.6 No Violations 10
2.7 Securities Filings and Litigation 10
2.8 Target Financial Statements 11
2.9 Absence of Certain Changes or Events 12
2.10 Compliance with Laws 12
2.11 Permits. 13
2.12 Finders and Investment Bankers 13
2.13 Contracts 13
2.14 Employee Benefit Plans 14
2.15 Taxes and Tax Returns 15
2.16 Liabilities 17
2.17 Environmental Matters 18
2.18 Intellectual Property 18
2.19 Real Estate 19
2.20 Corporate Records 20
2.21 Title to and Condition of Personal Property 20
2.22 No Adverse Actions 20
2.23 Labor Matters 20
2.24 Change of Control Agreements 21
2.25 Insurance 21
2.26 Information Supplied 22
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2.27 Takeover Statutes 22
2.28 Year 2000 22
2.29 Target Options 23
2.30 Transactions with Affiliates 23
2.31 No Existing Discussions 23
2.32 Disclosure 23
ARTICLE III - REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
OF PARENT AND ACQUIROR 24
3.1 Organization and Good Standing 24
3.2 Authorization; Binding Agreement 24
3.3 Governmental Approvals 25
3.4 No Violations 25
3.5 Finders and Investment Bankers 25
3.6 Information Supplied 25
3.7 Financial Ability 26
ARTICLE IV - ADDITIONAL COVENANTS OF TARGET 26
4.1 Conduct of Business of Target and Target Subsidiaries 26
4.2 Notification of Certain Matters 29
4.3 Access and Information 29
4.4 Shareholder Approval; Proxy Statement; Shareholder Lists 29
4.5 Reasonable Business Efforts 31
4.6 Public Announcements 31
4.7 Compliance 31
4.8 Benefit Plans 32
4.9 No Solicitation of Takeover Proposal 32
4.10 Securities and Shareholder Materials 34
4.11 Resignations 34
4.12 Noncompete and Confidentiality Agreements 34
4.13 Comfort Letters 35
4.14 Takeover Statutes 35
4.15 Year 2000 Plan 35
4.16 Purchase of Target Common Stock 35
4.17 Conversion of Options 35
4.18 Disposition of U.S. Flagged Vessels;
Non-U.S. Flagged Vessels 36
4.19 Amendments to Articles of Incorporation and By-Laws 36
ARTICLE V - ADDITIONAL COVENANTS OF PARENT AND ACQUIROR 37
5.1 Public Announcements 37
5.2 Compliance 37
5.3 Proxy Statement 37
5.4 Indemnification and Insurance 38
5.5 Advisory Committee 39
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ARTICLE VI - CONDITIONS 39
6.1 Conditions to Each Party's Obligations 39
6.1.1 Shareholder Approval 39
6.1.2 No Injunction or Action 40
6.1.3 ▇▇▇ ▇▇▇ ▇▇
6.1.4 Exon-▇▇▇▇▇▇ Amendment 40
6.1.5 Opinion of Financial Advisor 40
6.1.6 Governmental Approvals 40
6.2 Conditions to Obligations of Target 41
6.2.1 Acquiror Representations and Warranties 41
6.2.2 Performance by Parent and Acquiror 41
6.2.3 Certificate 41
6.3 Conditions to Obligations of Acquiror 41
6.3.1 Target Representations and Warranties 41
6.3.2 Performance by Target 42
6.3.3 No Material Adverse Change 42
6.3.4 No Pending Action 42
6.3.5 Dissenting Shares 42
6.3.6 Required Consents 42
6.3.7 Certificates and Other Deliveries 43
6.3.8 Opinion of Target Counsel 43
6.3.9 Comfort Letters 43
6.3.10 Vessels 43
6.3.11 Environmental Representations and Warranties 44
ARTICLE VII - TERMINATION AND ABANDONMENT 44
7.1 Termination 44
7.2 Termination Fees and Rights 45
7.3 Procedure Upon Termination 46
ARTICLE VIII - MISCELLANEOUS 46
8.1 Confidentiality 46
8.2 Amendment and Modification 47
8.3 Waiver of Compliance; Consents 47
8.4 Survival of Representations and Warranties 47
8.5 Notices 48
8.6 Binding Effect; Assignment 49
8.7 Expenses 49
8.8 Governing Law 49
8.9 Counterparts 49
8.10 Interpretation 49
8.11 Entire Agreement 50
8.12 Severability 50
8.13 Specific Performance 50
8.14 Third Parties 50
8.15 Schedules 50
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LIST OF SCHEDULES
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SCHEDULE DESCRIPTION
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2.2(a) Rights, Subscriptions, Warrants, Options, etc., with
Respect to Stock
2.2(b) Restrictions with Respect to Stock
2.3(a) Target Ownership Interests
2.3(b) Claims as to Capital Stock and Other Interests Held
2.3(c) Rights with respect to Target Subsidiary Securities
2.5 Regulatory Consents
2.6 Target Required Approvals
2.7 Target Litigation
2.9 Target Subsequent Events
2.10 Compliance with Laws
2.13 Target Material Contracts
2.14 Target Employee Benefit Plans
2.15 Target Tax Matters
2.16 Target Liabilities
2.17 Target Environmental Matters
2.18(a)(1) Target Intellectual Property
2.18(a)(2) Target Intellectual Property Exceptions
2.18(b) Computer Software Program Exceptions
2.19(b) Target Leased Real Property
2.20 Target Records Off Premises
2.22 Target Adverse Actions
2.23 Target Labor Matters
2.24 Target Change of Control Agreements
2.30 Target Affiliate Transactions
4.12 Form of Noncompete and Confidentiality Agreements
6.3.8 Opinion of Counsel to Target
LIST OF EXHIBITS
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EXHIBIT DESCRIPTION
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4.18(a) Form of Charter Agreement
6.3.10 Letter Agreement
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GLOSSARY OF DEFINED TERMS
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Term Page Where
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Acquiror 1
Acquiror Ancillary Agreements 26
Acquiror Material Adverse Effect 25
Acquiror Material Contract 27
Acquiror Modified Representation 43
Acquiror Nonmodified Representation 43
Acquisition Agreement 35
Acquisition Subsidiary 1
affiliate 52
Agreement 1
Articles Amendment 38
associate 52
Benefit Plan 15
Certificate of Merger 2
Certificates 3
Claim Notice 19
Closing 2
Closing Date 2
Code 5
Consent 10
Costs 40
Dissenting Shares 3
Effective Time 2
Enforceability Exceptions 9
Environmental Laws 19
ERISA 15
Event 12
Exchange Agent 3
Exon-▇▇▇▇▇▇ Amendment 10
Final Order 43
Governmental Authority 10
HSR Act 10
Indemnified Parties 40
Intellectual Property 19
IRS 15
Law 11
Letter of Transmittal 3
Litigation 11
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Majority Shareholder 1
Majority Shareholder Agreement 1
Merger 1
Merger Consideration 2
Missouri Code 1
Multi-employer Plan 15
NASD 10
Noncompete and Confidentiality Agreements 36
Option Consideration 5
Options 5
Parent 1
person 52
Proxy Statement 31
Representatives 34
Resignations 36
SEC 11
Securities Act 8
Securities Exchange Act 8
shareholder 53
Shareholders' Meeting 31
Subsidiary 7
Superior Proposal 35
Surviving Corporation 1
Surviving Corporation Common Stock 3
Surviving Corporation Material Adverse Effect 42
Takeover Proposal 34
Takeover Statute 23
Target 1
Target Ancillary Agreements 9
Target Approved Budget 13
Target Common Stock 2
Target Financial Statements 12
Target Material Adverse Effect 7
Target Material Contract 14
Target Minority Entity 8
Target Modified Representation 44
Target Nonmodified Representation 44
Target Permits 13
Target Real Property Leases 20
Target Securities Filings 11
Target Shareholders' Approval 9
Target Shares 2
Target Subsidiaries 7
Tax 16
Tax Return 16
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Termination Fee 49
Year 2000 Compliant 24
Year 2000 Plan 24
Year 2000 Problem 24
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AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
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entered into as of July 16, 1999, by and among KUONI REISEN HOLDING AG,
a Swiss corporation incorporated in the Canton of Zurich, Switzerland
("Parent"), DIAMOND HOLDING DELAWARE, INC., a Delaware corporation
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("Acquiror"), DIAMOND ACQUISITION SUBSIDIARY MISSOURI, INC., a
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Missouri corporation and wholly owned subsidiary of Acquiror
("Acquisition Subsidiary") and INTRAV, INC., a Missouri corporation
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("Target").
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Recitals
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A. The respective Boards of Directors of Target, Parent,
Acquisition Subsidiary and Acquiror have approved the merger (the
"Merger") of Acquisition Subsidiary with and into Target in accordance
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with the laws of the State of Missouri and the provisions of this
Agreement.
B. Target, Acquisition Subsidiary, Acquiror, and Parent desire
to make certain representations, warranties and agreements in connection
with, and establish various conditions precedent to, the Merger.
C. Concurrently with the execution and delivery of this
Agreement, Acquiror is entering into an agreement (the "Majority
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Shareholder Agreement") with the majority shareholder of Target (the
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"Majority Shareholder") whereby, among other things, the Majority
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Shareholder will grant an option to Acquiror to purchase certain shares
of Target Common Stock (as hereinafter defined) held by the Majority
Shareholder and the Majority Shareholder will agree to vote (or grant
Acquiror a proxy to vote) such shares in favor of the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
ARTICLE I
TERMS OF THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions
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of this Agreement, the Merger shall be consummated in accordance with
The General and Business Corporation Law of Missouri (the "Missouri
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Code"). At the Effective Time (as defined in Section 1.2, below),
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upon the terms and subject to the conditions of this Agreement,
Acquisition Subsidiary shall be merged with and into Target in
accordance with the Missouri Code and the separate existence of
Acquisition Subsidiary shall thereupon cease, and Target, as the
surviving corporation in the Merger (the "Surviving Corporation"),
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shall continue its corporate existence under the laws of the State of
Missouri as a subsidiary of Acquiror. Acquiror shall prepare and Target
shall execute articles of merger (the "Certificate of Merger") in
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order to comply in all respects with the requirements of the Missouri
Code and with the provisions of this Agreement.
1.2 EFFECTIVE TIME. The Merger shall become effective at the
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time of the filing of the Certificate of Merger with the Secretary of
Stateof the State of Missouri in accordance with the
applicable provisions of the Missouri Code or at such later time as may
be specified in the Certificate of Merger. The Certificate of Merger
shall be filed as soon as practicable after all of the conditions set
forth in this Agreement have been satisfied or waived by the party or
parties entitled to the benefit of the same. Acquiror, after
consultation with Target, shall determine the time of such filing (which
in no event shall be more than five (5) business days after all of the
conditions set forth in this Agreement have been satisfied or waived by
the party or the parties entitled to the benefit of the conditions) and
the place where the closing of the Merger (the "Closing") shall occur.
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The time when the Merger shall become effective is herein referred to as
the "Effective Time" and the date on which the Effective Time occurs
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is herein referred to as the "Closing Date."
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1.3 MERGER CONSIDERATION.
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(a) Subject to the provisions of this Agreement and any
applicable backup or other withholding requirements, each of the issued
and outstanding shares ("Target Shares") of common stock, par value
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$0.01 per share, of Target ("Target Common Stock") (other than shares
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canceled pursuant to Section 1.3(b) and Dissenting Shares (as
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hereinafter defined), if any) as of the Effective Time shall by virtue
of the Merger and without any action on part of the holder thereof, be
converted into the right to receive, and there shall be paid as
hereinafter provided, in exchange for each of the Target Shares, $21.32
(the "Merger Consideration"), payable to the holder thereof, in cash,
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without interest thereon, upon the surrender of the certificate formerly
representing such Target Share in the manner provided in Section 1.6.
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(b) Each share of Target Common Stock issued and outstanding
immediately prior to the Effective Time that is owned by Parent,
Acquiror or Acquisition Subsidiary and each share of Target Common Stock
held in the treasury of Target or by a wholly owned subsidiary of Target
shall be canceled as of the Effective Time and no Merger Consideration
shall be payable with respect thereto. From and after the Effective
Time, there shall be no further transfers on the stock transfer books of
Target of any of the Target Shares outstanding prior to the Effective
Time. If, after the Effective Time, Certificates (as hereinafter
defined) are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration provided for in, and
in accordance with the procedures set forth in, this Agreement.
(c) Subject to the provisions of this Agreement, at the
Effective Time, the shares of Acquisition Subsidiary common stock
outstanding immediately prior to the Merger shall be converted, by
virtue of the Merger and without any action on the part of the holder
thereof, into one validly issued, fully paid and nonassessable share of
the common stock of the Surviving Corporation (the "Surviving
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Corporation Common Stock"), which share of the Surviving Corporation
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Common Stock shall constitute all of the issued and outstanding capital
stock of the Surviving Corporation.
1.4 SHAREHOLDERS' RIGHTS UPON MERGER. Upon consummation of
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the Merger, the certificates which theretofore represented Target Shares
(other than Dissenting Shares) (the "Certificates") shall cease to
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represent any rights with respect thereto, and, subject to applicable
Law (as hereinafter defined) and this Agreement, the Certificates shall
only represent the right to receive the Merger Consideration.
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1.5 DISSENTING SHARES. (a) Notwithstanding anything in this
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Agreement to the contrary, Target Shares which are issued and
outstanding immediately prior to the Effective Time and which are held
by holders of Target Common Stock who have demanded and exercised any
dissenters' rights in the manner provided under the Missouri Code, if
applicable and, as of the Effective Time, have neither effectively
withdrawn nor lost their rights to payment under the Missouri Code (the
"Dissenting Shares"), shall not be converted into or be exchangeable
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for the right to receive the Merger Consideration, unless and until such
holder shall have failed to exercise or shall have effectively withdrawn
or lost such holder's right to payment under the Missouri Code. If such
holder shall have so failed to exercise or shall have effectively
withdrawn or lost such right, such holder's Shares shall thereupon be
deemed to have been converted into and to have become exchangeable for,
at the Effective Time, the right to receive the Merger Consideration
provided for in this Agreement, without any interest thereon.
(b) Target shall give Acquiror (i) prompt notice of any demands
for appraisal and payment pursuant to Section 351.455 of the Missouri
Code received by Target, withdrawals of such demands, and any other
instruments served pursuant to the Missouri Code, and received by Target
and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal and payment under the Missouri Code.
Target shall not, except with the prior written consent of Acquiror or
as otherwise required by applicable law, make any payment with respect
to any such demands for appraisal and payment or offer to settle or
settle any such demands.
1.6 SURRENDER AND EXCHANGE OF SHARES.
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(a) Prior to the Effective Time, Acquiror shall designate
ChaseMellon Shareholder Services, L.L.C. or such other bank or trust
company as it may designate to act as exchange agent in the Merger (the
"Exchange Agent"). Parent shall cause Acquiror to deposit with the
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Exchange Agent the funds as necessary to make the payments contemplated
herein on a timely basis. Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each holder of Target
Shares a form of letter of transmittal (the "Letter of Transmittal")
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and instructions for use in effecting the surrender of the Certificates
pursuant to such Letter of Transmittal. After the Effective Time, each
holder of Target Shares (other than Dissenting Shares) shall surrender
and deliver the Certificates to the Exchange Agent together with a duly
completed and executed Letter of Transmittal and any other required
documents. Upon such surrender and delivery, the holder shall be
entitled to receive in exchange therefor the Merger Consideration, and
such Certificates shall forthwith be canceled. No interest will be paid
or accrued on the cash payable upon the surrender of the Certificates.
If payment is to be made to a person other than the person in whose name
the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed
or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of
the payment to a person other than the registered holder of the
Certificate surrendered or establish to the reasonable satisfaction of
the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this
Section 1.6 and exchanged, each outstanding Certificate after the
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Effective Time (other than Certificates representing Dissenting Shares)
shall be deemed for all purposes only to evidence the right to receive
the Merger Consideration, without any interest thereon.
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(b) At any time following the sixth (6th) month after the
Effective Time, the Surviving Corporation shall be entitled to require
the Exchange Agent to deliver to it any portion of the funds which had
been made available to the Exchange Agent and not disbursed to holders
of shares of Target Common Stock (including, without limitation, all
interest and other income received by the Exchange Agent in respect of
all amounts of funds made available to it), and thereafter each such
holder shall be entitled to look only to the Surviving Corporation
(subject to abandoned property, escheat and other similar laws), and
only as general creditors thereof, with respect to any Merger
Consideration that may be payable upon due surrender of the Certificates
held by such holder. If any Certificates representing shares of Target
Common Stock shall not have been surrendered immediately prior to such
date on which the Merger Consideration in respect of such Certificate
would otherwise escheat to or become the property of any Governmental
Entity (as hereinafter defined), any such cash, shares, dividends or
distributions payable in respect of such Certificate shall, to the
extent permitted by applicable Law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto. Notwithstanding the foregoing, none of the
Surviving Corporation, Acquiror, Acquisition Subsidiary or the Exchange
Agent shall be liable to any holder of a share of Target Common Stock
for any Merger Consideration delivered in respect of such share of
Target Common Stock to a public official pursuant to any abandoned
property, escheat or other similar Law.
(c) At the Effective Time, the stock transfer books of Target
shall be closed and thereafter there shall be no further registration of
transfers of shares of Target Common Stock on the records of Target.
Except for Parent, Acquiror and Acquisition Subsidiary, the holders of
shares of Target Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights, from and after the
Effective Time, with respect to such shares of Target Common Stock
except as otherwise provided herein or by applicable Law, and all cash
paid pursuant to this Article I upon the surrender or exchange of
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Certificates shall be deemed to have been paid in full satisfaction of
all rights pertaining to the shares of Target Common Stock theretofore
represented by such Certificate.
(d) Parent, Acquiror, Acquisition Subsidiary, the Surviving
Corporation and the Exchange Agent, as the case may be, shall be
entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of shares of Target
Common Stock and Options (as hereinafter defined) such amounts that
Parent, Acquiror, Acquisition Subsidiary, the Surviving Corporation or
the Exchange Agent is required to deduct and withhold with respect to
the making of such payment under the Internal Revenue Code of 1986, as
amended (the "Code"), the rules and regulations promulgated thereunder
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or any provision of state, local or foreign tax Law. To the extent that
amounts are so withheld by Parent, Acquiror, Acquisition Subsidiary, the
Surviving Corporation or the Exchange Agent, such amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares of Target Common Stock and Options in respect of
which such deduction and withholding was made by Acquiror, Acquisition
Subsidiary, the Surviving Corporation or the Exchange Agent.
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1.7 OPTIONS AND WARRANTS.
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(a) Prior to the Effective Time, Target shall cause each
outstanding and unexpired option or warrant to purchase Shares described
in Schedule 2.2 (an "Option" and, collectively, the "Options"), to
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be converted into the right to receive from the Surviving Corporation an
amount of cash equal to the product of (i) the number of Shares subject
to the Option and (ii) the excess, if any, of the Merger Consideration
over the exercise price per Share of such Option (the "Option
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Consideration")), as contemplated by Section 4.17. Prior to the
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Effective Time, Target shall cause each Option to be converted as
described herein, and shall take all steps necessary to give written
notice to each holder of an Option that: (i) all Options shall be
canceled effective as of the Effective Time; and (ii) the Option
Consideration for such Options held by each holder shall be payable as
described in Section 1.7(b). The Board of Directors of Target or any
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committee thereof responsible for the administration of any plans under
which Options have been granted shall take any and all action necessary
to effectuate matters described in this Section 1.7 and Section 4.17
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on or before the Effective Time.
(b) The Option Consideration shall be payable by the Surviving
Corporation to each holder of Options promptly following the Effective
Time, only after (i) verification by the Acquiror and the Surviving
Corporation of the ownership and terms of the particular Option by
reference to the Surviving Corporation's records, and (ii) delivery of
a written instrument duly executed by the holder of the applicable
Option, in a form provided by Target and acceptable to Acquiror and
setting forth (x) the aggregate number of Options owned by that person
and their respective issue dates and exercise prices, (y) a
representation by the person that he or she is the owner of all Options
described pursuant to clause (x) and that none of those Options has
expired or ceased to be exercisable and (z) a confirmation of, and
consent to, the cancellation and/or conversion of all Options held by
such person effective as of the Effective Time, as contemplated by this
Section 1.7 and Section 4.17.
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(c) Any amounts payable pursuant to this Section 1.7 shall be
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subject to any required withholding of taxes and shall be paid without
interest.
1.8 ARTICLES OF INCORPORATION. At and after the Effective
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Time, the Articles of Incorporation of the Surviving Corporation shall
be amended and restated in their entirety to read as the Articles of
Incorporation of the Acquisition Subsidiary in effect at the Effective
Time except that Article First shall be amended to read as follows:
"The name of the corporation is Intrav, Inc." (subject to any
subsequent amendment).
1.9 BY-LAWS. At and after the Effective Time, the By-Laws of
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Acquisition Subsidiary in effect at the Effective Time shall be the By-
Laws of the Surviving Corporation (subject to any subsequent
amendment).
1.10 OTHER EFFECTS OF MERGER. The directors and officers of
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Acquisition Subsidiary at the Effective Time shall be the initial
directors and officers of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are
duly elected or appointed and qualify in the manner provided in the
Articles of Incorporation and By-Laws of the Surviving
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Corporation, or as otherwise provided by Law. The Merger shall have
all further effects as specified in the applicable provisions of the
Missouri Code.
1.11 FURTHER ADJUSTMENTS. If, at any time the Target Shares
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are changed into a different number of shares or a different
class by reason of any reclassification, recapitalization, split-up,
combination, exchange or readjustment of Target's capital stock or
if a dividend thereon is declared with a record date prior to the
termination of this Agreement, or if the representations in Section 2.2
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of the Merger Agreement are or become untrue, then the merger consideration
provisions of this Agreement shall be appropriately adjusted.
1.12 ADDITIONAL ACTIONS. If, at any time after the Effective
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Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record
or otherwise in the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of Acquisition
Subsidiary or Target or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized
to execute and deliver, in the name and on behalf of Acquisition
Subsidiary or Target, as the case may be, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name and on
behalf of Acquisition Subsidiary or Target, as the case may be, all
such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF TARGET
Target represents, warrants and/or covenants to and with Parent
and Acquiror as follows:
2.1 ORGANIZATION AND GOOD STANDING. Target and each of its
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Subsidiaries (as defined below) (the "Target Subsidiaries") is a
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corporation, limited liability company or partnership duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate, limited liability company or partnership power and authority
to own, lease and operate its properties and to carry on its business
as now being conducted. Target and each of Target Subsidiaries is duly
qualified and in good standing to do business in each jurisdiction in
which the character of the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so duly qualified and in good
standing would not have a Target Material Adverse Effect (as defined
below). For purposes of this Agreement, "Target Material Adverse Effect"
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shall mean a material adverse effect on (i) the business, assets,
condition (financial or otherwise), properties, liabilities, prospects
or the results of operations of Target and Target Subsidiaries taken
as a whole, (ii) the ability of Target to perform its obligations set
forth in this Agreement and the Target Ancillary Agreements (as
hereinafter defined), or (iii) the ability to timely consummate the
transactions contemplated by this Agreement and the Target Ancillary
Agreements. Target has delivered to Acquiror a complete and accurate
list of the jurisdictions of incorporation or organization and qualification
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of Target and Target Subsidiaries. Target has heretofore delivered to
Acquiror accurate and complete copies of the Certificates or Articles
of Incorporation and By-Laws, or equivalent governing instruments, as
currently in effect, of Target and each of the Target Subsidiaries.
"Subsidiary" means, with respect to any person, any affiliate
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controlled by such person directly, or indirectly through one or more
intermediaries, and shall include, without limitation, any corporation,
partnership, joint venture, limited liability company, trust, estate or
other organization or entity, of which (or in which) 50% or more of:
(i) the issued and outstanding shares of capital stock having ordinary
voting power to elect a majority of the board of directors or others
performing similar functions with respect thereto of such corporation
or other organization (irrespective of whether at the time shares of
capital stock or other interests of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency); (ii) the interest in the capital or profits of such
partnership, joint venture, limited liability company or other
organization or entity; or (iii) the beneficial interest in such trust
or estate; is at the time, directly or indirectly, owned or controlled
by such person, by such person and one or more of its other
subsidiaries or by one or more of such person's other subsidiaries.
2.2 CAPITALIZATION. As of the date hereof, the authorized
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capital stock of Target consists of 20,000,000 shares of Target Common
Stock and 5,000,000 shares of preferred stock. As of the opening of
business on the date hereof, (a) 5,114,200 shares of Target Common
Stock were issued and outstanding, (b) 210,800 shares of Target Common
Stock were issued and held in the treasury of Target, and (c) Options
to purchase 515,000 shares of Target Common Stock were issued and
outstanding with an aggregate exercise price of such Options being
$5,734,000. No other capital stock of Target is issued or outstanding.
All issued and outstanding shares of the Target Common Stock are duly
authorized, validly issued, fully paid and non-assessable and were
issued free of preemptive rights and in compliance with applicable
corporate and securities Laws (as hereinafter defined). Except as set
forth on Schedule 2.2(a) attached hereto, as of the date of this
---------------
Agreement there are no outstanding rights, reservations of shares,
subscriptions, warrants, puts, calls, unsatisfied preemptive rights,
options or other agreements of any kind relating to any of the capital
stock or any other security of Target, and there is no authorized or
outstanding security of any kind convertible into or exchangeable for
any such capital stock or other security. There are no restrictions
upon the transfer of or otherwise pertaining to the securities
(including, but not limited to, the ability to pay dividends thereon)
or retained earnings of Target and the Target Subsidiaries or the
ownership thereof other than those, if any, described on
Schedule 2.2(b) attached hereto or those imposed generally by federal
---------------
Merchant Marine Act of 1936, as amended, the federal Shipping Act of
1916, as amended, the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended
--------------
(the "Securities Exchange Act"), applicable state or foreign
-----------------------
securities Laws or applicable corporate Law.
2.3 SUBSIDIARIES. Schedule 2.3(a) attached hereto sets
------------ ---------------
forth the name and percentages of outstanding capital stock or other
interest held, directly or indirectly, by Target and other persons,
with respect to Target's Subsidiaries or other persons in which Target
or a Target Subsidiary holds, directly or indirectly, any capital stock
or other interest (a "Target Minority Entity"). Except as set forth
----------------------
on Schedule 2.3(b) attached hereto, all of the capital stock and
---------------
other interests so held by Target are owned by it or a Target
Subsidiary as indicated on said
7
Schedule 2.3(a), free and clear of any claim, lien, encumbrance,
---------------
security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Target Subsidiaries
are duly authorized, validly issued, fully paid and non-assessable and
were issued free of preemptive rights and in compliance with applicable
Laws. Except as set forth on Schedule 2.3(c) attached hereto, there
---------------
are no irrevocable proxies, voting agreements or similar obligations
with respect to such capital stock of the Target Subsidiaries or a
Target Minority Entity held by Target or any of the Target Subsidiaries
and no equity securities or other interests of any of the Target
Subsidiaries are or may become required to be issued or purchased by
reason of any options, warrants, rights to subscribe to, puts, calls,
reservation of shares or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of any capital stock of any Target Subsidiary, and there
are no contracts, commitments, understandings or arrangements by which
any Target Subsidiary is bound to issue additional shares of its
capital stock, or options, warrants or rights to purchase or acquire
any additional shares of its capital stock or securities convertible
into or exchangeable for such shares.
2.4 AUTHORIZATION; BINDING AGREEMENT. (a) Target has all
--------------------------------
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the other agreements and
documents referred to herein and to be executed in connection herewith
to which Target is or will be a party or a signatory, (the "Target
------
Ancillary Agreements") and the consummation of the transactions
--------------------
contemplated hereby and thereby including, but not limited to, the
Merger have been duly and validly authorized by Target's Board of
Directors and no other corporate proceedings on the part of Target or
any Target Subsidiary are necessary to authorize the execution and
delivery of this Agreement and the Target Ancillary Agreements or to
consummate the transactions contemplated hereby or thereby (other than
the adoption of this Agreement by the shareholders of Target in
accordance with the Missouri Code and the Articles of Incorporation and
By-Laws of Target (the "Target Shareholders' Approval")). This
-----------------------------
Agreement has been duly and validly executed and delivered by Target
and constitutes, and upon execution and delivery thereof as
contemplated by this Agreement, the Target Ancillary Agreements will
constitute, the legal, valid and binding agreements of Target,
enforceable against Target in accordance with its and their respective
terms, except to the extent that enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by
principles of equity regarding the availability of remedies
("Enforceability Exceptions").
-------------------------
(b) At a meeting duly called and held on July 16, 1999, the
Board of Directors of Target, after consideration of various factors it
deemed relevant, including without limitation: (A) the long-term as
well as the short-term interests of Target, and (B) the interests of
the shareholders, long-term as well as short-term, including the
possibility that those interests may be best served by the continued
independence of Target, unanimously (i) determined that this Agreement
and the other transactions contemplated hereby, including the Merger,
are fair to and in the best interests of Target and the holders of
Target Shares, (ii) approved, authorized and adopted this Agreement,
the Target Ancillary Agreements, the Merger and the other transactions
contemplated hereby and thereby, and (iii) resolved to recommend
approval and adoption of this
8
Agreement and the Merger and the other transactions contemplated hereby
and thereby by the holders of Target Shares.
(c) Target's Board of Directors has received from Target's
financial advisor, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, a written
opinion addressed to it for inclusion in the Proxy Statement (as
hereinafter defined) to the effect that the Merger Consideration is
fair to the holders of the Target Shares (other than Acquiror and its
affiliates) from a financial point of view. An accurate and complete
copy of such opinion has been provided to Acquiror.
(d) The affirmative vote of the holders of at least two-thirds
of the outstanding Target Shares is required to adopt this Agreement
and the Merger and the other transactions contemplated hereby and
thereby. No other vote of the holders of Target Common Stock or any
other capital stock of Target is required by Law or the Articles of
Incorporation or By-Laws of Target or otherwise in order for Target to
consummate the Merger and the transactions contemplated hereby and by
the Target Ancillary Agreements.
(e) Pursuant to Article 11.H of the Articles of Incorporation
of Target, the Board of Directors of Target has either amended its By-
Laws or otherwise set forth rules and regulations which (i) interpret
Article 11 to provide that an agreement to vote by the Majority
Shareholder, which is entered into in conjunction with Target's
execution and delivery of this Agreement, does not constitute
"Beneficial Ownership" by Parent, Acquiror or Acquisition Subsidiary in
Target for purposes of such Article 11 and (ii) confirm that for
purposes of calculating "Excess Shares," that the date of Acquiror's
agreement with the Majority Shareholder shall be deemed to be the
acquisition date of the shares of Target Common Stock subject to the
option in favor of Acquiror.
2.5 GOVERNMENTAL APPROVALS. No consent, approval, waiver or
----------------------
authorization of, notice to or registration, declaration or filing with
or other action by ("Consent") any nation or government, any state or
-------
other political subdivision thereof, any person, authority or body
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government including,
without limitation, any governmental or regulatory authority, agency,
department, board, commission or instrumentality, any court, tribunal
or arbitrator and any self-regulatory organization ("Governmental
------------
Authority") on the part of Target or any of the Target Subsidiaries is
---------
required in connection with any change of control of Target or any of
the Target Subsidiaries, including, without limitation, any acquisition
of Target Common Stock by Acquiror or any of its affiliates or
associates, or the execution or delivery by Target of this Agreement
and the Target Ancillary Agreements or the consummation by Target of
the transactions contemplated hereby or thereby, other than (i) the
filing of the Certificate of Merger with the Secretary of the State of
Missouri in accordance with the Missouri Code, (ii) filings with the
SEC, state securities laws administrators and the National Association
of Securities Dealers, Inc. (the "NASD"), (iii) Consents from or with
----
Governmental Authorities set forth on Schedule 2.5 attached hereto,
------------
(iv) filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR Act"), (v) filings under the applicable provisions of
-------
Section 721 of Title VII of the Defense Production Act of 1950, as
amended, 50 U.S.C. App. 2170 (the "Exon-▇▇▇▇▇▇ Amendment"),
---------------------
(vi) Consents
9
described in Section 2.11 below, and (vii) those Consents that, if
------------
they were not obtained or made, do not or would not have a Target
Material Adverse Effect.
2.6 NO VIOLATIONS. The execution and delivery of this
-------------
Agreement and the Target Ancillary Agreements, the consummation of the
transactions contemplated hereby and thereby and compliance by Target
with any of the provisions hereof or thereof and any change of control
of Target or any of the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates, will not (i) conflict with or result
in any breach of any provision of the Certificate and/or Articles of
Incorporation or By-Laws or other governing instruments of Target or
any of the Target Subsidiaries, (ii) except as set forth on
Schedule 2.6 attached hereto, require any Consent under or result in
------------
a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or augment the performance
required) under any of the terms, conditions or provisions of any
Target Material Contract (as hereinafter defined) or other obligation
to which Target or any Target Subsidiary is a party or by which any of
them or any of their properties or assets may be bound, (iii) result in
the creation or imposition of any lien or encumbrance of any kind upon
any of the assets of Target or any Target Subsidiary, or (iv) subject
to obtaining the Consents from Governmental Authorities referred to in
Section 2.5, above, contravene any applicable provision of any
-----------
constitution, treaty, statute, law, code, rule, regulation, tariff,
ordinance, policy, permit or order of any Governmental Authority or
other matters having the force of law including, but not limited to,
any orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any court, tribunal, arbitrator, mediator or other
Governmental Authority ("Law") currently in effect to which Target or
---
any Target Subsidiary or its or any of their respective assets or
properties are subject, except in the case of clauses (ii), (iii) and
(iv), above, for any deviations from the foregoing which do not or
would not have a Target Material Adverse Effect.
2.7 SECURITIES FILINGS AND LITIGATION. Target has made
---------------------------------
available to Acquiror true and complete copies of (i) its Annual
Reports on Form 10-K, as amended, for the years ended December 31,
1996, 1997 and 1998, as filed with the Securities and Exchange
Commission (the "SEC"), (ii) the proxy statements relating to all of
---
the meetings of shareholders (whether annual or special) of Target and
the Target Subsidiaries since January 1, 1996, as filed with the SEC,
and (iii) all other reports, statements, schedules, registration
statements and other filings or documents and amendments thereto
(including, without limitation, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as amended) filed by Target with the SEC
since January 1, 1996. The reports, statements, schedules, registration
statements, and other filings and documents set forth in clauses (i)
through (iii), above, and those subsequently provided or required to be
provided pursuant to this Section, are referred to collectively herein
as the "Target Securities Filings."
-------------------------
Target and the Target Subsidiaries have filed with the SEC all
Target Securities Filings required to be filed therewith on or prior to
the date of this Agreement and, as of the Closing, Target and the
Target Subsidiaries shall have filed with the SEC all Target Securities
Filings required to be filed on or prior thereto. As of their
respective dates, or as of the date of the last amendment thereof, if
amended after filing, none of the Target Securities Filings (including
all schedules thereto and disclosure documents incorporated by
reference therein), contained or, as
10
to Target Securities Filings subsequent to the date hereof, will
contain any untrue statement of a material fact or omitted or, as to
Target Securities Filings subsequent to the date hereof, will omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Except for Target's proxy statement
for its 1999 Annual Meeting of Shareholders which was not timely filed,
each of the Target Securities Filings at the time of filing or as of
the date of the last amendment thereof, if amended after filing,
complied or, as to Target Securities Filings subsequent to the date
hereof, will comply in all material respects with the Securities
Exchange Act or the Securities Act, as applicable. Except as set forth
in Schedule 2.7 attached hereto, there is no action, cause of action,
------------
claim, demand, suit, proceeding, citation, summons, subpoena, inquiry
or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, by or before any court, tribunal,
arbitrator, mediator or other Governmental Authority ("Litigation")
----------
pending or, to the knowledge of Target, threatened against Target, any
Target Subsidiary or any Target Minority Entity, or any officer,
director, employee or agent thereof, in his or her capacity as such, or
as a fiduciary with respect to any Benefit Plan (as hereinafter
defined) of Target, or otherwise relating, in a manner that could have
a Target Material Adverse Effect, to Target, any Target Subsidiary, any
Target Minority Entity or the securities of any of them, or any
properties or rights of Target, any of the Target Subsidiaries or any
Target Minority Entity or any Benefit Plan. No event has occurred as a
consequence of which Target would be required to file a Current Report
on Form 8-K pursuant to the requirements of the Securities Exchange Act
as to which such a report has not been timely filed with the SEC. Any
reports, statements, schedules, registration statements and other
filings and documents and amendments thereto (including, without
limitation, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K, as amended) filed by Target with the
SEC after the date hereof shall be provided to Acquiror no later than
the date of such filing.
2.8 TARGET FINANCIAL STATEMENTS. The audited consolidated
---------------------------
and unaudited interim consolidated financial statements of Target and
the Target Subsidiaries included in the Target Securities Filings and,
as prepared by Target, the unaudited interim consolidated financial
statements of Target and the Target Subsidiaries as of and for the
months ended January 31, 1999, February 28, 1999, March 31, 1999, April
30, 1999, and May 31, 1999 (the "Target Financial Statements") have
---------------------------
been provided to Acquiror. Except as noted therein, the Target
Financial Statements were or, as to those Target Financial Statements
provided or required to be provided subsequent to the date hereof
pursuant to this Section, will be, prepared in accordance with
generally accepted accounting principles applicable to the businesses
of Target and the Target Subsidiaries consistently applied in
accordance with past accounting practices, except as otherwise
described therein, and fairly present (including, but not limited to,
the inclusion of all adjustments with respect to interim periods which
are necessary to present fairly the consolidated financial condition or
the consolidated results of operations of Target and the Target
Subsidiaries except as may be indicated therein or in the notes
thereto, subject to normal year-end adjustments in the ordinary course
with respect to certain items immaterial in amount or effect and the
exclusion of footnote disclosure in interim Target Financial
Statements) the consolidated financial condition and the consolidated
results of operations of Target and the Target Subsidiaries as of the
dates and for the periods indicated. Except as reflected in the Target
Financial Statements, as of their respective dates, neither Target nor
any Target Subsidiary had
11
any debts, obligations, guaranties of obligations of others or
liabilities (contingent or otherwise) that would be required in
accordance with generally accepted accounting principles to be
disclosed in the Target Financial Statements. Any financial statements
prepared with respect to Target or a Target Subsidiary subsequent to
the date hereof promptly shall be provided to Acquiror and shall
constitute Target Financial Statements for purposes hereof.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
------------------------------------
forth in the Target Securities Filings made available by Target to
Acquiror prior to the date of this Agreement or in Schedule 2.9
------------
attached hereto, since December 31, 1998, through the date of this
Agreement, there has not been: (i) any event, occurrence, fact,
condition, change, development or effect ("Event") that has had or
-----
could reasonably be expected to have a Target Material Adverse Effect;
(ii) any declaration, payment or setting aside for payment of any
dividend (except to Target or a Target Subsidiary wholly owned by
Target) or other distribution or any redemption, purchase or other
acquisition of any shares of capital stock or securities of or interest
in Target or any Target Subsidiary; (iii) any return of any capital or
other distribution of assets to shareholders of Target or any Target
Subsidiary (except to Target or a Target Subsidiary wholly owned by
Target); (iv) other than in the ordinary course of business and
consistent with the budget of Target dated July 13, 1999, a copy of
which budget has been delivered to Acquiror (the "Target Approved
---------------
Budget"), any investment of a capital nature by the purchase of any
------
property or assets by Target or any Target Subsidiary; (v) any
acquisition (by merger, consolidation, acquisition of stock or assets
or otherwise) of any person or business; (vi) any sale, disposition,
pledge, mortgage or other transfer of assets or properties of Target or
any Target Subsidiary other than in the ordinary course of business
consistent with past practice or having a net book value in excess of
$50,000 individually or $500,000 in the aggregate; (vii) any action or
agreement or undertaking by Target or any Target Subsidiary to take any
action that, if taken or done on or after the date hereof, would result
in a breach of Section 4.1, below; (viii) any change in accounting
-----------
methods or practices or any change in depreciation or amortization
policies or rates of or applicable to Target or any Target Subsidiary;
(ix) any employment, severance or consulting agreement entered into by
Target or any Target Subsidiary with any shareholder, officer,
director, agent, employee or consultant of Target or any Target
Subsidiary or any amendment or modification to, or termination of, any
current employment, severance or consulting agreement to which Target
or any Target Subsidiary is a party or by which it is bound; (x) any
forgiveness, cancellation, compromise, settlement, waiver or release of
any debts, claims, rights or Litigation; (xi) any agreement,
authorization or commitment to take, whether in writing or otherwise,
any action which, if taken prior to the date hereof, would have made
any representation or warranty of Target in this Agreement untrue or
incorrect in any material respect; or (xii) any failure by Target or
any Target Subsidiary to conduct its business in the ordinary course
consistent with past practice.
2.10 COMPLIANCE WITH LAWS. Other than as may be set forth on
--------------------
Schedule 2.10, the business of Target and each Target Subsidiary has
-------------
been operated in compliance with all Laws applicable thereto, including
without limitation all standards and regulations issued by the
International Maritime Organization and The Federal Maritime
Commission, except for any instances of non-compliance which do
not and would not have a Target Material Adverse Effect.
12
2.11 PERMITS. (i) Target and the Target Subsidiaries have all
-------
permits, certificates, licenses, approvals, tariffs and other
authorizations required in connection with the operation of their
respective businesses (collectively, "Target Permits"), (ii) neither
--------------
Target nor any Target Subsidiary is in violation of any Target Permit,
and (iii) no proceedings are pending or, to the knowledge of Target,
threatened, to revoke or limit any Target Permit, except, in the case
of those which do not and would not have a Target Material Adverse
Effect.
2.12 FINDERS AND INVESTMENT BANKERS. Neither Target nor any of
------------------------------
the Target Subsidiaries nor any of their officers or directors or other
affiliates has employed any broker or finder or incurred any liability
for any brokerage fees, commissions or finders' fees in connection with
the acquisition of Target Common Stock by Acquiror or any of its
affiliates or associates, the Merger, the Target Ancillary Agreements
or the transactions contemplated hereby or thereby, other than (i)
pursuant to the agreement for financial advisory services with ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Co., Incorporated, an accurate and complete copy of which
has been provided to Acquiror, and (ii) a $200,000 consulting fee
payable to ▇▇▇▇-▇'▇▇▇▇▇▇▇ & Co. upon consummation of the Merger.
2.13 CONTRACTS. Schedule 2.13 attached hereto sets forth a
--------- -------------
complete and accurate list of all material notes, bonds, mortgages,
indentures, contracts, leases, licenses, agreements, understandings,
arrangements, commitments, instruments, bids or proposals to which
Target or any Target Subsidiary is a party or is subject ("Target
------
Material Contract") . For purposes of this Section 2.13, a note,
----------------- ------------
bond, mortgage, indenture, contract, lease, license, agreement,
understanding, arrangement, commitment, instrument, bid or proposal
shall be considered material if (i) it is with an affiliate or
associate of Target or of a Target Subsidiary or with a Target Minority
Entity, (ii) it is required to be described in or filed as an exhibit
to any document filed under the Securities Act or the Securities
Exchange Act by an issuer subject thereto, (iii) the financial
obligation of Target or a Target Subsidiary thereunder or applicable to
the assets or properties of Target or a Target Subsidiary could exceed
$500,000, except for air charter agreements, hotel agreements and
cruise agreements which were undertaken by Target or a Target
Subsidiary in the ordinary course of business, (iv) it provides for
recurring monthly revenues to Target or a Target Subsidiary in excess
of $100,000 and such revenues would arise otherwise than in the
ordinary course of business, (v) it includes any exclusivity or non-
competition restrictions applicable to Target or a Target Subsidiary,
(vi) it is for the purchase or sale of any assets or services otherwise
than in the ordinary course of business, or (vii) it is a collective
bargaining or similar agreement or an agreement relating to which
employees of Target or any of the Target Subsidiaries are represented
by a union in their employment relationship with Target and any of the
Target Subsidiaries. Target has made available to Acquiror true and
accurate copies of all Target Material Contracts. Target Material
Contracts are valid and binding and are in full force and effect and
enforceable in accordance with their respective terms (assuming the
other parties thereto are bound, as to which Target has no basis to
believe otherwise), subject to the Enforceability Exceptions. Since
May 1995, any and all transactions between or involving Target or a
Target Subsidiary and an affiliate or associate (other than Target or a
Target Subsidiary listed on Schedule 2.3(a)) thereof were entered
---------------
into in the ordinary course of business and are upon fair and
reasonable terms not materially less favorable than Target or such
Target Subsidiary could obtain or become entitled to in an arm's-length
transaction with a person that is not an affiliate or an associate.
Except as set forth in
13
Schedule 2.6 attached hereto, (i) no Consent of any person is needed
------------
in order that each such Target Material Contract shall continue in full
force and effect in accordance with its terms without penalty,
acceleration or rights of early termination by reason of any change of
control of Target or any of the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates, or the execution, delivery or
performance of this Agreement and the Target Ancillary Agreements or
the consummation of the transactions contemplated hereby or thereby,
and (ii) neither Target nor any Target Subsidiary is in violation or
breach of or default under any such Target Material Contract, nor to
Target's knowledge is any other party to any such Target Material
Contract in violation or breach of or default under any such Target
Material Contract.
2.14 EMPLOYEE BENEFIT PLANS.
----------------------
(a) Except as set forth in Schedule 2.14 attached hereto,
-------------
there are no Benefit Plans (as defined below) maintained or contributed
to by Target or a Target Subsidiary under which Target, a Target
Subsidiary or the Surviving Corporation could incur any liability. A
"Benefit Plan" shall include (i) an employee benefit plan as defined
------------
in Section 3(3) of the Employee Retirement Income Security Act of
------------
1974, as amended, together with all regulations thereunder ("ERISA"),
-----
even if, because of some other provision of ERISA, such plan is not
subject to any or all of ERISA's provisions, and (ii) whether or not
described in the preceding clause, (a) any pension, profit sharing,
stock bonus, deferred or supplemental compensation, retirement, thrift,
stock purchase, stock appreciation or stock option plan, or any other
compensation, welfare, fringe benefit or retirement plan, program,
policy, course of conduct, understanding or arrangement of any kind
whatsoever, whether formal or informal, oral or written, providing for
benefits for or the welfare of any or all of the current or former
employees or agents of Target or a Target Subsidiary or their
beneficiaries or dependents, (b) a multi-employer plan as defined in
Section 3(37) of ERISA (a "Multi-employer Plan"), or (c) a multiple
-------------------
employer plan as defined in Section 413 of the Code.
(b) With respect to each Benefit Plan (where applicable):
Target has made available to Acquiror complete and accurate copies of
(i) all plan and trust texts and agreements, insurance contracts and
other funding arrangements; (ii) annual reports on the Form 5500 series
for the last three (3) years; (iii) financial statements and/or annual
and periodic accountings of plan assets for the last three (3) years;
(iv) the most recent determination letter received from the Internal
Revenue Service ("IRS"); (v) actuarial valuations for the last three
---
(3) years; and (vi) the most recent summary plan description as defined
in ERISA.
(c) With respect to each Benefit Plan while maintained or
contributed to by Target or a Target Subsidiary: (i) if intended to
qualify under Code Section 401(a) or 403(a), such Benefit Plan has
received a favorable determination letter from the IRS that it so
qualifies, and its trust is exempt from taxation under Code Section
501(a) and nothing has since occurred to cause the loss of the Benefit
Plan's qualification; (ii) except for payment of benefits made in the
ordinary course of the plan administration, no event has occurred and
there exists no circumstance under which Target, a Target Subsidiary or
the Surviving Corporation could incur material liability under ERISA,
the Code or otherwise; (iii) no accumulated funding deficiency as
defined in Code Section 412 has occurred or exists; (iv) no material
non-exempt prohibited transaction as defined
14
under ERISA and the Code has occurred; (v) no reportable event as
defined in Section 4043 of ERISA has occurred; (vi) all contributions
and premiums due have fully been made and paid on a timely basis; and
(vii) except as set forth on Schedule 2.14 attached hereto, all
-------------
contributions made or required to be made under any Benefit Plan meet
the requirements for deductibility under the Code, and all
contributions accrued prior to the Effective Time which have not been
made have been properly recorded on the Target Financial Statements.
(d) No Benefit Plan of Target or a Target Subsidiary is a
defined benefit pension plan subject to Title IV of ERISA or Section
412 of the Code. Each of such Benefit Plans has been maintained in
compliance with its terms and all applicable Law, except where the
failure to do so would not result in a Target Material Adverse Effect
or a Surviving Corporation Material Adverse Effect (as hereinafter
defined). Neither Target nor any of the Target Subsidiaries
contributes to, or has any outstanding liability with respect to, any
Multi-employer Plan.
(e) With respect to each Benefit Plan which is a welfare plan
(as defined in ERISA Section 3(1)): (i) any liability for medical or
death benefits with respect to current or former employees beyond their
termination of employment is set forth in the Target Financial
Statements (or footnotes thereto) to the extent required to be so set
forth by applicable accounting principles; (ii) there are no reserves,
assets, surplus or prepaid premiums under any such plan; (iii) except
as set forth in Schedule 2.14 attached hereto, no term or provision
-------------
of any such plan prohibits the amendment or termination thereof; and
(iv) Target and the Target Subsidiaries have complied with Code
Section 4980B, except for any deviations from the foregoing which do
not and would not have a Target Material Adverse Effect or a Surviving
Corporation Material Adverse Effect (as hereinafter defined).
(f) Except as set forth in Schedule 2.14 attached hereto, the
-------------
consummation of the Merger or the other transactions contemplated by
this Agreement or the Target Ancillary Agreements or any change of
control of Target or any of the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates, will not, either alone or in
conjunction with another Event: (i) entitle any individual to
severance pay, or (ii) accelerate the time of payment or vesting of
benefits or increase the amount of compensation or benefits due to any
individual.
2.15 TAXES AND TAX RETURNS.
---------------------
(a) Except as disclosed in Schedule 2.15 attached
-------------
hereto, Target and each of the Target Subsidiaries has timely filed, or
caused to be timely filed, all federal, state, local and foreign
income, gross receipts, sales, use, property, production, payroll,
franchise, withholding, employment, social security, license, excise,
transfer, gains, and other tax returns or reports required to be filed
by it (any of the foregoing being referred to herein as a "Tax
---
Return"), and each such Tax Return is true, correct and complete in
------
all material respects. Target and each of the Target Subsidiaries has
paid, collected or withheld, or caused to be paid, collected or
withheld, all taxes and governmental charges, assessments and
contributions of any nature whatsoever including, but not limited to,
any related penalties, interest and liabilities (any of the foregoing
being referred to herein as a "Tax"), required to be paid, collected
---
or withheld, other than such Taxes for which adequate reserves in the
Target Financial Statements have been established or
15
which are being contested in good faith and have been disclosed in
writing to Acquiror prior to the date of this Agreement. Except as set
forth in Schedule 2.15 attached hereto, there are no claims or
-------------
assessments pending against Target or any Target Subsidiary for any
alleged deficiency in any Tax, and Target does not know of any
threatened Tax claims or assessments against Target or any Target
Subsidiary (other than those for which adequate reserves in the Target
Financial Statements have been established or which are being contested
in good faith and have been disclosed in writing to Acquiror prior to
the date of this Agreement). Except as set forth in Schedule 2.15
-------------
attached hereto, neither Target nor any Target Subsidiary has made an
election under Section 338 of the Code or has taken any action that
would result in any Tax liability of Target or any Target Subsidiary as
a result of a deemed election within the meaning of Section 338 of the
Code. Except as set forth in Schedule 2.15 attached hereto, neither
-------------
Target nor any Target Subsidiary has any waivers or extensions of any
applicable statute of limitations to assess any Taxes. Except as set
forth in Schedule 2.15 attached hereto, there are no outstanding
-------------
requests by Target or a Target Subsidiary for any extension of time
within which to file any Tax Return or within which to pay any Taxes
shown to be due on any Tax Return. Except as set forth on
Schedule 2.15 attached hereto, no taxing authority is conducting or
-------------
has notified or, to the knowledge of Target, has threatened Target or
any Target Subsidiary that it intends to conduct, an audit of any prior
Tax period of Target or any of its past or present subsidiaries.
Except as disclosed in Schedule 2.15 attached hereto, neither Target
-------------
nor any Target Subsidiary has ever been an "S" corporation under the
Code.
(b) Neither Target nor any Target Subsidiary is a party
to any Tax sharing agreements or similar arrangements with respect to
or involving Target or a Target Subsidiary.
(c) Neither Target nor any Target Subsidiary has made or
become obligated to make, or will, as a result of the transactions
contemplated by this Agreement, make or become obligated to make, any
"excess parachute payment" as defined in Section 280G of the Code.
(d) Neither Target nor any Target Subsidiary is or has
been a United States real property holding company (as defined in
Section 897(c)(2) of the Code) during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code.
(e) Except as disclosed on Schedule 2.15, neither
-------------
Target nor any Target Subsidiary is a person other than a United States
person within the meaning of the Code.
(f) None of the assets of Target or of any Target
Subsidiary is property which Target or any Target Subsidiary is
required to treat as being owned by any other person pursuant to the
so-called "safe harbor lease" provisions of former Section 168(f)(8) of
the Code.
(g) Target and each Target Subsidiary have disclosed on
their federal income Tax Returns all positions taken therein that could
give rise to a substantial understatement of federal income tax
liability within the meaning of Section 6662(d) of the Code.
(h) There are no liens for Taxes on the assets of Target
or any Target Subsidiary except for statutory liens for current Taxes
not yet due and payable.
16
(i) All elections with respect to Taxes affecting Target
and the Target Subsidiaries are set forth in Schedule 2.15 attached
-------------
hereto or, with respect to elections made on or before December 31,
1998, are reflected in the Tax Returns of Target filed and provided to
Acquiror prior to the date of this Agreement. Neither Target nor any
Target Subsidiary: (i) has made or will make a deemed dividend
election under former Treas. Reg. Sec. 1.1502-32(f)(2) or a consent
dividend election under Section 565 of the Code; (ii) has consented at
any time under Section 341(f)(l) of the Code to have the provisions of
Section 341(f)(2) of the Code apply to any disposition of the assets of
Target or any Target Subsidiary; (iii) has agreed, or is required, to
make any adjustment under Section 481(a) of the Code by reason of a
change in accounting method or otherwise; (iv) has made an express
election, or is required, to treat any asset of Target or any Target
Subsidiary as owned by another person for federal income tax purposes
or as tax-exempt bond financed property or tax-exempt use property
within the meaning of Section 168 of the Code; or (v) has made any of
the foregoing elections or is required to apply any of the foregoing
rules under any comparable state, foreign or local income Tax
provision.
(j) Except as set forth on Schedule 2.15, Target and
-------------
the Target Subsidiaries are not and have never been includable
corporations in an affiliated group of corporations, within the meaning
of Section 1504 of the Code, other than in the affiliated group of
which Target is the common parent corporation.
(k) Except as set forth in Schedule 2.15 attached
-------------
hereto, the consolidated net operating losses, net capital losses,
foreign tax credits, investment and other tax credits set forth in the
Target Financial Statements are not subject to any limitations under
Section 382, Section 383 or the Treasury regulations (whether
temporary, proposed or final) under Section 1502 of the Code.
(l) Except as set forth in Schedule 2.15 attached
-------------
hereto, neither Target nor any Target Subsidiary is a partner or member
in or subject to any joint venture, partnership, limited liability
company or other arrangement or contract that is or could be treated as
a partnership for federal income tax purposes.
2.16 LIABILITIES. From December 31, 1998, through the date of
-----------
this Agreement, except as expressly disclosed in the Target Securities
Filings or in Target's monthly financial statements through June 30,
1999 made available by Target to Acquiror prior to the date of this
Agreement or in Schedule 2.16 attached hereto, Target and the Target
-------------
Subsidiaries do not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or
responsibility, fixed or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise, whether or not of a kind required by generally accepted
accounting principles to be set forth in a financial statement other
than those incurred in the ordinary course of business and in an amount
not in excess of $50,000 individually or $250,000 in the aggregate.
Except as set forth on Schedule 2.16 attached hereto or reflected in
-------------
the Target Securities Filings made available by Target to Acquiror
prior to the date of this Agreement, as of the date of this Agreement,
neither Target nor the Target Subsidiaries have any (i) obligations in
respect of borrowed money, (ii) obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations which
would be required by generally accepted accounting principles to be
classified as "capital leases," (iv) obligations to pay the deferred
purchase price
17
of property or services, except trade accounts payable arising in the
ordinary course of business and payable not more than twelve (12)
months from the date of incurrence, and (v) any guaranties of any
obligations of any other person.
2.17 ENVIRONMENTAL MATTERS. As of the date of this Agreement,
---------------------
to the best knowledge of Target, (i) Target and the Target Subsidiaries
are in compliance in all material respects with all applicable
Environmental Laws (as hereinafter defined), (ii) there is no civil,
criminal or administrative judgment, action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or
demand letter pending or, to the knowledge of Target, threatened
against Target, a Target Subsidiary or any of their properties pursuant
to Environmental Laws, and (iii) there are no past or present Events
which reasonably may be expected to prevent compliance with, or which
have given rise to or will give rise to material liability on the part
of Target or a Target Subsidiary under, Environmental Laws. As used
herein the term "Environmental Laws" shall mean Laws relating to
------------------
pollution, chemical usage, waste or emission control, the management,
generation, presence or disposal of asbestos, hazardous or toxic wastes
or substances, the protection or remediation of the environment,
environmental activity, product stewardship or public health and
safety. In particular, without limiting the generality of the
foregoing, except as set forth on Schedule 2.17 attached hereto,
-------------
neither Target nor any of the Target Subsidiaries may be deemed an
"owner or operator" of a "facility" or "vessel" which owns, possesses,
transports, generates or disposes of a "hazardous substance" as those
terms are defined in Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section
9601 et seq.
------
2.18 INTELLECTUAL PROPERTY.
---------------------
(a) For purposes of this Agreement, "Intellectual Property"
---------------------
shall mean all U.S. and foreign patents, trademarks, service marks,
trade names, copyrights, franchises and similar rights of or used by
Target or a Target Subsidiary, all applications for any of the
foregoing and all permits, grants and licenses or other rights running
to or from Target or any of the Target Subsidiaries relating to any of
the foregoing and any and all goodwill associated therewith. Target or
one of the Target Subsidiaries owns, or is licensed to, or otherwise
has, the full and exclusive rights to use all right, title and interest
in, to and under any and all Intellectual Property identified on
Schedule 2.18(a)(1) and any and all goodwill associated therewith.
-------------------
Except as set forth on Schedule 2.18(a)(2), Target or one of the
-------------------
Target Subsidiaries owns, or is licensed to use, or otherwise has,
legally enforceable rights to all of the Intellectual Property
currently used or proposed to be used in, and necessary for the conduct
of the business of Target and the Target Subsidiaries as presently or
proposed to be conducted. The rights of Target and the Target
Subsidiaries in the Intellectual Property are, subject to the rights of
any licensor thereof, free and clear of any liens or other encumbrances
and restrictions and Target and the Target Subsidiaries have not
received, as of the date of this Agreement, notice of any
adversely-held Intellectual Property of any other person, or notice of
any charge or claim of any person relating to such Intellectual
Property or any process or confidential information of Target or any
Target Subsidiary ("Claim Notice") and do not know of any basis for
------------
any such charge or claim. Target, the Target Subsidiaries and their
respective predecessors, if any, have not conducted business at any
time during the period beginning five (5) years prior to the date
hereof under any corporate, trade or fictitious names other than their
current corporate names. Target shall promptly notify,
18
and shall cause the Target Subsidiaries to promptly notify, Acquiror of
any Claim Notice received by Target or a Target Subsidiary after the
date of this Agreement. The business of each of Target and the Target
Subsidiaries, presently conducted, does not conflict with and, to the
knowledge of Target, has not been alleged to conflict with any patents,
trademarks, trade names, service marks, copyrights or other
intellectual property rights of others. The execution and delivery of
this Agreement, the Target Ancillary Agreements, the consummation of
the transactions contemplated hereby and thereby and any change of
control of Target or any of the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates, will not result in the loss or
impairment of any of the Intellectual Property rights or Target's or
any Target Subsidiaries' right to use any of the licensed Intellectual
Property rights. To the knowledge of Target, there are no third
parties using any of the Intellectual Property rights material to the
business of Target or any Target Subsidiaries as presently conducted.
(b) Without limiting the generality of paragraph (a) above,
except as disclosed in Schedule 2.18(b), each of Target and the
----------------
Target Subsidiaries owns, or possesses valid rights to, all computer
software programs that are material to the conduct of the business of
the Target and Target Subsidiaries. To Target's knowledge, there are
no infringement suits, actions or proceedings pending or threatened
against Target or any Target Subsidiary with respect to any software
owned or licensed by Target or any Target Subsidiary.
2.19 REAL ESTATE.
-----------
(a) Neither Target nor any of the Target Subsidiaries owns or
has any agreement or other right to acquire any real property as of the
date of this Agreement.
(b) Schedule 2.19(b) attached hereto sets forth a true,
----------------
correct and complete schedule as of the date of this Agreement of all
material leases, subleases, easements, rights-of-way, licenses or other
agreements under which Target or any of the Target Subsidiaries uses or
occupies, or has the right to use or occupy, now or in the future, any
real property or improvements thereon (the "Target Real Property
--------------------
Leases"), and the same constitute the only leases necessary in
------
connection with the conduct of business by Target and any of the Target
Subsidiaries as currently conducted. Each of Target and the Target
Subsidiaries enjoys quiet possession under all leases to which it is a
party as lessee, and all of such leases are valid, subsisting, and in
full force and effect. Except as set forth in Schedule 2.19(b), upon
----------------
a any change of control of Target or the Target Subsidiaries,
including, without limitation, any acquisition of Target Common Stock
by Acquiror or any of its affiliates or associates, or the execution or
delivery of this Agreement and the Target Ancillary Agreements or the
consummation of the Merger or the transactions contemplated hereby or
thereby, all such Target Real Property Leases shall continue in full
force and effect in accordance with their terms, without penalty,
acceleration or rights of early termination. Except for the matters
listed on said Schedule 2.19(b), Target or a Target Subsidiary, as
----------------
indicated thereon, holds the leasehold estate under or other interest
in each Target Real Property Lease free and clear of all liens,
encumbrances and other rights of occupancy other than statutory
landlords or mechanics' liens which have not been executed upon.
19
2.20 CORPORATE RECORDS. The respective corporate record books
-----------------
of or relating to Target and each of the Target Subsidiaries have been
made available to Acquiror by Target and contain materially accurate
and complete records of (i) all corporate actions of the respective
shareholders and directors (and committees thereof) of Target and the
Target Subsidiaries, (ii) the Certificate and/or Articles of
Incorporation, By-Laws and/or other governing instruments, as amended,
of Target and the Target Subsidiaries, and (iii) the issuance and
transfer of stock of Target and the Target Subsidiaries. Except as set
forth on Schedule 2.20 attached hereto, neither Target nor any Target
-------------
Subsidiary has any of its material records or information recorded,
stored, maintained or held off the premises of Target and the Target
Subsidiaries.
2.21 TITLE TO AND CONDITION OF PERSONAL PROPERTY. Target and
-------------------------------------------
each of the Target Subsidiaries have good and marketable title to, or a
valid leasehold interest in, all material items of any personal
property reflected in the Target Financial Statements dated December
31, 1998, or currently used in the operation of their respective
businesses, and such property or leasehold interests are free and clear
of all liens, claims, charges, security interests, options, or other
title defects or encumbrances, except for property disposed of in the
ordinary course since the date thereof consistent with the provisions
of Section 2.9, above, and such exceptions to title and liens,
-----------
claims, charges, security interests, options, title defects or
encumbrances which do not and would not have a Target Material Adverse
Effect or interfere with the use and enjoyment of such property and
interests. As of the date of this Agreement, all such personal
property is in good operating condition and repair (ordinary wear and
tear excepted), is suitable for the use to which the same is
customarily put by Target or any Target Subsidiary, is, to the
knowledge of Target, free from inherent or latent manufacturing
defects, and is free from all other material defects and is of a
quality and quantity presently usable in the ordinary course of the
operation of the business of Target and the Target Subsidiaries.
2.22 NO ADVERSE ACTIONS. Except as set forth on
------------------
Schedule 2.22 attached hereto, there is no existing, pending or, to
-------------
the knowledge of Target, threatened termination, cancellation,
limitation, modification or change in the business relationship of
Target or any of the Target Subsidiaries, with any supplier, customer
or other person except as are immaterial individually and in the
aggregate and are in the ordinary course of business. None of Target,
any Target Subsidiary or, to the knowledge of Target, any director,
officer, agent, employee or other person acting on behalf of any of the
foregoing has used any corporate funds for unlawful contributions,
payments, gifts, entertainment or other unlawful expenses relating to
political activity, or made any direct or indirect unlawful payments to
governmental or regulatory officials or others.
2.23 LABOR MATTERS. Except as set forth on Schedule 2.13
------------- -------------
attached hereto, neither Target nor any of the Target Subsidiaries has
any obligations, contingent or otherwise, under any employment,
severance or consulting agreement, collective bargaining agreement or
other contract with a labor union or other labor or employee group. To
the knowledge of Target, as of the date of this Agreement, there are no
efforts presently being made or threatened by or on behalf of any labor
union with respect to the unionizing of employees of Target or any
Target Subsidiary. As of the date of this Agreement, there is no
unfair labor practice complaint against Target or any Target Subsidiary
pending or, to the knowledge of Target, threatened before the National
Labor Relations Board or comparable agency; there is no labor strike,
dispute, slowdown or stoppage pending or, to the knowledge of Target,
threatened against or involving
20
Target or any Target Subsidiary; no representation question exists
respecting the employees of Target or any Target Subsidiary; no
grievance or internal or informal complaint exists, no arbitration
proceeding arising out of or under any collective bargaining agreement
is pending and no claim therefor has been asserted; no collective
bargaining agreement is currently being negotiated by Target or any
Target Subsidiary; and neither Target nor any Target Subsidiary is
experiencing any work stoppage, strike, slowdown or other labor
difficulty. Except as set forth on Schedule 2.23, as of the date of
-------------
this Agreement, there has not been, and to the knowledge of Target
there will not be, any material adverse change in relations with
employees or agents of Target or any Target Subsidiary as a result of
any announcement or consummation of the transactions contemplated by
this Agreement or the Target Ancillary Agreements or any change of
control of Target or the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates. Target shall promptly notify, and
shall cause the Target Subsidiaries to promptly notify, Acquiror upon
knowledge by Target or a Target Subsidiary of the occurrence after the
date hereof of any matter referenced in this Section.
2.24 CHANGE OF CONTROL AGREEMENTS. Except as set forth in
----------------------------
Schedule 2.24, neither the execution and delivery of this Agreement
-------------
or the Target Ancillary Agreements nor the consummation of the Merger
or the other transactions contemplated hereby or thereby, nor any
change of control of Target or the Target Subsidiaries, including
without limitation, any acquisition of Target Common Stock by Acquiror
or any of its affiliates or associates will (either alone or in
conjunction with any other Event) result in, cause the accelerated
vesting or delivery of, or increase the amount of value of, any payment
or benefit to any director, officer or employee of Target or any Target
Subsidiary. Except as set forth in Schedule 2.24, without limiting
-------------
the generality of the foregoing, (x) no amount paid or payable by
Target in connection with the Merger or the other transactions
contemplated by this Agreement or the Target Ancillary Agreements,
including accelerated vesting of options, (either solely as a result
thereof or as a result of such transactions in conjunction with any
other event) will be an "excess parachute payment" within the meaning
of Section 280G of the Code and (y) there are no agreements or
arrangements on behalf of any officer, director or employee providing
for payment or other benefits to such person contingent upon the
execution of this Agreement or the Target Ancillary Agreements or the
transactions contemplated hereby or thereby or a transaction involving
a change of control of Target or the Target Subsidiaries, including,
without limitation, any acquisition of Target Common Stock by Acquiror
or any of its affiliates or associates.
2.25 INSURANCE. Target and each of the Target Subsidiaries
---------
has obtained and maintains in full force and effect insurance with
responsible and reputable insurance companies or associations in such
amounts, on such terms and covering such risks, including fire and
other risks insured against by extended coverage, public liability
insurance and insurance against claims for personal injury or death or
property damage occurring in connection with the activities of Target
or the Target Subsidiaries or any properties owned, occupied or
controlled by them, as is customary. Within the past five years,
neither Target nor any of the Target Subsidiaries has received notice
of default under, or intended cancellation or nonrenewal of, any
policies of insurance. Neither Target nor any Target Subsidiary has
been refused any insurance for coverage by an insurance carrier to
which it has applied for insurance.
21
2.26 INFORMATION SUPPLIED. The Proxy Statement (as
--------------------
hereinafter defined) to be mailed to the holders of Target Common Stock
in connection with the Shareholders' Meeting (as hereinafter defined)
to be called to consider the Merger at the date such document is first
published, sent or delivered to the holders of Target Common Stock or
at any time prior to or during the pendency of the Shareholders'
Meeting, will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Proxy
Statement and any related schedules or other filings made with the SEC,
as contemplated hereby, will comply as to form and substance in all
material respects with the requirements of the Securities Exchange Act
and the applicable rules and regulations of the SEC thereunder and
other applicable Laws. Notwithstanding the foregoing, no
representation or warranty is made by Target with respect to statements
made or incorporated by reference therein based on information relating
solely to Acquiror or Acquisition Subsidiary supplied by Acquiror or
Acquisition Subsidiary in writing expressly for inclusion or
incorporation by reference in the foregoing document.
2.27 TAKEOVER STATUTES. No "business combination," "fair
-----------------
price," "moratorium," "control share acquisition" or other similar
antitakeover statute or regulation enacted under state or federal laws
in the United States (each a "Takeover Statute"), including, without
----------------
limitation, Sections 351.407 and 351.459 of the Missouri Code (inasmuch
as Target has approved the transactions contemplated by this Agreement,
the Majority Shareholder Agreement and the Target Ancillary Agreements
for purposes of Section 351.459 of the Missouri Code and has taken all
other requisite corporate action under the Takeover Statutes),
applicable to Target or any of the Target Subsidiaries is applicable to
the Merger, this Agreement, the Target Ancillary Agreements or the
other transactions contemplated hereby or thereby or any change of
control of Target or the Target Subsidiaries, including, without
limitation, any acquisition of Target Common Stock by Acquiror or any
of its affiliates or associates.
2.28 YEAR 2000. (a) Target has initiated a review and
---------
assessment of the Year 2000 Problem (as hereinafter defined), has
developed a plan for addressing the Year 2000 Problem on a timely basis
and is implementing such plan on a timely basis. Except as would not
reasonably be expected to have a Target Material Adverse Effect, to the
best knowledge of Target after due inquiry, none of the assets or
equipment owned or utilized by Target or any of the Target Subsidiaries
will fail to perform because of, or due in any way to, a Year 2000
Problem. To the best knowledge of Target based on responses to
written inquiries made by Target or otherwise based on information
brought specifically to the attention of Target, no vendor, supplier or
customer of Target or any of the Target Subsidiaries is reasonably
expected to experience a Year 2000 Problem that, individually or in the
aggregate, could constitute a Target Material Adverse Effect. The term
"Year 2000 Problem" means the inability of any hardware, software or
-----------------
process to recognize or correctly calculate dates on and after January
1, 2000, or the failure of computer systems, products or services to
perform any of their intended functions in a proper manner in
connection with data containing any date on or after January 1, 2000.
(b) Target has made available to Acquiror Target's plan to
address the Year 2000 Problem (the "Year 2000 Plan"). To Target's
--------------
knowledge, the Year 2000 Plan will enable Target and the Target
Subsidiaries to be Year 2000 Compliant (as hereinafter defined) in a
timely
22
manner except as to matters which are not reasonably likely to result
in a Target Material Adverse Effect and the aggregate cost for Target
and Target Subsidiaries to become Year 2000 Compliant is estimated to
be less than $600,000. "Year 2000 Compliant" means that (a) the
-------------------
products, services, or other item(s) at issue accurately process,
provide and/or receive date/time data (including calculating,
comparing, and sequencing), within, from, into, and between centuries
(including the twentieth and twenty-first centuries and the years 1999
and 2000), including leap year calculations, and (b) neither
performance nor the functionality nor the supply of the products,
services, and other items at issue will be affected by dates/times
prior to, on, after, or spanning January 1, 2000. The design of the
products, services, and other items at issue to ensure compliance with
the foregoing warranties and representations includes proper date/time
data century recognition and recognition of 1999 and 2000, calculations
that accommodate same century and multicentury formulae and date/time
values before, on, after, and spanning January 1, 2000, and date/time
data interface values that reflect the century, 1999 and 2000.
2.29 TARGET OPTIONS. Upon the consummation of the Merger,
--------------
each of Target's outstanding Options to acquire shares of Target Common
Stock shall, pursuant to their terms as amended as contemplated hereby,
become converted into the right to receive an amount in cash equal to
the Option Consideration, as contemplated by Section 1.7.
-----------
2.30 TRANSACTION WITH AFFILIATES. Except as set forth in
---------------------------
Schedule 2.30 (other than compensation and benefits received in the
-------------
ordinary course of business as an employee or director of Target or the
Target Subsidiaries), no director, officer or any other affiliate or
associate of Target or any of the Target Subsidiaries or any entity in
which, to the knowledge of Target, any such director, officer or other
affiliate or associate, owns any beneficial interest (other than a
publicly held corporation whose stock is traded on a national
securities exchange or in the over-the-counter market and less than 1%
of the stock of which is beneficially owned by such persons), (A) has
any interest in: (i) any contract, arrangement or understanding with,
or relating to the business or operations of Target or any of the
Target Subsidiaries; (ii) any loan, arrangement, understanding,
agreement or contract for or relating to indebtedness of Target or any
of the Target Subsidiaries, or (ii) any property (real, personal or
mixed), tangible or intangible, used or currently intended to be used
in, the business or operations of Target or any of the Target
Subsidiaries or (B) is an obligor under any notes receivable of Target
or any of the Target Subsidiaries.
2.31 NO EXISTING DISCUSSIONS. As of the date hereof, Target
-----------------------
is not engaged, directly or indirectly, in any negotiations or
discussions with any other party with respect to a Takeover Proposal
(as hereinafter defined).
2.32 DISCLOSURE. All information and documents provided
----------
prior to the date of this Agreement, and all information and documents
subsequently provided, to Acquiror or its representatives or lenders by
or on behalf of Target in connection with the transactions contemplated
by this Agreement are or contain, or will be or will contain as to
subsequently provided information or documents, true, accurate and
complete information in all material respects with respect to the
subject matter thereof and are, or will be as to subsequently provided
information or documents, reasonably responsive to any specific request
made by or on behalf of Acquiror or its representatives or lenders.
23
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
CERTAIN COVENANTS OF PARENT AND ACQUIROR
Parent and Acquiror jointly and severally represent, warrant
and/or covenant to and with Target as follows:
3.1 ORGANIZATION AND GOOD STANDING. Parent is a corporation
------------------------------
duly organized and validly existing under the laws of the Canton of
Zurich, Switzerland. Acquiror is a corporation duly organized and
validly existing under the laws of the State of Delaware. Acquisition
Subsidiary is a corporation duly organized and validly existing under
the laws of the State of Missouri. Each of Parent, Acquiror and
Acquisition Subsidiary has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its businesses
as now being conducted, except where the failure to have such power and
authority would not have an Acquiror Material Adverse Effect (as
hereinafter defined). Each of Parent, Acquiror and Acquisition
Subsidiary is duly qualified and in good standing to do business in
each jurisdiction in which the character of the property owned, leased
or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so duly
qualified and in good standing would not have an Acquiror Material
Adverse Effect. For purposes of this Agreement, "Acquiror Material
-----------------
Adverse Effect" shall mean a material adverse effect on (i) the
--------------
business, assets, condition (financial or otherwise), properties,
liabilities, prospects or the results of operations of Parent, Acquiror
and its subsidiaries (including Acquisition Subsidiary) taken as a
whole, (ii) the ability of Parent and Acquiror to perform their
obligations set forth in this Agreement and the Acquiror Ancillary
Agreements (as hereinafter defined), or (iii) the ability to timely
consummate the transactions contemplated by this Agreement and the
Acquiror Ancillary Agreements.
3.2 AUTHORIZATION; BINDING AGREEMENT. Parent, Acquiror and
--------------------------------
Acquisition Subsidiary have all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the other agreements and documents referred to herein and
to be executed in connection herewith to which Parent, Acquiror or
Acquisition Subsidiary is or will be a party or a signatory (the
"Acquiror Ancillary Agreements") and the consummation of the
-----------------------------
transactions contemplated hereby and thereby including, but not limited
to, the Merger have been duly and validly authorized by the respective
Boards of Directors of Parent, Acquiror and Acquisition Subsidiary, as
appropriate, and no other corporate proceedings on the part of Parent,
Acquiror or Acquisition Subsidiary are necessary to authorize the
execution and delivery of this Agreement and the Acquiror Ancillary
Agreements or to consummate the transactions contemplated hereby or
thereby. This Agreement has been duly and validly executed and
delivered by each of Parent, Acquiror and Acquisition Subsidiary and
constitutes, and upon execution and delivery thereof as contemplated by
this Agreement, the Acquiror Ancillary Agreements will constitute, the
legal, valid and binding agreements of Parent, Acquiror and Acquisition
Subsidiary, enforceable against each of Parent, Acquiror and
Acquisition Subsidiary in accordance with its and their respective
terms, subject to the Enforceability Exceptions.
24
3.3 GOVERNMENTAL APPROVALS. No Consent from or with any
----------------------
Governmental Authority on the part of Parent, Acquiror or Acquisition
Subsidiary is required in connection with the execution or delivery by
Parent, Acquiror and Acquisition Subsidiary of this Agreement and the
Acquiror Ancillary Agreements or the consummation by Parent, Acquiror
and Acquisition Subsidiary of the transactions contemplated hereby or
thereby other than (i) filings with the SEC, state securities laws
administrators and the NASD and filing and recordation of appropriate
Merger documents as required by the Missouri Code, (ii) Consents from
or with Governmental Authorities, (iii) filings under the HSR Act, (iv)
filings under the Exon-▇▇▇▇▇▇ Amendment, and (v) those Consents that,
if they were not obtained or made, do not or would not have an Acquiror
Material Adverse Effect.
3.4 NO VIOLATIONS. The execution and delivery of this
-------------
Agreement and the Acquiror Ancillary Agreements, the consummation of
the transactions contemplated hereby and thereby and compliance by
Parent, Acquiror and Acquisition Subsidiary with any of the provisions
hereof or thereof will not (i) conflict with or result in any breach of
any provision of the Certificate and/or Articles of Incorporation or
By-Laws or other governing instruments of Parent, Acquiror or
Acquisition Subsidiary, (ii) require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or augment the performance
required) under any of the terms, conditions or provisions of any
Acquiror Material Contract (as hereinafter defined) or other obligation
to which Parent, Acquiror or Acquisition Subsidiary is a party or by
which any of them or any of their properties or assets may be bound,
(iii) result in the creation or imposition of any lien or encumbrance
of any kind upon any of the assets of Parent, Acquiror or Acquisition
Subsidiary, or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in Section 3.3, above, contravene any Law
-----------
currently in effect to which Parent, Acquiror or Acquisition Subsidiary
or its or any of their respective assets or properties are subject,
except in the case of clauses (ii), (iii) and (iv), above, for any
deviations from the foregoing which do not or would not have an
Acquiror Material Adverse Effect. An "Acquiror Material Contract" is
--------------------------
any material note, bond, mortgage, indenture, contract, lease, license,
agreement, understanding, instrument, bid or proposal the breach of
which would result in an Acquiror Material Adverse Effect.
3.5 FINDERS AND INVESTMENT BANKERS. Neither Acquiror nor any
------------------------------
of its officers or directors has employed any broker or finder or
otherwise incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby.
3.6 INFORMATION SUPPLIED. None of the information relating
--------------------
solely to Acquiror or Acquisition Subsidiary supplied or to be supplied
by Acquiror or Acquisition Subsidiary in writing expressly for
inclusion or incorporation by reference in the Proxy Statement (as
hereinafter defined) will, at the date such document is first
published, sent or delivered to holders of Target Common Stock or, at
any time during the pendency of the Shareholders' Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, no
representation or warranty is made by the Acquiror or Acquisition
Subsidiary with respect to
25
statements made or incorporated by reference therein based on
information supplied by Target for inclusion or incorporation by
reference in the foregoing document.
3.7 FINANCIAL ABILITY. Sufficient funds and binding credit
-----------------
arrangements are available to Parent and Acquiror as of the date
hereof, and will be available at and after the Effective Time, to pay
the Merger Consideration and any other amounts payable by Parent or
Acquiror hereunder at and after the Closing.
ARTICLE IV
ADDITIONAL COVENANTS OF TARGET
Target represents, covenants and agrees as follows:
4.1 CONDUCT OF BUSINESS OF TARGET AND TARGET SUBSIDIARIES.
-----------------------------------------------------
Except as expressly contemplated by this Agreement, during the period
from the date of this Agreement to the Effective Time, Target shall
conduct, and it shall cause the Target Subsidiaries to conduct, its or
their respective businesses in the ordinary course and consistent with
past practice, subject to the limitations contained in this Agreement,
and Target shall, and it shall cause the Target Subsidiaries to, use
its or their respective reasonable business efforts to preserve intact
its or their respective business organizations, to keep available the
services of its officers, agents and employees and to maintain
satisfactory relationships with all persons with whom any of them does
business. Without limiting the generality of the foregoing, and except
as otherwise expressly provided in this Agreement, after the date of
this Agreement and prior to the Effective Time, neither Target nor any
Target Subsidiary will, without the prior written consent of Acquiror:
(i) amend or propose to amend its Certificate or Articles
of Incorporation or By-Laws (or comparable governing instruments) in
any material respect;
(ii) authorize for issuance, issue, grant, sell, pledge,
dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, the capital stock
or other securities of Target or any Target Subsidiary including, but
not limited to, any securities convertible into or exchangeable for
shares of stock of any class of Target or any Target Subsidiary, except
for the issuance of shares of Target Common Stock pursuant to the
exercise of stock options or warrants outstanding on the date of this
Agreement in accordance with their present terms;
(iii) split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, other than dividends or
distributions to Target or a Target Subsidiary wholly owned by Target,
or directly or indirectly redeem, purchase or otherwise acquire or
offer to acquire any shares of its capital stock or other securities,
provided that Target may declare a quarterly dividend not in excess of
$0.125 per Target Share payable to
26
shareholders of record on September 30, 1999 to be paid on October 15,
1999 and such other quarterly dividends as Acquiror agrees to in
writing;
(iv) (a) except for debt (including, but not limited to,
obligations in respect of capital leases) not in excess of the amounts
set forth in the Target Approved Budget, create, incur or assume any
short-term debt, long-term debt or obligations in respect of capital
leases; (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise)
for the obligations of any person, except for obligations permitted by
this Agreement of any wholly-owned Target Subsidiary in the ordinary
course of business consistent with past practice; (c) make any capital
expenditures or make any loans, advances or capital contributions to,
or investments in, any other person (other than customary advances to
employees made in the ordinary course of business consistent with past
practice), provided that Target will continue to make capital
expenditures, maintain, upgrade and expand its facilities and those of
the Target Subsidiaries and otherwise operate in accordance with the
Target Approved Budget; (d) acquire the stock or assets of, or merge or
consolidate with, any other person or business; or (e) voluntarily
incur any material liability or obligation (absolute, accrued,
contingent or otherwise);
(v) sell, transfer, mortgage, pledge or otherwise dispose
of, or encumber, or agree to sell, transfer, mortgage, pledge or
otherwise dispose of or encumber, any material assets or properties,
real, personal or mixed;
(vi) increase in any manner the compensation of any of its
officers, agents or employees other than any increases required
pursuant to the Target Material Contracts in accordance with their
terms in effect on the date of this Agreement and increases in the
ordinary course of business consistent with past practice not in excess
on an individual basis of the lesser of 15% of the current compensation
of such individual or $10,000 per annum (except that the annual salary
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Target's President and Chief Executive, will
increase by $15,194 as of August 1, 1999 pursuant to existing
arrangements) or increase in any manner the compensation of any
director;
(vii) except as required by ERISA and only after reasonable
prior consultation with Acquiror, enter into, establish, amend, make
non-routine or material interpretations or determinations with respect
to, or terminate any employment, consulting, retention, change in
control, collective bargaining, bonus or other incentive compensation,
profit sharing, health or other welfare, stock option, stock purchase,
restricted stock, or other equity, pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan,
policy, agreement, trust, fund or arrangement with, for or in respect
of, any shareholder, officer, director, other employee, agent,
consultant, affiliate or associate;
(viii) make any elections with respect to Taxes that are
inconsistent with the prior elections reflected in the Target Financial
Statements as of and to the period ended December 31, 1998;
(ix) compromise, settle, forgive, cancel, grant any waiver
or release relating to or otherwise adjust any debts, claims, rights or
27
Litigation, except routine debts, claims, rights or Litigation in the
ordinary course of business consistent with past practice, involving
only a payment not in excess of $25,000 individually or $250,000 when
aggregated with all such payments by Target and the Target Subsidiaries
combined;
(x) take any action or omit to take any action, which
action or omission, if taken prior to, on or after the date hereof,
would result in a breach of any of the covenants, representations or
warranties of Target set forth in this Agreement or would have a Target
Material Adverse Effect;
(xi) enter into any lease or other agreement, or amend any
lease or other agreement, with respect to real property;
(xii) subject to clause (xiii) below, enter into or amend
any agreement or transaction (a) pursuant to which the aggregate
financial obligation of Target or a Target Subsidiary or the value of
the services to be provided could exceed $2,000,000 individually, and
(b) which is not terminable upon no more than 30 days' notice by
Target or the Target Subsidiary involved without penalty in excess of
$2,000,000 individually;
(xiii) enter into, amend, modify, terminate or waive any
rights under (a) any Target Material Contract; or (b) any material
agreement or other material obligation that restricts, in any material
respect, the activities of Target or a Target Subsidiary; or (c) any
agreement or obligation that restricts in any material respect any
other person;
(xiv) take any action with respect to the indemnification
of any person;
(xv) change any accounting practices or policies or
depreciation or amortization rates, except as required by generally
accepted accounting principles or Laws or as agreed to or requested by
Target's auditors after consultation with Acquiror's auditors;
(xvi) adopt a plan of liquidation, dissolution, merger,
consolidation, share exchange, restructuring, recapitalization, or
other reorganization; or
(xvii) resolve, agree, commit or arrange to do any of the
foregoing.
Furthermore, Target covenants, represents and warrants that from
and after the date hereof, unless Acquiror shall otherwise expressly
consent in writing, Target shall, and Target shall cause each Target
Subsidiary to, use its or their reasonable business efforts to:
(A) keep in full force and effect insurance comparable in
amount and scope of coverage to insurance now carried by it or them;
(B) pay all accounts payable and other obligations, when
they become due and payable, in the ordinary course of business
consistent with past practice and with the provisions of this
Agreement, except if the same are contested in good faith, and, in the
case of the failure to pay any material accounts payable or other
obligations which are contested in good faith, only after consultation
with Acquiror; and
28
(C) comply in all material respects with all Laws
applicable to it or any of them or their respective properties, assets
or businesses and maintain in full force and effect all Target Permits
necessary for, or otherwise material to, such businesses.
4.2 NOTIFICATION OF CERTAIN MATTERS. Target shall give
-------------------------------
prompt notice to Acquiror if any of the following occur after the date
of this Agreement: (i) any notice of, or other communication relating
to, a default or Event which, with notice or lapse of time or both,
would become a default under any Target Material Contract; (ii) receipt
of 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; (iii) receipt of
any material notice or other communication from any Governmental
Authority (including, but not limited to, the NASD or any other
securities exchange) in connection with the transactions contemplated
by this Agreement; (iv) the occurrence of an Event which would have a
Target Material Adverse Effect; (v) the commencement or threat of any
Litigation involving or affecting Target or any Target Subsidiary or
any affiliate, or any of their respective properties or assets, or, to
its knowledge, any employee, agent, director or officer of Target or
any Target Subsidiary, in his or her capacity as such or as a fiduciary
under a Benefit Plan of Target, which, if pending on the date hereof,
would have been required to have been disclosed in or pursuant to this
Agreement or which relates to the consummation of the Merger or any
material development in connection with any Litigation disclosed by
Target in or pursuant to this Agreement or the Target Securities
Filings; and (vi) the occurrence of any Event that would cause a breach
by Target of any provision of this Agreement or a Target Ancillary
Agreement, including such a breach that would occur if such Event had
taken place on or prior to the date of this Agreement.
4.3 ACCESS AND INFORMATION. Between the date of this
----------------------
Agreement and the Effective Time, each of Target and the Target
Subsidiaries, upon reasonable notice, will give, and shall direct its
accountants and legal counsel to give, Acquiror, its lenders and their
respective authorized representatives (including, without limitation,
financial advisors, accountants and legal counsel) at all reasonable
times full access to all offices and other facilities, to all personnel
and to all contracts, agreements, commitments, books and records
(including, but not limited to, Tax Returns) of or pertaining to Target
and the Target Subsidiaries, will permit the foregoing to make such
inspections as they may reasonably require and will cause its officers
and employees promptly to furnish Acquiror with (a) such financial and
operating data and other information with respect to the business,
assets, liabilities, obligations and operations of Target and the
Target Subsidiaries as Acquiror may from time to time reasonably
request including, but not limited to, data and information required
for inclusion in any of Acquiror's filings with the SEC, and (b) a copy
of each material report, schedule and other document filed or received
by Target or any Target Subsidiary pursuant to the requirements of
applicable securities Laws, the NASD or other securities exchange.
4.4 SHAREHOLDER APPROVAL; PROXY STATEMENT; SHAREHOLDER LISTS.
--------------------------------------------------------
(a) As soon as practicable, Target will in accordance with
applicable Law, its Articles of Incorporation and its By-Laws take all
steps necessary to duly call, give notice of, convene and hold a
meeting of its shareholders (the "Shareholders' Meeting") for the
---------------------
purpose of adopting this Agreement and the Merger and the other
transactions contemplated hereby and for such other
29
purposes as may be necessary or desirable in connection with
effectuating the transactions contemplated hereby. Except as otherwise
contemplated in this Agreement, the Board of Directors of Target (i)
will take all steps necessary to present and recommend to the
shareholders of Target that they adopt this Agreement and approve the
transactions contemplated hereby, and (ii) will use its reasonable best
efforts to obtain any necessary adoption and approval by Target's
shareholders of this Agreement and the Merger and the other
transactions contemplated hereby, including, without limitation, voting
the Target Shares held by such Directors for such adoption and
approval.
(b) Acquiror and Target will as promptly as practicable
following the execution of this Agreement jointly prepare, and Target
shall file, a proxy statement on an appropriate schedule or other form
for distribution to holders of Target Shares in advance of the
Shareholders' Meeting and such other schedules and other filings as may
be necessary or appropriate (collectively, together with any amendments
or supplements thereto, the "Proxy Statement") with the SEC and will
---------------
use its reasonable best efforts to respond to the comments of the SEC
and to cause the Proxy Statement to be mailed to the holders of Target
Shares at the earliest practical time. Target shall furnish all
information concerning it and the holders of its capital stock as
Acquiror may reasonably request in connection with such actions.
Target will notify Acquiror promptly of the receipt of the comments of
the SEC, if any, and of any request by the SEC for amendments or
supplements to the Proxy Statement or for additional information with
respect thereto, and will supply Acquiror with copies of all
correspondence between Target or its representatives, on the one hand,
and the SEC or members of its staff, on the other hand, with respect to
the Proxy Statement or the Merger or this Agreement, the Target
Ancillary Agreements or the other transactions contemplated hereby or
thereby. If (A) at any time prior to the Shareholders' Meeting, any
event should occur relating to Target or any of the Target Subsidiaries
which should be set forth in an amendment of, or a supplement to, the
Proxy Statement, Target will promptly inform Acquiror and (B) if at any
time prior to the Shareholders' Meeting, any event should occur
relating to Parent, Acquiror or Acquisition Subsidiary or any of their
respective associates or affiliates, or relating to the plans of any
such persons for Target after the Effective Time that should be set
forth in an amendment of, or a supplement to, the Proxy Statement,
Acquiror will promptly inform Target and in the case of (A) or (B)
Target and Acquiror shall file and, if required, mail such amendment or
supplement to holders of Target Shares; provided, prior to such filing
or mailing, Target and Acquiror shall consult with each other with
respect to such amendment or supplement and shall incorporate the
other's comments thereon. Target will not distribute or file the Proxy
Statement, or any amendment thereof or supplement thereto, to which
Acquiror reasonably objects.
(c) Target hereby consents to the inclusion in the Proxy
Statement of the recommendation of the Board of Directors of Target
described in Section 2.4, subject to any modification, amendment or
-----------
withdrawal thereof permitted hereby, and represents that its financial
adviser has, subject to the terms of their engagement letter with
Target and the Board of Directors of Target, consented to the inclusion
of references to their opinion in the Proxy Statement. To the extent
reasonably practicable, Target and its counsel shall permit Acquiror
and its counsel to participate in all communications with the SEC and
its staff, including any meetings and telephone conferences, relating
to the Proxy Statement, the Merger or this Agreement or the other
transactions contemplated hereby.
30
(d) Target shall promptly upon the request by Acquiror, or
shall cause its transfer agent to promptly, furnish Acquiror and
Acquisition Subsidiary with mailing labels containing the names and
addresses of all record holders of shares of Target Common Stock and
with security position listings of shares of Target Common Stock held
in stock depositories, each as of the most recent practicable date,
together with all other available listings and computer files
containing names, addresses and security position listings of record
holders and beneficial owners of shares of Target Common Stock. Target
shall furnish Acquiror and Acquisition Subsidiary with such additional
information, including, without limitation, updated listings and
computer files of the holders of Target Common Stock, mailing labels
and security position listings, and such other assistance as Acquiror
or their agents may reasonably request.
4.5 REASONABLE BUSINESS EFFORTS. Subject to the terms and
---------------------------
conditions herein provided, Target agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the Merger and the other
transactions contemplated by this Agreement and the Target Ancillary
Agreements, including, without limitation, any acquisition of Target
Common Stock by Acquiror or any of its affiliates or associates,
including, but not limited to (i) obtaining the Consent of others to
this Agreement, the Target Ancillary Agreements and the transactions
contemplated hereby and thereby, including, without limitation, any
acquisition of Target Common Stock by Acquiror or any of its affiliates
or associates, (ii) the defending of any Litigation against Target or
any Target Subsidiary challenging this Agreement, the Target Ancillary
Agreements or the consummation of the transactions contemplated hereby
or thereby, including, without limitation, any acquisition of Target
Common Stock by Acquiror or any of its affiliates or associates,
(iii) obtaining all Consents from Governmental Authorities required for
the consummation of the Merger and the transactions contemplated hereby
or thereby, including, without limitation, any acquisition of Target
Common Stock by Acquiror or any of its affiliates or associates,
(iv) timely making all necessary filings under the HSR Act, and (v)
timely making all necessary filings under the Exon-▇▇▇▇▇▇ Amendment.
Upon the terms and subject to the conditions hereof, Target agrees to
use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary to satisfy
the other conditions of the Closing set forth herein. Target will
consult with counsel for Acquiror as to, and will permit such counsel
to participate in, at Acquiror's expense, any Litigation referred to in
clause (ii) above brought against or involving Target or any Target
Subsidiary.
4.6 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in
--------------------
effect, Target shall not, and shall cause its affiliates not to,
without the written consent of Acquiror (which consent shall not be
unreasonably withheld or delayed), make any announcement or other
disclosure relating to this Agreement, the terms hereof, the Merger or
negotiations with respect thereto, except to their legal, accounting
and financial advisers engaged in connection with the Merger, unless
otherwise required by Law or pursuant to any applicable listing
agreement with, or rules of, the NASD or other securities exchange;
provided, that Target shall give Acquiror notice a reasonable time
prior to any such disclosure required by Law or otherwise, as referred
to above, and shall cooperate with and consult with Acquiror regarding
the contents of any such disclosure.
4.7 COMPLIANCE. In consummating the Merger and the
----------
transactions contemplated hereby and by the Target Ancillary
Agreements, Target shall comply in all material respects with
31
the applicable provisions of the Securities Exchange Act and shall
comply, and/or cause the Target Subsidiaries to comply or to be in
compliance, in all material respects, with all other applicable Laws.
4.8 BENEFIT PLANS. Between the date of this Agreement and
-------------
through the Effective Time, no discretionary award or grant under any
Benefit Plan of Target or a Target Subsidiary shall be made without the
prior written consent of Acquiror; nor shall Target or a Target
Subsidiary take any action or permit any action to be taken to
accelerate the vesting of any warrants or options previously granted
pursuant to any such Benefit Plan, other than pursuant to the existing
terms of outstanding employee stock options which, as originally
granted, contain acceleration provisions. Neither Target nor any
Target Subsidiary shall make any amendment to any Benefit Plan, any
awards thereunder or the terms of any security convertible into or
exchangeable for capital stock without the prior written consent of
Acquiror.
4.9 NO SOLICITATION OF TAKEOVER PROPOSAL.
------------------------------------
(a) Target shall, and shall direct and cause its officers,
directors, employees, representatives and agents to, immediately cease
any discussions or negotiations with any parties that may be ongoing
with respect to a Takeover Proposal (as hereinafter defined). Target
shall not, nor shall it permit any of the Target Subsidiaries to, nor
shall it authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it or any of the Target
Subsidiaries (collectively the "Representatives") of Target and the
---------------
Target Subsidiaries) to, directly or indirectly, (i) solicit, initiate
or encourage (including by way of furnishing information), or take any
other action designed or reasonably likely to facilitate, any inquiries
or the making of any proposal which constitutes, or may reasonably be
expected to lead to, any Takeover Proposal, or (ii) participate in any
discussions or negotiations regarding any Takeover Proposal; provided,
however, that if, at any time prior to receipt of the Target
Shareholders' Approval, the Target's Board of Directors reasonably
determines in good faith, after receipt of written advice from outside
counsel and an independent financial advisor of nationally recognized
reputation, that failing to take such action could reasonably be
expected to be a breach of its fiduciary duties to Target's
shareholders under applicable Law, Target may, in response to a
Takeover Proposal made after the date of this Agreement which was not
solicited by Target or its Representatives and which did not otherwise
result from a breach of this Section 4.9, and which is reasonably
-----------
likely to lead to a Superior Proposal (as hereinafter defined), and
subject to compliance with Section 4.9(c) (x) furnish information
--------------
with respect to Target to any person pursuant to a customary
confidentiality agreement including customary standstill provisions (as
determined by Target after consultation with its outside counsel) and
(y) participate in negotiations regarding such Takeover Proposal.
Without limiting the generality of the foregoing, it is understood that
any violation of the restrictions set forth in the previous two
sentences by any Representative of Target or any of the Target
Subsidiaries, including, without limitation, any investment banker,
financial advisor, attorney, accountant or other representative
retained by Target or any of the Target Subsidiaries, whether or not
acting on behalf of Target or any of the Target Subsidiaries, shall be
deemed to be a breach of this Section 4.9 by Target. For all
-----------
purposes of this Agreement, "Takeover Proposal" means any inquiry,
-----------------
proposal or offer relating to any direct or indirect acquisition or
purchase, in one transaction or a series of related transactions, of
15% or more of the assets of Target or any
32
of the Target Subsidiaries or 5% or more of any class of equity
securities of Target or any of the Target Subsidiaries, any tender
offer or exchange offer that if consummated would result in any person
beneficially owning 15% or more of any class of equity securities of
Target or any Target Subsidiary, any merger, consolidation, share
exchange, business combination, recapitalization, liquidation,
dissolution or similar transaction involving Target or any Target
Subsidiary, other than the transactions contemplated by this Agreement,
the Majority Shareholder Agreement or the Target Ancillary Agreements,
or any other transaction the consummation of which could reasonably be
expected to impede, interfere with, prevent or materially delay the
Merger or which could reasonably be expected to dilute materially the
benefits to Acquiror of the transactions contemplated by this
Agreement.
(b) The Board of Directors of Target shall promptly recommend
to the shareholders of Target that they adopt this Agreement and
approve the transactions contemplated hereby, and except as set forth
in this Section 4.9, neither the Board of Directors of Target nor any
-----------
committee thereof shall (i) withdraw or modify, or propose publicly to
withdraw or modify, the approval or recommendation by such Board of
Directors or such committee of the Merger or this Agreement, (ii)
approve or recommend, or propose publicly to approve or recommend, any
Takeover Proposal or (iii) cause Target to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Takeover
---------------------
Proposal. Notwithstanding the foregoing, if at any time prior to
receipt of Target Shareholders' Approval the Board of Directors of
Target determines in good faith, after receipt of written opinions from
outside counsel and an independent financial advisor of nationally
recognized reputation, that it has received a Takeover Proposal that
constitutes a Superior Proposal which did not result from a breach of
this Section 4.9 and that failure to do one of the following could
-----------
reasonably be expected to be a breach of its fiduciary duties to
Target's shareholders under applicable Law, the Board of Directors of
Target may (subject to this and the following sentences), after paying
to Acquiror the Termination Fee (as hereinafter defined), (x) withdraw
or modify its approval or recommendation of the Merger and this
Agreement, (y) approve or recommend the Superior Proposal (as defined
below), or (z) or terminate this Agreement (and concurrently with or
after such termination, if it so chooses, cause Target to enter into
any Acquisition Agreement with respect to the Superior Proposal), but
in each of the cases set forth in clause (x), (y) or (z), only at a
time prior to receipt of the Target Shareholders' Approval and only at
a time that is after the tenth business day following Acquiror's
receipt of written notice advising Acquiror that the Board of Directors
of Target has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal. Any such withdrawal or
modification of the recommendation of the Merger and this Agreement,
the Majority Shareholder Agreement or the Target Ancillary Agreements
and the transactions contemplated hereby and thereby shall not change
the approval of the Board of Directors of Target for purposes of
causing Section 351.459 of the Missouri Code or any other Takeover
Statute to be inapplicable to the Merger and this Agreement, the
Majority Shareholder Agreement or the Target Ancillary Agreements and
the transactions contemplated hereby and thereby. For all purposes of
this Agreement, a "Superior Proposal" means any bona fide proposal
-----------------
made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, 100% of the Target
Shares then outstanding (whether pursuant to a tender or exchange
offer, merger, consolidation, share
33
exchange, or other business combination) or all or substantially all
the assets of Target and otherwise on terms which the Board of
Directors of Target determines in its good faith judgment (based on a
written opinion of an independent financial advisor of nationally
recognized reputation) to be materially more favorable to Target and
its shareholders than the Merger (taking into account any changes to
the financial and other contractual terms of this Agreement proposed by
Acquiror in response to such proposal and all other relevant financial
and strategic considerations, including the timing of the consummation
of such transactions) and for which financing, to the extent required,
is then committed or which, in the good faith judgment of the Board of
Directors of Target, is reasonably capable of being financed by such
third party.
(c) In addition to the obligations of Target set forth in
paragraphs (a) and (b) of this Section 4.9, Target shall immediately
-----------
advise Acquiror orally and in writing of any request for information or
of any Takeover Proposal, the material terms and conditions of such
request or Takeover Proposal and the identity of the person making such
request or Takeover Proposal. Target will keep Acquiror fully informed
of the status and details (including amendments or proposed amendments)
of any such request or Takeover Proposal. If, after Target receives a
Superior Proposal, Acquiror desires to continue negotiations with
Target with respect to the Merger, Target agrees to negotiate in good
faith with Acquiror.
(d) Nothing contained in this Section 4.9 shall prohibit
-----------
Target from taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
Act or from making any disclosure to Target's shareholders if, in the
good faith judgment of the Board of Directors of Target, after
consultation with outside counsel, failure so to disclose would be
inconsistent with its fiduciary duties to Target's shareholders under
applicable Law; provided, however, neither Target nor its Board of
Directors nor any committee thereof shall, except as permitted by
Section 4.9(b), withdraw or modify, or propose publicly to withdraw
--------------
or modify, its position with respect to the Merger or this Agreement or
approve or recommend, or propose publicly to approve or recommend, a
Takeover Proposal.
4.10 SECURITIES AND SHAREHOLDER MATERIALS. Each of Target and
------------------------------------
the Target Subsidiaries shall send to Acquiror a copy of all material
public reports and materials as and when it sends the same to its
shareholders, the SEC, the NASD or any other securities commission,
exchange or market.
4.11 RESIGNATIONS. Target shall cause the officers and/or
------------
directors of Target and the Target Subsidiaries as Acquiror may request
to voluntarily resign their positions as such prior to and as of the
Effective Time. The instruments effecting such resignations are herein
referred to as the "Resignations.") Target shall cause such
------------
directors, prior to their resignation, to appoint new directors
nominated by Acquiror to fill such vacancies.
4.12 NONCOMPETE AND CONFIDENTIALITY AGREEMENTS. At or prior
-----------------------------------------
to closing, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ shall duly
execute noncompete and confidentiality agreements in substantially the
form attached hereto as Schedule 4.12 (the "Noncompete and
--------------
Confidentiality Agreements.").
--------------------------
34
4.13 COMFORT LETTERS. Upon the request of Acquiror, Target
---------------
shall use reasonable business efforts to provide to Acquiror prior to
the Effective Time "comfort letters" from the independent certified
public accountants for Target dated as of the date of the Proxy
Statement and the Closing Date, addressed to the Board of Directors of
each of Target and Acquiror, covering such matters as Acquiror shall
reasonably request with respect to facts concerning the financial
condition and results of operations of Target and the Target
Subsidiaries and customary for such certified public accountants to
deliver in connection with a transaction similar to the Merger.
4.14 TAKEOVER STATUTES. If any Takeover Statute is or may
-----------------
become applicable to the Merger or this Agreement or the Target
Ancillary Agreements or the transactions contemplated hereby or thereby
or the execution, delivery or performance of any other agreement to
acquire, or any other acquisition of, Target Common Stock by Acquiror
or any of its affiliates or associates, Target and the members of its
Board of Directors will grant such approvals, and will take such other
actions as are necessary so that the Merger, this Agreement, the
Majority Shareholder Agreement, the Target Ancillary Agreements and the
other transactions contemplated hereby or thereby or the execution,
delivery or performance of any other agreement to acquire, or any other
acquisition of, Target Common Stock by Acquiror or any of its
affiliates or associates may be consummated as promptly as practicable
on the terms contemplated hereby and will otherwise act to eliminate or
minimize the effects of any Takeover Statute on the Merger, this
Agreement, the Target Ancillary Agreements and any of the transactions
contemplated hereby or thereby or the execution, delivery or
performance of any other agreement to acquire, or any other acquisition
of, Target Common Stock by Acquiror or any of its affiliates or
associates.
4.15 YEAR 2000 PLAN. Target shall use all commercially
--------------
reasonable efforts to ensure that the Year 2000 Plan shall be completed
in a timely manner. Target shall (i) allow Acquiror to monitor
Target's Year 2000 compliance issues and Year 2000 Plan, (ii) provide
prompt notice to Acquiror if Target does not achieve, or reasonably
expects it shall not achieve, milestones and objectives identified in
the Year 2000 Plan and (iii) cooperate in good faith with Acquiror's
efforts to cause Target to be Year 2000 Compliant.
4.16 PURCHASE OF TARGET COMMON STOCK. Subject to the existing
-------------------------------
provisions of Target's Articles of Incorporation and By-Laws, Target
shall in no way prohibit Acquiror or any of its affiliates or
associates from purchasing shares of Target Common Stock or entering
into option, lock-up, voting or proxy agreements or any other similar
agreements with respect to Target Common Stock at any time prior to the
consummation of the Merger.
4.17 CONVERSION OF OPTIONS. Target shall offer to modify, and
---------------------
shall obtain such modification to, each outstanding Option to cause
each such Option either to be exercised prior to the Effective Time, or
to be canceled as of the Effective Time in exchange for the Option
Consideration, as contemplated by Section 1.7(b). Target shall effect
--------------
the foregoing after reasonable consultation with Acquiror pursuant to
written agreements in form and substance reasonably satisfactory to
Acquiror, including, without limitation, in a form consistent with
Section 1.7(b) hereof.
--------------
35
4.18 DISPOSITION OF U.S. FLAGGED VESSELS; NON-U.S. FLAGGED
-----------------------------------------------------
VESSELS. Immediately prior to the Effective Time, Target will sell,
-------
transfer, assign, contribute or otherwise dispose of its two U.S.
flagged vessels, or the shares of the Target Subsidiaries owning such
vessels, to such person or persons as designated by Acquiror and as
directed by and on such terms and conditions as specified by Acquiror,
and such U.S. flagged vessels shall be registered in the name(s) of the
new owner(s) with an endorsement for the coastwise trade and all
applicable mortgages with respect to such U.S. flagged vessels shall be
recorded with the National Vessel Documentation Center. Immediately
prior to the Effective Time, Target shall enter into (i) a time charter
of such U.S. flagged vessels in substantially the form attached hereto
as Exhibit 4.18(a) or on such other terms and conditions as specified
---------------
by Acquiror, (ii) an operating agreement with respect to Target's two
non-U.S. flagged vessels in a form and on such terms and conditions as
specified by Acquiror; and (iii) a transitional services agreement
providing for certain transition services with a person or persons as
designated by Acquiror in a form and on terms and conditions as
reasonably specified by Acquiror. If, after Target receives a Takeover
Proposal it takes any of the actions described in Section 4.9(a) or (b),
---------------------
at Acquiror's request, Target shall restructure the ownership of
Target's U.S. flagged vessels to allow the ownership of more than 25%
of the Target Shares by a non-U.S. citizen as reasonably requested by
Acquiror. Such restructuring shall be accomplished in a manner that
does not materially and adversely affect the interests of Target.
4.19 AMENDMENTS TO ARTICLES OF INCORPORATION AND BY-LAWS.
---------------------------------------------------
(a) Notwithstanding anything to the contrary herein, including
but not limited to anything in Section 4.9 hereof, as soon as
-----------
practicable, Target will in accordance with applicable Law, its
Articles of Incorporation and its By-Laws take all steps necessary to
duly call, give notice of, convene and hold a meeting of its
shareholders (which meeting may be, but need not be, the Shareholders'
Meeting) for the purpose of considering and voting upon a proposal to
approve and adopt a resolution which will amend Target's Articles of
Incorporation to remove the additions to the Articles of Incorporation
approved at a meeting of Target's shareholders held on March 23, 1999
(including but not limited to the new Article Eleven to Target's
Articles of Incorporation), which additions restricted ownership of
more than 24.9% of the outstanding Target Shares by non-United States
Citizens (the "Articles Amendment"). The Board of Directors of
------------------
Target (i) will take all steps necessary to present and recommend to
the shareholders of Target that they adopt the Articles Amendment at
such meeting and (ii) will use its reasonable best efforts to obtain
any necessary adoption and approval by Target's shareholders at such
meeting of the Articles Amendment.
(b) Acquiror and Target will as promptly as practicable
following the execution of this Agreement jointly prepare, and Target
shall file, a proxy statement on an appropriate schedule or other form
for distribution to holders of Target Shares in advance of the
shareholders' meeting referred to in Section 4.19(a) and such other
---------------
schedules and other filings as may be necessary or appropriate (which
may be the Proxy Statement) with the SEC and will use its reasonable
best efforts to respond to the comments of the SEC and to cause such
proxy statement to be mailed to the holders of Target Shares at the
earliest practical time. Target shall furnish all information
concerning it and the holders of its capital stock as Acquiror may
reasonably request in connection with such actions. Target will
notify Acquiror promptly of the receipt of the comments of the SEC, if
any, and of any request by the SEC for amendments or
36
supplements to such proxy statement or for additional information with
respect thereto, and will supply Acquiror with copies of all
correspondence between Target or its Representatives, on the one hand,
and the SEC or members of its staff, on the other hand, with respect to
such proxy statement. If at any time prior to such shareholders'
meeting, any event should occur relating to Target or any of the Target
Subsidiaries which should be set forth in an amendment of, or a
supplement to, such proxy statement, Target will promptly inform
Acquiror and Target shall file and, if required, mail such amendment or
supplement to holders of Target Shares; provided, prior to such filing
or mailing, Target shall consult with Acquiror with respect to such
amendment or supplement and shall incorporate Acquiror's comments
thereon, unless Target reasonably objects thereto. Target will not
distribute or file such proxy statement, or any amendment thereof or
supplement thereto, to which Acquiror reasonably objects.
(c) The Board of Directors of Target shall recommend to
Target's shareholders that they approve and adopt the Articles
Amendment.
(d) Target's Board of Directors shall, as soon as practicable,
amend Target's By-Laws to remove therefrom Article XV of such By-Laws
(relating to foreign ownership of Target Shares).
ARTICLE V
ADDITIONAL COVENANTS OF PARENT AND ACQUIROR
Parent and Acquiror jointly and severally covenant and agree as
follows:
5.1 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in
--------------------
effect, Parent and Acquiror shall not, and shall cause their affiliates
not to, without the written consent of Target, make any announcement or
other disclosure relating to this Agreement, the terms hereof, the
Merger or negotiations with respect thereto, except to their legal,
accounting and financial advisers engaged in connection with the
Merger, unless otherwise required by Law or pursuant to any applicable
listing agreement with, or rules and regulations of, the NASD or other
securities exchange; provided, that Parent and Acquiror shall give
Target notice a reasonable time prior to any such disclosure required
by Law or otherwise, as referred to above, and shall cooperate with and
consult with Target regarding the contents of any such disclosure
5.2 COMPLIANCE. In consummating the Merger and the
----------
transactions contemplated hereby, Parent and Acquiror shall comply in
all material respects with the applicable provisions of the Securities
Exchange Act and shall comply, and/or cause Acquisition Subsidiary to
comply or to be in compliance, in all material respects, with all other
applicable Laws applicable thereto.
5.3 PROXY STATEMENT. Parent and Acquiror shall cooperate
---------------
with Target with respect to the preparation of the Proxy Statement as
set forth in Section 4.4 (and the proxy statement, if different than
-----------
the Proxy Statement, as set forth in Section 4.19) and shall provide
------------
Target with such information concerning Parent, Acquiror and
Acquisition Subsidiary as shall be required to be included therein.
Parent and Acquiror shall vote, or cause to be voted, in favor of the
Merger,
37
this Agreement and the Articles Amendment all shares of Target Common
Stock directly or indirectly beneficially owned by them.
5.4 INDEMNIFICATION AND INSURANCE.
-----------------------------
(a) The Articles of Incorporation and By-Laws of the
Surviving Corporation shall contain provisions with respect to
indemnification and exculpation similar to those set forth in the
Articles of Incorporation and By-Laws of Target, which provisions
Acquiror shall not and shall cause the Surviving Corporation not to
amend, repeal or otherwise modify for a period of five (5) years from
the Effective Time in any manner that would materially and adversely
affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees or agents of Target, unless such
amendment, repeal or other modification is required by applicable Law.
(b) From and after the Effective Time, Parent and
Acquiror agree that they will indemnify and hold harmless each present
director and officer of Target (when acting in such capacity)
determined as of the Effective Time (the "Indemnified Parties"),
-------------------
against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit,
-----
proceeding or investigation whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or
occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the fullest extent
that Target would have been permitted under the Missouri Code and its
Articles of Incorporation or By-Laws in effect on the date of this
Agreement to indemnify such person (and Parent and Acquiror shall also
advance expenses as incurred to the fullest extent permitted under
applicable Law and the Articles of Incorporation and the By-Laws of
Target, provided that the person to whom expenses are advanced provides
an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification).
(c) Any Indemnified Party wishing to claim
indemnification under paragraph (b) of this Section 5.4, upon
-----------
learning of any such claim, action, suit, proceeding or investigation,
shall promptly notify Acquiror thereof in writing, but the failure to
so notify shall not relieve Acquiror of any liability it may have to
such Indemnified Party if such failure does not materially prejudice
Acquiror. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i)
Acquiror or the Surviving Corporation shall have the right to assume
the defense thereof, and Acquiror shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any
other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Acquiror or the
Surviving Corporation elects not to assume such defense, or if there
are any issues which raise material conflicts of interest between
Acquiror or the Surviving Corporation and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to
Acquiror, and Acquiror or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified
Parties; provided, however, that Acquiror shall be obligated pursuant
to this paragraph (c) to pay for only one firm or counsel for all
Indemnified Parties and, as applicable, for local counsel, and
provided, however, the costs of more than one firm or counsel shall be
paid if the Indemnified Parties cannot be represented by one firm or
counsel
38
because of a conflict of interest, (ii) the Indemnified Parties will
cooperate in the defense of any such matter, and (iii) Acquiror shall
not be liable for any settlement effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed).
(d) For a period of five (5) years after the Effective
Time and to the extent available, Parent, Acquiror or the Surviving
Corporation shall maintain in effect policies of directors' and
officers' liability insurance covering those persons who are currently
covered by Target's directors' and officers' liability insurance policy
on terms (including the amounts of coverage and the amounts of
deductibles, if any) that are no less favorable to them in any material
respect than the terms now applicable to them under Target's current
insurance policies; provided that the Surviving Corporation shall not
be required to pay an annual premium for such insurance in excess of
150% of the last annual premium paid prior to the date hereof, but in
such case shall purchase as much coverage as possible for such amount.
(e) If Parent, Acquiror or the Surviving Corporation or
any of their successors or assigns (i) shall consolidate with or merge
into any other corporation or entity and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii)
shall transfer all or substantially all of its properties and assets to
any individual, corporation or other entity, then and in each case,
proper provisions shall be made so that the successors and assigns of
Acquiror or the Surviving Corporation, as the case may be, shall assume
all of the obligations set forth in this Section 5.4; provided, that
-----------
the failure to make such provisions shall not affect the validity of
any such consolidation, merger or transfer.
(f) The provisions of this Section 5.4 are intended to
-----------
be for the benefit of, and shall be enforceable by, each of the
Indemnified Parties, their heirs and representatives.
5.5 ADVISORY COMMITTEE. Following the Closing, Parent and
------------------
Acquiror shall cause the Surviving Corporation to form an Advisory
Committee, and each of Target's current non-employee directors other
than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be offered the opportunity to serve as an
Advisory Director for a two-year term commencing on the Closing Date.
In consideration for serving as an Advisory Director, each such
individual shall be entitled to receive an annual fee of $12,000, a fee
of $600 for each Advisory Committee meeting attended and a $5,000
annual credit for traveling on the Surviving Corporation's travel
programs. The Advisory Committee shall meet from time to time, in St.
Louis, Missouri or such other place, as reasonably agreed to by the
committee members and the Surviving Corporation.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
--------------------------------------
obligations of each party to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the
following conditions:
6.1.1 SHAREHOLDER APPROVAL. This Agreement and the
--------------------
Merger and the other transactions contemplated hereby shall have
been duly adopted at or prior to the Effective
39
Time by the requisite vote of the shareholders of Target in
accordance with the Articles of Incorporation and By-Laws of
Target, the Missouri Code and the Securities Exchange Act.
6.1.2 NO INJUNCTION OR ACTION. No order, statute, rule,
-----------------------
regulation, executive order, stay, decree, judgment or injunction
shall have been enacted, entered, promulgated or enforced by any
court or other Governmental Authority, which prohibits or
prevents the consummation of the Merger or the other transactions
contemplated hereby and which has not been vacated, dismissed or
withdrawn by the Effective Time. Target and Acquiror shall use
their reasonable best efforts to have any of the foregoing
vacated, dismissed or withdrawn by the Effective Time.
6.1.3 HSR ACT. Any waiting period applicable to the
-------
Merger under the HSR Act shall have expired or earlier
termination thereof shall have been granted and no action shall
have been instituted by either the United States Department of
Justice or the Federal Trade Commission to prevent the
consummation of the transactions contemplated by this Agreement
or to modify or amend such transactions in any material manner,
or if any such action shall have been instituted, it shall have
been withdrawn or a final judgment shall have been entered
against such Department or Commission, as the case may be.
6.1.4 EXON-▇▇▇▇▇▇ AMENDMENT. All approvals under the
---------------------
Exon-▇▇▇▇▇▇ Amendment necessary to permit the consummation of the
transactions contemplated by this Agreement shall have been
obtained.
6.1.5 OPINION OF FINANCIAL ADVISOR. The fairness opinion
----------------------------
referenced in Section 2.4(c) above shall not have been
--------------
withdrawn at or prior to the Effective Time.
6.1.6 GOVERNMENTAL APPROVALS. All Consents, other than
----------------------
Consents the failure of which to be obtained or made, in the
judgment of Acquiror, would not have a material adverse effect on
the business, assets, condition (financial or otherwise),
properties, liabilities, prospects or the result of operations of
the Surviving Corporation and its subsidiaries taken as a whole
("Surviving Corporation Material Adverse Effect"), of any
---------------------------------------------
Governmental Authority required for the consummation of the
Merger and the transactions contemplated by this Agreement shall
have been obtained by Final Order (as hereinafter defined). The
term "Final Order" with respect to any Consent of a
-----------
Governmental Authority shall mean an action by the appropriate
Governmental Authority as to which: (i) no request for stay by
such Governmental Authority of the action is pending, no such
stay is in effect, and, if any deadline for filing any such
request is designated by statute or regulation, it has passed;
(ii) no petition for rehearing or reconsideration of the action
is pending before such Governmental Authority, and no appeal or
comparable administrative remedy is pending before such
Governmental Authority, and the time for filing any such
petition, appeal or administrative remedy has passed; (iii) such
Governmental Authority does not have the action under
reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or
request for stay by a court, of the Governmental Authority action
is pending or
40
in effect, and if any deadline for filing any such appeal or
request is designated by statute or rule, it has passed. The
condition contained in this Subsection 6.1.6 may be waived by
----------------
Acquiror, in its sole judgment.
6.2 CONDITIONS TO OBLIGATIONS OF TARGET. The obligation of
-----------------------------------
Target to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following additional conditions, any
one or more of which may be waived by Target:
6.2.1 ACQUIROR REPRESENTATIONS AND WARRANTIES. The
---------------------------------------
representations and warranties of Parent and Acquiror contained
in this Agreement that are modified by materiality or Acquiror
Material Adverse Effect ("Acquiror Modified Representation")
--------------------------------
shall be true and correct in all respects and those that are not
so modified ("Acquiror Nonmodified Representation") shall be
-----------------------------------
true and correct in all material respects, on the date hereof
and, except for changes not prohibited by this Agreement, as of
the Effective Time as if made at the Effective Time.
Furthermore, none of the representations or warranties of
Acquiror contained in this Agreement, disregarding any
qualifications therein or in this Section 6.2.1 regarding
-------------
materiality or Acquiror Material Adverse Effect, shall be untrue
or incorrect to the extent that such untrue or incorrect
representations or warranties, when taken together as a whole,
have had or would have an Acquiror Material Adverse Effect.
6.2.2 PERFORMANCE BY PARENT AND ACQUIROR. Parent and
----------------------------------
Acquiror shall have performed and complied with all of the
covenants and agreements in all material respects and satisfied
in all material respects all of the conditions required by this
Agreement to be performed or complied with or satisfied by Parent
and Acquiror at or prior to the Effective Time.
6.2.3 CERTIFICATE. Acquiror shall have delivered to
-----------
Target a certificate executed on its behalf by its President or
another authorized officer to the effect that the conditions set
forth in Subsections 6.2.1 and 6.2.2, above, have been satisfied.
---------------------------
6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND ACQUIROR. The
------------------------------------------------
obligations of Parent and Acquiror to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the
following additional conditions, any one or more of which may be waived
by Parent and Acquiror:
6.3.1 TARGET REPRESENTATIONS AND WARRANTIES. The
-------------------------------------
representations and warranties of Target contained in this
Agreement that are modified by materiality or Target Material
Adverse Effect ("Target Modified Representation") shall be true
------------------------------
and correct in all respects, and those that are not so modified
("Target Nonmodified Representation") shall be true and correct
---------------------------------
in all material respects, on the date hereof and, except for
changes not prohibited by this Agreement, as of the Effective
Time as if made at the Effective Time. Furthermore, none of the
representations or warranties of Target contained in this
Agreement, disregarding any qualifications therein or in this
Section 6.3.1 regarding materiality or Target Material Adverse
-------------
Effect, shall be untrue or
41
incorrect to the extent that such untrue or incorrect
representations or warranties, when taken together as a whole,
have had or would have a Target Material Adverse Effect.
6.3.2 PERFORMANCE BY TARGET. Target shall have performed
---------------------
and complied with all the covenants and agreements in all
material respects and satisfied in all material respects all the
conditions required by this Agreement to be performed or complied
with or satisfied by Target at or prior to the Effective Time.
6.3.3 NO MATERIAL ADVERSE CHANGE. There shall have not
--------------------------
occurred after the date hereof any Event that has or reasonably
could be expected to have a Target Material Adverse Effect.
6.3.4 NO PENDING ACTION. There shall not be instituted,
-----------------
pending or threatened any action, investigation or proceeding by
any Governmental Authority, and there shall not be instituted,
pending or threatened any action or proceeding by any other
person, domestic or foreign, before any Governmental Authority,
which is reasonably likely to be determined adversely to Parent,
Acquiror or Acquisition Subsidiary, (A) challenging or seeking to
make illegal, to delay materially or otherwise, directly or
indirectly, to restrain or prohibit the consummation of the
Merger, seeking to obtain material damages or imposing any
material adverse conditions in connection therewith or otherwise,
directly or indirectly relating to the transactions contemplated
by the Merger, (B) seeking to restrain, prohibit or delay the
exercise of full rights of ownership or operation by Parent,
Acquiror or Acquisition Subsidiary or their affiliates of all or
any portion of the business or assets of Target and the Target
Subsidiaries, taken as a whole, or of Parent, Acquiror or
Acquisition Subsidiary or any of their affiliates, or to compel
Acquiror or Acquisition Subsidiary or any of their affiliates to
dispose of or hold separate all or any material portion of the
business or assets of Target and the Target Subsidiaries, taken
as a whole, or of Parent, Acquiror or Acquisition Subsidiary or
any of their affiliates, (C) seeking to impose or confirm
material limitations on the ability of Parent, Acquiror or
Acquisition Subsidiary or any of their affiliates to exercise
full rights of the ownership of the shares of Target Common
Stock, including, without limitation, the right to vote the
shares of Target Common Stock acquired or owned by Parent,
Acquiror or Acquisition Subsidiary or any of their affiliates on
all matters properly presented to the holders of Target Common
Stock, (D) seeking to require divestiture by Parent, Acquiror or
Acquisition Subsidiary or any of their affiliates of the shares
of Target Common Stock, or (E) that otherwise would reasonably be
expected to have a Target Material Adverse Effect.
6.3.5 DISSENTING SHARES. At the Effective Time,
-----------------
Dissenting Shares shall not exceed 200,000 Target Shares.
6.3.6 REQUIRED CONSENTS. All required Consents of any
-----------------
person (other than a Governmental Authority) to the Merger or the
transactions contemplated hereby shall have been obtained or made
on terms and conditions reasonably acceptable to Acquiror and be
in full force and effect, except for those the failure of which
to obtain or be made, in the judgment of Acquiror, would not have
a Surviving Corporation Material Adverse Effect.
42
6.3.7 CERTIFICATES AND OTHER DELIVERIES. Target shall
---------------------------------
have delivered, or caused to be delivered, to Acquiror (i) a
certificate executed on its behalf by its President or another
duly authorized officer to the effect that the conditions set
forth in Subsections 6.1.1, 6.1.4, 6.1.5, 6.3.1, 6.3.2, 6.3.3,
-----------------------------------------------------
6.3.4, 6.3.5 and 6.3.6, above, have been satisfied; (ii) a
----------------------
certificate of good standing or of legal existence, as
applicable, from the Secretary of State of each state or
comparable authority in other jurisdictions in which Target and
the Target Subsidiaries are incorporated or qualified to do
business stating that each is a validly existing corporation in
good standing or of legal existence, as applicable; (iii) duly
adopted resolutions of the Board of Directors and shareholders of
Target approving the execution, delivery and performance of this
Agreement, the Target Ancillary Agreements and the instruments
contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of Target; (iv) a true and complete copy of
the Articles or Certificate of Incorporation or comparable
governing instruments, as amended, of Target and each of the
Target Subsidiaries certified by the Secretary of State of the
state of incorporation or comparable authority in other
jurisdictions, and a true and complete copy of the By-Laws or
comparable governing instruments, as amended, of Target and each
of the Target Subsidiaries certified by the Secretary thereof;
(v) the duly executed Noncompete and Confidentiality Agreements;
(vi) the duly executed Resignations on terms and conditions
reasonably acceptable to Acquiror; (vii) a list of the
shareholders of Target entitled to vote on the adoption of this
Agreement and an undertaking from Target's transfer agent to
deliver a list of the shareholders of Target as of the Effective
Time as soon thereafter as it is available, each such list to be
certified by the transfer agent of Target; and (viii) such other
documents and instruments as Acquiror reasonably may request.
6.3.8 OPINION OF TARGET COUNSEL. Acquiror shall have
-------------------------
received the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to Target,
in form and substance reasonably satisfactory to Acquiror,
covering the matters set forth in Schedule 6.3.8 attached
--------------
hereto.
6.3.9 COMFORT LETTERS. Acquiror shall have received
---------------
"comfort letters" from the independent certified public
accountants for Target dated as of the date of the Proxy
Statement and the Closing Date, addressed to the Board of
Directors of each of Target and Acquiror, covering such matters
as Acquiror shall reasonably request with respect to facts
concerning the financial condition and results of operations of
Target and the Target Subsidiaries and customary for such
certified public accountants to deliver in connection with a
transaction similar to the Merger.
6.3.10 VESSELS. Target shall have taken all of the
-------
actions and completed all of the transactions contemplated by
Section 4.18 and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President and Chief
------------
Executive Officer of Target, shall have taken such actions,
undertaken such obligations and entered into such agreements as
are advisable or necessary to facilitate the transactions
contemplated by Section 4.18 hereof and the ownership and
------------
operation of Target's U.S. flagged vessels and the operation of
Target's non-U.S. flagged vessels, upon terms and conditions
reasonably satisfactory to Acquiror, in accordance with terms of
the agreement attached hereto as Exhibit 6.3.10 (the agreement
--------------
attached hereto as Exhibit 6.3.10 may be amended, modified or
--------------
supplemented from time to time by a written agreement between
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and Acquiror).
43
6.3.11 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
--------------------------------------------
The environmental representations and warranties of Target
contained in Section 2.17 shall be true and correct in all material
------------
respects, without reference to any knowledge qualifier contained
therein, as of the Effective Time as if made at the Effective
Time.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 TERMINATION. This Agreement may be terminated at any
-----------
time prior to the Effective Time, whether before or after approval of
the shareholders of Target described herein, only:
(a) by mutual written consent of Acquiror and Target;
(b) by either Acquiror or Target if:
(i) the Merger shall not have been consummated on or
prior to March 31, 2000; provided, however, that if Target or Acquiror
determines that additional time is necessary in connection with
obtaining a Consent with respect to the HSR Act from any Governmental
Authority or satisfying any related waiting period, such date may be
extended by Target or Acquiror from time to time by written notice to
the other party to a date no later than June 30, 2000; and provided
further, however, that the right to terminate this Agreement pursuant
to this Section 7.1(b)(i) shall not be available to any party whose
-----------------
failure to perform any of its obligations under this Agreement results
in the failure of the Merger to be consummated by such time;
(ii) the approval of holders of Target Common Stock
required by Section 6.1.1 shall not have been obtained at a meeting
-------------
duly convened therefor or at any adjournment or postponement thereof;
(iii) any court of competent jurisdiction or other
Governmental Authority shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Acquiror, if (i) there are any breaches of any Target
Modified Representation or there are any material breaches of any
Target Nonmodified Representation, or (ii) Target shall have breached
or failed to perform, notwithstanding satisfaction or due waiver of all
conditions thereto, any of its material covenants or agreements
contained herein as to which notice specifying such breach or failure
has been given to Target promptly after the discovery thereof and
Target has failed to cure or otherwise resolve the same to the
reasonable satisfaction of Acquiror within twenty (20) days after
receipt of such notice (without limiting the foregoing or any other
covenants or agreements that may be deemed material, it is agreed that
a breach of Section 4.1(iii) shall be deemed a breach of a material
covenant or agreement);
44
(d) by Acquiror, if Section 4.9 shall be breached by Target
-----------
in any material respect, including, without limitation, by failing to
promptly notify Acquiror as required thereunder;
(e) by Acquiror, if (i) the Board of Directors of Target or any
committee thereof shall have withdrawn or modified in a manner adverse
to Acquiror its approval or recommendation of the Merger and this
Agreement, or failed to reconfirm its recommendation within ten (10)
days after a written request to do so, or approved or recommended any
Takeover Proposal or (ii) the Board of Directors of Target or any
committee thereof shall have resolved to take any of the foregoing
actions;
(f) by Acquiror, if (i) holders of Target Common Stock do not
approve the Articles Amendment at a meeting duly convened therefor or
at any adjournment or postponement thereof prior to March 31, 2000, or
(ii) if the Board of Directors of Target do not amend Target's By-Laws
pursuant to Section 4.19(d);
---------------
(g) by Target, if (i) there are any breaches of any Acquiror
Modified Representation or there are any material breaches of any
Acquiror Nonmodified Representation, or (ii) Acquiror shall have
breached or failed to perform, notwithstanding satisfaction or due
waiver of all conditions thereto, any of its material covenants or
agreements contained herein as to which notice specifying such breach
or failure has been given to Acquiror promptly after the discovery
thereof and Acquiror has failed to cure or otherwise resolve the same
to the reasonable satisfaction of Target within twenty (20) days after
receipt of such notice; and
(h) by Target, in accordance with Section 4.9(b), provided
--------------
that it has complied with all provisions thereof, including the notice
provisions therein, and that it complies with applicable requirements
relating to the payment (including the timing of any payment) of the
Termination Fee (as hereinafter defined).
The party desiring to terminate this Agreement pursuant to
the preceding paragraphs (b), (c), (d), (e), (f), (g) or (h), shall
give written notice of such termination to the other party in
accordance with Section 8.5 below.
-----------
7.2 TERMINATION FEES AND RIGHTS.
---------------------------
(a) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article VII, this Agreement
(other than as set forth in this Section 7.2, Section 4.18,
----------- ------------
Section 4.19, Section 7.3, Section 8.1, Section 8.7 and
------------ ----------- ----------- -----------
Section 8.8) shall become void and of no effect with no liability on
-----------
the part of any party hereto (or of any of its directors, officers,
employees, agents, legal or financial advisers or other
representatives); provided, however, that no such termination shall
relieve any party hereto from any liability for breach of this
Agreement.
(b) In the event that this Agreement is terminated by Acquiror
pursuant to Section 7.1(c) solely due to a breach of a Target
--------------
Modified Representation or a material breach of a Target Nonmodified
Represenation and the circumstances resulting in such breach occurred
in the ordinary course of Target's business consistent with past
practice, then Target shall promptly, but in no event later than two
days after the date of such termination, pay Acquiror, as liquidated
damages, a fee equal to $1 million. The amount payable in this
Section 7.2(b) shall not be payable if the Termination Fee is payable
--------------
pursuant to Section 7.2(c).
--------------
45
(c) In the event that (A) a bona fide Takeover Proposal shall
have been made known to Target or any of the Target Subsidiaries or has
been made directly to holders of Target Common Stock generally or any
person shall have publicly announced an intention (whether or not
conditional) to make a bona fide Takeover Proposal and such Takeover
Proposal or announced intention shall not have been withdrawn and
thereafter this Agreement is terminated by Target pursuant to Section
-------
7.1(b)(i), or by Acquiror pursuant to Section 7.1(b)(i) after a date
--------- -----------------
occuring the earlier of (1) June 30, 2000 or (2) one additional month
following March 31, 2000 for each bona fide Takeover Proposal received
by Target, or (B) this Agreement is terminated by (x) either Target or
Acquiror pursuant to Section 7.1(b)(ii), (y) Target pursuant to
------------------
Section 7.1(h) or (z) by Acquiror pursuant to Sections 7.1(c) (if
-------------- -------------------
not otherwise covered by Section 7.2(b)), 7.1(d), 7.1(e), or 7.1(f),
-------------------------------------------------------------------
or (C) the condition in Section 6.1.5 is not satisfied after Target's
-------------
receipt of a bona fide Takeover Proposal and this Agreement is duly
terminated by either party, then Target shall promptly, but in no event
later than two days after the date of such termination, pay Acquiror a
fee equal to $8 million (the "Termination Fee"), payable by wire
---------------
transfer of same day funds.
(d) Target acknowledges that the agreements contained in this
Section 7.2 are an integral part of the transactions contemplated by
-----------
this Agreement, and that, without these agreements, Acquiror would not
enter into this Agreement; accordingly, if Target fails to promptly pay
any amount due pursuant to this Section 7.2, and in order to obtain
-----------
such payment, Acquiror commences a suit which results in a judgment
against Target for the Termination Fee set forth in Section 7.2(c) or
--------------
for any amount set forth in Section 7.2(b), Target shall also pay to
--------------
Acquiror its costs and expenses (including attorneys' fees) in
connection with such suit, together with interest on the amount of the
Termination Fee or the amount due and owing pursuant to Section
-------
7.2(b) at the prime rate of Bank of America, N.A. in effect on the
------
date such payment was required to be made.
7.3 PROCEDURE UPON TERMINATION. In the event of termination
--------------------------
pursuant to this Article VII, this Agreement shall terminate and the
-----------
Merger shall be abandoned without further action by Target or Acquiror,
provided that the agreements contained in Sections 4.18, 4.19, 7.2,
-------------------------
7.3, 8.1, 8.7 and 8.8 hereof shall remain in full force and effect.
---------------------
If this Agreement is terminated as provided herein, each party shall
use its reasonable best efforts to redeliver all documents, work papers
and other material (including any copies thereof) of any other party
relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the party furnishing the same.
Nothing contained in this Agreement shall relieve any party from any
liability for any inaccuracy, misrepresentation or breach of this
Agreement prior to termination.
ARTICLE VIII
MISCELLANEOUS
8.1 CONFIDENTIALITY. Unless (i) otherwise expressly provided
---------------
in this Agreement, (ii) required by applicable Law or any listing
agreement with, or the rules and regulations of, any applicable
securities exchange or the NASD, (iii) necessary to secure any required
Consents as to
46
which the other party has been advised, or (iv) consented to in writing
by Acquiror and Target, this Agreement and any information or documents
furnished in connection herewith shall be kept strictly confidential by
Target and the Target Subsidiaries, Acquiror and Acquisition Subsidiary
and their respective officers, directors, employees and agents. Prior
to any disclosure pursuant to the preceding sentence, the party
intending to make such disclosure shall consult with the other party
regarding the nature and extent of the disclosure. Nothing contained
herein shall preclude disclosures to the extent necessary to comply
with accounting, SEC and other disclosure obligations imposed by
applicable Law. In connection with any filing with the SEC under the
Securities Exchange Act, Target or Acquiror, after consultation with
the other party, may include any information required to be included
therein with respect to the Merger. Acquiror and Target shall
cooperate with the other and provide such information and documents as
may be required in connection with any such filings. In the event the
Merger is not consummated, Acquiror and Target shall return to the
other all documents furnished by the other and will hold in absolute
confidence all information obtained from the other party except to the
extent (i) such party is required to disclose such information by Law
or such disclosure is necessary or desirable in connection with the
pursuit or defense of a claim, (ii) such information was known by such
party prior to such disclosure or was thereafter developed or obtained
by such party independent of such disclosure, (iii) such party received
such information on a non-confidential basis from a source, other than
the other party, which is not known by such party to be bound by a
confidentiality obligation with respect thereto or (iv) such
information becomes generally available to the public or is otherwise
no longer confidential. Prior to any disclosure of information
pursuant to the exception in clause (i) of the preceding sentence, the
party intending to disclose the same shall so notify the party which
provided the same in order that such party may seek a protective order
or other appropriate remedy should it choose to do so.
8.2 AMENDMENT AND MODIFICATION. To the extent permitted by
--------------------------
applicable Law, this Agreement may be amended, modified or supplemented
only by a written agreement among Target, Parent, Acquiror and
Acquisition Subsidiary, whether before or after approval of the Merger
and this Agreement by the holders of Target Common Stock and the
holders of the common stock of Acquisition Subsidiary.
8.3 WAIVER OF COMPLIANCE; CONSENTS. Any failure of Target on
------------------------------
the one hand, or Acquiror on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by
Acquiror on the one hand, or Target on the other hand, only by a
written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as
set forth in this Section 8.3.
-----------
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
------------------------------------------
respective representations and warranties of Target and Parent and
Acquiror contained herein or in any certificates or other documents
delivered prior to or at the Closing shall survive the execution and
delivery of this Agreement, notwithstanding any investigation made or
information obtained by the other party, but shall terminate at the
Effective Time.
47
8.5 NOTICES. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given when
delivered in person, by facsimile, receipt confirmed, or on the next
business day when sent by overnight courier or on the second succeeding
business day when sent by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Target, to:
Intrav, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and
(ii) if to Parent, Acquiror or Acquisition
Subsidiary, to:
Kuoni Reisen Holding AG
▇▇▇▇ ▇▇▇▇ ▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: Chief Executive Officer
with copies to:
Kuoni Reisen Holding AG
Kuoni House
Dorking
Surrey U.K. ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
48
and
Kuoni Reisen Holding AG
▇▇▇▇ ▇▇▇▇ ▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
8.6 BINDING EFFECT; ASSIGNMENT. This Agreement and all of
--------------------------
the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
prior to the Effective Time without the prior written consent of the
other party hereto, except that Acquisition Subsidiary may assign to
Acquiror or any other Subsidiary of Acquiror any and all rights,
interests and obligations of Acquisition Subsidiary under this
Agreement.
8.7 EXPENSES. All costs and expenses incurred in connection
--------
with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs or expenses.
8.8 GOVERNING LAW. This Agreement shall be deemed to be made
-------------
in, and in all respects shall be interpreted, construed and governed by
and in accordance with the internal laws of, the State of Missouri
(without regard for its choice of law rules). Any and all disputes
which may arise out of this Agreement will be heard and determined
before the United States District Court for the Eastern District of
Missouri or the Circuit Court of St. Louis County, Missouri. The
parties hereto acknowledge that such courts have the jurisdiction to
interpret and enforce the provisions of this Agreement and the parties
waive any and all objections that they may have as to jurisdiction or
venue in the above courts, including, but not limited to, any defense
of forum non conveniens, and irrevocably agree to be bound by any non-
appealable final judgment rendered thereby.
8.9 COUNTERPARTS. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.10 INTERPRETATION. The article and section headings
--------------
contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Agreement. No rule of
construction shall apply to this Agreement which construes ambiguous
language in favor of or against any party by reason of that party's
role in drafting this Agreement. As used in this Agreement, (i) the
term
49
"person" shall mean and include an individual, a partnership, a joint
------
venture, a corporation, a limited liability company, a trust, an
association, an unincorporated organization, a Governmental Authority
and any other entity; (ii) the terms "affiliate" and "associate"
--------- ---------
shall have the same meanings as set forth in Rule 12b-2 under the
Securities Exchange Act; and (iii) the term "shareholder" of any
-----------
specified person shall mean any holder of capital stock or other equity
interest in such person.
8.11 ENTIRE AGREEMENT. This Agreement and the other
----------------
agreements, documents or instruments referred to herein or executed in
connection herewith including, but not limited to, the Schedules
attached hereto, which Schedules are incorporated herein by reference,
and the Confidentiality Agreement between Parent and Target dated June
15, 1999, embody the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and the
understandings between the parties with respect to such subject matter.
8.12 SEVERABILITY. In case any provision in this Agreement or
------------
in any of the other agreements, documents or instruments referred to
herein shall be held invalid, illegal or unenforceable in any
jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same
valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not
in any way be affected or impaired thereby nor shall the validity,
legality or enforceability of such provision be affected thereby in any
other jurisdiction.
8.13 SPECIFIC PERFORMANCE. The parties hereto agree that
--------------------
irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the parties further
agree that each party shall be entitled to an injunction or restraining
order to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or
any state having jurisdiction, this being in addition to any other
right or remedy to which such party may be entitled under this
Agreement, at law or in equity.
8.14 THIRD PARTIES. Nothing contained in this Agreement or in
-------------
any instrument or document executed by any party in connection with the
transactions contemplated hereby shall create any rights in, or be
deemed to have been executed for the benefit of, any person that is not
a party hereto or thereto, or, a successor or permitted assign of such
a party, provided that the Indemnified Parties shall be entitled to the
benefits of Section 5.4 and the members of the Advisory Committee
-----------
shall be entitled to the benefits of Section 5.5 hereof.
-----------
8.15 SCHEDULES. The Schedules in this Agreement shall be
---------
arranged in separate parts corresponding to the numbered and lettered
sections, and the disclosure in any numbered or lettered part shall be
deemed to relate to and to qualify only the particular representation
or warranty set forth in the corresponding numbered or lettered
section, and not any other representation or warranty (unless an
express and specific reference to any other Schedule which clearly
identifies the particular item being referred is set forth therein).
50
IN WITNESS WHEREOF, Parent, Acquiror, Acquisition Subsidiary and
Target have caused this Agreement to be signed and delivered by their
respective duly authorized officers as of the date first above written.
KUONI REISEN HOLDING AG
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Executive Vice President
-----------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Title: Director
-----------------------------------------
DIAMOND HOLDING DELAWARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Chief Executive Officer
-----------------------------------------
DIAMOND ACQUISITION SUBSIDIARY
MISSOURI, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Chief Executive Officer
-----------------------------------------
INTRAV, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
51