Conformed Copy
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE REGISTRY, INC.,
RAIN ACQUISITION CORP.,
AND
RENAISSANCE SOLUTIONS, INC.
Dated as of May 19, 1997
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TABLE OF CONTENTS
ARTICLE I
THE MERGER.............................................................. 1
SECTION 1.1 The Merger............................................. 1
SECTION 1.2 Effective Time......................................... 2
SECTION 1.3 Effect of the Merger................................... 2
SECTION 1.4 Certificate of Incorporation, By-Laws.................. 2
SECTION 1.5 Directors and Officers................................. 2
SECTION 1.6 Effect on Capital Stock................................ 3
SECTION 1.7 Exchange of Certificates............................... 5
SECTION 1.8 Stock Transfer Books................................... 6
SECTION 1.9 No Further Ownership Rights in Company Common Stock.... 6
SECTION 1.10 Lost, Stolen or Destroyed Certificates................ 7
SECTION 1.11 Tax and Accounting Consequences....................... 7
SECTION 1.12 Taking of Necessary Action; Further Action............ 7
SECTION 1.13 Material Adverse Effect............................... 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 8
SECTION 2.1 Organization and Qualification; Subsidiaries........... 8
SECTION 2.2 Certificate of Incorporation and By-Laws............... 8
SECTION 2.3 Capitalization......................................... 9
SECTION 2.4 Authority Relative to this Agreement................... 9
SECTION 2.5 No Conflict; Required Filings and Consents............ 10
SECTION 2.6 Compliance............................................ 11
SECTION 2.7 SEC Filings; Financial Statements..................... 11
SECTION 2.8 Absence of Certain Changes or Events.................. 12
SECTION 2.9 No Undisclosed Liabilities............................ 12
SECTION 2.10 Absence of Litigation................................ 12
SECTION 2.11 Employee Benefit Plans, Employment Agreements........ 12
SECTION 2.12 Labor Matters........................................ 14
SECTION 2.13 Registration Statement, Joint Proxy
Statement/Prospectus................................. 14
SECTION 2.14 Title to Property.................................... 15
SECTION 2.15 Taxes................................................ 15
SECTION 2.16 Environmental Matters................................ 16
SECTION 2.17 Intellectual Property................................ 17
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SECTION 2.18 Interested Party Transactions......................... 17
SECTION 2.19 Insurance............................................. 17
SECTION 2.20 Pooling Matters....................................... 18
SECTION 2.21 Opinion of Financial Advisor.......................... 18
SECTION 2.22 Brokers............................................... 18
SECTION 2.23 Section 203 of the DGCL Not Applicable................ 18
SECTION 2.24 Change in Control Payments............................ 18
SECTION 2.25 No Existing Discussions............................... 18
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB................. 19
SECTION 3.1 Organization and Qualification; Subsidiaries............ 19
SECTION 3.2 Charter and By-Laws..................................... 19
SECTION 3.3 Capitalization.......................................... 19
SECTION 3.4 Authority Relative to this Agreement.................... 20
SECTION 3.5 No Conflict, Required Filings and Consents.............. 20
SECTION 3.6 Compliance.............................................. 21
SECTION 3.7 SEC Filings; Financial Statements....................... 22
SECTION 3.8 Absence of Certain Changes or Events.................... 22
SECTION 3.9 No Undisclosed Liabilities.............................. 23
SECTION 3.10 Absence of Litigation.................................. 23
SECTION 3.11 Employee Benefit Plans; Employment Agreements.......... 23
SECTION 3.12 Labor Matters.......................................... 25
SECTION 3.13 Registration Statement; Joint Proxy
Statement/Prospectus................................... 25
SECTION 3.14 Title to Property...................................... 25
SECTION 3.15 Taxes.................................................. 26
SECTION 3.16 Environmental Matters.................................. 26
SECTION 3.17 Intellectual Property.................................. 26
SECTION 3.18 Interested Party Transactions.......................... 27
SECTION 3.19 Pooling Matters........................................ 27
SECTION 3.20 Opinion of Financial Advisor........................... 27
SECTION 3.21 Brokers................................................ 27
SECTION 3.22 Ownership of Merger Sub; No Prior Activities........... 27
SECTION 3.23 Chapter 110F Not Applicable............................ 28
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER.................................. 28
SECTION 4.1 Conduct of Business by the Company Pending the Merger... 28
SECTION 4.2 No Solicitation......................................... 30
SECTION 4.3 Conduct of Business by Parent Pending the Merger........ 31
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ARTICLE V
ADDITIONAL AGREEMENTS................................................... 32
SECTION 5.1 HSR Act................................................. 32
SECTION 5.2 Joint Proxy Statement Prospectus;
Registration Statement.................................. 32
SECTION 5.3 Stockholders Meetings................................... 32
SECTION 5.4 Access to Information; Confidentiality.................. 33
SECTION 5.5 Consents; Approvals..................................... 33
SECTION 5.6 Agreements with Respect to Affiliates................... 33
SECTION 5.7 Indemnification and Insurance........................... 34
SECTION 5.8 Notification of Certain Matters......................... 35
SECTION 5.9 Further Action/Tax Treatment............................ 35
SECTION 5.10 Public Announcements................................... 36
SECTION 5.11 Accountants' Letters................................... 36
SECTION 5.12 Pooling Accounting Treatment........................... 36
SECTION 5.13 Board Representation................................... 36
SECTION 5.14 Nasdaq Listing......................................... 36
SECTION 5.15 Listing of Parent Shares............................... 36
ARTICLE VI
CONDITIONS TO THE MERGER................................................ 37
SECTION 6.1 Conditions to Obligation of Each Party to Effect
the Merger.............................................. 37
SECTION 6.2 Additional Conditions to Obligations of Parent and
Merger Sub.............................................. 38
SECTION 6.3 Additional Conditions to Obligation of the Company...... 39
ARTICLE VII
TERMINATION............................................................. 40
SECTION 7.1 Termination............................................. 40
SECTION 7.2 Effect of Termination................................... 41
SECTION 7.3 Fees and Expenses....................................... 41
ARTICLE VIII
GENERAL PROVISIONS...................................................... 43
SECTION 8.1 Effectiveness of Representations, Warranties and
Agreements; Knowledge, etc.......................................... 43
SECTION 8.2 Notices................................................. 44
SECTION 8.3 Certain Definitions..................................... 45
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SECTION 8.4 Amendment............................................... 46
SECTION 8.5 Waiver.................................................. 46
SECTION 8.6 Headings................................................ 46
SECTION 8.7 Severability............................................ 46
SECTION 8.8 Entire Agreement........................................ 46
SECTION 8.9 Assignment; Guarantee of Merger Sub..................... 47
SECTION 8.10 Parties in Interest.................................... 47
SECTION 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative.. 47
SECTION 8.12 Governing Law.......................................... 47
SECTION 8.13 Counterparts........................................... 47
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Location of Defined Terms in Agreement and Plan of Merger
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Defined Terms Section of Merger Agreement
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1997 Company Balance Sheet 2.9
1997 Parent Balance Sheet 3.9
Acquisition Proposal 4.2(a)
Affiliates 8.3
Affiliate Agreement 5.6
Affiliate Letters 5.6
Agreement Preamble
Approvals 2.1
Beneficial Owner 8.3
Blue Sky Laws 2.5(d)
Business Day 8.3
Certificates 1.6(f)
Certificate of Merger 1.2
Code Preamble
Company Preamble
Company Alternative Transaction 7.1
Company Common Stock Preamble
Company Disclosure Schedule Article II Preamble
Company Employee Plans 2.11(a)
Company ERISA Affiliate 2.11(a)
Company Fee 7.3(b)
Company Intellectual Property Rights 2.17(a)
Company Material Adverse Effect 1.13
Company Permits 2.6(b)
Company SEC Reports 2.7(a)
Company Stockholders Meeting 2.13
Company Stock Option Plans 1.6(c)(i)
Confidentiality Letter 5.4
Control 8.3
DGCL Preamble
Effective Time 1.2
Environmental Laws 2.16
ERISA 2.11(a)
Exchange Act 2.5(a)
Exchange Agent 1.7(a)
Exchange Ratio 1.6(a)
Generally accepted accounting principles 8.3
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HSR Act 2.5(d)
Indemnified Parties 5.7(b)
IRS 2.11(b)
ISO 2.11(c)
Joint Proxy Statement/Prospectus 2.13
Laws 2.5(c)
Liens 2.3
Merger Preamble
Merger Consideration 1.7(b)
Merger Sub Preamble
Parent Preamble
Parent Alternative Transaction 7.3
Parent Common Stock 1.6(a)
Parent Disclosure Schedule Article III Preamble
Parent Employee Plans 3.11(a)
Parent ERISA Affiliate 3.11(a)
Parent Fee 7.3(c)
Parent Intellectual Property Rights 3.17
Parent Material Adverse Effect 1.13
Parent Permits 3.6(b)
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Conformed Copy
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Exhibit No. 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 19, 1997 (this "Agreement"),
among The Registry, Inc., a Massachusetts corporation ("Parent"), Rain
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and Renaissance Solutions, Inc., a Delaware corporation
(the "Company").
WITNESSETH:
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company have
each determined that it is advisable and in the best interests of their
respective stockholders for Parent to enter into a business combination with the
Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Parent, Merger Sub and the Company have each approved the merger (the "Merger")
of Merger Sub with and into the Company in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL"), and upon the
terms and subject to the conditions set forth herein;
WHEREAS, Parent, Merger Sub and the Company intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated thereunder;
and
WHEREAS, pursuant to the Merger, each outstanding share (a "Share") of the
Company's common stock, $.0001 par value (the "Company Common Stock"), shall be
converted into the right to receive the Merger Consideration (as defined in
Section 1.7(b)), upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger.
(a) Effective Time. At the Effective Time (as defined in Section 1.2),
and subject to and upon the terms and conditions of this Agreement and the DGCL,
Merger Sub shall be merged with and into the Company, the separate corporate
existence of Merger Sub shall cease, and the
Company shall continue as the surviving corporation. The Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
(b) Closing. Unless this Agreement shall have been terminated pursuant to
Section 7.1 and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the consummation of the Merger will take place as promptly
as practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article VI, at the offices of Ropes &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, unless another date, time
or place is agreed to in writing by the parties hereto.
SECTION 1.2 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the DGCL (the "Certificate of Merger"), together with
any required related certificates, with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the time of such filing being the "Effective
Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Certificate of Merger and
the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.4 Certificate of Incorporation, By-Laws.
(a) Certificate of Incorporation. Unless otherwise determined by Parent
prior to the Effective Time, at the Effective Time the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time but subject to compliance with Section 5.7, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the DGCL and such Certificate of Incorporation.
(b) By-Laws. Unless otherwise determined by Parent prior to the Effective
Time, the By-Laws of Merger Sub, as in effect immediately prior to the Effective
Time but subject to compliance with Section 5.7, shall be the By-Laws of the
Surviving Corporation until thereafter amended in accordance with the DGCL, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
SECTION 1.5 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
Merger Sub immediately prior to the Effective Time and the additional persons
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listed on Exhibit 1.5 shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
SECTION 1.6 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parent, Merger Sub, the
Company or any of their respective stockholders:
(a) Conversion of Securities. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 1.6(b)) shall be converted, subject to Section 1.6(f), into
the right to receive 0.80 shares (the "Exchange Ratio") of validly issued, fully
paid and nonassessable shares ("Parent Shares") of the Common Stock, no par
value, of Parent ("Parent Common Stock").
(b) Cancellation. Each Share held in the treasury of the Company and each
Share owned by Parent, Merger Sub or any direct or indirect wholly owned
subsidiary of the Company or Parent immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, be canceled and retired without payment of any
consideration therefor and cease to exist.
(c) Stock Option Plans and Stock Purchase Plan.
(i) At the Effective Time, Parent will assume the obligations of the
Company under the Company's 1995 Equity Incentive Plan, the 1995 Director
Stock Option Plan and the 1997 Stock Incentive Plan (the "Company Stock
Option Plans") and each outstanding option to purchase Company Common Stock
(a "Stock Option") granted under the Company Stock Option Plans, whether
vested or unvested, shall be deemed assumed by Parent and deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such Stock Option prior to the Effective Time, the number
(rounded down to the nearest whole number) of Parent Shares as the holder
of such Stock Option would have been entitled to receive pursuant to the
Merger had such holder exercised such option in full immediately prior to
the Effective Time (not taking into account whether or not such option was
in fact exercisable), at a price per share equal to (x) the aggregate
exercise price for Company Common Stock otherwise purchasable pursuant to
such Stock Option divided by (y) the number of Parent Shares deemed
purchasable pursuant to such Stock Option.
(ii) As soon as practicable after the Effective Time, Parent shall
deliver to each holder of an outstanding Stock Option an appropriate notice
setting forth such holder's rights pursuant thereto, and such Stock Option
shall continue in effect on the same terms and conditions (including
antidilution provisions). Parent will comply with the Company Stock Option
Plans and take such actions within its control that are reasonably
necessary to ensure that Stock Options that qualified as incentive stock
options under Section 422 of the Code (each, an "ISO") prior to the
Effective Time will continue to so qualify thereafter.
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(iii) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of Parent Shares for delivery pursuant to the
terms set forth in this Section 1.6(c).
(iv) Subject to any applicable limitations under the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the
"Securities Act"), Parent shall either (A) file a Registration Statement on
Form S-8 (or any successor form), effective as of the Effective Time, with
respect to the shares of Parent Common Stock issuable upon exercise of the
Stock Options, or (B) file any necessary amendments to the Company's
previously-filed Registration Statement(s) on Form S-8 in order that the
Parent will be deemed a "successor registrant" thereunder, and, in either
event the Parent shall use all reasonable efforts to maintain the
effectiveness of such registration statement(s) (and maintain the current
status of the prospectus or prospectuses relating thereto) for so long as
such Stock Options shall remain outstanding.
(v) The Company will take all necessary actions pursuant to the
Company Stock Option Plans and the instruments evidencing the Stock Options
to provide for the conversion and assumption of the Stock Options in
accordance with this Section 1.6(c).
(vi) The Company will promptly cause written notice of the execution
of this Agreement to be given to persons holding options or other rights to
purchase Company Common Stock ("Purchase Rights") under the Company's 1995
Employee Stock Purchase Plan (the "Company Stock Purchase Plan"). The
Company will terminate the Company Stock Purchase Plan at the end of the
current purchase period.
(d) Capital Stock of Merger Sub. Each share of common stock, $.01 par
value, of Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, $.01 par value, of the Surviving
Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted
to reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Parent
Common Stock), reorganization, recapitalization or other like change with
respect to Parent Common Stock occurring after the date hereof and prior to the
Effective Time.
(f) Fractional Shares. No certificates or scrip representing less than
one Parent Share shall be issued upon the surrender for exchange of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"). In lieu of any such
fractional share, each holder of Shares who would otherwise have been entitled
to a fraction of a Parent Share upon surrender of Certificates for exchange
shall be paid upon such surrender cash equal to the product of (i) such
fraction, multiplied by (ii) the average closing price per share of
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Parent Common Stock as reported on the Nasdaq National Market for the ten
trading days on the Nasdaq National Market ending on the day prior to the date
on which the Effective Time occurs.
SECTION 1.7 Exchange of Certificates.
(a) Exchange Agent. Parent shall supply, or shall cause to be supplied,
to or for the account of BankBoston, N.A., or such other bank or trust company
as shall be designated by Parent (the "Exchange Agent"), in trust for the
benefit of the holders of Company Common Stock, for exchange in accordance with
this Section 1.7, through the Exchange Agent, certificates evidencing the Parent
Shares issuable pursuant to Section 1.6 in exchange for outstanding Shares.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of Certificates (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify), and (ii) instructions to effect the surrender of the Certificates in
exchange for the certificates evidencing Parent Shares. Upon surrender of a
Certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor (A) certificates evidencing that number
of whole Parent Shares which such holder has the right to receive in accordance
with the Exchange Ratio in respect of the Shares formerly evidenced by such
Certificate, (B) any dividends or other distributions to which such holder is
entitled pursuant to Section 1.7(c), and (C) cash in respect of fractional
shares as provided in Section 1.6(f) (the Parent Shares, dividends,
distributions and cash being, collectively, the "Merger Consideration"), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which is not registered in the transfer records
of the Company as of the Effective Time, Parent Shares, dividends and
distributions may be issued and paid in accordance with this Article I to a
transferee if the Certificate evidencing such Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer pursuant to this Section 1.7(b) and by evidence that any
applicable stock transfer taxes have been paid. Until so surrendered, each
outstanding Certificate that, prior to the Effective Time, represented Shares
will be deemed from and after the Effective Time, for all corporate purposes,
other than the payment of dividends and subject to Section 1.6(f), to evidence
the ownership of the number of full Parent Shares into which such Shares shall
have been so converted.
(c) Distributions With Respect to Unexchanged Parent Shares. No dividends
or other distributions declared or made after the Effective Time with respect to
Parent Shares with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the Parent Shares they
are entitled to receive until the holder of such Certificate shall surrender
such Certificate. Subject to applicable law, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole Parent Shares issued
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in exchange therefor, without interest, at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole Parent Shares.
(d) Transfers of Ownership. If any certificate for Parent Shares is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it will be a condition to the issuance thereof
that the Certificate so surrendered will be properly endorsed and otherwise in
proper form for transfer and that the person requesting such exchange will have
paid to Parent or any agent designated by it any transfer or other taxes
required by reason of the issuance of a certificate for Parent Shares in any
name other than that of the registered holder of the certificate surrendered, or
have established to the satisfaction of Parent or any agent designated by it
that such tax has been paid or is not payable.
(e) No Liability. At any time following one year after the Effective
Time, Parent shall be entitled to require the Exchange Agent to deliver to
Parent any Merger Consideration which had been made available to the Exchange
Agent by or on behalf of Parent and which has not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look to Parent
only as general creditors thereof with respect to the Merger Consideration
payable upon due surrender of their Certificates. Notwithstanding the foregoing,
neither Parent, Merger Sub nor the Company shall be liable to any holder of
Company Common Stock for any Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) Withholding Rights. Parent or the Exchange Agent shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock such amounts as Parent or
the Exchange Agent is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent or the Exchange
Agent, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the Shares in respect of which such
deduction and withholding was made by Parent or the Exchange Agent.
SECTION 1.8 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of Company Common Stock thereafter on the records of
the Company.
SECTION 1.9 No Further Ownership Rights in Company Common Stock. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Shares which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article I.
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SECTION 1.10 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such Parent Shares as
may be required pursuant to Section 1.6; provided, however, that Parent may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against Parent or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
SECTION 1.11 Tax and Accounting Consequences. It is intended by the
parties hereto that the Merger shall (i) constitute a reorganization within the
meaning of Section 368 of the Code and (ii) qualify for accounting treatment as
a pooling of interests. The parties hereto hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-
3(a) of the United States Treasury Regulations.
SECTION 1.12 Taking of Necessary Action; Further Action. Each of Parent,
Merger Sub and the Company will take all such reasonable and lawful action as
may be necessary or appropriate in order to effectuate the Merger in accordance
with this Agreement as promptly as possible. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
SECTION 1.13 Material Adverse Effect. When used in connection with the
Company or any of its subsidiaries, or Parent or any of its subsidiaries, as the
case may be, the term "Material Adverse Effect" means any change, effect or
circumstance that, individually or when taken together with all other such
similar or related changes, effects or circumstances that have occurred prior to
the date of determination of the occurrence of the Material Adverse Effect, (a)
is materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the Company and its subsidiaries
or Parent and its subsidiaries, as the case may be, in each case taken as a
whole (other than changes that are the effect of economic factors affecting the
economy as a whole or changes that are the effect of factors generally affecting
the specific markets in which the Company and its subsidiaries or the Parent and
its subsidiaries, as the case may be, compete), or (b) is reasonably likely to
materially delay or prevent the consummation of the transactions contemplated
hereby; provided, however, that a "Material Adverse Effect" shall not include
any adverse effect primarily arising out of or resulting primarily from actions
contemplated by the parties in connection with, or that is primarily
attributable to, the announcement or performance of this Agreement and the
transactions contemplated hereby. A Material Adverse Effect relating to the
Company and its Subsidiaries is referred to as a
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"Company Material Adverse Effect" and a Material Adverse Effect relating to
Parent and its Subsidiaries is referred to as a "Parent Material Adverse
Effect."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub that,
except as set forth in the written disclosure schedule delivered on or prior to
the date hereof by the Company to Parent that is arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
II (the "Company Disclosure Schedule"):
SECTION 2.1 Organization and Qualification; Subsidiaries. Each of the
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Approvals") necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power,
authority and Approvals would not reasonably be expected to have a Company
Material Adverse Effect. Each of the Company and each of its subsidiaries is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not reasonably be expected
to have a Company Material Adverse Effect. A true and complete list as of the
date hereof of all of the Company's subsidiaries, together with the jurisdiction
of incorporation of each subsidiary, the authorized capitalization of each
subsidiary, and the percentage of each subsidiary's outstanding capital stock
owned by the Company or another subsidiary, is set forth in Section 2.1 of the
Company Disclosure Schedule. The Company does not directly or indirectly own
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity,
with respect to which interest the Company has invested or is required to invest
$200,000 or more, excluding securities in any publicly traded company held for
investment by the Company and comprising less than five percent of the
outstanding stock of such company.
SECTION 2.2 Certificate of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a complete and correct copy of its Certificate of
Incorporation and By-Laws as most recently restated and subsequently amended to
the date hereof and, to the extent Parent has requested, has furnished or made
available to Parent the Certificate of Incorporation and By-Laws (or equivalent
organizational documents) of each of its subsidiaries (the "Subsidiary
Documents"). Such Certificate of Incorporation, By-Laws and Subsidiary
Documents are in full force and effect and neither the Company nor any of its
subsidiaries is in violation of any of the
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provisions of its Certificate of Incorporation or By-Laws or Subsidiary
Documents, except where the failure to be in full force and effect or where such
violation would not have a Company Material Adverse Effect.
SECTION 2.3 Capitalization. The authorized capital stock of the Company
consists of (i) 20,000,000 shares of Company Common Stock and (ii) 2,000,000
shares of preferred stock, $.01 par value per share. No shares of preferred
stock are issued and outstanding and none are held in treasury. As of April 30,
1997, (i) 9,467,045 shares of Company Common Stock were issued and outstanding,
all of which are validly issued, fully paid and nonassessable, and (ii) no
shares of Company Common Stock were held in treasury or by subsidiaries of the
Company. No material change in such capitalization has occurred between April
30, 1997 and the date hereof other than the issuance of shares of Company Common
Stock under the Company Stock Option Plans and the accrual of rights to acquire
shares of Company Common Stock under the Company Stock Purchase Plan. All
options, warrants or other rights, agreements, arrangements or commitments of
any character existing on the date hereof to which the Company or a subsidiary
or, to the Company's knowledge, any other person is a party relating to the
issued or unissued capital stock of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, the Company or any of its
subsidiaries are described in Section 2.3 of the Company Disclosure Schedule.
All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be duly authorized, validly issued, fully paid
and nonassessable. There are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of Company Common Stock or the capital stock of any subsidiary or to
provide funds to or make any investment (in the form of a loan, capital
contribution, guaranty or otherwise) in any such subsidiary or any other entity.
All of the outstanding shares of capital stock of each of the Company's
subsidiaries is duly authorized, validly issued, fully paid and nonassessable,
and all such shares are owned by the Company or another subsidiary of the
Company, free and clear of all security interests, liens, claims, pledges,
agreements, limitations in the Company's voting rights, charges or other
encumbrances of any nature whatsoever (collectively, "Company Liens").
SECTION 2.4 Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the adoption of this Agreement by the holders of at least a majority
of the outstanding shares of Company Common Stock entitled to vote in accordance
with the DGCL and the Company's Certificate of Incorporation and By-Laws). As
of the date of this Agreement, the Board of Directors of the Company has
determined that it is advisable and in the best interest of the Company's
stockholders
-9-
for the Company to enter into a business combination with Parent upon the terms
and subject to the conditions of this Agreement, and has unanimously recommended
that the Company's stockholders approve and adopt this Agreement and the Merger.
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and Merger
Sub, as applicable, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
SECTION 2.5 No Conflict; Required Filings and Consents.
(a) Section 2.5(a) of the Company Disclosure Schedule includes a list of
all agreements which, as of the date hereof, the Company is required to file as
"material contracts" with the Securities and Exchange Commission ("SEC")
pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
and the SEC's rules and regulations thereunder (the "Exchange Act").
(b) (i) Neither the Company nor any of its subsidiaries has breached, is
in default under, or has received written notice of any breach of or default
under, any of the agreements, contracts or other instruments referred to in
Section 2.5(a), (ii) to the best knowledge of the Company, no other party to any
of the agreements, contracts or other instrument referred to in Section 2.5 (a)
has breached or is in default of any of its obligations thereunder, and (iii) to
the best knowledge of the Company, each of the agreements, contracts and other
instruments referred to in Section 2.5(a) is in full force and effect, except in
any such case for breaches, defaults or failures to be in full force and effect
that is not currently having or would not reasonably be expected to have a
Company Material Adverse Effect.
(c) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or By-Laws of the Company, (ii) conflict with or
violate any federal, foreign, state or provincial law, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair the Company's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Company Lien on any of the properties or assets of the Company or
any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or its or any of their respective
properties is bound or affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that would not reasonably be
expected to have a Company Material Adverse Effect.
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(d) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any federal, foreign, state or provincial governmental or regulatory
authority except (i) for applicable requirements, if any, of the Securities Act,
the Exchange Act, state securities laws ("Blue Sky Laws"), the pre-merger
notification requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the filing and recordation of appropriate
merger or other documents as required by the DGCL, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would be reasonably expected to have a Company
Material Adverse Effect.
SECTION 2.6 Compliance. Neither the Company nor any of its subsidiaries
is in conflict with, or in default or violation of, (i) any Law or Approval
applicable to the Company or any of its subsidiaries or by which its or any of
their respective properties is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not reasonably be expected to have a Company
Material Adverse Effect.
SECTION 2.7 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed by it with the SEC and has made available to Parent (i) its Annual Report
on Form 10-K for the period ended December 31, 1996, (ii) its Quarterly Report
on Form 10-Q for the period ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
since April 11, 1995, (iv) all other reports (other than reports on Form 10-Q
not referred to in clause (ii) above) or registration statements filed by the
Company with the SEC, and (v) all amendments and supplements to all such reports
and registration statements filed by the Company with the SEC (collectively, the
"Company SEC Reports"). The Company SEC Reports (i) were prepared in all
material respects in accordance with the requirements of the Securities Act or
the Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of the Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates
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thereof and the consolidated results of its operations and cash flows and
stockholders equity for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
SECTION 2.8 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Reports filed prior to the date hereof, since March 28, 1997,
the Company has conducted its business in the ordinary course and there has not
occurred: (a) any Company Material Adverse Effect; (b) any amendments or changes
in the Certificate of Incorporation or By-laws of the Company; (c) any damage
to, destruction or loss of any asset of the Company (whether or not covered by
insurance) that would reasonably be expected to have a Company Material Adverse
Effect; (d) any material change by the Company in its accounting methods,
principles or practices; (e) any revaluation by the Company of any of its assets
having a Company Material Adverse Effect; (f) any other action or event that
would have required the consent of Parent pursuant to Section 4.1 had such
action or event occurred after the date of this Agreement and that, individually
or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect; or (g) any sale of a material amount of property of the
Company or any of its subsidiaries taken as a whole, except in the ordinary
course of business.
SECTION 2.9 No Undisclosed Liabilities. Except as disclosed in the
Company SEC Reports filed prior to the date hereof, neither the Company nor any
of its subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a) in the aggregate adequately provided for in
the Company's balance sheet (including any related notes thereto) as of March
28, 1997 (the "1997 Company Balance Sheet"), (b) incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected on the 1997 Company Balance Sheet, (c) incurred since March 28,
1997 in the ordinary course of business consistent with past practice, (d)
incurred in connection with this Agreement, or (e) which would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 2.10 Absence of Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any properties or
rights of the Company or any of its subsidiaries, before any federal, foreign,
state or provincial court, arbitrator or administrative, governmental or
regulatory authority or body that would reasonably be expected to have a Company
Material Adverse Effect.
SECTION 2.11 Employee Benefit Plans, Employment Agreements.
(a) Section 2.11 (a) of the Company Disclosure Schedule lists as of the
date hereof all employee pension plans (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), all
material employee welfare plans (as defined in Section 3(1) of ERISA), and all
other material bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe or
employee benefit
-12-
plans, programs or arrangements, written or otherwise, for the benefit of, or
relating to, any group of current or former employees of or consultants to the
Company, any trade or business (whether or not incorporated) which is a member
of a controlled group including the Company or which is under common control
with the Company (a "Company ERISA Affiliate") within the meaning of Section 414
of the Code, or any subsidiary of the Company, as well as each plan with respect
to which the Company or a Company ERISA Affiliate would incur liability under
Section 4069 (if such plan has been or were terminated) or Section 4212(c) of
ERISA (all such plans, practices and programs are referred to as the "Company
Employee Plans." To the extent requested by Parent, there have been made
available to Parent copies of (i) each such written Company Employee Plan (other
than those referred to in Section 4(b)(4) of ERISA), (ii) the most recent annual
report on Form 5500 series, with accompanying schedules and attachments, filed
with respect to each Company Employee Plan required to make such a filing, and
(iii) the most recent actuarial valuation for each Company Employee Plan subject
to Title IV of ERISA. For purposes of this Section 2.11 (a), the term
"material," used with respect to any Company Employee Plan, shall mean that the
Company or a Company ERISA Affiliate has incurred or may reasonably be expected
to incur obligations in an annual amount exceeding $500,000 with respect to such
Company Employee Plan.
(b) (i) None of the Company Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, and none of the Company
Employee Plans is a "multiemployer plan" as such term is defined in Section
3(37) of ERISA; (ii) there has been no "prohibited transaction," as such term is
defined in Section 406 of ERISA and Section 4975 of the Code, with respect to
any Company Employee Plan, which could result in any material liability of the
Company or any of its subsidiaries; (iii) all Company Employee Plans are in
compliance in all material respects with the requirements prescribed by any and
all Laws (including ERISA and the Code), currently in effect with respect
thereto (including all applicable requirements for notification to participants
or the Department of Labor, Pension Benefit Guaranty Corporation (the "PBGC"),
Internal Revenue Service (the "IRS") or Secretary of the Treasury), and the
Company and each of its subsidiaries have performed all material obligations
required to be performed by them under, are not in any material respect in
default under or violation of, and have no knowledge of any default or violation
by any other party to, any of the Company Employee Plans; (iv) each Company
Employee Plan intended to qualify under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code is the subject of a
favorable determination letter from the IRS, and nothing has occurred which may
reasonably be expected to impair such determination; (v) all contributions
required to be made to any Company Employee Plan pursuant to Section 412 of the
Code, or the terms of the Company Employee Plan or any collective bargaining
agreement, have been made on or before their due dates; (vi) with respect to
each Company Employee Plan, no "reportable event" within the meaning of Section
4043 of ERISA (excluding any such event for which the 30 day notice requirement
has been waived under the regulations to Section 4043 of ERISA) nor any event
described in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither
the Company nor any Company ERISA Affiliate has incurred, nor reasonably expects
to incur, any liability under Title IV of ERISA (other than
-13-
liability for premium payments to the PBGC arising in the ordinary course),
except where the failure of any of the foregoing to be true would not have a
Company Material Adverse Effect.
(c) Section 2.11(c) of the Company Disclosure Schedule sets forth a true
and complete list as of the date hereof of each current or former employee,
officer or director of the Company or any of its subsidiaries who holds (i) any
option to purchase Company Common Stock as of the date hereof, together with the
number of shares of Company Common Stock subject to such option, the option
price of such option (to the extent determined as of the date hereof), whether
such option is intended to qualify as an ISO, and the expiration date of such
option; (ii) any other right, directly or indirectly, to acquire Company Common
Stock, together with the number of shares of Company Common Stock subject to
such right. Section 2.11(c) of the Company Disclosure Schedule also sets forth
the total number of such ISOs, such nonqualified options and such other rights
outstanding on the date hereof. No consent of any holder of Stock Options is
required to effect the conversion and assumption of the Stock Options and the
Company Stock Option Plans pursuant to Section 1.6(c).
(d) Section 2.11(d) of the Company Disclosure Schedule sets forth as of
the date hereof a true and complete list of: (i) all written employment
agreements with officers or employees of the Company or any of its subsidiaries
that provide for annual base salaries in excess of $300,000; (ii) all agreements
with consultants who are individuals obligating the Company or any of its
subsidiaries to make annual cash payments in an amount exceeding $200,000; and
(iii) all severance agreements, programs and policies of the Company or any of
its subsidiaries with or relating to its employees, in each case with
outstanding commitments exceeding $200,000, excluding programs and policies
required to be maintained by law.
SECTION 2.12 Labor Matters. (a) There are no claims or proceedings
pending or, to the knowledge of the Company or any of its subsidiaries,
threatened, between the Company or any of its subsidiaries and any of their
respective employees, asserting that the Company has committed an unfair labor
practice which claims or proceedings are currently having or would reasonably be
expected to have a Company Material Adverse Effect; (b) neither the Company nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by the Company or its
subsidiaries; and (c) neither the Company nor any of its subsidiaries has any
knowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
subsidiaries, which would reasonably be expected to have a Company Material
Adverse Effect.
SECTION 2.13 Registration Statement, Joint Proxy Statement/Prospectus.
The information supplied by the Company for inclusion or incorporation by
reference in the Registration Statement (as defined in Section 3.13) shall not
at the time the Registration Statement is declared effective by the SEC contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The information supplied by the
-14-
Company for inclusion or incorporation by reference in the joint proxy
statement/prospectus to be sent to the stockholders of the Company in connection
with the meeting of the stockholders of the Company to consider the Merger (the
"Company Stockholders Meeting") and to be sent to the stockholders of Parent in
connection with the meeting of the stockholders of Parent to consider the Merger
(the "Parent Stockholders Meeting," and together with the Company Stockholder
Meeting, the "Stockholders Meetings") (such joint proxy statement/prospectus as
amended or supplemented is referred to herein as the "Joint Proxy
Statement/Prospectus"), will not, on the date the Joint Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is first
mailed to stockholders, at the time of the Stockholders Meetings, or at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders
Meetings which has become false or misleading. If at any time prior to the
Effective Time any event relating to the Company or any of its respective
affiliates, officers or directors should be discovered by the Company which
should be set forth in an amendment to the Registration Statement or a
supplement to the Joint Proxy Statement/Prospectus, the Company shall promptly
inform Parent and Merger Sub. Notwithstanding the foregoing, the Company makes
no representation or warranty with respect to any information supplied by Parent
or Merger Sub which is contained in or furnished in connection with the
preparation of the Registration Statement or the Joint Proxy
Statement/Prospectus.
SECTION 2.14 Title to Property. Neither the Company nor any of its
subsidiaries owns any real property.
SECTION 2.15 Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any federal,
state, local or foreign taxing authority, including (without limitation) (i)
income, franchise, profits, gross receipts, ad valorem, net worth, value added,
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production, excise,
stamp, occupation, premiums, windfall profits, transfer and gains taxes, and
(ii) interest, penalties, additional taxes and additions to tax imposed with
respect thereto; and "Tax Returns" shall mean returns, reports, and information
statements with respect to Taxes required to be filed with the IRS or any other
federal, foreign, state or provincial taxing authority, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax returns.
(b) (i) The Company and its subsidiaries have filed all Tax Returns
required to be filed by them, (ii) the Company and its subsidiaries have paid
and discharged all Taxes due in connection
-15-
with or with respect to the periods or transactions covered by such Tax Returns
and have paid all other Taxes as are due, except such as are being contested in
good faith by appropriate proceedings (to the extent that any such proceedings
are required) and with respect to which the Company is maintaining adequate
reserves, and (iii) there are no other Taxes that would be due if asserted by a
taxing authority, except with respect to which the Company is maintaining
reserves to the extent currently required, unless in the case of clauses (i),
(ii) and (iii) above the failure to do so would not reasonably be expected to
have a Company Material Adverse Effect. Except as does not involve or would not
result in liability that would reasonably be expected to have a Company Material
Adverse Effect: (i) there are no tax liens on any assets of the Company or any
subsidiary thereof; and (ii) neither the Company nor any of its subsidiaries has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any Tax. Neither the Company nor
any of its subsidiaries has made any payments, is obligated to make any
payments, or it a party to any agreement that under any circumstance could
obligate it to make any payments that will not be deductible under Code Section
280G. None of the Company and its subsidiaries (i) has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was the Company) or (ii) has any liability for
the Taxes of any other person or entity (other than the Company and its
subsidiaries) under Treas. Reg. (S)1.1502-6 (or any similar provision of state,
local or foreign law), as transferee or successor, by contract or otherwise.
Neither the Company nor any subsidiary has consented at any time under Section
341(f)(1) of the Code to have the provisions of Section 341(f)(2) of the Code
apply to any disposition of the assets of the Company or any subsidiary. The
accruals and reserves for Taxes (including deferred taxes) reflected in the 1997
Company Balance Sheet are in all material respects adequate to cover all Taxes
required to be accrued through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with
generally accepted accounting principles.
(c) Neither the Company nor any of its subsidiaries is, or has been, a
United States real property holding corporation (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. To the best knowledge of the Company, neither the Company nor any
of its subsidiaries owns any property of a character, the indirect transfer of
which, pursuant to this Agreement, would give rise to any material documentary,
stamp or other transfer tax.
SECTION 2.16 Environmental Matters. Except in all cases as, in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect, the Company and each of its subsidiaries: (i) have
obtained all Approvals which are required to be obtained under all applicable
federal, state, foreign or local laws or any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic materials or wastes
into ambient air, surface water, ground water, or land or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes by the Company
-16-
or its subsidiaries or their respective agents ("Environmental Laws"); (ii) are
in compliance with all terms and conditions of such required Approvals, and also
are in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in applicable Environmental Laws; (iii) have not received notice of
any past or present violations of Environmental Laws or any event, condition,
circumstance, activity, practice, incident, action or plan which is reasonably
likely to interfere with or prevent continued compliance with or which would
give rise to any common law or statutory liability, or otherwise form the basis
of any claim, action, suit or proceeding, against the Company or any of its
subsidiaries based on or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste; and (iv) have taken all
actions necessary under applicable Environmental Laws to register any products
or materials required to be registered by the Company or its subsidiaries (or
any of their respective agents) thereunder.
SECTION 2.17 Intellectual Property.
(a) The Company, directly or indirectly, owns, or is licensed or otherwise
possesses legally enforceable rights to use, all trademarks, trade names,
service marks, copyrights, and any applications therefor, know-how, computer
software programs or applications, and tangible or intangible proprietary
information or material that are material to the business of the Company and its
subsidiaries, taken as a whole, as currently conducted or as proposed to be
conducted (the "Company Intellectual Property Rights"), except where the failure
to do so would not have a Company Material Adverse Effect.
(b) No claims have been asserted to the Company or any subsidiary in
writing or, to the knowledge of the Company, are threatened by any person nor
are there any valid grounds, to the knowledge of the Company, for any bona fide
claims (i) against the use by the Company or any of its subsidiaries of the
Company Intellectual Property Rights, or (ii) challenging the ownership by the
Company or any of its subsidiaries, or the validity or effectiveness of any of
the Company Intellectual Property Rights, except for such claims that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
SECTION 2.18 Interested Party Transactions. Except for transactions
described in the Company SEC Reports filed prior to the date hereof, since April
21, 1997, no event has occurred that would be required to be reported as a
Certain Relationship or Related Transaction, pursuant to Item 404 of Regulation
S-K promulgated by the SEC.
SECTION 2.19 Insurance. All material fire and casualty, general liability,
business interruption, product liability, professional liability and sprinkler
and water damage insurance policies maintained by the Company or any of its
subsidiaries are with reputable insurance carriers, provide adequate coverage
for all normal risks incident to the business of the Company and its
subsidiaries, taken as a whole, and their properties and assets, and are in
character and
-17-
amount customary for persons engaged in similar businesses and subject to the
same or similar perils or hazards, except for any such failures to maintain
insurance policies that, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect.
SECTION 2.20 Pooling Matters. To the Company's knowledge, neither the
Company nor any of its affiliates has taken or agreed to take any action that
would affect the ability of Parent to account for the business combination to be
effected by the Merger as a pooling of interests under generally accepted
accounting principles and applicable SEC interpretations. The failure of this
representation to be true and correct, shall, if the Merger is not able to be
accounted for as a pooling of interests, constitute a breach of this Agreement
by the Company for the purposes of Section 7.1(f).
SECTION 2.21 Opinion of Financial Advisor. The Company has been advised
by its financial advisor, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, that in its opinion, as of the
date hereof, the Merger Consideration to be received by the holders of shares in
the Merger is fair to the holders of Shares from a financial point of view.
SECTION 2.22 Brokers. No broker, finder or investment banker (other than
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, the fees and expenses of whom will be paid by the
Company) is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or its subsidiaries or
affiliates. The Company has heretofore furnished to Parent a complete and
correct copy of all agreements between the Company and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder.
SECTION 2.23 Section 203 of the DGCL Not Applicable. The Board of
Directors of the Company has taken all actions so that the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in Section 203) will not apply to the execution, delivery or performance
of this Agreement or the respective Stockholder Agreements dated as of the date
hereof between Parent and certain stockholders of the Company (collectively, the
"Stockholders Agreements") or the consummation of the Merger or the other
transactions contemplated by this Agreement or by the Stockholders Agreements.
SECTION 2.24 Change in Control Payments. Neither the Company nor any of
its subsidiaries have any plans, programs or agreements to which they are
parties, or to which they are subject, pursuant to which payments may be
required or acceleration of benefits may be required upon a change of control of
the Company.
SECTION 2.25 No Existing Discussions. As of the date hereof, the Company
is not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to an Acquisition Proposal (as defined in Section
4.2).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby, jointly and severally, represent and warrant
to the Company that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by Parent to the Company that is
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III (the "Parent Disclosure Schedule"):
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of Parent
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and is in possession of all
Approvals necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is now being conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority and Approvals would not reasonably be expected to
have a Parent Material Adverse Effect. Each of Parent and each of its
subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except for such failures to be
so duly qualified or licensed and in good standing that would not reasonably be
expected to have a Parent Material Adverse Effect. A true and complete list as
of the date hereof of all of Parent's subsidiaries, together with the
jurisdiction of incorporation of each subsidiary and the percentage of each
subsidiary's outstanding capital stock owned by Parent or another subsidiary, is
set forth in Section 3.1 of the Parent Disclosure Schedule. Parent does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity, with respect to which Parent has invested or is required
to invest $200,000 or more, excluding securities in any publicly traded company
held for investment by Parent and comprising less than five percent of the
outstanding capital stock of such company.
SECTION 3.2 Charter and By-Laws. Parent has heretofore furnished to the
Company a complete and correct copy of its Restated Articles of Organization and
By-Laws, as most recently restated and subsequently amended to the date hereof.
Such Restated Articles of Organization and By-Laws are in full force and effect
and neither Parent nor Merger Sub is in violation of any of the provisions of
its charter or By-Laws, except where the failure to be in full force and effect
or where such violation would not have a Parent Material Adverse Effect.
SECTION 3.3 Capitalization. As of March 29, 1997, the authorized capital
stock of Parent consisted of (i) 49,000,000 shares of Parent Common Stock, of
which 14,110,240 shares were issued and outstanding, all of which are validly
issued, fully paid and non-assessable, and no shares were held in treasury, and
(ii) 1,000,000 shares of preferred stock, $.10 par value per share, none of
which was issued and outstanding and none of which was held in treasury. No
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material change in such capitalization has occurred between March 29, 1997 and
the date hereof, except for the issuance of Parent Common Stock pursuant to
Parent stock plans and in connection with acquisitions of businesses. All
options, warrants or other rights, agreements, arrangements or commitments of
any character existing on the date hereof to which Parent or a subsidiary or, to
Parent's knowledge, any other person is a party relating to the issued or
unissued capital stock of Parent or any of its subsidiaries or obligating Parent
or any of its subsidiaries to issue or sell any shares of capital stock of, or
other equity interests in, Parent or any of its subsidiaries are described in
Section 3.3 of the Parent Disclosure Schedule. There are no obligations,
contingent or otherwise, of Parent or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of Parent Common Stock or the capital
stock of any subsidiary or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any such subsidiary other
than guarantees of bank obligations of subsidiaries entered into in the ordinary
course of business. All of the outstanding shares of capital stock of each of
Parent's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by Parent or another subsidiary of
Parent, free and clear of all security interests, liens, claims, pledges,
agreements, limitations in Parent's voting rights, charges or other encumbrances
of any nature whatsoever (collectively, "Parent Liens").
SECTION 3.4 Authority Relative to this Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub, and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated thereby (other than the approval of the issuance of the Parent
Common Stock by holders of a majority of the outstanding Parent Common Stock
present or represented by proxy and entitled to vote at the Parent Stockholders
Meeting). As of the date hereof, the Board of Directors of Parent has determined
that it is advisable and in the best interest of Parent's stockholders for
Parent to enter into a business combination with the Company upon the terms and
subject to the conditions of this Agreement and has unanimously recommended that
the stockholders of Parent approve the issuance of Parent Common Stock in the
Merger pursuant to this Agreement. This Agreement has been duly and validly
executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Parent and Merger Sub enforceable against each of them
in accordance with its terms.
SECTION 3.5 No Conflict, Required Filings and Consents.
(a) Section 3.5(a) of the Parent Disclosure Schedule includes a list of
all agreements which, as of the date hereof, Parent is required to file with the
SEC pursuant to the requirements of the Exchange Act as "material contracts."
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(b) (i) neither the Parent nor any of its subsidiaries has breached, is in
default under, or has received written notice of any breach of or default under,
any of the agreements, contracts or other instruments referred to in Section
3.5(a), (ii) to the best knowledge of Parent, no other party to any of the
agreements, contracts or other instrument referred to in Section 3.5(a) has
breached or is in default of any of its obligations thereunder, and (iii) to the
best knowledge of Parent, each of the agreements, contracts and other
instruments referred to in Section 3.5(a) is in full force and effect, except in
any such case for breaches, defaults or failures to be in full force and effect
that would not reasonably be expected to have a Parent Material Adverse Effect.
(c) The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the performance of this Agreement by Parent and Merger Sub will
not, and the consummation of the transactions contemplated hereby will not, (i)
conflict with or violate the Articles of Organization (or Certificate of
Incorporation) or By-Laws of Parent or Merger Sub, (ii) conflict with or violate
any Laws applicable to Parent or any of its subsidiaries or by which its or
their respective properties are bound or affected, or (iii) result in any breach
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or impair Parent's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Parent Lien on any of the
properties or assets of Parent or any of its subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or its or
any of their respective properties are bound or affected, except in any such
case for any such conflicts, violations, breaches, defaults or other occurrences
that would not reasonably be expected to have a Parent Material Adverse Effect.
(d) The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the performance of this Agreement by Parent and Merger Sub will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any federal, foreign, state or provincial governmental or
regulatory authority, except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, the Blue Sky Laws, the pre-merger notification
requirements of the HSR Act, and the filing and recordation of appropriate
merger or other documents as required by the DGCL, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 3.6 Compliance. Neither Parent nor any of its subsidiaries is in
conflict with, or in default or violation of, (i) any Law or Approval applicable
to Parent or any of its subsidiaries or by which its or any of their respective
properties is bound or affected or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
is bound or affected, except
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for any such conflicts, defaults or violations which would not reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 3.7 SEC Filings; Financial Statements.
(a) Parent has filed all forms, reports and documents required to be filed
with the SEC and has heretofore delivered to the Company, in the form filed with
the SEC, (i) its Annual Report on Form 10-K for the fiscal year ended June 28,
1996, (ii) its Quarterly Reports on Form 10-Q for the periods ended September
28, 1996, December 28, 1996 and ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) all proxy statements
relating to Parent's meetings of stockholders (whether annual or special) since
June 10, 1996, (iv) all other reports or registration statements (other than
Reports on Form 10-Q not referred to in clause (ii) above) filed by Parent with
the SEC, and (v) all amendments and supplements to all such reports and
registration statements filed by Parent with the SEC (collectively, the "Parent
SEC Reports"). The Parent SEC Reports (i) were prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. None of Parent's subsidiaries is required
to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto) and each fairly presents in all material respects the
consolidated financial position of Parent and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows and stockholders' equity for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount.
SECTION 3.8 Absence of Certain Changes or Events. Except as disclosed in
the Parent SEC Reports filed prior to the date hereof, since March 29, 1997,
Parent has conducted its business in the ordinary course and other than as
disclosed in the Parent SEC Reports filed prior to the date hereof there has not
occurred: (i) any Parent Material Adverse Effect; (ii) any amendments or changes
in the Articles of Organization or By-Laws of Parent; (iii) any damage to,
destruction or loss of any assets of the Parent (whether or not covered by
insurance) that would reasonably be expected to have a Parent Material Adverse
Effect; (iv) any material change by Parent in its accounting methods, principles
or practices; (v) any revaluation by Parent of any of its assets having a Parent
Material Adverse Effect; (vi) any other action or event that would have required
the consent of the Company pursuant to Section 4.3 had such action or event
occurred after the date of this Agreement and that, individually or in the
aggregate, has had or would
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reasonably be likely to have a Parent Material Adverse Effect; or (vii) any sale
of a material amount of assets of Parent or any of its subsidiaries except in
the ordinary course of business.
SECTION 3.9 No Undisclosed Liabilities. Except as disclosed in the Parent
SEC Reports filed prior to the date hereof, neither Parent nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (a) adequately provided for in Parent's balance sheet
(including any related notes thereto) as of March 29, 1997 included in the
Parent's Quarterly Report on 10-Q for the period ended March 29, 1997 (the "1997
Parent Balance Sheet"), (b) incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected on the
1997 Parent Balance Sheet, (c) incurred since March 29, 1997 in the ordinary
course of business and consistent with past practice, (d) incurred in connection
with this Agreement, or (e) which would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 3.10 Absence of Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Parent,
threatened against the Parent or any of its subsidiaries, or any properties or
rights of the Parent or any of its subsidiaries, before any federal, foreign,
state or provincial court, arbitrator or administrative, governmental or
regulatory authority or body that would reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 3.11 Employee Benefit Plans; Employment Agreements.
(a) Section 3.11(a) of the Parent Disclosure Schedule lists as of the date
hereof all employee pension plans (as defined in Section 3(2) of ERISA), all
material employee welfare plans, (as defined in Section 3(1) of ERISA) and all
other material bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe or
employee benefit plans, programs or arrangements, written or otherwise, for the
benefit of, or relating to, any group of current or former employees of or
consultants to Parent, any trade or business (whether or not incorporated) which
is a member of a controlled group including Parent or which is under common
control with Parent (a "Parent ERISA Affiliate") within the meaning of Section
414 of the Code, or any subsidiary of Parent, as well as each plan with respect
to which Parent or a Parent ERISA Affiliate would incur liability under Section
4069 (if such plan has been or were terminated) or Section 4212(c) of ERISA (all
such plans, practices, and programs are referred to herein as the "Parent
Employee Plans." To the extent requested by the Company, there have been made
available to the Company copies of (i) each such written Parent Employee Plan
(other than those referred to in Section 4(b)(4) of ERISA), (ii) the most recent
annual report on form 5500 series, with accompanying schedules and attachments,
filed with respect to each Parent Employee Plan required to make such a filing,
and (iii) the most recent actuarial valuation for each Parent Employee Plan
subject to Title IV of ERISA. For purposes of this Section 3.11 (a) the term
material, used with respect to any Parent Employee Plan, shall mean that Parent
or a Parent ERISA Affiliate has incurred or may reasonably be expected to incur
obligations in an annual amount exceeding $1,000,000 with respect to such Parent
Employee Plan.
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(b) (i) None of the Parent Employee Plans promises or provides retiree
medical or other welfare benefits to any person, and none of the Parent Employee
Plans is a "multiemployer plan" as such term is defined in Section 3(37) of
ERISA; (ii) there has been no "prohibited transaction," as such term is defined
in Section 406 of ERISA and Section 4975 of the Code, with respect to any Parent
Employee Plan, which would result in any material liability of Parent or any of
its subsidiaries; (iii) all Parent Employee Plans are in compliance in all
material respects with the requirements prescribed by any and all Laws
(including ERISA and the Code), currently in effect with respect thereto
(including all applicable requirements for notification to participants or the
Department of Labor, IRS, PBGC or Secretary of the Treasury), and Parent and
each of its subsidiaries have performed all material obligations required to be
performed by them under, are not in any material respect in default under or
violation of, and have no knowledge of any default or violation by any other
party to, any of the Parent Employee Plans; (iv) each Parent Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
determination letter from the IRS, and nothing has occurred which may reasonably
be expected to impair such determination; (v) all contributions required to be
made to any Parent Employee Plan pursuant to Section 412 of the Code, or the
terms of the Parent Employee Plan or any collective bargaining agreement, have
been made on or before their due dates; (vi) with respect to each Parent
Employee Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the 30 day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any event described
in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither Parent
nor any Parent ERISA Affiliate has incurred, nor reasonably expects to incur,
any liability under Title IV of ERISA (other than liability for premium payments
to the PBGC arising in the ordinary course), except where the failure of any of
the foregoing to be true would not have a Parent Material Adverse Effect.
(c) Section 3.1l(c) of the Parent Disclosure Schedule sets forth as of
the date hereof a true and complete list of each current or former officer or
director of Parent, and of all other employees as a group who hold (i) any
option to purchase Parent Common Stock as of the date hereof, together with the
number of shares of Parent Common Stock subject to such option, the option price
of such option (to the extent determined as of the date hereof), whether such
option is intended to qualify as an ISO, and the expiration date of such option,
and (ii) any other right, directly or indirectly, to acquire Parent Common
Stock, together with the number of shares of Parent Common Stock subject to such
right. Section 3.11 (c) of the Parent Disclosure Schedule also sets forth the
total number of such ISOs, such nonqualified options and such other rights
outstanding on the date hereof.
(d) Section 3.11(d) of the Parent Disclosure Schedule sets forth a true
and complete list of: (i) all written employment agreements with officers or
employees of Parent or any of its subsidiaries that provide for annual base
salaries in excess of $250,000; (ii) all agreements with consultants who are
individuals obligating the Company or any of its subsidiaries to make annual
cash payments in an amount exceeding $250,000; (iii) all severance agreements,
programs and
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policies of Parent with or relating to its employees in each case with
outstanding commitments exceeding $250,000, excluding programs and policies
required to be maintained by law.
SECTION 3.12 Labor Matters. There are no claims or proceedings pending
or, to the knowledge of Parent or any of its subsidiaries, threatened, between
Parent or any of its subsidiaries and any of their respective employees,
asserting that the Company has committed an unfair labor practice which claims
or proceedings have or would reasonably be expected to have a Parent Material
Adverse Effect; (ii) neither Parent nor any of its subsidiaries is a party to
any collective bargaining agreement or other labor union contract applicable to
persons employed by Parent or its subsidiaries; and (iii) neither Parent nor any
of its subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of Parent or
any of its subsidiaries, which would reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 3.13 Registration Statement; Joint Proxy Statement/Prospectus.
Subject to the accuracy of the representations of the Company in Section 2.13,
the registration statement (the "Registration Statement") pursuant to which the
Parent Common Stock to be issued in the Merger will be registered with the SEC
shall not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements included therein, in light of the circumstances
under which they were made, not misleading. The information supplied by Parent
for inclusion or incorporation in the Joint Proxy Statement/Prospectus will not,
on the date the Joint Proxy Statement/Prospectus is first mailed to
stockholders, at the time of the Stockholders Meetings and at the Effective
Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or will omit to state any material fact necessary in order
to make the statements therein not false or misleading; or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders Meetings which
has become false or misleading. If at any time prior to the Effective Time any
event relating to Parent, Merger Sub or any of their respective affiliates,
officers or directors should be discovered by Parent or Merger Sub which should
be set forth in an amendment to the Registration Statement or a supplement to
the Joint Proxy Statement/Prospectus, Parent or Merger Sub will promptly inform
the Company. Notwithstanding the foregoing, Parent and Merger Sub make no
representation or warranty with respect to any information supplied by the
Company which is contained in any of the foregoing documents. Notwithstanding
the foregoing, Parent makes no representation or warranty with respect to any
information supplied by the Company which is contained in, or furnished in
connection with the preparation of, the Registration Statement or the Joint
Proxy Statement/Prospectus.
SECTION 3.14 Title to Property. Neither the Parent nor any of its
subsidiaries owns any real property.
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SECTION 3.15 Taxes. Parent and its subsidiaries have filed all United
States federal income Tax Returns and all other material Tax Returns required to
be filed by them, and Parent and its subsidiaries have paid and discharged all
Taxes due in connection with or with respect to the periods or transactions
covered by such Tax Returns and have paid all other Taxes as are due, except
such as are being contested in good faith by appropriate proceedings (to the
extent that any such proceedings are required) and there are no other Taxes that
would be due if asserted by a taxing authority, except with respect to which
Parent is maintaining reserves to the extent currently required unless the
failure to do so would not reasonably be expected to have a Parent Material
Adverse Effect. Except as does not involve or would not result in liability to
Parent that would reasonably be expected to have a Parent Material Adverse
Effect: (i) there are no tax liens on any assets of Parent or any subsidiary
thereof; and (ii) neither Parent nor any of its subsidiaries has granted any
waiver of any statute of limitations with respect to, or any extension of a
period for the assessment of, any Tax. The accruals and reserves for Taxes
(including deferred taxes) reflected in the 1997 Parent Balance Sheet are in all
material respects adequate to cover all Taxes required to be accrued through the
date thereof (including interest and penalties, if any, thereon and Taxes being
contested) in accordance with generally accepted accounting principles.
SECTION 3.16 Environmental Matters. Except in all cases as, in the
aggregate, have not had and would not reasonably be expected to have a Parent
Material Adverse Effect, Parent and each of its subsidiaries to the best of
Parent's knowledge: (i) have obtained all Approvals which are required to be
obtained under all applicable Environmental Laws by Parent or its subsidiaries
(or their respective agents); (ii) are in compliance with all terms and
conditions of such required Approvals, and also are in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in applicable Environmental
Laws; (iii) have not received notice of any past or present violations of
Environmental Laws, or any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued compliance with or which would give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit or
proceeding, against Parent or any of its subsidiaries based on or resulting from
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant or hazardous or toxic material or
waste; and (iv) have taken all actions necessary under applicable Environmental
Laws to register any products or materials required to be registered by Parent
or its subsidiaries (or any of their respective agents) thereunder.
SECTION 3.17 Intellectual Property.
(a) Parent, directly or indirectly, owns, or is licensed or otherwise
possesses legally enforceable rights to use, all trademarks, trade names,
service marks, copyrights, and any applications therefor, know-how, computer
software programs or applications, and tangible or intangible proprietary
information or material that are material to the business of Parent and its
subsidiaries, taken as a whole, as currently conducted or as proposed to be
conducted (the "Parent
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Intellectual Property Rights"), except where the failure to do so would not have
a Parent Material Adverse Effect.
(b) No claims have been asserted to Parent or any of its subsidiaries in
writing or, to the knowledge of Parent, are threatened by any person nor are
there any valid grounds, to the knowledge of Parent, for any bona fide claims
(i) against the use by Parent or any of its subsidiaries of Parent Intellectual
Property Rights, or (ii) challenging the ownership by Parent or any of its
subsidiaries, or the validity or effectiveness of any of Parent Intellectual
Property Rights, except for such claims that would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect.
SECTION 3.18 Interested Party Transactions. Since the date of Parent's
registration statement on Form S-1 as filed with the SEC on January 30, 1997,
other than as described therein, no event has occurred that would be required to
be reported as a Certain Relationship or Related Transaction, pursuant to Item
404 of Regulation S-K promulgated by the SEC.
SECTION 3.19 Pooling Matters. To the Parent's knowledge, neither Parent
nor any of its affiliates has taken or agreed to take any action that would
affect the ability of Parent to account for the business combination to be
effected by the Merger as a pooling of interests under generally accepted
accounting principles and applicable SEC interpretations. The failure of this
representation to be true and correct, shall, if the Merger is not able to be
accounted for as a pooling of interests, constitute a breach of the Agreement by
Parent for the purposes of Section 7.1(f).
SECTION 3.20 Opinion of Financial Advisor. Parent has received the
opinion of its financial advisor, ▇▇▇▇▇▇▇▇▇▇ Securities, that, as of the date
hereof, the Merger Consideration to be paid by Parent is fair to Parent from a
financial point of view.
SECTION 3.21 Brokers. No broker, finder or investment banker (other than
▇▇▇▇▇▇▇▇▇▇ Securities, the fees and expenses of which will be paid by Parent) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Merger Sub.
SECTION 3.22 Ownership of Merger Sub; No Prior Activities.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement and except for this Agreement
and any other agreements or arrangements contemplated by this Agreement, Merger
Sub has not and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
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business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
SECTION 3.23 Chapter 110F Not Applicable. The Board of Directors of Parent
has taken all actions so that the restrictions contained in Chapter 110F of the
Massachusetts Business Corporation Law applicable to a "business combination"
(as defined in Chapter 110F) will not apply to the execution, delivery or
performance of this Agreement or the Parent Voting Agreement dated as of the
date hereof between the Company and G. ▇▇▇▇ ▇▇▇▇▇▇ (the "Parent Voting
Agreement") or the consummation of the Merger or the other transactions
contemplated by the Parent Voting Agreement.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 4.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless Parent shall otherwise agree in writing and except
as otherwise contemplated by this Agreement or the Company Disclosure Schedule,
the Company shall conduct its business and shall cause the businesses of its
subsidiaries to be conducted in all material respects in the ordinary course of
business; and, except as set forth in the Company Disclosure Schedule, the
Company shall use all reasonable commercial efforts to preserve substantially
intact the business organization of the Company and its subsidiaries taken as a
whole, to keep available the services of the present key officers, employees and
consultants of the Company and its subsidiaries taken as a whole and to preserve
the present relationships of the Company and its subsidiaries with customers,
suppliers and other persons with which the Company or any of its subsidiaries
has significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, neither the Company nor any of its
subsidiaries shall, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the
Effective Time, directly or indirectly do, or propose to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change the Certificate of Incorporation or By-Laws
of the Company or any of its subsidiaries, except for the currently proposed
amendment to increase the authorized Company Common Stock to 50,000,000 shares;
(b) except as set forth in Section 4.1(b) of the Company Disclosure
Schedule, issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company or any of its subsidiaries.
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(c) sell, pledge, dispose of or encumber any assets of the Company or any
of its subsidiaries (except for (i) sales of assets in the ordinary course of
business and in a manner consistent with past practice, (ii) dispositions of
obsolete or worthless assets, and (iii) sales of other assets not in excess of
$250,000 in the aggregate);
(d) except as set forth in Section 4.1(d) of the Company Disclosure
Schedule, (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of the Company
may declare and pay a dividend to its parent, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) amend the terms or change the period of exercisability
of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary
to purchase, repurchase, redeem or otherwise acquire, any of its securities or
any securities of its subsidiaries, including, without limitation, shares of
Company Common Stock or any option, warrant or right, directly or indirectly, to
acquire shares of Company Common Stock, including the Stock Options, or enter
into any agreement to do any of the foregoing;
(e) except as set forth in Section 4.1(e) of the Company Disclosure
Schedule, (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any business or any corporation, partnership or other business
organization or division; (ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any person or, except
in each case in the ordinary course of business consistent with past practice,
make any loans or advances; (iii) enter into or amend any contract or agreement
other than in the ordinary course of business; (iv) authorize any capital
expenditures or purchase of fixed assets which are, in the aggregate, in excess
of $500,000 for the Company and its subsidiaries taken as a whole; or (v) enter
into or amend any contract, agreement, commitment or arrangement to effect any
of the matters prohibited by this Section 4.1(e);
(f) except as set forth in Section 4.1(f) of the Company Disclosure
Schedule, (i) increase the compensation payable or to become payable to its
executive officers, directors or employees except in the ordinary course of
business consistent with past practice; (ii) grant any additional severance or
termination pay to, or enter into any new employment or severance agreements
with, any director, executive officer or current employee of the Company or its
subsidiaries; (iii) enter into any employment or severance agreement with any
new employees of the Company or its subsidiaries except in the ordinary course
of business consistent with past practice; or (iv) establish, adopt, enter into
or amend any collective bargaining, profit sharing, thrift, restricted stock,
pension, retirement, deferred compensation or severance plan, trust, fund or
policy for the benefit of current or former directors, officers or employees of
the Company or any of its subsidiaries, except, in each case, as may be required
by law;
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(g) except as required under generally accepted accounting principles,
take any action to change in any material respect the accounting policies or
procedures (including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts receivable)
of the Company or any subsidiary (except in the case of subsidiaries to conform
to the Company's policies and procedures);
(h) except as set forth in Section 4.1(h) of the Company Disclosure
Schedule, make any tax election inconsistent with past practice or settle or
compromise any federal, state, local or foreign tax liability or agree to an
extension of a statute of limitations, in each case which would be material to
the Company and its subsidiaries taken as a whole;
(i) except as set forth in Section 4.1(i) of the Company Disclosure
Schedule, pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise) material to
the Company and its subsidiaries taken as a whole, other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities reflected or reserved against in the financial
statements contained in the Company SEC Reports filed prior to the date of this
Agreement or incurred in the ordinary course of business and consistent with
past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1 (a) through (i) above.
SECTION 4.2 No Solicitation.
(a) The Company shall not, directly or indirectly, through any officer,
director, employee, representative or agent of the Company or any of its
subsidiaries, (i) solicit, initiate or encourage the initiation of any inquiries
or proposals regarding any merger, sale of substantial assets, sale of shares of
capital stock (including without limitation by way of a tender offer) or similar
transactions involving the Company or any subsidiaries of the Company other than
the Merger (any of the foregoing inquiries or proposals being referred to herein
as an "Acquisition Proposal"), (ii) engage in negotiations or discussions
concerning, or provide any nonpublic information to any person relating to, any
Acquisition Proposal or (iii) agree to, approve or recommend any Acquisition
Proposal. Nothing contained in this Section 4.2(a) shall prevent the Board of
Directors of the Company from considering, negotiating, approving and
recommending to the stockholders of the Company a bona fide Acquisition Proposal
not solicited in violation of this Agreement, provided the Board of Directors of
the Company determines in good faith (upon advice of outside counsel) that it is
required to do so in order to discharge properly its fiduciary duties.
(b) The Company shall immediately notify Parent after receipt of any
Acquisition Proposal, or any modification of or amendment to any Acquisition
Proposal, or any request for nonpublic information relating to the Company or
any of its subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any subsidiary by
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any person or entity that informs the Board of Directors of the Company or such
subsidiary that it is considering making, or has made, an Acquisition Proposal.
Such notice to Parent shall be made orally and in writing, and shall indicate
whether the Company is providing or intends to provide the person making the
Acquisition Proposal with access to information concerning the Company as
provided in Section 4.2(c).
(c) If the Board of Directors of the Company receives a request for
material nonpublic information by a person who makes, or indicates that it is
considering making, a bona fide Acquisition Proposal, and the Board of Directors
determines in good faith and upon the advice of independent counsel that it is
required to cause the Company to act as provided in this Section 4.2(c) in order
to discharge properly the directors' fiduciary duties, then, provided the person
making the Acquisition Proposal has executed a confidentiality agreement
substantially similar to the one then in effect between the Company and Parent,
the Company may provide such person with access to information regarding the
Company.
(d) The Company shall ensure that the officers and directors of the
Company and its subsidiaries and any investment banker or other advisor or
representative retained by the Company are aware of the restrictions described
in this Section 4.2.
SECTION 4.3 Conduct of Business by Parent Pending the Merger. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, Parent covenants and agrees
that, unless the Company shall otherwise agree in writing, Parent shall conduct
its business, and cause the businesses of its subsidiaries to be conducted, in
the ordinary course, other than actions taken by Parent or its subsidiaries in
contemplation of the Merger, and shall not directly or indirectly do, or propose
to do, any of the following without the prior written consent of the Company:
(a) amend or otherwise change Parent's Restated Articles of Organization
or By-Laws, except to increase the authorized Parent Common Stock to not more
than 100,000,000 shares;
(b) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of Parent may
declare and pay a dividend to its parent;
(c) take or agree in writing or otherwise to take any action which would
make any of the representations or warranties of Parent contained in this
Agreement untrue or incorrect or prevent Parent from performing or cause Parent
not to perform its covenants hereunder; or
(d) acquire or agree to acquire (by merger, consolidation or acquisition
of stock or assets) any business or any corporation, partnership or other
business organization or division, if such acquisition would involve
consideration of more than $75,000,000 in any single instance or require the
approval of the stockholders of Parent.
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 HSR Act. As promptly as practicable after the date of the
execution of this Agreement, the Company and Parent shall file notifications
under and in accordance with the HSR Act in connection with the Merger and the
transactions contemplated hereby and respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antitrust Division
of the Department of Justice for additional information or documentation and
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other governmental authority in connection with
antitrust matters.
SECTION 5.2 Joint Proxy Statement Prospectus; Registration Statement. As
promptly as practicable after the execution of this Agreement, the Company and
Parent shall prepare and file with the SEC preliminary proxy materials which
shall constitute the Joint Proxy Statement/Prospectus and the Registration
Statement of the Parent with respect to the Parent Common Stock to be issued in
connection with the Merger. As promptly as practicable after comments are
received from the SEC thereon and after the furnishing by the Company and Parent
of all information required to be contained therein, the Company and Parent
shall file with the SEC a combined proxy and Registration Statement on Form S-4
(or on such other form as shall be appropriate) relating to the adoption of this
Agreement and approval of the transactions contemplated hereby by the
stockholders of the Company and the approval by the stockholders of Parent to
increase the number of authorized shares of Parent Company Stock and the
issuance of Parent Common Stock in the Merger pursuant to this Agreement, and
shall use all reasonable efforts to cause the Registration Statement to become
effective, and to mail the Joint Proxy Statement/Prospectus to their respective
shareholders, as soon thereafter as practicable. The Joint Proxy
Statement/Prospectus shall include the recommendation of the Boards of Directors
of the Company and Parent in favor of the Merger, subject to the last sentence
of Section 5.3.
SECTION 5.3 Stockholders Meetings. The Company and Parent shall call and
hold their respective Stockholders Meetings as promptly as practicable and in
accordance with applicable laws for the purpose of voting upon the approval of
the Merger and the issuance of the Parent Common Stock, and Parent and the
Company shall use their reasonable best efforts to hold the Stockholders
Meetings on the same day (and at the same time of such day) and as soon as
practicable after the date on which the Registration Statement becomes
effective. Unless otherwise required under the applicable fiduciary duties of
the respective directors of the Company or Parent, as determined by such
respective directors in good faith after consultation with and based upon the
advice of their respective outside legal counsel, the Company and Parent shall
use all reasonable efforts to solicit from their respective stockholders proxies
in favor of adoption of this Agreement and approval of the transactions
contemplated hereby or the issuance of Parent Company Stock in the Merger
pursuant to this Agreement, as the case may be, and shall take all
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other action reasonably necessary or advisable to secure the vote or consent of
stockholders to obtain such approvals.
SECTION 5.4 Access to Information; Confidentiality. Upon reasonable
notice and subject to restrictions contained in confidentiality agreements to
which such party is subject (from which such party shall use reasonable efforts
to be released), the Company and Parent shall each (and shall cause each of
their subsidiaries to) afford to the officers, employees, accountants, counsel
and other representatives of the other, reasonable access, during the period to
the Effective Time, to all of its properties, books, contracts, commitments and
records and, during such prior period, the Company and Parent each shall (and
shall cause each of their subsidiaries to) furnish promptly to the other all
information concerning its business, properties and personnel as such other
party may reasonably request, and each shall make available to the other the
appropriate individuals (including attorneys, accountants and other
professionals) for discussion of the other's business, properties and personnel
as either Parent or the Company may reasonably request. Each party shall keep
such information confidential in accordance with the terms of the mutual non-
disclosure letter, dated April 24, 1997 (the "Confidentiality Letter"), between
Parent and the Company.
SECTION 5.5 Consents; Approvals. The Company and Parent shall each use
all reasonable efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States and
foreign governmental and regulatory rulings and approvals), and the Company and
Parent shall make all filings (including, without limitation, all filings with
United States and foreign governmental or regulatory agencies) required in
connection with the authorization, execution and delivery of this Agreement by
the Company and Parent and the consummation by them of the transactions
contemplated hereby, in each case as promptly as practicable. The Company and
Parent shall furnish promptly all information required to be included in the
Joint Proxy Statement/Prospectus and the Registration Statement, or for any
application or other filing to be made pursuant to the rules and regulations of
any United States or foreign governmental body in connection with the
transactions contemplated by this Agreement.
SECTION 5.6 Agreements with Respect to Affiliates. Each of Parent and
the Company shall deliver to the other, prior to the date the Registration
Statement becomes effective under the Securities Act, a letter (the "Affiliate
Letters") identifying all persons who are, and at the time of the Stockholders
Meetings are expected to be, "affiliates" of the Parent or the Company,
respectively, for purposes of Rule 145 under the Securities Act ("Rule 145").
Each of Parent and the Company shall use its best efforts to cause each person
who is identified as an "affiliate" in its Affiliate Letter to deliver, prior to
the Effective Time, a written agreement (an "Affiliate Agreement") in connection
with pooling-of-interests accounting treatment and, in the case of "Affiliates"
of the Company, restrictions on affiliates under Rule 145, in substantially the
form of Exhibits 5.6(a) and 5.6(b), as applicable.
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SECTION 5.7 Indemnification and Insurance.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Certificate of Incorporation and By-Laws of the Company, which
provisions shall not be amended, repealed or otherwise modified for a period of
ten years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who at or before the Effective Time were
directors, officers, employees or agents of the Company, unless such
modification is required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and, after the Effective Time, Parent and the Surviving Corporation shall, to
the fullest extent permitted under applicable law or under the Surviving
Corporation's Certificate of Incorporation or By-Laws, indemnify and hold
harmless, each present and former director, officer or employee of the Company
or any of its subsidiaries (collectively, the "Indemnified Parties") against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, (x) arising out of or pertaining to the
transactions contemplated by this Agreement or (y) otherwise with respect to any
acts or omissions occurring at or prior to the Effective Time, to the same
extent as provided in the Company's Certificate of Incorporation or By-Laws or
any applicable contract or agreement as in effect on the date hereof, in each
case for a period of ten years after the date hereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) any counsel retained by the Indemnified Parties
for any period after the Effective Time shall be reasonably satisfactory to the
Surviving Corporation, (ii) after the Effective Time, Parent or the Surviving
Corporation shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, and (iii) Parent and the Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that neither Parent nor the Surviving Corporation shall be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld); and provided, further, that, in the event that any claim
or claims for indemnification are asserted or made within such ten-year period,
all rights to indemnification in respect of any such claim or claims shall
continue until the disposition of any and all such claims. The Indemnified
Parties as a group may retain only one law firm to represent them with respect
to any single action unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnified Parties.
(c) Parent and the Surviving Corporation shall honor and fulfill in all
respects the obligations of the Company pursuant to indemnification agreements
with the Company's directors and officers existing at or before the Effective
Time.
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(d) For a period of four years after the Effective Time, Parent shall
maintain or cause the Surviving Corporation to maintain in effect, if available,
directors' and officers' liability insurance covering those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy (a copy of which has been made available to Parent) on terms comparable
to those now applicable to directors and officers of the Company; provided,
however, that in no event shall Parent or the Surviving Corporation be required
to expend in excess of 150% of the annual premium currently paid by the Company
for such coverage; and provided further, that if the premium for such coverage
exceeds such amount, Parent or the Surviving Corporation shall purchase a policy
with the greatest coverage available for such 150% of the annual premium.
(e) This Section 5.7 shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
Parent and the Surviving Corporation and shall be enforceable by the Indemnified
Parties, their heirs and their representatives.
SECTION 5.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or nonoccurrence of any event known to such party the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to become materially untrue or
inaccurate, or (ii) any failure of the Company, Parent or Merger Sub, as the
case may be, materially to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice; and provided further that failure to give such notice shall not be
treated as a breach of covenant for the purposes of Sections 6.2(a) or 6.3(a)
unless the failure to give such notice results in material prejudice to the
other party.
SECTION 5.9 Further Action/Tax Treatment. Upon the terms and subject to
the conditions hereof each of the parties hereto shall use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, and otherwise
to satisfy or cause to be satisfied all conditions precedent to its obligations
under this Agreement. The foregoing covenant shall not include any obligation by
Parent to agree to divest, abandon, license or take similar action with respect
to any assets (tangible or intangible) of Parent or the Company. Each of Parent,
Merger Sub and the Company shall use its best efforts to cause the Merger to
qualify, and will not (both before and after consummation of the Merger) take
any actions which to its knowledge would reasonably be expected to prevent the
Merger from qualifying, as a reorganization under the provisions of Section 368
of the Code. Following the Merger, Parent will cause the Surviving Corporation
to continue the Company's historic business or use a significant portion of the
Company's historic business assets in a business.
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SECTION 5.10 Public Announcements. Parent and the Company shall consult
with each other before issuing any press release with respect to the Merger or
this Agreement and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by law or the rules and
regulations of the Nasdaq National Market System, if it has used all reasonable
efforts to consult with the other party prior thereto.
SECTION 5.11 Accountants' Letters. Upon reasonable notice from the
other, the Company and Parent shall use their respective best efforts to cause
Deloitte & Touche LLP or Price Waterhouse LLP, respectively, to deliver to
Parent or the Company, as the case may be, a letter, dated within 2 business
days of the Effective Date of the S-4 Registration Statement covering such
matters as are requested by Parent or the Company, as the case may be, and as
are customarily addressed in accountant's "comfort" letters.
SECTION 5.12 Pooling Accounting Treatment. Each of Parent and the
Company agrees not to take any action that to its knowledge would reasonably be
expected to adversely affect the ability of Parent to treat the Merger as a
pooling of interests, and each of Parent and the Company agrees to take
reasonable efforts to seek to negate the impact of any past actions that to its
knowledge would reasonably be expected to adversely impact the ability of Parent
to treat the Merger as a pooling of interests. The taking by Parent or the
Company of any action prohibited by the previous sentence, or the failure of
Parent or the Company to take any action required by the previous sentence,
shall, if the Merger is not able to be accounted for as a pooling of interests,
constitute a breach of this Agreement by Parent or the Company, as the case may
be, for the purposes of Section 7.1(f).
SECTION 5.13 Board Representation. Parent will take such action as is
necessary to cause ▇▇▇▇▇ ▇. ▇▇▇▇▇ to be included as a management nominee to be
elected to serve as a Class II director of Parent at the next Annual Meeting of
Stockholders of Parent.
SECTION 5.14 Nasdaq Listing. Each of the Company and Parent shall use
its best efforts to continue the quotation of the Company Common Stock and
Parent Common Stock, respectively, on the Nasdaq National Market during the term
of this Agreement.
SECTION 5.15 Listing of Parent Shares. Parent shall use its best efforts
to cause the Parent Shares to be issued in the Merger to be approved for
quotation, upon official notice of issuance, on the Nasdaq National Market.
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ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose and no
similar proceeding in respect of the Joint Proxy Statement/Prospectus shall have
been initiated or threatened by the SEC;
(b) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of the Company
and the issuance of Parent Common Stock in the Merger pursuant to this Agreement
shall have been approved by the requisite vote of the stockholders of Parent;
(c) HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated;
(d) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any proceeding brought
by any administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be pending;
and there shall not be any action taken, or any Law enacted, entered, enforced
or deemed applicable to the Merger, which makes the consummation of the Merger
illegal;
(e) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental authority
or administrative agency before any governmental authority, administrative
agency or court of competent jurisdiction, nor shall there be in effect any
judgment, decree or order of any governmental authority, administrative agency
or court of competent jurisdiction, in either case, seeking to prohibit or limit
Parent from exercising all material rights and privileges pertaining to its
ownership of the Surviving Corporation or the ownership or operation by Parent
or any of its subsidiaries of all or a material portion of the business or
assets of Parent or any of its subsidiaries, or seeking to compel Parent or any
of its subsidiaries to dispose of or hold separate all or any material portion
of the business or assets of Parent and its subsidiaries taken as a whole
(including the Surviving Corporation and its subsidiaries), as a result of the
Merger or the transactions contemplated by this Agreement; and
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(f) Nasdaq. The Parent Shares to be issued in the Merger shall have been
approved, upon official notice of issuance, for quotation on the Nasdaq National
Market.
SECTION 6.2 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger are also
subject to the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct in all
respects at and as of the Effective Time as if made at and as of such time,
except for (i) changes contemplated or permitted (i.e., resulting from actions
or inactions by the Company or its subsidiaries that do not violate Article IV
of this Agreement) by this Agreement, (ii) those representations and warranties
which address matters only as of a particular date (which shall have been true
and correct as of such date, subject to clause (iii)), and (iii) where the
failure to be true and correct would not reasonably be expected to have a
Company Material Adverse Effect, with the same force and effect as if made at
and as of the Effective Time, and Parent and Merger Sub shall have received a
certificate to such effect signed on behalf of the Company by the President and
the Chief Financial Officer of the Company;
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Effective Time, and Parent and Merger Sub shall have received a certificate to
such effect signed on behalf of the Company by the President and the Chief
Financial Officer of the Company;
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders (other than those listed in Section 2.5(c) of the Company Disclosure
Schedule) required to be obtained, and all filings required to be made, by the
Company for the due authorization, execution and delivery of this Agreement and
the consummation by it of the transactions contemplated hereby shall have been
obtained and made by the Company, except where the failure to receive such
consents, etc. would not reasonably be expected to have a Company Material
Adverse Effect;
(d) Tax Opinion. Parent shall have received a written opinion from Ropes
& ▇▇▇▇, in form and substance reasonably satisfactory to Parent, to the effect
that the Merger will constitute a tax-free reorganization within the meaning of
Section 368 of the Code;
(e) Opinions of Accountants. Parent shall have received from each of
Deloitte & Touche LLP and Price Waterhouse LLP, independent accountants, a
confirmation of their respective opinions delivered on or prior to the date of
this Agreement relating to pooling-of-interests accounting treatment;
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(f) Affiliate Agreements. Parent shall have received from each person
who is identified in the Affiliate Letter as an "affiliate" of the Company, an
Affiliate Agreement, and such Affiliate Agreement shall be in full force and
effect, except for any Affiliate Letter or Letters the failure to obtain or be
in full force and effect would not prevent the Merger from qualifying for
pooling-of-interests accounting treatment; and
(g) Stockholder Agreements. The Stockholder Agreements shall be in full
force and effective at and as of the Effective Time.
SECTION 6.3 Additional Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub contained in this Agreement shall be true and correct
in all respects on and as of the Effective Time, except for (i) changes
contemplated or permitted (i.e., resulting from actions or inactions by the
Parent or its subsidiaries that do not violate Article IV of this Agreement) by
this Agreement, (ii) those representations and warranties which address matters
only as of a particular date (which shall have been true and correct as of such
date, subject to clause (iii)), and (iii) where the failure to be true and
correct would not reasonably be expected to have a Parent Material Adverse
Effect, with the same force and effect as if made on and as of the Effective
Time, and the Company shall have received a certificate to such effect signed on
behalf of Parent by the President and the Chief Financial Officer of Parent;
(b) Agreements and Covenants. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate to such effect
signed on behalf of Parent by the President and the Chief Financial Officer of
Parent;
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by
Parent and Merger Sub for the authorization, execution and delivery of this
Agreement and the consummation by them of the transactions contemplated hereby
shall have been obtained and made by Parent and Merger Sub, except where the
failure to receive such consents, etc. would not reasonably be expected to have
a Parent Material Adverse Effect;
(d) Tax Opinion. The Company shall have received a written opinion of
▇▇▇▇ and ▇▇▇▇ LLP, in form and substance reasonably satisfactory to the Company,
to the effect that the Merger will constitute a tax-free reorganization within
the meaning of Section 368 of the Code; and
(e) Opinions of Accountants. The Company shall have received a copy of
the opinions referred to in Section 6.2(e) above; and
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(f) Parent Voting Agreement. The Parent Voting Agreement shall be in
full force and effective at and as of the Effective Time.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company or Parent:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent and the Company; or
(b) by either Parent or the Company, if the Merger shall not have been
consummated by November 30, 1997 (provided that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date); or
(c) by either Parent or the Company, if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall have
issued a nonappealable final order, decree or ruling or taken any other action
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger (provided that the right to terminate this Agreement under this
Section 7.1(c) shall not be available to any party who has not complied with its
obligations under Section 5.9 and such noncompliance materially contributed to
the issuance of any such order, decree or ruling or the taking of such action);
or
(d) by Parent, if the requisite vote of the stockholders of the Company
shall not have been obtained by November 30, 1997, or by the Company, if the
requisite vote of the stockholders of Parent shall not have been obtained by
November 30, 1997; or
(e) by Parent or the Company, if: (i) the Board of Directors of the
Company shall withdraw, modify or change its approval or recommendation of this
Agreement or the Merger in a manner adverse to Parent or shall have resolved to
do so; (ii) the Board of Directors of the Company shall have recommended to the
stockholders of the Company a Company Alternative Transaction (as defined
below); or (iii) a tender offer or exchange offer for 25% or more of the
outstanding shares of Company Common Stock is commenced (other than by Parent or
an affiliate of Parent) and the Board of Directors of the Company recommends
that the stockholders of the Company tender their shares in such tender or
exchange offer; or
(f) by Parent or the Company, (i) if any representation or warranty of
the Company or Parent, respectively, set forth in this Agreement shall be untrue
when made, or (ii) upon a breach of any covenant or agreement on the part of the
Company or Parent, respectively, set forth in this Agreement, such that the
conditions set forth in Section 6.2(a) or 6.2(b), or Section 6.3(a) or
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6.3(b), as the case may be, would not be satisfied (either (i) or (ii) above
being a "Terminating Breach"), provided, that, the non-breaching party shall
have given the breaching party at least 10 business days' prior notice and
provided, further, that if such Terminating Breach is curable prior to November
30, 1997 by the Company or Parent, as the case may be, through the exercise of
its reasonable best efforts and for so long as the Company or Parent, as the
case may be, continues to exercise such reasonable best efforts, neither Parent
nor the Company, respectively, may terminate this Agreement under this Section
7.1(f); or
(g) by Parent, if any representation or warranty of the Company shall have
become untrue such that the condition set forth in Section 6.2(a) would not be
satisfied, or by the Company, if any representation or warranty of Parent shall
have become untrue such that the condition set forth in Section 6.3(a) would not
be satisfied, in either case after 10 business days' prior written notice and
after a reasonable opportunity to cure, other than by reason of a Terminating
Breach; or
(h) by Parent or the Company, if the Board of Directors of Parent shall
have withdrawn or modified its recommendation of the approval of the issuance of
the Parent Common Stock in the Merger in a manner adverse to the Company or
shall have resolved to do so.
As used herein, "Company Alternative Transaction" means any of (i) a
transaction pursuant to which any person (or group of persons) other than Parent
or its affiliates (a "Third Party") acquires or would acquire more than 25% of
the outstanding Shares, whether from the Company or pursuant to a tender offer
or exchange offer or otherwise, (ii) a merger or other business combination
involving the Company pursuant to which any Third Party acquires more than 25%
of the outstanding equity securities of the Company or the entity surviving such
merger or business combination, or (iii) any other transaction pursuant to which
any Third Party acquires or would acquire control of assets (including for this
purpose the outstanding equity securities of subsidiaries of the Company, and
the entity surviving any merger or business combination including any of them)
of the Company or any of its subsidiaries having a fair market value (as
determined by the Board of Directors of the Company in good faith) equal to more
than 25% of the fair market value of all the assets of the Company and its
subsidiaries, taken as a whole, immediately prior to such transaction.
SECTION 7.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or stockholders except (i) as set forth in
Section 7.3 and Section 8.1 hereof, and (ii) nothing herein shall relieve any
party from liability for any willful breach hereof prior to such termination.
SECTION 7.3 Fees and Expenses.
(a) Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated; provided, however, that Parent and
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the Company shall share equally all fees and expenses, other than accountants'
and attorneys' fees, incurred in connection with the printing and filing of the
Joint Proxy Statement/Prospectus (including any preliminary materials related
thereto) and the Registration Statement (including financial statements and
exhibits) and any amendments or supplements thereto.
(b) The Company shall pay Parent a fee of $6,000,000 (the "Initial
Company Fee") upon the first to occur of the following events:
(i) the termination of this Agreement by Parent pursuant to
Section 7.1(d) as a result of the failure to receive the requisite vote for
approval and adoption of the Merger Agreement by the stockholders of the
Company by November 30, 1997 if a proposal for a Company Alternative
Transaction shall have been made prior to the Company Stockholders Meeting;
or
(ii) the termination of this Agreement by Parent or the Company
pursuant to Section 7.1(e); or
(iii) the termination of this Agreement by Parent pursuant to
Section 7.1(f) on account of a Terminating Breach by the Company.
(c) Parent shall pay the Company a fee of $6,000,000 (the "Initial Parent
Fee") upon the first to occur of the following events:
(i) the termination of this Agreement by the Company pursuant to
Section 7.1(d) as a result of the failure to receive the requisite vote for
issuance of the Parent Common Stock by the stockholders of Parent by
November 30, 1997 if a proposal for a Parent Alternative Transaction (as
defined below) shall have been made prior to the Parent Stockholders
Meeting; or
(ii) the termination of this Agreement by the Company pursuant to
Section 7.1(f) on account of a Terminating Breach by Parent; or
(iii) the termination of this Agreement by the Company pursuant to
Section 7.1(h).
(d) The Initial Company Fee or the Initial Parent Fee payable pursuant to
this Section 7.3 shall be paid within one business day after the first to occur
of any of the events described in Section 7.3(b) or Section 7.3(c),
respectively; provided, that, in no event shall either party be required to pay
such Fee if, immediately prior to the termination of this Agreement, the other
party was in material breach of its obligations under this Agreement.
(e) If the Company shall have paid the Initial Company Fee, and if within
twelve months of the termination of this Agreement after any of the events set
forth in Section 7.3(b), the Company shall have entered into a binding agreement
to consummate a Company Alternative
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Transaction, and if such Parent Alternative Transaction shall be consummated at
any time thereafter, the Company shall pay to Parent, within one business day
after the consummation of such Company Alternative Transaction, the additional
sum of $6,000,000.
(f) If Parent shall have paid the Initial Parent Fee, and if within twelve
months of the termination of this Agreement after any of the events set forth in
Section 7.3(c), Parent shall have entered into a binding agreement to consummate
a Parent Alternative Transaction and if such Parent Alternative Transaction
shall be consummated at any time thereafter, Parent shall pay to the Company,
within one business day after the consummation of such Parent Alternative
Transaction, the additional sum of $6,000,000.
(g) As used herein, "Parent Alternative Transaction" means any of (i) a
transaction pursuant to which any person (or group of persons) other than
Company or its affiliates (a "Third Person") acquires or would acquire more than
25% of the outstanding shares of Parent Common Stock, whether from Parent or
pursuant to a tender offer or exchange offer or otherwise, (ii) a merger or
other business combination involving Parent pursuant to which any Third Person
acquires more than 25% of the outstanding equity securities of Parent or the
entity surviving such merger or business combination, or (iii) any other
transaction pursuant to which any Third Person acquires or would acquire control
of assets (including for this purpose the outstanding equity securities of
subsidiaries of Parent, and the entity surviving any merger or business
combination including any of them) of Parent or any of its subsidiaries having a
fair market value (as determined by the Board of Directors of Parent in good
faith) equal to more than 25% of the fair market value of all the assets of the
Company and its subsidiaries, taken as a whole, immediately prior to such
transaction.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.
(a) Except as otherwise provided in this Section 8.1, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that the agreements set
forth in Article I and Section 5.7 shall survive the Effective Time indefinitely
and those set forth in Section 7.3 shall survive such termination indefinitely.
The Confidentiality Letter shall survive termination of this Agreement as
provided therein.
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(b) Any disclosure made with reference to one or more sections of the
Company Disclosure Schedule or the Parent Disclosure Schedule shall be deemed
disclosed only with respect to such section unless it is reasonably apparent
from a reading of such disclosure that it also applies to other sections in
which case it shall also be deemed disclosed with respect to such other
sections.
(c) Reference to a party's "knowledge" in this Agreement refers to the
actual knowledge of the directors and officers of that party who are required to
file reports under Section 16(a) of the Exchange Act.
SECTION 8.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by facsimile transmission, with confirmation
received and a copy placed in the United States mail to the following addresses,
to the telecopy numbers specified below (or at such other address or telecopy
number for a party as shall be specified by like notice):
(a) If to Parent or Merger Sub:
The Registry, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) If to the Company:
Renaissance Solutions, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 8.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person; including, without limitation, any partnership
or joint venture in which the first mentioned person (either alone, or through
or together with any other subsidiary) has, directly or indirectly, an interest
of 5% or more;
(b) "beneficial owner" with respect to any shares of Company Common Stock
means a person who shall be deemed to be the beneficial owner of such shares (as
such term is defined in Rule 13d-3 of the Exchange Act);
(c) "business day" means any day other than a day on which banks in The
Commonwealth of Massachusetts are required or authorized to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(e) "generally accepted accounting principles" shall mean United States
generally accepted accounting principles.
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(f) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act); and
(g) "subsidiary" or "subsidiaries" of the Company, Parent or any other
person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
SECTION 8.4 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
by law requires further approval by such stockholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.5 Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the party or parties to be
bound thereby.
SECTION 8.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
SECTION 8.8 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings (other than the
Confidentiality Letters), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof.
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SECTION 8.9 Assignment; Guarantee of Merger Sub Obligations. This
Agreement shall not be assigned by operation of law or otherwise, except that
Merger Sub may assign all or any of its rights hereunder to any wholly owned
subsidiary of the Parent provided that no such assignment shall relieve the
assigning party of its obligations hereunder. Parent guarantees the full and
punctual performance by Merger Sub of all the obligations hereunder of Merger
Sub or any such assignees.
SECTION 8.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, including, without limitation, by way of subrogation, other
than Section 5.7 (which is intended to be for the benefit of the Indemnified
Parties and may be enforced by such Indemnified Parties).
SECTION 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 8.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the State of
Delaware.
SECTION 8.13 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[This space intentionally left blank.]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
THE REGISTRY, INC.
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: G. ▇▇▇▇ ▇▇▇▇▇▇
Title: President
RAIN ACQUISITION CORP.
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: G. ▇▇▇▇ ▇▇▇▇▇▇
Title: President
RENAISSANCE SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer