EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
Huhtamaki Oy,
Seal Acquisition Corporation
and
Sealright Co., Inc.
March 2, 1998
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . .2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . .2
1.2 Additional Terms . . . . . . . . . . . . . . . . . . .9
ARTICLE II TERMS OF THE MERGER. . . . . . . . . . . . . . . . .9
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . .9
2.2 Effective Time . . . . . . . . . . . . . . . . . . . .9
2.3 Closing. . . . . . . . . . . . . . . . . . . . . . . .9
2.4 Ancillary Agreements . . . . . . . . . . . . . . . . .9
ARTICLE III CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
SURVIVING COMPANY . . . . . . . . . . . . . . . . . . . . 10
3.1 Certificate of Incorporation . . . . . . . . . . . . 10
3.2 The Bylaws . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV DIRECTORS AND OFFICERS OF THE SURVIVING COMPANY. . 10
4.1 Directors. . . . . . . . . . . . . . . . . . . . . . 10
4.2 Officers . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
COMPANY SHARES IN THE MERGER. . . . . . . . . . . . . . . 11
5.1 Merger Consideration . . . . . . . . . . . . . . . . 11
5.2 Cancellation of Company Shares . . . . . . . . . . . 11
5.3 Payment for Company Shares . . . . . . . . . . . . . 12
5.4 Dissenting Shares. . . . . . . . . . . . . . . . . . 13
5.5 Transfer of Company Shares After the Effective Time. 14
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . 14
6.1 Capitalization . . . . . . . . . . . . . . . . . . . 14
6.2 Corporate Organization, Qualification and Power. . . 15
6.3 Authorization of Agreement and Merger. . . . . . . . 15
6.4 Enforceable Agreement. . . . . . . . . . . . . . . . 15
6.5 No Conflicts, Violations, Breaches or Defaults . . . 16
6.6 Company SEC Reports. . . . . . . . . . . . . . . . . 16
6.7 Financial Statements; Accounting Matters . . . . . . 17
6.8 Absence of Certain Changes . . . . . . . . . . . . . 17
6.9 Proxy Statement; S-4 Registration Statement. . . . . 17
6.10 Litigation. . . . . . . . . . . . . . . . . . . . . 18
6.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . 18
6.12 Employee Matters. . . . . . . . . . . . . . . . . . 19
6.13 Environmental Laws and Regulations. . . . . . . . . 20
6.14 Compliance with Applicable Laws . . . . . . . . . . 21
6.15 Title to Properties . . . . . . . . . . . . . . . . 21
6.16 Intellectual Property . . . . . . . . . . . . . . . 22
6.17 Insurance . . . . . . . . . . . . . . . . . . . . . 22
6.18 DGCL Section 203. . . . . . . . . . . . . . . . . . 23
6.19 Material Contracts. . . . . . . . . . . . . . . . . 23
6.20 Authorization of Flexible Shares. . . . . . . . . . 25
6.21 Broker's Fees . . . . . . . . . . . . . . . . . . . 25
6.22 Opinions of Financial Advisors. . . . . . . . . . . 25
6.23 Liabilities . . . . . . . . . . . . . . . . . . . . 25
6.24 Sufficiency of Assets . . . . . . . . . . . . . . . 25
6.25 Solvency of the Flexible Company. . . . . . . . . . 25
6.26 Flexible Company. . . . . . . . . . . . . . . . . . 25
6.27 Venture Packaging . . . . . . . . . . . . . . . . . 26
6.28 Permitted Asset Sale. . . . . . . . . . . . . . . . 26
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB. . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Corporate Organization, Qualification and Power. . . 26
7.2 Authorization of Agreement and Merger. . . . . . . . 26
7.3 Enforceable Agreement. . . . . . . . . . . . . . . . 27
7.4 No Conflicts, Violations, Breaches or Defaults . . . 27
7.5 Proxy Statement;S-4 Registration Statement . . . . . 27
7.6 Financing. . . . . . . . . . . . . . . . . . . . . . 28
7.7 Broker's Fees. . . . . . . . . . . . . . . . . . . . 28
7.8 Interim Operations of Merger Sub . . . . . . . . . . 28
ARTICLE VIII CONDUCT PENDING THE CLOSING AND COVENANTS. . . . 28
8.1 Conduct of Business by Company . . . . . . . . . . . 28
8.2 Conduct of the Company as to Employee Matters. . . . 30
8.3 Sale of Certain Assets . . . . . . . . . . . . . . . 30
8.4 Conduct of Business of Merger Sub. . . . . . . . . . 31
8.5 Acquisition Proposals. . . . . . . . . . . . . . . . 31
8.6 Stockholders' Approval; Proxy Statement. . . . . . . 32
8.7 Reasonable Best Efforts. . . . . . . . . . . . . . . 33
8.8 Notification of Certain Matters. . . . . . . . . . . 33
8.9 HSR. . . . . . . . . . . . . . . . . . . . . . . . . 34
8.10 Representations and Warranties. . . . . . . . . . . 34
8.11 Access to/Confidentiality of Information. . . . . . 34
8.12 Publicity . . . . . . . . . . . . . . . . . . . . . 34
8.13 Indemnification of Directors and Officers . . . . . 34
8.14 Employees . . . . . . . . . . . . . . . . . . . . . 35
8.15 Amendment of Options. . . . . . . . . . . . . . . . 35
8.16 Conduct of Flexible Business. . . . . . . . . . . . 35
ARTICLE IX CONDITIONS . . . . . . . . . . . . . . . . . . . . 36
9.1 Conditions to Each Party's Obligation to Close . . . 36
9.2 Additional Conditions to the Obligations of Parent
and Merger Sub to Close . . . . . . . . . . . . . . 36
9.3 Additional Conditions to the Company's Obligation
to Close. . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE X TERMINATION AND REMEDIES. . . . . . . . . . . . . . 39
10.1 Termination . . . . . . . . . . . . . . . . . . . . 39
10.2 Effect of Termination . . . . . . . . . . . . . . . 41
ARTICLE XI GENERAL PROVISIONS . . . . . . . . . . . . . . . . 41
11.1 Expenses. . . . . . . . . . . . . . . . . . . . . . 41
11.2 Nonsurvival . . . . . . . . . . . . . . . . . . . . 42
11.3 Further Documents . . . . . . . . . . . . . . . . . 42
11.4 Modification or Amendment . . . . . . . . . . . . . 42
11.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . 43
11.6 Notices . . . . . . . . . . . . . . . . . . . . . . 43
11.7 Governing Law . . . . . . . . . . . . . . . . . . . 44
11.8 Entire Agreement. . . . . . . . . . . . . . . . . . 44
11.9 Construction. . . . . . . . . . . . . . . . . . . . 44
11.10 Binding Effect. . . . . . . . . . . . . . . . . . . 44
11.11 Assignment. . . . . . . . . . . . . . . . . . . . . 44
11.12 Counterparts. . . . . . . . . . . . . . . . . . . . 44
11.13 Obligation of Parent. . . . . . . . . . . . . . . . 45
11.14 Validity. . . . . . . . . . . . . . . . . . . . . . 45
LIST OF EXHIBITS
Exhibit 2.4(a) Tax Procedures Agreement
Exhibit 2.4(b) Intellectual Property License Agreement
LIST OF SCHEDULES
Schedule 1.1
Excluded Assets
Schedule 1.2 Excluded Liabilities
Schedule 1.3 Term Sheet for a Permitted Transaction
Schedule 8.1(e) Permitted Restructuring
Schedule 8.1(h) Permitted Capital Expenditures
Schedule 8.3 Permitted Asset Sales
Schedule 8.14(a) Company Employment Agreements and Termination
Agreements
KC01 69387.10
KC 194136
3/16/98
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered
into as of March 2, 1998, by and among HUHTAMAKI OY, a
corporation organized under the laws of Finland ("Parent"), SEAL
ACQUISITION CORPORATION, a Delaware corporation, which is a
wholly owned indirect subsidiary of Parent ("Merger Sub"), and
SEALRIGHT CO., INC., a Delaware corporation (the "Company").
RECITALS
A.The respective Boards of Directors of Parent, Merger
Sub and the Company each have determined that it is in the best
interests of their companies and respective stockholders that
Merger Sub be merged with and into the Company, and, to that end,
have approved the merger of Merger Sub with and into the Company
in accordance with the laws of the State of Delaware and the
provisions of this Agreement and Plan of Merger.
B.Parent, Merger Sub and the Company desire to make
certain representations, warranties and agreements in connection
with, and establish certain conditions precedent to, the Merger.
C.Parent and Merger Sub are unwilling to enter into
this Agreement unless certain stockholders of the Company
concurrently with the execution and delivery of this Agreement
enter into Irrevocable Proxy and Option Agreements (each an
"Irrevocable Proxy") between Parent and ▇▇▇▇▇▇ ▇. ▇▇▇▇ Group,
Inc., G. ▇▇▇▇▇▇▇ BaumTrust, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust, among other
things the grant by such stockholders of (i) an irrevocable proxy
in favor of Parent with respect to all shares of Common Stock
owned by such Persons, and (ii) the option, under certain
circumstances, to purchase all shares of Common Stock owned by
such Persons, and the Board of Directors of the Company has
approved the execution and delivery of the Irrevocable Proxies.
AGREEMENT
In consideration of the mutual agreements, promises
and covenants set forth herein and the recitals set forth above,
and other good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties hereto, intending
to be legally bound, agree as follows.
ARTICLE I
DEFINITIONS
0.1Defined Terms. As used herein the following terms
shall have the following meanings:
Acquisition Proposal: Any inquiry, proposal or
offer from any Person relating to any direct or indirect
acquisition or purchase of a substantial amount of assets of
the Company or any of its Subsidiaries (other than with
respect to a Permitted Transaction) or of over 10% of any
class of equity securities of the Company or any of its
Subsidiaries (other than the Flexible Company), any tender
offer or exchange offer that if consummated would result in
any Person beneficially owning 10% or more of any class of
equity securities of the Company or any of its Subsidiaries
(other than the Flexible Company), any merger,
consolidation, business combination, sale of substantially
all the assets, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its
Subsidiaries (other than the Transactions or a Permitted
Transaction), or any other transaction (other than a
Permitted Transaction) the consummation of which could
reasonably be expected to impede, interfere with, prevent or
materially delay the Merger or which would reasonably be
expected to dilute materially the benefits to Parent of the
Transactions.
Additional Agreements: Those agreements listed in
this Agreement and attached hereto, either as of the date
hereof or, subject to the mutual agreement of the parties,
prior to Closing, as exhibits and incorporated herein by
reference, including but not limited to the Confidentiality
Agreement, as well as all assignments and Ancillary
Agreements necessary to effectuate the Merger, but excluding
any assignments or agreements associated with Permitted
Restructuring or Permitted Transactions.
Agreement: This Agreement and Plan of Merger,
including the preamble, recitals, exhibits and schedules
hereto, all of which are hereby incorporated herein by
reference and made a part hereof, as may be amended from
time to time pursuant to the terms hereof.
Ancillary Agreements: Those agreements described
in Section 2.4.
Certificates: The certificates representing
Company Shares to be surrendered pursuant to Section 5.3 in
exchange for the Merger Consideration and the Redemption
Consideration.
Certificate of Merger: The document to be
prepared by the parties hereto, in compliance in all
respects with the requirements of the DGCL and the
provisions of this Agreement and which shall be filed with
the Secretary of State of the State of Delaware.
Closing: A meeting for the purpose of concluding
the Transactions to be held at the place and on the date
fixed in accordance with Section 2.3.
Code: The Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated
thereunder.
Company: Shall have the meaning set forth in the
preamble to this Agreement.
Company Disclosure Letter: That letter from the
Company to Parent to be delivered upon the execution of this
Agreement, and updated, subject to the approval of Parent,
and redelivered at the Closing, which sets forth certain
disclosures concerning the Company and its business.
Company Intellectual Property Rights: All the
domestic and foreign patents, trademarks (registered or
unregistered), trade names, service marks and copyrights
registered and unregistered and applications relating to any
of the foregoing, computer software, data bases, inventions,
trade secrets and proprietary information of any type owned
by or licensed to the Company or any of its Subsidiaries,
except those Intellectual Property Rights that are Excluded
Assets.
Company Permits: All permits, licenses,
variances, exemptions, orders, franchises and approvals of
all Governmental Authorities necessary for the lawful
conduct of the businesses of the Company and its
Subsidiaries, except those that relate exclusively to the
Flexible Business.
Company SEC Reports: The forms, reports and
documents filed by the Company with the SEC since January 1,
1993, together with any amendments or supplements thereto,
any exhibits or schedules thereto and any materials or
information incorporated by reference therein.
Company Shares: The Company Stock issued and
outstanding immediately prior to the Effective Time.
Company Stock: The shares of common stock, $.10
par value per share, of the Company.
Company Stockholders Meeting: The meeting of the
stockholders of the Company to be held in connection with
the vote of such stockholders with respect to the Merger.
Company Transaction Expenses: That portion, if
any, of the aggregate out-of-pocket expenses incurred by the
Company in connection with the Transactions, Permitted
Restructuring or the Permitted Transactions (including but
not limited to investment banking, legal and accounting fees
and expenses, printing costs and SEC filing fees) in excess
of four million dollars ($4,000,000).
Confidentiality Agreement: The confidentiality
agreement between Parent and the Company, dated December 2,
1997.
DGCL: The General Corporation Law of the State of
Delaware.
Dissenting Shares: Company Shares which are held
by stockholders who have properly complied with the
provisions of Section 262 of the DGCL with respect to
appraisal rights.
Effective Time: The date and time at which the
Certificate of Merger has been duly filed with the Secretary
of State of the State of Delaware or such other time as is
agreed upon by the parties and specified in the Certificate
of Merger.
Environmental Claim: Any action, cause of action,
claim, investigation, demand or notice by any Person
alleging liability under or non-compliance with any
environmental Law.
ERISA: The Employee Retirement Income Security
Act of 1974, as amended.
Exchange Act: The Securities Exchange Act of
1934, as amended (15 U.S.C. ss 78a et. seq.).
Excluded Assets: The stock of the Flexible
Company and those assets used exclusively in the Flexible
Business, and described on Schedule 1.1, which are owned by
the Flexible Company, or which shall be transferred to it in
connection with the Permitted Restructuring, or, in the
alternative may be sold by the Company prior to the Closing
pursuant to a Permitted Transaction.
Excluded Liabilities: Those liabilities directly
and exclusively related to the Excluded Assets and the
Flexible Business, and described on Schedule 1.2, which are
the liability of the Flexible Company or which shall be
assumed by the Flexible Company in connection with the
Permitted Restructuring, or, in the alternative, may be
assumed in connection with the Excluded Assets in connection
with a Permitted Transaction.
Flexible Business: The business of manufacturing
and selling flexible packaging and labeling for the food,
dairy and beverage market (excluding the Company's
Australian operations), and machines for the application of
sleeve labels to plastic bottles, operated by the Company,
directly and through certain of its subsidiaries.
Flexible Buyer: A buyer of the Excluded Assets
and Excluded Liabilities pursuant to a Permitted
Transaction.
Flexible Company: Sealright Manufacturing-East,
Inc., a wholly-owned Subsidiary of the Company, incorporated
under the Laws of the State of Ohio.
Flexible Company Material Adverse Effect: Any
adverse change in the business, assets, liabilities,
operations, prospects, condition (financial or otherwise),
or results of operations of the Flexible Company, including
any of its Subsidiaries, which is material to the Flexible
Company and its Subsidiaries, taken as a whole.
Flexible Shares: The outstanding capital stock of
the Flexible Company which shall be distributed to the
Company's stockholders as the Redemption Consideration.
Governmental Authority: The federal government,
any state, county, municipal, local or foreign government
and any agency, bureau, commission, authority or body of any
of the foregoing.
HSR: The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
Intellectual Property Rights: Domestic and
foreign patents, trademarks (registered or unregistered),
trade names, service marks and copyrights (registered and
unregistered) and applications relating to any of the
foregoing, computer software, databases, inventions, trade
secrets and proprietary information of any type.
Judgment: Any judgment, writ, injunction, order
or decree of or by any court, judge, justice or magistrate,
including any bankruptcy court or judge, having appropriate
jurisdiction, and any binding adjudicative order of or by a
Governmental Authority.
Law: The common law and any statute, ordinance,
code or other law, rule, regulation, order, requirement or
procedure enacted, adopted, promulgated, applied or followed
by any Governmental Authority or court.
Lien: Any mortgage, lien or encumbrance of any
kind whatsoever, which (i) creates or confers or purports to
create or confer an interest in property to secure payment
or performance of a liability, obligation or claim, or which
retains or reserves or purports to retain or reserve such an
interest for such purpose; (ii) grants to any Person the
right to purchase or otherwise acquire, or obligates any
Person to sell or otherwise dispose of, or otherwise results
or may result in any Person acquiring, any property or
interest in property; (iii) restricts the transfer of, or
the exercise of any rights in or the enjoyment of any
benefits arising by reason of ownership of, any property; or
(iv) otherwise constitutes an interest in, or claim against,
property, whether arising pursuant to any Law, Judgment or
any binding contract.
Material Adverse Effect: Any adverse change in
the business, assets, liabilities, operations, prospects,
condition (financial or otherwise), or results of operations
of the Company or any of the Company's Subsidiaries which is
material to the Company and its Subsidiaries, taken as a
whole, but shall exclude any adverse change in the Flexible
Business.
Merger: The merger of Merger Sub into and with
the Company at Closing, as set forth in Section 2.1.
Merger Consideration: $11.00 per Company Share,
in cash.
Merger Payment Fund: That amount of (i) cash
equal to the aggregate amount of the Merger Consideration
and the cash portion of the Redemption Consideration
payable, if any, pursuant to Section 5.1 and, if applicable,
(ii) all of the issued and outstanding Flexible Shares, all
of which shall be delivered to the Paying Agent in
accordance with the provisions of this Agreement.
Merger Sub: Shall have the meaning set forth in
the preamble of this Agreement.
Option: Each option to purchase Company Stock
issued pursuant to any of the Company's Option Plans, or
otherwise granted by agreement to the Company's employees,
outstanding immediately prior to the Effective Time, whether
or not vested.
Option Plans: The Company's 1995 Stock Option
Plan and The Company's Amended and Restated 1987 Stock
Option Plan.
Parent: Shall have the meaning set forth in the
preamble of this Agreement.
Paying Agent: Shall have the meaning set forth in
Section 5.3(a) of this Agreement.
Permitted Restructuring: The transfer of Excluded
Assets and Excluded Liabilities to the Flexible Company from
the Company and its other Subsidiaries, for the purpose of
facilitating the distribution of the Flexible Shares as a
part of the Redemption Consideration or the Permitted
Transactions, as described on Schedule 8.1(e), provided that
all such transfers shall qualify as Tax free transfers and
no deferred gains shall be created by such transfers.
Permitted Transaction: Sale, in one or more
transactions, of all, but not less than all, of Excluded
Assets (including the stock of the Flexible Company), to,
and the assumption of all of the Excluded Liabilities by,
Flexible Buyers prior to the Closing, consistent with the
provisions set forth on Schedule 1.3 to the Company
Disclosure Letter.
Person: Any natural person, corporation, general
or limited partnership, limited liability company, joint
venture, trust, association, unincorporated entity of any
kind or Governmental Authority.
Proxy Statement: The proxy statement and form of
proxy in connection with the vote of the stockholders of the
Company with respect to the Merger and this Agreement,
together with any amendments thereof or supplements thereto
and all materials incorporated by reference therein, in the
form mailed to the Company's stockholders.
Redemption Consideration: One-half of a Flexible
Share per Company Share, or in lieu thereof, a pro rata
share of the net sales proceeds reduced by Tax liabilities
resulting from the sale of the Excluded Assets pursuant to
Permitted Transactions, which shall be distributed to the
holders of Company Shares with respect to each such share
owned at the Effective Time, in partial redemption of the
outstanding Company Stock. The aggregate after Tax sales
proceeds shall be reduced by the amount of Company
Transaction Expenses, if any. The calculation of such after
Tax sale proceeds shall assume that such proceeds are taxed
at the highest combined federal, state, local, municipal and
foreign Tax rates which are applicable to any taxable gain
or income on sale. In the event the Flexible Business is
sold in a Permitted Transaction prior to the Closing, such
proration of such net sales proceeds shall be calculated
based on the aggregate number of Company Shares outstanding
as of the Effective Time, on a fully-diluted basis.
Representatives: Directors, officers, employees,
legal counsel, financial advisors, accountants or other
authorized representatives of any of the parties hereto.
S-4 Registration Statement. The Company's
registration statement on Form S-4, as amended or
supplemented, containing the Proxy Statement, filed by the
Company with the SEC in connection with the registration
under the Securities Act of the Flexible Shares
distributable in connection with the Merger.
SEC: The United States Securities and Exchange
Commission.
Securities Act: The Securities Act of 1933, as
amended (15 U.S.C. ss 77a et. seq.).
Stock Plan: Any plan, agreement, program or
arrangement providing for the issuance, transfer or grant of
any capital stock of the Company or any interest or right in
respect of any capital stock of the Company, including but
not limited to the Option Plans or any provisions regarding
the foregoing contained as a part of any plan, program,
agreement or arrangement.
Subsidiary: In reference to any Person, any
corporation or other legal entity (x) a majority of the
outstanding voting securities of which are owned directly or
indirectly by such entity or (y) of which such Person
controls or has the power to elect or appoint a majority of
the Board of Directors or equivalent body of any such
Person, or any partnership of which such Person is a general
partner.
Superior Proposal: A bona fide proposal made by a
third party to acquire all of the outstanding Company Stock
pursuant to a tender offer, to acquire all of the assets of
the Company, or all of the assets of the Company, other than
the Excluded Assets, or to enter into a merger agreement
with the Company, in each case (a) on terms which a majority
of the members of the Board of Directors of the Company
determines in its good faith reasonable judgment (based on
the advice of independent outside financial and legal
advisors) to be more favorable to the Company and its
stockholders than the Transactions and (b) for which
financing, to the extent required, is then committed or
which is reasonably capable of being obtained by such third
party on commercially reasonable terms as determined in the
good faith reasonable judgment of the Board of Directors of
the Company (based on the advice of independent outside
financial and legal advisors).
Surviving Company: The Company, which shall be
the survivor of the Merger, as set forth in Section 2.1.
Taxes: All taxes, assessments, charges, duties,
fees, levies or other governmental charges, including,
without limitation, all Federal, state, local, foreign and
other income, franchise, profits, capital gains, capital
stock, transfer, sales, use, occupation, property, excise,
severance, windfall profits, stamp, license, payroll,
withholding and other taxes, assessments, charges, duties,
fees, levies or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), all
estimated taxes, deficiency assessments, additions to tax,
penalties and interest and shall include any liability for
such amounts as a result either of being a member of a
combined, consolidated, unitary or affiliated group or of a
contractual obligation to indemnify any Person or other
entity.
Tax Returns: All returns, declarations, reports,
information returns and statements with respect to Taxes of
whatsoever kind.
Third Party Acquisitions: Any merger or any other
business combination, sale or other disposition of any
material amount of assets, sale of shares of capital stock,
tender offer or exchange offer or similar transaction
involving the Company or any of its Subsidiaries (other than
exclusively related to the Excluded Assets, the Flexible
Business or the Flexible Shares) which (a) involves any
party (or any affiliates or associates thereof) (i) with
whom the Company or its Representatives, had any discussions
with respect to any of the foregoing transactions, (ii) to
whom the Company or its Representatives, furnished
information with respect to or with a view toward any of the
foregoing transactions, (iii) who had submitted a proposal
or expressed any interest, either to the Company, the
Company's Representatives, or publicly, in any of the
foregoing transactions (in each such case, after the date
hereof and prior to the termination of the Agreement) and
(b) provides for direct or indirect consideration for the
Company Stock in excess of the Merger Consideration (or in
the case of a Third Party Acquisition for the whole Company,
including the Flexible Business, in excess of the Merger
Consideration plus the Redemption Consideration).
Transactions: The transactions contemplated by
this Agreement, including the Merger, the distribution of
the Flexible Shares, and those contemplated by the
Additional Agreements, but excluding any Permitted
Transactions or Permitted Restructuring.
Voting Debt: Bonds, debentures, notes or other
indebtedness the holders of which have the right to vote (or
convertible or exchangeable into or exercisable for
securities having the right to vote) with the stockholders
of the Company or any of its Subsidiaries on any matter.
1.2 Additional Terms. Terms not set forth in Section 1.1,
but otherwise defined in the body of this Agreement, shall have
the specific meanings attributed to them in the text. Terms in
the singular shall have the same meanings when used in the plural
and vice versa.
ARTICLE II
TERMS OF THE MERGER
0.1The Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time, the Company
and Merger Sub shall consummate the Merger in which (a) Merger
Sub shall be merged into and with the Company in accordance with
the DGCL, (b) the separate existence of the Merger Sub shall
thereupon cease, (c) the Company shall be the survivor of the
Merger and, as the Surviving Company, shall continue its
corporate existence under the DGCL as a Subsidiary of Parent,
retaining its corporate name, and its other rights, privileges,
immunities, powers and franchises, unaffected by the Merger, and
shall assume all the rights and obligations of Merger Sub. The
Merger shall have the effects set forth in the DGCL.
0.2Effective Time. Subject to the terms and conditions
of this Agreement, the parties hereto shall prepare and execute a
Certificate of Merger setting forth the terms hereof. The
Certificate of Merger shall be filed on the date of Closing (or
such other date as agreed by Parent and the Company) with the
Secretary of State of the State of Delaware in the manner
provided in the DGCL and the Merger shall be effective at the
Effective Time.
0.3Closing. The Closing of the Merger shall occur at
the offices of ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, commencing at 10:00 A.M., local time, on
the third business day following the date on which the last of
the conditions set forth in Article IX hereof shall have been
fulfilled or waived, or at such other place, time and date as
Parent and the Company may agree.
0.4Ancillary Agreements. To the extent that the
Ancillary Agreements are not attached as exhibits hereto as of
the date hereof, Parent and the Company shall each use their
respective reasonable best efforts to negotiate and reach
agreement regarding the terms of each of the following Ancillary
Agreements:
0.4(a)Tax Procedures Agreement between the
Surviving Company and the Flexible Company substantially in
the form of Exhibit 2.4(a) attached hereto, to the
allocation of past and future tax liabilities;
0.4(b)Intellectual Property License Agreement
between the Surviving Company and the Flexible Company
substantially in the form of Exhibit 2.4(b) attached hereto,
with respect to the interim use of certain shared
intellectual property by the Flexible Company; and
0.4(c)Transitional Agreement between the Surviving
Company and the Flexible Company to be negotiated with
respect to the provision of certain services by the
Surviving Company to the Flexible Company and/or the
provision of certain services by the Flexible Company to the
Surviving Company.
Unless Parent otherwise consents in its sole discretion,
each such Ancillary Agreement, not attached as an Exhibit hereto,
shall be entered into on an arm's length basis, shall not extend
for a duration in excess of six months (other than the Tax
Procedures Agreement) and will otherwise be on terms reasonably
satisfactory to Parent. In the event of any inconsistency
between the terms set forth in any of the Ancillary Agreements
and the terms of this Agreement, the terms of this Agreement
shall govern. In the event the Flexible Business is sold in one
or more Permitted Transactions prior to the Closing, if requested
by the Flexible Buyer(s), Parent and the Company shall each use
their respective reasonable best efforts to negotiate and reach
agreement regarding the terms of agreements with respect to the
matters addressed by the Ancillary Agreements referred to in
clauses (a) through (c) of this Section 2.4 with such Flexible
Buyer.
ARTICLE III
CERTIFICATE OF INCORPORATION AND
BYLAWS OF THE SURVIVING COMPANY
_0._1_Certificate of Incorporation. At the Effective
Time and in accordance with the DGCL, and without any further
action on the part of the Surviving Company, Parent, or the
Merger Sub, the Certificate of Incorporation of the Merger Sub,
as may be amended by the Certificate of Merger, shall become the
Certificate of Incorporation of the Surviving Company.
_0._2_The Bylaws. At the Effective Time and without
any further action on the part of the Surviving Company, Parent,
or the Merger Sub, the Bylaws of Merger Sub shall be the Bylaws
of the Surviving Company.
ARTICLE IV
DIRECTORS AND OFFICERS OF
THE SURVIVING COMPANY
0.1Directors. The directors of Merger Sub at the
Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Company until their successors have
been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
Surviving Company's Certificate of Incorporation and Bylaws.
0.2Officers. The officers of the Company at the
Effective Time shall, from and after the Effective Time, be the
officers of the Surviving Company until their successors have
been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
Surviving Company's Certificate of Incorporation and Bylaws.
ARTICLE V
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF COMPANY SHARES IN THE MERGER
A1.A1Merger Consideration. Subject to the provisions
of this Agreement, at the Effective Time, each Company Share, by
virtue of the Merger and without any action on the part of the
holder thereof, other than (a) Company Shares owned by Parent,
Merger Sub, or any direct or indirect wholly owned Subsidiary of
Parent, (b) any shares of Company Stock owned by the Company or
any of its Subsidiaries, and (c) any Dissenting Shares, shall be
converted into the right to receive the Merger Consideration,
without interest thereon, plus the Redemption Consideration, upon
surrender of the Certificate representing such Company Share, in
accordance with Section 5.3.
A1.A2Cancellation of Company Shares.
(a)All Company Shares to be converted into the
right to receive the Merger Consideration, plus the
Redemption Consideration, pursuant to Section 5.1 shall, by
virtue of the Merger and without any action on the part of
the holders thereof, cease to be outstanding, be canceled
and cease to exist, and each holder of a Certificate shall
thereafter cease to have any rights with respect to such
Company Shares, except the right to receive for each of the
Company Shares, upon the surrender of such Certificate in
accordance with Section 5.3, the Merger Consideration and
the Redemption Consideration.
(b)At the Effective Time, each Company Share
issued and outstanding and owned by Parent, Merger Sub or
any direct or indirect wholly owned Subsidiary of Parent,
and each share of Company Stock owned by the Company or any
of its Subsidiaries, 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 cease to exist without payment of any
consideration therefor.
(c)At the Effective Time, each share of common
stock of Merger Sub issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and
without any action on the part of Merger Sub or the holder
thereof, be converted into shares of common stock of the
Surviving Company pursuant to the Certificate of Merger.
(d)Each Option shall be canceled and extinguished
solely in consideration for the cash and Flexible Shares
payable pursuant to amendments of the Options entered into
pursuant to Section 8.15. No Options shall be exercisable
for the purchase of Company Stock after the Effective Time.
Any rights to acquire options to purchase Company Stock and
any stock appreciation rights outstanding immediately prior
to the Effective Time shall be canceled and extinguished
without compensation therefor.
(e)The Option Plans and any other Stock Plan (or
the applicable portions thereof) shall be terminated (or
deleted, as applicable) as of the Effective Time, and the
Company shall ensure that following the Effective Time no
holder of an Option or any participant in any Stock Plan
shall have any right thereunder to acquire any capital stock
of the Company, Parent or the Surviving Company. The
Company will ensure that neither the Company nor any of its
Subsidiaries is or will be bound by any Options, other
options, warrants, rights or agreements which would entitle
any Person, other than Parent or its affiliates, to own any
capital stock of the Surviving Company or any of its
Subsidiaries or to receive any payment in respect thereof.
After the date of this Agreement, no additional Options or
stock appreciation rights shall be granted under any Stock
Plan, and no cash payments will be made to holders of any
such options or stock appreciation rights in respect
thereof, except as expressly contemplated in Section 5.2(d).
A1.A3Payment for Company Shares. The manner of making
payment for Company Shares in the Merger shall be as follows:
(a)Concurrently with or prior to the Effective
Time, a bank or trust company located in the United States
shall be designated by Parent and the Company, subject to
their mutual agreement, to act as paying/exchange agent for
the Merger Consideration and the Redemption Consideration
(the "Paying Agent") for purposes of making the cash
payments and the distribution of Flexible Shares
contemplated hereby. At the Effective Time, Parent shall
make available to the Paying Agent the aggregate Merger
Consideration, and the Company shall make available to the
Paying Agent, the aggregate Redemption Consideration,
payable pursuant to Section 5.1, which, in aggregate, shall
constitute the Merger Payment Fund. The cash portion of the
Merger Payment Fund shall be invested by the Paying Agent,
as directed by Parent, so long as such directions do not
materially impair the rights of holders of Company Shares,
in direct obligations of the United States of America,
obligations for which the full faith and credit of the
United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated
the highest quality by ▇▇▇▇▇'▇ Investors' Services or
Standard & Poor's Corporation, or certificates of deposit
issued by a commercial bank having at least $500,000,000 of
assets; and any net earnings with respect thereto shall be
paid to Parent as and when requested by Parent. The Paying
Agent shall, pursuant to irrevocable instructions, make the
payments provided for in Section 5.3 out of the Merger
Payment Fund. At any time after the Effective Time, upon
notice from the Surviving Company that a stockholder has
properly dissented, demanded payment of the fair value of
his Company Shares and otherwise properly perfected his
appraisal rights under Section 262 of the DGCL, the Paying
Agent shall promptly (i) repay to the Surviving Company from
the Merger Payment Fund an amount equal to the product of
(A) the number of Dissenting Shares (as herein defined) held
by such stockholder and (B) $11.00 and (ii) return to the
Surviving Company that number of Flexible Shares equal to
the number of Dissenting Shares held by such stockholder
divided by two. The Merger Payment Fund shall not be used
for any purpose other than as described herein.
(b)Promptly after the Effective Time, the Paying
Agent shall mail to each holder of record of Company Shares
(i) a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title
to the Company Shares shall pass, only upon proper delivery
of the Certificates representing such Company Shares to the
Paying Agent) and (ii) instructions for use in effecting the
surrender of the Certificates for payment therefor. Upon
surrender of Certificates to the Paying Agent, together with
such letter of transmittal duly executed and any other
required documents, the holder of such Certificates shall be
entitled to receive for each of the Company Shares
represented by such Certificates the Merger Consideration
and Redemption Consideration. Until so surrendered, such
Certificates shall represent solely the right to receive the
Merger Consideration and Redemption Consideration with
respect to each of the Company Shares represented thereby.
No interest shall be paid or accrue on the cash portion of
the Merger Payment Fund payable upon surrender of the
Certificates. If any payment of the Merger Consideration or
the Redemption Consideration is to be made to a Person other
than the one in whose name the Certificate surrendered in
exchange therefor is registered, it shall be a condition of
such payment that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer
and that the Person requesting such payment shall pay to the
Paying Agent any applicable transfer or other similar Taxes,
or shall establish to the satisfaction of the Paying Agent
that any such Tax has been paid or is not applicable.
Notwithstanding the foregoing, neither the Paying Agent nor
any party hereto shall be liable to a holder of Company
Shares for any Merger Consideration or the Redemption
Consideration delivered to a public official pursuant to
applicable escheat Law.
(c)Any portion of the Merger Payment Fund
(including any interest thereon or earnings or profits with
respect thereto, or Flexible Shares, if any) which remains
unclaimed by the former stockholders of the Company for six
months after the Effective Time (including any interest
thereon or earnings or profits with respect thereto) shall
be delivered to the Surviving Company, upon demand of
Parent. Any former stockholders of the Company shall
thereafter look only to the Surviving Company for payment of
their claim for the Merger Consideration and Redemption
Consideration for the Company Shares but shall have no
greater rights against the Surviving Corporation, or Parent
than may be accorded to general creditors of the Surviving
Corporation or Parent under applicable Law.
A1.A4Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, those Company Shares which
immediately prior to the Effective Time are Dissenting Shares
shall not be converted into the right to receive the Merger
Consideration and Redemption Consideration as provided in
Section 5.1 hereof, but the holders of Dissenting Shares shall be
entitled to receive such consideration as shall be determined
pursuant to Section 262 of the DGCL; provided, however, that, if
any such holder shall have failed to perfect or shall withdraw
(with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within 60 days after the Effective
Time) or lose his right to appraisal and payment in accordance
with the DGCL, such holder's shares shall thereupon be deemed to
have been converted as of the Effective Time into the right to
receive the Merger Consideration and Redemption Consideration,
without any interest thereon, as provided in Section 5.1 and such
shares shall no longer be Dissenting Shares. The Company (and
after the Effective Time, the Surviving Corporation) shall give
Parent and Merger Sub (A) prompt notice of any written demands
for appraisal, withdrawals of demands for appraisal and any other
related instruments received by the Company or the Surviving
Corporation, as the case may be, and (B) the opportunity to
direct all negotiations and proceedings with respect to demands
for appraisal. The Company (and, after the Effective Time, the
Surviving Corporation) will not voluntarily make any payment with
respect to any demands for appraisals and will not, without the
prior written consent of Parent, settle or offer to settle any
such demand.
A1.A5Transfer of Company Shares After the Effective
Time. No transfers of Company Shares shall be made on the stock
transfer books of the Company after the close of business on the
business day preceding the date of the Effective Time.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Merger Sub as follows:
0.1Capitalization.
(a)The entire authorized capital stock of the
Company consists of 20,000,000 shares of common stock,
having a per share par value of $.10 per share. As of the
date hereof, (i) 11,078,232 shares of Company Stock are
issued and outstanding, (ii) no such shares are held in
treasury and (iii) 239,606 shares of Company Stock are
reserved for issuance pursuant to outstanding Options. No
other shares of the capital stock of the Company are issued
and outstanding or reserved for issuance. All issued and
outstanding shares of Company Stock are duly authorized,
validly issued and are fully paid and non-assessable and are
not subject to, nor were they issued in violation of, any
pre-emptive rights. Except as set forth on Schedule 6.1 to
the Company Disclosure Letter, there are not as of the date
hereof, and there will not be at the Effective Time, any
stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or to which
it is bound relating to the voting of any shares of the
capital stock of the Company. Except as set forth on
Schedule 6.1 to the Company Disclosure Letter, there are no
outstanding or authorized options, warrants, agreements,
subscriptions, calls, demands or rights of any character
relating to the Company's capital stock, whether or not
issued, which the Company is a party to, including without
limitation, securities convertible into, exchangeable for or
evidencing the right to purchase any capital stock or other
securities of the Company. The Company has no authorized or
outstanding Voting Debt.
(b)All of the outstanding shares of capital stock
of each of the Company's Subsidiaries have been duly
authorized and validly issued, are fully paid and
non-assessable, are not subject to, nor were they issued in
violation of, any preemptive rights, and are owned, of
record and beneficially, by the Company, free and clear of
all Liens whatsoever. No shares of capital stock of any of
the Company's Subsidiaries are reserved for issuance and
there are no outstanding or authorized options, warrants,
rights, subscriptions, claims of any character, agreements,
obligations, rights of redemption, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to the capital stock of any Subsidiary,
pursuant to which such Subsidiary is or may become obligated
to issue any shares of capital stock of such Subsidiary or
any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of such
Subsidiary, except for any agreements with respect to the
Flexible Company and the Permitted Transactions. Other than
as set forth on Schedule 6.1 to the Company Disclosure
Letter or otherwise restricted by the DGCL, there are no
restrictions of any kind which prevent the payment of
dividends by any of the Company's Subsidiaries. Except for
the Subsidiaries listed on Schedule 6.1 to the Company
Disclosure Letter, neither the Company nor any of its
Subsidiaries is subject to any obligation or requirement to
provide funds for or to make any investment (in the form of
a loan, capital contribution or otherwise) to or in any
Person. The Company's Subsidiaries have no Voting Debt.
0.2Corporate Organization, Qualification and Power.
Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation and is duly qualified or
licensed to conduct its business, and to the extent such concept
is applicable, is in good standing in every other jurisdiction in
which its business is conducted, except where failure to be so
qualified or licensed or in good standing, individually or in
aggregate, could not reasonably be expected to have a Material
Adverse Effect. Each of the Company and its Subsidiaries has the
corporate power to own or lease its respective properties and to
carry on its business as now being conducted, wherever located.
The Company's Subsidiaries are listed on Schedule 6.2 to the
Company Disclosure Letter, and, except as disclosed on
Schedule 6.2 to the Company Disclosure Letter, the Company owns
no interest in any corporation, partnership, proprietorship or
any other business entity. The Company has heretofore made
available to Parent complete and correct copies of its
Certificate of Incorporation, as amended and Bylaws, as amended
and the Articles of Incorporation and Bylaws, or other comparable
charter or organizational documents, of its Subsidiaries, in each
case as amended to the date of this Agreement.
0.3Authorization of Agreement and Merger. The Company
has the requisite corporate power and authority to approve,
authorize, execute and deliver this Agreement and to consummate
the Transactions, including the distribution of the Flexible
Shares (subject to the requisite approval of the Merger by
stockholders of the Company holding a majority of the outstanding
voting stock of the Company, pursuant to Section 251(c) of the
DGCL). This Agreement, and the consummation by the Company of
the Transactions, including the distribution of the Flexible
Shares, have been duly and validly authorized by the Board of
Directors of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement
or to consummate the Transactions (other than the requisite
approval of the Merger by the stockholders of the Company).
0.4Enforceable Agreement. This Agreement has been duly
and validly executed and delivered by the Company and, assuming
it constitutes the valid and binding agreement of Parent and
Merger Sub, constitutes a valid and binding obligation of the
Company, enforceable against the Company according to its terms,
subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting the
enforceability of contractual obligations and creditor's rights
generally and by the application of equitable principles by
courts of competent jurisdiction, sitting at law or in equity.
0.5No Conflicts, Violations, Breaches or Defaults.
Except as set forth on Schedule 6.5 to the Company Disclosure
Letter, the execution and delivery of this Agreement by the
Company and its performance of its obligations hereunder,
including its execution, delivery and performance of any
Additional Agreements to which it is a party and the consummation
of the Transactions, (a) do not conflict with or result in any
breach of any provision of the Certificate of Incorporation, as
amended or the Bylaws, as amended, of the Company or the
comparable charter or organizational documents of any of its
Subsidiaries; (b) do not require any consent, approval,
authorization or permit of, or filing with, or notification to,
any Governmental Authority, except (i) in connection with the
applicable requirements, if any, of HSR; (ii) in connection with
the applicable requirements, if any, of the Australian Foreign
Acquisitions and Takeovers Act or the Australian Trade Practices
Act of 1974, as amended; (iii) pursuant to the applicable
requirements of the Securities Act and the Exchange Act, and the
rules and regulations promulgated thereunder; (iv) the filing of
the Certificate of Merger pursuant to the DGCL and appropriate
documents with the relevant authorities of other states in which
the Company is authorized to do business; (v) such filing or
consent as may be required by applicable state securities, or
"blue sky" Laws; or (vi) where the failure to obtain such
consent, approval, authorization or permit, or to make such
filing or notification, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect or
materially adversely affect the ability of the Company to
consummate the Transactions; (c) except as individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect or materially adversely affect the ability of the
Company to consummate the Transactions, conflict with or
contravene any provisions or result in a breach or violation of,
or constitute a default under, or result in (or create in any
party the right to cause) the acceleration of any performance or
any increase in any payment required by or the termination,
suspension, modification or impairment of, or result in the loss,
revocation, impairment, suspension or forfeiture or any rights of
the Company or its Subsidiaries under, any mortgage, bond,
indenture, agreement, contract, license or other instrument or
obligations to which the Company and/or any of its Subsidiaries
are subject or bound; (d) do not conflict with, violate or
contravene any Judgment or Law by which the Company or any of its
Subsidiaries is subject or bound; or (e) do not result in the
creation of any Lien on any of the assets of the Company or any
of its Subsidiaries, other than the Flexible Assets.
0.6Company SEC Reports. Since January 1, 1993, the
Company has filed all forms, reports and documents with the SEC
required to be filed by it pursuant to the federal securities
Laws, all of which complied as of their respective dates in all
material respects with all applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder. The Company has, prior to the date of
this Agreement, made available to Parent true and complete copies
of all Company SEC Reports. None of the Company SEC Reports,
including, without limitation, any financial statements or
schedules included therein, at the time filed, or the Company's
earnings release dated February 9, 1998, contained any untrue
statement of a material fact or omitted to state a 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.
0.7Financial Statements; Accounting Matters. The
statements of financial position and the related statements of
revenues and expenses, stockholders' equity and cash flows
(including the related notes thereto) of the Company included in
the Company SEC Reports complied as to form in all material
respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior
periods (except as otherwise noted therein), and present fairly
the financial position of the Company as of their respective
dates, and the consolidated results of its operations and its
cash flows for the periods presented therein (subject, in the
case of the unaudited interim financial statements, to normal
year-end adjustments and except that the unaudited interim
financial statements do not contain all of the footnote
disclosure required by generally accepted accounting principles).
The total amount of indebtedness of the Company and its
Subsidiaries for borrowed money, as of February 27, 1998 was
$86,550,000.
0.8Absence of Certain Changes. Except as disclosed in
the Company SEC Reports, as contemplated in this Agreement, or as
set forth on Schedule 6.8 to the Company Disclosure Letter, since
September 30, 1997 (a) there has not been any material adverse
change in the business, assets, liabilities, operations,
condition (financial or otherwise), results of operations or
prospects of the Company and its Subsidiaries, taken as a whole;
(b) the businesses of the Company and each of its Subsidiaries
have been conducted only in the ordinary course; (c) neither the
Company nor any of its Subsidiaries (other than the Flexible
Company) has incurred any material liabilities (direct,
contingent or otherwise) or engaged in any material transaction
or entered into any material agreement, other than in the
ordinary course of business; (d) the Company and its Subsidiaries
(other than the Flexible Company) have not increased the
compensation of any officer or granted any general salary or
benefits increase to their employees other than in the ordinary
course of business; (e) neither the Company nor any of its
Subsidiaries (other than solely with respect to the Flexible
Business) has taken any action referred to in Section 8.1 hereof,
except as permitted thereby; (f) there has been no declaration,
setting aside or payment of any dividend or other distribution
with respect to the Company Stock; and (g) there has been no
change by the Company in accounting principles, practices or
methods, except as may have been required by GAAP or applicable
rule or regulation.
0.9Proxy Statement; S-4 Registration Statement. None
of the information included or incorporated by reference, or to
be included or incorporated by reference, in the Proxy Statement
or the S-4 Registration Statement required to be filed in
connection with the Transactions (or any amendment or supplement
thereto) will (a) in the case of the Proxy Statement, at the time
of the mailing of the Proxy Statement and at the time of the
Company Stockholders Meeting, and (b) in the case of the S-4
Registration Statement, at the time it becomes effective and at
the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event
occurs with respect to the Company which is required to be
described in an amendment of, or a supplement to, the S-4
Registration Statement, the Company shall promptly notify Parent,
file such with the SEC and disseminate it to the Company's
stockholders as required by Law. If at any time prior to the
Company Stockholders Meeting any event occurs or the Company
becomes aware of any event or fact which is required to be
described in an amendment of, or a supplement to, the Proxy
Statement, the Company shall promptly notify Parent, file such
amendment or supplement with the SEC and disseminate it to the
Company's stockholders as required by Law. Prior to its filing
with the SEC, such amendment or supplement shall be delivered to
Parent and Merger Sub and their counsel and Parent and Merger Sub
shall have a reasonable opportunity to comment on such amendment
or supplement prior to such filing. The Proxy Statement and the
S-4 Registration Statement will comply as to form in all material
respects with the applicable requirements of the Exchange Act and
the Securities Act, respectively and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or
warranty is made with respect to any information with respect to
Parent, Merger Sub or their officers, directors or affiliates
provided in writing to the Company by Parent or Merger Sub
expressly for inclusion in the Proxy Statement or the S-4
Registration Statement.
0.10Litigation. Except as disclosed in the Company SEC
Reports or as set forth on Schedule 6.10 to the Company
Disclosure Letter, there is no action, suit, claim, governmental
investigation, arbitration or any administrative or other
proceeding pending, or, to the Company's knowledge, threatened,
against the Company or any of its Subsidiaries which, if
adversely determined, individually or in the aggregate, might
result in any Material Adverse Effect or which challenge, or
might prevent or materially delay, the consummation of the
Transactions. Except as disclosed in the Company SEC Reports or
as set forth on Schedule 6.10 to the Company Disclosure Letter,
neither the Company nor any of its Subsidiaries is subject to any
Judgment entered in any lawsuit or proceeding which could be
reasonably likely to have a Material Adverse Effect or challenge,
prevent or materially delay the consummation of the Transactions.
0.11Taxes. Except as set forth on Schedule 6.11 to the
Company Disclosure Letter:
(a)The Company and each of its Subsidiaries has
(i) timely filed or caused to be timely filed all Tax
Returns in respect of all Taxes that are required to be
filed by or with respect to them through the date hereof and
shall prepare and file all such Tax Returns required to be
filed after the date hereof and on or before the Effective
Time and (ii) paid, or caused to be paid, all Taxes due and
owing for the periods covered by such Tax Returns and all
Taxes, if any, required to be paid for which no return is
required, except in either case as accrued and adequately
disclosed and fully provided for on their respective books
and records in accordance with generally accepted accounting
principals consistently applied by them through all periods
indicated. True copies of all federal, state, local and
foreign Tax Returns of the Company and/or each of its
Subsidiaries relating to each of the last three taxable
years ended December 31, 1996 have been delivered to Parent
or made available for its review. The Company is not being
audited or examined by the Internal Revenue Service or any
state, local or foreign taxing jurisdiction, nor has the
Company or any of its Subsidiaries received any notices from
any taxing authority relating to any issue which could have
a Material Adverse Effect on the Tax liability of the
Company or any of its Subsidiaries, and no agreements or
consents extending or waiving the period during which any
Taxes may be assessed or collected are now in force. As of
the date hereof, no material adjustments have been proposed
by the Internal Revenue Service or by any other taxing
authority with respect to any open Tax years or Tax Returns.
(b)Neither the Company nor any of its Subsidiaries
has been included in any "consolidated," "unitary" or
"combined" Tax Return provided for under the Law of the
United States, any foreign jurisdiction or any state or
locality with respect to Taxes for any taxable period for
which the statute of limitations has not expired.
(c)All Taxes which the Company or any of its
Subsidiaries is (or was) required by Law to withhold or
collect have been duly withheld or collected, and have been
timely paid, and in some cases over paid, to the proper
authorities to the extent due and payable.
(d)Neither the Company nor any of its Subsidiaries
is a "United States real property holding corporation"
within the meaning of Section 897(c)(2) of the Code.
(e)There are no tax sharing, allocation,
indemnification or similar agreements in effect as between
the Company, any of its Subsidiaries or any predecessor or
affiliate thereof and any other party under which Parent and
Merger Sub or the Company could be liable for any Taxes or
other claims of any party, other than as contemplated in the
Tax Procedures Agreement, attached hereto as Exhibit 2.4(a).
(f)Neither the Company nor any of its Subsidiaries
has applied for, been granted, or agreed to any accounting
method change for which it will be required after the
Effective Time to take into account any adjustment under
Section 481 of the Code or any similar provision of the Code
or the corresponding tax Laws of any nation, state or
locality.
(g)No election under Section 341(f) of the Code
has been made or shall be made prior to the Closing Date to
treat the Company or any of its Subsidiaries as a
"consenting corporation," as defined in Section 341 of the
Code.
0.12Employee Matters. Except as set forth on
Schedule 6.12 to the Company Disclosure Letter, with respect to
the Company's business, excluding the Flexible Business,
(a) there are no collective bargaining agreements between the
Company or any of its Subsidiaries and any bargaining
representative of the employees; and (b) there is not any
existing, or to the best knowledge of the Company, any threatened
labor dispute regarding the Company, any of its Subsidiaries
(other than the Flexible Company), or their respective
businesses. The Company has furnished to Parent true and
complete copies of any and all of the employee benefit, fringe
benefit and incentive compensation plans, policies, funds,
trusts, schemes, agreements or arrangements of the Company and
its Subsidiaries (other than the Flexible Company) or to which
the Company or any such Subsidiary contribute or have any
liability, all of which are set forth on Schedule 6.12 to the
Company Disclosure Letter (each an "employee plan" for purposes
of this Section 6.12); and except as set forth on Schedule 6.12
to the Company Disclosure Letter, with respect to any assets
allocated to any such employee plan, (i) there are no benefit
commitments exceeding any assets allocated thereto, (ii) to the
best knowledge of the Company, there have been no prohibited
transactions under Section 406 of ERISA or Section 4975 of the
Code, (iii) to the best knowledge of the Company, there have been
no actions, suits, grievances or other manner of litigation or
claim with respect to any such employee plan which are pending,
threatened or commenced; (iv) any such employee plan and/or
related trust which is intended to be qualified or exempt under
Section 401(a) or 501(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and, to
the Company's knowledge, nothing has occurred that could
reasonably be expected to adversely affect any such
determination, (v) neither the Company nor any of its
Subsidiaries (other than the Flexible Company) would be subject
to any withdrawal liability under Part 1 of Subtitle E of
Title IV of ERISA if, as of the close of the most recent fiscal
year of any such employee plan which is a "multiemployer plan"
(within the meaning of Section 4001(a)(3) of ERISA) ended prior
to the date hereof, the Company or any such Subsidiary were to
engage in a withdrawal from any such employee plan, and (vi) to
the best knowledge of the Company, no event has occurred and no
conditions exist that could reasonably be expected to materially
increase the level of contributions required to be paid by the
Company or any such Subsidiary to any such employee plan which is
subject to Title IV of ERISA from the level of contributions made
for the Company or such Subsidiary's most recently ended fiscal
year. Except as set forth on Schedule 6.12 to the Company
Disclosure Letter or pursuant to the Option Plans or other
Options, there is no contract, arrangement or employee plan
covering any employee of the Company which (either alone or upon
the occurrence of any additional or subsequent event) could give
rise to the payment of any amount which would constitute an
"excess parachute payment" as defined in Section 280G of the
Code. Except as set forth in Schedule 6.12, or pursuant to the
Option Plans or the Options, the execution of this Agreement and
the consummation of the Transactions will not (A) be a trigger
event under any employee plan that will result in any payment
(whether severance pay or otherwise) becoming due to any
employee, officer, director, shareholder, or contractor of the
Company, or (B) accelerate the time of payment or vesting, or
increase the amount, of compensation or benefits due to any
employee, former employee, officer, director, shareholder or
contractor of the Company or any of its Subsidiaries under any
employee plan, or any policy, arrangement, statement, commitment
or agreement. Each of the Company and its Subsidiaries has, in
all material respects, complied with all applicable Laws
(including notice and filing requirements thereunder) relating to
the employment of labor and the employee plans, including those
relating to wages, collective bargaining, equal employment
opportunity, ERISA, the Code, Occupational Safety and Health Act
of 1970, as amended, Worker Adjustment and Retraining
Notification Act, the Immigration Reform and Control Act of 1986,
the Americans with Disabilities Act and the National Labor
Relations Act. As of the Effective Time, each of the Company and
its Subsidiaries will have paid all amounts due and owing to its
employees, including wages, salary, bonuses or any other accrued
compensation and under each employee plan and any agreement or
Law applicable to any such employee plan. Except as set forth on
Schedule 6.12 to the Company Disclosure Letter, there are no
written agreements or oral arrangements which may constitute
employment contracts between the Company or any of its
Subsidiaries and independent contractors, employees and agents
who are employed or engaged in the management or operation of the
Company and any of its Subsidiaries.
0.13Environmental Laws and Regulations. Except as set
forth on Schedule 6.13 to the Company Disclosure Letter, the
Company and each of its Subsidiaries, (a) are in material
compliance with environmental Laws and (b) have not received
written notice of, nor, to the knowledge of the Company, is any
of them the subject of an Environmental Claim, and (c) there are
no facts, circumstances or conditions concerning the business or
operations of the Company or any of its Subsidiaries or any real
property at any time owned or operated by the Company or any of
its Subsidiaries that could reasonably be expected to give rise
to an Environmental Claim against the Company or any of its
Subsidiaries or any such currently owned real property.
0.14Compliance with Applicable Laws. The Company,
including its Subsidiaries, (a) holds all Company Permits except
where the failure to so hold, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect; (b) is in compliance with the terms of the Company
Permits, except where the failure so to comply would not,
individually or in the aggregate, have a Material Adverse Effect
or could reasonably be expected to materially adversely affect
the ability of the Company to consummate the Transactions; and
(c) except as disclosed in the Company SEC Reports filed prior to
the date of this Agreement, the businesses of the Company and its
Subsidiaries are being conducted in compliance with all
applicable Laws, except for possible non-compliance which,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect or which could not
reasonably be expected to materially adversely affect the ability
of the Company to consummate the Transactions.
0.15Title to Properties.
(a)With respect to each parcel of real property
owned in fee, leased or subleased by the Company, which is
not an Excluded Asset, Schedule 6.15 to the Company
Disclosure Letter sets forth a complete and accurate list
setting forth its address and, in the case of owned real
property, its legal description. Except as disclosed in the
Company SEC Reports or as set forth on Schedule 6.15 to the
Company Disclosure Letter, each of the Company and each of
its Subsidiaries currently has and, as of the Closing, with
the exception of any Excluded Assets sold pursuant to
Permitted Transactions or other assets sold or disposed of
pursuant to Sections 8.1 or 8.3, prior thereto, will have,
good and marketable title to, or valid leasehold interests
in, all their respective properties and assets, except for
defects in title, easements, restrictive covenants and
similar encumbrances or impediments that, in the aggregate,
do not materially interfere with its ability to conduct its
business as currently conducted or materially impair the
value of the properties. All such assets and properties,
other than assets and properties in which the Company or any
of its Subsidiaries has leasehold interests, are free and
clear of all Liens other than those set forth on
Schedule 6.15 to the Company Disclosure Letter, and except
for Liens that, in the aggregate, do not and will not
materially interfere with the ability of the Company and its
Subsidiaries to conduct their businesses as currently
conducted or materially impair the value of the properties.
(b)Except as disclosed in the Company SEC Reports
or as set forth on Schedule 6.15 to the Company Disclosure
Letter or as to leases with respect to Excluded Assets, each
of the Company and its Subsidiaries has complied in all
material respects with the terms of all leases to which it
is a party, and all such leases are in full force and
effect; all rents and additional rents due to date in
respect to all such leases have been paid; neither the
Company nor any Subsidiary has received notice that it is in
default under any lease; and, to the knowledge of the
Company, there exists no event, occurrence, condition, or
act (including consummation of this transaction) which, with
the giving of notice, the lapse of time or the happening of
any further event or condition, would become a default by
the Company or any Subsidiary under any such leases. The
Company has made available to Parent true and complete
copies of all the such material leases. Each of the Company
and its Subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
0.16Intellectual Property. Schedule 6.16 to the
Company Disclosure Letter lists each foreign and domestic patent,
trademark and service ▇▇▇▇, whether patented, registered or
unregistered and all applications for the same and each
registered or material unregistered copyright owned by or
licensed to the Company or any of its Subsidiaries, except those
which constitute Excluded Assets. Each registered or patented
item listed on Schedule 6.16 to the Company Disclosure Letter as
owned by Company or any of its Subsidiaries either has been duly
patented, registered with, filed in, or issued by the appropriate
domestic or foreign Governmental Authority agency and each such
patent, registration, filing and issuance remains in full force
and effect. No Intellectual Property Rights other than the
Company Intellectual Property Rights are required by each of the
Company and each of its Subsidiaries to conduct, and to continue
to conduct, their respective businesses (other than the Flexible
Business) as currently conducted in all material respects.
Except as disclosed on Schedule 6.16 to the Company Disclosure
Letter, each of the Company and each of its Subsidiaries owns
free from any Liens and has good marketable title to the Company
Intellectual Property Rights and the consummation of the
Transactions will not alter or impair the Company's or its
Subsidiaries rights in the Company's Intellectual Property Rights
in any respect. Except as set forth on Schedule 6.16 to the
Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has received any written notice from any other
Person pertaining to or challenging the right of the Company or
any of its Subsidiaries to use any of the Company Intellectual
Property Rights or alleging that the Company or its Subsidiaries
are infringing, will infringe or have infringed in the past the
Intellectual Property Rights of another Person nor, to the
knowledge of the Company, do grounds for such a claim exist. No
claims are pending by any Person with respect to the ownership,
validity, enforceability or use of any of the Company
Intellectual Property Rights or challenging or questioning the
validity or effectiveness of any of the foregoing. Except as set
forth on Schedule 6.16 to the Company Disclosure Letter, to the
knowledge of the Company, neither the Company nor any or its
Subsidiaries has made any claim nor do grounds exist to support a
claim of a violation or infringement by others of its rights to
or in connection with the Company Intellectual Property Rights.
0.17Insurance. The Company and its Subsidiaries have
obtained and maintained in full force and effect insurance with
responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including
fire and other risks insured against by extended coverage, as is
reasonably prudent, and each has maintained in full force and
effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in
connection with the activities of the Company or its Subsidiaries
or any properties owned, occupied or controlled by the Company or
its Subsidiaries, as is reasonably prudent.
0.18DGCL Section 203. On or before the date hereof,
the Board of Directors of the Company has approved the Merger,
this Agreement, the Transactions and the Irrevocable Proxies, and
such approval is sufficient to render inapplicable to the Merger
and this Agreement, the other Transactions, and the Irrevocable
Proxies the provisions of Section 203 of the DGCL.
0.19Material Contracts. Except as set forth on
Schedule 6.19 to the Company Disclosure Letter or identified in
SEC Reports, neither the Company nor any of its Subsidiaries
(other than the Flexible Company) has or is bound by:
(a)any agreement, contract or commitment that
involves the performance of services by it of an amount or
value (as measured by the revenue derived therefrom during
1997) in excess of $500,000 annually, unless terminable by
the Company on not more than 90 days notice;
(b)any agreement, contract or commitment to be
performed relating to capital expenditures in excess of
$200,000 in any calendar year, or in the aggregate require
expenditures in excess of $500,000;
(c)any other material agreement, contract or
commitment, not entered into in the ordinary course of
business;
(d)any agreement, indenture or other instrument
which contains restrictions with respect to payment of
dividends or any other distribution in respect of its
capital stock;
(e)any agreement, indenture or instrument relating
to indebtedness for borrowed money or the deferred purchase
price of property (excluding trade payables in the ordinary
course of business, intercompany indebtedness and leases for
telephones, copy machines, facsimile machines and other
office equipment);
(f)any loan or advance to (other than advances to
employees in the ordinary course of business in amounts of
$10,000 or less to any individual and $50,000 in the
aggregate), or investment in (other than investments in
Subsidiaries), any Person, or any agreement, contract or
commitment relating to the making of any such loan, advance
or investment or any agreement, contract or commitment
involving a sharing of profits (except for bonus
arrangements with employees entered into in the ordinary
course of business consistent with past practice);
(g)any guarantee or other contingent liability in
respect of any indebtedness or obligation of any Person
(other than in the ordinary course of business and other
than with respect to any indebtedness or obligation of the
Company or any of its Subsidiaries);
(h)any management service, consulting or any other
similar type of contract (other than contingent fee
agreements with collection attorneys), involving payments of
more than $50,000 annually, unless terminable by the Company
on not more than 90 days notice;
(i)any agreement, contract or commitment limiting
the ability of the Company or any of its Subsidiaries (other
than the Flexible Company) to engage in any line of business
or to compete with any Person (other than with respect to
the Flexible Business);
(j)any warranty, guaranty or other similar
undertaking with respect to a contractual performance
extended by the Company or any of its Subsidiaries, other
than in the ordinary course of business; or
(k)any material amendment, modification or
supplement in respect of any of the foregoing.
Except as otherwise identified on Schedule 6.19 to the
Company Disclosure Letter, each contract or agreement set
forth on Schedule 6.19 to the Company Disclosure Letter is
in full force and effect and there exists no default or
event of default or event, occurrence, condition or act on
the part of the Company or any Subsidiary or, to the
knowledge of the Company, on the part of any other Person
which, with the giving of notice, the lapse of time or the
happening of any other event or condition, would become a
default or event of default thereunder, except for such
default or event of default which could not reasonably be
likely to result in a Material Adverse Effect.
0.20Authorization of Flexible Shares. Prior to the
Effective Time, if the Company has not entered into a Permitted
Transaction, the Company and the Flexible Company will have taken
all necessary action to permit the issuance of the Flexible
Shares required to be issued pursuant to Article V. Flexible
Shares issued pursuant to Article V will, when issued, be validly
issued, fully paid and nonassessable and no Person will have any
preemptive right of subscription or purchase in respect thereof.
The Flexible Shares will, when issued, be registered under the
Securities Act and the Exchange Act and registered or exempt from
registration under any applicable state securities Laws.
0.21Broker's Fees. Except for the fees and expenses
payable to ▇▇▇▇▇▇▇, Sachs & Co. and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Co., the
Company's financial advisors, which are reflected in their
agreements with the Company, true and correct copies of which
have been furnished to Parent, the Company has not employed any
investment bank, broker, finder, consultant or other
intermediary, which would be entitled to any fee or commission
from the Company in connection with the Transactions.
0.22Opinions of Financial Advisors. The Board of
Directors of the Company has received the opinion of ▇▇▇▇▇▇▇,
Sachs & Co., the Company's financial advisor, to the effect that
the Merger Consideration to be received by the holders, other
than Parent, Merger Sub, the Company or any of their respective
Subsidiaries, of Company Shares pursuant to the Merger is fair to
such holders from a financial point of view.
0.23Liabilities. Except as set forth on
Schedule 8.1(h), neither the Company nor any of its Subsidiaries
has any material claims, liabilities or indebtedness, contingent
or otherwise, outstanding except (i) as set forth in the
consolidated balance sheet of the Company as of September 30,
1997, or referred to in the footnotes thereto, or (ii) for
liabilities incurred subsequent to September 30, 1997 in the
ordinary course of business not involving borrowings by the
Company or any of its Subsidiaries, or (iii) as otherwise
disclosed in the Company SEC Reports.
0.24Sufficiency of Assets. As of the Effective Time,
the assets of the Company and its Subsidiaries (other than the
Flexible Company) will constitute all of the assets necessary for
conducting the business of the Company and its Subsidiaries
(other than the Flexible Business) as presently conducted and
will not include any of the Excluded Assets or Excluded
Liabilities.
0.25Solvency of the Flexible Company As of the
Effective Time, in the event that the Flexible Shares are being
distributed to the Company's stockholders, the Flexible Company
will not be insolvent and will not be rendered insolvent by the
distribution of the Flexible Shares, will not be left with
unreasonably small capital with which to engage in its business
and will not have incurred debts beyond its ability to pay such
debts as they mature and become due.
0.26Flexible Company. Attached as Schedule 6.26 to the
Company Disclosure Letter is a pro forma balance sheet (the
"Flexible Balance Sheet") of the Flexible Company as of
December 31, 1997 assuming that all of the Excluded Assets and
the Excluded Liabilities as of such date had been transferred to
the Flexible Company. The Flexible Balance Sheet was prepared
from the books and records of the Company and is subject to
further allocations, adjustments and reclassifications, which
will not have a Material Adverse Effect on the financial position
of the Company (absent the Excluded Assets and Excluded
Liabilities or the Flexible Company). At the Effective Time, the
Flexible Company will only consist of the Excluded Assets and the
Excluded Liabilities determined on a basis consistent with the
Flexible Balance Sheet, after audit and prepared in accordance
with generally accepted accounting principles.
0.27Venture Packaging. Venture Packaging, Inc. does
not engage in any business or conduct any operations. Its only
assets are Excluded Assets.
0.28Permitted Asset Sale. The Company currently
expects to consummate the sale of all right, title and interest
in the real property located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ to Poly Food Packaging Co., Inc., for the
amount of $4,850,000 (before taxes and expenses of sale).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent
and warrant to the Company as follows:
A1.A1Corporate Organization, Qualification and Power.
Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing under the Laws of its
respective jurisdiction of incorporation and is qualified and in
good standing as a foreign corporation in each jurisdiction where
the properties owned, leased or operated, or the business
conducted, by it require such qualification, except where the
failure to so qualify or be in such good standing, individually
or in the aggregate, could not reasonably be expected to
materially adversely affect the ability of Parent or Merger Sub
to consummate the Transactions.
A1.A2Authorization of Agreement and Merger. Each of
Parent and Merger Sub has the requisite corporate power and
authority to approve, authorize, execute and deliver this
Agreement and to consummate the Transactions. This Agreement,
and the consummation by Parent and Merger Sub of the Merger and
the other Transactions have been duly and validly authorized by
the respective Boards of Directors of Parent and Merger Sub and
the sole stockholder of Merger Sub and no other corporate
proceedings on the part of Parent and Merger Sub are necessary to
authorize this Agreement or to consummate the Transactions.
A1.A3Enforceable Agreement. This Agreement has been
duly and validly executed and delivered by Parent and Merger Sub
and, assuming it constitutes the valid and binding agreement of
the Company, constitutes a valid and binding obligation of each
of Parent and Merger Sub, enforceable against each of them
according to its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
Laws affecting the enforceability of contractual obligations and
creditor's rights generally and by the application of equitable
principles by courts of competent jurisdiction, sitting at law or
in equity.
A1.A4No Conflicts, Violations, Breaches or Defaults.
Execution and delivery of this Agreement by Parent and its
performance of the obligations hereunder, including its
execution, delivery and performance of any Additional Agreements
to which it is a party and the consummation of the Transactions,
(a) do not conflict with or result in any breach of any provision
of the Certificate of Incorporation or Bylaws (or comparable
chart or organizational documents) of Parent and Merger Sub;
(b) do not require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental
Authority, except (i) in connection with the applicable
requirements, if any, of the HSR; (ii) in connection with the
applicable requirements, if any, of the Australian Foreign
Acquisitions and Takeovers Act or the Australian Trade Practices
Act of 1974, as amended; (iii) pursuant to the applicable
requirements of the Securities Act and the Exchange Act, and the
rules and regulations promulgated thereunder; (iv) the filing of
the Certificate of Merger pursuant to the DGCL; (v) such filing
or consent as may be required by applicable state securities, or
"blue sky" Laws; or (vi) such filings, consents, approvals,
orders, registrations, declarations and filings as may be
required under the Laws of any foreign county in which Parent or
Merger Sub conducts any business or owns any assets, where the
failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, individually or
in the aggregate could not reasonably be expected to materially
adversely affect the ability of Parent or Merger Sub to
consummate the Transactions; (c) except as, individually or in
the aggregate, could not reasonably be expected to materially
adversely affect the ability of Parent or Merger Sub to
consummate the Transactions, conflict with or contravene any
provisions or result in a breach or violation of, or constitute a
default under, or result in (or create in any party the right to
cause) the acceleration of any performance or any increase in any
payment required by or the termination, suspension, modification
or impairment of, or result in the loss, revocation, impairment,
suspension or forfeiture or any rights of Parent or Merger Sub
under any mortgage, bond, indenture, agreement, contract, license
or other instrument or obligations to which Parent or its
Subsidiaries is subject or bound; or (d) do not conflict with,
violate or contravene any Judgment or Law by which Parent or
Merger Sub is subject or bound.
A1.A5Proxy Statement; S-4 Registration Statement. None
of the information supplied by Parent or Merger Sub in writing
expressly for inclusion or incorporation by reference in the
Proxy Statement or the S-4 Registration Statement required to be
filed in connection with the Transactions (or any amendment or
supplement thereto) will (a) in the case of the Proxy Statement,
at the time of the mailing of the Proxy Statement and at the time
of the Company Stockholders Meeting, and (b) in the case of the
S-4 Registration Statement, at the time it becomes effective and
at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time, Parent
or Merger Sub obtains actual knowledge of any event which is
required to be described in an amendment of, or a supplement to
the S-4 Registration Statement, Parent shall promptly notify the
Company. If at any time prior to the Company Stockholders
Meeting Parent or Merger Sub obtains actual knowledge of any
event which is required to be described in an amendment of, or a
supplement to, the Proxy Statement, Parent shall promptly notify
the Company.
A1.A6Financing. As of Closing Date, Parent and/or
Merger Sub will have funds in place, which, in the aggregate will
be sufficient to enable Merger Sub to consummate the
Transactions.
A1.A7Broker's Fees. Except for the fees and expenses
payable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Parent's financial advisor,
which are reflected in its agreement with Parent, Parent has not
employed any investment bank, broker, finder, consultant or other
intermediary, which would be entitled to any fee or commission
from Parent in connection with the Transactions.
A1.A8Interim Operations of Merger Sub. Merger Sub was
formed solely for the purpose of engaging in the Transactions and
has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.
ARTICLE VIII
CONDUCT PENDING THE CLOSING AND COVENANTS
A1.A1Conduct of Business by Company. Except as
contemplated by Section 8.16, the Company covenants and agrees
that prior to the Effective Time, unless Parent agrees in writing
or as otherwise contemplated by this Agreement, it will conduct
its business and day to day operations (including those of any
Subsidiaries) in the ordinary and usual course of business,
consistent with its past custom and practice, and will use its
reasonable best efforts to preserve intact its business
organization and goodwill, keep in full force and effect all
material rights, licenses, permits and franchises relating to
such business, keep available the services of its officers and
key employees and maintain satisfactory relationships with
suppliers, customers and others having business relationships
with it, except with respect to dispositions of any of the
foregoing pursuant to the Company's limited right to engage in
sale transactions, as set forth in Section 8.3. The Company
specifically agrees that, prior to the Effective Time, unless the
Parent otherwise agrees in writing or as otherwise contemplated
by this Agreement, including the Permitted Restructuring and/or
any Permitted Transactions, neither the Company, nor any of the
Company's Subsidiaries, will:
(a)except pursuant to the Option Plans or the
other obligations set forth on Schedule 6.1 to the Company
Disclosure Letter, issue, deliver, sell or dispose of,
pledge or otherwise encumber (i) any additional shares of
capital stock of any class, or any securities or rights
convertible into, exchangeable for or creating the right to
subscribe for any share of capital stock, or any rights,
warrants, options, calls, or any other agreement of any kind
to purchase or acquire any share of capital stock or such
securities, (ii) any securities convertible into
exchangeable for, in respect of, or in substitution for
Company Stock currently outstanding, or (iii) any Voting
Debt;
(b)except pursuant to existing employee benefit
plans or the other obligations set forth on Schedule 6.1 to
the Company Disclosure Letter, redeem, purchase or otherwise
acquire any of its outstanding capital stock;
(c)split, combine, subdivide or reclassify any
share of its capital stock, or declare, set aside or pay any
dividend, or make any distribution, on its capital stock
(except for dividends by a wholly owned Subsidiary);
(d)amend its Certificate of Incorporation or
Bylaws;
(e)adopt a plan of liquidation, dissolution,
merger (other than the Merger), consolidation,
restructuring, or other reorganization of the Company, or
any Subsidiary, or alter in any manner the corporate
structure or ownership of any Subsidiary, except pursuant to
the Permitted Restructuring, as set forth on
Schedule 8.1(e);
(f)make any acquisition of any corporation,
partnership or business, through merger, consolidation,
acquisition of stock or assets or otherwise;
(g)(i) except in the ordinary course of business,
consistent with past practice, incur or modify or amend any
debt for borrowed money or guarantee any such debt or
encumber any asset in connection with any such debt, issue
any debt securities, or (ii) make any loans, advances or
capital contributions to, or investments in, any other
Person, other than a wholly owned Subsidiary;
(h)except as set forth on Schedule 8.1(h),
(i) enter into any contract or commitment with respect to
capital expenditures in excess of $200,000, individually, or
$500,000, in the aggregate; or (ii) except in the ordinary
course of business, enter into, amend, modify, supplement or
cancel any other material contract;
(i)take any action which would render, or which
reasonably may be expected to render, any representation or
warranty made by it in this Agreement untrue in any material
respect at the Effective Time;
(j)acquire a material amount of assets or
securities or release or relinquish any material contract
rights;
(k)except as set forth on Schedule 8.1(h),
transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any assets,
that are material to the Company and its Subsidiaries, taken
as a whole;
(l)agree to the settlement of any claim or
litigation, that is material to the Company and its
Subsidiaries, taken as a whole;
(m)make any Tax election or settle or compromise
any Tax liability, that is material to the Company and its
Subsidiaries, taken as a whole; or
(n)authorize, propose or announce an intention to
do any of the foregoing, or enter into any contract or
agreement to do any of the foregoing.
A1.A2Conduct of the Company as to Employee Matters.
The Company specifically agrees that with respect to any
employee, officer or director, who is not as of the date hereof,
or will not be as of the Effective Time, employed exclusively by
the Flexible Company, unless Parent otherwise agrees in writing
or as otherwise contemplated by this Agreement, prior to the
Effective Time the Company shall not (a) grant any increase in
salary or other compensation, including bonuses, to any such
director, officer or key employee, or grant a general wage
increase, except in the ordinary course of business, in
accordance with the Company's past practices; (b) grant or
increase any severance or termination pay or pension rights to
any such employee, officer or director of the Company not
required by an existing plan or agreement to which the Company is
a party; (c) become obligated under any new pension plan, welfare
plan, employee benefit plan, severance plan, benefit arrangement
or similar plan or arrangement, which is not in existence as of
the date hereof, or amend any such existing plan or arrangement
in a manner which would have the effect of materially increasing
any benefits thereunder; or (d) enter into or negotiate any
renewal, extension or any other matter with respect to any
collective bargaining agreement or employment agreement.
A1.A3Sale of Certain Assets. On or prior to the
Closing Date, the Company may enter into and consummate
agreements with respect to the sale or other disposition of the
assets listed on Schedule 8.3, but only in conformity with the
conditions in such Schedule, or with respect to a Permitted
Transaction, provided that all Excluded Assets must be sold and
all Excluded Liabilities must be assumed in the event of a
Permitted Transaction. Any agreement or agreements with respect
to Permitted Transactions (and the assumption of any such
Excluded Liabilities) shall be reasonably satisfactory to Parent
in all respects and shall not be entered into without Parent's
prior written consent after the date the Proxy Statement is
mailed to the Company's stockholders. Without limiting the
generality of the foregoing:
(a)to the extent any negotiations in connection
with any Permitted Transaction involve the disclosure of any
confidential information regarding the Company's business or
its assets or liabilities (other than those exclusively
related to the Flexible Business), the Company shall obtain
confidentiality agreements with respect to such information,
in form and substance similar to the Confidentiality
Agreement;
(b)except with respect to (i) any representations,
warranties or covenants with respect to Taxes or liabilities
therefore incurred prior to the closing of a Permitted
Transaction, (ii) covenants to take supplemental or
confirmatory actions subsequent to the closing of a
Permitted Transaction that may be required in order to fully
consummate or evidence the Permitted Transaction,
(iii) covenants to indemnify the Flexible Company or the
Flexible Buyer against liabilities of the Company that are
not Excluded Liabilities, and (iv) the indemnities referred
to in clause (c) below, all representations, warranties and
covenants of the Company, and/or its Subsidiaries contained
in any agreement for the sale of Excluded Assets shall
expire at the closing of each Permitted Transaction, and the
recourse for a breach prior to the closing of a Permitted
Transaction of any such representation, warranty or covenant
shall be limited to the Flexible Buyer's election to
terminate the agreement; and
(c)any agreement for any Permitted Transaction
shall provide for the assumption of all Excluded Liabilities
directly related to the Excluded Assets sold thereunder and
shall provide for such indemnities in favor of Parent,
Merger Sub and the Surviving Company in respect of such
Excluded Liabilities as Parent shall reasonably request.
A1.A4Conduct of Business of Merger Sub. During the
period of time from the date of this Agreement to the Effective
Time, Merger Sub shall not engage in any activities of any nature
except as provided in or contemplated by this Agreement.
A1.A5Acquisition Proposals.
(a)The Company and its affiliates and each of
their respective Representatives shall immediately cease any
discussions or negotiations with any other parties that may
be ongoing with respect to any Acquisition Proposal.
Neither the Company nor any of its affiliates, shall,
directly or indirectly, take (and the Company shall not
authorize or permit its or its Representatives or
affiliates, to so take) any action to (i) encourage, solicit
or initiate the making of any Acquisition Proposal,
(ii) enter into any agreement with respect to any
Acquisition Proposal or (iii) participate in any way in
discussions or negotiations with, or, furnish or disclose
any information to, any Person (other than Parent or Merger
Sub) in connection with, or take any other action to
facilitate any inquiries or the making of any proposal
(including without limitation taking any action that would
make Section 203 of the DGCL inapplicable to an Acquisition
Proposal, unless such Acquisition Proposal has been
determined to be a Superior Proposal and this Agreement has
been terminated in compliance with its terms) that
constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, provided, however, that the Company,
in response to an unsolicited Acquisition Proposal and in
compliance with its obligations under Section 8.5(b) hereof,
may participate in discussions or negotiations with or
furnish information to any third party which proposes a
transaction which the Board of Directors of the Company
reasonably determines is likely to result in a Superior
Proposal if the Board of Directors believes (based upon the
advice of independent outside counsel) that failing to take
such action would constitute a breach of its fiduciary
duties under applicable Law. In addition, neither the Board
of Directors of the Company nor any committee thereof shall
(A) withdraw or modify, or propose to with or modify, in a
manner adverse to Parent or Merger Sub the approval and
recommendation of the Merger and this Agreement in
connection with an Acquisition Proposal or (B) approve or
recommend, or propose to approve or recommend, any
Acquisition Proposal, provided that the Company may
recommend to its stockholders an Acquisition Proposal, and
in connection therewith withdraw or modify its approval or
recommendation of the Merger and this Agreement, if (I) the
Board of Directors of the Company has determined that the
Acquisition Proposal is a Superior Proposal, (II) all the
conditions to the Company's right to terminate this
Agreement in accordance with Section 10.1(b)(iii) have been
satisfied (including the expiration of the five day period
and the payment of the amounts required pursuant to
Section 11.1(b)), and (III) simultaneously with such
withdrawal, modification or recommendation, this Agreement
is terminated in accordance with Section 10.1(b)(iii). Any
actions permitted under, and taken in compliance with, this
Section 8.5 shall not be deemed a breach of any other
covenant or agreement of such party contained in this
Agreement.
(b)In addition to the obligations of the Company
set forth in Section 8.5(a), on the date of receipt thereof,
the Company shall advise Parent of any request for
information or of any Acquisition Proposal, or any inquiry
or proposal with respect to any Acquisition Proposal, the
material terms and conditions of such request or takeover
proposal, and the identity of the Person making any such
takeover proposal or inquiry. The Company will keep Parent
fully informed of the status and details (including
amendments or proposed amendments) of any such request,
takeover proposal or inquiry and keep Parent fully informed
as to the details of any information requested of or
provided by, the Company and as to the details of all
discussions or negotiations with respect to any such
request, takeover proposal or inquiry.
(c)Immediately following the date hereof, the
Company will cause its financial adviser to request each
Person which has heretofore executed a confidentiality
agreement in connection with its consideration of acquiring
the Company or any portion thereof (other than any Person
who has advised the Company that it remains interested in
pursuing only a Permitted Transaction) to return all
confidential information heretofore furnished to such Person
by or on behalf of the Company.
A1.A6Stockholders' Approval; Proxy Statement.
(a)The Company, acting through its Board of
Directors, shall, in accordance with applicable Law, duly
call, convene and hold the Company Stockholders Meeting for
the purpose of voting upon this Agreement and the Merger and
the Company agrees that this Agreement and the Merger shall
be submitted at the Company Stockholders Meeting. Subject
to Section 8.5 of this Agreement, the Company agrees that it
shall use its reasonable best efforts to solicit from its
stockholders proxies, and shall take all other action
necessary and advisable, to secure the vote of its
stockholders required by applicable Law to obtain the
approval of this Agreement and the Merger and will include
in the Proxy Statement the recommendation of its Board of
Directors that holders of Common Stock approve and adopt
this Agreement and approve the Merger. Parent will cause
all shares of Common Stock owned by Parent and its
Subsidiaries to be voted in favor of the Merger. The
Company will not, without Parent's prior written consent,
include a fairness opinion from any Person other than
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in the Proxy Statement unless it is an
opinion of a nationally recognized investment bank of a
similar ranking.
(b)As promptly as practicable, the Company will
prepare and file a preliminary Proxy Statement/S-4
Registration Statement with the SEC and will use its best
efforts to respond to the comments of the SEC in connection
therewith and to furnish all information required to prepare
the definitive Proxy Statement/S-4 Registration Statement
(including, without limitation, financial statements and
supporting schedules and certificates and reports of
independent public accountants). The Company will cause the
definitive Proxy Statement/S-4 Registration Statement to be
mailed to the stockholders of the Company and, if necessary,
after the definitive Proxy Statement/S-4 Registration
Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material and, if
required in connection therewith, resolicit proxies. The
Company will use all reasonable efforts to have or cause the
S-4 Registration Statement declared effective as promptly as
practicable including, without limitation, causing its
accountants to deliver necessary or required instruments
such as reports, opinions, "comfort letters," and
certificates, and will take any other action reasonably
required or necessary to be taken under federal or state
securities Laws or otherwise in connection with the
registration process.
(c)The Company shall use reasonable efforts to
obtain, prior to the effective date of the S-4 Registration
Statement, all necessary state securities Laws or "blue sky"
permits and approvals required to carry out the
Transactions.
A1.A7Reasonable Best Efforts. Subject to the terms and
conditions herein, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things and make all filings
necessary, proper or advisable under applicable Laws to
consummate and make effective the Transactions, including using
its reasonable best efforts to obtain all necessary or
appropriate waivers, consents and approvals, to effect all
necessary registrations, filings and submissions, including, but
not limited to, (i) filings under the HSR and any other
submissions requested by any Governmental Authority (ii) filings
under the Australian Foreign Acquisitions and Takeovers Act or
the Australian Trade Practices Act of 1974, as amended and
(iii) required approvals under the applicable state Laws, to
obtain the requisite approvals of the stockholders of the
Company, and to lift any injunction or other legal bar to the
Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), and to fulfill the other conditions
to the Transactions; provided, however, that no loan agreement or
contract for borrowed money shall be repaid (except as currently
required by its terms or from the proceeds of any Permitted
Transaction), in whole or in part, and no contract shall be
amended to increase the amount payable thereunder or otherwise to
be more burdensome to the Company or any of its Subsidiaries in
order to obtain any such consent, approval or authorization
without first obtaining the written approval of Parent.
A1.A8Notification of Certain Matters. The Company
shall give prompt notice to Parent of: (a) any notice of, or
other communication relating to, a default or event that, with
notice or lapse of time or both, would become a default, received
by the Company or any of its Subsidiaries subsequent to the date
of this Agreement and prior to the Effective Time, under any
material contract to which the Company or any of its Subsidiaries
is a party or is subject; and (b) any Material Adverse Effect or
the occurrence of any event which is reasonably likely to result
in any such Material Adverse Effect. Each of the Company and
Parent shall give prompt notice to the other party of any notice
or other communication from any third party alleging that the
consent of such third party is or may be required in connection
with the Transactions.
A1.A9HSR. The Company and Parent shall, as soon as
practicable and in any event, within fifteen business days from
the date of this Agreement, file Notification and Report Forms
under HSR with the Federal Trade Commission and the Antitrust
Division of the Department of Justice and shall use their best
efforts to respond as promptly as practicable to all inquiries
received from such Governmental Authorities for additional
information or documentation. The Company and Parent shall, as
soon as practicable file all information required under the
Australian Foreign Acquisitions and Takeovers Act or the
Australian Trade Practices Act of 1974, as amended and shall use
their best efforts to respond as promptly as practicable to all
inquiries received from any Governmental Authorities with respect
thereto for additional information or documentation.
A1.A10Representations and Warranties. Neither the
Company, Parent nor Merger Sub will take any action that would
cause any of their respective representations or warranties set
forth herein not to be true and correct in all material respects
at and as of the Effective Time.
A1.A11Access to/Confidentiality of Information. Upon
reasonable notice, the Company shall (and shall cause its
Subsidiaries to) afford Parent's Representatives reasonable
access during normal business hours to its properties, books and
records and, during such period, and furnish promptly to such
Representatives all information concerning its business,
properties and personnel as may reasonably be requested. Parent
agrees that it will not, and will cause its Representatives not
to, use any information obtained pursuant to this Section 8.11
for any purpose unrelated to the consummation of the Transactions
and the operation of the business of the Company and its
Subsidiaries. The Confidentiality Agreement shall apply with
respect to information furnished by the Company or its
Representatives hereunder.
A1.A12Publicity. The parties will consult with each
other and will mutually agree upon any press releases or public
announcement pertaining to the Merger and the other Transactions
and shall not issue any such press releases or make any such
public announcements prior to such consultation and agreement,
except as may be required by applicable Law or by obligations
pursuant to any listing agreement with The NASDAQ Stock Market
and the rules of the Helsinki Stock Exchange, in which case the
party proposing to issue such press release or make such public
announcement shall use all reasonable efforts to consult in good
faith with the other party before any such issuance or
announcement.
A1.A13Indemnification of Directors and Officers. The
Certificate of Incorporation and Bylaws of the Surviving Company
shall contain provisions with respect to indemnification no less
favorable to the indemnified Persons than those set forth in the
Certificate of Incorporation, as amended, and Bylaws, as amended,
of the Company on the date of this Agreement, and such provisions
shall not be amended, repealed or otherwise modified for a period
of six years after the Effective Time in any manner that would
materially adversely affect the rights thereunder of Persons who
at any time prior to the Effective Time were directors or
officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without
limitation, the Transactions), unless such modification is
required by Law; provided, that in the event any claim or claims
are asserted or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims. Such
obligation shall be guaranteed by Parent or Parent shall cause
the Company to extend the D&O insurance policy currently
maintained by the Company through the purchase of coverage for
runoff claims. This Section 8.13 is intended to benefit the
Persons with rights of indemnification referred to above and
shall be binding on all successors and assigns of Parent, Merger
Sub, the Company and the Surviving Company.
A1.A14Employees.
(a)The Surviving Company hereby agrees to honor
(without modification) the employment agreements, executive
termination agreements and individual benefit arrangements
listed on Schedule 8.14(a), all in effect on the date
hereof.
(b)The Company shall, and shall use its best
efforts to cause any Flexible Buyer of the Flexible Business
to, comply with the Worker Adjustment and Retraining
Notification Act.
A1.A15Amendment of Options. The Company shall obtain
the amendment of all agreements with respect to Options, so as to
provide for (a) the acceleration of vesting at the Effective
Time; (b) the payment, at the Effective Time, of an option
settlement amount in cash and Flexible Shares (subject to any
applicable withholding Taxes) equal to the product of (i) the
number of shares for which the Option is exercisable multiplied
by (ii) the sum of the Merger Consideration plus the Redemption
Consideration, minus the per share exercise price of the Option
and (c) the cancellation of all Options as of the Effective Time.
Assuming the Redemption Consideration consists of Flexible
Shares, for each payment of such settlement amount, 76% will be
paid in cash and 24% will be paid in Flexible Shares based upon
an aggregate value of $38,000,000 for the Flexible Company. The
Surviving Company shall bear the cash portion of such settlement
amount and the Flexible Company shall bear the balance of such
settlement amount. Notwithstanding the foregoing, in the event
of a Permitted Transaction that portion of the option settlement
amount otherwise payable in Flexible Shares shall be paid in
cash.
A1.A16Conduct of Flexible Business. After the date
hereof, the Flexible Business and the business of the Surviving
Company shall be treated for accounting purposes as if they were
separate stand alone businesses as of the close of business on
December 31, 1997. Any cash provided by the Company or any of
its other Subsidiaries to the Flexible Business shall be treated
as an advance from the Company or such Subsidiary to the Flexible
Business which will be repaid by the Flexible Company in cash, on
or prior to the Effective Time.
ARTICLE IX
CONDITIONS
0.1Conditions to Each Party's Obligation to Close. The
obligations of each of the parties to consummate the Transactions
are subject to satisfaction, or, to the extent permitted by Law,
mutual waiver, on or prior to the Effective Time of each of the
following conditions:
0.1(a)Injunction. There shall not be in effect
any Law or any Judgment directing that the Transactions not
be consummated; provided, however, that prior to invoking
this condition each party shall use its reasonable best
efforts to have any such Judgment vacated; and there shall
have been no Law enacted or promulgated which would make
consummation of the Transactions illegal.
0.1(b)Stockholder Approval. This Agreement and
the Merger shall have been duly approved by the stockholders
of the Company in accordance with applicable Law and the
Certificate of Incorporation, as amended, of the Company at
the Company Stockholders Meeting.
0.1(c)HSR. Any waiting period (and any extension
thereof) applicable to the consummation of the Merger under
the HSR or the Australian Foreign Acquisitions and Takeovers
Act or the Australian Trade Practices Act of 1974, as
amended shall have expired or shall have been earlier
terminated.
0.1(d)S-4 Registration Statement; "Blue Sky"
Approvals. The S-4 Registration Statement shall have become
effective and no stop order suspending its effectiveness
shall have been issued and no proceedings for such purpose
shall have been initiated and be continuing by the SEC. If
required, the Company shall have received all state
securities Law or "blue sky" permits and authorizations
necessary to distribute the Flexible Shares as part of the
Merger Consideration.
0.1(e)Amendment of Option Agreements. The Company
shall, prior to the Effective Time, have taken all actions,
and obtained all consents and approvals, necessary
(including, without limitation, to appropriately amend the
Options pursuant to Section 8.15) to effect the
cancellation, extinguishment and/or conversion of all
Options.
0.2Additional Conditions to the Obligations of Parent
and Merger Sub to Close. The obligations of Parent and Merger
Sub to consummate the Transactions are subject to satisfaction,
or, to the extent permitted by Law, waiver on or prior to the
Effective Time of each of the following conditions:
0.2(a)Performance. The Company shall have
complied with and satisfied, in all material respects, all
the covenants, agreements and obligations of the Company
contained herein, and performed in all material respects all
acts required of the Company by this Agreement.
0.2(b)Representations and Warranties. All the
representations and warranties made herein by the Company
which are qualified as to materiality shall have been and
shall be true and correct in all respects and each such
representation and warranty which is not qualified shall
have been, and shall be, true and correct in all material
respects when made and as of the Effective Time (except for
changes permitted by this Agreement, or except to the extent
they relate to a particular date).
0.2(c)Deliveries. Parent shall have received at
the Effective Time:
0.2(c)(i)a certificate dated the Effective
Time and executed by the President or a Vice President
of the Company certifying to the fulfillment of the
conditions specified in Sections 9.2(a) and (b) and, as
to the Company, fulfillment of the conditions specified
in Sections 9.1(b);
0.2(c)(ii)certified or verified copies of the
Company's Certificate of Incorporation, as amended, its
Bylaws, as amended, and certificates of good standing
for the Company, as Parent may reasonably request; and
0.2(c)(iii)such other documents as Parent may
reasonably request to effectuate, or in connection
with, the Transactions.
0.2(d)Consents and Approvals. All consents,
approvals and authorizations legally required to be obtained
to consummate the Merger shall have been obtained from all
Governmental Entities.
0.2(e)Flexible Business. All of the Excluded
Assets and Excluded Liabilities related to the Flexible
Business (i) shall be owned, directly or indirectly, by the
Flexible Company, or (ii) shall have been assigned to and
assumed by one or more Flexible Buyers pursuant to one or
more Permitted Transactions in compliance with
Section 8.3 hereof. All amounts payable owed by the
Flexible Company to the Company or any Subsidiary of the
Company shall have been paid in cash. Any settlement of
intercompany accounts shall have been effected without any
adverse Tax consequences to the Company or any of its
Subsidiaries (other than the Flexible Company).
0.2(f)Ancillary Agreements. Provided the Flexible
Shares are to be distributed to the stockholders of the
Company, the Surviving Company and the Flexible Company
shall have duly executed and delivered each of the Ancillary
Agreements.
0.2(g)Non-U.S. Real Property Interest Statement.
The Company shall furnish to the Parent and Merger Sub on or
before the Effective Time a copy of a statement, dated not
more than thirty days prior to the Effective Time, issued by
the Company pursuant to Section 1.897-2(h) of the Code,
certifying that the interest in the Company being acquired
by the Parent and Merger Sub is not a U.S. real property
interest as defined in Section 897 of the Code.
0.2(h)Material Adverse Changes. No change shall
have occurred or been threatened, and Parent shall not have
become aware of any fact that is reasonably likely to have
either a Material Adverse Effect or a Flexible Company
Material Adverse Effect.
0.2(i)No Litigation. No suit, action or
proceeding by any Governmental Authority, or by any other
Person, domestic or foreign, shall be threatened, instituted
or pending before any court of competent jurisdiction or
Governmental Authority, (i) challenging or seeking to, or
which could reasonably be expected to make illegal, impede,
delay or otherwise directly or indirectly restrain, prohibit
or make materially more costly the Merger, or seeking to
obtain material damages, (ii) seeking to prohibit or
materially limit the ownership or operation by Parent or
Merger Sub of all or any material portion of the business
assets of the Company and its Subsidiaries taken as a whole,
or to compel Parent or Merger Sub to dispose of or hold
separately all or any material portion of the business or
assets of Parent and its Subsidiaries or the Company and its
Subsidiaries taken as a whole, or seeking to impose any
limitation on the ability of Parent or Merger Sub to conduct
its business or own such assets, (iii) seeking to impose
limitations on the ability of Parent or Merger Sub
effectively to exercise full rights of ownership of the
shares of Company Stock, including, without limitation, the
right to vote any shares of Company Stock acquired or owned
by Merger Sub or Parent on all matters properly presented to
the Company's stockholders, or (iv) seeking to require
divestiture by Parent or Merger Sub of any shares of Company
Stock.
0.3Additional Conditions to the Company's Obligation to
Close. The obligation of the Company to consummate the
Transactions is subject to satisfaction, or, to the extent
permitted by Law, waiver, on or prior to the Effective Time of
each of the following conditions:
0.3(a)Performance. Parent and Merger Sub shall
have materially complied with, and satisfied, in all
material respects, all the covenants, agreements and
obligations of Parent and Merger Sub contained herein, and
materially performed all acts required of Parent and Merger
Sub by this Agreement.
0.3(b)Representations and Warranties. All the
representations and warranties made herein by Parent or
Merger Sub which are qualified as to materiality shall have
been and shall be true and correct in all respects and each
such representation and warranty which is not so qualified
shall have been, and shall be, true and correct, in all
material respects when made and as of the Effective Time
(except for changes permitted by this Agreement, or except
to the extent they relate to a particular date).
0.3(c)Deliveries. The Company shall have received
at the Effective Time:
0.3(c)(i)a certificate dated the Effective
Time and executed by the President or a Vice President
of Parent certifying to the fulfillment of the
conditions specified in Sections 9.3(a) and (b);
0.3(c)(ii)certified or verified copies of
Merger Sub's Certificates of Incorporation, as
currently amended, and certificates of good standing
for Merger Sub; and
0.3(c)(iii)such other documents as the
Company may reasonably request to effectuate, or in
connection with, the Transactions.
0.3(d)Ancillary Agreements. Provided the Flexible
Shares are to be distributed to the stockholders of the
Company, Surviving Company and the Flexible Company shall
have duly executed and delivered each of the Ancillary
Agreements.
ARTICLE X
TERMINATION AND REMEDIES
A1.A1Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective
Time, before or after the approval by stockholders of the
Company,
(a)by the mutual written consent of Parent and the
Company;
(b)by either Parent or the Company, if:
(i)any court of competent jurisdiction in the
United States, or some other Governmental Authority,
shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final
and nonappealable; provided, however, that the party
seeking to terminate this Agreement under this
Section 10.1(b)(i) shall have used its reasonable best
efforts to remove such injunction, order or decree; or
(ii)the Merger shall not have been
consummated by September 30, 1998; provided, that the
right to terminate this Agreement pursuant to this
Section 10.1(b)(ii) shall not be available to any party
whose failure to fulfill any of its obligations under
this Agreement results in the failure of the Merger to
occur on or before such date;
(iii)by either Parent, on the one hand, or
the Company, on the other hand, if the Board of
Directors of the Company determines that an Acquisition
Proposal constitutes a Superior Proposal and the Board
believes (based upon the advice of independent outside
counsel) that a failure to terminate this Agreement and
enter into an agreement to effect the Superior Proposal
would constitute a breach of its fiduciary duties;
provided, however the Company may not terminate this
Agreement pursuant to this Section 10.1(b)(iii) unless
and until (A) five days have elapsed following delivery
to Parent of a written notice of such determination by
the Board of Directors; (B) during such five day period
the Company has fully cooperated with the Parent,
including, without limitation, informing the Parent of
the terms and conditions of such Superior Proposal, and
the identity of the Person making such Proposal, with
the intent of enabling both parties to agree to a
modification of the terms and conditions of this
Agreement so that the Transactions may be effected; and
(C) at the end of such five day period the Board of
Directors of the Company determines that the
Acquisition Proposal constitutes a Superior Proposal
and the Board continues to believe (again based upon
the advice of independent outside counsel) that a
failure to terminate this Agreement and enter into an
agreement to effect the Superior Proposal would
constitute a breach of its fiduciary duties; provided
further that this Agreement shall not terminate
pursuant to this Section 10.0(b)(iii) unless
simultaneously with such termination (I) the Company
enters into a definitive acquisition, merger or similar
agreement to effect the Superior Proposal and
(II) Parent has received all amounts required to be
paid to Parent pursuant to Section 11.1(b) by wire
transfer in same day funds; or
(iv)if the Stockholders of the Company do not
approve this Agreement and Merger at the Company
Stockholders Meeting.
(c)by Parent, if:
(i)(A) any of the representations or
warranties made by the Company in this Agreement that
are qualified as to materiality shall be untrue or
incorrect in any respect or any such representations
and warranties that are not so qualified shall be
untrue or incorrect in any material respect, in each
case as of the date of this Agreement and Closing Date,
except that those representations and warranties which
address matters only as of a particular date shall
remain true and correct as of such date, (B) the
Company shall have failed to perform in any material
respect any material obligation or to comply in any
material respect with any material agreement or
material covenant of the Company to be performed or
complied with by it under this Agreement, or (C) any
Person (other than Parent, Sub or one of their
controlled affiliates) shall have commenced a tender
offer for 10% or more of any class of equity securities
of the Company; provided, that prior to termination
this Agreement pursuant to clause (A) or (B), Parent
shall have given the Company written notice of such
breach or misrepresentation and the Company shall not
have cured such breach or misrepresentation within
thirty days of the date of such notice if curable
within such thirty day period; or
(ii)the Board of Directors of the Company
withdraws or materially modifies or changes its
recommendation of this Agreement or the Merger in a
manner adverse to Parent or Merger Sub and there exists
at such time an Acquisition Proposal for the Company;
or
(iii)holders of Dissenting Shares hold more
than five percent (5%) of the outstanding Company
Shares.
(d)by the Company, if (i) any of the
representations or warranties made by the Parent and Merger
Sub in this Agreement that are qualified as to materiality
shall be untrue or incorrect in any respect or any such
representations and warranties that are not so qualified
shall be untrue or incorrect in any material respect, in
each case as of the date of this Agreement and Closing Date,
except that those representations and warranties which
address matters only as of a particular date shall remain
true and correct as of such date, or (ii) Parent or Merger
Sub shall have failed to perform in any material respect any
material obligation or to comply in any material respect
with any material agreement or material covenant of Parent
or Merger Sub, as the case may be, to be performed or
complied with by each of them under this Agreement; provided
that, prior to terminating this Agreement pursuant to this
clause 10.1(d), the Company shall have given Parent and
Merger Sub written notice of such breach or
misrepresentation and Parent and/or Merger Sub shall not
have cured such breach or misrepresentation within thirty
days of the date of such notice if curable within such
thirty day period.
A1.A2Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to
Section 10.1, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto or
its affiliates, directors, officers or stockholders, provided
that, notwithstanding the foregoing, if this Agreement has been
terminated the provisions of Sections 6.21, 7.7, 10.2, 11.1 and
11.2; the last two sentences of Section 8.11; and Article XI, in
its entirety, shall survive all such termination and shall
continue to be of binding effect. Nothing contained in this
Section 10.2 shall relieve any party from liability for any
willful and material breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
ARTICLE XI
GENERAL PROVISIONS
A1.A1Expenses.
(a)All fees, costs and expenses, including
attorney's fees and investment banking fees, incurred in
connection with this Agreement or the Transactions shall be
paid by the party incurring such, provided however it is
agreed that in the event of a distribution of the Flexible
Shares upon Closing, the Company Transaction Expenses shall
be paid by the Flexible Company. All such fees, costs and
expenses shall be paid in full at Closing.
(b)In the event this Agreement is terminated in
any of the following manners, the Company shall pay to
Parent an amount equal to $3.8 million plus $1.5 million,
representing reimbursement for out-of-pocket fees and
expenses incurred by Parent or on its behalf in connection
with the transactions contemplated in connection with this
Agreement, payable by wire transfer of immediately available
funds at the times as set forth below:
(i)by the Company, pursuant to
Section 10.1(b)(iii) (amounts payable simultaneously with
execution of a definitive agreement to effect the Superior
Proposal);
(ii)by the Company, pursuant to
Section 10.1(b)(ii) or (iv), but only in the event that
within 12 months from the date of such termination the
Company enters into an agreement with respect to the Third
Party Acquisition, or a Third Party Acquisition occurs
(amounts payable upon the occurrence of a Third Party
Acquisition, or the earlier execution by the Company of a
definitive agreement to effect such Third Party
Acquisition);
(iii)by Parent, pursuant to
Section 10.1(b)(iii), but only in the event that the Company
executes a definitive agreement to effect the Superior
Proposal (amounts payable upon the execution of such
definitive agreement);
(iv)by Parent, pursuant to
Section 10.1(c)(i)(A) or (B), unless the Company's failure
to so perform or comply is beyond the control of the Company
(amounts payable within five (5) business days of such
termination); or
(v)by Parent, pursuant to Section 10.1(c)(ii)
(amounts payable within two (2) business days of such
termination).
A1.A2Nonsurvival. The representations and warranties
made herein shall not survive beyond the earlier of termination
of this Agreement or the Effective Time. This Section 11.2 shall
not limit any covenant or agreement of the parties hereto which
by its terms contemplates performance after the Effective Time.
The Confidentiality Agreement shall survive any termination of
this Agreement.
A1.A3Further Documents. Each party hereto agrees to
execute and deliver to the other party such other and further
agreements, consents, documents, or instruments of conveyance,
assignment, assumption or transfer, and to do such other things
and to take such other actions, supplemental or confirmatory, as
may be required by the other party for the purpose of or in
connection with the consummation or evidencing of the
Transactions.
A1.A4Modification or Amendment. This Agreement may be
amended by an instrument in writing executed and delivered on
behalf of each of the parties hereto, at any time prior to the
Effective Time, subject to the provisions of the DGCL; provided,
however, that after approval of this Agreement by the
stockholders of the Company, no amendment shall be made which by
Law requires further approval by such stockholders without such
further approval.
A1.A5Waiver. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of
such party and may be waived, at any time prior to the Effective
Time, by such party in whole or in part to the extent permitted
by Law. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in writing
signed on behalf of such party, and shall not be inferred by the
failure of any such party to assert any of its rights hereunder.
Waiver of any provision of this Agreement or of any breach hereof
shall be a waiver of only said specific provision or breach and
shall not be deemed a waiver of any other provision or any future
breach hereof.
A1.A6Notices. All notices, documents, or other
communications to be given hereunder shall be in writing and
shall be deemed validly given if delivered by messenger,
facsimile transmission (with a confirming copy sent by overnight
courier), or express overnight delivery, as follows:
(a) If to the Company, to
G. ▇▇▇▇▇▇▇ ▇▇▇▇
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company
Twelve Wyandotte Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
(b) If to Parent or Merger Sub, to
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
(▇▇▇) ▇▇▇-▇-▇▇▇▇-▇▇ (telephone)
(▇▇▇) ▇▇▇-▇-▇▇▇▇-▇▇▇▇ (telecopier)
with a copy to:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
or such other Persons or addresses as may be designated in
writing by the party to receive such notice. Any notice
delivered by messenger shall be deemed received when such
delivery is tendered; notices sent by facsimile transmission
shall be deemed received upon faxed confirmation of receipt; and
notices delivered by other methods shall be deemed received when
actually received by the addressee or its authorized agent
A1.A7Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with, the Laws of
the State of Delaware, without giving effect to the principals of
the conflicts of Law thereof.
A1.A8Entire Agreement. This Agreement, including the
Additional Agreements, constitute the entire agreement and
understanding of the parties with respect to the Transactions and
supersedes any and all prior agreements and understandings
relating to the subject matter hereof, provided, however, that
the provisions of the Confidentiality Agreement shall remain
valid and in effect.
A1.A9Construction. The section and article headings
contained in this Agreement are inserted for convenience of
reference only and shall not affect the meaning or interpretation
of this Agreement. The preamble hereof, the recitals hereto, and
all exhibits and schedules attached hereto and the Company
Disclosure Letter and the Schedules thereto are hereby
incorporated herein by reference and made a part hereof.
A1.A10Binding Effect. This Agreement shall be binding
upon and inure solely to the benefit of the parties, and their
respective successors and assigns, to the extent allowed hereby.
Nothing in this Agreement, express or implied, other than the
right to receive the Merger Consideration payable pursuant to
Article V hereof is intended to or shall confer upon any other
Person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement; provided, however, that the
provisions of Sections 8.13 and 8.14 shall inure to the benefit
of and be enforceable by the indemnified parties or the employees
and directors of the Company, respectively.
A1.A11Assignment. None of the parties hereto may
assign any rights or delegate any obligations provided for in
this Agreement without the prior written consent of all the other
parties.
A1.A12Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which shall be
deemed to be an original, but which together shall constitute one
and the same instrument.
A1.A13Obligation of Parent. Whenever this Agreement
requires Merger Sub to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause
Merger Sub to take such action and a guarantee of the performance
thereof.
A1.A14Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, each of
which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective duly authorized
officers as of the date first above written.
SEALRIGHT CO., INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
HUHTAMAKI OY
By: /s/ ▇▇▇▇ ▇▇▇
Name: ▇▇▇▇ ▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Administration
SEAL ACQUISITION CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇
Name: ▇▇▇▇ ▇▇▇
Title: President
