EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
DATED AS OF
FEBRUARY 14, 1996
BY AND AMONG
CHO HOLDINGS INC.,
CHO ACQUISITION INC.
AND
ANDROS INCORPORATED
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TABLE OF CONTENTS
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ARTICLE I THE TENDER OFFER.............................................................. 1
SECTION 1.1 The Offer..................................................................... 1
SECTION 1.2 Company Action................................................................ 3
SECTION 1.3 Directors..................................................................... 4
ARTICLE II THE MERGER.................................................................... 5
SECTION 2.1 Merger........................................................................ 5
SECTION 2.2 Conversion of Shares.......................................................... 6
SECTION 2.3 Exchange of Certificates...................................................... 7
SECTION 2.4 Dissenting Shares............................................................. 8
SECTION 2.5 Certificate of Incorporation and Bylaws of the Surviving Corporation.......... 9
SECTION 2.6 Directors and Officers of the Surviving Corporation........................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER.................... 9
SECTION 3.1 Corporate Organization........................................................ 9
SECTION 3.2 Authority..................................................................... 10
SECTION 3.3 Consents and Approvals; No Violation.......................................... 10
SECTION 3.4 Financing..................................................................... 11
SECTION 3.5 Surviving Corporation After the Merger........................................ 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................. 11
SECTION 4.1 Corporate Organization........................................................ 11
SECTION 4.2 Capitalization................................................................ 12
SECTION 4.3 Subsidiaries.................................................................. 12
SECTION 4.4 Authority..................................................................... 13
SECTION 4.5 Consents and Approvals; No Violation.......................................... 13
SECTION 4.6 Proxy or Information Statement................................................ 14
SECTION 4.7 Conduct of Business........................................................... 14
SECTION 4.8 SEC Documents................................................................. 15
SECTION 4.9 Litigation.................................................................... 16
SECTION 4.10 Labor Relations; Employees.................................................... 16
SECTION 4.11 Certain Agreements and Employee Benefit Plans................................. 17
SECTION 4.12 Taxes......................................................................... 18
SECTION 4.13 Absence of Certain Changes or Events.......................................... 20
SECTION 4.14 Properties.................................................................... 21
SECTION 4.15 Intellectual Property......................................................... 21
SECTION 4.16 Material Contracts............................................................ 21
SECTION 4.17 Fees.......................................................................... 22
SECTION 4.18 Business Combination Statute Inapplicable..................................... 22
ARTICLE V COVENANTS OF THE COMPANY AND PARENT........................................... 22
SECTION 5.1 Conduct of Business of the Company............................................ 22
SECTION 5.2 Stockholder Meeting; Proxy Material; Information Statement.................... 24
SECTION 5.3 No Solicitation of Competing Transactions..................................... 25
ARTICLE VI ADDITIONAL AGREEMENTS......................................................... 26
SECTION 6.1 Access to Information......................................................... 26
SECTION 6.2 Legal Conditions to Offer and Merger.......................................... 27
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SECTION 6.3 Confidentiality Agreement..................................................... 27
SECTION 6.4 Public Announcements.......................................................... 28
SECTION 6.5 Directors' and Officers' Insurance and Indemnification........................ 28
SECTION 6.6 Employee Arrangements......................................................... 29
SECTION 6.7 Company Stock Option Plans.................................................... 29
SECTION 6.8 Company Employee Stock Purchase Plan.......................................... 30
SECTION 6.9 Notice of Certain Events...................................................... 30
SECTION 6.10 Obligations of Purchaser...................................................... 31
SECTION 6.11 Voting of Shares.............................................................. 31
ARTICLE VII CONDITIONS PRECEDENT.......................................................... 31
SECTION 7.1 Conditions of Each Party's Obligation to Effect the Merger.................... 31
SECTION 7.2 Conditions to the Obligations of the Company to Effect the Merger............. 31
ARTICLE VIII TERMINATION................................................................... 32
SECTION 8.1 Termination................................................................... 32
SECTION 8.2 Effect of Termination......................................................... 33
SECTION 8.3 Certain Payments.............................................................. 33
ARTICLE IX GENERAL PROVISIONS............................................................ 34
SECTION 9.1 Amendment..................................................................... 34
SECTION 9.2 Extension; Waiver............................................................. 34
SECTION 9.3 Nonsurvival of Representations, Warranties and Agreements..................... 34
SECTION 9.4 Entire Agreement.............................................................. 34
SECTION 9.5........... Severability.................................................................. 34
SECTION 9.6 Notices....................................................................... 35
SECTION 9.7 Headings...................................................................... 36
SECTION 9.8 Expenses...................................................................... 36
SECTION 9.9 Benefits; Assignment.......................................................... 36
SECTION 9.10 Specific Performance.......................................................... 36
SECTION 9.11 Governing Law................................................................. 37
SECTION 9.12 Counterparts.................................................................. 37
ANNEX I CONDITIONS TO THE OFFER
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INDEX OF DEFINED TERMS
DEFINED TERM REFERENCE
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Agreement........................................................................ Preamble
CERCLA........................................................................... Section.47(c)
Certificates..................................................................... Section.23(a)
Code............................................................................. Section.411(a)
Common Stock..................................................................... Recitals
Company.......................................................................... Preamble
Competing Transaction............................................................ Section 5.3
Confidentiality Agreement........................................................ Section 6.3
Constituent Corporations......................................................... Section 2.1 (a)
Cut-off Date..................................................................... Section 1.3 (a)
Current Offering................................................................. Section 6.8
DGCL............................................................................. Recitals
Dissenting Shares................................................................ Section 2.4 (a)
Dissenting Stockholder........................................................... Section 2.4 (a)
Effective Time................................................................... Section 2.1 (b)
Environmental Laws............................................................... Section 4.7 (c)
ERISA............................................................................ Section 4.11(b)
Exchange Act..................................................................... Section 1.1 (a)
Exchange Agent................................................................... Section 2.3 (a)
Financing Commitments............................................................ Section 3.4
Fully Diluted Shares............................................................. Section 4.2
Governmental Entity.............................................................. Section 3.3
Hazardous Materials.............................................................. Section 4.7 (c)
HSR Act.......................................................................... Section 3.3
Information Statement............................................................ Section 4.6
ISO.............................................................................. Section 4.11(c)
IRS.............................................................................. Section 4.11(b)
Lien............................................................................. Section 4.14
Material Adverse Effect.......................................................... Section 4.1
Material Contracts............................................................... Section 4.16
Material Plans................................................................... Section 4.11(b)
Merger........................................................................... Recitals
Merger Price..................................................................... Section 2.2 (a)
Minimum Shares................................................................... Section 1.1 (a)
Minimum Share Condition.......................................................... Section 1.1 (a)
Offer............................................................................ Recitals
Offer Documents.................................................................. Section 1.1 (b)
Parent........................................................................... Preamble
Permits.......................................................................... Section 4.7 (b)
Proxy Statement.................................................................. Section 4.6
Purchaser........................................................................ Preamble
Schedule 14D-9................................................................... Section 1.2 (b)
SEC.............................................................................. Section 1.1 (b)
SEC Documents.................................................................... Section 4.8
Securities Act................................................................... Section 4.8
Shares........................................................................... Recitals
Special Committee................................................................ Section 1.2 (a)
Stock Options.................................................................... Section 4.2
Stock Option Plans............................................................... Section 6.7 (a)
Stock Purchase Plan.............................................................. Section 4.2
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DEFINED TERM REFERENCE
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Stockholders' Meeting............................................................ Section.52(a)
Subsidiary....................................................................... Section.13(a)
Superior Proposal................................................................ Section.53
Surviving Corporation............................................................ Section.21(a)
Taxes............................................................................ Section.412(a)
Tendered Shares.................................................................. Section.11(a)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February
14, 1996, is entered into by and among CHO HOLDINGS INC., a Delaware corporation
("Parent"), CHO ACQUISITION INC., a Delaware corporation and a wholly owned
subsidiary of Parent (the "Purchaser"), and ANDROS INCORPORATED, a Delaware
corporation (the "Company").
R E C I T A L S
WHEREAS, the respective Boards of Directors of the Company, Parent and the
Purchaser have approved the acquisition of the Company by the Purchaser and, in
furtherance of such acquisition, Parent proposes to cause the Purchaser to make
a cash tender offer (the "Offer") for all of the outstanding shares of common
stock, par value $.01 per share ("Common Stock"), of the Company ("Shares") on
the terms specified herein and the Board of Directors of the Company has
approved the Offer and recommended that it be accepted by the stockholders of
the Company; and
WHEREAS, the Boards of Directors of the Company and the Purchaser deem it
advisable and in the best interests of the stockholders of such corporations to
effect the merger (the "Merger") of the Purchaser with and into the Company
following the consummation of the Offer, all pursuant to this Agreement and in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL");
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, Parent, the Purchaser and
the Company hereby agree as follows:
ARTICLE I
THE TENDER OFFER
SECTION 1.1 THE OFFER.
(a) Subject to the provisions of this Agreement and provided that nothing
shall have occurred that would result in a failure to satisfy any of the
conditions set forth in ANNEX I hereto, Parent shall cause the Purchaser to, as
promptly as reasonably practicable after the date hereof, but in no event later
than five (5) business days following the initial public announcement of the
Purchaser's intention to commence the Offer, commence (within the meaning of
Rule 14d-2(a) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), the Offer for all of the outstanding Shares at a price of
$18.00 per Share, net to the seller in cash, subject only (i) to a minimum of
2,649,538 Shares (or such other number of Shares, when added to the number of
Shares already owned by Parent, the Purchaser or any direct or indirect wholly
owned Subsidiary (as defined in Section 1.3(a)) of Parent, as shall constitute a
majority of the Company's Fully Diluted Shares (as defined in Section 4.2) (the
"Minimum Shares") being validly tendered prior to the expiration or termination
of the Offer and not withdrawn (the "Minimum Share Condition") and (ii) to the
other conditions to the Offer set forth in ANNEX I. The Purchaser may at any
time transfer or assign to one or more corporations directly or indirectly
wholly owned by Parent the right to purchase all or any portion of the Shares
tendered pursuant to the Offer (the "Tendered Shares"), but no such assignment
shall relieve the Purchaser of its obligations hereunder. The Purchaser
expressly reserves the right to waive any of the conditions to the Offer set
forth in ANNEX I and to modify the terms and conditions of the Offer; PROVIDED,
HOWEVER, that, without the prior written approval of the Company, the Purchaser
shall not amend or modify the terms of the Offer to (i) reduce the cash price to
be paid pursuant to the Offer, (ii) reduce the number of Shares as to which the
Offer is made, (iii) change the form of consideration to be paid in the Offer,
(iv) modify or waive the Minimum Share Condition, or (v) impose conditions to
its obligation to accept for payment or pay for the Tendered Shares other than
those set forth in ANNEX I. The Offer may not be extended without the Company's
prior written consent; PROVIDED, HOWEVER, that the Purchaser may extend (and
re-extend) the Offer for up to a total of 20
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business days if, as of the initial expiration date, which shall be 20 business
days following commencement of the Offer, there shall not have been validly
tendered and not withdrawn that number of Shares necessary to permit the Merger
to be effected without a meeting of the Company's stockholders in accordance
with the DGCL.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, the Purchaser shall file with the Securities and Exchange Commission
("SEC") a Tender Offer Statement on Schedule 14D-1 with respect to the Offer,
which shall contain or shall incorporate by reference an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1 and
the documents included therein or incorporated therein by reference pursuant to
which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"). Parent and the Purchaser agree that the Offer
Documents shall comply as to form in all material respects with the Exchange
Act, and the rules and regulations promulgated thereunder, and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by Parent or the Purchaser with respect to information supplied by the
Company or any of its representatives which is included in the Offer Documents.
Each of Parent, the Purchaser and the Company agrees to correct promptly any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading, and each of Parent
and the Purchaser further agrees to take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as so amended or
supplemented to be filed with the SEC and to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a reasonable
opportunity to review the Offer Documents and all amendments and supplements
thereto prior to their filing with the SEC or dissemination to stockholders of
the Company. Parent and the Purchaser agree to provide the Company and its
counsel any comments Parent, the Purchaser or their counsel may receive from the
SEC or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
(c) Subject to the terms and conditions of the Offer, the Purchaser shall
pay for Shares which have been validly tendered and not withdrawn pursuant to
the Offer as promptly as practicable following expiration of the Offer.
SECTION 1.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the Offer and represents
that at a meeting duly called and held the Board of Directors of the Company
has, after receiving the recommendation in favor thereof of the special
committee of the Board of Directors of the Company (the "Special Committee")
formed to consider this Agreement and the transactions contemplated hereby, (i)
approved and adopted this Agreement and the transactions contemplated hereby and
determined that the Offer and the Merger are in the best interests of the
Company and its stockholders and on terms that are fair to such stockholders,
and (ii) recommended that the Company's stockholders accept the Offer and tender
all of their Shares in connection therewith and, if required under the DGCL,
approve this Agreement and the transactions contemplated hereby. The Company
represents that its Board of Directors has received the written opinion of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation that the consideration to be
received by the Company's stockholders pursuant to each of the Offer and the
Merger is fair to the Company's stockholders from a financial point of view, and
that a complete and correct signed copy of such opinion will be delivered
promptly following the date hereof by the Company to Parent. The Company
represents that the Special Committee has duly adopted resolutions providing for
the dissolution of the Special Committee on the Cut-Off Date (as defined below).
(b) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to
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the Offer (such Schedule 14D-9, as amended and supplemented from time to time,
the "Schedule 14D-9") and shall mail the Schedule 14D-9 to the stockholders of
the Company. Subject to the fiduciary duties of the Board of Directors as
advised by counsel, the Offer Documents and the Schedule 14D-9 shall contain the
recommendation of the Company's Board of Directors described in Section 1.2(a).
The Company agrees that the Schedule 14D-9 shall comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Parent or the Purchaser or any of their respective
representatives which is included in the Schedule 14D-9. Each of the Company,
Parent and the Purchaser agrees to correct promptly any information provided by
it for use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading, and the Company further agrees to take
all steps necessary to amend or supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given a reasonable opportunity to review the Schedule 14D-9 and all amendments
and supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Parent and its
counsel with any comments the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company shall cause its transfer agent
to furnish the Purchaser promptly with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to the Purchaser such
information and assistance (including updated lists of stockholders, security
position listings and computer files) as the Purchaser may reasonably request in
communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer or the Merger, Parent and the Purchaser and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the other
transactions contemplated hereby and, if this Agreement shall be terminated,
will deliver, and will use their reasonable best efforts to cause their agents
to deliver, to the Company all copies of such information then in their
possession or control.
SECTION 1.3 DIRECTORS.
(a) Promptly upon the purchase by the Purchaser of Shares in the Offer, and
from time to time thereafter, the Purchaser shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's Board
of Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors (giving effect to the election of any additional
directors pursuant to this Section 1.3) and (ii) the percentage that the number
of Shares owned by the Purchaser, Parent and any direct or indirect wholly owned
Subsidiary of Parent (including Shares purchased in the Offer) bears to the
total number of Shares outstanding, and to effect the foregoing the Company
shall upon request by the Purchaser, at the Company's election, either increase
the number of directors comprising the Company's Board of Directors or seek and
accept resignations of incumbent directors. The first date on which designees of
the Purchaser shall constitute a majority of the Company's Board of Directors is
referred to in this Agreement as the "Cut-Off Date." At such times, the Company
will use its reasonable best efforts to cause individuals designated by the
Purchaser to constitute the same percentage as such individuals represent on the
Company's
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Board of Directors of (x) each committee of the Board, (y) each board of
directors of each Subsidiary of the Company and (z) each committee of each such
board. As used in this Agreement, a "Subsidiary" of any other corporation means
a corporation an amount of whose voting securities sufficient to elect at least
a majority of its Board of Directors is owned directly or indirectly by such
other corporation.
(b) The Company shall promptly take all actions required pursuant to Section
14(f) and Rule 14f-1 in order to fulfill its obligations under this Section and
shall include in the Schedule 14D-9 such information with respect to the Company
and its officers and directors as is required under Section 14(f) and Rule 14f-1
to fulfill its obligations under this Section 1.3. The Purchaser will supply to
the Company and be solely responsible for any information with respect to itself
and its nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1.
(c) Following the Cut-Off Date and prior to the Effective Time, any
amendment of this Agreement or the Certificate of Incorporation or Bylaws of the
Company or any of its Subsidiaries, any termination or amendment of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or the Purchaser
or any exercise or waiver of any of the Company's rights hereunder, will require
the concurrence of a majority of the directors of the Company then in office who
are neither designated by the Purchaser, employees of the Company or any of its
Subsidiaries nor otherwise affiliated with the Purchaser.
ARTICLE II
THE MERGER
SECTION 2.1 MERGER.
(a) At the Effective Time (as defined in subsection (b) below) and subject
to the terms and conditions hereof and the provisions of the DGCL, the Purchaser
will be merged with and into the Company in accordance with the DGCL, the
separate existence of the Purchaser shall thereupon cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation"). The
Purchaser and the Company are sometimes hereinafter referred to collectively as
the "Constituent Corporations."
(b) Subject to the terms and conditions hereof, the Merger shall be
consummated as promptly as practicable after the expiration of the Offer and the
Stockholders' Meeting (as defined in Section 5.2), if any, by duly filing an
appropriate certificate of merger or certificate of ownership, as the case may
be, in such form as is required by, and executed in accordance with, the
relevant provisions of the DGCL. The Merger shall be effective at such time as
the certificate of merger or certificate of ownership is duly filed with the
Secretary of State of the State of Delaware in accordance with the DGCL or at
such later time as is specified in the certificate of merger or certificate of
ownership (the "Effective Time"). Prior to such filing, a closing shall take
place at the offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other place as the parties shall agree, for
the purpose of confirming the satisfaction or waiver of the conditions contained
in Article VII hereof.
(c) The separate corporate existence of the Company, as the Surviving
Corporation, with all its purposes, objects, rights, privileges, powers,
certificates and franchises, shall continue unimpaired by the Merger. The
Surviving Corporation shall succeed to all the properties and assets of the
Constituent Corporations and to all debts, choses in action and other interests
due or belonging to the Constituent Corporations and shall be subject to, and
responsible for, all the debts, liabilities and duties of the Constituent
Corporations with the effect set forth in Section 259 of the DGCL.
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SECTION 2.2 CONVERSION OF SHARES.
At the Effective Time and by virtue of the Merger and without any action on
the part of the holders of the capital stock of the Constituent Corporations:
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than (i) Shares to be cancelled pursuant to subsection (b) below
and (ii) Dissenting Shares (as defined in Section 2.4)) shall be converted
into the right to receive in cash an amount per Share equal to the highest
price paid per Share pursuant to the Offer (the "Merger Price");
(b) Each Share held in the treasury of the Company and each Share owned
by Parent, the Purchaser or the Company, or by any direct or indirect wholly
owned Subsidiary of any of them, shall be cancelled and retired without
payment of any consideration therefor; and
(c) Each share of Common Stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into one validly issued, fully paid and nonassessable
share of Common Stock, par value $.01 per share, of the Surviving
Corporation.
SECTION 2.3 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, a bank or trust company to be
designated by Parent with the concurrence of the Company shall act as exchange
agent (the "Exchange Agent") in effecting the exchange of the Merger Price for
certificates which prior to the Effective Time represented Shares and which as
of the Effective Time represent the right to receive the Merger Price (the
"Certificates"). Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of Certificates a form of letter of transmittal and
instructions for use in surrendering such Certificates and receiving the Merger
Price therefor in a form approved by Parent and the Company. At or prior to the
Effective Time, the Purchaser shall deposit in trust with the Exchange Agent
immediately available funds in an amount sufficient to pay the Merger Price for
all such Shares to the Company's stockholders as contemplated by this Section
2.3. Such funds shall be invested by the Exchange Agent as directed by Parent or
the Surviving Corporation, PROVIDED that such investments shall be in
obligations of or guaranteed by the United States of America or of any agency
thereof and backed by the full faith and credit of the United States of America,
in commercial paper obligations rated A-1 or P-1 or better by ▇▇▇▇▇'▇ Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital, surplus and undivided profits aggregating in
excess of $250 million (based on the most recent financial statements of such
bank which are then publicly available at the SEC or otherwise). Upon the
surrender of each Certificate and the issuance and delivery by the Exchange
Agent of the Merger Price for the Shares represented thereby in exchange
therefor, the Certificate shall forthwith be cancelled. Until so surrendered and
exchanged, each Certificate shall represent solely the right to receive the
Merger Price for the Shares represented thereby, without any interest thereon.
Upon the surrender and exchange of such an outstanding Certificate, the holder
thereof shall receive the Merger Price multiplied by the number of Shares
represented by such Certificate, without any interest thereon. If any cash is to
be paid to a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition to such payment or
exchange that the person requesting such payment or exchange shall pay to the
Exchange Agent any transfer or other taxes required by reason of the payment of
such cash to a name other than that of the registered holder of the Certificate
surrendered, or such person shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Exchange Agent nor any party hereto shall be liable to a
holder of Certificates for any part of the Merger Price payments made to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(b) Promptly following the sixth month after the Effective Time, the
Exchange Agent shall return to the Surviving Corporation all cash relating to
the transactions described in this Agreement,
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and the Exchange Agent's duties shall terminate. Thereafter, each holder of a
Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Merger Price for such Shares, without any interest
thereon, but shall have no greater rights against the Surviving Corporation than
may be accorded to general creditors of the Surviving Corporation under
applicable law. At and after the Effective Time, holders of Certificates shall
cease to have any rights as stockholders of the Company except for the right to
surrender such Certificates in exchange for the Merger Price for such Shares or
to perfect their right to receive payment for their Shares pursuant to Section
262 of the DGCL and Section 2.4 below, and there shall be no transfers on the
stock transfer books of the Company or the Surviving Corporation of any Shares
that were outstanding immediately prior to the Merger.
SECTION 2.4 DISSENTING SHARES.
(a) Notwithstanding the provisions of Section 2.2 or any other provision of
this Agreement to the contrary, Shares that are issued and outstanding
immediately prior to the Effective Time and are held by stockholders who have
not voted such Shares in favor of the approval and adoption of this Agreement
and who shall have properly demanded appraisal of such Shares in accordance with
Section 262 of the DGCL ("Dissenting Shares") shall not be converted into the
right to receive the Merger Price at the Effective Time, unless and until the
holder of such Dissenting Shares shall have failed to perfect or shall have
effectively withdrawn or lost such right to appraisal and payment under the
DGCL. If a holder of Dissenting Shares (a "Dissenting Stockholder") shall have
so failed to perfect or shall have effectively withdrawn or lost such right to
appraisal and payment, then, as of the Effective Time or the occurrence of such
event, whichever last occurs, such Dissenting Shares shall be converted into and
represent solely the right to receive the Merger Price, without any interest
thereon, as provided in Section 2.2.
(b) The Company shall give Parent (i) prompt notice of any written demands
for appraisal, withdrawals of demands for appraisal and any other instruments
served pursuant to Section 262 of the DGCL received by the Company, and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under Section 262 of the DGCL. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
demands for appraisal or settle or offer to settle any such demands.
SECTION 2.5 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION.
(a) Subject to the terms of Section 6.5, at the Effective Time the
Certificate of Incorporation of the Purchaser, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation; PROVIDED, HOWEVER, that Article I of the Certificate of
Incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is Andros Incorporated."
(b) Subject to the terms of Section 6.5, the Bylaws of the Purchaser, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation or such Bylaws.
SECTION 2.6 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the
Effective Time, the directors of the Purchaser immediately prior to the
Effective Time shall become the directors of the Surviving Corporation, each of
such directors to hold office, subject to the applicable provisions of the
Certificate of Incorporation and Bylaws of the Surviving Corporation, until the
next annual stockholders' meeting of the Surviving Corporation and until their
successors shall be duly elected or appointed and shall duly qualify. At the
Effective Time, the officers of the Purchaser immediately prior to the Effective
Time shall become the officers of the Surviving Corporation until their
respective successors are duly elected or appointed and qualified.
6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser hereby jointly and severally represent and warrant
to the Company that, except as and to the extent set forth in a Disclosure
Schedule delivered to the Company on or prior to the date hereof setting forth
additional exceptions specified therein to the representations and warranties
contained in this Article III, which Disclosure Schedule shall identify
exceptions by specific Section references:
SECTION 3.1 CORPORATE ORGANIZATION.
(a) Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Purchaser has not
engaged in any business since it was incorporated other than in connection with
the transactions contemplated by this Agreement. Parent owns all of the
outstanding capital stock of the Purchaser.
SECTION 3.2 AUTHORITY. Each of Parent and the Purchaser has the full
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly approved by the respective
Boards of Directors of Parent and the Purchaser and no other corporate
proceedings on the part of Parent or the Purchaser are necessary to consummate
the transactions so contemplated (other than, with respect to the Merger, the
filing and recordation or the appropriate merger documents as required by the
DGCL). This Agreement has been duly executed and delivered by each of Parent and
the Purchaser and, assuming the due authorization, execution and delivery
thereof by the Company, constitutes a valid and binding obligation of each of
Parent and the Purchaser, enforceable against such parties in accordance with
its terms.
SECTION 3.3 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution
and delivery of this Agreement by Parent and the Purchaser nor the consummation
by Parent and the Purchaser of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of their respective
Certificates of Incorporation or Bylaws, or (ii) assuming compliance with the
matters referred to in clause (iii) below, constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or give rise to a right of termination, cancellation or acceleration of any
obligation contained in or to the loss of a benefit under, or result in the
creation of any lien or other encumbrance upon any of the properties or assets
of Parent or the Purchaser under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, lease agreement or
other agreement, instrument, obligation, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Parent or the Purchaser, or to which either of them or any of their
respective properties or assets may be subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of liens
or other encumbrances, which, individually or in the aggregate, will not have a
material adverse effect on Parent and its Subsidiaries taken as a whole or (iii)
require any consent, approval, authorization or permit of, or filing with or
notification to, any court, administrative agency, commission or other
governmental or regulatory authority or instrumentality, domestic or foreign (a
"Governmental Entity"), except (A) pursuant to the Exchange Act, (B) filing a
certificate of merger or certificate of ownership, as the case may be, pursuant
to the DGCL, (C) filings required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the termination of the
waiting periods thereunder or (D) consents, approvals, authorizations, permits,
filings or notifications which if not obtained or made will not, individually or
in the aggregate, have a material adverse effect on Parent and its Subsidiaries
taken as a whole or prevent or materially delay consummation of the Offer or the
Merger.
7
SECTION 3.4 FINANCING. The Purchaser has received loan commitment letters
from one or more commercial banks and purchase commitment letters from
subordinated debt investors (together, the "Financing Commitments"), copies of
which have been provided to the Company. The Purchaser has or will have, prior
to the expiration of the Offer and the Effective Time of the Merger, sufficient
cash or cash-equivalent funds available to purchase all of the Shares
outstanding in the Offer and the Merger, to provide adequate working capital for
the Company following the Effective Time and to pay all related fees and
expenses incurred in connection with the Offer and the Merger.
SECTION 3.5 SURVIVING CORPORATION AFTER THE MERGER. At the Effective Time
and after and giving effect to any changes in the Surviving Corporation's assets
and liabilities as a result of the Merger and after and giving effect to the
financing contemplated by the Financing Commitments, the Surviving Corporation
will not (i) be insolvent (either because its financial condition is such that
the sum of its debts is greater than the fair value of its assets or because the
present fair saleable value of its assets will be less than the amount required
to pay its probable liability on its debts as they become absolute and matured),
(ii) have unreasonably small capital with which to engage in its business or
(iii) have incurred or plan to incur debts beyond its ability to pay as they
become absolute and matured.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and the Purchaser that,
except as and to the extent set forth in a Disclosure Schedule delivered to
Parent on or prior to the date hereof setting forth additional exceptions
specified therein to the representations and warranties contained in this
Article IV, which Disclosure Schedule shall identify exceptions by specific
Section references:
SECTION 4.1 CORPORATE ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. All Subsidiaries of the Company are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and the Company and its Subsidiaries have the
requisite corporate power and authority and all necessary governmental approvals
to own or lease and operate their properties and assets and to carry on their
businesses as they are now being conducted, and are duly qualified or licensed
as foreign corporations to do business and in good standing in each jurisdiction
in which the nature of the businesses conducted by them or the character or
location of the properties owned or leased by them makes such qualification or
licensing necessary, except where the failure to be so organized, existing, in
good standing, qualified or licensed would not have a Material Adverse Effect.
As used herein, the term "Material Adverse Effect" means any change or effect
that, individually or in the aggregate, is or is reasonably likely to be
materially adverse to the business, operations, properties, financial condition,
assets or liabilities (including, without limitation, contingent liabilities) of
the Company and the Subsidiaries taken as a whole.
SECTION 4.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 10,000,000 shares of Common Stock. As of the close of business on
January 31, 1996, 4,628,054 shares of Common Stock were issued and outstanding,
671,021 shares of Common Stock were reserved for issuance upon the exercise of
outstanding options to acquire shares of Common Stock ("Stock Options"), no
shares of Common Stock were held by the Company in its treasury and 16,430
shares of Common Stock were reserved for issuance under the Company's employee
stock purchase plan (the "Stock Purchase Plan") and no shares of Preferred Stock
were issued and outstanding. The number of issued and outstanding shares of
Common Stock at any time taken together with the number of shares of Common
Stock reserved for issuance upon the exercise of outstanding Stock Options at
such time is referred to herein as the "Fully Diluted Shares." All of the issued
and outstanding shares of Common Stock are validly issued, fully paid and
nonassessable and are not subject to preemptive rights created by statute, the
Certificates of Incorporation or Bylaws of the Company or any agreement to which
the Company is a party or by which the Company or its assets is bound. Except as
8
disclosed in this Section 4.2, there are no shares of capital stock of the
Company issued or outstanding, and except for the Stock Options and rights to
purchase shares of Common Stock under the Stock Purchase Plan, there are no
outstanding subscriptions, options, warrants, rights, convertible securities or
other agreements or commitments of any character (including, without limitation,
rights which will or could become exercisable as a result of this Agreement or
any transaction contemplated hereby) relating to the issued or unissued capital
stock or other securities of the Company obligating the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of the Company or obligating the Company to grant, extend or enter
into any subscription, option, warrant, right, convertible security or other
similar agreement or commitment. There are no voting trusts or other agreements
or understandings to which the Company or any Subsidiary of the Company is a
party with respect to the voting of the capital stock of the Company or such
Subsidiary.
SECTION 4.3 SUBSIDIARIES. The Subsidiaries of the Company are listed on
SCHEDULE 4.3. All of the outstanding shares of capital stock of each Subsidiary
of the Company are validly issued, fully paid and nonassessable and are owned by
the Company or a wholly owned Subsidiary of the Company, free and clear of all
liens, claims or encumbrances. There are no existing subscriptions, options,
warrants, rights, convertible securities or other agreements or commitments of
any character relating to the issued or unissued capital stock or other
securities of any Subsidiary of the Company obligating any such Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock of any Subsidiary of the Company or obligating any
Subsidiary of the Company to grant, extend or enter into any subscription,
option, warrant, right, convertible security or other similar agreement or
commitment. Except as disclosed in SCHEDULE 4.3, the Company does not own,
directly or indirectly, any equity or similar interest in, or any interest
convertible into or exchangeable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
SECTION 4.4 AUTHORITY. The Company has the full corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly approved 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 so contemplated (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
stockholders of the Company if and to the extent required by applicable law, and
the filing and recordation of the appropriate merger documents as required by
DGCL). This Agreement has been duly executed and delivered by, and, assuming the
due authorization, execution and delivery thereof by Parent and the Purchaser,
constitutes a valid and binding obligation of, the Company, enforceable against
the Company in accordance with its terms.
SECTION 4.5 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution
and delivery of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby will (i) conflict with or result
in any breach or violation of any provision of the Certificate of Incorporation
or Bylaws (or other comparable organizational documents) of the Company or any
Subsidiary of the Company, or (ii) constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or give rise
to a right of termination, cancellation or acceleration of any obligation
contained in or to the loss of a benefit under, or result in the creation of any
lien or other encumbrance upon any of the properties or assets of the Company or
any of its Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any such Subsidiary or to which they or any of their
respective properties or assets may be subject, except for such violations,
conflicts, breaches, terminations, accelerations or creations of liens or other
encumbrances, which will not have a Material Adverse Effect, or (iii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental
9
Entity, except (A) pursuant to the Exchange Act, (B) filing a certificate of
merger pursuant to the DGCL, (C) filings under the HSR Act and the termination
of the waiting periods thereunder or (D) consents, approvals, authorizations,
permits, filings or notifications which if not obtained or made will not have a
Material Adverse Effect or prevent or materially delay consummation of the Offer
or the Merger.
SECTION 4.6 PROXY OR INFORMATION STATEMENT. If the DGCL shall require a
Stockholders' Meeting to be convened in connection with the Merger, the proxy
statement to be provided to stockholders of the Company in connection with the
Stockholders' Meeting (together with the amendments thereof and supplements
thereto, the "Proxy Statement") and all amendments thereof and supplements
thereto shall, and if the DGCL shall not require a Stockholders' Meeting to be
convened in connection with the Merger, the information statement to be provided
to stockholders of the Company in connection with the Merger (together with the
amendments thereof and supplements thereto, the "Information Statement") shall,
comply as to form in all material respects with the applicable requirements of
the Exchange Act and the rules and regulations promulgated thereunder, and shall
not, at the time of (i) first mailing thereof or (ii) in the case of the Proxy
Statement, the Stockholders' Meeting to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that (x) no representation is made by the Company with
respect to information supplied in writing by Parent or any affiliates or
representatives of Parent or Purchaser for inclusion in the Proxy Statement or
Information Statement, as the case may be, and (y) no representation is made
with respect to a Proxy Statement or Information Statement, as the case may be,
prepared by the Company and provided to the Company's stockholders at any time
following the Cut-Off Date.
SECTION 4.7 CONDUCT OF BUSINESS.
(a) The businesses of the Company and its Subsidiaries are not being
conducted in default or violation of any term, condition or provision of (i) its
respective charter or bylaws, or (ii) any note, bond, mortgage, indenture, deed
of trust, lease, agreement, or other instrument or obligation of any kind to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties or assets may
be bound, or (iii) any federal, state, local or foreign statue, law, ordinance,
rule, regulation, judgment, decree, order, concession, grant, franchise, permit
or license or other governmental authorization or approval applicable to the
Company or any of its Subsidiaries, excluding from the foregoing clauses (ii)
and (iii) defaults or violations that would not have a Material Adverse Effect.
(b) The Company and each of its Subsidiaries have all licenses, permits,
orders or approvals of, and have made all required registrations with, all
Governmental Entities that are material to the conduct of the business of the
Company and its Subsidiaries taken as a whole (collectively, "Permits"). To the
knowledge of the Company, (i) all Permits are in full force and effect; (ii) no
material violations are or have been recorded in respect of any Permit; and
(iii) no proceeding is pending or threatened to revoke or limit any Permit.
(c) Neither the Company nor any of its Subsidiaries has received any written
communication from a Governmental Entity that alleges that the Company or any
Subsidiary of the Company is not in compliance with any Environmental Law (as
defined below) if such non-compliance could reasonably be expected to have a
Material Adverse Effect. The Company has no knowledge of any environmental
materials or information, including on-site or off-site disposal or releases of
Hazardous Materials (as defined below), that could reasonably be expected to
have a Material Adverse Effect. As used in this Agreement, the term
"Environmental Laws" means any applicable treaties, laws, regulations,
enforceable requirements, orders, decrees or judgments issued, promulgated or
entered into by any Governmental Entity, which relate to (A) pollution or
protection of the environment or (B) the generation, storage, use, handling,
disposal or transportation of or exposure to Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
10
amended, 42 U.S.C. SectionSection 9601, ET SEQ. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. SectionSection 6901 ET
SEQ., the Federal Water Pollution Control Act, as amended, 33 U.S.C.
SectionSection 1251 ET SEQ., the Clean Air Act of 1970, as amended, 42 U.S.C.
SectionSection 7401 ET SEQ., the Toxic Substances Control Act of 1976, 15 U.S.C.
SectionSection 2601 ET SEQ., the Hazardous Materials Transportation Act, 49
U.S.C. SectionSection 1801 ET SEQ., and any similar or implementing state or
local law, and all amendments or regulations promulgated thereunder. As used in
this Agreement, the term "Hazardous Materials" means all explosive or regulated
radioactive materials or substances, biological hazards, genotoxic or mutagenic
hazards, hazardous or toxic substances, medical wastes or other wastes or
chemicals, petroleum or petroleum distillates, asbestos or asbestos-containing
materials, and all other materials or chemicals regulated pursuant to any
Environmental Law, including materials listed in 49 C.F.R. SectionSection
172.101 and materials defined as hazardous pursuant to Section 101(14) of
CERCLA.
SECTION 4.8 SEC DOCUMENTS. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC since July 31,
1992 (the "SEC Documents"). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such SEC Documents, and, at the time of filing, none of the SEC Documents
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. The financial statements of the Company included in the SEC
Documents comply 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 (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Company and its Subsidiaries as of the
dates thereof and their consolidated statements of operations, stockholders'
equity and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal and recurring year-end audit adjustments which
were and are not expected to have a Material Adverse Effect). Except as and to
the extent set forth on the consolidated balance sheet of the Company and the
Subsidiaries as at July 30, 1995, including the notes thereto, neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet, or in the notes thereto, prepared in accordance
with generally accepted accounting principles, except for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since July 30, 1995 which could not reasonably be expected to have a
Material Adverse Effect. The Company has heretofore made available to Parent
complete and correct copies of all of the SEC Documents and all amendments and
modifications thereto, as well as, to the extent any shall exist, all amendments
and modifications that have not been filed by the Company with the SEC to all
agreements, documents and other instruments that previously had been filed by
the Company with the SEC and are currently in effect.
SECTION 4.9 LITIGATION. There is no suit, action or proceeding pending or,
to the knowledge of the Company, threatened against the Company or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to (i) have a Material Adverse Effect, (ii) materially impair the
ability of the Company to perform its obligations under this Agreement or (iii)
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity outstanding against the Company or any of its subsidiaries
having, or that could reasonably be expected to have, any such effect.
SECTION 4.10 LABOR RELATIONS; EMPLOYEES. (i) Neither the Company nor any
of its Subsidiaries is, directly or indirectly, a party to or bound by any
collective bargaining agreement; (ii) no collective bargaining agreement is
currently being negotiated by the Company or its Subsidiaries; and (iii) to the
knowledge of the Company, no representation question exists respecting the
employees of the Company or its Subsidiaries.
11
SECTION 4.11 CERTAIN AGREEMENTS AND EMPLOYEE BENEFIT PLANS.
(a) Neither the Company nor any of its Subsidiaries is a party to any
written (i) employment, severance, collective bargaining or consulting agreement
not terminable on 60 days' or less notice, (ii) agreement with any executive
officer or other key employee of the Company or any Subsidiary of the Company
(A) the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving the Company or any
Subsidiary of the Company of the nature of any of the transactions contemplated
by this Agreement, (B) providing any term of employment or compensation
guarantee extending for a period longer than one year, or (C) providing
severance benefits or other benefits after the termination of employment of such
executive officer or key employee regardless of the reason for such termination
of employment, (iii) agreement, plan or arrangement under which any person may
receive payments subject to the tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or (iv) agreement or plan,
including, without limitation, any stock option plan (other than the Stock
Option Plans), stock appreciation right plan, restricted stock plan or stock
purchase plan, the benefits of which would be increased, or the vesting of
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.
(b) SCHEDULE 4.11(B) contains a true and complete summary or list of, or
otherwise describes (i) all employee benefit plans (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements to which the Company or any Subsidiary is a party, with respect to
which the Company or any Subsidiary has any obligations which while are material
in amount and which are maintained, contributed to or sponsored by the Company
or any Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Subsidiary and (ii) each employee benefit plan
for which the Company or any Subsidiary could incur liability under Section 4069
of ERISA, in the event such plan were terminated, or under Section 4212(c) of
ERISA, or in respect of which the Company or any Subsidiary remains secondarily
liable under Section 4204 of ERISA (collectively, the "Material Plans"). Each
Material Plan is in writing and the Company has previously made available to
Parent a true and complete copy of each Material Plan and a true and complete
copy of each material document prepared in connection with each such Material
Plan including, without limitation: (i) a copy of each trust or other funding
arrangement, (ii) the most current summary plan description and summary of
material modifications, (iii) the most recently filed Internal Revenue Service
("IRS") Form 5500, (iv) the most recently received IRS determination letter for
each such Material Plan, and (v) the most recently prepared actuarial report and
financial statement in connection with each such Material Plan. Neither the
Company nor any Subsidiary has any express or implied commitment (i) to create,
incur liability with respect to or cause to exist any other employee benefit
plan, program or arrangement, (ii) to enter into any contract or agreement to
provide compensation or benefits to any individual or (iii) to modify, change or
terminate any Material Plan, other than with respect to a modification, change
or termination required by ERISA or the Code. To the extent applicable, the
Material Plans comply with the requirements of ERISA and the Code, and any
Material Plan intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and has been so
qualified during the period from its adoption to date. No Material Plan is
covered by Title IV of ERISA or Section 412 of the Code. Neither the Company,
its Subsidiaries nor any officer or director of the Company or any of its
Subsidiaries has incurred any liability or penalty under Sections 4975 through
4980 of the Code or Title I of ERISA. To the knowledge of the Company, each
Material Plan has been maintained and administered in all material respects in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to ERISA and
the Code, which are applicable to such Material Plans. There are no pending or
anticipated claims against or otherwise involving any of the Material Plans and
no suit, action or other litigation (excluding claims for benefits
12
incurred in the ordinary course of Material Plan activities) has been brought,
or to the knowledge of the Company is threatened, against or with respect to any
such Material Plan. All material contributions, reserves or premium payments
required to be made or accrued as of the date hereof to the Material Plans have
been made or accrued.
(c) SCHEDULE 4. 11(C) contains a true and correct list of each person who
holds any Stock Option as of the date hereof, together with (i) the number of
shares of Common Stock subject to such Stock Option, (ii) the date of grant of
such Stock Option, (iii) the extent to which such Stock Option is currently
vested or scheduled to vest by June 30, 1996, (iv) the exercise price of such
Stock Option, (v) whether such Stock Option is intended to qualify as an
incentive stock option within the meaning of Section 422(b) of the Code (an
"ISO") and (vi) the expiration date of such Stock Option. SCHEDULE 4.11(C) also
sets forth the aggregate number of ISO's and nonqualified Stock Options
outstanding as of the date hereof.
SECTION 4.12 TAXES.
(a) The Company and its Subsidiaries (i) have filed when due (taking into
account extensions) with the appropriate federal, state, local, foreign and
other governmental agencies, all tax returns, estimates and reports required to
be filed by it, (ii) either paid when due and payable or established adequate
reserves or otherwise accrued all requisite federal, state, local or foreign
taxes, levies, imposts, duties, licenses and registration fees and charges of
any nature whatsoever, and unemployment and social security taxes and income tax
withholding, including interest and penalties thereon ("Taxes") and there are
and will be no tax deficiencies claimed in writing and received by the Company
or its Subsidiaries in respect of any period preceding the Effective Time that,
in the aggregate, would result in any tax liability in excess of the amount of
the reserves or accruals, and (iii) have established or will establish in
accordance with its normal accounting practices and procedures accruals and
reserves that, in the aggregate, are adequate for the payment of all Taxes not
yet due and payable and attributable to any period preceding the Effective Time.
(b) No taxes, interest, penalties, assessments or deficiencies have been
threatened or claimed in a writing and received by the Company or any of its
Subsidiaries by any taxing authority in respect of any tax returns filed by the
Company and its Subsidiaries (or any predecessor corporations). Neither the
Company nor any of its Subsidiaries (nor any predecessor corporation) have
executed or filed with the IRS or any other taxing authority any agreement or
other document extending, or having the effect of extending, the period of
assessment or collection of any Taxes. Neither the Company nor any of its
Subsidiaries is currently being audited by any taxing authority or have received
notice of a proposed audit pertaining to Taxes. There are no tax liens on any
assets of the Company or any affiliate, except for Taxes not yet due and
payable. The accruals and reserves for taxes reflected in the consolidated
balance sheet of the Company and the Subsidiaries as at July 30, 1995 are in all
material respects adequate to cover all Taxes accruable through the date thereof
(including interest and penalties, if any, thereon and Taxes being contested) in
accordance with generally accepted accounting principles.
(c) The Company neither is a party to, is bound by, nor has any obligation
under any tax sharing or similar agreement.
(d) Neither the Company nor any of its Subsidiaries is required to include
in income (i) any amount in respect of any adjustment under Section 481 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) any deferred
intercompany transaction or (iii) any installment sale gain, where the inclusion
in income would result in a tax liability materially in excess of the reserves
therefor. Neither the Company nor any of its Subsidiaries has given a consent
under Section 341(f) of the Code. Neither the Company nor any of its
Subsidiaries is, or has been at any time, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code.
(e) Neither the Company nor any of its Subsidiaries is a party to any
agreement, contract or arrangement that may result, separately or in the
aggregate, in the payment of any "excess parachute
13
payment" within the meaning of Section 280G of the Code by reason of the
consummation of the Offer or the Merger, determined without regard to Section
280G(b)(4) of the Code. No acceleration of the vesting schedule for any property
that is substantially unvested within the meaning of the regulations under
Section 83 of the Code will occur in connection with the transactions
contemplated by this Agreement. Neither the Company nor any of its Subsidiaries
is or has been subject to any accumulated earnings tax or personal holding
company tax. Neither the Company nor any of its Subsidiaries owns stock in (i) a
passive foreign investment company within the meaning of Section 1296 of the
Code or (ii) a controlled foreign corporation within the meaning of Section 957
of the Code. Neither the Company nor any of its Subsidiaries is obligated under
any agreement with respect to industrial development bonds or other obligations
with respect to which the excludibility from gross income of the holder for
federal income tax purposes could be affected by the transactions contemplated
hereunder. Neither the Company nor any of its Subsidiaries has an unrecaptured
overall foreign loss within the meaning of Section 904(f) of the Code or has
participated in or cooperated with an international boycott within the meaning
of Section 999 of the Code. Neither the Company nor any of its Subsidiaries owns
any property of a character the transfer of which would give rise to (x) a
revaluation of such property for purposes of any AD VALOREM or similar tax, or
(y) any documentary, stamp or other transfer tax. Neither the Company nor any of
its Subsidiaries has an "excess loss account" for purposes of the Treasury
Regulations promulgated under Section 1502 of the Code.
SECTION 4.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since July 30, 1995,
except as contemplated by this Agreement or disclosed in any SEC Document filed
since July 30, 1995 and prior to the date of this Agreement, the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary
course consistent with past practice, and there has not been (i) any damage,
destruction or loss, whether covered by insurance or not, having or which,
insofar as reasonably can be foreseen, in the future would have a Material
Adverse Effect, (ii) any declaration, setting aside or payment of any dividend
(whether in cash, stock or property) with respect to Common Stock, or any
redemption, purchase or other acquisition of any of its securities, (iii) any
change in the business, operations, properties, financial condition, assets or
liabilities (including, without limitation, contingent liabilities) of the
Company or any Subsidiary having a Material Adverse Effect, (iv) any labor
dispute, other than routine matters, none of which is material to the Company
and its Subsidiaries taken as a whole, (v) any entry into any material
commitment or transaction (including, without limitation, any borrowing or
capital expenditure) other than in the ordinary course of business consistent
with past practice, (vi) any material change by the Company in its accounting
methods, principles or practices, (vii) any revaluation by the Company of any
asset (including, without limitation, any writing down of the value of inventory
or writing off of notes or accounts receivable), other than in the ordinary
course of business consistent with past practice, or (viii) any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except in the ordinary course of business consistent with past
practice.
SECTION 4.14 PROPERTIES. All of the properties and assets owned by the
Company and each of its Subsidiaries are owned by each of them, respectively,
free and clear of any lien, claim, encumbrance or restriction of any nature
whatsoever (a "Lien"), except for Liens which could not reasonably be expected
to have a Material Adverse Effect. To the knowledge of the Company, the Company
and its Subsidiaries have good and marketable title subject to no Liens, other
than those permitted under this Section 4.14, to all of the properties and
assets necessary for the conduct of their business other than to the extent that
the failure to have such title could not reasonably be expected to have a
Material Adverse Effect.
SECTION 4.15 INTELLECTUAL PROPERTY. The Company and the Subsidiaries own
or possess adequate licenses or other valid rights to use all patents, patent
rights, trademarks, trademark rights,
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trade names, trade name rights, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held or intended as of the date
hereof by management of the Company to be used by the Company or any Subsidiary
in, and all such intellectual property necessary in the conduct of, the business
of the Company and the Subsidiaries as currently conducted or as contemplated to
be conducted as of the date hereof by management of the Company, and there are
no other items of intellectual property that are material to the Company or any
Subsidiary or the business of the Company and the Subsidiaries. The Company is
unaware of any assertion or claim challenging the validity of any of the
foregoing which could reasonably be expected to have a Material Adverse Effect.
The conduct of the business of the Company and the Subsidiaries as currently
conducted and as contemplated to be conducted as of the date hereof by
management of the Company does not and will not conflict in any way with any
patent, patent right, license, trademark, trademark right, trade name, trade
name right, service ▇▇▇▇ or copyright of any third party that could reasonably
be expected to have a Material Adverse Effect, and neither the Company nor any
Subsidiary has received any claim or written notice from any person to such
effect. To the knowledge of the Company, there are no infringements of any
proprietary rights owned by or licensed by or to the Company or any Subsidiary
which could reasonably be expected to have a Material Adverse Effect. To the
knowledge of the Company, neither it nor any Subsidiary has licensed or
otherwise permitted the use by any third party of any proprietary information on
terms or in a manner which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.16 MATERIAL CONTRACTS. All contracts, leases and other
agreements to which the Company or any of its Subsidiaries is a party that would
be required to be filed as Exhibits to the SEC Documents (the "Material
Contracts") have been filed as Exhibits to the SEC Documents. To the knowledge
of the Company: (i) each Material Contract is in full force and effect except as
the same may have expired in accordance with its terms; (ii) neither the Company
nor any of its Subsidiaries has received any written assertion of default under
any Material Contract; and (iii) neither the Company nor any of its Subsidiaries
reasonably expects or has received any notice related to any termination or
material change to, or proposal with respect to, any of the Material Contracts
as a result of the transactions contemplated by this Agreement; in each case
except where the result of a failure of a representation contained in clauses
(i), (ii) or (iii) above could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.17 FEES. Except for the fees payable by the Company to
▇▇▇▇▇▇▇▇▇, Lufkin and ▇▇▇▇▇▇▇▇ Securities Corporation described in an engagement
letter dated October 22, 1994, a complete and correct copy of which has been
provided to Parent, neither the Company nor any of its Subsidiaries has paid or
will become obligated to pay any fee or commission to any broker, finder or
intermediary in connection with the transactions contemplated hereby.
SECTION 4.18 BUSINESS COMBINATION STATUTE INAPPLICABLE. As of the date
hereof and pursuant to Section 203(a)(1) of the DGCL, the restrictions contained
in Section 203 of the DGCL are, and at all times on or prior to the Effective
Time such restrictions shall be, inapplicable to the Offer, the Merger and the
transactions contemplated by this Agreement, including, without limitation, the
pledge of the shares of the Company Common Stock acquired in the Offer to the
lending institutions providing the financing for the Offer, and the transfer of
such shares upon the exercise or remedies under the applicable agreements. The
Company has heretofore delivered to Parent a complete and correct copy of the
resolutions of the Board of Directors of the Company to the effect that pursuant
to Section 203(a)(1) of the DGCL the restrictions contained in Section 203 of
the DGCL are and shall be inapplicable to the Offer, the Merger and the
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF THE COMPANY AND PARENT
SECTION 5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by
this Agreement, during the period commencing on the date of this Agreement and
continuing until the Cut-Off
15
Date or until the termination of this Agreement in accordance with its terms,
the Company and each of its Subsidiaries shall conduct its operations in the
ordinary and usual course consistent with past practice, and the Company and its
Subsidiaries will each endeavor to preserve intact its business organization, to
keep available the services of its officers and employees and to maintain
satisfactory relations with suppliers, contractors, distributors, licensors,
licensees, customers and others having business relationships with it. Without
limiting the generality of the foregoing and except as provided in this
Agreement, prior to the Cut-Off Date, neither the Company nor any of its
Subsidiaries shall directly or indirectly do, or propose to do, any of the
following, without the prior written consent of Parent:
(a) Declare or pay any dividends on or make any other distribution in
respect of any of the capital stock of the Company;
(b) Split, combine or reclassify any of the capital stock of the Company
or issue or authorize any other securities in respect of, in lieu of or in
substitution for, shares of the capital stock of the Company or repurchase,
redeem or otherwise acquire any shares of the capital stock of the Company;
(c) Issue, deliver, encumber, sell or purchase any shares of the capital
stock of the Company or any securities convertible into, or rights,
warrants, options or other rights of any kind to acquire, any such shares of
capital stock, other convertible securities or any other ownership interest
(including, without limitation, any phantom interest) (other than the
issuance of Common Stock upon the exercise of outstanding Stock Options);
(d) Amend or otherwise change its Certificate of Incorporation or Bylaws
(or other comparable organizational document);
(e) Acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof;
(f) Sell, lease or otherwise dispose of any of its assets, other than in
the ordinary course of business consistent with its past practices;
(g) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities of the Company or any
Subsidiary of the Company or guarantee any debt securities of others, other
than in the ordinary course of business consistent with past practice;
(h) Enter into any contract or agreement other than in the ordinary
course of business consistent with past practice;
(i) Authorize any single capital expenditure which is in excess of
$50,000 or capital expenditures which are, in the aggregate, in excess of
$250,000 for the Company and the Subsidiaries taken as a whole;
(j) Increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any Subsidiary
who are not officers of the Company, or grant any severance or termination
pay to, or enter into any employment or severance agreement with any
director, officer or other employee of the Company or any Subsidiary, or
establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, officer or employee;
16
(k) Take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect
to accounting policies or procedures (including, without limitation,
procedures with respect to cash management, the payment of accounts payable
and the collection of accounts receivable);
(l) Make any tax election or settle or compromise any material federal,
state, local or foreign income tax liability, or execute or file with the
IRS or any other taxing authority any agreement or other document extending,
or having the effect of extending, the period of assessment or collection of
any taxes;
(m) Amend or modify the warranty policy of the Company or any
Subsidiary;
(n) Pay, discharge, satisfy, settle or compromise any suit, claim,
liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction,
in the ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the Company's consolidated
balance sheet dated as of July 30, 1995, as filed by the Company with the
SEC in its Annual Report on Form 10--K for its fiscal year ended July 30,
1995, or subsequently incurred in the ordinary course of business and
consistent with past practice; or
(o) Take any action that would result in any of the representations and
warranties of the Company set forth in this Agreement becoming untrue in any
material respect or in any of the conditions to the Offer or any of the
conditions to the Merger set forth in Article VII not being satisfied.
SECTION 5.2 STOCKHOLDER MEETING; PROXY MATERIAL; INFORMATION STATEMENT.
(a) If this Agreement is required by the DGCL to be approved by the
Company's stockholders, then the Company shall cause a meeting of its
stockholders (the "Stockholders' Meeting") to be duly called and held as soon as
reasonably practicable for the purpose of voting on the approval and adoption of
this Agreement and the transactions contemplated hereby. The Board of Directors
of the Company shall, subject to their fiduciary duties as advised by counsel,
recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company (i) shall
promptly prepare and file with the SEC, use all reasonable efforts to have
cleared by the SEC and thereafter mail to its stockholders as promptly as
practicable the Proxy Statement and all other proxy materials for such meeting,
(ii) shall notify Parent of the receipt of any comments of the SEC with respect
to the Proxy Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to Parent
promptly copies of all correspondence between the Company or any representative
of the Company and the SEC, (iii) shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC, (iv) shall, subject to the fiduciary duties of its Board of
Directors as advised by counsel, use all reasonable efforts to obtain the
necessary approvals by its stockholders of this Agreement and the transactions
contemplated hereby and (v) shall otherwise comply with all legal requirements
applicable to such meeting.
(b) Notwithstanding the foregoing, in the event that Purchaser shall acquire
at least 90% of the then outstanding Shares, the parties hereto agree, at the
request of Purchaser, subject to Article VII, to take all necessary and
appropriate action, including the preparation and mailing of the Information
Statement, to cause the Merger to become effective, in accordance with Section
253 of the DGCL, as soon as reasonably practicable after such acquisition,
without a meeting of the stockholders of the Company.
SECTION 5.3 NO SOLICITATION OF COMPETING TRANSACTIONS. Neither the Company
nor any Subsidiary shall, directly or indirectly, through any officer, director,
agent or otherwise, initiate, solicit or intentionally encourage (including by
way of furnishing non-public information or assistance), or
17
take any other action to intentionally facilitate, any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of the officers, directors or
employees of the Company or any investment banker, financial advisor, attorney,
accountant or other agent or representative of the Company to take any such
action; provided, however, that nothing contained in this Section 5.3 shall
prohibit the Board of Directors of the Company from (i) furnishing information
to, or entering into discussions or negotiations with, any person or entity that
makes an unsolicited, bona fide written proposal to acquire the Company pursuant
to a merger, consolidation, share exchange, business combination, tender or
exchange offer or other similar transaction, if, and only to the extent that,
(A) the Board of Directors of the Company determines in good faith (after
consultation with its financial advisor) that the proposal would, if
consummated, result in a transaction more favorable to the Company's
stockholders from a financial point of view than the transactions contemplated
by this Agreement, (B) the Board of Directors of the Company further determines
in good faith after consultation with counsel that the failure to do so would
cause the Board of Directors of the Company to breach its fiduciary duties to
the Company or its stockholders under applicable law (any such proposal, a
"Superior Proposal") and (C) no information is so furnished, and no such
discussions or negotiations are held, prior to the execution by the receiving
party and the Company of a confidentiality and standstill agreement on terms no
less favorable to the Company than those contained in the Confidentiality
Agreement, or (ii) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a tender or exchange offer. The Company shall notify Parent
promptly if any such proposal or offer, or any inquiry or contact with any
person with respect thereto, is made and shall, in any such notice to Parent
indicate in reasonable detail the identity of the person making such proposal,
offer, inquiry or contact and the terms and conditions of such proposal, offer,
inquiry or contact. The Company agrees not to release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which the
Company is a party (except to the extent necessary to permit such third party to
deliver a Superior Proposal). For purposes of this Agreement, "Competing
Transaction" shall mean any of the following involving the Company: (i) any
merger, consolidation, share exchange, business combination, or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of more than 25% of the assets of the Company in a single
transaction or series of transactions; (iii) any tender offer or exchange offer
for more than 25% of the Shares or the filing of a registration statement under
the Securities Act in connection therewith; or (iv) any person having acquired
beneficial ownership or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) having been formed which
beneficially owns or has the right to acquire beneficial ownership of, more than
25% of the Shares.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 ACCESS TO INFORMATION. Between the date of this Agreement and
the Cut-Off Date, the Company and its Subsidiaries will afford to Parent and its
authorized representatives for the transactions contemplated hereby and the
authorized representatives of such parties and persons providing or committing
to provide Parent or the Purchaser financing for the transactions contemplated
hereby, reasonable access at all reasonable times to the officers, employees,
agents, properties, offices and all other facilities, books and records of the
Company and its Subsidiaries as Parent may reasonably request. Additionally, the
Company will permit Parent and its authorized representatives for the
transactions contemplated hereby, and the authorized representatives of such
parties and persons providing or committing to provide Parent or the Purchaser
financing for the transactions contemplated hereby to make such inspections of
the Company and its operations at all reasonable times as it may reasonably
require and will cause its officers, employees and agents, and those of its
18
Subsidiaries to furnish Parent with such financial and operating data and other
information with respect to the business and properties of the Company and its
Subsidiaries as Parent may from time to time reasonably request. No
investigation pursuant to this Section 6.1 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto.
SECTION 6.2 LEGAL CONDITIONS TO OFFER AND MERGER.
(a) The Company will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on the Company with
respect to the Offer and the Merger (including furnishing all information
required under the HSR Act) and will take all reasonable actions necessary to
cooperate promptly with and furnish information to the Purchaser or Parent in
connection with any such requirements imposed upon the Purchaser or Parent in
connection with the Offer and the Merger. The Company will take, and will cause
its Subsidiaries to take, all reasonable actions necessary to obtain (and will
take all reasonable actions necessary to cooperate promptly with the Purchaser
and Parent in obtaining) any consent, authorization, order or approval of, or
any exemption by, any Governmental Entity, or other third party, required to be
obtained or made by the Company or any of its Subsidiaries (or by the Purchaser
or Parent) in connection with the Offer or the Merger or the taking of any
action contemplated thereby or by this Agreement. In addition to the foregoing,
prior to the Effective Time, the parties shall take, or cause to be taken, all
such actions as may be necessary or appropriate in order to effectuate, as
expeditiously as practicable, the Offer and the Merger and the other
transactions contemplated by this Agreement, including any necessary consents
and waivers.
(b) The Purchaser and Parent will take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed on them with
respect to the Offer and the Merger (including furnishing all information
required under the HSR Act) and will take all reasonable actions necessary to
cooperate promptly with and furnish information to the Company in connection
with any such requirements imposed upon the Company or any Subsidiary of the
Company in connection with the Offer and the Merger. The Purchaser and Parent
will take all reasonable actions necessary to obtain (and will take all
reasonable actions necessary to cooperate promptly with the Company and its
Subsidiaries in obtaining) any consent, authorization, order or approval of, or
exemption by, any Governmental Entity, or other third party, required to be
obtained or made by the Purchaser or Parent (or by the Company or any of its
Subsidiaries) in connection with the Offer or the Merger or the taking of any
action contemplated thereby or by this Agreement.
SECTION 6.3 CONFIDENTIALITY AGREEMENT. The Company and Parent acknowledge
that the existing confidentiality agreement between such parties (the
"Confidentiality Agreement") shall remain in full force and effect at all times
prior to the Effective Time and after any termination of this Agreement, and
such parties agree to comply with the terms of such Agreement.
SECTION 6.4 PUBLIC ANNOUNCEMENTS. he Purchaser, Parent and the Company
will consult with each other before issuing any press release or otherwise
making any public statements with respect to the Offer, the Merger or any
transaction contemplated hereby and shall not issue any such press release or
make any such public statement except as they may mutually agree unless required
so to do by law or by obligations pursuant to any listing agreement with any
national securities exchange or the National Association of Securities Dealers,
Inc. The Company and Parent have agreed as to the form of joint press release
announcing execution of this Agreement.
SECTION 6.5 DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION.
(a) The Certificate of Incorporation and the Bylaws of the Surviving
Corporation shall contain the respective provisions that are set forth, as of
the date of this Agreement, in Article Twelfth of the Certificate of
Incorporation of the Company and Article 5 of the Bylaws of the Company, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at or at any time prior to the Effective
Time were entitled to indemnification thereunder unless such modification shall
be required by law.
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(b) Parent hereby agrees (i) to assume, as of the Effective Time, all
obligations of the Company under Article Twelfth of the Certificate of
Incorporation of the Company and Article 5 of the Bylaws of the Company, and
(ii) to pay all amounts that become due and payable under such provisions.
(c) The Surviving Corporation and Parent shall honor and fulfill in all
respects the obligations of the Company pursuant to indemnification agreements
with the Company's directors and officers existing at or before the Effective
Time.
(d) The Surviving Corporation shall use commercially reasonable efforts to
maintain in effect for six years from the Effective Time directors' and
officers' liability insurance covering those persons who are currently covered
by the Company's directors' and officers' liability insurance policy on terms
comparable to such existing insurance coverage (including coverage amounts);
PROVIDED, HOWEVER, that in no event shall the Surviving Corporation be required
to expend pursuant to this Section 6.5 more than an amount per year equal to
150% of current annual premiums paid by the Company for such insurance (which
premiums the Company represents and warrants to be $61,000 in the aggregate) and
PROVIDED FURTHER that if the annual premiums exceed such amount, Parent shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount.
(e) This Section shall survive the consummation of the Offer and the Merger,
is intended to benefit the Company, the Surviving Corporation and each
indemnified party, shall be binding, jointly and severally, on all successors
and assigns of the Surviving Corporation and Parent, and shall be enforceable by
the indemnified parties.
(f) After the date of consummation of the Offer, neither Parent nor the
Purchaser shall take any action that would cause the Company not to honor in
accordance with their terms, any employment, severance, consulting, change of
control and other compensation contracts between the Company or any of its
Subsidiaries and any current or former director, officer or employee thereof
listed on SCHEDULE 4.11(B).
SECTION 6.6 EMPLOYEE ARRANGEMENTS. From and after the Effective Time,
Parent shall, or shall cause the Surviving Corporation to, cause any employee
benefit plans, programs, policies or arrangements of the Surviving Corporation
covering any active, former or retired employee of the Surviving Corporation or
its Subsidiaries to give full credit for each participant's period of service
with the Company and its Subsidiaries prior to the Effective Time for all
purposes for which such service was recognized under the Material Plans prior to
the Effective Time, including, but not limited to, recognition of service for
vesting, amount of benefits, eligibility to participate and eligibility for
disability and early retirement benefits (including subsidies relating to such
benefits) and full credit for deductibles satisfied under the Material Plans
toward any applicable deductibles for the same period following the Effective
Time.
SECTION 6.7 COMPANY STOCK OPTION PLANS.
(a) Prior to the Effective Time, the Board of Directors of the Company (or,
if appropriate, any committee administering the Stock Option Plans (as defined
below)) shall adopt such resolutions or take such other actions as are required
to provide that each outstanding Stock Option heretofore granted under any stock
option, stock appreciation rights or stock purchase plan, program or arrangement
of the company (collectively, the "Stock Option Plans") outstanding immediately
prior to the consummation of the Offer, whether or not then exercisable, shall
be, unless otherwise consented to by Parent in its sole discretion, exchanged,
in whole and not in part, for a cash payment from the Company in an amount
(subject to any applicable withholding tax) equal to the product of (i) the
excess of the Merger Price over the per share exercise price of the Stock
Option, multiplied by (ii) the number of Shares covered by the Stock Option
immediately prior to the Effective Time.
(b) Except as provided in this Agreement or as otherwise agreed to by the
parties and to the extent permitted by the Stock Option Plans, (i) the Stock
Option Plans shall terminate as of the Effective Time and (ii) the Company shall
use reasonable efforts to ensure that following the Effective
20
Time no holder of options or any participant in the Stock Option Plans shall
have any right thereunder to acquire any equity securities of the Company, the
Surviving Corporation or any Subsidiary thereof.
SECTION 6.8 COMPANY EMPLOYEE STOCK PURCHASE PLAN. The Company shall take
all actions necessary pursuant to the terms of Stock Purchase Plan in order to
shorten the offering period under such plan which includes the Effective Time
(the "Current Offering"), such that the Current Offering shall terminate at or
prior to the Effective Time (the final day of the Current Offering period being
referred to as the "Final Purchase Date"). On the Final Purchase Date, the
Company shall apply the funds credited as of such date under the Stock Purchase
Plan within each participant's payroll withholdings account to the purchase of
whole shares of Common Stock in accordance with the terms of the Stock Purchase
Plan. The cost to each participant in the Stock Purchase Plan for shares of
Common Stock shall be the lower of 85% of the closing sale price of Common Stock
on the Nasdaq National Market on (i) the first day of the Current Offering
period and (ii) the last trading day on or prior to the Final Purchase Date.
SECTION 6.9 NOTICE OF CERTAIN EVENTS. The Company shall notify Parent, and
Parent shall promptly notify the Company, of:
(i) receipt of any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) receipt of any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement;
(iii) receipt of notice that any actions, suits, claims, investigations
or proceedings have been commenced or, to the knowledge threatened against,
or involving the Company or any of its Subsidiaries, or Parent, as
applicable, which, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.9 or which relate to
the consummation of the transactions contemplated by this Agreement;
(iv) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause any representation or
warranty of it (and, in the case of Parent, of the Purchaser) contained in
this Agreement to be untrue or inaccurate; and
(v) any failure of the Company, Parent or the Purchaser, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section 6.9
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 6.10 OBLIGATIONS OF PURCHASER. Parent will take all action
necessary to cause the Purchaser to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 6.11 VOTING OF SHARES. Parent agrees to cause Purchaser (i) to
vote all Shares beneficially owned by it in favor of adoption of this Agreement
and the Merger at the Stockholders' Meeting, if any such meeting shall be
required by the DGCL, and (ii) if no Stockholders' Meeting shall be required by
the DGCL, file the certificate of ownership providing for the Merger of
Purchaser with and into the Company as soon as permitted under applicable
regulatory requirements and law.
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ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1 CONDITIONS OF EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is subject
to the satisfaction prior to the Closing Date of the following conditions:
(a) STOCKHOLDER APPROVAL. If required by the DGCL, this Agreement and
the Merger shall have been approved and adopted by the affirmative vote or
consent of the stockholders of the Company to the extent required by the
DGCL and the Certificate of Incorporation of the Company.
(b) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any
Governmental Entity of competent jurisdiction nor any statute, rule,
regulation or executive order promulgated or enacted by any Governmental
Entity, nor other legal restriction, restraint or prohibition, preventing
the consummation of the Merger shall be in effect; PROVIDED, HOWEVER, that
each of the parties shall have used reasonable efforts to prevent the entry
of any such injunction or other order and to appeal as promptly practicable
any injunction or other order that may be entered.
(c) THE OFFER. Shares shall have been purchased pursuant to the Offer.
SECTION 7.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger is further subject
to the satisfaction or waiver at or prior to the Effective Time of the
conditions that Parent and the Purchaser shall have performed in all material
respects each of their obligations under this Agreement required to be performed
by them pursuant to the terms hereof and the representations and warranties of
Parent and the Purchaser contained herein shall be true and correct in all
material respects.
ARTICLE VIII
TERMINATION
SECTION 8.1 TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding any
requisite approval of this Agreement and the transactions contemplated hereby by
the stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of Directors
of the Company, Parent and the Purchaser;
(b) by either Parent or the Company if (i) the Cut-Off Date shall not
have occurred on or before May 31, 1996; PROVIDED, HOWEVER, that the right
to terminate this Agreement under this Section 8.1(b) shall not be available
(A) to any party whose failure to fulfill any obligation under this
Agreement has been the substantial cause of, or resulted in, the failure of
the Cut-Off Date to occur on or before such date, or (B) to Parent if it
shall fail to designate persons that will constitute a majority of the Board
of Directors in accordance with Section 1.3 by May 24, 1996; or (ii) any
court of competent jurisdiction or other governmental authority shall have
issued an order, decree, ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the acceptance for payment
of, or payment for, Shares pursuant to the Offer or the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable;
(c) by either Parent or the Company if (i) as a result of an occurrence
or circumstance that would result in the failure of any of the conditions
set forth in ANNEX I hereto the Offer shall have terminated or expired in
accordance with its terms without the Purchaser having accepted for payment
any Shares pursuant to the Offer; or (ii) the Purchaser shall not have
accepted for payment any Shares pursuant to the Offer within 100 days
following the commencement of the
22
Offer; PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this Section 8.1(c) shall not be available to any party the
failure of which (or the failure of the affiliates of which) to perform in
any material respect any of its obligations under this Agreement results in
the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a material breach of a
representation or warranty under this Agreement by such party;
(d) by Parent if prior to the purchase of Shares pursuant to the Offer,
(A) the Board of Directors of the Company or any committee thereof shall
have withdrawn or modified in a manner adverse to the Purchaser or Parent
its approval or recommendation of the Offer, this Agreement, the Merger or
any other transaction contemplated by this Agreement; (B) the Board of
Directors of the Company or any committee thereof shall have recommended to
the stockholders of the Company acceptance of a Competing Transaction; (C)
the Company shall have entered into any definitive agreement with respect to
a Competing Transaction; or (D) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing; or
(e) by the Company if (i) the Board of Directors of the Company shall
have withdrawn or modified in a manner adverse to the Purchaser or Parent
its approval or recommendation of the Offer, this Agreement or the Merger in
order to approve the execution by the Company of a definitive agreement
providing for the transactions contemplated by a Superior Proposal; or (ii)
Parent or the Purchaser shall have breached in any material respect any of
their respective representations, warranties, covenants or other agreements
contained in this Agreement which breach cannot be or has not been cured 20
days after the giving of written notice to Parent or the Purchaser, as
applicable, except, in any case, for such breaches which are not reasonably
likely to affect adversely Parent's or the Purchaser's ability to complete
the Offer or the Merger.
SECTION 8.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except for fraud and for willful
breach of a material obligation contained herein and except that the agreements
contained in Sections 6.3, 8.3 and 9.3 shall survive the termination hereof.
SECTION 8.3 CERTAIN PAYMENTS. In the event that:
(i) any person (including, without limitation, the Company or any
affiliate thereof), other than Parent or any affiliate of Parent, shall have
become the beneficial owner of a majority of the then outstanding Shares and
this Agreement shall have been terminated pursuant to Section 8.1;
(ii) any person shall have commenced, publicly proposed or communicated
to the Company a Competing Transaction and (A) the Offer shall have remained
open for at least 20 business days, (B) the Minimum Condition shall not have
been satisfied, (C) this Agreement shall have been terminated pursuant to
Section 8.1 and (D) the Company shall have consummated a Competing
Transaction with any person other than Parent or any of its affiliates
before or within 12 months after the date of such termination; or
(iii) this Agreement is terminated (A) pursuant to Section 8.1(d) or
Section 8.1(e)(i); or (B) pursuant to Section 8.1(c) to the extent that the
termination or the failure to accept any Shares for payment, as set forth in
Section 8.1(c), shall relate to the intentional failure of the Company to
perform in any material respect any material covenant or agreement of it
contained in this Agreement or the intentional material breach by the
Company of any material representation or warranty of it contained in this
Agreement;
then, in any such event, the Company shall pay Parent promptly (but in no event
later than one business day after the first of such events shall have occurred)
a fee of $3,100,000, which amount shall be payable in immediately available
funds.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 AMENDMENT. This Agreement may be amended by the parties, by
action taken by their respective Boards of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of the Company but, after any such approval, no amendment shall be
made which by law requires further approval by such stockholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 9.2 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties, by action taken by their respective Boards of Directors, may, to
the extent legally allowed (i) extend the time for the performance of any of the
obligations or other acts of the other parties, (ii) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
SECTION 9.3 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger or
termination of this Agreement, as the case may be, except for the agreements
contained in Sections 6.5, 6.6 and 6.7 of this Agreement, each of which shall
survive the Merger, and the agreements contained in Sections 6.3 and 8.3, each
of which shall survive termination of this Agreement.
SECTION 9.4 ENTIRE AGREEMENT. This Agreement (including the Annexes,
Schedules and Exhibits), together with the Confidentiality Agreement, contains
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior arrangements and understandings with respect
thereto.
SECTION 9.5 SEVERABILITY. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, in the event that any term or other
provision of this Agreement would be held in any jurisdiction to be invalid,
prohibited or unenforceable for any reason, all other conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
24
SECTION 9.6 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to be sufficient if contained in a written
instrument and shall be deemed given if delivered personally or telecopied to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or the Purchaser:
CHO Holdings Inc. or CHO Acquisition Inc.
Metro Tower, Suite 1170
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies in each case to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company:
Andros Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chairman of the Board
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ Godward ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices and other communications shall be deemed to have been received
(i) in the case of personal delivery, on the date of such delivery and (ii) in
the case of a telecopy, when the party who receives such telecopy shall have
confirmed receipt of the communication. Notices and other communications which
are delivered by telecopier shall be followed promptly with a copy of the notice
or other communication by registered or certified mail.
SECTION 9.7 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.8 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be borne by the party
incurring such cost or expense.
25
SECTION 9.9 BENEFITS; ASSIGNMENT. This Agreement is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder
and, except as provided in Section 1.1(a), shall not be assigned other than by
operation of law; PROVIDED, HOWEVER, that the officers and directors of the
Company and its Subsidiaries as provided in Section 6.5 are intended
beneficiaries of the covenants and agreements contained in such Section.
SECTION 9.10 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
SECTION 9.11 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its principles of conflicts of laws other than principles directing the
application of Delaware law.
SECTION 9.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreements and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, all as of the date first
written above.
CHO HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇▇ PATERSON______________
Title: Chairman and President
CHO ACQUISITION INC.
By: /s/ ▇▇▇▇-▇▇▇▇▇▇ ▇. CONTE__________
Title: Vice President and
Treasurer
ANDROS INCORPORATED
By: /s/ ▇▇▇ TURNER____________________
Title: Vice President
26
ANNEX I
CONDITIONS OF THE OFFER
DEFINED TERMS. Capitalized terms used in this Annex I and not otherwise
defined shall have the meanings attributed thereto in the Agreement and Plan of
Merger, dated as of February 14, 1996 (the "Merger Agreement"), by and among CHO
Holdings Inc., CHO Acquisition Inc. and Andros Incorporated.
CONDITIONS OF THE OFFER. Notwithstanding any other term of the Offer, the
Purchaser shall not be required to accept for payment or pay for any Shares
tendered pursuant to the Offer, and may terminate or amend the Offer and may
postpone the acceptance for payment of and payment for Shares tendered, if (i)
the Minimum Share Condition shall not have been satisfied, or (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer, (iii) the Purchaser shall not
have obtained financing pursuant to, or on terms and conditions no less
favorable than those contained in, the Financing Commitments (the "Financing
Condition"), or (iv) at any time on or after the date of the Merger Agreement
and before the acceptance of such Shares for payment or the payment therefor,
any of the following conditions exists:
(a) a preliminary or permanent injunction or other order by any federal,
state or foreign court which prevents the acceptance for payment of, or
payment for, some of or all the Shares shall have been issued and shall
remain in effect;
(b) there shall have been instituted or be pending any action or
proceeding by any Governmental Entity (i) challenging the acquisition by the
Purchaser of Shares or otherwise seeking to restrain, materially delay or
prohibit the consummation of the Offer or the Merger or seeking damages that
would make the Offer, the Merger or any other transaction contemplated
hereby materially more costly to Parent or the Purchaser, (ii) seeking to
prohibit or limit materially the ownership or operation by the Purchaser or
Parent of all or a material portion of the business or assets of the Company
and its Subsidiaries, or to compel the Purchaser or Parent to dispose of or
hold separate all or a material portion of the business or assets of the
Company and its Subsidiaries or the Purchaser or Parent, as a result of the
Offer or the Merger, (iii) seeking to impose or confirm limitations on the
ability of Parent or the Purchaser effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by it on all matters properly presented to the
Company's stockholders, including, without limitation, the approval and
adoption of the Merger Agreement and the transactions contemplated hereby,
or (iv) seeking to require divestiture by Parent, the Purchaser or any other
affiliate of Parent of any Shares;
(c) there shall have been any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to
the Offer, the Merger or any other transaction contemplated hereby, Parent,
the Company or any affiliate of Parent or the Company by any Governmental
Entity, except for the waiting period provisions of the HSR Act, which is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (b) above;
(d) any change or effect that, individually or in the aggregate, is or
is reasonably likely to constitute a Material Adverse Effect shall have
occurred following the date of the Merger Agreement;
(e) the Company shall have breached or failed to perform in any material
respect any of its obligations, covenants or agreements under the Merger
Agreement;
1
(f) any representation or warranty of the Company in the Merger
Agreement that is qualified as to materiality shall not be true and correct
or any such representation or warranty that is not so qualified shall not be
true and correct in any material respect, in each case when made and at and
as of such time as if made at and as of such time;
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the Nasdaq National
Market; (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or Canada; (iii) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States or
Canada which has or is reasonably likely to have a Material Adverse Effect;
(iv) any extraordinary material adverse change in the financial markets in
the United States which has or is reasonably likely to have a Material
Adverse Effect; or (v) in the case of any of the foregoing existing on the
date hereof, a material acceleration or worsening thereof;
(h) (i) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of a majority of the then outstanding Shares have been
acquired by any person other than Parent or any of its affiliates or (ii)(A)
the Board of Directors of the Company or any committee thereof shall have
withdrawn or modified in a manner adverse to Parent or the Purchaser the
approval or recommendation of the Offer, the Merger or the Merger Agreement,
or approved or recommended any Competing Transaction or any other
acquisition of Shares other than the Offer and the Merger or (B) the Board
of Directors of the Company or any committee thereof shall have resolved to
do any of the foregoing; or
(i) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent. The foregoing rights of the Purchaser shall be available regardless of
the circumstances giving rise to any such conditions (including any action or
omission to act of the Purchaser) and, subject to Section 1.1(a) of the Merger
Agreement, may be waived by Purchaser or Parent in whole or in part at any time
and from time to time in their sole discretion. Any determination by the
Purchaser will be final and binding upon all parties including tendering
stockholders.
The failure by the Purchaser or Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right; the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time.
2