Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
AMONG
▇▇▇▇▇▇ AUTOMATION, INC.,
PRI AUTOMATION, INC.,
AND
PONTIAC ACQUISITION CORP.
DATED: OCTOBER 23, 2001
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TABLE OF CONTENTS
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Article I. DEFINITIONS...................................... 1
Article II. THE MERGER...................................... 8
Section 2.1 Procedure for the Merger................. 8
Section 2.2 Surviving Corporation.................... 8
Section 2.3 Closing.................................. 8
Section 2.4 Effective Time........................... 8
Section 2.5 Articles of Organization and Bylaws of
the Surviving Corporation............................. 9
Section 2.6 Board of Directors of ▇▇▇▇▇▇............. 9
Section 2.7 Name of ▇▇▇▇▇▇........................... 9
Section 2.8 Reservation of Right to Revise
Transaction........................................... 9
Article III. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.... 9
Section 3.1 Effect of Merger on Capital Stock........ 9
Section 3.2 Dissenting Shares........................ 10
Section 3.3 Exchange of Certificates................. 10
Section 3.4 Options and Warrants..................... 12
Section 3.5 Certain Adjustments...................... 13
Article IV. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇........ 13
Section 4.1 Organization; Standing and Corporate
Power................................................. 13
Section 4.2 Subsidiaries............................. 14
Section 4.3 Capitalization........................... 14
Section 4.4 Authorization of Transaction............. 15
Section 4.5 No Conflict of Transaction With
Obligations and Laws.................................. 15
Section 4.6 Present Compliance with Obligations and
Laws.................................................. 16
Section 4.7 ▇▇▇▇▇▇ SEC Reports....................... 16
Section 4.8 Information Supplied..................... 17
Section 4.9 Absence of Undisclosed Liabilities....... 17
Section 4.10 Absence of Certain Changes............... 18
Section 4.11 Payment of Taxes......................... 18
Section 4.12 Certain Contracts........................ 19
Section 4.13 Legal Proceedings........................ 19
Section 4.14 ERISA and Employee Benefits.............. 20
Section 4.15 Intellectual Property.................... 21
Section 4.16 Environmental Matters.................... 23
Section 4.17 Labor Matters............................ 23
Section 4.18 Brokers.................................. 23
Section 4.19 Opinion of Financial Advisor............. 24
Section 4.20 Ownership of PRI Common Stock............ 24
Section 4.21 Section 203 of the DGCL Not Applicable... 24
Section 4.22 Rights Agreement......................... 24
Section 4.23 ▇▇▇▇▇▇ Action............................ 24
Section 4.24 Certain Tax Matters...................... 24
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Section 4.25 Compliance with Investment Company Act... 25
Article V. REPRESENTATIONS AND WARRANTIES OF PRI............ 25
Section 5.1 Organization; Standing and Corporate
Power................................................. 25
Section 5.2 Subsidiaries............................. 25
Section 5.3 Capitalization........................... 25
Section 5.4 Authorization of Transaction............. 26
Section 5.5 No Conflict of Transaction With
Obligations and Laws.................................. 27
Section 5.6 Present Compliance with Obligations and
Laws.................................................. 28
Section 5.7 PRI SEC Reports.......................... 28
Section 5.8 Information Supplied..................... 29
Section 5.9 Absence of Undisclosed Liabilities....... 29
Section 5.10 Absence of Certain Changes............... 29
Section 5.11 Payment of Taxes......................... 30
Section 5.12 Certain Contracts........................ 31
Section 5.13 Legal Proceedings........................ 31
Section 5.14 Employee Benefits........................ 32
Section 5.15 Intellectual Property.................... 33
Section 5.16 Environmental Matters.................... 35
Section 5.17 Labor Matters............................ 35
Section 5.18 Brokers.................................. 36
Section 5.19 Opinion of Financial Advisor............. 36
Section 5.20 Ownership of ▇▇▇▇▇▇ Common Stock......... 36
Section 5.21 Antitakeover Laws........................ 36
Section 5.22 Rights Agreement......................... 36
Section 5.23 PRI Action............................... 36
Section 5.24 Product Warranties; Product Liability.... 37
Section 5.25 Certain Tax Matters...................... 37
Section 5.26 Compliance with Investment Company Act... 37
Article VI. REPRESENTATIONS AND WARRANTIES RELATED TO ▇▇▇▇▇▇
MERGER SUB................................................ 37
Section 6.1 Organization............................. 37
Section 6.2 Capitalization........................... 37
Section 6.3 Authorization of Transaction............. 37
Article VII. COVENANTS RELATING TO CONDUCT OF BUSINESS...... 38
Section 7.1 Conduct of Business by ▇▇▇▇▇▇............ 38
Section 7.2 Conduct of Business by PRI............... 39
Section 7.3 No Solicitation by PRI................... 42
Article VIII. ADDITIONAL AGREEMENTS......................... 43
Section 8.1 Preparation of Registration Statement and
the Joint Proxy Statement/ Prospectus;
Stockholders Meetings.................... 43
Section 8.2 Letters of PRI's Accountants............. 45
Section 8.3 Letters of ▇▇▇▇▇▇' Accountants........... 45
Section 8.4 Access to Information; Confidentiality... 45
Section 8.5 Best Efforts............................. 46
Section 8.6 Indemnification, Exculpation and
Insurance............................................. 46
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Section 8.7 Fees and Expenses........................ 47
Section 8.8 Public Announcements..................... 48
Section 8.9 Stock Listing............................ 48
Section 8.10 Tax Treatment............................ 48
Section 8.11 Conveyance Taxes......................... 48
Section 8.12 Restraints............................... 48
Section 8.13 Section 16 Matters....................... 48
Section 8.14 Benefit Plans............................ 48
Article IX. CONDITIONS PRECEDENT............................ 49
Section 9.1 Conditions to Each Party's Obligation to
Effect the Merger..................................... 49
Section 9.2 Conditions to Obligations of ▇▇▇▇▇▇...... 50
Section 9.3 Conditions to Obligations of PRI......... 51
Section 9.4 Frustration of Closing Conditions........ 51
Article X. TERMINATION, AMENDMENT AND WAIVER................ 52
Section 10.1 Termination.............................. 52
Section 10.2 Effect of Termination.................... 52
Section 10.3 Amendment................................ 53
Section 10.4 Extension; Waiver........................ 53
Section 10.5 Procedure for Termination, Amendment,
Extension or Waiver................................... 53
Article XI. GENERAL PROVISIONS.............................. 53
Section 11.1 Nonsurvival of Representations and
Warranties............................................ 53
Section 11.2 Notices................................. 53
Section 11.3 Interpretation.......................... 54
Section 11.4 Counterparts............................ 54
Section 11.5 Entire Agreement; No Third-Party
Beneficiaries......................................... 54
Section 11.6 Governing Law........................... 55
Section 11.7 Assignment.............................. 55
Section 11.8 Consent to Jurisdiction................. 55
Section 11.9 Headings................................ 55
Section 11.10 Severability............................ 55
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AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of October 23,
2001, between ▇▇▇▇▇▇ Automation, Inc., a
Delaware corporation ("▇▇▇▇▇▇"),
Pontiac Acquisition Corp., a Massachusetts corporation ("▇▇▇▇▇▇ MERGER SUB"),
and PRI Automation, Inc., a Massachusetts corporation ("PRI").
RECITALS:
WHEREAS, the Boards of Directors of ▇▇▇▇▇▇ and PRI, deeming it advisable
and for the respective benefit of ▇▇▇▇▇▇ and PRI, and their respective
stockholders, have approved a transaction in which ▇▇▇▇▇▇ Merger Sub, a wholly
owned subsidiary of ▇▇▇▇▇▇, would be merged (the "MERGER") with and into PRI,
and the stockholders of PRI would receive ▇▇▇▇▇▇ Common Stock upon the terms and
subject to the conditions set forth in this Agreement and in accordance with the
provisions of the Massachusetts Business Corporation Law (the "MBCL");
WHEREAS, the respective Boards of Directors of ▇▇▇▇▇▇ and PRI have each
determined that the Merger and the other transactions contemplated hereby are
consistent with, and in furtherance of, their respective business strategies and
goals and are in the best interests of their respective stockholders;
WHEREAS, the respective Boards of Directors of ▇▇▇▇▇▇ and PRI have approved
the Merger, upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, as a condition to the willingness of the parties hereto to enter
into this Agreement and as an inducement to the parties to do so,
contemporaneous with the delivery of this Agreement, certain holders of the
capital stock of each of ▇▇▇▇▇▇ and PRI are entering into Voting Agreements in
the form of Exhibits 4.23A and 5.23A, which provide for certain actions related
to the transactions contemplated hereby, including the agreement of those
holders to vote in favor of the Merger;
WHEREAS, for federal income tax purposes, it is intended that the Merger
will qualify as a reorganization under the provisions of Section 368(a) of the
Code and this Agreement shall be, and hereby is, adopted as a plan of
reorganization for purposes of Section 368(a) of the Code; and
WHEREAS, ▇▇▇▇▇▇, ▇▇▇▇▇▇ Merger Sub and PRI desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the consummation of the
Merger;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article:
"AFFILIATE" of a person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person, where "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise.
"AGREEMENT" -- this Agreement, including the Schedules and Exhibits hereto.
"AMENDED CANADIAN ARTICLES" means the Articles of Arrangement of PRI
Canada, as amended to give effect to the terms of the Merger and the issuance of
▇▇▇▇▇▇ Common Stock to holders of PRI Exchangeable Shares instead of PRI Common
Stock.
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"AMENDED MRRS DECISION DOCUMENT" means that MRRS Decision Document dated
February 1, 1999 issued by the Canadian Regulators, amended as necessary in the
opinion of counsel to PRI Canada to give effect to the issuance of ▇▇▇▇▇▇ Common
Stock instead of PRI Common Stock.
"AMENDED SUPPORT AGREEMENT" means the Support Agreement dated March 2, 1999
by and among PRI, PRI Canada and PRI Subco, as amended and restated in
accordance with its terms to give effect to the terms of the Merger, to add
▇▇▇▇▇▇ in place of PRI and to give effect to the issuance of ▇▇▇▇▇▇ Common Stock
to holders of PRI Exchangeable Shares instead of PRI Common Stock.
"AMENDED VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and Exchange
Trust Agreement dated as of March 2, 1999 by and among PRI, PRI Subco, PRI
Canada and Montreal Trust Company of Canada, as amended and restated in
accordance with its terms to give effect to the terms of the Merger, to add
▇▇▇▇▇▇ in place of PRI and to give effect to the issuance of ▇▇▇▇▇▇ Common Stock
to holders of PRI Exchangeable Shares instead of PRI Common Stock.
"ANCILLARY AGREEMENTS" -- the Voting Agreements contemplated by Sections
4.23 and 5.23 and the Employment Agreement contemplated by Section 5.23.
"ARTICLES OF ORGANIZATION" -- as defined in Section 2.5.
"ARTICLES OF MERGER" -- as defined in Section 2.1.
"▇▇▇▇▇▇" -- as defined in the Recitals.
"▇▇▇▇▇▇ COMMON STOCK" -- the Common Stock, $.01 par value, of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 4.15
"▇▇▇▇▇▇ LATEST FORM 10-Q" -- as defined in Section 4.7.
"▇▇▇▇▇▇ MATERIAL CONTRACTS" -- as defined in Section 4.12.
"▇▇▇▇▇▇ MERGER SUB" -- as defined in the Recitals.
"▇▇▇▇▇▇ MERGER SUB COMMON STOCK" -- as defined in Section 6.2.
"▇▇▇▇▇▇ OPTIONS" means any options granted by ▇▇▇▇▇▇ to purchase its Common
Stock pursuant to its stock option plans or otherwise.
"▇▇▇▇▇▇ PREFERRED STOCK" -- as defined in Section 4.3.
"▇▇▇▇▇▇ RIGHTS" has the same meaning as the term "Rights" under the ▇▇▇▇▇▇
Rights Plan.
"▇▇▇▇▇▇ RIGHTS PLAN" means the Rights Agreement dated as of July 23, 1997
between ▇▇▇▇▇▇ and Boston Equiserve Trust Company, N.A. (successor in interest
to BankBoston, N.A.), as amended to date.
"▇▇▇▇▇▇ SEC REPORTS" -- as defined in Section 4.7.
"▇▇▇▇▇▇ SPECIAL VOTING SHARE" means the share of Special Voting Preferred
Stock to be authorized by the Certificate of Incorporation of ▇▇▇▇▇▇ having the
same rights, privileges, restrictions and conditions relative to the ▇▇▇▇▇▇
Common Stock as the PRI Special Voting Stock has relative to the PRI Common
Stock and having that number of votes equal to the number of shares of ▇▇▇▇▇▇
Common Stock that holders of PRI Exchangeable Shares would receive under the
Merger if they held shares of PRI Common Stock.
"▇▇▇▇▇▇ STOCKHOLDER APPROVAL" -- as defined in Section 4.4.
"▇▇▇▇▇▇ STOCKHOLDERS MEETING" -- as defined in Section 8.1.
"▇▇▇▇▇▇ WARRANTS" means any warrants granted by ▇▇▇▇▇▇ to purchase its
Common Stock.
"BYLAWS" -- as defined in Section 2.5.
"CANADIAN REGULATORS" -- as defined in Section 4.5.
"CLOSING" -- as defined in Section 2.3.
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"CLOSING DATE" -- the date and time on which the Closing actually takes
place.
"CODE" -- the Internal Revenue Code of 1986, as amended, or any successor
law.
"COMPANY SHARES" -- as defined in Section 3.3.
"CONFIDENTIALITY AGREEMENT" -- the Mutual Confidentiality and No-Shop
Agreement, dated November 13, 2000 between ▇▇▇▇▇▇ and PRI.
"CONVERTED SHARES" -- as defined in Section 3.3.
"DGCL" means the General Corporation Law of the State of
Delaware.
"DISCLOSURE SCHEDULE" -- the disclosure schedule delivered by each of
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Merger Sub to PRI, and by PRI to ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Merger Sub,
concurrently with the execution and delivery of this Agreement.
"EFFECTIVE TIME" -- as defined in Section 2.4.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation,
severance, insurance coverage or other benefits (other than ordinary cash
compensation) to any current or former director, officer, current or former
employee or consultant (or to any dependent or beneficiary thereof), of either
of ▇▇▇▇▇▇ or PRI, as applicable, or its Subsidiaries, which are now, or were
within the past five years, maintained by either ▇▇▇▇▇▇ or PRI or its respective
Subsidiaries or ERISA Affiliate, or under which it has or could have any
obligation or liability, whether actual or contingent, including, without
limitation, all incentive, bonus, deferred compensation, vacation, holiday,
cafeteria, medical, disability, stock purchase, stock option, stock
appreciation, phantom stock, restricted stock or other stock-based compensation
plans, policies, programs, practices or arrangements.
"ENCUMBRANCE" -- any mortgage, charge, claim, community property interest,
equitable interest, lien, option, pledge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership; and
the verb "ENCUMBER" shall be construed accordingly.
"ENVIRONMENTAL CLAIM" -- any accusation, allegation, notice of violation,
action, claim, Encumbrance, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Authority or any Person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, damage to the environment, nuisance, pollution, contamination
or other adverse effects on the environment, or for fines, penalties or
restrictions resulting from or based upon (a) the existence, or the continuation
of the existence, of a Release (including, without limitation, sudden or
non-sudden accidental or non-accidental Releases) of, or exposure to, any
Hazardous Material or other substance, clinical material, pollutant,
contaminant, odor, audible noise, or other Release in, into or onto the
environment (including, without limitation, the air soil, soil, surface water or
groundwater) at, in, by, from or related to the Facilities or any activities
conducted thereon; (b) the environmental aspects of the transportation, storage,
treatment or disposal of Hazardous Materials in connection with the operation of
the Facilities; or (c) the violation, or alleged violation, of any Environmental
Laws, Orders or Governmental Permits of or from any Governmental Authority
relating to environmental matters connected with the Facilities.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" -- any cost, damage,
expense, liability, obligation or other responsibility arising from or under any
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to: (a) any environmental, health or safety matter or condition
(including on-site or off-site contamination, generation, handling and disposal
of Hazardous Materials, occupational safety and health, and regulation of
chemical and Hazardous Materials); (b) fines, penalties, judgments, awards,
settlements, legal or administrative proceedings, damages, losses, litigation,
including civil and criminal claims, demands and responses, investigative,
remedial, response or inspection costs and expenses arising under Environmental
Law or Occupational Safety and Health Law; (c) financial responsibility under
Environmental Law or Occupational Safety and Health Law for cleanup costs or
corrective action, including
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any investigation, cleanup, removal, containment or other remediation or
response actions required by applicable Environmental Law or Occupational Safety
and Health Law and for any natural resource damages; or (d) any other
compliance, corrective, investigative or remedial measures required under
Environmental Law or Occupational Safety and Health Law. The terms "removal,"
"remedial," and "response action," include the types of activities covered by
the United States Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. sec. 9601 et seq., as amended ("CERCLA").
"ENVIRONMENTAL LAW" -- any Law concerning the environment, or activities
that might threaten or result in damage to the environment or human health, or
any Law that is concerned in whole or in part with the environment and with
protecting or improving the quality of the environment and human and employee
health and safety and includes, but is not limited to, CERCLA, the Hazardous
Materials Transportation Act (49 U.S.C. sec. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. sec. 6901 et seq.), the Clean Water Act
(33 U.S.C. sec. 1251 et seq.), the Clean Air Act (33 U.S.C. sec. 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. sec. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. sec. 136 et seq.) and the
Occupational Safety and Health Act (29 U.S.C. sec. 651 et seq.) ("OSHA"), as
such laws have been amended or supplemented, and the regulations promulgated
pursuant thereto, and any and all analogous state or local statutes, and the
regulations promulgated pursuant thereto.
"ERISA" -- the Employee Retirement Income Security Act of 1974, as amended.
"ERISA AFFILIATE" means any entity (whether or not incorporated) other than
▇▇▇▇▇▇ or PRI, as applicable, or its Subsidiaries that, together with it or its
Subsidiaries, is a member of (a) a controlled group of corporations within the
meaning of Section 414(b) of the Code; (b) a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code; or (c) an
affiliated service group within the meaning of Section 414(m) of the Code.
"EXCHANGE ACT" -- the Securities Exchange Act of 1934, as amended, or any
successor law.
"EXCHANGE AGENT" -- as defined in Section 3.3(a).
"EXCHANGE RATIO" -- as defined in Section 3.1.
"FACILITIES" -- any real property, leaseholds or other interests currently
(or, for purposes of Section 4.16 and 5.16 only, formerly) owned or operated by
a party hereto or any Subsidiary thereof, and any buildings, plants, structures
or equipment (including motor vehicles) currently or formerly owned or operated
by a party hereto or any Subsidiary thereof.
"GAAP" -- United States generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" -- any court, tribunal, authority, agency,
commission, bureau, department, official or other instrumentality of the United
States, any foreign country or any domestic, foreign, regional, state, local,
county, city or other political subdivision.
"GOVERNMENTAL PERMIT" -- any license, franchise, permit or other
authorization of any Governmental Authority.
"HAZARDOUS MATERIALS" -- any substance, material or waste which is
regulated by Environmental Law, including, without limitation, any material or
substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste," "subject waste," "contaminant," "toxic waste" or "toxic substance" under
any provision of Environmental Law, including but not limited to, petroleum
products, asbestos and polychlorinated biphenyls.
"HSR ACT" -- the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, or any successor law.
"JOINT PROXY STATEMENT/PROSPECTUS" -- as defined in Section 8.1.
"KNOWLEDGE" -- of any Person which is not an individual means the actual
knowledge, without investigation, of such Person's executive officers or senior
management of such Person's operating divisions and segments.
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"LAW" -- any federal, state, local or foreign law (including common law),
statute, code, ordinance, rule, regulation or other requirement or guideline.
"LIEN" -- any lien, pledge, hypothecation, levy, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, or other real estate declaration, covenant, condition, restriction or
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.
"MBCL" -- as defined in the Recitals.
"MARKET VALUE" -- as defined in Section 3.3.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when used in
connection with PRI or ▇▇▇▇▇▇, any change, effect, event, occurrence or state of
facts that is, or would reasonably be expected to be, materially adverse to the
business, financial condition or results of operations of such party and its
Subsidiaries, taken as a whole, other than any such change, effect, event,
occurrence or state of facts (a) relating to general economic, regulatory or
political conditions, except to the extent such change, effect, event,
occurrence or state of facts disproportionately affects such party and its
Subsidiaries, taken as a whole, (b) relating to the semiconductor capital
equipment industry, the flat panel display manufacturing equipment industry, or
the data storage industry generally, except to the extent such change, effect,
event, occurrence or state of facts disproportionately affects such party and
its Subsidiaries, taken as a whole, (c) relating to any change in the trading
price of the common stock of such party or (d) relating to any
reduction-in-force. A failure by a party to meet the revenue, earnings or
bookings predictions of equity analysts as reflected in the First Call consensus
estimate or any other revenue, earnings or bookings predictions, including
internal management predictions, for any period ending on or after the date of
this Agreement shall not, in and of itself, and apart from the underlying event,
occurrence or state of facts, if any, be deemed to constitute a Material Adverse
Change or a Material Adverse Effect.
"MERGER" -- as defined in the Recitals.
"MERGER CONSIDERATION" -- as defined in Section 3.1.
"MJDS POLICY" - as defined in Section 4.5.
"NASDAQ" -- as defined in Section 3.3.
"OCCUPATIONAL SAFETY AND HEALTH LAW" -- any legal or governmental
requirement or obligation relating to safe and healthful working conditions or
to reduce occupational safety and health hazards.
"OLD CERTIFICATES" -- as defined in Section 3.3.
"ORDER" -- any order, consent order, stay, injunction, judgment, decree,
consent decree, ruling, writ, assessment or arbitration award of a Governmental
Authority.
"ORGANIZATIONAL DOCUMENTS" -- (a) the articles or certificate of
incorporation or organization and the bylaws or code of regulations of a
corporation; (b) the partnership agreement and any statement of partnership of a
general partnership; (c) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (d) the articles or certificate
of formation and operating agreement of a limited liability company; (e) any
charter, trust certificate or document or similar document adopted or filed in
connection with the creation, formation or organization of a Person; and (e) any
and all currently effective amendments to any of the foregoing.
"PENSION PLAN" means an Employee Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA.
"PERMITTED ENCUMBRANCES" means (a) liens for current taxes and other
statutory liens and trusts not yet due and payable or that are being contested
in good faith, (b) liens that were incurred in the ordinary course of business,
such as carriers', warehousemen's, landlords' and mechanics' liens and other
similar liens arising in the ordinary course of business, (c) liens on personal
property leased under operating leases, (d) liens, pledges or deposits incurred
or made in connection with workmen's compensation, unemployment insurance
5
and other social insurance and social security benefits, or securing the
performance of bids, tenders, leases, contracts (other than for the repayment of
borrowed money), statutory obligations, progress payments, surety and appeal
bonds and other obligations of like nature, in each case incurred in the
ordinary course of business, (e) pledges of or liens on manufactured products as
security for any drafts or bills of exchange drawn in connection with the
importation of such manufactured products in the ordinary course of business,
(f) liens under Article 2 of the Uniform Commercial Code or under applicable
Canadian provincial personal property security Laws that are special property
interests in goods identified as goods to which a contract refers, and (g) liens
under Article 9 of the Uniform Commercial Code or under applicable Canadian
provincial personal property security Laws that are purchase money security
interests, none of which are material in the aggregate or individually.
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Authority.
"PRI" -- as defined in the Recitals.
"PRI ACQUISITION AGREEMENT" -- as defined in Section 7.3.
"PRI CANADA" -- PRI Automation (Canada), Inc., a corporation organized
under the Canada Business Corporations Act.
"PRI CLASS ONE PREFERRED STOCK" -- as defined in Section 5.3.
"PRI COMMON STOCK" -- the Common Stock, $0.01 par value, of PRI.
"PRI COPYRIGHTS" -- as defined in Section 5.15.
"PRI DISSENTING SHARES" -- as defined in Section 3.2.
"PRI EXCHANGEABLE SHARES" means the Exchangeable Shares authorized by the
articles of arrangement of PRI Canada.
"PRI EXCHANGEABLE SHARE PROVISIONS" means the provisions of the articles of
arrangement of PRI Canada relating to the PRI Exchangeable Shares, as
supplemented by the provisions of the PRI Voting and Exchange Trust Agreement
and the PRI Support Agreement.
"PRI INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 5.15.
"PRI LATEST FORM 10-Q" -- as defined in Section 5.7.
"PRI MARKS" -- as defined in Section 5.15.
"PRI MATERIAL CONTRACTS" -- as defined in Section 5.12.
"PRI OPTIONS" -- as defined in Section 3.4.
"PRI PATENTS" -- as defined in Section 5.15.
"PRI PREFERRED STOCK" -- as defined in Section 5.3.
"PRI RIGHTS" -- has the same meaning as the term "Rights" under the PRI
Rights Plan.
"PRI RIGHTS PLAN" means the Rights Agreement dated as of December 9, 1998
between PRI and State Street Bank and Trust Company, as rights agent, as amended
to date.
"PRI SEC REPORTS" -- as defined in Section 5.7.
"PRI SECRET INFORMATION" -- as defined in Section 5.15.
"PRI SERIES A PREFERRED STOCK" -- as defined in Section 5.3.
"PRI SPECIAL VOTING SHARE" -- as defined in Section 5.3.
"PRI STOCKHOLDER APPROVAL" -- as defined in Section 5.4.
"PRI STOCKHOLDERS MEETING" -- as defined in Section 8.1.
6
"PRI SUBCO" -- 1325949 Ontario Inc., an Ontario corporation.
"PRI SUPERIOR PROPOSAL" means any written PRI Takeover Proposal for (i) all
of the capital stock, or (ii) not less than 90% of the assets (except to the
extent a portion not in excess of 30% of the assets is reasonably anticipated to
be required to be disposed of pursuant to any requirement of or agreement
entered into with a regulatory body) of the assets of PRI, which PRI Takeover
Proposal the PRI Board of Directors in good faith believes is reasonably capable
of being completed on terms substantially similar to the terms proposed, for
consideration consisting of cash and/or securities, and otherwise on terms which
the Board of Directors of PRI determines in its good faith judgment after
consultation with a financial advisor of nationally recognized reputation and
considering all relevant factors (including the financial terms and the legal
and regulatory factors), would result in a transaction more favorable to PRI's
stockholders compared with the transactions contemplated by this Agreement and
for which financing, to the extent required, is then committed or which, in the
good faith judgment of the Board of Directors of PRI after consultation with its
financial advisor, is reasonably capable of being obtained by such Person.
"PRI SUPPORT AGREEMENT" means the Support Agreement dated as of March 2,
1999 among PRI, PRI Subco and PRI Canada.
"PRI TAKEOVER PROPOSAL" or "PONTIAC TAKEOVER PROPOSAL" means any inquiry,
proposal or offer from any Person relating to any direct or indirect acquisition
or purchase by such Person of a business or assets that constitutes 15% or more
of the net revenues, net income or assets of PRI and its Subsidiaries, taken as
a whole, or 15% or more of any class of equity securities of PRI, any tender
offer or exchange offer that if consummated would result in any Person
beneficially owning 15% or more of any class of equity securities of PRI, or any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving PRI or the PRI Common Stock (or any
PRI Subsidiary whose business constitutes 30% or more of the net revenues, net
income or assets of PRI and its Subsidiaries, taken as whole), other than the
transactions contemplated by this Agreement.
"PRI TERMINATION FEE" -- as defined in Section 8.7.
"PRI VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and Exchange
Trust Agreement dated as of March 2, 1999 among PRI, PRI Subco, PRI Canada and
Montreal Trust Company of Canada.
"PRI WARRANTS" -- as defined in Section 3.4.
"PROCEEDING" -- any pending formal or informal action, investigation,
arbitration, litigation or other judicial, regulatory or administrative
proceeding.
"REGISTRATION STATEMENT" -- the registration statement on Form S-4 to be
filed by ▇▇▇▇▇▇ with the SEC pursuant to Sections 4.8, 5.8 and 8.1.
"RELEASE" -- any release, spill, effluent, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration into
the indoor or outdoor environment of any Hazardous Material through or in the
air, soil, surface water or groundwater.
"REMEDIAL ACTION" -- all actions, including, without limitation, any
expenditures, required or voluntarily undertaken to (a) clean up, remove, treat,
or in any other way address any Hazardous Material or other substance in the
indoor or outdoor environment; (b) prevent the Release or threat of Release, or
minimize the further Release of any Hazardous Material or other substance so it
does not migrate or endanger or threaten to endanger public health or welfare of
the indoor or outdoor environment; (c) perform pre-remedial studies and
investigations or post-remedial monitoring and care; or (d) bring any Facility
into compliance with all applicable Environmental Laws and Governmental Permits.
"RESTRAINTS" -- as defined in Section 9.1.
"SEC" -- the United States Securities and Exchange Commission.
"SECURITIES ACT" -- the Securities Act of 1933, as amended, or any
successor law.
"SIGNIFICANT SUBSIDIARY" has the meaning specified by Rule 1-02(w) of
Regulation S-X of the SEC.
7
"SUBSIDIARY" -- with respect to any Person means any corporation, joint
venture, limited liability company, partnership, association or other business
entity of which more than 50% of the total voting power of stock or other equity
interest entitled to vote generally in the election of directors or managers or
equivalent positions thereto is owned or controlled, directly or indirectly, by
such Person.
"SURVIVING CORPORATION" -- as defined in Section 2.2.
"TAXES" means all taxes, charges, fees, Encumbrances, customs, duties or
other assessments, however denominated, including any interest, penalties,
additions to tax or additional taxes that may become payable in respect thereof,
imposed by any Governmental Authority, which taxes shall include without
limitation all income taxes, payroll and employee withholding taxes,
unemployment insurance, social security, sales and use taxes, excise taxes,
capital taxes, franchise taxes, gross receipt taxes, occupation taxes, real and
personal property taxes, value added taxes, stamp taxes, transfer taxes,
workers' compensation taxes, taxes relating to benefit plans and other
obligations of the same or similar nature.
"TAX AUTHORITY" means any Governmental Authority that administers Taxes or
enforces the payment or imposition of Taxes.
"TAX RETURN" -- any report, return, declaration, statement, or other
information required to be filed with any Governmental Authority with respect to
or in connection with Taxes.
"TRADING DAY" -- any day on which the Nasdaq National Market is open for
business.
ARTICLE II. THE MERGER
SECTION 2.1 PROCEDURE FOR THE MERGER
Upon the terms and subject to the conditions set forth in this Agreement
(including Section 2.8), ▇▇▇▇▇▇ Merger Sub shall be merged, in accordance with
section 78 of the MBCL, with and into PRI. The Merger shall be effected by
filing articles of merger ("ARTICLES OF MERGER") with the Secretary of State of
the Commonwealth of Massachusetts in accordance with Section 78 of the MBCL.
SECTION 2.2 SURVIVING CORPORATION
Following the Merger, the separate corporate existence of ▇▇▇▇▇▇ Merger Sub
shall cease, and PRI shall continue as the surviving corporation (the "SURVIVING
CORPORATION"). The name of the Surviving Corporation shall be PRI. At the
Effective Time, the purpose of the Surviving Corporation shall be to conduct and
engage in all lawful activities and businesses to the maximum extent permitted
by the MBCL.
SECTION 2.3 CLOSING
The closing of the transactions contemplated by this Agreement (the
"CLOSING") will take place at 10:00 a.m. on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the third business
day after satisfaction or waiver of the conditions set forth in Sections 9.1,
9.2(d) and 9.3(d), unless another time or date is agreed to by the parties
hereto. The Closing will be held at such location in Boston, Massachusetts as is
agreed to by the parties hereto.
SECTION 2.4 EFFECTIVE TIME
Subject to the provisions of this Agreement, as soon as practicable on the
Closing Date, the parties shall cause the Merger contemplated by this Agreement
to be consummated by the filing of the Articles of Merger with the Secretary of
State of the Commonwealth of Massachusetts executed in accordance with the
relevant provisions of the MBCL, and the parties shall make all other filings or
recordings required under the MBCL. The Merger shall become effective at such
time as the Articles of Merger have been duly filed with the Secretary of State
of the Commonwealth of Massachusetts, or at such subsequent date or time as the
parties shall agree and specify in the Articles of Merger (the time the Merger
becomes effective being hereinafter referred to as the "EFFECTIVE TIME").
8
SECTION 2.5 ARTICLES OF ORGANIZATION AND BYLAWS OF THE SURVIVING CORPORATION
Except as provided herein, the Articles of Organization of ▇▇▇▇▇▇ Merger
Sub, as in effect immediately prior to the Effective Time, shall be the articles
of organization of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law (the "ARTICLES OF ORGANIZATION"). The
bylaws of ▇▇▇▇▇▇ Merger Sub, as in effect immediately prior to the Effective
Time, shall be the bylaws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law (the "BYLAWS"). At the
Effective Time, the Surviving Corporation shall be authorized to issue 200,000
shares of common stock, par value $.01 per share. After the Effective Time, the
directors and officers of ▇▇▇▇▇▇ Merger Sub shall be the directors and officers
of the Surviving Corporation.
SECTION 2.6 BOARD OF DIRECTORS OF ▇▇▇▇▇▇
Prior to or contemporaneously with the Effective Time, ▇▇▇▇▇▇ shall
increase the size of its Board of Directors to seven directors and appoint
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and one other designee of PRI (subject to ▇▇▇▇▇▇' approval,
not to be unreasonably withheld) to the Board of Directors of ▇▇▇▇▇▇. If any
such person is unable or unwilling at the Effective Time to serve as a Director
of ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall appoint another designee of PRI in place of such person
(subject to ▇▇▇▇▇▇' approval, not to be unreasonably withheld).
SECTION 2.7 NAME OF ▇▇▇▇▇▇
At or immediately after the Effective Time, the corporate name of ▇▇▇▇▇▇
shall be changed to ▇▇▇▇▇▇ -- PRI Automation, Inc., or as otherwise agreed to
between the parties prior to the Effective Time.
SECTION 2.8 RESERVATION OF RIGHT TO REVISE TRANSACTION
Not later than the effective time of the Joint Proxy Statement/Prospectus,
▇▇▇▇▇▇ (with the consent of PRI, not to be unreasonably withheld) may change the
method of effecting the business combination among ▇▇▇▇▇▇, ▇▇▇▇▇▇ Merger Sub,
and PRI, and each party shall cooperate in such efforts, including to provide
for (a) a merger of PRI with and into ▇▇▇▇▇▇ Merger Sub, (b) a merger of PRI
directly into ▇▇▇▇▇▇, or (c) some other substantially similar structure;
provided, however, that no such change shall (i) alter or change the amount or
kind of consideration to be issued to holders of PRI Common Stock, PRI Options
and PRI Warrants as provided for in this Agreement, (ii) result in the
transaction being a taxable transaction for PRI or PRI's stockholders in the
Merger (including holders of the PRI Exchangeable Shares), (iii) materially
delay receipt of any approval required for the consummation of the transactions
contemplated by this Agreement, (iv) require PRI to obtain the agreement,
approval or consent of any person whose agreement, approval or consent is not
required in connection with the Merger described herein (unless ▇▇▇▇▇▇ shall
waive the requirement to obtain such agreement, approval or consent in a manner
satisfactory to PRI), (v) impair or delay or the consummation of the Merger or
any other transaction contemplated hereby or the ability of any party hereto to
perform its obligations hereunder by more than fifteen calendar days; or (vi) in
PRI's sole judgment, cause PRI to breach any representation, warranty, covenant
or agreement (unless ▇▇▇▇▇▇ shall waive compliance with such representation,
warranty, covenant or agreement in a manner satisfactory to PRI).
ARTICLE III. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.1 EFFECT OF MERGER ON CAPITAL STOCK
At the Effective Time, by virtue of the Merger and without any action on
the part of any party hereto or any holder of any capital stock of ▇▇▇▇▇▇,
▇▇▇▇▇▇ Merger Sub, or PRI:
(a) Each share of ▇▇▇▇▇▇ Common Stock, if any, that is owned by PRI or
any of its Subsidiaries shall be canceled and cease to exist, no
consideration shall be delivered in exchange therefor and each holder of a
certificate representing any such shares shall cease to have any rights
with respect thereto.
9
Each share of PRI Common Stock and the associated PRI Right that is owned
by PRI or any of its Subsidiaries shall be canceled and cease to exist, no
consideration shall be delivered in exchange therefor and each holder of a
certificate representing any such shares shall cease to have any rights
with respect thereto.
(b) Subject to Section 3.3, each share of PRI Common Stock and the
associated PRI Right (other than shares and PRI Rights canceled pursuant to
Section 3.1(a) and PRI Dissenting Shares) issued and outstanding
immediately prior to the Effective Time shall automatically be converted
into the right to receive 0.52 (the "EXCHANGE RATIO") shares of ▇▇▇▇▇▇
Common Stock, together with cash, if any, in lieu of any fractional shares
pursuant to Section 3.3(d). Upon such conversion, all such shares of PRI
Common Stock and associated PRI Rights shall be canceled and cease to
exist, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to receive
the number of whole shares of ▇▇▇▇▇▇ Common Stock to be issued in
consideration therefor and any cash in lieu of fractional shares of ▇▇▇▇▇▇
Common Stock upon the surrender of such certificate in accordance with
Section 3.3, without interest (collectively, the "MERGER CONSIDERATION").
(c) If the approval of the holders of the PRI Exchangeable Shares of the
matters described in Section 9.2(d) and 9.3(d) is obtained, the PRI Special
Voting Share shall automatically be converted into the right to receive the
▇▇▇▇▇▇ Special Voting Share. Upon such conversion, the PRI Special Voting
Share shall be canceled and cease to exist, and the holder of such share
shall cease to have any rights with respect thereto, except the right to
receive the ▇▇▇▇▇▇ Special Voting Share upon the surrender of such
certificate. If such approval is not obtained and the PRI Exchangeable
Shares are redeemed or the exercise of the Redemption Call Right of PRI
Subco as described in Section 9.2(d) and 9.3(d) takes place, the ▇▇▇▇▇▇
Special Voting Share shall be cancelled and the holder of such share shall
cease to have any rights with respect thereto.
(d) Each share of the capital stock of ▇▇▇▇▇▇ Merger Sub issued and
outstanding immediately prior to the Effective Time shall automatically be
converted into one validly issued, fully paid and nonassessable share of
the common stock, $.01 par value per share, of the Surviving Corporation.
SECTION 3.2 DISSENTING SHARES
Notwithstanding anything in this Agreement to the contrary, shares of PRI
Common Stock that have not been voted for adoption of this Agreement and with
respect to which appraisal rights shall have been properly perfected in
accordance with Sections 85 through 98 of the MBCL (the "PRI DISSENTING SHARES")
shall not be converted into the right to receive the Merger Consideration in
accordance with this Agreement, at or after the Effective Time, unless and until
the holder of such PRI Dissenting Shares withdraws his demand for such appraisal
in accordance with the MBCL or becomes ineligible for such appraisal. If a
holder of PRI Dissenting Shares shall withdraw his demand for such appraisal in
accordance with the MBCL, or shall become ineligible for such appraisal, then,
as of the later of the Effective Time or the occurrence of such event, such
holder's PRI Dissenting Shares shall cease to be PRI Dissenting Shares and shall
be deemed to have converted as of the Effective Time into the right to receive
the Merger Consideration into which his PRI Common Stock would otherwise have
converted as of the Effective Time pursuant to this Agreement. PRI shall give
prompt notice to ▇▇▇▇▇▇ of any demands received by PRI for appraisal of any
shares of capital stock of PRI, and ▇▇▇▇▇▇ shall have the right to participate,
on an equal basis with PRI, in all negotiations, proceedings and settlements
with respect to such demands. Before the Effective Time, PRI shall not, without
the prior written consent of ▇▇▇▇▇▇, which consent shall not be unreasonably
withheld or delayed, make any payment with respect to, or settle or offer to
settle, any such demands, or agree to do any of the foregoing.
SECTION 3.3 EXCHANGE OF CERTIFICATES
(a) As soon as practicable after the Effective Time, ▇▇▇▇▇▇ shall deposit
with its transfer agent (or a bank or trust company designated by ▇▇▇▇▇▇ prior
to the Effective Time) (the "EXCHANGE AGENT") certificates representing shares
of ▇▇▇▇▇▇ Common Stock required to effect the exchanges referred to in Section
3.1, together with cash in an amount estimated in good faith to equal or exceed
the amount payable pursuant to Section 3.3(d) in lieu of fractional shares.
10
(b) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a certificate or certificates that,
immediately prior to the Effective Time, represented outstanding shares of PRI
Common Stock (collectively, the "OLD CERTIFICATES") that were converted
(collectively, the "CONVERTED SHARES") into the right to receive shares of
▇▇▇▇▇▇ Common Stock (collectively, the "COMPANY SHARES") pursuant to Section
3.1, (i) a form of letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to any Old Certificate shall pass,
only upon actual delivery of such Old Certificate to the Exchange Agent) and
(ii) instructions for use in effecting the surrender of Old Certificates in
exchange for certificates representing Company Shares and cash in lieu of the
fraction of a share of Company Shares, if any, payable pursuant to Section
3.3(d) hereof. Upon surrender of an Old Certificate to the Exchange Agent (or to
such other agent or agents as may be appointed by ▇▇▇▇▇▇), together with a duly
executed letter of transmittal and such other documents as the Exchange Agent
shall require, the holder of such Old Certificate shall be entitled to receive
in exchange therefor a certificate representing the number of whole Company
Shares that such holder has the right to receive pursuant to the provisions of
this Article III and payment in lieu of fractional shares which such holder has
the right to receive pursuant to Section 3.3(d) hereof, and the Old Certificate
so surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Converted Shares that is not registered in the transfer records of
PRI a certificate representing the proper number of Company Shares may be issued
to the transferee if the Old Certificate representing such Converted Shares is
presented to the Exchange Agent, accompanied by all documents deemed by the
Exchange Agent to be required to evidence and effect such transfer and by
evidence satisfactory to the Exchange Agent that any applicable stock transfer
taxes have been paid. If any Old Certificate shall have been lost, stolen,
mislaid or destroyed, then upon receipt of (x) an affidavit of that fact from
the holder claiming such Old Certificate to be lost, mislaid, stolen or
destroyed, (y) such bond, security or indemnity as ▇▇▇▇▇▇ or the Exchange Agent
may reasonably require, and (z) any other documentation deemed by the Exchange
Agent to be necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder a certificate representing the number
of Company Shares into which the shares represented by such lost, stolen,
mislaid or destroyed Old Certificate shall have been converted. Until
surrendered as contemplated by this Section 3.3, each Old Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration upon such surrender.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to Company Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Old Certificate
with respect to the Company Shares represented thereby, and no cash payment in
lieu of fractional shares shall be made to any such holder pursuant to Section
3.3(d), until the holder of record of such Old Certificate shall surrender such
Old Certificate as contemplated by Section 3.3(b). Subject to the effect of
unclaimed property, escheat and other applicable laws, following surrender of
any such Old Certificate there shall be paid to the holder of the certificates
representing whole Company Shares issued in exchange therefor, without interest,
(i) at the time of such surrender or as soon thereafter as may be practicable,
the amount of any cash payable in lieu of a fractional Company Share to which
such holder is entitled pursuant to Section 3.3(d) and the amount of dividends
or other distributions with a record date after the Effective Time theretofore
paid with respect to such whole Company Shares and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole Company Shares.
(d) No certificates or scrip representing fractional Company Shares shall
be issued upon the surrender for exchange of Old Certificates, and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a holder of Company Shares. In lieu thereof, each holder of Converted
Shares who would otherwise be entitled to a fraction of a Company Share (after
aggregating all fractional Company Shares to be received by such holder) shall
receive from ▇▇▇▇▇▇ an amount of cash (rounded down to the nearest whole cent),
without interest, equal to the product of such fraction multiplied by the Market
Value of the Company Shares. The "MARKET VALUE" of the Company Shares means the
closing price per share of the Company Shares (rounded to the nearest cent) on
the Nasdaq National Market ("NASDAQ") (as reported in the Wall Street Journal,
or, if not reported therein, any other authoritative source selected by ▇▇▇▇▇▇)
on the day of the Closing.
11
(e) All Company Shares issued upon the surrender for exchange of Converted
Shares in accordance with the terms of this Article III (including any cash paid
in respect thereof) shall be deemed to have been issued in full satisfaction of
all rights pertaining to such Converted Shares under this Article III. From and
after the Effective Time, the stock transfer books of PRI shall be closed and no
transfer of any capital stock of PRI shall thereafter be made. If after the
Effective Time Old Certificates are presented to ▇▇▇▇▇▇ for registration of
transfer, they shall be canceled and exchanged for certificates representing the
number of whole Company Shares and the cash amount, if any, determined in
accordance with Article III.
(f) Any certificates representing Company Shares deposited with the
Exchange Agent pursuant to Section 3.3(a) and not exchanged within one year
after the Effective Time pursuant to this Section 3.3 shall be returned by the
Exchange Agent to ▇▇▇▇▇▇, which shall thereafter act as Exchange Agent. All
funds held by the Exchange Agent for payment to the holders of unsurrendered Old
Certificates and unclaimed at the end of one year from the Effective Time shall
be returned to ▇▇▇▇▇▇, whereupon any holder of unsurrendered Old Certificates
shall look as a general unsecured creditor only to ▇▇▇▇▇▇ for payment of any
funds to which such holder may be entitled, subject to applicable law. Neither
the Exchange Agent nor ▇▇▇▇▇▇ shall be liable to any person for such shares or
funds delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(g) ▇▇▇▇▇▇ and the Exchange Agent will be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement such amounts
as ▇▇▇▇▇▇ or the Exchange Agent are required to deduct and withhold with respect
to the making of such payment under the Code, or any provision of federal,
state, local or foreign Tax Law. To the extent that amounts are so withheld by
▇▇▇▇▇▇ or the Exchange Agent, such withheld amounts will be treated for all
purposes of this Agreement as having been paid to the holder of PRI Common Stock
in respect of whom such deduction and withholding were made by ▇▇▇▇▇▇ or the
Exchange Agent.
SECTION 3.4 OPTIONS AND WARRANTS
(a) As of the Effective Time, all (i) options granted by PRI to purchase
its Common Stock pursuant to its stock option plans or otherwise ("PRI OPTIONS")
and (ii) warrants granted by PRI to purchase its Common Stock ("PRI WARRANTS"),
whether vested or unvested, whether or not exercisable, shall be assumed by
▇▇▇▇▇▇. Immediately after the Effective Time, each PRI Option and PRI Warrant
outstanding immediately prior to the Effective Time shall be deemed to
constitute an option or warrant to acquire, on the same terms and conditions as
were applicable under such PRI Option or PRI Warrant at the Effective Time, the
number of shares of ▇▇▇▇▇▇ Common Stock equal to the number of shares of PRI
Common Stock subject to the unexercised portion of such PRI Option or PRI
Warrant multiplied by the Exchange Ratio (rounded down to the nearest whole
share). The exercise price per share of each such assumed PRI Option or PRI
Warrant shall be equal to the exercise price of such PRI Option or PRI Warrant
immediately prior to the Effective Time, divided by the Exchange Ratio (rounded
up to the nearest cent). The terms, exercisability, vesting schedule, status as
an "incentive stock option" under Section 422 of the Code, if applicable, and
all of the other terms of the PRI Options and PRI Warrants shall otherwise
remain unchanged. Without limiting the foregoing, for purposes of determining
vesting of the PRI Options and otherwise, employees of ▇▇▇▇▇▇ or the Surviving
Corporation will be credited for their full term during which they were employed
by PRI to the extent relevant under the terms of their respective options.
(b) Before or as of the Effective Time, PRI shall take all necessary
actions with respect to the PRI Options and PRI Warrants under the plans and
instruments governing such PRI Options and PRI Warrants, if any, to provide for
the conversion of the PRI Options and PRI Warrants into options and warrants to
acquire shares of ▇▇▇▇▇▇ Common Stock in accordance with this Section 3.4.
(c) As soon as practicable after the Effective Time, ▇▇▇▇▇▇ shall deliver
to the holders of PRI Options and PRI Warrants appropriate notices setting forth
such holders' rights pursuant to such PRI Options and PRI Warrants, as amended
by this Section 3.4, and the agreements evidencing such PRI Options and PRI
Warrants shall continue in effect on the same terms and conditions (subject to
the amendments provided for in this Section 3.4).
12
(d) ▇▇▇▇▇▇ shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of ▇▇▇▇▇▇ Common Stock for delivery upon
exercise of the PRI Options and PRI Warrants assumed in accordance with this
Section 3.4. Before the Effective Time, ▇▇▇▇▇▇ shall file one or more
registration statements on Form S-8 (or any successor or other appropriate form)
under the Securities Act with respect to all shares of ▇▇▇▇▇▇ Common Stock
subject to PRI Options that may be registered on a Form S-8, and shall use
commercially reasonable efforts to maintain the effectiveness of any such
registration statement for so long as such PRI Options remain outstanding.
SECTION 3.5 CERTAIN ADJUSTMENTS
If between the date hereof and the Effective Time, the outstanding shares
of PRI Common Stock or of ▇▇▇▇▇▇ Common Stock shall be changed into a different
number of shares by reason of any reclassification, recapitalization,
reorganization, split-up, combination or exchange of shares, or if any dividend
payable in stock or other securities shall be declared thereon with a record
date within such period, or if the ▇▇▇▇▇▇ Rights become exercisable or are
exercised, the Exchange Ratio shall be adjusted accordingly to provide to the
holders of PRI Common Stock the same economic benefit as was contemplated by
this Agreement prior to such reclassification, recapitalization, reorganization,
split-up, combination, exchange or dividend. If the PRI Rights become
exercisable or are exercised, ▇▇▇▇▇▇, ▇▇▇▇▇▇ Merger Sub and PRI shall promptly
negotiate in good faith an amendment to this Agreement that will adjust the
Exchange Ratio accordingly and make such other changes to the
Merger Agreement
so as to provide the holders of each share of PRI Common Stock and the holders
of each 1/100,000 of a share of Class One Preferred Stock (other than an
Acquiring Person as defined in the PRI Rights Plan) the same economic benefit as
was contemplated hereunder prior to such event for the holder of each share of
PRI Common Stock.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
Except as disclosed in the ▇▇▇▇▇▇ SEC Reports or as set forth on the ▇▇▇▇▇▇
Disclosure Schedule delivered by ▇▇▇▇▇▇ to PRI prior to the execution of this
Agreement and making reference to the particular subsection of this Agreement to
which exception is being taken, ▇▇▇▇▇▇ represents and warrants to PRI as set
forth in this Article IV. The ▇▇▇▇▇▇ Disclosure Schedule shall be arranged in
sections and paragraphs corresponding to the numbered and lettered sections and
paragraphs contained in this Article IV and the disclosure in any section or
paragraph shall qualify other sections and paragraphs in this Article IV only to
the extent that it is reasonably apparent from a reading of such disclosure that
it also qualifies or applies to such other sections and paragraphs.
SECTION 4.1 ORGANIZATION; STANDING AND CORPORATE POWER
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries is a corporation or other legal
entity duly organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the jurisdiction
in which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except for those jurisdictions where the failure to be in good standing,
individually or in the aggregate, would not have a Material Adverse Effect on
▇▇▇▇▇▇. Each of ▇▇▇▇▇▇ and its Subsidiaries is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing, individually or in the
aggregate, would not have a Material Adverse Effect on ▇▇▇▇▇▇.
(b) ▇▇▇▇▇▇ has delivered to PRI prior to the execution of this Agreement
complete and correct copies of its Organizational Documents, as amended to date.
(c) Except as set forth in Section 4.1 of the ▇▇▇▇▇▇ Disclosure Schedule,
the minute books of ▇▇▇▇▇▇ which have been made available to PRI contain, in all
material respects, accurate records of all meetings and accurately reflect all
other actions taken by the stockholders, the Board of Directors and all
committees of the Board of Directors of ▇▇▇▇▇▇ since January 1, 1996.
13
SECTION 4.2 SUBSIDIARIES
Section 4.2 of the ▇▇▇▇▇▇ Disclosure Schedule includes all the Subsidiaries
of ▇▇▇▇▇▇ which as of the date of this Agreement are Significant Subsidiaries.
Except as otherwise indicated on the ▇▇▇▇▇▇ Disclosure Schedule, all the
outstanding shares of capital stock of, or other equity interests in, each such
Significant Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and are owned directly or indirectly by ▇▇▇▇▇▇,
free and clear of all Encumbrances.
SECTION 4.3 CAPITALIZATION
(a) The authorized capital stock of ▇▇▇▇▇▇ presently consists of 43,000,000
shares of ▇▇▇▇▇▇ Common Stock and 1,000,000 shares of preferred stock, par value
$.01 per share ("▇▇▇▇▇▇ PREFERRED STOCK"), of which 21,500 shares have been
designated Series A Junior Participating Preferred Stock. At the close of
business on October 19, 2001: (i) 19,904,968 shares of ▇▇▇▇▇▇ Common Stock were
issued and outstanding; (ii) no shares of ▇▇▇▇▇▇ Common Stock were held by
▇▇▇▇▇▇ in its treasury or by any Subsidiaries of ▇▇▇▇▇▇; and (iii) no shares of
▇▇▇▇▇▇ Preferred Stock were issued and outstanding or held by ▇▇▇▇▇▇ in its
treasury or by any Subsidiaries of ▇▇▇▇▇▇. There has been no material change in
such capitalization between that date and the date of this Agreement. At or
prior to the Effective Time, the authorized capital stock of ▇▇▇▇▇▇ shall be
increased to consist of (i) 100,000,000 shares of ▇▇▇▇▇▇ Common Stock and
1,000,000 shares of Preferred Stock, of which 100,000 shares shall have been
designated Series A Junior Participating Preferred Stock, and (iii) the ▇▇▇▇▇▇
Special Voting Share.
(b) Section 4.3 of the ▇▇▇▇▇▇ Disclosure Schedule sets forth a complete and
correct list, as of October 19, 2001, of the number of shares of ▇▇▇▇▇▇ Common
Stock subject to ▇▇▇▇▇▇ Options, ▇▇▇▇▇▇ Warrants and other rights to purchase or
receive ▇▇▇▇▇▇ Common Stock (other than the ▇▇▇▇▇▇ Rights), the dates of grant
and exercise prices thereof.
(c) All outstanding shares of capital stock of ▇▇▇▇▇▇ are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive rights. All shares of capital stock of ▇▇▇▇▇▇ which may be issued
under the ▇▇▇▇▇▇ Options and the ▇▇▇▇▇▇ Warrants are duly authorized and not
subject to preemptive rights, and, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be
validly issued, fully paid and nonassessable.
(d) Except as set forth in this Section 4.3 or in Section 4.3 of the ▇▇▇▇▇▇
Disclosure Schedule and except for changes since October 19, 2001 resulting from
the issuance of shares of ▇▇▇▇▇▇ Common Stock pursuant to the ▇▇▇▇▇▇ Options:
(i) there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of ▇▇▇▇▇▇, (B) any securities of ▇▇▇▇▇▇
or any ▇▇▇▇▇▇ Subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of ▇▇▇▇▇▇, (C) any warrants, calls,
options or other rights to acquire from ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary, or any
obligation of ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary to issue, deliver or sell, or
cause to be issued, delivered or sold, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of ▇▇▇▇▇▇; and (ii) there are no obligations, contingent or
otherwise, of ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary to repurchase, redeem or otherwise
acquire any such securities of ▇▇▇▇▇▇ or to provide funds to or make any
material investment (in the form of a loan, capital contribution or otherwise)
in any such Subsidiary or any other entity other than guarantees of bank
obligations of Subsidiaries entered into in the ordinary course of business.
Except as set forth in Section 4.3 of the ▇▇▇▇▇▇ Disclosure Schedule, there are
not issued, reserved for issuance or outstanding (A) any securities of ▇▇▇▇▇▇ or
any ▇▇▇▇▇▇ Subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or other voting securities or ownership interests in any ▇▇▇▇▇▇
Subsidiary, or (B) any warrants, calls, options or other rights to acquire from
▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary, or any obligation of ▇▇▇▇▇▇ or any ▇▇▇▇▇▇
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any ▇▇▇▇▇▇ Subsidiary.
Except as set forth in Section 4.3 of the ▇▇▇▇▇▇ Disclosure Schedule, there are
no obligations, contingent or otherwise, of ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary to
repurchase, redeem or otherwise acquire any such securities of any ▇▇▇▇▇▇
Subsidiary.
14
(e) Except as set forth in Section 4.3 of the ▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇ nor any ▇▇▇▇▇▇ Subsidiary is a party to any agreement restricting
the transfer of, relating to the voting of, requiring registration of, or
granting any preemptive, or antidilutive rights with respect to, any securities
of the type referred to in paragraph (a), (b) or (d). Other than the ▇▇▇▇▇▇
Subsidiaries, except as set forth in Section 4.3 of the ▇▇▇▇▇▇ Disclosure
Schedule, ▇▇▇▇▇▇ does not directly or indirectly beneficially own any securities
or other beneficial ownership interests in any other entity except for
non-controlling investments made in the ordinary course of business in entities
which are not individually or in the aggregate material to ▇▇▇▇▇▇ and its
Subsidiaries as a whole. To the Knowledge of ▇▇▇▇▇▇, other than as set forth in
Section 4.3 of the ▇▇▇▇▇▇ Disclosure Schedule or in connection with the
Ancillary Agreements, there are no voting trusts, proxies or other voting
agreements or understandings with respect to the shares of capital stock of
▇▇▇▇▇▇.
SECTION 4.4 AUTHORIZATION OF TRANSACTION
▇▇▇▇▇▇ has all requisite power and authority to execute, deliver and
perform this Agreement, any Ancillary Agreements delivered pursuant to this
Agreement, the Amended Support Agreement and the Amended Voting and Exchange
Trust Agreement, to perform its obligations hereunder and thereunder, and to
carry out the transactions contemplated hereby and thereby and to create the
▇▇▇▇▇▇ Special Voting Share. Subject to the adoption of this Agreement, the
approval of the Merger by a majority of the outstanding shares of ▇▇▇▇▇▇ Common
Stock entitled to vote on this Agreement and the Merger (collectively, the
"▇▇▇▇▇▇ STOCKHOLDER APPROVAL"), the creation of the ▇▇▇▇▇▇ Special Voting Share,
the entering into by ▇▇▇▇▇▇ of the Amended Support Agreement and the Amended
Voting and Exchange Trust Agreement, all necessary action, corporate or
otherwise, has been taken by ▇▇▇▇▇▇ to authorize the execution, delivery and
performance of this Agreement, each of the Ancillary Agreements, the Amended
Support Agreement, the Amended Voting and Exchange Trust Agreement and the
transactions contemplated hereby and thereby. This Agreement and the Ancillary
Agreements have been duly executed and delivered by ▇▇▇▇▇▇ and constitute legal,
valid and binding obligations of ▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in
accordance with their respective terms, except (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any Proceeding therefor
may be brought. At the Closing, the Amended Support Agreement and the Amended
Voting and Exchange Trust Agreement will have been duly executed and delivered
by ▇▇▇▇▇▇ and, when so executed, will constitute legal, valid and binding
obligations of ▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in accordance with their
respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, and (ii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any Proceeding therefor
may be brought.
SECTION 4.5 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS
(a) Except as set forth in Section 4.5 of the ▇▇▇▇▇▇ Disclosure Schedule
and subject to compliance with the requirements of paragraph (b) below, none of
the execution, delivery and performance of this Agreement, the Ancillary
Agreements, the Amended Support Agreement and the Amended Voting and Exchange
Trust Agreement nor the consummation of the transactions contemplated hereby or
thereby, will: (i) constitute a breach or violation of the Organizational
Documents of ▇▇▇▇▇▇ or any Significant Subsidiary; (ii) require any Order,
consent, waiver, exemption, approval or authorization of, declaration, filing or
registration with, or giving of notice to, any Governmental Authority; (iii)
constitute (with or without the passage of time or the giving of notice) a
breach of, or default under, any debt instrument to which ▇▇▇▇▇▇ or any
Significant Subsidiary is a party, or give any person the right to accelerate
any indebtedness or terminate, modify or cancel any right with respect to any
indebtedness; (iv) constitute (with or without the passage of time or giving of
notice) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under or breach
of in any material respect any other agreement, instrument or obligation to
which ▇▇▇▇▇▇ or any Subsidiary is a party or by which ▇▇▇▇▇▇ or any Subsidiary
or any of their assets are bound; (v) result in the creation of any Encumbrance
upon any of the assets of ▇▇▇▇▇▇ or any Subsidiary; (vi) result in a violation
of any Law applicable to ▇▇▇▇▇▇ or any Subsidiary, or their businesses or
15
assets; or (vii) invalidate or adversely affect any material Governmental Permit
used in ▇▇▇▇▇▇' or any Subsidiary's business, except in the case of clauses
(iii), (iv) and (v), such conflicts, breaches or defaults as will not have a
Material Adverse Effect on ▇▇▇▇▇▇. Except as set forth in Section 4.5 of the
▇▇▇▇▇▇ Disclosure Schedule, none of the execution, delivery and performance of
this Agreement and the Ancillary Agreements nor the consummation of the
transactions contemplated hereby or thereby will give rise to a right of any
party (other than ▇▇▇▇▇▇ or any Subsidiary) to terminate, modify or cancel any
contract, agreement or other instrument required to be disclosed in the ▇▇▇▇▇▇
Disclosure Schedule or disclosed in the ▇▇▇▇▇▇ SEC Reports.
(b) The consummation of the transactions contemplated hereby and by the
Ancillary Agreements requires: (1) the filing of a pre-merger notification and
report form by ▇▇▇▇▇▇ under the HSR Act and any other documents or information
requested by the United States Department of Justice or the United States
Federal Trade Commission in connection therewith; (2) the filing of similar
notifications, applications, documents and information with anti-competition
authorities of foreign jurisdictions; (3) the filing with the SEC of (A) a proxy
statement relating to the ▇▇▇▇▇▇ Stockholders Meeting as part of the Joint Proxy
Statement/Prospectus, and (B) such reports under Section 13(a) or 15(d) of the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated hereby; (4) the filing of the Articles of Merger with
the Secretary of State of the Commonwealth of Massachusetts; (5) the creation of
the ▇▇▇▇▇▇ Special Voting Share and all required corporate filings in connection
therewith; (6) such filings with Governmental Authorities as are necessary to
satisfy the applicable requirements of state securities or "blue sky" laws; and
(7) notification under the Investment Canada Act (Canada) of consummation of the
transaction prior to or within 30 days after consummation; (8) the receipt of
the Amended MRRS Decision Document on or before Closing; (9) if appropriate
exemptions are not available, the filing of the Joint Proxy Statement/Prospectus
pursuant to and in accordance with National Instrument 71-101 -- the
Multijurisdictional Disclosure System (the "MJDS Policy") of the Canadian
provincial securities regulators (the "Canadian Regulators"); (10) approval by
the Toronto Stock Exchange of the Amended Canadian Articles and the listing of
the PRI Exchangeable Shares or any exchangeable shares issued in place thereof;
(11) the issuance by the Canadian Regulators of all exemptive orders required in
connection with the issuance of ▇▇▇▇▇▇ Common Stock in Canada; and (12) such
other consents, waivers, exemptions, declarations, filings, registrations,
notices, approvals, Orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a Material Adverse
Effect on ▇▇▇▇▇▇ or (y) reasonably be expected to impair the ability of ▇▇▇▇▇▇
to perform its obligations under this Agreement or the Ancillary Agreements.
SECTION 4.6 PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS
Except as set forth in Section 4.6 in the ▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇ nor any Subsidiary is: (a) in violation of its Organizational
Documents; (b) in default in any material respect in the performance of any
obligation, agreement or condition of any debt instrument that (with or without
the passage of time or the giving of notice) affords to any person the right to
accelerate any indebtedness or terminate any right; (c) in default of or in
breach of in any material respect (with or without the passage of time or the
giving of notice) any other contract to which it is a party or by which it or
its assets are bound, except for such defaults or breaches that will not singly
or in the aggregate have a Material Adverse Effect on ▇▇▇▇▇▇; or (d) in
violation of any Order or Governmental Permit that is held by ▇▇▇▇▇▇ or any
Subsidiary applicable to any of them or their respective businesses or assets.
▇▇▇▇▇▇ and the Subsidiaries have conducted and are now conducting their
businesses and the ownership and operation of their assets in compliance in all
material respects with all applicable Laws, including, without limitation, the
▇▇▇▇▇▇▇ Act, the ▇▇▇▇▇▇▇ Act, the Federal Trade Commission Act and the rules and
regulations thereunder and all Environmental Laws.
SECTION 4.7 ▇▇▇▇▇▇ SEC REPORTS
(a) ▇▇▇▇▇▇ has filed all registration statements, prospectuses, reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) required to be filed with the SEC for
the period commencing October 1, 1996 (the "▇▇▇▇▇▇ SEC REPORTS"). As of their
respective
16
dates, the ▇▇▇▇▇▇ SEC Reports complied in all material respects with the
requirements of 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 Reports, and none of the ▇▇▇▇▇▇ SEC Reports when filed (or, if
amended or superseded by a filing before the date of this Agreement, then on the
date of such filing) 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.
(b) The financial statements of ▇▇▇▇▇▇ included in the ▇▇▇▇▇▇ SEC Reports
(including any related notes) complied as to form, as of their respective dates
of filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-Q or Form 8-K, as applicable, 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 ▇▇▇▇▇▇ and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations 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 not and are not expected to be material
in amount) and except that, in the case of financial statements included therein
which were later restated to account for one or more business combinations
accounted for as poolings-of-interest, such original financial statements do not
reflect such restatements).
(c) Except as set forth in Section 4.7 of the ▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇ or its Subsidiaries, as applicable, (i) owns all right, title and
interest in and to each of the material assets shown or reflected on the balance
sheet included in the Form 10-Q for the nine months ended June 30, 2001 filed by
▇▇▇▇▇▇ (the "▇▇▇▇▇▇ LATEST FORM 10-Q") (except where such assets have been sold
in the ordinary course of business since June 30, 2001), free and clear of all
Encumbrances (other than Permitted Encumbrances), or (ii) licenses, leases or
otherwise possesses legally valid and enforceable rights to use each of such
assets.
SECTION 4.8 INFORMATION SUPPLIED
(a) None of the information supplied or to be supplied by ▇▇▇▇▇▇
specifically for inclusion or incorporation by reference in (i) the registration
statement on Form S-4 to be filed with the SEC by ▇▇▇▇▇▇ in connection with the
issuance of ▇▇▇▇▇▇ Common Stock in the Merger (the "REGISTRATION STATEMENT")
will, at the time the Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (ii) the Joint Proxy Statement/Prospectus will, at the date it
is first mailed to stockholders of ▇▇▇▇▇▇ or PRI or at the time of the ▇▇▇▇▇▇
Stockholders Meeting or the PRI Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the ▇▇▇▇▇▇
Stockholders Meeting or the PRI Stockholders Meeting which has become false or
misleading.
(b) The Joint Proxy Statement/Prospectus will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by
▇▇▇▇▇▇ with respect to statements made, omitted or incorporated by reference
therein based on information supplied by PRI specifically for inclusion or
incorporation by reference in the Joint Proxy Statement/Prospectus.
SECTION 4.9 ABSENCE OF UNDISCLOSED LIABILITIES
Neither ▇▇▇▇▇▇ nor any Subsidiary has any liabilities of any nature,
whether accrued, absolute, contingent or otherwise (including without limitation
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for Taxes due or then accrued or to become due), except: (a)
liabilities stated or
17
adequately reserved against on the balance sheet included in the ▇▇▇▇▇▇ Latest
Form 10-Q, (b) liabilities incurred since June 30, 2001 in the ordinary course
of business consistent with past practices, (c) liabilities disclosed on
Schedule 4.9 of the ▇▇▇▇▇▇ Disclosure Schedule, and (d) other liabilities not in
excess of $15 million in the aggregate. To the Knowledge of ▇▇▇▇▇▇, there is no
fact that will have a Material Adverse Effect on ▇▇▇▇▇▇ which has not been
specifically disclosed herein or in a schedule hereto.
SECTION 4.10 ABSENCE OF CERTAIN CHANGES
Since June 30, 2001, ▇▇▇▇▇▇ and its Subsidiaries have conducted their
businesses only in the ordinary course of business, consistent with prior
practices and, whether or not in the ordinary course of business, there has not
been any Material Adverse Change with respect to ▇▇▇▇▇▇. Without limiting the
generality of the foregoing, except as disclosed on Schedule 4.10 of the ▇▇▇▇▇▇
Disclosure Schedule, since June 30, 2001 there has not been:
(a) any amendment to the Organizational Documents of ▇▇▇▇▇▇ or any
Subsidiary;
(b) any material contingent liability incurred by ▇▇▇▇▇▇ or any of its
Subsidiaries as guarantor or otherwise with respect to the obligations of
others;
(c) any material Encumbrance placed on any of the properties of ▇▇▇▇▇▇
or any Subsidiary which remains in existence on the date hereof;
(d) any material obligation or liability incurred by ▇▇▇▇▇▇ or any of
its Subsidiaries other than obligations and liabilities incurred in the
ordinary course of business consistent with past practice (none of which is
a claim for breach of contract, breach of duty, breach of warranty, tort or
infringement of an intellectual property right);
(e) any sale or other disposition, or any agreement or other arrangement
for the sale or other disposition, of any material properties or assets of
▇▇▇▇▇▇ or any of its Subsidiaries other than in the ordinary course of
business; or
(f) any declaration, setting aside or payment of any dividend on, or the
making of any other distribution in respect of, the capital stock of
▇▇▇▇▇▇, or any direct or indirect redemption, purchase or other acquisition
by ▇▇▇▇▇▇ of its capital stock.
SECTION 4.11 PAYMENT OF TAXES
Except as set forth in Section 4.11 of the ▇▇▇▇▇▇ Disclosure Schedule:
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries has duly and timely filed all
Tax Returns that they were required to file, except where the failure to
file would not have a Material Adverse Effect. All of such Tax Returns were
complete and correct in all material respects. All Taxes shown to be due on
such Tax Returns have been paid or are being contested in good faith by
▇▇▇▇▇▇ and such contest is being diligently pursued, all of which contested
Taxes are listed in Section 4.11 of the ▇▇▇▇▇▇ Disclosure Schedule. With
respect to all other Taxes for which no Tax Return is required or which
have not yet accrued or otherwise become due, adequate provision has been
made in the financial statements included in the SEC Reports. The
provisions for Taxes reflected in the above-mentioned financial statements
are adequate to cover any Tax liabilities of ▇▇▇▇▇▇ and its Subsidiaries in
respect of their business, properties and operations during the periods
covered by said financial statements and all prior periods. All material
Taxes and other assessments and levies that ▇▇▇▇▇▇ or any Subsidiary of
▇▇▇▇▇▇ was required to withhold or collect have been withheld or collected
and paid over or will be paid over to proper governmental authorities as
required. None of ▇▇▇▇▇▇ and its Subsidiaries currently is the beneficiary
of any extension of time within which to file any Tax Return.
(b) No material deficiencies have been asserted or assessments made
against ▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇, nor is any Tax Authority now
asserting or, to the Knowledge of ▇▇▇▇▇▇, threatening to assert against
▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇ any material deficiency or claim for
additional Taxes or interest thereon or penalties in connection therewith.
18
(c) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has waived any statute of
limitations with respect to Taxes or agreed to an extension of time with
respect to a Tax assessment or deficiency, which waiver or extension
currently remains in effect.
(d) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries is a "consenting
corporation" within the meaning of Section 341(f) of the Code, and none of
the assets of ▇▇▇▇▇▇ or its Subsidiaries are subject to an election under
Section 341(f) of the Code.
(e) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has been a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(f) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has any actual or
potential liability for any Taxes of any person (other than any of ▇▇▇▇▇▇
and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of federal, state, local or foreign law), or as a
transferee or successor, by contract, or otherwise.
(g) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has undergone a change in
its method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481 of the Code.
(h) As of the end of ▇▇▇▇▇▇' most recent taxable year, none of the net
operating loss carryovers, capital loss carryovers, credit carryovers, or
other tax attributes of ▇▇▇▇▇▇ or its Subsidiaries are subject to
limitation under Sections 382 or 383 of the Code or to separate return year
limitations under the applicable consolidated return provisions of the
Treasury Regulations.
SECTION 4.12 CERTAIN CONTRACTS
(a) Except as set forth in the ▇▇▇▇▇▇ SEC Reports or in Section 4.12 of the
▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇ nor any of its Subsidiaries is a
party to or bound by (i) any "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC), (ii) any non-competition
agreement or any other agreement or obligation which purports to limit in any
material respect the manner in which, or the localities in which, all or any
material portion of the business of ▇▇▇▇▇▇ and its Subsidiaries, taken as a
whole, has been, or will be, conducted, or (iii) any contract or other agreement
which would prohibit or materially delay the consummation of the Merger or any
of the transactions contemplated by this Agreement (all contracts of the type
described in clauses (i) and (ii) being referred to herein as "▇▇▇▇▇▇ MATERIAL
CONTRACTS").
(b) Each ▇▇▇▇▇▇ Material Contract is valid and binding on ▇▇▇▇▇▇ (or, to
the extent a ▇▇▇▇▇▇ Subsidiary is a party, such Subsidiary) and is in full force
and effect, and ▇▇▇▇▇▇ and each ▇▇▇▇▇▇ Subsidiary and to ▇▇▇▇▇▇' Knowledge each
other party thereto have in all material respects performed all obligations
required to be performed by them to date under each ▇▇▇▇▇▇ Material Contract,
except where such noncompliance, individually or in the aggregate, would not
have a Material Adverse Effect on ▇▇▇▇▇▇. Neither ▇▇▇▇▇▇ nor any ▇▇▇▇▇▇
Subsidiary Knows of, or has received notice of, any violation or default under
(nor, to the Knowledge of ▇▇▇▇▇▇, does there exist any condition which with the
passage of time or the giving of notice or both would result in such a violation
or default under) any ▇▇▇▇▇▇ Material Contract by ▇▇▇▇▇▇.
SECTION 4.13 LEGAL PROCEEDINGS
(a) Except as set forth in the ▇▇▇▇▇▇ SEC Reports or in Section 4.13 of the
▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇ nor any Subsidiary has received
notice of, nor to its Knowledge does there exist, any Proceeding that has been
commenced by or against ▇▇▇▇▇▇ or any Subsidiary or any of the officers,
directors, former officers or directors, employees, shareholders or agents of
either ▇▇▇▇▇▇ or any Subsidiary (in their capacities as such) or that otherwise
relates to the business of, or any of the assets or properties owned or used by,
any of them which, if determined adversely, would have a Material Adverse Effect
on ▇▇▇▇▇▇, nor, to the Knowledge of ▇▇▇▇▇▇, are there any facts which could
reasonably be expected to lead to such a Proceeding.
19
(b) There is no Proceeding that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby or by any of the Ancillary Agreements.
SECTION 4.14 ERISA AND EMPLOYEE BENEFITS
(a) Except for the Employee Benefit Plans listed on Section 4.14 of the
▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇ nor any Subsidiary nor any ERISA
Affiliate of any of them maintains, has an obligation to contribute to, or has
any actual or contingent liability with respect to, any Employee Benefit Plan.
▇▇▇▇▇▇ and its Subsidiaries will deliver to PRI or its counsel within 15 days
after the date hereof true and complete copies of (i) plan instruments and
amendments thereto for all Employee Benefit Plans required to be listed on
Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule (or written summaries of any such
Employee Benefit Plans that are unwritten) and related trust agreements,
insurance and other contracts, summary plan descriptions, and summaries of
material modifications, and material communications distributed to the
participants of each such Employee Benefit Plan, (ii) to the extent annual
reports on Form 5500 are required with respect to any such Employee Benefit
Plan, the three most recent annual reports and attached schedules for each such
Employee Benefit Plan as to which such report is required to be filed, (iii)
where applicable, the most recent (A) opinion, notification and determination
letters, (B) audited financial statements, (C) actuarial valuation reports and
(D) nondiscrimination tests performed under the Code (including Section 401(k)
and 401(m) tests) for each such Employee Benefit Plan, and (iv) all contracts
with third party administrators, investment managers, actuaries, consultants,
vendors or insurance or mutual fund companies.
(b) Except as set forth on Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇ nor any of its Subsidiaries nor any of their ERISA Affiliates
maintains or has ever maintained or contributed to an Employee Benefit Plan
subject to Title IV of ERISA (including a multiemployer plan as defined in ERISA
Section 3(37) and no facts exist under which any of them could incur any
liability under Title IV of ERISA.
(c) With respect to each Employee Benefit Plan required to be listed on
Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule, (i) no party in interest or
disqualified person (as defined in Section 3(14) of ERISA and Section 4975 of
the Code, respectively) has at any time engaged in a transaction which could
subject ▇▇▇▇▇▇, PRI or any of their Subsidiaries or ERISA Affiliates, directly
or indirectly, to a Tax, penalty or liability for prohibited transactions
imposed by ERISA Section 406 or Code Section 4975 and (ii) no fiduciary (as
defined in Section 3(21) of ERISA) with respect to any such Employee Benefit
Plan, for whose conduct ▇▇▇▇▇▇, PRI or any of their Subsidiaries could have any
liability (by reason of indemnities or otherwise), has breached any of the
responsibilities or obligations imposed upon the fiduciary under Title I of
ERISA.
(d) Each Employee Benefit Plan required to be listed on Section 4.14 of the
▇▇▇▇▇▇ Disclosure Schedule which is a "welfare plan" within the meaning of
Section 3(1) of ERISA and which provides health, disability or death benefits is
fully insured and does not utilize a trust intended to be exempt from Tax
pursuant to Section 501 of the Code and neither ▇▇▇▇▇▇ nor any Subsidiary is
obligated to directly pay any such benefits or to reimburse any third Person
payor for the payment of such benefits.
(e) Each Employee Benefit Plan required to be listed on Section 4.14 of the
▇▇▇▇▇▇ Disclosure Schedule which is a Pension Plan and which is subject to
Sections 201, 301 or 401 of ERISA has received a favorable determination letter
from the Internal Revenue Service covering all amendments required by the Tax
Reform Act of 1986 and prior legislation and there are no circumstances that are
likely to result in revocation of any such favorable determination letter.
Except as noted on Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule, no Pension
Plan has assets other than securities listed on a public exchange, public stock
market, mutual fund shares registered under federal law, publicly traded debt or
government debt instruments, or participant loans extended in accordance with
its terms. Each Employee Benefit Plan required to be listed on Section 4.14 of
the ▇▇▇▇▇▇ Disclosure Schedule is and has been operated in material compliance
with its terms and all applicable Laws and Orders currently in effect with
respect thereto, and by its terms can be amended and/or terminated at any time.
(f) Except as set forth on Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule
with respect to each Employee Benefit Plan required to be listed on Section 4.14
of the ▇▇▇▇▇▇ Disclosure Schedule, no event or omission has
20
occurred, and there exists no condition, claim, or set of circumstances in
connection with which ▇▇▇▇▇▇, or any of Subsidiaries could be subject to any
liability, loss, damage, Tax, penalty or expense.
(g) Except as set forth on Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule,
the execution and delivery of this Agreement by ▇▇▇▇▇▇, the performance by
▇▇▇▇▇▇ of its obligations hereunder and consummation by ▇▇▇▇▇▇ of the
transactions contemplated by this Agreement will not, alone or together with any
other event, (i) entitle any employee or former employee of ▇▇▇▇▇▇ or any of its
Subsidiaries to any payment, (ii) result in an increase in the amount of
compensation or benefits or accelerate the vesting or timing of payment of any
benefits or compensation, including but not limited to stock options or benefits
under any deferred compensation plan, payable in respect of any employee or
former employee of ▇▇▇▇▇▇ or any of its Subsidiaries, or (iii) result in any
parachute payment under Section 280G of the Code, whether or not such payment is
considered reasonable compensation for services rendered.
(h) ▇▇▇▇▇▇ and its Subsidiaries will take all actions within their control
to ensure that all actions required to be taken by a fiduciary of any Employee
Benefit Plan required to be listed on Section 4.14 of the ▇▇▇▇▇▇ Disclosure
Schedule in order to effectuate the transaction contemplated by this Agreement
shall comply with the terms of such Employee Benefit Plan, ERISA and other
applicable Laws.
(i) No Employee Benefit Plan required to be listed on Section 4.14 of the
▇▇▇▇▇▇ Disclosure Schedule provides benefits, including without limitation death
or medical benefits (through insurance or otherwise), with respect to any
employee or former employee of ▇▇▇▇▇▇ or any of its Subsidiaries beyond their
retirement or other termination of service, other than (i) continuation or other
coverage mandated by applicable Law, (ii) retirement or death benefits under any
Pension Plan disclosed on Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule, (iii)
disability benefits under any welfare plan that have been fully provided for by
insurance or otherwise, (iv) deferred compensation benefits accrued as
liabilities on the consolidated books of ▇▇▇▇▇▇ or (v) benefits in the nature of
severance pay.
(j) No Employee Benefit Plan required to be listed on Section 4.14 of the
▇▇▇▇▇▇ Disclosure Schedule is a "multiple employer plan" as described in Section
3(40) of ERISA or Section 413(c) of the Code.
(k) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has proposed, agreed to or
announced any changes to any Employee Benefit Plan required to be listed on
Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule that would cause an increase in
benefits under any such Employee Benefit Plan (or the creation of new benefits
or plans) or to change any employee coverage which would cause an increase in
the expense of maintaining any such plan, except as required by amendments to
Section 401(a) of the Code.
(l) Other than claims for benefits submitted by participants or
beneficiaries in the ordinary course, no claim against, investigation or request
for information, or Proceeding involving any Employee Benefit Plan required to
be listed on Section 4.14 of ▇▇▇▇▇▇ Disclosure Schedule is pending, or to the
Knowledge of ▇▇▇▇▇▇, threatened.
SECTION 4.15 INTELLECTUAL PROPERTY
(a) As used herein, the term "▇▇▇▇▇▇ Intellectual Property Assets" shall
mean all worldwide intellectual property rights which are material to the
conduct of the business of ▇▇▇▇▇▇ or one of its Subsidiaries as it is currently
conducted or as proposed to be conducted by ▇▇▇▇▇▇ or any of its Subsidiaries,
including without limitation in both cases: (A) all trademarks, service marks,
trade names, common law trademarks, business names, Internet domain names, trade
dress, slogans, and the goodwill associated therewith, and all registrations or
applications therefor (collectively, "▇▇▇▇▇▇ ▇▇▇▇▇"); (B) all patents and patent
applications (collectively, "▇▇▇▇▇▇ Patents"); (C) all copyrights in both
published works and unpublished works, including training manuals, marketing and
promotional materials, internal reports, business plans and any other
expressions, mask works and software, firmware and videos, whether registered or
unregistered, and all registrations or applications in connection therewith
(collectively, "▇▇▇▇▇▇ Copyrights"); and (D) information which is considered to
be secret, confidential and proprietary, including all trade secrets, know-how,
confidential information, customer lists, technical information, proprietary
information, technologies, processes and formulae, source code, object code,
library functions, flow charts, algorithms, architecture,
21
structure, display screens and development tools, data, plans, drawings and blue
prints, whether tangible or intangible and whether stored, compiled, or
memorialized physically, electronically, photographically, or otherwise
(collectively, "▇▇▇▇▇▇ Secret Information").
(b) Except as set forth in Section 4.15 of the ▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇ or one of its Subsidiaries, as applicable, (i) owns all right, title and
interest in and to each of the ▇▇▇▇▇▇ Intellectual Property Assets, free and
clear of all Encumbrances, or (ii) licenses or otherwise possesses legally valid
and enforceable rights to use each of the ▇▇▇▇▇▇ Intellectual Property Assets.
▇▇▇▇▇▇ and its Subsidiaries have made all necessary filings and recordations to
protect and maintain their interests in the ▇▇▇▇▇▇ Intellectual Property Assets
except where the failure to make such filings or recordation would not have a
Material Adverse Effect on ▇▇▇▇▇▇.
(c) Except as set forth in Section 4.15 of the ▇▇▇▇▇▇ Disclosure Schedule
(i) to the Knowledge of ▇▇▇▇▇▇, all ▇▇▇▇▇▇ Patents owned by ▇▇▇▇▇▇ or any of its
Subsidiaries are valid and subsisting and all maintenance fees, annuities and
the like required to be paid before the date hereof have been paid; (ii) to the
Knowledge of ▇▇▇▇▇▇, none of the issued ▇▇▇▇▇▇ Patents is infringed; (iii) to
the Knowledge of ▇▇▇▇▇▇, neither the validity nor the enforceability of any of
the ▇▇▇▇▇▇ Patents has been challenged or threatened in any way by any Person;
and (iv) no Person has notified ▇▇▇▇▇▇ in writing that any of the products or
technology used, sold, offered for sale or licensed or proposed for use, sale,
offer for sale or license by ▇▇▇▇▇▇ or any of its Subsidiaries infringes any
rights of any Person.
(d) (i) To the Knowledge of ▇▇▇▇▇▇, all ▇▇▇▇▇▇ ▇▇▇▇▇ owned by ▇▇▇▇▇▇ or any
of its Subsidiaries are valid and subsisting; (ii) to the Knowledge of ▇▇▇▇▇▇,
none of the ▇▇▇▇▇▇ ▇▇▇▇▇ is infringed or diluted, (iii) to the Knowledge of
▇▇▇▇▇▇, none of the ▇▇▇▇▇▇ ▇▇▇▇▇ owned by ▇▇▇▇▇▇ or any of its Subsidiaries has
been opposed or challenged, and, to the Knowledge of ▇▇▇▇▇▇, no claims exist
against the use by ▇▇▇▇▇▇ or any of its Subsidiaries of any ▇▇▇▇▇▇ ▇▇▇▇▇; and
(iv) to the Knowledge of ▇▇▇▇▇▇, all uses of registered ▇▇▇▇▇▇ ▇▇▇▇▇ are in
conformance with applicable statutory and common law so as not to compromise the
strength, good will, and integrity of the ▇▇▇▇▇▇ ▇▇▇▇▇.
(e) To the Knowledge of ▇▇▇▇▇▇, (i) all the ▇▇▇▇▇▇ Copyrights owned by
▇▇▇▇▇▇ or any of its Subsidiaries which are material to the consolidated
business, whether or not registered, are valid and enforceable; (ii) to the
Knowledge of ▇▇▇▇▇▇ none of the ▇▇▇▇▇▇ Copyrights is infringed or has been
challenged or threatened in any way; and (iii) no claims exist against the use
by ▇▇▇▇▇▇ or any of its Subsidiaries of any writings or other expressions used
in the business of ▇▇▇▇▇▇ or any of its Subsidiaries as currently conducted or
as proposed to be conducted.
(f) ▇▇▇▇▇▇ and its Subsidiaries have taken reasonable measures to protect
the secrecy, confidentiality and value of their ▇▇▇▇▇▇ Secret Information. To
the Knowledge of ▇▇▇▇▇▇, the ▇▇▇▇▇▇ Secret Information has not been used,
divulged or appropriated for the benefit of any Person (other than ▇▇▇▇▇▇ or any
of its Subsidiaries). To the Knowledge of ▇▇▇▇▇▇, none of the ▇▇▇▇▇▇ Secret
Information is subject to any material adverse claim. Reasonably appropriate
policies are in place to protect the continued secrecy, confidentiality and
value of the ▇▇▇▇▇▇ Secret Information.
(g) Except as set forth in Section 4.15 of the ▇▇▇▇▇▇ Disclosure Schedule,
to the Knowledge of ▇▇▇▇▇▇, no ▇▇▇▇▇▇ Intellectual Property Asset is subject to
any outstanding Order, Proceeding (other than pending Proceedings pertaining to
applications for patent, trademark or copyright registration), or stipulation
restricting in any manner the licensing thereof by ▇▇▇▇▇▇ or any of its
Subsidiaries. Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has entered into any
agreement to indemnify any other person against any charge of infringement of
the intellectual property rights of any other Person, other than indemnification
as part of the sale or licensing of the products of ▇▇▇▇▇▇ and its Subsidiaries
in the ordinary course of business.
(h) To the Knowledge of ▇▇▇▇▇▇, all employees, contractors, agents and
consultants of ▇▇▇▇▇▇ or any of its Subsidiaries who are involved in the
creation of ▇▇▇▇▇▇ Intellectual Property Assets or who have access to ▇▇▇▇▇▇
Secret Information have executed a nondisclosure and assignment of inventions
agreement to protect the confidentiality and to vest in ▇▇▇▇▇▇ or any of its
Subsidiaries exclusive ownership of ▇▇▇▇▇▇ Intellectual Property Assets, except
where the failure to have executed such an agreement will not have a Material
22
Adverse Effect. To ▇▇▇▇▇▇' Knowledge, neither ▇▇▇▇▇▇ nor any of its Subsidiaries
has written or oral agreements with any employees, contractors, agents or
consultants with respect to the ownership of inventions, trade secrets or other
works as a result of which any such employee, contractor, agent or consultant
may have rights to any material portion of the ▇▇▇▇▇▇ Intellectual Property
Assets.
SECTION 4.16 ENVIRONMENTAL MATTERS
(a) To the Knowledge of ▇▇▇▇▇▇, each of ▇▇▇▇▇▇ and its Subsidiaries is in
compliance in all material respects with applicable Environmental Laws, which
compliance includes, but is not limited to, the possession by each of all
Governmental Permits required by any Governmental Authority to operate its
business or under applicable Environmental Laws, and compliance in all material
respects with the terms and conditions thereof. Neither ▇▇▇▇▇▇ nor any of its
Subsidiaries has received notice of, nor, to the Knowledge of ▇▇▇▇▇▇, is any
predecessor of any of them the subject of, any Environmental Claim or Remedial
Action. To the Knowledge of ▇▇▇▇▇▇, ▇▇▇▇▇▇ and its Subsidiaries have no material
Environmental, Health and Safety Liabilities. To the Knowledge of ▇▇▇▇▇▇, there
are no circumstances or conditions related to ▇▇▇▇▇▇ or any of its Subsidiaries,
their operations or Facilities that are reasonably likely to prevent or
interfere with such compliance or give rise to an Environmental Claim or
Remedial Action in the future.
(b) There are no Environmental Claims that are pending or, to the Knowledge
of ▇▇▇▇▇▇, threatened against ▇▇▇▇▇▇ or any of its Subsidiaries or against any
Person whose liability for any Environmental Claim ▇▇▇▇▇▇ or any of its
Subsidiaries has retained or assumed either contractually or by operation of
Law.
(c) To the Knowledge of ▇▇▇▇▇▇, neither ▇▇▇▇▇▇ nor any of its Subsidiaries,
nor any other Person acting on behalf of any of them, has disposed of,
transported, stored, or arranged for the disposal of any Hazardous Materials to,
at or upon: (i) any location other than a site lawfully permitted to receive
such Hazardous Materials; (ii) any Facilities except for the use of household
cleaners and office products in the ordinary course of business in compliance
with applicable Environmental Laws; or (iii) any site which, pursuant to CERCLA
or any similar state Law, has been placed on the National Priorities List,
CERCLIS or their state equivalents. To the Knowledge of ▇▇▇▇▇▇, there has not
occurred during the period ▇▇▇▇▇▇ or any of its Subsidiaries operated or
possessed any Facility, nor is there presently occurring, a Release, or
threatened Release, of any Hazardous Materials on, into or beneath the surface
of, or adjacent to, any Facilities except for the use of household cleaners and
office products in the ordinary course of business in material compliance with
applicable Environmental Laws.
SECTION 4.17 LABOR MATTERS
Except as set forth on Section 4.17 of the ▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇ nor any of its Subsidiaries is a party to or otherwise bound by
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither ▇▇▇▇▇▇ nor any
of its Subsidiaries is the subject of any Proceeding of which ▇▇▇▇▇▇ or any
Subsidiary has received written notice or is otherwise aware asserting that
▇▇▇▇▇▇ or any of its Subsidiaries has committed an unfair labor practice or is
seeking to compel it to bargain with any labor union or labor organization that,
individually or in the aggregate, is reasonably likely to have a ▇▇▇▇▇▇ Material
Adverse Effect, nor is there pending or, to the Knowledge of ▇▇▇▇▇▇, threatened,
any labor strike, dispute, walkout, work stoppage or lockout involving ▇▇▇▇▇▇ or
any of its Subsidiaries that, individually or in the aggregate, is reasonably
likely to have a ▇▇▇▇▇▇ Material Adverse Effect.
SECTION 4.18 BROKERS
No broker, investment banker, financial advisor or other person other than
Credit Suisse First Boston Corporation (the fees and expenses of which will be
paid by ▇▇▇▇▇▇), is entitled to any broker's, finder's, financial advisor's or
other similar fee, commission or payment in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
▇▇▇▇▇▇. ▇▇▇▇▇▇ has furnished to PRI true and complete copies of all agreements
under which any such fees, commissions or payments are
23
payable and all indemnification and other agreements related to the engagement
of the persons to whom such fees, commissions or payments are payable.
SECTION 4.19 OPINION OF FINANCIAL ADVISOR
The Board of Directors of ▇▇▇▇▇▇ has received the opinion of Credit Suisse
First Boston Corporation dated the date of this Agreement, to the effect that,
as of the date of the opinion, the Exchange Ratio for the conversion of PRI
Common Stock into ▇▇▇▇▇▇ Common Stock is fair from a financial point of view to
▇▇▇▇▇▇, a signed copy of which opinion will be delivered to PRI solely for
informational purposes promptly after receipt thereof by ▇▇▇▇▇▇, it being
understood and agreed by PRI that such opinion is for the benefit of the Board
of Directors of ▇▇▇▇▇▇ and may not be relied upon by PRI, its Affiliates or any
of their respective stockholders.
SECTION 4.20 OWNERSHIP OF PRI COMMON STOCK
Except as set forth in Section 4.20 of the ▇▇▇▇▇▇ Disclosure Schedule, as
of the date hereof, neither ▇▇▇▇▇▇ nor, to its Knowledge without independent
investigation, any of its Affiliates, (i) beneficially owns (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, or (ii) is party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of PRI.
SECTION 4.21 SECTION 203 OF THE DGCL NOT APPLICABLE
The Board of Directors of ▇▇▇▇▇▇ has taken all actions so that the
restrictions contained in Section 203 of the DGCL applicable to a "business
combination" (as defined therein) will not apply to, and no other "fair price,"
"business combination," "moratorium," "control share acquisition" or other form
of antitakeover Law will apply to, the execution, delivery or performance of
this Agreement or the Stockholders Agreement or the consummation of the Merger
or the other transactions contemplated by this Agreement.
SECTION 4.22 RIGHTS AGREEMENT
Immediately prior to the execution of this Agreement, ▇▇▇▇▇▇ has (a) duly
entered into an appropriate amendment to the ▇▇▇▇▇▇ Rights Plan, which amendment
has been provided to PRI, and approved by the Board of Directors of ▇▇▇▇▇▇ and
(b) taken all other action necessary or appropriate so that the entering into of
this Agreement by ▇▇▇▇▇▇ and the entering into of the Voting Agreements by the
Stockholders of ▇▇▇▇▇▇ specified in Section 4.23 of this Agreement do not and
will not result in the ability of any Person to exercise any ▇▇▇▇▇▇ Rights under
the ▇▇▇▇▇▇ Rights Plan or enable or require the ▇▇▇▇▇▇ Rights issued thereunder
to separate from the shares of ▇▇▇▇▇▇ Common Stock to which they are attached or
to be triggered or become exercisable.
SECTION 4.23 ▇▇▇▇▇▇ ACTION
▇▇▇▇▇▇ has obtained and delivered to PRI a duly executed Voting Agreement
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ substantially in the form
attached hereto as Exhibit 4.23A, pursuant to which, among other things, each
such Person has agreed to vote all ▇▇▇▇▇▇ Common Stock owned by such Person or
over which he has voting control, in favor of this Agreement and the Merger and
irrevocably granted a proxy, coupled with an interest, to PRI or its designee to
vote such shares of ▇▇▇▇▇▇ Common Stock in favor of this Agreement and the
Merger.
SECTION 4.24 CERTAIN TAX MATTERS
To its Knowledge, after consulting with its independent auditors, neither
▇▇▇▇▇▇ nor any of its Affiliates has taken or agreed to take any action that
would prevent the Merger from constituting a transaction qualifying as a
reorganization under Section 368(a) of the Code.
24
SECTION 4.25 COMPLIANCE WITH INVESTMENT COMPANY ACT
▇▇▇▇▇▇ is not an "investment company" as defined in the Investment Company
Act of 1940, as amended.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PRI
Except as disclosed in the PRI SEC Reports or as set forth on the PRI
Disclosure Schedule delivered by PRI to ▇▇▇▇▇▇ prior to the execution of this
Agreement and making reference to the particular subsection of this Agreement to
which exception is being taken, PRI represents and warrants to ▇▇▇▇▇▇ as set
forth in this Article V. The PRI Disclosure Schedule shall be arranged in
sections and paragraphs corresponding to the numbered and lettered sections and
paragraphs contained in this Article V and the disclosure in any section or
paragraph shall qualify other sections and paragraphs in this Article V only to
the extent that it is reasonably apparent from a reading of such disclosure that
it also qualifies or applies to such other sections and paragraphs.
SECTION 5.1 ORGANIZATION; STANDING AND CORPORATE POWER
(a) Each of PRI and its Subsidiaries is a corporation or other legal entity
duly organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the jurisdiction
in which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except for those jurisdictions where the failure to be in good standing,
individually or in the aggregate, would not have a Material Adverse Effect on
PRI. Each of PRI and its Subsidiaries is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing, individually or in the
aggregate, would not have a Material Adverse Effect on PRI.
(b) PRI has delivered to ▇▇▇▇▇▇ prior to the execution of this Agreement
complete and correct copies of its Organizational Documents, as amended to date.
(c) Except as set forth in Section 5.1 of the PRI Disclosure Schedule, the
minute books of PRI which have been made available to ▇▇▇▇▇▇ contain, in all
material respects, accurate records of all meetings and accurately reflect all
other actions taken by the stockholders, the Board of Directors and all
committees of the Board of Directors of PRI since January 1, 1995.
SECTION 5.2 SUBSIDIARIES
Section 5.2 of the PRI Disclosure Schedule includes all the Subsidiaries of
PRI which as of the date of this Agreement are Significant Subsidiaries. Except
as set forth in Section 5.2 of the PRI Disclosure Schedule, all the outstanding
shares of capital stock of, or other equity interests in, each such Significant
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable and, except for the PRI Exchangeable Shares, are owned directly or
indirectly by PRI, free and clear of all Encumbrances.
SECTION 5.3 CAPITALIZATION
(a) The authorized capital stock of PRI consists of 75,000,000 shares of
PRI Common Stock and 400,000 shares of preferred stock, par value $0.01 per
share ("PRI PREFERRED STOCK"), of which 10,000 shares have been designated as
Class One Participating Cumulative Preferred Stock (the "PRI CLASS ONE PREFERRED
STOCK"), 250,000 shares have been designated as Series A Participating
Cumulative Preferred Stock (the "PRI SERIES A PREFERRED STOCK") and one share
has been designated as Special Voting Preferred Stock (the "PRI SPECIAL VOTING
SHARE"). At the close of business on October 19, 2001: (i) 25,595,715 shares of
PRI Common Stock were issued and outstanding; (ii) no shares of PRI Common Stock
were held by PRI in its treasury or by any Subsidiaries of PRI; and (iii) the
PRI Special Voting Share was issued and outstanding, and no other shares of PRI
Preferred Stock were issued and outstanding or held by PRI in its treasury or by
25
any Subsidiaries of PRI. There has been no material change in such
capitalization between that date and the date of this Agreement.
(b) Section 5.3 of the PRI Disclosure Schedule sets forth a complete and
correct list, as of October 19, 2001, of the number of shares of PRI Common
Stock subject to PRI Options or other rights to purchase or receive PRI Common
Stock (other than the PRI Rights), the dates of grant and exercise prices
thereof.
(c) All outstanding shares of capital stock of PRI are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive rights. All shares of capital stock of PRI which may be issued
under the PRI Options, the PRI Warrants and the PRI Exchangeable Shares are duly
authorized and not subject to preemptive rights, and, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be validly issued, fully paid and nonassessable.
(d) Except as set forth in this Section 5.3 or in Section 5.3 of the PRI
Disclosure Schedule, and except for changes since October 19, 2001 resulting
from the issuance of shares of PRI Common Stock pursuant to the PRI Options and
except as necessary to comply with the exchange, redemption or retraction of PRI
Exchangeable Shares: (i) there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of PRI,
(B) any securities of PRI or any PRI Subsidiary convertible into or exchangeable
or exercisable for shares of capital stock or voting securities of PRI, or (C)
any warrants, calls, options or other rights to acquire from PRI or any PRI
Subsidiary, or any obligation of PRI or any PRI Subsidiary to issue, deliver or
sell, or cause to be issued, delivered or sold, any capital stock, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock or voting securities of PRI; and (ii) there are no obligations,
contingent or otherwise, of PRI or any PRI Subsidiary to repurchase, redeem or
otherwise acquire any such securities of PRI or to provide funds to or make any
material investment (in the form of a loan, capital contribution or otherwise)
in any such Subsidiary or any other entity other than guarantees of bank
obligations of Subsidiaries entered into in the ordinary course of business.
Except as set forth in Section 5.3 of the PRI Disclosure Schedule, there are not
issued, reserved for issuance or outstanding (A) any securities of PRI or any
PRI Subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any PRI
Subsidiary, or (B) any warrants, calls, options or other rights to acquire from
PRI or any PRI Subsidiary, or any obligation of PRI or any PRI Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock, voting
securities or ownership interests in, any PRI Subsidiary. Except as set forth in
Section 5.3 of the PRI Disclosure Schedule, there are no obligations, contingent
or otherwise, of PRI or any PRI Subsidiary to repurchase, redeem or otherwise
acquire any such securities of any PRI Subsidiary.
(e) Except as set forth in Section 5.3 of the PRI Disclosure Schedule,
neither PRI nor any PRI Subsidiary is a party to any agreement restricting the
transfer of, relating to the voting of, requiring registration of, or granting
any preemptive, or antidilutive rights with respect to, any securities of the
type referred to in paragraph (a), (b) or (d). Other than the PRI Subsidiaries,
except as set forth in Section 5.3 of the PRI Disclosure Schedule, PRI does not
directly or indirectly beneficially own any securities or other beneficial
ownership interests in any other entity except for non-controlling investments
made in the ordinary course of business in entities which are not individually
or in the aggregate material to PRI and its Subsidiaries as a whole. To the
Knowledge of PRI, other than as set forth in Section 5.3 of the PRI Disclosure
Schedule or in connection with the Ancillary Agreements, there are no voting
trusts, proxies or other voting agreements or understandings with respect to the
shares of capital stock of PRI.
SECTION 5.4 AUTHORIZATION OF TRANSACTION
PRI has all requisite power and authority to execute, deliver and perform
this Agreement and any Ancillary Agreements delivered pursuant to this
Agreement, to perform its obligations hereunder and thereunder, and to carry out
the transactions contemplated hereby and thereby. Subject to the adoption of
this Agreement and the approval of the Merger by a majority of the outstanding
shares of PRI Common Stock and PRI Exchangeable Shares entitled to vote on this
Agreement and the Merger (voting together as a single class) (collectively, the
"PRI STOCKHOLDER APPROVAL") and the approval of the holders of the PRI
26
Exchangeable Shares of the matters described in Section 9.2(d) and 9.3(d) or, if
the holders of the PRI Exchangeable Shares do not approve the matters submitted
for a vote at the meeting of such holders as described in Section 8.1(a), the
redemption of the PRI Exchangeable Shares or the exercise of the Redemption Call
Right of PRI Subco as described in Section 9.2(d) and 9.3(d), all necessary
action, corporate or otherwise, has been taken by PRI to authorize the
execution, delivery and performance of this Agreement and each of the Ancillary
Agreements and the transactions contemplated hereby and thereby. The Agreement
and the Ancillary Agreements have been duly executed and delivered by PRI and
constitute legal, valid and binding obligations of PRI, enforceable against PRI
in accordance with their respective terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any Proceeding therefor
may be brought.
SECTION 5.5 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS
(a) Except as set forth in Section 5.5 of the PRI Disclosure Schedule and
subject to compliance with the requirements of paragraph (b) below, and subject
to obtaining the approval of the holders of the PRI Exchangeable Shares of the
matters described in Section 9.2(d) and 9.3(d), none of the execution, delivery
and performance of this Agreement and the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby or thereby, will: (i)
constitute a breach or violation of the Organizational Documents of PRI or any
Significant Subsidiary; (ii) require any Order, consent, waiver, exemption,
approval or authorization of, declaration, filing or registration with, or
giving of notice to, any Governmental Authority; (iii) constitute (with or
without the passage of time or the giving of notice) a breach of, or default
under, any debt instrument to which PRI or any Significant Subsidiary is a
party, or give any person the right to accelerate any indebtedness or terminate,
modify or cancel any right with respect to any indebtedness; (iv) constitute
(with or without the passage of time or giving of notice) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under or breach of in any material respect any
other agreement, instrument or obligation to which PRI or any Subsidiary is a
party or by which PRI or any Subsidiary or any of their assets are bound; (v)
result in the creation of any Encumbrance upon any of the assets of PRI or any
Subsidiary; (vi) result in a violation of any Law applicable to PRI or any
Subsidiary, or their businesses or assets; or (vii) invalidate or adversely
affect any material Governmental Permit used in PRI's or any Subsidiary's
business, except in the case of clauses (iii), (iv) and (v), such conflicts,
breaches or defaults as will not have a Material Adverse Effect on PRI. Except
as set forth in Section 5.5 of the PRI Disclosure Schedule, none of the
execution, delivery and performance of this Agreement and the Ancillary
Agreements nor the consummation of the transactions contemplated hereby or
thereby will give rise to a right of any party (other than PRI or any
Subsidiary) to terminate, modify or cancel any contract, agreement or other
instrument required to be disclosed in the PRI Disclosure Schedule or disclosed
in the PRI SEC Reports.
(b) The consummation of the transactions contemplated hereby and by the
Ancillary Agreements requires: (1) the filing of a pre-merger notification and
report form by PRI under the HSR Act and any other documents or information
requested by the United States Department of Justice or the United States
Federal Trade Commission in connection therewith; (2) the filing of similar
notifications, applications, documents and information with anti-competition
authorities of foreign jurisdictions; (3) the filing with the SEC of (A) a proxy
statement relating to the PRI Stockholders Meeting as part of the Joint Proxy
Statement/ Prospectus, and (B) such reports under Section 13(a)or 15(d) of the
Exchange Act, as may be required in connection with this Agreement and the
transactions contemplated hereby; (4) the filing with the applicable Canadian
Regulators of the foregoing filings with the SEC; as supplemented by applicable
rules and policy statements; (5) receipt of the Amended MRRS Decision Document
on or before Closing, (6) if appropriate exemptions are not available, the
filing of the Joint Proxy Statement/Prospectus pursuant to and in accordance
with the MJDS Policy of the Canadian Regulators; (7) either (A) the approval of
the holders of the PRI Exchangeable Shares of the matters described in Section
9.2(d) and 9.3(d) and the dissemination and filing with the appropriate Canadian
securities regulatory authorities and The Toronto Stock Exchange of a proxy
circular in connection with the meeting of the holders of the PRI Exchangeable
Shares described in
27
Section 8.1(a), or (B) if the holders of the PRI Exchangeable Shares do not
approve the matters submitted for a vote at the meeting of such holders as
described in Section 8.1(a), the redemption of the PRI Exchangeable Shares or
the exercise of the Redemption Call Right of PRI Subco as described in Section
9.2(d) and 9.3(d); (8) approval by the Toronto Stock Exchange of the Amended
Canadian Articles and the listing of the PRI Exchangeable Shares or any
exchangeable shares issued in place thereof; (9) the filing of the Articles of
Merger with the Secretary of State of the Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of other states in which PRI
is qualified to do business; (10) such filings with Governmental Authorities as
are necessary to satisfy the applicable requirements of state or provincial
securities or "blue sky" laws; and (11) such other consents, waivers,
exemptions, declarations, filings, registrations, notices, approvals, Orders or
authorizations the failure of which to be made or obtained individually or in
the aggregate would not (x) have a Material Adverse Effect on PRI or (y)
reasonably be expected to impair the ability of PRI to perform its obligations
under this Agreement or the Ancillary Agreements.
SECTION 5.6 PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS
Except as set forth in Section 5.6 of the PRI Disclosure Schedule, neither
PRI nor any Subsidiary is: (a) in violation of its Organizational Documents; (b)
in default in any material respect in the performance of any obligation,
agreement or condition of any debt instrument that (with or without the passage
of time or the giving of notice) affords to any person the right to accelerate
any indebtedness or terminate any right; (c) in default of or in breach of in
any material respect (with or without the passage of time or the giving of
notice) any other contract to which it is a party or by which it or its assets
are bound, except for such defaults or breaches that will not singly or in the
aggregate have a Material Adverse Effect on PRI; or (d) in violation of any
Order or Governmental Permit that is held by PRI or any Subsidiary applicable to
any of them or their respective businesses or assets. Except as set forth in
Section 5.6 of the PRI Disclosure Schedule, PRI and the Subsidiaries have
conducted and are now conducting their businesses and the ownership and
operation of their assets in compliance in all material respects with all
applicable Laws, including, without limitation, the ▇▇▇▇▇▇▇ Act, the ▇▇▇▇▇▇▇
Act, the Federal Trade Commission Act and the rules and regulations thereunder
and all Environmental Laws.
SECTION 5.7 PRI SEC REPORTS
(a) PRI has filed all registration statements, prospectuses, reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) required to be filed with the SEC for
the period commencing October 1, 1996 (the "PRI SEC REPORTS"). As of their
respective dates, the PRI SEC Reports complied in all material respects with the
requirements of 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
PRI SEC Reports, and none of the PRI SEC Reports when filed (or, if amended or
superseded by a filing before the date of this Agreement, then on the date of
such filing) 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.
(b) The financial statements of PRI included in the PRI SEC Reports
(including any related notes) complied as to form, as of their respective dates
of filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-Q or Form 8-K, as applicable, 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 PRI and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations 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 not and are not expected to be material
in amount) and except that, in the case of financial statements included therein
which were later restated to account for one or more business
28
combinations accounted for as poolings-of-interest, such original financial
statements do not reflect such restatements).
(c) Except as set forth in Section 5.7 of the PRI Disclosure Schedule, PRI
or its Subsidiaries, as applicable, (i) owns all right, title and interest in
and to each of the material assets shown or reflected on the balance sheet
included in the Form 10-Q for the nine months ended July 1, 2001 filed by PRI
(the "PRI LATEST FORM 10-Q") (except where such assets have been sold in the
ordinary course of business since July 1, 2001), free and clear of all
Encumbrances (other than Permitted Encumbrances), or (ii) licenses, leases or
otherwise possesses legally valid and enforceable rights to use each of such
assets, and, in each case of clause (i) and (ii) PRI and its Subsidiaries may
transfer such rights as are contemplated by this Agreement.
SECTION 5.8 INFORMATION SUPPLIED
(a) None of the information supplied or to be supplied by PRI specifically
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (ii) the Joint Proxy Statement/Prospectus will, at the date it
is first mailed to stockholders of PRI or ▇▇▇▇▇▇ or at the time of the PRI
Stockholders Meeting or the ▇▇▇▇▇▇ Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the PRI
Stockholders Meeting or the ▇▇▇▇▇▇ Stockholders Meeting which has become false
or misleading.
(b) The Joint Proxy Statement/Prospectus will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by PRI
with respect to statements made, omitted or incorporated by reference therein
based on information supplied by ▇▇▇▇▇▇ specifically for inclusion or
incorporation by reference in the Joint Proxy Statement/Prospectus.
SECTION 5.9 ABSENCE OF UNDISCLOSED LIABILITIES
Neither PRI nor any Subsidiary has any liabilities of any nature, whether
accrued, absolute, contingent or otherwise (including without limitation
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for Taxes due or then accrued or to become due), except: (a)
liabilities stated or adequately reserved against on the balance sheet included
in the PRI Latest Form 10-Q, (b) liabilities incurred since July 1, 2001 in the
ordinary course of business consistent with past practices, (c) liabilities
disclosed on Schedule 5.9 of the PRI Disclosure Schedule, and (d) other
liabilities not in excess of $15 million in the aggregate. Except as set forth
in Section 5.9 of the PRI Disclosure Schedule, to the Knowledge of PRI, there is
no fact that will have a Material Adverse Effect on PRI which has not been
specifically disclosed herein or in a schedule hereto.
SECTION 5.10 ABSENCE OF CERTAIN CHANGES
Except as set forth in Section 5.10 of the PRI Disclosure Schedule, since
July 1, 2001, PRI and its Subsidiaries have conducted their businesses only in
the ordinary course of business, consistent with prior practices and, whether or
not in the ordinary course of business, there has not been any Material Adverse
Change with respect to PRI. Without limiting the generality of the foregoing,
except as set forth in Section 5.10 of the PRI Disclosure Schedule, since July
1, 2001 there has not been:
(a) any amendment to the Organizational Documents of PRI or any
Subsidiary;
(b) any material contingent liability incurred by PRI or any of its
Subsidiaries as guarantor or otherwise with respect to the obligations of
others;
29
(c) any material Encumbrance placed on any of the properties of PRI or
any Subsidiary which remains in existence on the date hereof;
(d) any material obligation or liability incurred by PRI or any of its
Subsidiaries other than obligations and liabilities incurred in the
ordinary course of business consistent with past practice (none of which is
a claim for breach of contract, breach of duty, breach of warranty, tort or
infringement of an intellectual property right);
(e) any sale or other disposition, or any agreement or other arrangement
for the sale or other disposition, of any material properties or assets of
PRI or any of its Subsidiaries other than in the ordinary course of
business;
(f) any declaration, setting aside or payment of any dividend on, or the
making of any other distribution in respect of, the capital stock of PRI,
or any direct or indirect redemption, purchase or other acquisition by PRI
of its capital stock;
(g) any material change in the compensation or other amounts payable or
to become payable by PRI or any of its Subsidiaries to any of its officers
except changes in the ordinary course of business consistent with past
practices; or any material change in any bonus, pension or profit sharing
payment, entitlement or arrangement made to or with any of such officers
except changes in the ordinary course of business consistent with past
practices; or any grant of any loans or severance or termination pay to
such officers; or
(h) any change in the employment status of the executive officers of
PRI.
SECTION 5.11 PAYMENT OF TAXES
Except as set forth in Section 5.11 of the PRI Disclosure Schedule:
(a) Each of PRI and its Subsidiaries has duly and timely filed all Tax
Returns that they were required to file, except where the failure to file
would not have a Material Adverse Effect. All of such Tax Returns were
complete and correct in all material respects. All Taxes shown to be due on
such Tax Returns have been paid or are being contested in good faith by PRI
and such contest is being diligently pursued, all of which contested Taxes
are listed in Section 5.11 of the PRI Disclosure Schedule. With respect to
all other Taxes for which no Tax Return is required or which have not yet
accrued or otherwise become due, adequate provision has been made in the
financial statements included in the SEC Reports. The provisions for Taxes
reflected in the above-mentioned financial statements are adequate to cover
any Tax liabilities of PRI and its Subsidiaries in respect of their
business, properties and operations during the periods covered by said
financial statements and all prior periods. All material Taxes and other
assessments and levies that PRI or any Subsidiary of PRI was required to
withhold or collect have been withheld or collected and paid over or will
be paid over to proper governmental authorities as required. None of PRI
and its Subsidiaries currently is the beneficiary of any extension of time
within which to file any Tax Return.
(b) No material deficiencies have been asserted or assessments made
against PRI or any Subsidiary of PRI, nor is any Tax Authority now
asserting or, to the Knowledge of PRI, threatening to assert against PRI or
any Subsidiary of PRI any material deficiency or claim for additional Taxes
or interest thereon or penalties in connection therewith.
(c) Neither PRI nor any of its Subsidiaries has waived any statute of
limitations with respect to Taxes or agreed to an extension of time with
respect to a Tax assessment or deficiency, which waiver or extension
currently remains in effect.
(d) Neither PRI nor any of its Subsidiaries is a "consenting
corporation" within the meaning of Section 341(f) of the Code, and none of
the assets of PRI or its Subsidiaries are subject to an election under
Section 341(f) of the Code.
30
(e) Neither PRI nor any of its Subsidiaries has been a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(f) Neither PRI nor any of its Subsidiaries has made any material
payment, is obligated to make any material payment, or is a party to any
agreement that under certain circumstances could obligate it to make any
material payment that will not be deductible under Section 280G of the
Code.
(g) Neither PRI nor any of its Subsidiaries has any actual or potential
liability for any Taxes of any person (other than any of PRI and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of federal, state, local or foreign law), or as a transferee or
successor, by contract, or otherwise.
(h) Neither PRI nor any of its Subsidiaries has undergone a change in
its method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481 of the Code.
(i) As of the end of PRI's most recent taxable year, none of the net
operating loss carryovers, capital loss carryovers, credit carryovers, or
other tax attributes of PRI or its Subsidiaries are subject to limitation
under sections 382 or 383 of the Code or to separate return year
limitations under the applicable consolidated return provisions of the
Treasury Regulations.
SECTION 5.12 CERTAIN CONTRACTS
(a) Except as set forth in the PRI SEC Reports or in Section 5.12 of the
PRI Disclosure Schedule, neither PRI nor any of its Subsidiaries is a party to
or bound by (i) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC), (ii) any non-competition agreement or
any other agreement or obligation which purports to limit in any material
respect the manner in which, or the localities in which, all or any material
portion of the business of PRI and its Subsidiaries, taken as a whole, has been,
or the business of ▇▇▇▇▇▇ and its Subsidiaries after the Merger will be,
conducted, or (iii) any contract or other agreement which would by its terms
prohibit or materially delay the consummation of the Merger or any of the
transactions contemplated by this Agreement (all contracts of the type described
in clauses (i) and (ii) being referred to herein as "PRI MATERIAL CONTRACTS").
(b) Except as set forth in Section 5.12 of the PRI Disclosure Schedule,
each PRI Material Contract is valid and binding on PRI (or, to the extent a PRI
Subsidiary is a party, such Subsidiary) and is in full force and effect, and PRI
and each PRI Subsidiary and to PRI's Knowledge each other party thereto have in
all material respects performed all obligations required to be performed by them
to date under each PRI Material Contract, except where such noncompliance,
individually or in the aggregate, would not have a Material Adverse Effect on
PRI. Except as set forth in Section 5.12 of the PRI Disclosure Schedule, neither
PRI nor any PRI Subsidiary Knows of, or has received notice of, any violation or
default under (nor, to the Knowledge of PRI, does there exist any condition
which with the passage of time or the giving of notice or both would result in
such a violation or default under) any PRI Material Contract by PRI.
SECTION 5.13 LEGAL PROCEEDINGS
(a) Except as set forth in the PRI SEC Reports or in Section 5.13 of the
PRI Disclosure Schedule, neither PRI nor any Subsidiary has received notice of,
nor to its Knowledge does there exist, any Proceeding that has been commenced by
or against PRI or any Subsidiary or any of the officers, directors, former
officers or directors, employees, shareholders or agents of either PRI or any
Subsidiary (in their capacities as such) or that otherwise relates to the
business of, or any of the assets or properties owned or used by, any of them
which, if determined adversely, would have a Material Adverse Effect on PRI,
nor, to the Knowledge of PRI, are there any facts which could reasonably be
expected to lead to such a Proceeding.
(b) There is no Proceeding that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby or by any of the Ancillary Agreements.
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SECTION 5.14 EMPLOYEE BENEFITS
(a) Except for the Employee Benefit Plans listed on Section 5.14 of the PRI
Disclosure Schedule, neither PRI nor any Subsidiary nor any ERISA Affiliate of
any of them maintains, has an obligation to contribute to, or has any actual or
contingent liability with respect to, any Employee Benefit Plan. PRI and its
Subsidiaries will deliver to ▇▇▇▇▇▇ or its counsel within 15 days after the date
hereof true and complete copies of (i) plan instruments and amendments thereto
for all Employee Benefit Plans required to be listed on Section 5.14 of the PRI
Disclosure Schedule (or written summaries of any such Employee Benefit Plans
that are unwritten) and related trust agreements, insurance and other contracts,
summary plan descriptions, and summaries of material modifications, and material
communications distributed to the participants of each such Employee Benefit
Plan, (ii) to the extent annual reports on Form 5500 are required with respect
to any such Employee Benefit Plan, the three most recent annual reports and
attached schedules for each such Employee Benefit Plan as to which such report
is required to be filed, (iii) where applicable, the most recent (A) opinion,
notification and determination letters, (B) audited financial statements, (C)
actuarial valuation reports and (D) nondiscrimination tests performed under the
Code (including Section 401(k) and 401(m) tests) for each such Employee Benefit
Plan, and (iv) all contracts with third party administrators, investment
managers, actuaries, consultants, vendors or insurance or mutual fund companies.
(b) Except as set forth on Section 5.14 of the PRI Disclosure Schedule,
neither PRI nor any of its Subsidiaries nor any of their ERISA Affiliates
maintains or has ever maintained or contributed to an Employee Benefit Plan
subject to Title IV of ERISA (including a multiemployer plan as defined in ERISA
Section 3(37) and no facts exist under which any of them could incur any
liability under Title IV of ERISA.
(c) With respect to each Employee Benefit Plan required to be listed on
Section 5.14 of the PRI Disclosure Schedule, (i) no party in interest or
disqualified person (as defined in Section 3(14) of ERISA and Section 4975 of
the Code, respectively) has at any time engaged in a transaction which could
subject PRI, ▇▇▇▇▇▇ or any of their Subsidiaries or ERISA Affiliates, directly
or indirectly, to a Tax, penalty or liability for prohibited transactions
imposed by ERISA Section 406 or Code Section 4975 and (ii) no fiduciary (as
defined in Section 3(21) of ERISA) with respect to any such Employee Benefit
Plan, for whose conduct PRI, ▇▇▇▇▇▇ or any of their Subsidiaries could have any
liability (by reason of indemnities or otherwise), has breached any of the
responsibilities or obligations imposed upon the fiduciary under Title I of
ERISA.
(d) Each Employee Benefit Plan required to be listed on Section 5.14 of the
PRI Disclosure Schedule which is a "welfare plan" within the meaning of Section
3(1) of ERISA and which provides health, disability or death benefits is fully
insured and does not utilize a trust intended to be exempt from Tax pursuant to
Section 501 of the Code and neither PRI nor any Subsidiary is obligated to
directly pay any such benefits or to reimburse any third Person payor for the
payment of such benefits.
(e) Each Employee Benefit Plan required to be listed on Section 5.14 of the
PRI Disclosure Schedule which is a Pension Plan and which is subject to Sections
201, 301 or 401 of ERISA has received a favorable determination letter from the
Internal Revenue Service covering all amendments required by the Tax Reform Act
of 1986 and prior legislation and there are no circumstances that are likely to
result in revocation of any such favorable determination letter. Except as noted
on Section 5.14 of the PRI Disclosure Schedule, no Pension Plan has assets other
than securities listed on a public exchange, public stock market, mutual fund
shares registered under federal law, publicly traded debt or government debt
instruments, or participant loans extended in accordance with its terms. Each
Employee Benefit Plan required to be listed on Section 5.14 of the PRI
Disclosure Schedule is and has been operated in material compliance with its
terms and all applicable Laws and Orders currently in effect with respect
thereto, and by its terms can be amended and/or terminated at any time.
(f) Except as set forth on Section 5.14 of the PRI Disclosure Schedule with
respect to each Employee Benefit Plan required to be listed on Section 5.14 of
the PRI Disclosure Schedule, no event or omission has occurred, and there exists
no condition, claim, or set of circumstances in connection with which PRI or any
of its Subsidiaries could be subject to any liability, loss, damage, Tax,
penalty or expense.
32
(g) Except as set forth in Section 5.14 of the PRI Disclosure Schedule, the
execution and delivery of this Agreement by PRI, the performance by PRI of its
obligations hereunder and consummation by PRI of the transactions contemplated
by this Agreement will not, alone or together with any other event, (i) entitle
any employee or former employee of PRI or any of its Subsidiaries to any
payment, (ii) result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation,
including but not limited to stock options or benefits under any deferred
compensation plan, payable in respect of any employee or former employee of PRI
or any of its Subsidiaries, or (iii) result in any parachute payment under
Section 280G of the Code, whether or not such payment is considered reasonable
compensation for services rendered.
(h) PRI and its Subsidiaries will take all actions within their control to
ensure that all actions required to be taken by a fiduciary of any Employee
Benefit Plan required to be listed on Section 5.14 of the PRI Disclosure
Schedule in order to effectuate the transaction contemplated by this Agreement
shall comply with the terms of such Employee Benefit Plan, ERISA and other
applicable Laws.
(i) Except as set forth in Section 5.14 of the PRI Disclosure Schedule, no
Employee Benefit Plan required to be listed on Section 5.14 of the PRI
Disclosure Schedule provides benefits, including without limitation death or
medical benefits (through insurance or otherwise), with respect to any employee
or former employee of PRI or any of its Subsidiaries beyond their retirement or
other termination of service, other than (i) continuation or other coverage
mandated by applicable Law, (ii) retirement or death benefits under any Pension
Plan disclosed on Section 5.14 of the PRI Disclosure Schedule, (iii) disability
benefits under any welfare plan that have been fully provided for by insurance
or otherwise, (iv) deferred compensation benefits accrued as liabilities on the
consolidated books of PRI or (v) benefits in the nature of severance pay.
(j) No Employee Benefit Plan required to be listed on Section 5.14 of the
PRI Disclosure Schedule is a "multiple employer plan" as described in Section
3(40) of ERISA or Section 413(c) of the Code.
(k) Neither PRI nor any of its Subsidiaries has proposed, agreed to or
announced any changes to any Employee Benefit Plan required to be listed on
Section 5.14 of the PRI Disclosure Schedule that would cause an increase in
benefits under any such Employee Benefit Plan (or the creation of new benefits
or plans) or to change any employee coverage which would cause an increase in
the expense of maintaining any such plan, except as required by amendments to
Section 401(a) of the Code.
(l) Other than claims for benefits submitted by participants or
beneficiaries in the ordinary course, no claim against, investigation or request
for information, or Proceeding involving any Employee Benefit Plan required to
be listed in Section 5.14 of the PRI Disclosure Schedule is pending or, to the
Knowledge of PRI, threatened.
SECTION 5.15 INTELLECTUAL PROPERTY
(a) As used herein, the term "PRI INTELLECTUAL PROPERTY ASSETS" shall mean
all worldwide intellectual property rights which are material to the conduct of
the business of PRI or one of its Subsidiaries as it is currently conducted or
as proposed to be conducted by PRI or any of its Subsidiaries, including without
limitation in both cases: (A) all trademarks, service marks, trade names, common
law trademarks, business names, Internet domain names, trade dress, slogans, and
the goodwill associated therewith, and all registrations or applications
therefor (collectively, "PRI MARKS"); (B) all patents and patent applications
(collectively, "PRI PATENTS"); (C) all copyrights in both published works and
unpublished works, including training manuals, marketing and promotional
materials, internal reports, business plans and any other expressions, mask
works and software, firmware and videos, whether registered or unregistered, and
all registrations or applications in connection therewith (collectively, "PRI
COPYRIGHTS"); and (D) information which is considered to be secret, confidential
and proprietary, including all trade secrets, know-how, confidential
information, customer lists, technical information, proprietary information,
technologies, processes and formulae, source code, object code, library
functions, flow charts, algorithms, architecture, structure, display screens and
development tools, data, plans, drawings and blue prints, whether tangible or
intangible and whether stored, compiled, or memorialized physically,
electronically, photographically, or otherwise (collectively, "PRI SECRET
INFORMATION").
33
(b) Except as set forth in Section 5.15 of the PRI Disclosure Schedule, PRI
or one of its Subsidiaries, as applicable, (i) owns all right, title and
interest in and to each of the PRI Intellectual Property Assets, free and clear
of all Encumbrances, or (ii) licenses or otherwise possesses legally valid and
enforceable rights to use each of the PRI Intellectual Property Assets, and, in
each case of clause (i) or (ii) PRI and its Subsidiaries may effect such
transfer of such rights, if any, as is contemplated by this Agreement. PRI and
its Subsidiaries have made all necessary filings and recordations to protect and
maintain their interests in the PRI Intellectual Property Assets except where
the failure to make such filings or recordation would not have a Material
Adverse Effect on PRI.
(c) Except as set forth in Section 5.15 of the PRI Disclosure Schedule, (i)
a true, correct and complete list of all PRI Patents (excluding patent
applications) owned by PRI or any of its Subsidiaries is set forth in Section
5.15 of the PRI Disclosure Schedule; (ii) to the Knowledge of PRI all PRI
Patents owned by PRI or any of its Subsidiaries are valid and subsisting and all
maintenance fees, annuities and the like required to be paid before the date
hereof have been paid; (iii) to the Knowledge of PRI, none of the issued PRI
Patents is infringed; (iv) to the Knowledge of PRI the validity or
enforceability of the PRI Patents has not been challenged or threatened in any
way by any Person; and (v) no Person has notified PRI in writing that any of the
products or technology used, sold, offered for sale or licensed or proposed for
use, sale, offer for sale or license by PRI or any of its Subsidiaries infringes
any rights of any Person.
(d) A true, correct and complete list of all registered PRI Marks owned by
PRI or any of its Subsidiaries is set forth on Section 5.15 of the PRI
Disclosure Schedule; (ii) to the Knowledge of PRI, all PRI Marks owned by PRI or
any of its Subsidiaries are valid and subsisting; (iii) to the Knowledge of PRI,
none of the PRI Marks is infringed or diluted, (iv) to the Knowledge of PRI,
none of the PRI Marks owned by PRI or any of its Subsidiaries has been opposed
or challenged, and, to the Knowledge of PRI, no claims exist against the use by
PRI or any of its Subsidiaries of any PRI Marks; and (v) to the Knowledge of PRI
all uses of registered PRI Marks are in conformance with applicable statutory
and common law so as not to compromise the strength, good will, and integrity of
the PRI Marks.
(e) A true, correct and complete list of all presently registered PRI
Copyrights owned by PRI or any of its Subsidiaries is set forth on Section 5.15
of the PRI Disclosure Schedule; (ii) to the Knowledge of PRI, all the PRI
Copyrights owned by PRI or any of its Subsidiaries which are material to the
consolidated business, whether or not registered, are valid and enforceable;
(iii) to the Knowledge of PRI, none of the PRI Copyrights is infringed or has
been challenged or threatened in any way; and (iv) to the Knowledge of PRI, no
claims exist against the use by PRI or any of its Subsidiaries of any writings
or other expressions used in the business of PRI or any of its Subsidiaries as
currently conducted or as proposed to be conducted.
(f) PRI and its Subsidiaries have taken reasonable measures to protect the
secrecy, confidentiality and value of their PRI Secret Information. To the
Knowledge of PRI, the PRI Secret Information has not been used, divulged or
appropriated for the benefit of any Person (other than PRI or any of its
Subsidiaries). To the Knowledge of PRI, none of the PRI Secret Information is
subject to any material adverse claim. Reasonably appropriate policies are in
place to protect the continued secrecy, confidentiality and value of the PRI
Secret Information.
(g) To the Knowledge of PRI, no PRI Intellectual Property Asset is subject
to any outstanding Order, Proceeding (other than pending Proceedings pertaining
to applications for patent, trademark or copyright registration), or stipulation
restricting in any manner the licensing thereof by PRI or any of its
Subsidiaries. Neither PRI nor any of its Subsidiaries has entered into any
agreement to indemnify any other person against any charge of infringement of
the intellectual property rights of any other Person, other than indemnification
as part of the sale or licensing of the products of PRI and its Subsidiaries in
the ordinary course of business.
(h) To the Knowledge of PRI, all employees, contractors, agents and
consultants of PRI or any of its Subsidiaries who are involved in the creation
of PRI Intellectual Property Assets or who have access to PRI Secret Information
have executed a nondisclosure and assignment of inventions agreement to protect
the confidentiality and to vest in PRI or any of its Subsidiaries exclusive
ownership of PRI Intellectual Property Assets, except where the failure to have
executed such an agreement will not have a Material Adverse Effect. To the
Knowledge of PRI, neither PRI nor any of its Subsidiaries has written or oral
agreements with any
34
employees, contractors, agents or consultants with respect to the ownership of
inventions, trade secrets or other works as a result of which any such employee,
contractor, agent or consultant may have rights to any material portion of the
PRI Intellectual Property Assets.
(i) To the Knowledge of PRI, no officer, employee, contractor, agent or
consultant of PRI or any of its Subsidiaries is in violation of any term of any
employment contract, patent disclosure agreement, proprietary information
agreement, noncompetition agreement, nonsolicitation agreement, confidentiality
agreement, or any other similar contract or agreement or any restrictive
covenant, in each case relating to the right of any such officer, employee,
contractor, agent or consultant to be employed or engaged by PRI or any of its
Subsidiaries because of the nature of the business conducted or to be conducted
by it or relating to the use of trade secrets or proprietary information of
others, and to PRI's Knowledge and belief, the continued employment or retention
of its officers, employees, contractors, agents or consultants does not subject
PRI or any of its Subsidiaries to any material liability with respect to any of
the foregoing matters.
SECTION 5.16 ENVIRONMENTAL MATTERS
(a) To the Knowledge of PRI, each of PRI and its Subsidiaries is in
compliance in all material respects with applicable Environmental Laws, which
compliance includes, but is not limited to, the possession by each of all
Governmental Permits required by any Governmental Authority to operate its
business or under applicable Environmental Laws, and compliance in all material
respects with the terms and conditions thereof. Neither PRI nor any of its
Subsidiaries has received notice of, nor, to the Knowledge of PRI, is any
predecessor of any of them the subject of, any Environmental Claim or Remedial
Action. To the Knowledge of PRI, PRI and its Subsidiaries have no material
Environmental, Health and Safety Liabilities. To the Knowledge of PRI, there are
no circumstances or conditions related to PRI or any of its Subsidiaries, their
operations or Facilities that are reasonably likely to prevent or interfere with
such compliance or give rise to an Environmental Claim or Remedial Action in the
future.
(b) There are no Environmental Claims that are pending or, to the Knowledge
of PRI, threatened against PRI or any of its Subsidiaries or against any Person
whose liability for any Environmental Claim PRI or any of its Subsidiaries has
retained or assumed either contractually or by operation of Law.
(c) To the Knowledge of PRI, neither PRI nor any of its Subsidiaries, nor
any other Person acting on behalf of any of them, has disposed of, transported,
stored, or arranged for the disposal of any Hazardous Materials to, at or upon:
(i) any location other than a site lawfully permitted to receive such Hazardous
Materials; (ii) any Facilities except for the use of household cleaners and
office products in the ordinary course of business in compliance with applicable
Environmental Laws; or (iii) any site which, pursuant to CERCLA or any similar
state Law, has been placed on the National Priorities List, CERCLIS or their
state equivalents. To the Knowledge of PRI, there has not occurred during the
period PRI or any of its Subsidiaries operated or possessed any Facility, nor is
there presently occurring, a Release, or threatened Release, of any Hazardous
Materials on, into or beneath the surface of, or adjacent to, any Facilities
except for the use of household cleaners and office products in the ordinary
course of business in material compliance with applicable Environmental Laws.
SECTION 5.17 LABOR MATTERS
Neither PRI nor any of its Subsidiaries is a party to or otherwise bound by
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither PRI nor any of
its Subsidiaries is the subject of any Proceeding of which PRI or any Subsidiary
has received written notice or is otherwise aware asserting that PRI or any of
its Subsidiaries has committed an unfair labor practice or is seeking to compel
it to bargain with any labor union or labor organization that, individually or
in the aggregate, is reasonably likely to have a PRI Material Adverse Effect,
nor is there pending or, to the Knowledge of PRI, threatened, any labor strike,
dispute, walkout, work stoppage or lockout involving PRI or any of its
Subsidiaries that, individually or in the aggregate, is reasonably likely to
have a PRI Material Adverse Effect.
35
SECTION 5.18 BROKERS
No broker, investment banker, financial advisor or other person other than
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (the fees and expenses of which will be paid by PRI),
is entitled to any broker's, finder's, financial advisor's or other similar fee,
commission or payment in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of PRI. PRI has furnished
to ▇▇▇▇▇▇ true and complete copies of all agreements under which any such fees,
commissions or payments are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees, commissions or
payments are payable.
SECTION 5.19 OPINION OF FINANCIAL ADVISOR
The Board of Directors of PRI has received the oral opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ on the date of this Agreement, to the effect that, as of
such date, the Exchange Ratio for the conversion of PRI Common Stock into ▇▇▇▇▇▇
Common Stock is fair from a financial point of view to holders of shares of PRI
Common Stock, and PRI has received the oral undertaking of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ to deliver to ▇▇▇▇▇▇ solely for informational purposes promptly after
delivery thereof to PRI, a signed, written opinion to that effect, it being
understood and agreed by ▇▇▇▇▇▇ that such opinion is for the benefit of the
Board of Directors of PRI and may not be relied upon by ▇▇▇▇▇▇, its Affiliates
or any of their respective stockholders.
SECTION 5.20 OWNERSHIP OF ▇▇▇▇▇▇ COMMON STOCK
Except as set forth in Section 5.20 of the PRI Disclosure Schedule, as of
the date hereof, neither PRI nor, to its Knowledge without independent
investigation, any of its Affiliates, (i) beneficially owns (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, or (ii) is party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of ▇▇▇▇▇▇.
SECTION 5.21 ANTITAKEOVER LAWS
No "fair price," "business combination," "moratorium," "control share
acquisition" or other form of antitakeover statute or regulation, including,
without limitation, Chapter 110C of the General Laws of The Commonwealth of
Massachusetts, is or will be applicable to the execution, delivery or
performance of this Agreement or the consummation of the Merger or the other
transactions contemplated by this Agreement.
SECTION 5.22 RIGHTS AGREEMENT
Immediately prior to the execution of this Agreement, PRI has (a) duly
entered into an appropriate amendment to the PRI Rights Plan, which amendment
has been provided to ▇▇▇▇▇▇, and approved by the Board of Directors of PRI and
(b) taken all other action necessary or appropriate so that the entering into of
this Agreement by PRI and the entering into of the Voting Agreements by the
stockholders of PRI specified in Section 5.23 of this Agreement does not and
will not result in the ability of any Person to exercise any PRI Rights under
the PRI Rights Plan or enable or require the PRI Rights issued thereunder to
separate from the shares of PRI Common Stock to which they are attached or to be
triggered or become exercisable.
SECTION 5.23 PRI ACTION
PRI has obtained and delivered to ▇▇▇▇▇▇ a duly executed Voting Agreement
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. d'Arbeloff and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ substantially in
the form attached hereto as Exhibit 5.23A pursuant to which among other things
each such Person has agreed to vote all PRI Common Stock owned by such Person or
over which he has voting control, in favor of this Agreement and the Merger and
irrevocably granted a proxy, coupled with an interest, to ▇▇▇▇▇▇ or its designee
to vote such shares of PRI Common Stock in favor of this Agreement and the
Merger. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has entered into and delivered the Employment
Agreement with ▇▇▇▇▇▇ in the form attached hereto as Exhibit 5.23B.
36
SECTION 5.24 PRODUCT WARRANTIES; PRODUCT LIABILITY
Section 5.24 of the PRI Disclosure Schedule sets forth the aggregate
expenses incurred by PRI's customer support and service center in fulfilling its
obligations under its guaranty, warranty and right of return provisions during
the fiscal year ended September 30, 2000, and PRI has no reason to believe that
such expenses will significantly increase as a percentage of sales in the
future. Except as set forth in Section 5.24 of the PRI Disclosure Schedule, no
claim has been asserted against PRI or any of its Subsidiaries since October 1,
1999 for renegotiation or price redetermination of any completed business
transaction.
SECTION 5.25 CERTAIN TAX MATTERS
To its Knowledge, after consulting with its independent auditors, neither
PRI nor any of its Affiliates has taken or agreed to take any action that would
(i) prevent the Merger from constituting a transaction qualifying as a
reorganization under Section 368(a) of the Code or (ii) interfere with ▇▇▇▇▇▇'
ability to continue to account for any past acquisition as a pooling of
interests, if such acquisition was accounted for as a pooling of interests.
SECTION 5.26 COMPLIANCE WITH INVESTMENT COMPANY ACT
PRI is not an "investment company" as defined in the Investment Company Act
of 1940, as amended.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES RELATED TO
▇▇▇▇▇▇ MERGER SUB
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Merger Sub hereby, jointly and severally, represent and
warrant to PRI that the representations and warranties in this Article VI are
true and correct.
SECTION 6.1 ORGANIZATION
▇▇▇▇▇▇ Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts with full
corporate power and authority to own, lease and operate its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is conducted by it. ▇▇▇▇▇▇ owns all of the
issued and outstanding capital stock of ▇▇▇▇▇▇ Merger Sub.
SECTION 6.2 CAPITALIZATION
The authorized capital stock of ▇▇▇▇▇▇ Merger Sub consists of 200,000
shares of common stock, par value $0.01 per share (the "▇▇▇▇▇▇ MERGER SUB COMMON
STOCK"), of which 100 shares are issued and outstanding, all of which have been
duly authorized and are validly issued, fully paid and nonassessable and held by
▇▇▇▇▇▇, and no shares of ▇▇▇▇▇▇ Merger Sub Common Stock are held in the treasury
of ▇▇▇▇▇▇ Merger Sub. Other than as contained in this Agreement, there are no
authorized or outstanding options, warrants, calls, rights, commitments or other
agreements of any character to which ▇▇▇▇▇▇ Merger Sub is a party or by which it
is bound requiring it to issue, transfer, sell, purchase, redeem or acquire any
shares of capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for or acquire, any
shares of capital stock of ▇▇▇▇▇▇ Merger Sub.
SECTION 6.3 AUTHORIZATION OF TRANSACTION
▇▇▇▇▇▇ Merger Sub has all requisite power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the Merger
and the transactions contemplated hereby and thereby. The execution and delivery
of this Agreement and the Ancillary Agreements to which it is a party, the
performance of this Agreement and the Ancillary Agreements and the consummation
by ▇▇▇▇▇▇ Merger Sub of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of ▇▇▇▇▇▇ Merger Sub. This Agreement and the Ancillary Agreements to which
▇▇▇▇▇▇ Merger Sub is a party
37
have been duly and validly executed and delivered by ▇▇▇▇▇▇ Merger Sub and
constitute legal, valid and binding obligations of ▇▇▇▇▇▇ Merger Sub,
enforceable against it in accordance with their respective terms, except (i) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, and (ii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any Proceeding therefor may be brought.
ARTICLE VII. COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 7.1 CONDUCT OF BUSINESS BY ▇▇▇▇▇▇
(a) Except as otherwise expressly contemplated by this Agreement, or as
consented to by PRI in writing (such consent not to be unreasonably withheld or
delayed), during the period from the date of this Agreement to the Effective
Time, ▇▇▇▇▇▇ shall, and shall cause its Subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice and
in compliance in all material respects with all applicable Laws and, to the
extent consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees and preserve their
relationships with those persons having business dealings with them to the end
that their goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing (but subject to the above
exceptions), during the period from the date of this Agreement to the Effective
Time, ▇▇▇▇▇▇ shall not, and shall not permit any of its Subsidiaries to:
(i) other than dividends and distributions by a direct or indirect
wholly owned Subsidiary of ▇▇▇▇▇▇ to its parent, or by a Subsidiary that is
partially owned by ▇▇▇▇▇▇ or any of its Subsidiaries, provided that ▇▇▇▇▇▇
or any such Subsidiary receives or is to receive its proportionate share
thereof, (A) declare, set aside or pay any dividends on, make any other
distributions in respect of, or enter into any agreement with respect to
the voting of, any of its capital stock, (B) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, except for issuances of ▇▇▇▇▇▇ Common Stock upon the
exercise of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants which are either outstanding
as of the date hereof in accordance with their present terms, including
cashless exercise, or are permitted to be issued pursuant to Section
7.1(a)(ii) hereof, or (C) purchase, redeem or otherwise acquire any shares
of capital stock of ▇▇▇▇▇▇ or any of its Subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
securities (except the deemed acceptance of shares of ▇▇▇▇▇▇ Common Stock
upon cashless exercise of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants, or in
connection with withholding obligations relating thereto and except from
former employees, directors and consultants in accordance with agreements
existing on the date hereof and providing for the repurchase of shares in
connection with any termination of service of such party);
(ii) issue, deliver, sell or subject to any Encumbrance any shares of
the capital stock of ▇▇▇▇▇▇ or any of its Subsidiaries, any other voting
securities or any securities convertible into or exchangeable or
exercisable for, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, in any transaction
which would materially delay or impair the ability of ▇▇▇▇▇▇ to perform its
obligations under this Agreement, and in any such case not for less than
the then current market price of such securities, provided that the
foregoing shall not prohibit (A) the issuance of ▇▇▇▇▇▇ Common Stock or
warrants to purchase ▇▇▇▇▇▇ Common Stock in connection with any acquisition
permitted by Section 7.1(a)(iv) or the issuance (or deemed issuance, by way
of assumption or otherwise) of options or warrants to purchase ▇▇▇▇▇▇
Common Stock in exchange for outstanding securities, rights, warrants or
options to acquire any securities of another Person in connection with any
such acquisition, (B) the issuance of ▇▇▇▇▇▇ Common Stock upon the exercise
of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants outstanding as of the date hereof in
accordance with their present terms, (C) the issuance of ▇▇▇▇▇▇ Options
(and shares of ▇▇▇▇▇▇ Common Stock upon the exercise thereof) granted after
the date hereof either in the ordinary course of business or in connection
with and promptly
38
following an acquisition permitted by Section 7.1(a)(iv), or (D) the
issuance of ▇▇▇▇▇▇ Rights (and shares of ▇▇▇▇▇▇ Preferred Stock upon the
exercise thereof) in accordance with the terms of the ▇▇▇▇▇▇ Rights Plan,
as in effect on the date hereof so long as nothing permitted by the
foregoing (A) through (D) shall materially delay or impair the ability of
▇▇▇▇▇▇ to perform its obligations under this Agreement.
(iii) amend any of its Organizational Documents other than as
contemplated by this Agreement;
(iv) 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 Person in a manner which would materially
delay or impair the ability of ▇▇▇▇▇▇ to perform its obligations under this
Agreement or that would either involve aggregate consideration in excess of
$200 million or require the approval of ▇▇▇▇▇▇ stockholders under the
Organizational Documents of ▇▇▇▇▇▇ or the rules and regulations of the
Nasdaq Stock Market, Inc. applicable to ▇▇▇▇▇▇. (For purposes hereof,
"aggregate consideration" shall equal the sum of (A)(1) the amount of cash
to be paid, (2) the value of any shares of ▇▇▇▇▇▇ Common Stock (valued at
the closing price of the ▇▇▇▇▇▇ Common Stock on Nasdaq on the day prior to
announcement of such acquisition) to be delivered, and (3) the fair market
value of any non-cash or non-▇▇▇▇▇▇ Common Stock consideration (including
the issuance (or deemed issuance, by way of assumption or otherwise) of
options or warrants to purchase ▇▇▇▇▇▇ Common Stock in exchange for
outstanding securities, rights, warrants or options to acquire any
securities of another Person in connection with any such acquisition, and
in any case as determined by the ▇▇▇▇▇▇ Board of Directors in good faith as
of the day prior to announcement of such acquisition) to be delivered to
the seller or its security holders in connection with such acquisition, and
(B) the amount of liabilities directly or indirectly assumed by ▇▇▇▇▇▇ or
its Subsidiaries or retired or defeased in connection with such
acquisition, including contingent liabilities to the extent they can be
estimated by the ▇▇▇▇▇▇ Board of Directors in good faith as of the day
prior to the announcement of such acquisition);
(v) authorize, or commit or agree to take, any of the foregoing actions,
provided that the limitations set forth in this Section shall not apply to
any transaction between ▇▇▇▇▇▇ and any wholly owned Subsidiary or between
any wholly owned Subsidiaries of ▇▇▇▇▇▇.
(b) Except as required by Law, ▇▇▇▇▇▇ shall not, and shall not permit any
of its Subsidiaries to, voluntarily take any action that would, or that could
reasonably be expected to, result in (i) any of its representations and
warranties set forth in this Agreement that are qualified as to materiality
becoming untrue or inaccurate at the Effective Time, (ii) any of such
representations and warranties that are not so qualified becoming untrue or
inaccurate in any material respect at the Effective Time, or (iii) any of the
conditions to the consummation of this Agreement and the transaction
contemplated hereby as set forth in Article IX not being satisfied.
(c) ▇▇▇▇▇▇ shall promptly advise PRI orally and in writing to the extent it
has Knowledge of (i) any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (ii) the failure by it or
any of its Subsidiaries to comply in any material respect with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement and (iii) any Material Adverse Effect or
any change or event having, or which, insofar as can reasonably be foreseen,
could reasonably be expected to have a Material Adverse Effect on the truth of
their respective representations and warranties or the ability of the conditions
set forth in Article IX to be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
SECTION 7.2 CONDUCT OF BUSINESS BY PRI
(a) Except as otherwise expressly contemplated by this Agreement, or as
consented to by ▇▇▇▇▇▇ in writing (such consent not to be unreasonably withheld
or delayed), during the period from the date of this Agreement to the Effective
Time, PRI shall, and shall cause its Subsidiaries to, carry on their respective
39
businesses in the ordinary course consistent with past practice and in
compliance in all material respects with all applicable Laws and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees and preserve their
relationships with those persons having business dealings with them to the end
that their goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing (but subject to the above
exceptions), during the period from the date of this Agreement to the Effective
Time, PRI shall not, and shall not permit any of its Subsidiaries to:
(i) other than dividends and distributions by a direct or indirect
wholly owned Subsidiary of PRI to its parent, or by a Subsidiary that is
partially owned by PRI or any of its Subsidiaries, provided that PRI or any
such Subsidiary receives or is to receive its proportionate share thereof,
and except as contemplated by the PRI Exchangeable Share Provisions, (A)
declare, set aside or pay any dividends on, make any other distributions in
respect of, or enter into any agreement with respect to the voting of, any
of its capital stock, (B) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, except
for issuances of PRI Common Stock upon the exercise of PRI Options or PRI
Warrants which are either outstanding as of the date hereof in accordance
with their present terms, including cashless exercise, or are permitted to
be issued pursuant to Section 7.2(a)(ii) hereof, or (C) purchase, redeem or
otherwise acquire any shares of capital stock of PRI or any of its
Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such securities (except, the deemed acceptance of
shares of PRI Common Stock upon cashless exercise of PRI Options or PRI
Warrants, or in connection with withholding obligations relating thereto
and except from former employees, directors and consultants in accordance
with agreements existing on the date hereof and providing for the
repurchase of shares in connection with any termination of service of such
party);
(ii) issue, deliver, sell or subject to any Encumbrance (other than
Encumbrances disclosed in Section 5.2 of the PRI Disclosure Schedule) any
shares of the capital stock of PRI or any of its Subsidiaries, any other
voting securities or any securities convertible into or exchangeable or
exercisable for, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, other than (A) the
issuance of PRI Common Stock or warrants to purchase PRI Common Stock in
connection with any acquisition permitted by Section 7.2(a)(iv), or the
issuance (or deemed issuance, by way of assumption or otherwise) of options
or warrants to purchase PRI Common Stock in exchange for outstanding
securities, rights, warrants or options to acquire any securities of
another Person in connection with any such acquisition, (B) the issuance of
PRI Common Stock upon the exercise of PRI Options or PRI Warrants
outstanding as of the date hereof in accordance with their present terms,
(C) the issuance to existing or new employees of PRI Options (and shares of
PRI Common Stock upon the exercise thereof) in an aggregate amount not to
exceed 200,000 (net of cancellations) granted after the date hereof, (D)
the issuance of PRI Options (and shares of Common Stock upon exercise
thereof) to employees of an acquired business in connection with and
promptly following an acquisition permitted by Section 7.2(a)(iv) in a
manner consistent with ▇▇▇▇▇▇' past practice in connection with
acquisitions, (E) the issuance of PRI Common Stock upon the exchange,
redemption or retraction of PRI Exchangeable Shares or (F) the issuance of
PRI Rights (and shares of Class One Preferred Stock upon the exercise
thereof) in accordance with the terms of the PRI Rights Plan, as in effect
on the date hereof;
(iii) amend any of its Organizational Documents;
(iv) 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 Person; provided that PRI may acquire or
contract to acquire one or more additional businesses with an aggregate
consideration of not more than $5 million and in each case in a manner
which would not materially delay or impair the ability of PRI to perform
its obligations under this Agreement and which is reasonably expected to be
accretive to PRI's earnings within 12 months following consummation. (For
purposes hereof, "aggregate consideration" shall equal the sum of (A)(1)
the amount of cash to be paid, (2) the value of any shares of PRI Common
Stock (valued at the closing price of the PRI Common Stock on Nasdaq on the
day
40
prior to announcement of such acquisition) to be delivered, and (3) the
fair market value of any non-cash or non-PRI Common Stock consideration
(including the issuance (or deemed issuance, by way of assumption or
otherwise) of options or warrants to purchase PRI Common Stock in exchange
for outstanding securities, rights, warrants or options to acquire any
securities of another Person in connection with any such acquisition, and
in any case as determined by the PRI Board of Directors in good faith as of
the day prior to announcement of such acquisition) to be delivered to the
seller or its security holders in connection with such acquisition, and (B)
the amount of liabilities directly or indirectly assumed by PRI or its
Subsidiaries or retired or defeased in connection with such acquisition,
including contingent liabilities to the extent they can be estimated by the
PRI Board of Directors in good faith as of the day prior to the
announcement of such acquisition);
(v) sell, lease, license, mortgage or otherwise create an Encumbrance on
or otherwise dispose of any of its existing properties or assets (including
securitizations) other than the sale of the E-machine machine shop and
other than in the ordinary course of business consistent with past
practice;
(vi) acquire, purchase or lease capital assets or otherwise incur a
capital expenditure in excess of $8 million in the aggregate;
(vii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any Person for
borrowed money for principal amounts in excess of $5 million on or before
January 31, 2002 or for principal amounts in excess of $20 million after
January 31, 2002, other than letters of credit issued for the benefit of
customers of PRI in the ordinary course of business;
(viii) accelerate, amend or change the period of exercisability of
options or restricted stock granted (or permitted by this Agreement to be
granted after the date hereof) under any PRI stock plan or authorize cash
payments in exchange for any options granted (or permitted by this
Agreement to be granted after the date hereof) under any such plan except
as required by the terms of such plan or any related agreements in effect
as of the date of this Agreement;
(ix) (A) increase the compensation payable or to become payable to its
officers or employees, except for increases in salary, wages or bonus of
employees in the ordinary course of business consistent with past practices
(which include market adjustments), (B) grant any additional severance or
termination benefits to, or enter into any severance agreements with, any
employees or officers other than severance or termination payments to
employees in connection with (i) reductions in force or (ii) terminations
of individual employees by PRI in the normal course of business, provided
that no such benefits or agreements shall be provided to any of PRI's
directors or twenty highest paid current employees except in connection
with a reduction in force and in a manner consistent with past practice for
such reductions in force, (C) enter into any collective bargaining
agreement (other than as required by Law), (D) establish, adopt, enter into
or amend any Employee Benefit Plan for the benefit of any directors,
officers or employees;
(x) compromise or settle any Proceeding if such compromise or settlement
would obligate PRI or any of its Subsidiaries to pay and/or assume
liabilities greater than $3 million, individually or in the aggregate, or
to take or refrain from any other action (other than as a result of a
breach of this Agreement);
(xi) except in the ordinary course of business consistent with past
practice, modify or amend in any material respect or terminate any PRI
Material Contract or waive, release or assign any material rights or claims
thereunder; (xii) change in any material respect its accounting methods,
principles or practices, except insofar as may be required by a generally
applicable change in GAAP or a change in the rules and regulations of the
SEC; or
(xiii) authorize, or commit or agree to take, any of the foregoing
actions, provided that the limitations set forth in this Section shall not
apply to any transaction between PRI and any wholly owned Subsidiary or
between any wholly owned Subsidiaries of PRI.
41
(b) Except as required by Law, PRI shall not, and shall not permit any of
its Subsidiaries to, voluntarily take any action that would, or that could
reasonably be expected to, result in (i) any of its representations and
warranties set forth in this Agreement that are qualified as to materiality
becoming untrue or inaccurate at the Effective Time, (ii) any of such
representations and warranties that are not so qualified becoming untrue or
inaccurate in any material respect at the Effective Time, or (iii) any of the
conditions to the consummation of this Agreement and the transaction
contemplated hereby as set forth in Article IX not being satisfied.
(c) PRI shall promptly advise ▇▇▇▇▇▇ orally and in writing to the extent it
has Knowledge of (i) any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (ii) the failure by it or
any of its Subsidiaries to comply in any material respect with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement and (iii) any Material Adverse Effect or
any change or event having, or which, insofar as can reasonably be foreseen,
could reasonably be expected to have a Material Adverse Effect on the truth of
their respective representations and warranties or the ability of the conditions
set forth in Article IX to be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
SECTION 7.3 NO SOLICITATION BY PRI
(a) PRI shall not, nor shall it permit any of its Subsidiaries to, nor
shall it authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to, directly or
indirectly through another Person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes a PRI
Takeover Proposal or (ii) participate in any discussions or negotiations
regarding any PRI Takeover Proposal; provided, however, that if the Board of
Directors of PRI determines in good faith, after consultation with its outside
counsel, that it is necessary to do so in order to act in a manner consistent
with its fiduciary duties to PRI's stockholders under applicable law, PRI may,
in response to a PRI Takeover Proposal which was not solicited by it, which did
not otherwise result from a breach of this Section, which the Board of Directors
of PRI determines in good faith, after consultation with a financial advisor of
nationally recognized reputation, is reasonably likely to lead to a PRI Superior
Proposal, and which is made Known to or received by PRI prior to the obtaining
of the PRI Stockholder Approval, and subject to providing prior written notice
of its decision to take such action to ▇▇▇▇▇▇ and compliance with paragraph (c)
below, (x) furnish information with respect to PRI and its Subsidiaries to the
person making such PRI Takeover Proposal pursuant to a customary confidentiality
agreement (as determined by PRI after consultation with its outside counsel, the
terms of which are no more favorable to such person than the Confidentiality
Agreement) and (y) participate in discussions or negotiations regarding such PRI
Takeover Proposal.
(b) Except as expressly permitted by this Section, neither PRI nor the
Board of Directors of PRI nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
▇▇▇▇▇▇, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any PRI Takeover Proposal, or (iii) cause PRI
to enter into any express or implied letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "PRI ACQUISITION
AGREEMENT") related to any PRI Takeover Proposal. Notwithstanding the foregoing,
at any time prior to the obtaining of the PRI Stockholder Approval, the Board of
Directors of PRI, to the extent that it determines in good faith, after
consultation with its outside counsel, that it is necessary to do so in order to
act in a manner consistent with its fiduciary duties to PRI's stockholders under
applicable law, may (subject to this and the following sentences) recommend any
PRI Superior Proposal, but only at a time that is after the fifth business day
following ▇▇▇▇▇▇' receipt of written notice advising ▇▇▇▇▇▇ that the Board of
Directors of PRI is prepared to recommend a PRI Superior Proposal, specifying
the terms and conditions of such PRI Superior Proposal and
42
identifying the person making such PRI Superior Proposal. During this five
business day period, ▇▇▇▇▇▇ may make, and in such event PRI shall consider, a
counterproposal to such PRI Superior Proposal, and, subject to the fiduciary
duties of PRI's Board of Directors, PRI (i) shall itself and shall cause its
financial and legal advisors to negotiate on its behalf with ▇▇▇▇▇▇ with respect
to the terms and conditions of such counterproposal for a reasonable period of
time given the terms and conditions of such counterproposal and such PRI
Superior Proposal, and (ii) shall accept such ▇▇▇▇▇▇ counterproposal unless the
Board of Directors of PRI determines in its good faith judgment, after
consultation with a financial advisor of nationally recognized reputation, that
such ▇▇▇▇▇▇ counterproposal is less favorable to PRI's stockholders than such
PRI Superior Proposal.
(c) In addition to the obligations of PRI set forth in paragraphs (a) and
(b) of this Section, PRI shall immediately advise ▇▇▇▇▇▇ orally and in writing
of any request for information or of any PRI Takeover Proposal, the material
terms and conditions of such request or PRI Takeover Proposal and the identity
of the person making such request or PRI Takeover Proposal. PRI will keep ▇▇▇▇▇▇
reasonably informed on a current basis of the status and details (including
amendments or proposed amendments) of any such request or PRI Takeover Proposal.
(d) Nothing contained in this Section shall prohibit PRI from taking and
disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule
14e-2 promulgated under the Exchange Act or from making any disclosure to PRI's
stockholders or the public if, in the good faith judgment of the Board of
Directors of PRI, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable law;
provided, however, that, except as expressly permitted by this Section, neither
PRI nor its Board of Directors nor any committee thereof shall withdraw or
modify, or propose publicly to withdraw or modify, its position with respect to
this Agreement or the Merger or approve or recommend, or propose publicly to
approve or recommend, a PRI Takeover Proposal.
(e) Nothing in this Section 7.3 shall (i) permit PRI to terminate this
Agreement (except as specifically provided in Section 10.1 hereof), (ii) permit
PRI to enter into any PRI Acquisition Agreement during the term of this
Agreement (it being agreed that during the term of this Agreement, PRI shall not
enter into any agreement with any person that provides for, or in any way
facilitates, a PRI Takeover Proposal (other than a confidentiality agreement of
the type referred to in Section 7.3(a) above)) or (iii) affect any other
obligation of PRI under this Agreement.
(f) Nothing contained in this Section shall prohibit PRI from advising any
Person making a PRI Takeover Proposal that PRI is bound by the terms of this
Agreement or from negotiating the confidentiality agreement described in Section
7.3(a).
ARTICLE VIII. ADDITIONAL AGREEMENTS
SECTION 8.1 PREPARATION OF REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS; STOCKHOLDERS MEETINGS
(a) As soon as practicable following the date of this Agreement, PRI and
▇▇▇▇▇▇ shall prepare and file with the SEC (and, if applicable exemptions are
not available, with the Canadian Regulators under the MJDS Policy) a joint proxy
statement/prospectus (such joint proxy statement/prospectus, together with any
accompanying letters to stockholders, notices of meeting and forms of proxy,
shall be referred to herein as the "JOINT PROXY STATEMENT/PROSPECTUS") and
▇▇▇▇▇▇ shall prepare and file with the SEC (and, if applicable, the Canadian
Regulators under the MJDS Policy) the Registration Statement, in which the Joint
Proxy Statement/Prospectus will be included as a prospectus. Each of PRI and
▇▇▇▇▇▇ shall use reasonable efforts to have the Registration Statement declared
effective under the Securities Act (and to comply with the MJDS Policy, if
applicable) as promptly as practicable after such filing. PRI will use
reasonable efforts to cause the Joint Proxy Statement/Prospectus to be mailed to
PRI's stockholders, and ▇▇▇▇▇▇ will use reasonable efforts to cause the Joint
Proxy Statement/Prospectus to be mailed to ▇▇▇▇▇▇' stockholders, in each case as
promptly as practicable after the Registration Statement is declared effective
under the Securities Act (and, if applicable, determined by ▇▇▇▇▇▇ and PRI to
comply with the MJDS Policy). ▇▇▇▇▇▇ shall take
43
any action (other than qualifying to do business in any jurisdiction in which
▇▇▇▇▇▇ or PRI is not now so qualified or filing a general consent to service of
process) required to be taken under any applicable state and provincial
securities laws in connection with the issuance of ▇▇▇▇▇▇ Common Stock in the
Merger. PRI shall furnish all information concerning itself and the holders of
its stock as may be reasonably requested in connection with any such action. No
filing of, or amendment or supplement to, the Registration Statement or the
Joint Proxy Statement/Prospectus will be made by any party without providing the
other party a reasonable opportunity to review and comment thereon. ▇▇▇▇▇▇ will
advise PRI, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the qualification
of the ▇▇▇▇▇▇ Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or any request by the SEC or the Canadian
Regulators for amendment of the Joint Proxy Statement/Prospectus or the
Registration Statement or comments thereon and responses thereto or requests by
the SEC or the Canadian Regulators for additional information. PRI shall cause a
meeting of the holders of the PRI Exchangeable Shares to be called and held in
accordance with applicable Canadian Law as soon as practicable following the
date of this Agreement for purposes of approving, and, to the extent required,
PRI will approve and will cause PRI Subco to approve the Amended Canadian
Articles, the Amended Support Agreement and the Amended Voting and Exchange
Trust Agreement and any other matters required as a result of the Merger and the
transactions contemplated hereby, and shall prepare, file and distribute any
proxy circular required by applicable Canadian Law or the PRI Exchangeable Share
Provisions. No such filing of, or amendment or supplement to, the proxy circular
will be made without providing ▇▇▇▇▇▇ a reasonable opportunity to review and
comment thereon. If the Board of Directors of PRI shall recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby, the Board of Directors of PRI Canada
shall recommend to the holders of the PRI Exchangeable Shares the approval and
adoption of any such amendments or other matters. ▇▇▇▇▇▇ shall cooperate with
PRI and PRI Canada in the preparation of any such proxy circular and shall
furnish all information concerning itself and the holders of its stock as may be
reasonably required in connection therewith. PRI shall use its best efforts to
cause PRI Canada to hold such meeting on the same date as the PRI Stockholders'
Meeting and the ▇▇▇▇▇▇ Stockholders' Meeting.
(b) If, at any time prior to the Effective Time, any information relating
to PRI or ▇▇▇▇▇▇, or any of their respective Affiliates, officers or directors,
is discovered by a party hereto which should be set forth in an amendment or
supplement to the Registration Statement, the Joint Proxy Statement/Prospectus
or any Canadian proxy circular, so that any of such documents would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other parties hereto and an appropriate amendment or
supplement describing such information shall be promptly filed with the SEC and,
to the extent required by Law, disseminated to the stockholders of PRI and
▇▇▇▇▇▇ (and, if applicable, necessary action will be taken to comply with the
requirements of the Canadian Regulators).
(c) PRI shall, as promptly as practicable after the Registration Statement
is declared effective under the Securities Act (and, if applicable, determined
by ▇▇▇▇▇▇ and PRI to comply with the MJDS Policy), duly call, give notice of,
convene and hold a meeting of its stockholders (the "PRI STOCKHOLDERS MEETING")
in accordance with the MBCL for the purpose of obtaining the PRI Stockholder
Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby; provided however, that in the event of a
PRI Takeover Proposal the Board of Directors of PRI may withdraw or modify such
recommendation if (but only if) (i) the Board of Directors of PRI has received a
PRI Superior Proposal and (ii) PRI has complied with the provisions of Section
7.3, but any such withdrawal of recommendation shall not obviate the obligation
to hold the PRI Stockholders Meeting.
(d) ▇▇▇▇▇▇ shall, as promptly as practicable after the Registration
Statement is declared effective under the Securities Act (and, if applicable,
determined by ▇▇▇▇▇▇ and PRI to comply with the MJDS Policy), duly call, give
notice of, convene and hold a meeting of its stockholders (the "▇▇▇▇▇▇
STOCKHOLDERS MEETING") in
44
accordance with the DGCL for the purpose of obtaining the ▇▇▇▇▇▇ Stockholder
Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby.
(e) ▇▇▇▇▇▇ and PRI will use best efforts to hold the PRI Stockholders
Meeting and the ▇▇▇▇▇▇ Stockholders Meeting on the same date and as soon as
reasonably practicable after the effectiveness of the Registration Statement
(and, if applicable, compliance with the MJDS Policy) and each will use its best
efforts to solicit from its stockholders proxies in favor of this Agreement and
the Merger.
(f) At the ▇▇▇▇▇▇ Stockholders Meeting, ▇▇▇▇▇▇ shall submit to the
stockholders of ▇▇▇▇▇▇ in accordance with the DGCL a proposal to change the name
of ▇▇▇▇▇▇ in accordance with Section 2.7 hereof, and shall, through its Board of
Directors, recommend to its stockholders the approval of such change in the name
of ▇▇▇▇▇▇. ▇▇▇▇▇▇ will use its best efforts to solicit from its stockholders
proxies in favor of such change in the name of ▇▇▇▇▇▇. If the stockholders of
▇▇▇▇▇▇ approve such change in the name of ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall not, for a period
of one year, make any further change in its name (including any change for
purposes of doing business).
(g) As soon as practicable after the date of this Agreement, ▇▇▇▇▇▇ shall
make all necessary filings with respect to the Merger under the Securities Act
and the Exchange Act and the rules and regulations thereunder and applicable
Canadian securities laws.
SECTION 8.2 LETTERS OF PRI'S ACCOUNTANTS
PRI shall use reasonable efforts to cause to be delivered to ▇▇▇▇▇▇ two
letters from PRI's independent accountants, one dated a date within two business
days before the date on which the Registration Statement shall become effective
and one dated a date within two business days before the Closing Date, each
addressed to ▇▇▇▇▇▇, in form and substance reasonably satisfactory to ▇▇▇▇▇▇ and
customary in scope and substance for comfort letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement. At the request of PRI Canada, PRI shall use reasonable
efforts to cause to be delivered to PRI Canada two letters from PRI's
independent accountants, one dated a date within two business days before the
date on which PRI Canada shall distribute any proxy circular to holders of the
PRI Exchangeable Shares and one dated a date within two business days before the
Closing Date, each addressed to PRI Canada, in form and substance reasonably
satisfactory to PRI Canada and customary in scope for comfort letters delivered
by independent public accountants in connection with proxy circulars similar to
such proxy circular.
SECTION 8.3 LETTERS OF ▇▇▇▇▇▇' ACCOUNTANTS
▇▇▇▇▇▇ shall use reasonable efforts to cause to be delivered to PRI two
letters from ▇▇▇▇▇▇' independent accountants, one dated a date within two
business days before the date on which the Registration Statement shall become
effective and one dated a date within two business days before the Closing Date,
each addressed to PRI, in form and substance reasonably satisfactory to PRI and
customary in scope and substance for comfort letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement. At the request of PRI Canada, ▇▇▇▇▇▇ shall use
reasonable efforts to cause to be delivered to PRI Canada two letters from
▇▇▇▇▇▇' independent accountants, one dated a date within two business days
before the date on which PRI Canada shall distribute any proxy circular to
holders of the PRI Exchangeable Shares and one dated a date within two business
days before the Closing Date, each addressed to PRI Canada, in form and
substance reasonably satisfactory to PRI Canada and customary in scope for
comfort letters delivered by independent public accountants in connection with
proxy circulars similar to such proxy circular.
SECTION 8.4 ACCESS TO INFORMATION; CONFIDENTIALITY
Subject to the Confidentiality Agreement and subject to restrictions
contained in confidentiality agreements to which such party is subject (which
such party will use its best efforts to have waived) and applicable Law, upon
reasonable notice, each of PRI and ▇▇▇▇▇▇ shall, and shall cause its
Subsidiaries to,
45
afford to the other party and to the officers, employees, accountants, counsel,
financial advisors and other representatives of such other party, reasonable
access during normal business hours during the period prior to the Effective
Time to all properties, books, contracts, commitments, personnel and records of
itself and its Subsidiaries. During such period, each of PRI and ▇▇▇▇▇▇ shall,
and shall cause its Subsidiaries to, furnish promptly to the other party (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of federal or
state securities laws and (b) all other information concerning its business,
properties and personnel as such other party may reasonably request. No review
pursuant to this Section 8.4 shall affect any representation or warranty given
by the other party hereto. Each of PRI and ▇▇▇▇▇▇ will hold, and will cause its
officers, employees, accountants, counsel, financial advisors and other
representatives and Affiliates to hold, any nonpublic information in accordance
with the terms of the Confidentiality Agreement.
SECTION 8.5 BEST EFFORTS
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, and to satisfy the conditions set forth in Article IX hereof,
including (i) the obtaining of all actions or non-actions, waivers, consents,
approvals, exemptions, authorizations and Orders from Governmental Authorities
and the making of all declarations, registrations and filings and the taking of
all steps as may be necessary to obtain an approval or waiver from, or to avoid
any Proceeding by, any Governmental Authority, (ii) the obtaining of all
consents, approvals or waivers from third parties that are (A) necessary to
consummate the transactions contemplated hereby, (B) required to be disclosed in
the ▇▇▇▇▇▇ Disclosure Schedule or the PRI Disclosure Schedule, as the case may
be, or (C) required to prevent a PRI Material Adverse Effect or a ▇▇▇▇▇▇
Material Adverse Effect from occurring before or after the Effective Time, (iii)
the defending of any Proceedings challenging this Agreement or the consummation
of the transactions contemplated by this Agreement, including seeking to have
any Order entered by any Governmental Authority vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Nothing set forth in this Section 8.5 will limit or affect actions
permitted to be taken pursuant to Section 7.3.
(b) Without limiting the foregoing, PRI and ▇▇▇▇▇▇ shall (i) take all
action necessary to ensure that no state "fair price," "business combination,"
"moratorium," "control share acquisition" or other form of antitakeover Law is
or becomes applicable to the Merger, this Agreement, or any of the other
transactions contemplated by this Agreement and (ii) if any such Law becomes
applicable to the Merger, this Agreement, or any other transaction contemplated
by this Agreement, take all action necessary to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such Law on the Merger and the other transactions
contemplated by this Agreement.
SECTION 8.6 INDEMNIFICATION, EXCULPATION AND INSURANCE
(a) ▇▇▇▇▇▇ agrees to maintain in effect in accordance with their terms all
rights to indemnification, exculpation from liabilities and reimbursement of
expenses for acts or omissions occurring at or prior to the Effective Time now
existing in favor of the current or former directors or officers of PRI and its
Subsidiaries as provided in their Organizational Documents and any
indemnification contracts between PRI and their respective current or former
directors and officers. In addition, from and after the Effective Time, persons
who become directors or officers of ▇▇▇▇▇▇ pursuant to this Agreement or
otherwise in connection with the Merger will be entitled to rights and
protections with respect to indemnity, exculpation and reimbursement of expenses
at least as favorable to them as the rights and protections held by the
directors and officers of ▇▇▇▇▇▇ immediately before the Effective Time.
(b) In the event that ▇▇▇▇▇▇ or its successor or assign (i) consolidates
with or merges into any other person and is not the continuing or surviving
corporation or Person of such consolidation or merger or
46
(ii) transfers or conveys all or substantially all of its properties and assets
to any Person, then, and in each such case, proper provision will be made so
that such successor or assign assumes the obligations set forth in this Section.
(c) The provisions of this Section (i) are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs and his
or her representatives and (ii) are in addition to, and not in substitution for,
any other rights to indemnification or contribution that any such person may
have by contract or otherwise.
SECTION 8.7 FEES AND EXPENSES
(a) Except as provided in this Section, all fees and expenses incurred in
connection with the Merger, this Agreement, and the transactions contemplated by
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except that each of ▇▇▇▇▇▇ and PRI
shall bear and pay one-half of the costs and expenses incurred in connection
with the filing, printing and mailing of the Registration Statement and the
Joint Proxy Statement/Prospectus (including SEC filing fees).
(b) In the event that (i) (A) a PRI Takeover Proposal shall have been made
Known to PRI or any of its Subsidiaries or shall have been made directly to
PRI's stockholders generally or any Person shall have publicly announced an
intention (whether or not conditional) to make a PRI Takeover Proposal, and (B)
thereafter this Agreement is terminated by either ▇▇▇▇▇▇ or PRI pursuant to
Section 10.1(b)(ii) or by ▇▇▇▇▇▇ pursuant to Section 10.1(c) (but only if such
termination is based upon PRI's failure to perform any of its covenants or
agreements contained herein, (ii) (A) there is a material breach by PRI (acting
through one of its executive officers, directors or authorized investment
bankers or counsel) of Section 7.3(a) of this Agreement which is not cured
within 24 hours after PRI's Chairman, Chief Executive Officer, Chief Financial
Officer or Vice President of Strategic Business Development becomes aware of the
breach and (B) thereafter this Agreement is terminated by ▇▇▇▇▇▇ pursuant to
Section 10.1(c) (but only if such termination is based upon PRI's failure to
perform any of its covenants or agreements contained in Section 7.3(a) of this
Agreement), or (iii) this Agreement is terminated by ▇▇▇▇▇▇ pursuant to Section
10.1(e), then PRI in either case shall promptly, but in no event later than two
days after the date of such termination, pay ▇▇▇▇▇▇ a fee equal to $14,000,000
plus the reasonable out-of-pocket expenses of ▇▇▇▇▇▇ incurred since October 1,
2001 and paid in connection with the transactions contemplated by this Agreement
(together, the "PRI TERMINATION FEE"), payable by wire transfer of same day
funds; provided, however, that no PRI Termination Fee shall be payable to ▇▇▇▇▇▇
pursuant to clause (i) of this paragraph (b) unless and until within 12 months
after such termination PRI or any of its Subsidiaries enters into any PRI
Acquisition Agreement pursuant to such PRI Takeover Proposal (or any other
transaction with the Person making such PRI Takeover Proposal or any Affiliate
of such Person, which transaction would itself be a PRI Takeover Proposal) or
any such PRI Takeover Proposal (or any other transaction with the Person making
such PRI Takeover Proposal or any Affiliate of such Person, which transaction
would itself be a PRI Takeover Proposal) is consummated, in which event the PRI
Termination Fee shall be payable upon the first to occur of such events. For
purposes of Section 8.7(b)(ii), (x) materiality shall be determined by reference
to the effect of the action on the completion of the Merger and (y) a breach
shall be deemed cured if, within the time frame specified, either (A) PRI shall
disavow in writing the action that constituted such breach, (B) ▇▇▇▇▇▇ shall
request such a disavowal in a written form reasonably acceptable to PRI, and PRI
shall have provided such disavowal within 48 hours after such request, or (C)
PRI shall inform ▇▇▇▇▇▇ of the breach and ▇▇▇▇▇▇ shall not request such a
written disavowal. PRI acknowledges that the agreements contained in this
Section are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, ▇▇▇▇▇▇ would not enter into this Agreement;
accordingly, if PRI fails promptly to pay the amount due pursuant to this
paragraph (b), and, in order to obtain such payment, ▇▇▇▇▇▇ commences a suit
which results in a judgment against PRI for the fee set forth in this paragraph
(b), PRI shall pay to ▇▇▇▇▇▇ its costs and expenses (including attorneys' fees
and expenses) in connection with such suit, together with interest on the amount
of the fee at the prime rate of ABN Amro in effect on the date such payment was
required to be made.
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SECTION 8.8 PUBLIC ANNOUNCEMENTS
▇▇▇▇▇▇ and PRI will consult with each other a reasonable time before
issuing, and provide each other a reasonable opportunity to review, comment upon
and concur with and use reasonable efforts to agree on, any press release or
other public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as either
party may determine is required by applicable Law, court process or by
obligations pursuant to any listing agreement with any securities exchange or
stock market on which listed.
SECTION 8.9 STOCK LISTING
Until the earlier of the termination of this Agreement or the Effective
Time, PRI shall continue the quotation of the PRI Common Stock on Nasdaq. ▇▇▇▇▇▇
shall use best efforts to cause the ▇▇▇▇▇▇ Common Stock issuable under Article
III, including ▇▇▇▇▇▇ Common Stock issuable upon exercise of the PRI Options and
PRI Warrants to purchase share of ▇▇▇▇▇▇ Common Stock described in Section 3.4
and upon the exchange redemption or retraction of the PRI Exchangeable Shares,
to be approved for listing on Nasdaq, subject to official notice or issuance, as
promptly as practicable after the date hereof, and in any event prior to the
Closing Date.
SECTION 8.10 TAX TREATMENT
Each of ▇▇▇▇▇▇ and PRI shall use best efforts to cause the Merger to
qualify as a reorganization under the provisions of Section 368 of the Code and
to obtain the opinions of counsel referred to in Sections 9.1(h). After the
Effective Time, ▇▇▇▇▇▇ shall continue the historic business of PRI or use a
significant portion of PRI's historic business assets in a business and shall
use its best efforts to avoid taking any action that would cause the Merger to
fail to qualify as a reorganization under the provisions of such Section 368.
SECTION 8.11 CONVEYANCE TAXES
▇▇▇▇▇▇ and PRI shall cooperate in the preparation, execution and filing of
all Tax Returns or other documents regarding any real property transfer or gains
taxes, or other Taxes, any transfer, recording, registration and other fees or
any similar Taxes which become payable in connection with the transactions
contemplated by this Agreement that are required or permitted to be filed at or
before the Effective Time. ▇▇▇▇▇▇ shall pay, and PRI shall pay, without
deduction or withholding from any amount payable to the holders of their Common
Stock, any such Taxes imposed by any Governmental Authority (and any penalties
and interest with respect to such Taxes), which become payable in connection
with the transactions contemplated by this Agreement, on behalf of their
respective stockholders.
SECTION 8.12 RESTRAINTS
Each of the parties shall use its best efforts to prevent the entry of any
Restraints and to appeal as promptly as possible any Restraints that may be
entered.
SECTION 8.13 SECTION 16 MATTERS
Before the Effective Time, the Board of Directors of ▇▇▇▇▇▇ shall adopt
such resolutions, in form and substance reasonably satisfactory to ▇▇▇▇▇▇ and
PRI, as are necessary to exempt from the application of Section 16(b) of the
Exchange Act the acquisition of any security of ▇▇▇▇▇▇ pursuant to or in
connection with the Merger by any person who becomes a director or officer of
▇▇▇▇▇▇, as those terms are defined in Rule 16a-1 under the Exchange Act,
pursuant to this Agreement or otherwise in connection with the Merger and the
other transactions contemplated hereby.
SECTION 8.14 BENEFIT PLANS
(a) As soon as administratively practicable after the Effective Time,
▇▇▇▇▇▇ shall take all reasonable action so that employees of PRI and its
Subsidiaries shall be entitled to participate in each ▇▇▇▇▇▇ Employee
48
Benefit Plan to the same extent as similarly-situated employees of ▇▇▇▇▇▇ and
its Subsidiaries (it being understood that inclusion of the employees of PRI and
its Subsidiaries in the ▇▇▇▇▇▇ Employee Benefit Plans may occur at different
times with respect to different plans). ▇▇▇▇▇▇ shall cause each ▇▇▇▇▇▇ Employee
Benefit Plan in which employees of PRI and its Subsidiaries are eligible to
participate to take into account for purposes of eligibility and vesting
thereunder the service of such employees with PRI and its Subsidiaries to the
same extent as such service was credited for such purposes by PRI.
(b) ▇▇▇▇▇▇ shall honor, and the Surviving Corporation shall continue to be
obligated to perform, in accordance with their terms, all benefit obligations
to, and contractual rights of, current and former employees of PRI existing as
of the Effective Date, as well as all employment or severance agreements, plans
or policies of PRI.
(c) If employees of PRI or any of its Subsidiaries become eligible to
participate in a medical, dental or vision benefits plan of ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall
cause each such plan to (i) waive any preexisting condition limitations to the
extent such conditions are covered under the applicable medical, dental or
vision benefits plans of ▇▇▇▇▇▇, (ii) honor under such plans any deductible,
co-payment and out-of-pocket expenses incurred by the employees and their
beneficiaries during the portion of the calendar year prior to such
participation and (iii) waive any waiting period limitation or evidence of
insurability requirement which would otherwise be applicable to such employee on
or after the Effective Time to the extent such employee had satisfied any
similar limitation or requirement under an analogous PRI Employee Benefit Plan
prior to the Effective Time.
ARTICLE IX. CONDITIONS PRECEDENT
SECTION 9.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
The obligation of each party to effect the Merger and the other
transactions contemplated by this Agreement is subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) Stockholder Approvals. Each of the PRI Stockholder Approval and the
▇▇▇▇▇▇ Stockholder Approval shall have been obtained.
(b) HSR ACT. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
(c) Approvals. Other than the filing provided for under Section 2.4,
all Orders, consents, waivers, exemptions, approvals or authorizations of,
declarations, filings or registrations with, or giving of notice to, any
Person or Governmental Authority required of PRI, ▇▇▇▇▇▇, or any of their
Subsidiaries to consummate this Agreement, the Merger and the other
transactions contemplated hereby, the failure of which to be obtained or
made (i) is reasonably expected to have a Material Adverse Effect on ▇▇▇▇▇▇
and its Subsidiaries, taken as a whole, or (ii) will result in a violation
of any Laws, shall have been obtained or made, all in form and substance
reasonably satisfactory to PRI and ▇▇▇▇▇▇.
(d) No Injunctions or Restraints. No Order or Law entered, enacted,
promulgated, enforced or issued by any Governmental Authority of competent
jurisdiction or other legal restraint or prohibition (collectively,
"RESTRAINTS") shall be in effect (i) preventing the consummation of the
Merger, or (ii) which otherwise is reasonably likely to have a Material
Adverse Effect on PRI or ▇▇▇▇▇▇, as applicable.
(e) Registration Statement. The Registration Statement shall have
become effective under the Securities Act prior to the mailing of the Joint
Proxy Statement/Prospectus by each of PRI and ▇▇▇▇▇▇ to their respective
stockholders, and no stop order or proceedings seeking a stop order shall
be threatened by the SEC or shall have been initiated by the SEC. The Joint
Proxy Statement/Prospectus shall not on the Closing Date be subject to any
similar proceedings commenced or threatened by the Canadian Regulators.
49
(f) Stock Listing. The shares of ▇▇▇▇▇▇ Common Stock issuable to PRI's
stockholders as contemplated by Article III, and the shares of ▇▇▇▇▇▇
Common Stock issuable upon exercise of PRI Options and PRI Warrants
described in Section 3.4 and upon the exchange, redemption or retraction of
the PRI Exchangeable Shares, shall have been approved for listing on the
Nasdaq National Market, subject to official notice of issuance. The Toronto
Stock Exchange shall have approved the continued listing of the PRI
Exchangeable Shares on such exchange.
(g) Shelf Registration Statement. Unless the condition set forth in
Section 9.3(d)(B) shall be satisfied, ▇▇▇▇▇▇ shall be eligible to file and
shall have filed a registration statement on Form S-3 pursuant to Rule 415
under the Securities Act with respect to the issuance of shares of ▇▇▇▇▇▇
Common Stock to the holders of PRI Exchangeable Shares upon the exchange,
redemption or retraction thereof in accordance with the PRI Exchangeable
Share Provisions; such registration statement shall have become effective
under the Securities Act, and no stop order or proceedings seeking a stop
order shall be threatened by the SEC or shall have been initiated by the
SEC.
(h) Tax Opinion. ▇▇▇▇▇▇ shall have received from Ropes & ▇▇▇▇, tax
counsel to ▇▇▇▇▇▇, and PRI shall have received from ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
LLP, tax counsel to PRI, on a date immediately prior to the mailing of the
Joint Proxy Statement/Prospectus and on the Closing Date, opinions, in each
case dated as of such respective dates, to the effect that the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Code. In rendering such opinions, counsel for ▇▇▇▇▇▇ and PRI shall be
entitled to rely upon representations of officers of ▇▇▇▇▇▇ and PRI
substantially in the form of Exhibits 9.1(h)A and 9.1(h)B hereto.
SECTION 9.2 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇
The obligation of ▇▇▇▇▇▇ to effect the ▇▇▇▇▇▇ Merger and the other
transactions contemplated by this Agreement is further subject to satisfaction
or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
of PRI set forth herein shall be true and correct both when made and at and
as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such
date), except where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to
"materiality" or Material Adverse Effect set forth therein) does not have,
and is not likely to have, individually or in the aggregate, a Material
Adverse Effect on PRI.
(b) Performance of Obligations of PRI. PRI shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of this
Agreement there shall not have occurred any Material Adverse Change
relating to PRI.
(d) PRI Exchangeable Share Matters. (A) (i) PRI shall have received all
approvals necessary from PRI Canada, the holders of the PRI Exchangeable
Shares and such other persons as shall be necessary under the PRI
Exchangeable Share Provisions, the Amended Support Agreement and Amended
Voting and Exchange Trust Agreement entered into by PRI in connection with
the PRI Exchangeable Shares and applicable Law in connection with the
Merger and all transactions contemplated under this Agreement and (ii) the
Amended MRRS Decision Document shall have been obtained, or (B) if any
approvals referred to in clause (i) are required but not obtained, then all
but not less than all of the then outstanding PRI Exchangeable Shares shall
have been redeemed in accordance with the PRI Exchangeable Share Provisions
and applicable Law (or PRI Subco shall have exercised its Redemption Call
Right (as defined in the PRI Exchangeable Share Provisions) in accordance
with the PRI Exchangeable Share Provisions and applicable Law with respect
to all but not less than all of the then outstanding PRI Exchangeable
Shares).
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SECTION 9.3 CONDITIONS TO OBLIGATIONS OF PRI
The obligation of PRI to effect the Merger and the other transactions
contemplated by this Agreement is further subject to satisfaction or waiver of
the following conditions:
(a) Representations and Warranties. The representations and warranties
of ▇▇▇▇▇▇ set forth herein shall be true and correct both when made and at
and as of the Closing Date, as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such
date), except where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to
"materiality," or Material Adverse Effect set forth therein) does not have,
and is not likely to have, individually or in the aggregate, a Material
Adverse Effect on ▇▇▇▇▇▇.
(b) Performance of Obligations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of this
Agreement there shall not have occurred any Material Adverse Change
relating to ▇▇▇▇▇▇.
(d) PRI Exchangeable Share Matters. (A) (i) PRI shall have received all
approvals necessary from PRI Canada, the holders of the PRI Exchangeable
Shares and such other persons as shall be necessary under the PRI
Exchangeable Share Provisions, the Amended Support Agreement and Amended
Voting and Exchange Trust Agreement entered into by PRI in connection with
the PRI Exchangeable Shares and applicable Law in connection with the
Merger and all transactions contemplated under this Agreement, (ii) ▇▇▇▇▇▇
shall have entered into the Amended Support Agreement and Amended Voting
and Exchange Trust Agreement and created the ▇▇▇▇▇▇ Special Voting Share,
and (iii) the Amended MRRS Decision Document shall have been obtained, or
(B) if any approvals referred to in clause (i) are required but not
obtained, then all but not less than all of the then outstanding PRI
Exchangeable Shares shall have been redeemed in accordance with the PRI
Exchangeable Share Provisions and applicable Law (or PRI Subco shall have
exercised its Redemption Call Right (as defined in the PRI Exchangeable
Share Provisions) in accordance with the PRI Exchangeable Share Provisions
and applicable Law with respect to all but not less than all of the then
outstanding PRI Exchangeable Shares).
SECTION 9.4 FRUSTRATION OF CLOSING CONDITIONS
Neither ▇▇▇▇▇▇ nor PRI may rely on the failure of any condition set forth
in Section 9.1, 9.2 or 9.3, as the case may be, to be satisfied if such failure
was caused by such party's failure to use best efforts to consummate the Merger
and the other transactions contemplated by this Agreement, as required by and
subject to Section 8.5.
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ARTICLE X. TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1 TERMINATION
This Agreement may be terminated at any time prior to the Effective Time,
(and whether before or after the PRI Stockholder Approval or the ▇▇▇▇▇▇
Stockholder Approval):
(a) by mutual written consent of ▇▇▇▇▇▇ and PRI;
(b) by either ▇▇▇▇▇▇ or PRI if: (i) the Merger shall not have been
consummated by July 31, 2002; provided, however, that the right to
terminate this Agreement pursuant to this Section 10.1(b)(i) shall not be
available to any party whose failure to perform any of its obligations
under this Agreement results in the failure of the Merger to be consummated
by such time; provided, further, that this Agreement may be extended by not
more than 30 calendar days by either party by written notice to the other
party if the Merger shall not have been consummated as a direct result of
▇▇▇▇▇▇ or PRI having failed to receive all regulatory approvals required to
be obtained with respect to the Merger; (ii) the PRI Stockholder Approval
shall not have been obtained at a PRI Stockholders Meeting duly convened
therefor (including any adjournment or postponement thereof); (iii) the
▇▇▇▇▇▇ Stockholder Approval shall not have been obtained at a ▇▇▇▇▇▇
Stockholders Meeting duly convened therefor (including any adjournment or
postponement thereof); or (iv) any Restraint having any of the effects set
forth in Section 9.1(d) shall be in effect and shall have become final and
nonappealable, provided, that the party seeking to terminate this Agreement
pursuant to this paragraph (b)(iv) shall have used its best efforts to
prevent the entry of and to remove such Restraint;
(c) by ▇▇▇▇▇▇, if PRI shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section
9.2(a) or (b), and (B) is incapable of being cured by PRI or is not cured
within 45 days of written notice thereof from ▇▇▇▇▇▇;
(d) by PRI, if ▇▇▇▇▇▇ shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section
9.3(a) or (b), and (B) is incapable of being cured by ▇▇▇▇▇▇ or is not
cured within 45 days of written notice thereof from PRI;
(e) by ▇▇▇▇▇▇, if (i) PRI, the Board of Directors of PRI or any
committee thereof shall have recommended to the stockholders of PRI any PRI
Takeover Proposal; (ii) PRI, the Board of Directors of PRI or any committee
thereof shall for any reason have withdrawn or shall have amended or
modified in a manner adverse to ▇▇▇▇▇▇ its recommendation of this Agreement
and the Merger; (iii) PRI shall have failed to include its recommendation
of this Agreement and the Merger in the Joint Proxy Statement/ Prospectus
or Registration Statement; or (iv) a tender or exchange offer relating to
15% or more of the shares of PRI Common Stock shall have been commenced by
a Person unaffiliated with ▇▇▇▇▇▇, and PRI shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Exchange Act,
within ten business days after such tender or exchange offer is first
published, sent or given and made known to PRI, a statement recommending
rejection of such tender or exchange offer; or
(f) by PRI, if (i) ▇▇▇▇▇▇, the Board of Directors of ▇▇▇▇▇▇ or any
committee thereof shall for any reason have withdrawn or shall have amended
or modified in a manner adverse to PRI its recommendation of this Agreement
and the Merger or (ii) ▇▇▇▇▇▇ shall have failed to include its
recommendation of this Agreement and the Merger in the Joint Proxy
Statement/Prospectus or Registration Statement.
SECTION 10.2 EFFECT OF TERMINATION
In the event of termination of this Agreement by either PRI or ▇▇▇▇▇▇ as
provided in Section 10.1, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of ▇▇▇▇▇▇, ▇▇▇▇▇▇ Merger
Sub, or PRI other than the provisions of Section 8.7, this Article X and Article
XI
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and the Confidentiality Agreement, which provisions shall survive such
termination, and except that a party shall remain liable to the extent that such
termination results from the willful and material breach by such party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 10.3 AMENDMENT
This Agreement may be amended by the parties at any time before or after
the PRI Stockholder Approval or the ▇▇▇▇▇▇ Stockholder Approval; provided,
however, that after any such approval, there shall not be made any amendment
that by Law requires further approval by the stockholders of PRI or ▇▇▇▇▇▇
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 10.4 EXTENSION; WAIVER
At any time prior to the Effective Time, a party may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties of the
other parties contained in this Agreement or in any document delivered pursuant
to this Agreement or (c) subject to the proviso of Section 10.3, waive
compliance by the other party with any of the agreements or conditions contained
in this Agreement. 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. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights, nor will any single or partial exercise of any right preclude any
other or further exercise thereof or of any other right.
SECTION 10.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER
A termination of this Agreement pursuant to Section 10.1, an amendment of
this Agreement pursuant to Section 10.3 or an extension or waiver pursuant to
Section 10.4 shall, in order to be effective, require, in the case of ▇▇▇▇▇▇ or
PRI, action by its Board of Directors or, with respect to any amendment to this
Agreement, a duly authorized committee of its Board of Directors to the extent
permitted by Law.
ARTICLE XI. GENERAL PROVISIONS
SECTION 11.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 11.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 11.2 NOTICES
All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
mailed by registered or certified mail (return receipt requested), telecopied
(which is confirmed) or sent by overnight courier (providing proof of delivery)
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 ▇▇▇▇▇▇, to
▇▇▇▇▇▇ Automation, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Brown, Rudnick, Freed & Gesmer
53
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
(▇▇▇) ▇▇▇-▇▇▇▇
(b) if to PRI, to
PRI Automation, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
(▇▇▇) ▇▇▇-▇▇▇▇
(c) if to ▇▇▇▇▇▇ Merger Sub, to ▇▇▇▇▇▇ as provided herein.
SECTION 11.3 INTERPRETATION
When a reference is made in this Agreement to an Article, Section or
Exhibit, such reference shall be to an Article or Section of, or an Exhibit to,
this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or Law defined or referred to herein or in any agreement
or instrument that is referred to herein means such agreement, instrument or Law
as from time to time amended, modified or supplemented, including (in the case
of agreements or instruments) by waiver or consent and (in the case of Laws) by
succession of comparable successor Laws and references to all attachments
thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns.
SECTION 11.4 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
SECTION 11.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES
This Agreement (including the documents and instruments referred to herein)
and the Confidentiality Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter of this Agreement and the
Confidentiality Agreement and (b) except for the provisions of Article III and
Section 8.6, are not intended to confer upon any Person other than the parties
any rights or remedies. By execution and delivery of this Agreement, the parties
hereby amend the Confidentiality Agreement to delete Section 9 thereof,
effective as of the date hereof, provided that such amendment shall not
constitute a waiver by a party of its rights to seek and obtain a remedy for any
breach or violation of such Section 9 prior to such execution and delivery.
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SECTION 11.6 GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of
Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflict of laws thereof.
SECTION 11.7 ASSIGNMENT
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by any of the parties hereto without the prior written consent of
the other parties. Any assignment in violation of the preceding sentence shall
be void. Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
SECTION 11.8 CONSENT TO JURISDICTION
Each of the parties hereto (a) consents to and does hereby submit itself to
the personal jurisdiction of any federal court located in the Commonwealth of
Massachusetts or a Massachusetts state court in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement, (b)
agrees that it will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting
in the Commonwealth of Massachusetts or a Massachusetts state court.
SECTION 11.9 HEADINGS
The table of contents and 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 11.10 SEVERABILITY
If any term or other provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or incapable of being enforced
by any Law or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect. 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 to the
fullest extent permitted by applicable Law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, ▇▇▇▇▇▇ Automation, Inc., Pontiac Acquisition Corp. and
PRI Automation, Inc. have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
[seal] ▇▇▇▇▇▇ AUTOMATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
President and Chief Executive
Officer
[seal] PONTIAC ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
President
[seal] PRI AUTOMATION, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
President and Chief Executive
Officer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Treasurer and Chief Financial
Officer
56