EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
KAYAK ACQUISITION CORP.
AND
U.S. VISION, INC.
DATED AS OF
MAY 14, 2002
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of May 14, 2002, is by and between Kayak Acquisition Corp., a Delaware
corporation (the "Purchaser"), and U.S. Vision, Inc., a Delaware corporation
(the "Company"). Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to them in Appendix A attached
hereto.
BACKGROUND
WHEREAS, a Special Committee of the Board of Directors of the Company
formed on January 28, 2002 (the "Special Committee") has (i) considered the
merger of the Purchaser with and into the Company (the "Merger") and the other
Transactions, all upon the terms and provisions of and subject to the conditions
set forth in this Agreement, and (ii) by resolutions duly adopted, recommended
approval of this Agreement, the Merger and the other Transactions by the Board
of Directors of the Company;
WHEREAS, by resolutions duly adopted, the Board of Directors of the
Company, subsequent to the recommendation of the Special Committee, has (i)
determined that the Merger is advisable and in the best interests of the
Company's stockholders other than the Purchaser Stockholders (as defined below),
and (ii) approved this Agreement, the Merger and the other Transactions in
accordance with the General Corporation Law of the State of Delaware, as amended
from time to time (the "DGCL") and upon the terms and subject to the conditions
set forth herein;
WHEREAS, by resolutions duly adopted, the Board of Directors of the
Purchaser has (i) determined that the Merger is advisable and in the best
interests of its stockholders, and (ii) approved this Agreement, the Merger and
the other Transactions in accordance with the DGCL and upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Transactions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and provisions of and subject to
the conditions set forth in this Agreement and the certificate of merger (the
"Certificate of Merger"), and in accordance with the applicable provisions of
the DGCL, at the Effective Time, the Company and the Purchaser shall consummate
the Merger pursuant to which (i) the Purchaser shall be merged with and into the
Company and the separate corporate existence of the Purchaser shall thereupon
cease, and (ii) the Company shall be the surviving company in the Merger (the
"Surviving Company") and shall continue to be governed by the laws of the State
of Delaware. The Merger shall have the effects set forth in the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the assets, properties, rights, privileges, powers and franchises of
the Company and the Purchaser shall vest in the Surviving Company, and all
debts, liabilities and duties of the Company and the Purchaser shall become
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the debts, liabilities and duties of the Surviving Company. Pursuant to the
Merger, (i) the Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Company after the Effective Time, and thereafter
may be amended in accordance with its terms and as provided by applicable law;
provided, however, that at the Effective Time, Article I of the Certificate of
Incorporation of the Surviving Company shall be amended to reflect that the name
of the Company shall be U.S. Vision, Inc., and (ii) the By-laws of the
Purchaser, as in effect immediately prior to the Effective Time, shall be the
By-laws of the Surviving Company after the Effective Time, and thereafter may be
amended in accordance with their terms and as provided by applicable law.
Section 1.2 Effective Time. On the Closing Date (as defined
below), the parties shall cause the Merger to be consummated by causing a
Certificate of Merger with respect to the Merger to be executed and filed in
accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under applicable law. The Merger shall become
effective at the time of filing of the Certificate of Merger or at such later
time as is specified therein.
Section 1.3 Closing. The closing of the Merger shall take
place at 10:00 a.m., local time, on a date to be agreed upon by the parties, and
if such date is not agreed upon by the parties, the Closing shall occur on the
second business day after satisfaction or waiver of all of the conditions set
forth in Article VI, other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver of those
conditions (the "Closing Date"), at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at
such other time, date or place as the parties may agree in writing.
Section 1.4 Directors and Officers of the Surviving Company.
The members of the Board of Directors of the Purchaser immediately prior to the
Effective Time and the officers of the Purchaser immediately prior to the
Effective Time shall, from and after the Effective Time, be the members of the
Board of Directors and officers, respectively, of the Surviving Company until
their successors shall have been duly elected or appointed or qualified or until
their earlier death, resignation or removal in accordance with the Certificate
of Incorporation and the By-Laws of the Surviving Company. If, at the Effective
Time, a vacancy shall exist on the Company's Board of Directors or in any office
of the Surviving Company, such vacancy may thereafter be filled in the manner
provided by applicable law.
Section 1.5 Subsequent Actions. At and after the Effective
Time, the Surviving Company shall take all action as shall be required in
connection with the Merger, including, but not limited to, the execution and
delivery of any further deeds, assignments, instruments or documents as are
necessary or desirable to carry out and effectuate the Transactions.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK OF
THE COMPANY AND THE PURCHASER
Section 2.1 Cancellation of Company Common Stock Owned by the
Purchaser; Cancellation of Purchaser Common Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof,
all shares of Company Common Stock that are owned by the Purchaser shall
automatically be canceled and retired and shall cease to exist and no
consideration shall be paid with respect thereto. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
all shares of Purchaser Common Stock shall automatically be canceled and retired
and shall cease to exist and no consideration shall be paid with respect
thereto.
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Section 2.2 Conversion of Shares for Merger Consideration;
Converted Shares; Treasury Shares.
(a) Subject to Section 2.4, at the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof, each
Share outstanding immediately prior to the Effective Time shall automatically be
converted into the right to receive, and each certificate, which immediately
prior to the Effective Time represented such Shares, shall evidence solely the
right to receive from the Purchaser, $4.25 in cash (the "Merger Consideration")
payable, without interest, upon surrender of the certificates formerly
representing such Shares. Each fractional share outstanding immediately prior to
the Effective Time shall be rounded up to the nearest whole number and shall
automatically be converted into the right to receive from the Purchaser the
Merger Consideration, without interest.
(b) At the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, each Converted Share outstanding
immediately prior to the Effective Time shall automatically be converted into
and shall become one duly authorized, validly issued, fully paid and
non-assessable share of Surviving Company Common Stock upon the surrender of the
certificates previously representing such Converted Shares.
(c) All Treasury Shares shall, by virtue of the Merger and
without any action on the part of the holder thereof, automatically be canceled
and retired and shall cease to exist and no consideration shall be paid with
respect thereto.
Section 2.3 Options and Warrants.
(a) At least 30 days before the Effective Time, the Board of
Directors of the Company shall (i) adopt resolutions providing that each Option
(other than a Converted Option) outstanding immediately prior to the Effective
Time shall (A) become fully vested and exercisable as of immediately prior to
the Effective Time, (B) entitle the holder, without payment of the exercise
price for Shares subject to such Option, to receive in cash, without interest,
from the Surviving Company at the Closing, an amount equal to the product of (I)
the number of unissued Shares subject to such Option, and (II) the excess, if
any, of the Merger Consideration over the per-share exercise price for Shares
subject to such Option, such product to be reduced by the amount of withholding
or other taxes required by law to be withheld with respect to the exercise of
such Option, and (C) be cancelled as of the Effective Time if such Option is not
exercised immediately prior to the Effective Time; and (ii) provide, or cause to
be provided, to the holder of each Option (other than a Converted Option), a
notice of cancellation of such Option as of the Effective Time and the right of
the holder to exercise such Option as of immediately prior to the Effective Time
provided notice of such exercise is given by the Option holder to the Company
during the 30-day period preceding the Effective Time.
(b) Except as provided in Section 2.3(d) below, as of the
Effective Time, each outstanding Converted Option granted by the Company,
whether or not then exercisable, shall be modified to provide for cancellation
as of the Effective Time in consideration of the holder of such Converted Option
receiving from the Surviving Company a Subordinated Note of the Surviving
Company in an amount equal to the product of (i) the number of unissued Shares
subject to such Converted Option at the time of such cancellation, and (ii) the
excess, if any, of the Merger Consideration over the per-share exercise price
for Shares subject to such Converted Option at the time of such cancellation,
such product to be reduced by the amount of withholding or other taxes required
by law to be withheld with respect to the cancellation of such Converted Option
and the receipt of the Subordinated Note of the Surviving Corporation.
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(c) Except as provided in Sections 2.3(d) below, as of the
Effective Time, each outstanding Warrant granted by the Company shall be
cancelled as of the Effective Time in consideration of payment to the holder
thereof, in cash, without interest, from the Surviving Company of an amount
equal to the product of (i) the number of unissued Shares subject to such
Warrant at the time of such cancellation, and (ii) the excess, if any, of the
Merger Consideration over the per-share exercise price for Shares subject to
such Warrant, such product to be reduced by the amount (if any) of withholding
or other taxes required by law to be withheld with respect to amounts received
upon the cancellation of such Warrant.
(d) Notwithstanding any other provision of this Section 2.3 to
the contrary, payment of any consideration shall be withheld with respect to any
Option, Converted Option or Warrant, as applicable, until the holder of such
Option, Converted Option or Warrant, as applicable, shall have delivered to the
Company any consent to the foregoing cancellation and payment that is required
pursuant to the terms and conditions of any Option, Converted Option or Warrant,
in a form reasonably satisfactory to the Purchaser and the Company.
Section 2.4 Exchange of Certificates.
(a) Paying Agent. The Purchaser shall designate a bank or
trust company, reasonably satisfactory to the Company, to act as agent for the
holders of the Shares, Options and Warrants in connection with the Merger to
receive in trust the funds to which the holders of such Shares, Options and
Warrants shall become entitled pursuant to Section 2.2 and Section 2.3 (the
"Paying Agent"). On or prior to the Effective Time, the Purchaser shall deposit
with the Paying Agent, or cause to be deposited with the Paying Agent,
immediately available funds, for the benefit of such holders of Shares, Options
and Warrants, the aggregate consideration to which such holders shall be
entitled at the Effective Time pursuant to Section 2.2 and Section 2.3. Such
funds shall be invested as directed by the Purchaser or the Surviving Company
pending payment thereof by the Paying Agent to the holders of the Shares,
Options and Warrants. Earnings from such investments shall be the sole and
exclusive property of the Purchaser and the Surviving Company, and no part of
such earnings shall accrue to the benefit of the holders of the Shares, Options
or Warrants.
(b) Exchange Procedures.
(i) Promptly after the Effective Time, and using
commercially reasonable efforts to do so within three (3) Business Days
thereafter, the Paying Agent shall mail to each holder of record of an
outstanding certificate or certificates that immediately prior to the Effective
Time represented Shares, (A) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates shall
pass, only upon delivery of such certificates to the Paying Agent and shall have
such customary provisions not inconsistent with this Agreement as the Purchaser
may reasonably specify) and (B) instructions for use in effecting the surrender
of each certificate in exchange for payment of the Merger Consideration. Upon
surrender of a certificate for cancellation to the Paying Agent or to such other
agent or agents as may be appointed by the Purchaser or the Surviving Company,
together with such letter of transmittal, duly executed, the holder of such
certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each Share formerly represented by such certificate, and the
certificate so surrendered shall forthwith be canceled. No interest shall be
paid or accrue on the Merger Consideration.
(ii) If payment of the Merger Consideration is to be made
to a Person other than the Person in whose name the surrendered certificate is
registered, it shall be a condition of payment that the certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the Person requesting such payment shall have paid any
transfer and other taxes required
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by reason of the payment of the Merger Consideration to a Person other than the
registered holder of the certificate surrendered or shall have established to
the reasonable satisfaction of the Surviving Company that such tax either has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.4, each certificate shall be deemed, for all corporate purposes, at
any time after the Effective Time, to represent only the right to receive the
Merger Consideration in cash as contemplated by this Section 2.4.
(iii) In the event any certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such certificate to be lost, stolen or destroyed, the Paying Agent will
issue in exchange for such lost, stolen or destroyed certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Article II; provided that the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the Surviving
Company a written indemnity agreement in form and substance reasonably
satisfactory to the Surviving Company and which is customary in such instances
and, if deemed reasonably advisable by the Surviving Company, a bond in such sum
as the Surviving Company may reasonably direct as indemnity against any claim
that may be made against the Surviving Company with respect to such certificate
claimed to have been lost, stolen or destroyed.
(iv) Until surrendered as contemplated by this Section
2.4, each certificate formerly representing the Shares shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration for each such Share.
(v) Subject to the provisions of the DGCL, all cash paid
upon the surrender for exchange of certificates formerly representing Shares in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares exchanged for cash
theretofore represented by such certificates.
(c) Transfer Books; No Further Ownership Rights. At the
Effective Time, the stock, option and warrant transfer books of the Company
shall be closed, and thereafter there shall be no further registration of
transfers of the Shares, Options or Warrants on the records of the Company. From
and after the Effective Time, the holders of certificates and/or grant or other
agreements evidencing ownership of the Shares, Options or Warrants, as the case
may be, outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, Options or Warrants, as the case may be,
except as otherwise provided for herein or by applicable law.
(d) Termination of Fund; No Liability. At any time following
the day which is twelve (12) months after the Effective Time, the Surviving
Company shall be entitled to require the Paying Agent to deliver to it any funds
(including any earnings received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders of
certificates, and thereafter such holders shall be entitled to look only to the
Surviving Company (subject to abandoned property, escheat or other similar laws)
and only as general creditors thereof with respect to the Merger Consideration
payable upon due surrender of their certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Company nor the Paying
Agent shall be liable to any holder of a certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.5 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares, if any, shall not be converted into or represent a
right to receive Merger Consideration pursuant to Section 2.2, but the holder
thereof shall be entitled to only such rights as are granted by Section 262 of
the DGCL. Each holder of Dissenting Shares who becomes entitled to payment for
such shares pursuant to
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Section 262 of the DGCL shall receive payment therefor from the Surviving
Company in accordance with the DGCL, and any portion of the Merger Consideration
deposited with the Paying Agent to pay for such shares shall be returned to the
Surviving Company upon demand; provided, however, that if any such holder of
Dissenting Shares (i) shall have failed to establish such holder's entitlement
to relief as a dissenting stockholder as provided in Section 262 of the DGCL,
(ii) shall have effectively withdrawn such holder's demand for relief as a
dissenting stockholder with respect to such Dissenting Shares or lost such
holder's right to relief as a dissenting stockholder and payment for such
holder's Dissenting Shares under Section 262 of the DGCL, or (iii) shall have
failed to file a complaint with the appropriate court seeking relief as to
determination of the value of all Dissenting Shares within the time provided in
Section 262 of the DGCL, if applicable, such holder shall forfeit the right to
relief as a dissenting stockholder with respect to such shares, and each such
share shall be converted into the right to receive the Merger Consideration
without interest thereon, from the Surviving Company as provided in Section 2.2.
(b) Notwithstanding the provisions of Section 2.5(a), if any
holder of shares of Company Common Stock who demands appraisal of his or her
shares under the DGCL effectively withdraws or loses (through failure to perfect
or otherwise) his or her right to appraisal, then as of the Effective Time or
upon the occurrence of such event, whichever later occurs, such holder's shares
of Company Common Stock shall automatically be converted into and represent only
the right to receive the Merger Consideration as provided in Section 2.2,
without interest, upon surrender of the certificate or certificates representing
such shares pursuant to Section 2.4.
(c) The Company shall give the Purchaser (i) prompt notice of
any written demands for payment of the fair value of any shares of Company
Common Stock, withdrawals of such demands, and any other instruments served on
the Company pursuant to the DGCL received by the Company relating to
stockholders' rights of appraisal, and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. Except with the prior written consent of the Purchaser, the Company shall
not voluntarily make any payment with respect to any demands for appraisal, or
settle or offer to settle any such demands.
Section 2.6 Withholding Rights. The Purchaser and the
Surviving Company shall be entitled to deduct and withhold, or cause to be
deducted or withheld, from the consideration otherwise payable pursuant to this
Agreement to any holder of Shares, Warrants or Options, such amounts as are
required to be deducted and withheld with respect to the making of such payment
under the Code, or any provision of applicable state, local or foreign law. To
the extent that amounts are so deducted and withheld, such deducted and withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to such holders in respect of which such deduction and withholding was made.
Section 2.7 Certain Adjustments. If at any time during the
period between the date of this Agreement and the Effective Time, any change in
the outstanding shares of capital stock of the Company shall occur by reason of
any reclassification, recapitalization, stock split, reverse stock split,
exchange or readjustment of shares, or any similar transaction, or any stock
dividend thereon with a record date during such period, the Merger Consideration
shall be appropriately adjusted to provide the holders of Shares, Options and
Warrants the same economic effect as contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except (i) as set forth in the Disclosure Schedule (each
section of which qualifies only the correspondingly numbered representation and
warranty as specified therein), (ii) as disclosed in the
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Company SEC Documents, or (iii) as referenced in the particular section of this
Article III to which exception is being taken, the Company represents and
warrants to the Purchaser as follows:
Section 3.1 Organization; Qualification.
(a) The Company and each Subsidiary (i) is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its state of organization, and (ii) has full corporate power and
authority to carry on its business as it is now being conducted and to own the
properties and assets it now owns.
(b) The Company and each Subsidiary is duly qualified to do
business as a foreign corporation in good standing in the jurisdictions listed
in the Disclosure Schedule, which include every jurisdiction in which the
property owned, leased or operated by it or the conduct of its business makes
such qualification necessary, except where the failure to so qualify would not
reasonably be expected to have a Material Adverse Effect.
(c) The Company has, prior to the date of this Agreement, made
available to the Purchaser true, complete and correct copies of the Company's
Certificate of Incorporation, as amended, and the Company's By-Laws, as amended,
and the comparable governing documents of each Subsidiary, in each case as
amended and in full force and effect as of the date of this Agreement.
Section 3.2 Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of 20,000,000 shares of capital
stock, 15,000,000 shares of which are Company Common Stock, of which, 7,802,942
shares are issued and outstanding, and 5,000,000 shares of which are preferred
stock, none of which, are issued and outstanding. There are reserved for
issuance pursuant to a Company Stock Option Plan or pursuant to securities
exercisable for, or convertible into or exchangeable for 2,105,500 shares of
Company Common Stock, of which 1,653,920 unexercised options or warrants are
issued and outstanding. To the Knowledge of the Company, all of such outstanding
shares of Company Common Stock are, and all shares of Company Common Stock that
may be issued upon the exercise of outstanding Options and Warrants will be,
when issued in accordance with the term thereof, duly authorized, validly
issued, fully paid and nonassessable. To the Knowledge of the Company, no shares
of capital stock of the Company are subject to preemptive rights or any other
similar rights of the stockholders of the Company or any Liens imposed through
the actions or failure to act of the Company. Other than as set forth in the
Disclosure Schedule, to the Knowledge of the Company, there are no (i)
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, securities or rights relating to or convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or (ii) other commitments or rights of any character whatsoever
relating to the issuance of, or arrangements by which the Company or any
Subsidiary is or may become bound to, issue additional shares of capital stock
of the Company or any Subsidiary.
Section 3.3 Authorization; Validity of Agreement; Company
Action. The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to the Stockholder Approval, to consummate
the Transactions. The execution, delivery and performance by the Company of this
Agreement and the consummation by it of the Transactions, have been duly
authorized by the Board of Directors of the Company and, except for obtaining
the Stockholder Approval (as defined below), no other corporate action on the
part of the Company is necessary to authorize the execution and delivery by the
Company of this Agreement or the consummation by it of the Transactions (other
than the filing of the Certificate of Merger as required by the DGCL). This
Agreement has been duly executed and delivered by the Company and, assuming due
and valid authorization, execution and delivery thereof by the Purchaser, is a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent that enforceability
may be limited by
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applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
Section 3.4 Board Approvals Regarding Transactions. By
resolutions duly adopted, the Company's Board of Directors, subsequent to the
recommendation of the Special Committee, has (i) determined that the Merger is
advisable and in the best interests of the Company's stockholders other than the
Purchaser Stockholders, (ii) approved this Agreement, the Merger and the other
Transactions in accordance with the DGCL and upon the terms and subject to the
conditions set forth herein, and (iii) resolved to recommend that the
stockholders of the Company adopt this Agreement, and none of the aforesaid
actions by the Company's Board of Directors has been amended, rescinded or
modified. No business combination, control share acquisition or other state
takeover statute, other than as set forth in Sections 203 and 262 of the DGCL,
if applicable, will impose any procedural, voting or other restrictions on any
of the Transactions.
Section 3.5 Vote Required. The affirmative vote of the holders
of at least sixty-six and two-thirds (66 2/3) percent of the votes entitled to
be cast by the holders of the Company Common Stock, other than the Purchaser
Stockholders (the "Stockholder Approval") is the only vote of the holders of any
class or series of the Company's capital stock necessary to adopt this Agreement
and approve the Merger.
Section 3.6 Consents and Approvals.
(a) Except as disclosed in the Disclosure Schedule, none of
the execution, delivery or performance of this Agreement by the Company, the
consummation by the Company of the Transactions or compliance by the Company
with any of the provisions of this Agreement will conflict with or result in any
breach of any provision of the Certificate of Incorporation or By-Laws of the
Company or similar organizational documents of any Subsidiary.
(b) Except as disclosed in the Disclosure Schedule, none of
the execution, delivery or performance of this Agreement by the Company, the
consummation by the Company of the Transactions or compliance by the Company
with any of the provisions of this Agreement will require any filing or
registration with, or permit, authorization, consent or approval of, or notice
to any Governmental Entity, except for (A) any required filing of a premerger
notification and report form by the Company under the HSR Act, (B) the filing
with the SEC of the Proxy Statement, a Rule 13E-3 Transaction Statement on
Schedule 13E-3 (the "Schedule 13E-3") and such reports under the Exchange Act as
may be required in connection with this Agreement and the Transactions, (C) any
registration, filing or notification required pursuant to state securities or
"blue sky" laws, and (D) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware.
Section 3.7 Litigation. To the Knowledge of the Company, there
is no action, suit, inquiry, proceeding or investigation by or before any
Governmental Entity pending or threatened against or involving or affecting the
Company or any Subsidiary that, individually or in the aggregate, (i) would
reasonably be expected to have a Material Adverse Effect, or (ii) would
reasonably be expected to impair the ability of the Company to perform its
obligations under this Agreement or prevent or materially delay the consummation
of any of the Transactions.
Section 3.8 Information in Proxy Statement and Schedule 13E-3.
Except for information supplied or to be supplied by or on behalf of the
Purchaser, all information in (a) the Schedule 13E-3, and (b) the Proxy
Statement will not, in the case of the Schedule 13E-3 and each amendment or
supplement thereto as of the date thereof and as of the Effective Time, and in
the case of
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the Proxy Statement, either at the date mailed to the Company's stockholders or
at the time of the Special Meeting, 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 the light of the circumstances
under which they were made, not misleading. The Company represents and warrants
further that each of the Proxy Statement and the Schedule 13E-3, except for
information supplied or to be supplied by or on behalf of the Purchaser, will
comply in all material respects with all applicable provisions of the Exchange
Act.
Section 3.9 Brokers or Finders. To the Knowledge of the
Company, no agent, broker, investment banker, financial advisor or other firm or
Person is or will be entitled to any brokers', finder's, financial advisor's fee
or other commission or similar fee in connection with any of the Transactions,
except as set forth in the Disclosure Schedule.
Section 3.10 Disclaimer of Implied Representations and
Warranties. Except for the representations and warranties given or made by the
Company in this Agreement, or given or made in any other document, instrument or
agreement executed by the Company pursuant to this Agreement, the Company hereby
disclaims any and all implied representations and warranties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
Section 4.1 Organization. The Purchaser (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and (ii) has full corporate power and authority to carry on
its business as now being conducted and to own the properties and assets it now
owns.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. The Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution,
delivery and performance by the Purchaser of this Agreement and the consummation
by the Purchaser of the Transactions, have been duly authorized by the Board of
Directors and the stockholders of the Purchaser and no other corporate action on
the part of the Purchaser is necessary to authorize the execution and delivery
by the Purchaser of this Agreement or the consummation of the Transactions. This
Agreement has been duly executed and delivered by the Purchaser and, assuming
due and valid authorization, execution and delivery thereof by the Company, is a
legal, valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by the effect
of general principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity).
Section 4.3 Consents and Approvals; No Violations.
(a) None of the execution, delivery or performance of this
Agreement by the Purchaser, the consummation by the Purchaser of the
Transactions or compliance by the Purchaser with any of the provisions of this
Agreement will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or By-Laws of the Purchaser, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any notice requirement, right of
termination, amendment, cancellation or acceleration) or loss of any benefit
under, or result in the creation of any Lien upon any of the properties or
assets of the Purchaser under,
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any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Purchaser is a party or by which the Purchaser or any of its
respective properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule, regulation, permit or license applicable to
the Purchaser or any of its properties or assets, except in the case of the
foregoing clauses (ii) and (iii) such violations, breaches, defaults, losses of
creations of Liens that, individually or in the aggregate, would not reasonably
be expected to impair the ability of the Purchaser to perform its obligations
under this Agreement.
(b) None of the execution, delivery or performance of this
Agreement by the Purchaser, the consummation by the Purchaser of the
Transactions or compliance by the Purchaser with any of the provisions of this
Agreement will require any filing or registration with, or permit,
authorization, consent or approval of, or notice to any Governmental Entity,
except for (A) any required filing of a premerger notification and report form
by the Company under the HSR Act, (B) the filing with the SEC of the Proxy
Statement, the Schedule 13E-3 and such reports under the Exchange Act as may be
required in connection with this Agreement and the Transactions, and (C) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware.
Section 4.4 Information in Proxy Statement and Schedule 13E-3.
None of the information supplied or to be supplied in writing by or on behalf of
the Purchaser for inclusion in the Proxy Statement or in the Schedule 13E-3
will, in the case of the Schedule 13E-3 and each amendment or supplement thereto
as of the date thereof and as of the Effective Time, and in the case of the
Proxy Statement, either at the date mailed to the Company's stockholders or at
the time of the Special Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading. The Purchaser represents and warrants
further that the Proxy Statement and the Schedule 13E-3, as to information
supplied or to be supplied in writing by or on behalf of the Purchaser, will
comply in all material respects with all applicable provisions of the Exchange
Act.
Section 4.5 Purchaser's Operations. The Purchaser was formed
solely for the purpose of engaging in the Transactions and has not engaged in
any business activities or conducted any operations other than in connection
with the Transactions.
Section 4.6 Brokers or Finders. To the Knowledge of the
Purchaser, the Company has not engaged any agent, broker, investment banker,
financial advisor or other firm or Person that is entitled or will be entitled
to any brokers', finders', or financial advisor's fee or other commission or
similar fee in connection with any of the Transactions, except as set forth in
the Purchaser Disclosure Schedule. In addition, no agent, broker, investment
banker, financial or other firm or Person retained or engaged by Purchaser or
any of its Affiliates is entitled or will be entitled to any brokers', finders',
or financial advisor's fee or other commission or similar fee in connection with
any of the Transactions, except as set forth in the Purchaser Disclosure
Schedule.
Section 4.7 Financing.
(a) Purchaser has delivered to the Company true and complete
copies of (i) a letter and related term sheet, dated as of February 25, 2002
(collectively, the "Commerce Letter") from Commerce Bank, N.A. ("Commerce
Bank"), in which Commerce Bank expresses its intent to provide the Company, with
the other lenders named therein, a $15,000,000 term loan (the "Term Loan") and a
$17,500,000 revolving line of credit (the "Revolver"), on the terms and
conditions outlined in the Commerce Letter, for the purpose of providing
financing for the Transactions; (ii) a letter of intent, dated March 21, 2002
(the "Vendor A Letter") from a vendor of the Company ("Vendor A"), in which
Vendor A
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expresses its intent to provide the Company with a $3,000,000 advance, on the
terms and conditions outlined in the Vendor A Letter, for the purpose of
providing financing for the Transactions; and (iii) a letter of intent, dated as
of April 11, 2002 (the "Vendor B Letter") from a vendor of the Company ("Vendor
B"), in which Vendor B expresses its intent to provide the Company with a
$6,000,000 marketing advance, on the terms and conditions outlined in the Vendor
B Letter, for the purpose of providing financing for the Transactions (the
Commerce Letter, the Vendor A Letter and the Vendor B Letter are collectively
referred to as the "Commitment Letters"). The Vendor A Letter and the Vendor B
Letter have been previously delivered to the Company. The Commerce Letter is
attached to and described in the Purchaser Disclosure Schedule. Purchaser will
deliver to the Company correspondence (the "Commerce Consent") from Commerce
Bank, in which Commerce Bank has authorized the Company to use up to $2,400,000
from the Revolver to finance the Transactions (the Commitment Letters, the
Revolver and the Commerce Consent shall be collectively referred to herein as
the "Financing Arrangements").
(b) The Financing Arrangements, if concluded in accordance
with their terms, will provide sufficient financing to consummate the
Transactions, including, without limitation, the payment of the Merger
Consideration and the aggregate Net Amount, and to pay all fees and expenses
related to the Transactions. Purchaser has no Knowledge of any existing facts or
existing circumstances that may cause the Company or the Purchaser, as the case
may be, to be unable to consummate the Financing Arrangements or receive the
financing called for therein. As of the date hereof, none of the Financing
Arrangements has been amended or modified in any respect.
Section 4.8 Known Company Breach. Purchaser has no Knowledge
of any breach of or inaccuracy in any representation or warranty of the Company
contained in Article III.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that during the period from the date of this Agreement to
the Effective Time, except (i) as expressly contemplated by this Agreement, (ii)
as set forth in the Disclosure Schedule, or (iii) as consented to in writing by
the Purchaser after the date hereof (which consent shall not be unreasonably
withheld or delayed), the Company shall, and shall cause each Subsidiary to,
conduct its businesses only in the usual, regular and ordinary course and
substantially in the same manner as heretofore conducted, use its commercially
reasonable efforts to (A) preserve its business organization intact, (B) keep
available the services of its current officers and employees, and (C) maintain
its existing relations with material customers, suppliers, creditors, business
partners and others having material business dealings with it. Without limiting
the generality of the foregoing, and subject to exceptions set forth in clauses
(i) through (iii) above, during the period from the date of this Agreement to
the Effective Time the Company shall not and shall not permit any Subsidiary to:
(a) (i) amend or propose to amend its Certificate of
Incorporation or By-Laws or similar organizational documents (other than in the
case of any Wholly-Owned Company Subsidiary), (ii) except as required for
issuances of any class or series of its capital stock by any directly or
indirectly Wholly-Owned Company Subsidiary to its parent in the ordinary course
of business consistent with past practice, issue, sell, grant, transfer, or
subject to any Lien any shares of any class or series of its capital stock or
Voting Debt, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of any
class or series of its capital stock or any Voting Debt, or any stock or phantom
appreciation rights or performance share awards or other rights to receive
Shares other than (x) the issuance of shares of Company Common Stock reserved
for issuance on
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the date hereof pursuant to the exercise in accordance with their present terms
of (A) Options and (B) Warrants, in each case to the extent outstanding on the
date hereof, and (y) the issuance of shares of Company Common Stock in
accordance with past practice pursuant to the terms of the Company Stock Option
Plan as in effect on the date of this Agreement, (iii) declare, set aside or pay
any dividend or make any other actual, constructive or deemed distribution
payable in cash, stock or property with respect to any shares of any class or
series of its capital stock, other than the declaration, setting aside or
payment of cash dividends from any Wholly-Owned Company Subsidiary to its parent
consistent with past practice, (iv) split, combine or reclassify any shares of
any class or series of its stock or (v) redeem, purchase or otherwise acquire
directly or indirectly any shares of any class or series of its capital stock,
or any instrument or security which consists of or includes a right to acquire
such shares;
(b) except as permitted by Section 5.2 hereof, adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
Subsidiary(other than the Merger);
(c) other than as contemplated by this agreement or in
connection with inter-company indebtedness between the Company and any of its
Wholly-Owned Company Subsidiaries or between any Subsidiary or except if the
amount of any of the following items does not exceed $75,000.00 in the
aggregate: (i) incur or assume any long-term debt or incur or assume any
short-term indebtedness, (ii) modify the terms of any indebtedness or other
liability, other than under its existing line of credit and modifications of
short term debt in the ordinary course of business consistent with past
practice, (iii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person, enter into any "keep well" or other agreement to maintain any
financial condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, or (iv) make any loans, advances or
capital contributions to, or investments in, any other Person;
(d) (i) make or agree to make any capital expenditures in
excess of $75,000.00 in the aggregate (not including new store openings), (ii)
enter into any agreement that would be a Material Agreement had such agreement
been entered into prior to the date hereof, (iii) modify, amend or terminate any
of its Material Agreements or waive, release or assign any material rights or
claims thereunder, or (iv) enter into any agreement, understanding or commitment
that restrains, limits or impedes the Company's or any Subsidiary's ability to
compete with or conduct any business or line of business, including, but not
limited to, geographic limitations on the Company's or any Subsidiary's
activities;
(e) (i) enter into any collective bargaining agreement, (ii)
increase by greater than five (5%) over the prior fiscal year the compensation,
including bonuses, payable or to become payable to any of its officers (i.e.
vice presidents and above) or directors, (iii) enter into or amend any
employment, severance, retention, consulting, termination or other agreement
with, or grant any additional retention, severance or termination pay to, any of
its officers, directors or employees, (iv) adopt any employee benefit plan if
such adoption would create or increase any liability or obligation on the part
of the Company or any Subsidiary or, except as required by law, amend any Plan,
(v) except as contemplated by this Agreement, amend the terms of any Option,
(vi) change the manner in which contributions to any pension or retirement plan
are made or the basis on which such contributions are determined (including
actuarial assumptions used to calculate funding obligations) or (vii) make any
loans to any of its officers, directors, employees, Affiliates, agents or
consultants;
(f) acquire or enter into any agreement or transaction
relating to the acquisition, by merger, consolidation with or the purchase of a
substantial portion of the assets of, or by any other manner, any business or
any corporation, limited liability company, partnership, joint venture,
association or other business organization or division thereof;
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(g) transfer, lease (as lessor), license (as licensor), sell,
dispose of or subject to any Lien (including securitization) any assets, except
in the ordinary course of business; or
(h) except as contemplated by this Agreement or except in an
amount not to exceed $50,000.00 in the aggregate, pay, repurchase, discharge or
satisfy any of its claims, liabilities or obligations (absolute, accrued,
contingent or otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business consistent with past practice, of claims,
liabilities or obligations reflected or disclosed in the Balance Sheet (or the
notes thereto) or incurred since the Balance Sheet Date;
(i) permit any insurance policy naming it as a beneficiary or
a loss payee to be cancelled or terminated without notice to the Purchaser;
(j) (A) change any of the accounting methods used by it unless
required by GAAP or (B) make any material tax election or change any material
tax election already made, adopt any material tax accounting method, change any
material tax method unless required by GAAP or any Governmental Entity, law or
regulation, enter into any closing agreement or settle or compromise any
material Tax claim or assessment or waive the statute of limitations in respect
of any such material Tax claim or assessment;
(k) except as permitted by Section 5.2 hereof, take, or agree
to commit to take, any action which it believes when taken would cause any
representation or warranty of the Company contained herein that is qualified as
to materiality from being untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified from being untrue or
inaccurate in any material respect or that would materially impair the ability
of the Company to consummate any of the Transactions in accordance with the
terms of this Agreement or materially delay such consummation; and
(l) enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
Section 5.2 No Solicitation of Competing Transaction.
(a) Neither the Company nor any Subsidiary shall (and the
Company shall not authorize the officers, directors, employees, representatives
and agents of the Company or any Subsidiary, including, but not limited to,
investment bankers, attorneys and accountants, to), directly or indirectly
through any other Person, (i) solicit, initiate or encourage (including by way
of furnishing information), or knowingly take any other action designed to
facilitate any Acquisition Proposal, or afford access to the properties, books
or records of the Company or any Subsidiary to any Person or group in connection
with any Acquisition Proposal, or (ii) participate in or initiate discussions or
negotiations concerning any Acquisition Proposal; provided, however, that
nothing contained in this Section 5.2 or any other provision hereof shall
prohibit the Company or the Company's Board of Directors or the Special
Committee from (A) taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act, (B) making such
disclosure to the Company's stockholders as, in the good faith judgment of the
Company's Board of Directors or the Special Committee, after receiving advice
from outside counsel, is reasonably expected to be required under applicable
law, provided that the Company may not, except as permitted by Section 5.2(b),
withdraw or modify, or propose to withdraw or modify, its position with respect
to the Merger or approve or recommend, or propose to approve or recommend any
Acquisition Proposal, or enter into any letter of intent, agreement in principle
or agreement concerning any Acquisition Proposal, or (C) making inquiries
reasonably designed to determine whether the Acquisition Proposal could
reasonably be expected to constitute a superior transaction to the Merger from a
financial point of view to
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the stockholders of the Company other than the Purchaser Stockholders and is
reasonably capable of being funded and consummated. Upon execution of this
Agreement, the Company will immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Notwithstanding the foregoing, prior to the Effective
Time, the Company may furnish information (including non-public information)
concerning its business, properties or assets to any Person or group pursuant to
customary confidentiality agreements, and may negotiate and participate in
discussions and negotiations with such Person or group concerning an Acquisition
Proposal if: (x) such Person or group has, on an unsolicited basis (and
otherwise in the absence of a breach by the Company of the provisions of this
Section 5.2(a)), submitted a bona fide written proposal to the Company, the
Company's Board of Directors or the Special Committee relating to any such
Acquisition Proposal which the Special Committee determines in good faith could
reasonably be expected to constitute a superior transaction to the Merger from a
financial point of view to the stockholders of the Company other than the
Purchaser Stockholders and is reasonably capable of being funded and
consummated, and (y) in the good faith judgment of the Company's Board of
Directors or the Special Committee such action is reasonably expected to be
required to discharge its fiduciary duties to the Company's stockholders under
applicable law, determined only after receipt of legal advice of legal counsel
to the Company's Board of Directors or the Special Committee that the failure to
provide such information or access or to engage in such discussions or
negotiations may cause the Company's Board of Directors or the Special Committee
to violate its fiduciary duties to the Company's stockholders under applicable
law.
The Company will promptly notify the Purchaser of the
existence of any Acquisition Proposal received by the Company, and the Company
will promptly communicate to the Purchaser the terms of any Acquisition Proposal
which it may receive and the identity of the party making such proposal. The
Company will keep the Purchaser informed of the status and details (including
amendments or proposed amendments) of any such Acquisition Proposal.
(b) Except as set forth in this subsection (b), neither the
Company's Board of Directors nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to the Purchaser,
the approval or recommendation by the Company's Board of Directors or any such
committee this Agreement or the Merger, (ii) approve or recommend or propose to
approve or recommend, any Acquisition Proposal, or (iii) cause the Company (or
any Subsidiary) to enter into any letter of intent, agreement in principle or
agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, the Company, in response to a Superior Proposal which did not
otherwise result from a breach of Section 5.2(a), may terminate this Agreement
in order to enter into a letter of intent, agreement in principle or agreement
with respect to a Superior Proposal, but only at a time that is prior to the
Effective Time and is after the fifth (5th) Business Day following the
Purchaser's receipt of written notice from the Company advising the Purchaser
that the Company has received a Superior Proposal which it intends to accept,
specifying the material terms and conditions of such Superior Proposal,
identifying the Person making such Superior Proposal; provided, however, that
prior to such termination the Company shall have caused its financial and legal
advisors to negotiate with the Purchaser; and, provided, further, however, that
prior to such termination the Purchaser has not made a bona fide written
proposal to the Company, the Company's Board of Directors or the Special
Committee that the Company's Board of Directors or the Special Committee
determines in good faith after consulting with its legal and financial advisors
is (i) reasonably capable of being funded and consummated, and (ii) at least as
favorable to the stockholders of the Company other than the Purchaser
Stockholders as the Superior Proposal which the Company proposes to accept.
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Section 5.3 Special Meeting.
(a) The Company, acting through its Board of Directors, shall,
in accordance with applicable law, as promptly as practicable following the
execution of this Agreement:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders for the purpose of considering and taking action
upon adoption of this Agreement (the "Special Meeting"). Notwithstanding the
foregoing, if prior to the scheduled date of the Special Meeting the Special
Committee determines that it has received an Acquisition Proposal that
constitutes a Superior Proposal, then the Company may postpone the Special
Meeting for up to thirty (30) Business Days;
(ii) prepare and file with the SEC a preliminary form of
the Proxy Statement and a Schedule 13E-3 relating to the Merger and this
Agreement (which Proxy Statement and Schedule 13E-3 shall include all
information concerning the Company and the Purchaser required to be set forth
therein pursuant to the Exchange Act) and use commercially reasonable efforts to
obtain and furnish the information required by the SEC to be included in the
Proxy Statement and the Schedule 13E-3 and, after consultation with the
Purchaser, to respond promptly to any comments made by the SEC with respect to
the preliminary Proxy Statement and the Schedule 13E-3;
(iii) file a definitive form of the Proxy Statement and
any amendments or supplements to the Schedule 13E-3 reflecting compliance with
comments and requests of the SEC in accordance with the Exchange Act as the
Company shall deem appropriate after consultation with the Purchaser;
(iv) as promptly as practicable after the Proxy Statement
and the Schedule 13E-3 have been cleared by the SEC, cause a definitive Proxy
Statement, including any amendment or supplement thereto, to be mailed to its
stockholders, provided that no amendment or supplement to the Proxy Statement
and the Schedule 13E-3 will be made by the Company without consultation with the
Purchaser and its counsel and shall include therein (A) the recommendation of
the Company's Board of Directors that the stockholders of the Company vote in
favor of the adoption of this Agreement, except as may be otherwise required for
the Company's Board of Directors to comply with its fiduciary duties to
stockholders imposed by law as advised by legal counsel, and (B) the Fairness
Opinion;
(v) use its commercially reasonable efforts to solicit
from its stockholders proxies in favor of the Merger and shall take all other
action reasonably necessary to secure any vote of its stockholders required
under the DGCL and its Certificate of Incorporation and By-Laws to effect the
Merger.
(b) Each party shall provide promptly to the other party all
information concerning its (and its subsidiaries' and Affiliates') business,
financial condition and affairs as may be necessary or reasonably required in
connection with the preparation or filing of the Proxy Statement and the
Schedule 13E-3 and shall otherwise cooperate and cause its representatives to
cooperate with the other party's representatives in the preparation and filing
of the Proxy Statement and the Schedule 13E-3. The Company and the Purchaser
shall use commercially reasonable efforts to cause the Proxy Statement and the
Schedule 13E-3 to be completed as soon as practicable and to distribute copies
of the Proxy Statement to the stockholders of the Company. After the execution
of this Agreement and prior to the mailing of the Proxy Statement, and
thereafter until the Closing Date, the Company and the Purchaser shall promptly
advise each other of any facts or information which should be set forth in an
amendment or supplement to the Proxy Statement or the Schedule 13E-3.
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(c) Each of the Company and the Purchaser shall consult and
confer with the other and the other's counsel regarding the Proxy Statement and
the Schedule 13E-3 and each shall have the opportunity to comment on the Proxy
Statement and the Schedule 13E-3 and any amendments and supplements thereto
before the Proxy Statement and the Schedule 13E-3, and any amendments or
supplements thereto, are filed with the SEC and before the Proxy Statement is
mailed to Company stockholders. Company shall and shall cause its counsel to
provide a draft of the Proxy Statement and the Schedule 13E-3 to the counsel for
the Purchaser within five (5) Business Days from the execution of this
Agreement. Purchaser shall and shall cause its counsel to provide comments on
the Proxy Statement and the Schedule 13E-3 to the counsel for the Company within
five (5) Business Days of receipt of the draft Proxy Statement and Schedule
13E-3 from Company counsel. Each of the Company and the Purchaser will provide
to the other copies of all correspondence between it (or its advisors) and the
SEC relating to the Proxy Statement and the Schedule 13E-3. The Company and the
Purchaser agree that all telephonic calls and meetings with the SEC regarding
the Proxy Statement and the Schedule 13E-3 and the Transactions shall include
representatives of each of the Company and the Purchaser.
(d) At the Special Meeting, the Purchaser shall vote, or cause
to be voted, all shares of Company Common Stock owned beneficially or of record
by the Purchaser or any Subsidiary or Affiliate of the Purchaser in favor of the
adoption of this Agreement.
(e) The Company covenants that, except for information
supplied or to be supplied by or on behalf of the Purchaser, all information in
(a) the Schedule 13E-3, and (b) the Proxy Statement will not, in the case of the
Schedule 13E-3 and each amendment or supplement thereto as of the date thereof
and as of the Effective Time, and in the case of the Proxy Statement, either at
the date mailed to the Company's stockholders or at the time of the Special
Meeting, 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 the light of the circumstances under which they were made, not
misleading. The Company covenants that each of the Proxy Statement and the
Schedule 13E-3, except for information supplied or to be supplied by or on
behalf of the Purchaser, will comply in all material respects with all
applicable provisions of the Exchange Act.
(f) The Purchaser covenants that the information supplied or
to be supplied in writing by or on behalf of the Purchaser for inclusion in the
Proxy Statement or in the Schedule 13E-3, will not, in the case of the Schedule
13E-3 and each amendment or supplement thereto as of the date thereof and as of
the Effective Time, and in the case of the Proxy Statement, either at the date
mailed to the Company's stockholders or at the time of the Special Meeting,
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 the light of the circumstances under which they were made, not misleading.
The Purchaser covenants that the Proxy Statement and the Schedule 13E-3, as to
information supplied or to be supplied in writing by or on behalf of the
Purchaser, will comply in all material respects with all applicable provisions
of the Exchange Act.
Section 5.4 Access to Information; Confidentiality.
(a) The Company shall (and shall cause each Subsidiary to)
afford to the officers, employees, accountants, counsel, financing sources and
other representatives of the Purchaser, reasonable access during normal business
hours during the period prior to the Effective Time, to all of its officers,
accountants, properties, offices and other facilities, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each Subsidiary to) furnish promptly to the Purchaser (i) a copy of each
report, schedule, and other document filed or received by it during such period
pursuant to the requirements of federal securities laws, and (ii) all other
information concerning its business, properties and personnel as the Purchaser
may reasonably request.
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(b) Notwithstanding termination of this Agreement, the
Purchaser will cause its officers, employees, accountants, counsel, financial
advisers and other representatives, Subsidiaries and Affiliates to keep, all
Confidential Information (as defined below) confidential and not to disclose any
Confidential Information to any Person other than its directors, officers,
employees, Affiliates, representatives or agents, and then only on a
confidential basis; provided, however, that the Purchaser may disclose
Confidential Information (i) as required by applicable law, rule, regulation or
valid judicial process, (ii) to its attorneys, accountants, financial advisors
and lenders on a confidential basis, and (iii) as required by any Governmental
Entity; provided, however, that the Purchaser will cooperate with the Company so
that the Company may seek a protective order or other appropriate remedy. For
purposes of this Agreement, "Confidential Information" shall include all
information about the Company; provided, however, that Confidential Information
does not include information which (A) is or becomes generally available to the
public other than as a result of a disclosure by the Purchaser, its attorneys,
accountants, financial advisors, Subsidiaries or Affiliates not permitted by
this Agreement, (B) becomes available to the Purchaser on a non-confidential
basis from a Person other than the Company who, to the Knowledge of the
Purchaser, is not otherwise bound by a confidentiality agreement with the
Company or is not otherwise prohibited from transmitting the relevant
information to the Purchaser. In the event of termination of this Agreement for
any reason, the Purchaser shall promptly destroy all Confidential Information
without retaining any copy thereof and the Purchaser will, and will cause its
attorneys, accountants, financial advisors, Subsidiaries and Affiliates to,
promptly destroy all copies of any analyses, compilations, studies or other
documents, records or data prepared by or on behalf of the Purchaser, which
contain or otherwise reflect or are generated from the Confidential Information,
and a duly authorized officer of the Purchaser will certify in writing to the
Company that it has destroyed all the Confidential Information in its possession
and the Purchaser will request written confirmation from each of its attorneys,
accountants, financial advisors, Subsidiaries and Affiliates that they have
destroyed all the Confidential Information in their possession, and the
Purchaser will forward a copy of each such written confirmation to the Company.
Section 5.5 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser and the Company agree to use commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable (subject to any applicable laws) to consummate
and make effective the Transactions as promptly as practicable following the
execution hereof, including the taking of all actions necessary to obtain all
approvals, consents, orders, exemptions or waivers of or by any third party.
(b) Subject to the terms and conditions of this Agreement and
to any applicable laws, the parties hereto shall:
(i) as promptly as practical after the execution of this
Agreement, (A) file any required notification with respect to the Transactions
with any Governmental Entity and (B) thereafter promptly respond to all
inquiries or requests for information or documents received from any
Governmental Entity;
(ii) in connection with the Transactions, (A) consult with
each of the parties with respect to all filings to be made by any party to a
Governmental Entity and any information which may be supplied by any party to a
Governmental Entity; (B) promptly make any required submissions under the HSR
Act other than those referred to in clause (i) above and promptly respond to all
inquiries or requests received from the FTC or the Department of Justice for
additional information or documents; (C) excluding information and materials
which are subject to attorney client or work product privilege or
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which may not be disclosed due to confidentiality obligations, provide
information to the other party which information would be considered reasonably
necessary to accomplish any filings and, upon written request, provide copies of
any filings; and (D) promptly inform the other parties of any communication from
a Governmental Entity with respect to the Transactions and, where practical,
permit the other party to review in advance any proposed communication to a
Governmental Entity;
(iii) prior to any meeting with any Governmental Entity in
respect of any filings, investigation or other inquiry, consult with the other
parties and, to the extent permitted by such Governmental Entity, give the other
parties the opportunity to attend and participate, in each case to the extent
practicable;
(iv) to the extent that transfers, amendments or
modifications of permits or licenses granted by Government Entities (including
environmental permits) are required as a result of the execution of this
Agreement or consummation of any of the Transactions, use commercially
reasonable efforts to effect such transfers, amendments or modifications;
(v) not take any action after the date hereof that would
reasonably be expected to materially delay the Closing or the obtaining of, or
result in not obtaining, any permission, approval or consent from any
Governmental Entity necessary to be obtained prior to Closing; and
(vi) subject to the limitations set forth in Section
5.5(c) hereof, use commercially reasonable efforts (and cooperate amongst
themselves with respect thereto) to contest and resist any action by any third
party or Governmental Entity, whether by legislative, administrative or judicial
action, that challenges or seeks to prevent or prohibit the consummation of the
Transactions; provided that this Section 5.5(b)(vi) shall not be applicable to
any Acquisition Proposals, which shall be subject to Section 5.2 hereof.
(c) each of the parties shall use their commercially
reasonable efforts to (i) avoid the entry of, or to have vacated or terminated,
any decree, order, or judgment that would restrain or delay the Closing
including defending through litigation a motion for preliminary injunction
asserted in any court by any third party, and (ii) take all steps necessary to
avoid or eliminate any impediment under any antitrust, competition, or trade
regulation law that may be asserted by any Governmental Entity with respect to
the Transactions so as to enable the Closing to occur as soon as reasonably
possible, including proposing, negotiating, committing to and effecting, by
consent decree, hold separate order, or otherwise, the sale, divestiture or
disposition of such assets or businesses of the Company (or any of the
Subsidiaries) or otherwise take or commit to take any actions that may be
reasonably required in order to avoid the entry of, or to effect the dissolution
of any injunction, temporary restraining order, or other order in any suit or
proceeding which would otherwise have the effect of preventing or delaying the
Closing. Notwithstanding the foregoing this Section 5.5(c) shall not be
applicable to any Acquisition Proposal, which shall be subject to Section 5.2
hereof.
(d) Notwithstanding the foregoing or any other provision of
this Agreement, (i) nothing in this Section 5.5 shall limit a party's right to
terminate this Agreement pursuant to Section 7.1 so long as such party has up to
then complied with its obligations under this Section 5.5, and (ii) nothing in
this Agreement shall be deemed to require any party hereto to commence any
litigation against any Person in order to facilitate the consummation of any of
the Transactions.
Section 5.6 Financing.
(a) Purchaser shall use its commercially reasonable efforts to
satisfy the requirements of the Commitment Letters, execute definitive
agreements related thereto and to obtain the
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funding contemplated by and on the terms contained in the Commitment Letters and
in the Revolver or, if any such funds shall otherwise be unavailable, use
commercially reasonable efforts to obtain alternative commitments for financing
sufficient to consummate the Transactions. The Company shall fully cooperate
with and assist the Purchaser in all reasonable respects in an effort to obtain
the financing called for in the Commitment Letters and in the Revolver and shall
take or cause to be taken all appropriate action in furtherance of such
cooperation and assistance, including the preparation of any certificates or
disclosure documents reasonably requested by the Purchaser in order to
facilitate consummation of the financing. The obligations set forth in this
Section 5.6 shall not be construed to benefit or confer any rights upon any
Person other than the parties hereto.
(b) Following the date hereof, any amendment, modification,
termination or cancellation of any of the Financing Arrangements or any
information which becomes Known to Purchaser which makes it unlikely that the
financing will be obtained on the terms set forth in the Financing Arrangements,
shall be promptly disclosed to the Company. The Purchaser shall keep the Company
reasonably apprised of any discussions or communications with each Person
providing financing for the Transactions.
Section 5.7 Publicity. The initial press release with respect
to the execution of this Agreement shall be a Company press release drafted by
the Company and reasonably acceptable to the Purchaser. Thereafter, until the
Effective Time, or the date this Agreement is terminated or abandoned pursuant
to Article VII, neither the Company, the Purchaser nor any of their respective
Affiliates shall issue or cause the publication of any press release or
otherwise make any public announcement with respect to the this Agreement or the
Transactions without prior consultation with and review by the other party,
except as may be required by law or by any listing agreement with a national
securities exchange or trading market, in which case such party shall, prior to
any such publication or announcement, consult with, and afford the opportunity
to review to, the other parties.
Section 5.8 Notification of Certain Matters. The parties
hereto shall give prompt notice to the other party hereto of (i) the occurrence
or non-occurrence of any event the occurrence or non-occurrence of which would
cause any representation or warranty of any party contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Closing, and
(ii) any material failure of any party, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that, subject to the provisions of Section 5.12, the delivery
of any notice pursuant to this Section 5.8 shall not limit or otherwise affect
the remedies available hereunder to any party.
Section 5.9 State Takeover Laws. If any state takeover statute
other than Section 203 of the DGCL becomes or is deemed to become applicable to
the Agreement or any of the Transactions, the parties hereto shall use their
commercially reasonable efforts to render such statute inapplicable to all of
the foregoing.
Section 5.10 Option and Warrant Matters.
(a) Prior to the Effective Time, the Board of Directors (or,
if appropriate, any applicable committee) of the Company shall adopt such
resolutions or use reasonable efforts to take such actions as are necessary,
subject, if necessary, to obtaining consents of the holders of the Options,
Converted Options and Warrants, as applicable, to carry out the terms of Section
2.3.
(b) Except as may be otherwise agreed to in writing by the
Purchaser and the Company, the Company shall take all actions that are
reasonably necessary or appropriate so that the Company Stock Option Plan shall
terminate as of the Effective Time.
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Section 5.11 Disclosure Schedule Updates. Each of the parties
hereto agrees that, with respect to the representations and warranties of the
Company contained in Article III hereof, the Company shall have the continuing
obligation until the Closing Date to supplement, modify or amend promptly the
Disclosure Schedule with respect to (i) any matter occurring after the date
hereof that, if existing or occurring on or before the date of this Agreement,
would have been required to be set forth or described in the Disclosure Schedule
(the "New Matters"), and (ii) other matters which are not New Matters but should
have been set forth or described in the Disclosure Schedule as of the date
hereof (the "Other Matters"). Any such supplement, modification or amendment (i)
that reflects a New Matter shall qualify the Company's representations and
warranties for all purposes of this Agreement, and (ii) that reflects one or
more Other Matters shall not qualify any of the Company's representations or
warranties for any purpose under this Agreement, and shall be provided solely
for informational purposes. On or before the Closing Date, the Company will
prepare and deliver to the Purchaser a copy of the Disclosure Schedule revised
to reflect any supplement, modification or amendment required pursuant to this
Section 5.11. The Company shall use commercially reasonable efforts to deliver
any such supplemented, modified or amended Disclosure Schedule to the Purchaser
at least five (5) Business Days before the Closing Date. If no supplemented,
modified or amended Disclosure Schedule satisfying the foregoing requirements is
provided by the Company, the Disclosure Schedule as delivered upon the execution
of this Agreement shall continue to apply.
Section 5.12 Indemnification and Insurance.
(a) The Purchaser agrees that (i) the Certificate of
Incorporation and the By-Laws of the Surviving Company and its Subsidiaries
immediately after the Effective Time shall contain provisions with respect to
indemnification and exculpation from liability that are at least as favorable to
the beneficiaries of such provisions as those provisions that are set forth in
the Certificate of Incorporation and By-Laws of the Company and its
Subsidiaries, respectively, on the date of this Agreement and to the fullest
extent permitted by applicable law, which provisions shall not be amended,
repealed or otherwise modified for a period of six (6) years following the
Effective Time in any manner that would adversely affect the rights thereunder
of persons who on or prior to the Effective Time were directors, officers,
employees or agents of the Company or any Subsidiary (collectively, the
"Indemnified Parties"), and (ii) all rights to indemnification as provided in
any indemnification agreements with any current or former directors, officers,
employees or agents of the Company or any Subsidiary as in effect as of the date
hereof with respect to matters occurring at or prior to the Effective Time shall
survive the Merger and thereafter terminate as provided in such agreements.
(b) For a period of three (3) years after the Effective Time,
the Surviving Company shall maintain officers' and directors' liability
insurance covering the Indemnified Parties (whether or not they are entitled to
indemnification) on terms no less advantageous to such Indemnified Parties than
the existing officers' and directors' insurance policies of the Company with
coverage limits of not less than $5,000,000. The provisions of the immediately
preceding sentence shall be satisfied by the purchase and full prepayment of
policies that have been obtained by the Company and fully paid for by the
Company prior to Closing which policies provide such Indemnified Parties with
such coverage for an aggregate period of six (6) years after the Effective Time
with respect to claims arising from facts or events that occurred on or before
the Effective Time.
(c) The Surviving Company shall advance to the Indemnified
Parties amounts needed to pay all reasonable expenses, including, without
limitation, attorneys' fees and disbursements and costs of investigation, that
may be incurred by any Indemnified Parties in enforcing the indemnity and other
provisions provided for in this Section 5.12 to the fullest extent permitted by
applicable law.
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(d) In the event the Surviving Company or any of its
respective successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers all or substantially all of its
properties and assets to any Person, as a condition precedent to any such
transaction, all necessary provisions shall be made so that the successors and
assigns of the Surviving Company fully assumes all of the obligations set forth
in this Section 5.12.
(e) This Section 5.12, which shall survive the consummation of
the Merger at the Effective Time and shall continue for the periods specified
herein, is intended to benefit the Company, the Surviving Company and the
Indemnified Parties (and the heirs, successors and representatives of the
Indemnified Parties), and shall be binding on all successors and assigns of the
Purchaser and the Surviving Company and shall be enforceable by each Indemnified
Party and their heirs, representatives, and any Person or entity referenced in
this Section 5.12 or indemnified hereunder, each of whom may enforce the
provisions of this Section 5.12 (whether or not parties to this Agreement).
Without limiting the foregoing, the heirs, successors and representatives of the
Indemnified Parties shall be entitled to the benefits of this Section 5.12.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
the Transactions. The respective obligation of each party to effect the
Transactions shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any and all of which may be waived in
whole or in part by the Company or the Purchaser, as the case may be, on or
prior to the Closing Date to the extent permitted by applicable law:
(a) The Stockholder Approval shall have been obtained in
accordance with the DGCL and the Company's Certificate of Incorporation and
By-Laws.
(b) No statute, rule or regulation shall have been enacted or
promulgated by any Governmental Entity and no injunction, temporary restraining
order, writ, decree or order of any nature of a court of competent jurisdiction
shall be in effect enjoining, restraining or otherwise precluding consummation
of any of the Transactions contemplated hereby; provided, in the case of a
decree, injunction or other order, each of the parties shall have used their
commercially reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any decree, injunction or
other order that may be entered.
(c) Any applicable waiting period (and any extension thereof)
applicable to consummation of the Merger under the HSR Act shall have expired or
been terminated and no action by the Department of Justice or FTC challenging or
seeking to enjoin the consummation of any of the Transactions contemplated
hereby shall have been instituted and be pending.
(d) The Company shall have received the opinion of Commerce
Capital Markets, dated as of the date of the Proxy Statement (the "Fairness
Opinion"), to the effect that, as of such date, the Merger Consideration to be
received by the holders of the Shares is fair to the holders of the Shares from
a financial point of view and the Fairness Opinion shall not have been
withdrawn, revoked or annulled or adversely modified in any material respect
through the Effective Time.
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Section 6.2 Conditions to the Obligations of the Company to
Effect the Transactions. The obligations of the Company to effect the
Transactions shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any and all of which may be waived in
whole or in part by the Company on or prior to the Closing Date to the extent
permitted by applicable law:
(a) Each of the representations and warranties of the
Purchaser set forth in this Agreement (without giving effect to any qualifiers
as to "materiality" or "material" as set forth herein) shall be true and correct
as of the date of this Agreement and (except those representations and
warranties that address matters only as of a particular date which need be true
and accurate as of such date) as of immediately before the Effective Time and
the Company shall have received a certificate of an executive officer of the
Purchaser, dated as of the Closing Date, to such effect; provided, however, that
in no event shall Company be entitled to make a claim of breach of any
representation or warranty of the Purchaser, if such breach is a Known Purchaser
Breach.
(b) The Company shall have received, at or prior to the
Closing, certified resolutions duly adopted by the Board of Directors and the
stockholders of the Purchaser approving the Transactions contemplated hereby,
the execution and delivery of this Agreement and all other necessary corporate
action to enable the Purchaser to comply with the terms of this Agreement.
(c) The Purchaser shall have performed and complied in all
material respects with all obligations, agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
and the Company shall have received a certificate of an executive officer of
Purchaser, dated as of the Closing Date, to such effect.
Section 6.3 Conditions to the Obligations of the Purchaser to
Effect the Transactions. The obligations of the Purchaser to effect the
Transactions shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any and all of which may be waived in
whole or in part by the Purchaser on or prior to the Closing Date to the extent
permitted by applicable law:
(a) Each of the representations and warranties of the Company
set forth in this Agreement (without giving effect to any qualifiers as to
"materiality", "material" or "Material Adverse Effect" set forth therein) shall
be true and correct as of the date of this Agreement and (except those
representations and warranties that address matters only as of a particular date
which need be true and accurate as of such date) as of immediately before the
Effective Time to the extent that the cumulative effect of all such failures to
be so true and correct would not reasonably be expected to have a Material
Adverse Effect and the Purchaser shall have received a certificate of an
executive officer of the Company, dated as of the Closing Date, to such effect;
provided, however, that in no event shall Purchaser be entitled to make a claim
of breach of any representation or warranty of the Company, if such breach is a
Known Company Breach.
(b) The Company shall have performed and complied in all
material respects with all obligations, agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
and the Purchaser shall have received a certificate of an executive officer of
the Company, dated as of the Closing Date, to such effect.
(c) The Purchaser shall have received, at or prior to the
Closing, certified resolutions duly adopted by the Board of Directors of the
Company approving the Merger, the execution and delivery of this Agreement and
all other necessary corporate action to enable the Company to comply with the
terms of this Agreement.
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(d) Other than the filing of the Certificate of Merger in
accordance with the DGCL, all Governmental Approvals required in connection with
consummation of the Transactions shall have been obtained, been filed or have
occurred, other than Governmental Approvals the failure of which to obtain, make
or occur, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect; provided, however, that a Governmental Approval
shall not be deemed to have been obtained if in connection with the grant
thereof there shall have been an imposition by any Governmental Entity of any
condition, requirement or restriction, or any other action directly or
indirectly related to such grant taken by such Governmental Entity that (i)
imposes any limitations on the Purchaser's ownership or operation (or that of
any Subsidiary) of any portion of their or the Company's businesses or assets,
or seeks to compel the Purchaser to dispose of or hold separate any portion of
the business or assets of the Company or the Purchaser and their respective
Subsidiaries, and (ii) would reasonably be expected to have a Material Adverse
Effect.
(e) The total number of Dissenting Shares shall not exceed 5%
of the outstanding shares of Company Common Stock at the Effective Time.
(f) There shall not have occurred since the date of the filing
of the Company's report on Form 10-K for the fiscal year ended January 31, 2002,
any Material Adverse Effect.
(g) The Purchaser shall have received, or be entitled to
receive, the financing for the Transactions called for in the Financing
Arrangements on the terms substantially as set forth in the Commitment Letters,
the Revolver and the Commerce Consent, or in the alternative sources of
financing, as referred to in Section 5.6 of this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after Stockholder
Approval:
(a) By the mutual written consent of the Purchaser and the
Company;
(b) By either the Company or the Purchaser:
(i) if the Merger has not been consummated on or prior to
September 30, 2002 (the "Outside Date"); provided, however, that the right to
terminate this Agreement under this Section 7.1(b)(i) shall not be available to
any party whose breach of any representation, warranty, covenant or agreement
set forth in this Agreement has been the cause of, or resulted in, the failure
of the Merger to be consummated on or before such date;
(ii) if the stockholders of the Company fail to adopt this
Agreement at the Special Meeting (including any postponement or adjournment
thereof); or
(iii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action which temporarily,
preliminarily or permanently restrains, enjoins or otherwise prohibits the
Merger; provided, however, that the party seeking to terminate this Agreement
pursuant to this Section 7.1(b)(iii) shall have first complied with its
obligations under Section 5.5 hereof.
(c) By the Company:
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(i) in connection with entering into a definitive
agreement relating to a Superior Proposal as permitted by Section 5.2(b) hereof,
provided the Company has complied with all provisions thereof, including the
notice provisions therein;
(ii) if the Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not been cured within
thirty (30) days after the giving of written notice by the Company to the
Purchaser;
or
(d) By the Purchaser:
(i) if, the Company's Board of Directors or the Special
Committee shall have (x) failed to make, withdrawn, modified or changed in a
manner adverse to the Purchaser its approval or recommendation of this Agreement
or the Merger, (y) made any recommendation with respect to a Superior Proposal
other than a recommendation to reject such Superior Proposal, or (z) if the
Company shall have executed a letter of intent, agreement in principle or
definitive agreement relating to a Superior Proposal with a Person other than
the Purchaser or its Affiliates; or
(ii) if the Company shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not been cured within
thirty (30) days after the giving of written notice by the Purchaser to the
Company.
Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement by any
party hereto pursuant to the terms of this Agreement, (i) written notice thereof
shall forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination of this Agreement is made, (ii) this
Agreement shall be void and of no further force and effect, except that Sections
7.2 and 5.4(b) and Article IX hereof shall survive any termination of this
Agreement, and (iii) there shall be no other liability on the part of the
Purchaser or the Company, except for breach of this Agreement prior to such
termination and except as set forth in Section 7.2(b) below.
(b) If the Company terminates this Agreement pursuant to
Section 7.1(c)(i) hereof, or if the Purchaser terminates this Agreement pursuant
to Section 7.1(d)(i) hereof, then the Company shall pay to the Purchaser its
Legal Fees. Notwithstanding the foregoing, no Legal Fees shall be payable if, at
the time of such termination, the Purchaser is in material breach of its
representations and warranties or fails to perform in any material respect its
covenants or other agreements hereunder.
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ARTICLE VIII
RULES OF INTERPRETATION
Section 8.1 Rules of Interpretation.
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The plural of any defined term shall have a meaning
correlative to such defined term, and words denoting any gender shall include
all genders. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses. (a) Except as set forth in
Section 7.2(b), all costs and expenses incurred in connection with this
Agreement and the consummation of the Transactions, including, without
limitation, the fees and disbursements of counsel, financial advisors,
accountants and consultants, shall be paid by the party incurring such costs and
expenses, whether or not the Merger is consummated.
Section 9.2 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective boards of directors, at any time prior to the Closing Date
with respect to any of the terms contained herein; provided, however, that after
Stockholder Approval, no such amendment, modification or supplement shall reduce
the amount or change the form of the Merger Consideration.
Section 9.3 Notices. All notices, demands, consents, requests,
instructions and other communications to be given or delivered or permitted
under or by reason of the provisions of this Agreement, or in connection with
the transactions contemplated hereby and thereby shall be in writing
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and shall be deemed to be delivered and received by the intended recipient as
follows: (a) if personally delivered, on the Business Day of such delivery (as
evidenced by the receipt of the personal delivery service); (b) if mailed by
certified or registered mail return receipt requested, three (3) Business Days
after the aforesaid mailing; (c) if delivered by overnight courier (with all
charges having been prepaid), on the second Business Day of such delivery (as
evidenced by the receipt of the overnight courier service of recognized
standing); or (d) if delivered by facsimile transmission, on the Business Day of
such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent
after that time, on the next succeeding Business Day (as evidenced by the
printed confirmation of delivery generated by the sending party's telecopier
machine). If any notice, demand, consent, request, instruction or other
communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this Section 9.3), or the refusal to accept
same, the notice shall be deemed received on the Business Day the notice is sent
(as evidenced by a sworn affidavit of the sender). All such notices, demands,
consents, requests, instructions and other communications will be sent to the
following addresses or facsimile numbers as applicable:
(a) if to the Purchaser, to:
Kayak Acquisition Corp.
▇/▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, Lidji & Werbner
4400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Grotech Capital Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.4 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other party.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein),
constitutes the entire agreement and supersedes all prior agreements,
understandings, representations and warranties, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder, except that the Indemnified Parties are intended
beneficiaries of the covenants and agreements set forth in Section 5.12.
Section 9.6 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions contemplated herein are not affected in any
manner materially adverse to any party hereto, after taking into account the
mitigation contemplated by the next sentence. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner.
Section 9.7 Governing Law; Waiver of Jury Trial. This
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of Delaware without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. THE PARTIES HERETO HEREBY
ACKNOWLEDGE, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE TRANSACTIONS
AND ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS
AGREEMENT.
Section 9.8 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in
-27-
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware 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 or state court sitting in the State of Delaware.
Section 9.9 Extension; Waiver. At any time prior to the
Effective Time, the parties 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 provisions set forth in Section 9.2, waive
compliance by the other parties 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 those rights.
Section 9.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or in
part, by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
Section 9.11 Transfer Taxes. Subject to Section 2.4(b)(ii),
all liability for any transfer or other similar Taxes in connection with the
consummation of any Transaction contemplated by this Agreement shall be borne by
the Surviving Company.
Section 9.12 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement shall survive the
Effective Time. This Section 9.12 shall not limit or affect any covenant or
agreement of the parties which by its terms provides for performance after the
Effective Time.
Section 9.13 Independent Counsel. Each of the parties
acknowledges that it has been represented by independent counsel of its choice
throughout all negotiations that have preceded the execution of this Agreement
and that it has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel cooperated in the drafting and
preparation of this Agreement and the documents referred to herein, and any and
all drafts relating thereto shall be deemed the work product of the parties and
may not be construed against any party by reason of its preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intentions of the parties and this Agreement.
Section 9.14 Acknowledgement of Certain Relationships. Each of
the parties acknowledges that there exist certain relationships between and
among the Persons involved in the Transactions which may constitute conflicts of
interest or potential conflicts of interest. By way of example and not
limitation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., two of the
Purchaser Stockholders, serve as members of the board of directors of Commerce
Bancorp, Inc., whose wholly owned subsidiary, Commerce Bank, is expected to
participate as lender in connection with the Financing
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Arrangements. In addition, the Fairness Opinion to be delivered to the Company
in connection with the Merger is expected to be rendered by Commerce Capital
Markets, Inc., a wholly owned subsidiary of Commerce Bancorp, Inc., which has
provided and continues to provide financial advisory services to the Company.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
KAYAK ACQUISITION CORP.
By: /s/
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: President
U.S. VISION, INC.
By: /s/
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: Senior Vice President &
Chief Financial Officer
APPENDIX A
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise
defined have the meanings set forth below. Unless the context otherwise
requires, such terms shall include the singular and plural and the conjunctive
and disjunctive forms of the terms defined.
"Acquisition Proposal" shall mean any unsolicited proposal or
offer from any Person relating to any direct or indirect acquisition or purchase
of a business that constitutes 15% or more of the net revenues, net income or
the assets of the Company and its Subsidiaries, taken as a whole, or 15% or more
of any class of equity securities of the Company or any of its Subsidiaries, any
tender offer or exchange offer that if consummated would result in any Person
beneficially owning 15% or more of any class of equity securities of the Company
or any of its Subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of
the Exchange Act.
"Balance Sheet" shall mean the balance sheet of the Company
and its consolidated subsidiaries included in the Company's Annual Report on
Form 10-K filed for the fiscal year ended January 31, 2002.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in New York City, New York are
authorized or required by law or executive order to remain closed.
"Certificate of Merger" shall have the meaning set forth in
Section 1.1 of this Agreement.
"Closing Date" shall mean the closing date referred to in
Section 1.3 of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commerce Bank" shall have the meaning set forth in Section
4.7 of this Agreement.
"Commerce Consent" shall have the meaning set forth in Section
4.7 of this Agreement.
"Commerce Letter" shall have the meaning set forth in Section
4.7 of this Agreement.
"Commitment Letters" shall have the meaning set forth in
Section 4.7 of this Agreement.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
"Company SEC Documents" shall mean each form, report,
schedule, statement and other document required to be filed by the Company since
January 31, 2000, under the Exchange Act or the Securities Act, as such are
supplemented or amended since the time of filing, whether or not such
supplement or amendment is required to be so filed, including any such as are
filed after the date of the Agreement and prior to the Effective Time.
"Company Stock Option Plan" shall mean the 1996 Company Stock
Option Plan, as amended by the First Amendment to Company Stock Option Plan
dated as of June 22, 2000.
"Confidential Information" shall have the meaning set forth in
Section 5.4 of this Agreement.
"Converted Options" shall mean Options owned of record and
beneficially by the Purchaser Stockholders.
"Converted Shares" shall mean the shares of Company Common
Stock owned of record and beneficially by the Purchaser Stockholders.
"Department of Justice " shall mean the Antitrust Division of
the U.S. Department of Justice.
"Disclosure Schedule" shall mean the disclosure schedule
prepared and signed by the Company and attached to this Agreement as Exhibit A,
as amended, updated or supplemented as contemplated by Section 5.11.
"Dissenting Shares" shall mean any Shares as to which the
holder thereof has demanded payment with respect to the Merger and perfected his
or her entitlement to dissenters' rights in accordance with Section 262 of the
DGCL and as of the Effective Time has neither effectively withdrawn nor lost
(through failure to perfect or otherwise) his or her right to such appraisal.
"Effective Time" shall mean the time at which the Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware or
such other time as is agreed upon by the parties and specified in such
Certificate of Merger.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the applicable rules and regulations promulgated thereunder.
"Fairness Opinion" shall have the meaning set forth in Section
6.1(d) of this Agreement.
"Financing Arrangements" shall have the meaning set forth in
Section 4.7 of this Agreement.
"FTC" shall mean the U.S. Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting
principles, as in effect from time to time.
"Governmental Approvals" shall mean any consents, approvals,
permits, authorizations, confirmations and actions of, filings or registrations
with or notices to any Governmental Entity under any applicable laws, statutes,
rules, regulations, orders, decrees, administrative or judicial directives.
"Governmental Entity" shall mean any U.S. or foreign federal,
state or local court, administrative agency or commission or other governmental
or other regulatory agency, authority or commission.
2
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"Indemnified Parties" shall have the meaning set forth in
Section 5.12 of this Agreement.
"Knowledge" of any Person means actual knowledge, without
inquiry, with respect to the particular fact or matter in question. The Company
will be deemed to have "Knowledge" of a particular fact or matter only if a
member of the Special Committee, has Knowledge of such fact or matter. The
Purchaser will be deemed to have "Knowledge" of a particular fact or matter only
if it or any of its Subsidiaries or Affiliates or any of their respective
officers or directors has Knowledge of such fact or matter or if any of the
Purchaser Stockholders has Knowledge of such fact or matter.
"Known Company Breach" shall mean any fact or matter (i) which
Purchaser has Knowledge of as of the date of this Agreement, (ii) which has
caused or constitutes a breach of or inaccuracy in any of the Company's
representations or warranties included in Article III as of the date of this
Agreement, and (iii) of which the Company has no Knowledge.
"Known Purchaser Breach" shall mean any fact or matter (i)
which Company has Knowledge of as of the date of this Agreement, (ii) which has
caused or constitutes a breach of or inaccuracy in any of the Purchaser's
representations or warranties incurred in Article IV as of the date of this
Agreement, and (iii) of which the Purchaser has no Knowledge.
"Leases" shall mean any leases to which the Company or any of
its Subsidiaries is a party relating to the lease of real property by the
Company or any of its Subsidiaries.
"Legal Fees" shall mean actual legal fees and expenses of the
Purchaser's legal counsel in connection with the Transactions, in an amount not
to exceed $250,000.00
"Liens" shall mean, other than Permitted Liens, any liens,
mortgages, security interests, pledges, options, charges, claims or encumbrances
of any kind (including any agreement to give any of the foregoing).
"Material Agreement" shall mean any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any Subsidiary is a party or by which any of them or any
of their properties or assets is bound that is or would be required to be filed
as an exhibit to the Company's most recent Annual Report on Form 10-K or
Quarterly Report on Form 10-Q pursuant to the requirements of Item 601 of
Regulation S-K.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, properties, prospects, assets, condition (financial
or otherwise), or results of operations of the Company and its Subsidiaries,
taken as a whole, provided that any changes or effects which are due directly to
the following items will not constitute a Material Adverse Effect: (i) changes
in GAAP; (ii) changes in the U.S. economy or financial markets which do not
affect the Company in a disproportionate manner as compared with companies of a
similar size in the retail optical industry; or (iii) changes in the retail
optical industry which do not affect the Company in a disproportionate manner as
compared with companies of a similar size in the retail industry.
"Merger" shall have the meaning set forth in the recitals
hereto.
"Merger Consideration" shall have the meaning set forth in
Section 2.2(a) of this Agreement.
3
"Net Amount" shall mean the amount paid to the holder of an
Option as provided in Section 2.3(a)(i)(B) and the amount paid to the holder of
a Warrant as provided in Section 2.3(c) of this Agreement.
"Options" shall mean the options to purchase shares of Company
Common Stock which have been granted by the Company or a Subsidiary (or its
predecessor in interest) pursuant to the Company Stock Option Plan.
"Outside Date" shall have the meaning set forth in Section
7.1(b)(i) of this Agreement.
"Paying Agent" shall mean the bank or trust company designated
by the Purchaser to act as agent for the holders of the Shares pursuant to
Section 2.4(a) of this Agreement.
"Permitted Lien" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent, (iii) any minor imperfection of
title or similar Lien which individually or in the aggregate with other such
Liens does not materially impair the value of the property subject to such Lien
or the use of such property in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, (iv) any Lien securing an obligation of the
Purchaser, (v) real estate Taxes, assessments and water and sewer charges that
are a Lien, but not yet due and payable, (vi) any Liens that are to be
discharged or satisfied by the Company or any of its Subsidiaries at or prior to
Closing, (vii) any Lien to which any Leases, where the Company or any of its
Subsidiaries is a lessee, is subject or subordinate, (viii) any covenant,
condition, restriction or easement which encumbers any of the real property
owned by the Company or any of its Subsidiaries which individually or in the
aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, (ix) anything an
accurate survey of any of the real property owned by the Company or any of its
Subsidiaries or real property records of any Governmental Entity would disclose,
provided that neither the value nor the use of such Real Property is materially
and adversely affected, (x) Liens disclosed in any Company SEC Documents, (xi)
Liens incurred in the ordinary course of business, and (xii) zoning, building
and other similar restrictions.
"Person" shall mean a natural person, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Entity or other
entity or organization.
"Principal Stockholders" has the meaning set forth in the
recitals hereof.
"Proxy Statement" shall mean the proxy statement, letter to
stockholders, notice of meeting, and form of proxy to be filed by the Company
with the SEC pursuant to Section 5.3(a) of this Agreement, together with all
amendments and supplements thereto and including the exhibits thereto.
"Purchaser Common Stock" shall mean the common stock, par
value $0.01 per share, of the Purchaser.
"Purchaser Disclosure Schedule" shall mean the disclosure
schedule prepared and signed by the Purchaser and attached to this Agreement as
Exhibit B.
4
"Purchaser Stockholders" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Indiana Pacific Capital Trust,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
"Revolver" shall have the meaning set forth in Section 4.7 of
this Agreement.
"Schedule 13E-3" has the meaning set forth in Section 3.6(b)
of this Agreement.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the applicable rules and regulations promulgated thereunder.
"Shares" shall mean shares of Company Common Stock, other than
the Treasury Shares, the Converted Shares, the Dissenting Shares, if any, and
shares of Company Common Stock owned by the Purchaser, if any.
"Special Committee" has the meaning set forth in the recitals
hereof.
"Special Meeting" shall mean the special meeting referred to
in Section 5.3 of this Agreement.
"Stockholder Approval" shall have the meaning set forth in
Section 3.5 of this Agreement.
"Subordinated Note" shall mean a subordinated unsecured note
of the Surviving Company with the terms established by the Surviving Company.
"Subsidiary" shall mean any corporation or other organization,
whether incorporated or unincorporated, of which (a) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by the Person or by any one or more of its
Subsidiaries, or by the Person and one or more of its Subsidiaries or (b) the
Person or any other Subsidiary of the Person is a general partner (excluding any
such partnership where the Person or any Subsidiary of the Person does not have
a majority of the voting interest in such partnership).
"Superior Proposal" shall mean any proposal by a third party
to acquire, directly or indirectly, including pursuant to a tender offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash and/or
securities, more than fifty (50%) percent of the combined voting power of the
Shares then outstanding or all or substantially all the assets of the Company
and its Subsidiaries, taken as a whole, which satisfies both subsection (x) and
subsection (y) of Section 5.2(a).
"Surviving Company Common Stock" shall mean the common stock,
par value $.01 per share, of the Surviving Company.
"Tax" or "Taxes" shall mean any and all federal, state, local,
foreign or other taxes of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including, without limitation, taxes or other
charges on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital
5
stock, payroll, employment, social security, workers' compensation, unemployment
compensation or net worth, and taxes or other charges in the nature of excise,
withholding, ad valorem or value added.
"Term Loan" shall have the meaning set forth in Section 4.7 of
this Agreement.
"Transactions" shall mean the Merger and the other
transactions provided for or contemplated by this Agreement.
"Treasury Shares" shall mean Company Common Stock held in
treasury by the Company or any Subsidiary of the Company.
"Vendor A" shall have the meaning set forth in Section 4.7 of
this Agreement.
"Vendor A Letter" shall have the meaning set forth in Section
4.7 of this Agreement.
"Vendor B" shall have the meaning set forth in Section 4.7 of
this Agreement.
"Vendor B Letter" shall have the meaning set forth in Section
4.7 of this Agreement.
"Voting Debt" shall mean indebtedness having general voting
rights and debt convertible into securities having such rights.
"Warrants" shall mean any warrants to purchase shares of
Company Common Stock which have been granted by the Company (or its predecessor
in interest).
"Wholly-Owned Company Subsidiary" shall mean a Subsidiary that
is directly or indirectly wholly-owned by the Company.
6