Exhibit (a)(8)
Exhibit (a)(8) Agreement and Plan of Merger by and among Court Square, the
Purchaser and the Company dated as of February 7, 2001
AGREEMENT AND PLAN OF MERGER
by and among
COURT SQUARE CAPITAL LIMITED,
DRI ACQUISITION LLC
and
DELCO REMY INTERNATIONAL, INC.
FEBRUARY 7, 2001
Table of Contents
Page
------
ARTICLE I THE OFFER AND MERGER.... III-2
Section 1.1 The Offer............... III-3
Section 1.2 Company Actions......... III-4
Section 1.3 Directors............... III-5
Section 1.4 The Merger.............. III-5
Section 1.5 Effective Time.......... III-5
Section 1.6 Closing................. III-5
Section 1.7 Directors and Officers III-5
of the Surviving
Corporation.............
Section 1.8 Stockholders' Meeting... III-6
Section 1.9 Merger Without Meeting III-6
of Stockholders.........
ARTICLE II CONVERSION OF III-7
SECURITIES..............
Section 2.1 Conversion of Capital III-7
Stock...................
Section 2.2 Exchange of III-7
Certificates............
Section 2.3 Dissenting Shares....... III-9
Section 2.4 Company Option Plans.... III-9
Section 2.5 Change in Control III-9
Provisions..............
ARTICLE III REPRESENTATIONS AND III-10
WARRANTIES OF THE
COMPANY.................
Section 3.1 Corporate Organization.. III-10
Section 3.2 Capitalization.......... III-10
Section 3.3 Authority............... III-11
Section 3.4 Consents and Approvals; III-11
No Violations...........
Section 3.5 SEC Documents; III-12
Undisclosed
Liabilities.............
Section 3.6 Broker's Fees........... III-13
Section 3.7 Absence of Certain III-13
Changes or Events.......
Section 3.8 Company Information..... III-13
Section 3.9 Opinion of Financial III-13
Advisor.................
Section 3.10 Takeover Statutes....... III-14
ARTICLE IV REPRESENTATIONS AND III-14
WARRANTIES OF PARENT AND
PURCHASER...............
Section 4.1 Corporate Organization.. III-14
Section 4.2 Authority............... III-14
Section 4.3 Consents and Approvals; III-14
No Violation............
Section 4.4 Broker's Fees........... III-15
Section 4.5 Purchaser's Operation... III-15
Section 4.6 Parent or Purchaser III-15
Information.............
Section 4.7 Sufficient Funds........ III-15
Section 4.8 Purchaser III-15
Capitalization..........
Section 4.9 Ownership of Company III-15
Common Stock............
ARTICLE V COVENANTS............... III-16
Section 5.1 Conduct of Businesses III-16
Prior to the Effective
Time....................
Section 5.2 No Solicitation......... III-17
Section 5.3 Sufficient Funds........ III-18
Section 5.4 Publicity............... III-18
Section 5.5 Notification of Certain III-18
Matters.................
Section 5.6 Access to Information... III-19
Section 5.7 Further Assurances...... III-19
Section 5.8 Employee Benefit Plans.. III-20
Section 5.9 Indemnification and III-20
Insurance...............
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Page
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Section 5.10 Additional Agreements.................................. III-21
Section 5.11 Stockholder Litigation................................. III-21
Section 5.12 Transfer of Company Common Stock....................... III-21
ARTICLE VI CONDITIONS............................................. III-21
Section 6.1 Conditions to Each Party's Obligation to Effect the III-21
Merger.................................................
Section 6.2 Conditions to Obligations of Parent and Purchaser to III-22
Effect the Merger......................................
Section 6.3 Conditions to Obligations of the Company to Effect the III-22
Merger.................................................
ARTICLE VII TERMINATION............................................ III-23
Section 7.1 Termination............................................ III-23
Section 7.2 Effect of Termination.................................. III-24
Section 7.3 Termination Fee; Expenses.............................. III-24
ARTICLE VIII MISCELLANEOUS.......................................... III-25
Section 8.1 Amendment and Modification............................. III-25
Section 8.2 Extension; Waiver...................................... III-25
Section 8.3 Nonsurvival of Representations and Warranties.......... III-25
Section 8.4 Notices................................................ III-25
Section 8.5 Counterparts........................................... III-26
Section 8.6 Entire Agreement; Third Party Beneficiaries............ III-26
Section 8.7 Severability........................................... III-26
Section 8.8 Governing Law; Waiver of Trial by Jury................. III-26
Section 8.9 Assignment............................................. III-26
Section 8.10 Headings............................................... III-27
Section 8.11 Enforcement............................................ III-27
Section 8.12 Submission to Jurisdiction; Waivers.................... III-27
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February 7,
2001, by and among Court Square Capital Limited, a Delaware corporation
("Parent"), DRI Acquisition LLC, a Delaware limited liability company and a
subsidiary of Parent (the "Purchaser"), and Delco Remy International, Inc., a
Delaware corporation (the "Company").
WHEREAS, on January 11, 2001, Parent and the Purchaser commenced (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), a tender offer (such offer, including any amendments
and changes thereto (including those contemplated by this Agreement), the
"Offer") to purchase all of the outstanding shares of Class A common stock,
par value $.01 per share (the "Class A Common Stock"), of the Company not
currently owned by Parent (the "Shares") at a price of $8.00 per Share, net to
the seller in cash, without interest;
WHEREAS, on January 11, 2001, Parent and the Purchaser filed with the
Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule TO promulgated under the Exchange Act (together with all amendments
and supplements thereto, the "Schedule TO"), with respect to the Offer which
Schedule TO included an Offer to Purchase (the "Offer to Purchase");
WHEREAS, the Board of Directors of the Company has established a committee
(the "Special Committee") consisting of Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ to, among other things, consider the Offer, negotiate this
Agreement with Parent and Purchaser and solicit bids from, and conduct
preliminary negotiations with, third parties;
WHEREAS, on January 25, 2001, the Company filed with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 promulgated under the
Exchange Act (together with all amendments and supplements thereto, the
"Schedule 14D-9");
WHEREAS, following negotiations with the Special Committee, Parent,
Purchaser and the Special Committee have agreed to increase the price of $8.00
per Share to $9.50 per Share, net to the Seller in cash, without interest
(such price, or such higher price per Share as may be paid in the Offer, the
"Offer Price") and to provide for the Merger (as defined herein);
WHEREAS, as an inducement to Purchaser entering into this Agreement,
concurrently herewith, the Company has granted Purchaser an option to purchase
Shares of the Company pursuant to an agreement among Parent, Purchaser and the
Company (the "Option Agreement");
WHEREAS, Parent and the Board of Directors of Purchaser have each approved
this Agreement (including all terms and conditions set forth herein) and the
transactions contemplated hereby, including the Offer, the Merger and the
Option Agreement (collectively, the "Transactions");
WHEREAS, the Special Committee has (A) determined that the terms of the
Offer and the Merger are fair to, and in the best interests of, the
stockholders of the Company (other than Parent and its affiliates), (B)
subject to the terms and conditions set forth herein, recommended that the
Company's Board of Directors approve this Agreement and declare its
advisability, and (C) subject to the terms and conditions set forth herein,
recommended that the stockholders of the Company (other than Parent and its
affiliates) accept the Offer and tender their Shares pursuant to the Offer;
WHEREAS, the Board of Directors of the Company has (A) approved this
Agreement (including all terms and conditions set forth herein) and the
Transactions, (B) subject to the terms and conditions set forth herein
declared that this Agreement is advisable and that the terms of the Offer and
the Merger are fair to, and in the best interests of, the Company's
stockholders (other than Parent and its affiliates) and (C) subject to the
terms and conditions set forth herein, recommended that the Company's
stockholders (other than Parent and its affiliates) accept the Offer, tender
their Shares thereunder to the Purchaser and, if applicable, vote to adopt
this Agreement; and
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WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1. The Offer. (a) As promptly as practicable (but in no event
later than two (2) business days (as defined in Rule 14d-1 promulgated under
the Exchange Act) ("Business Days") after the public announcement of the
execution hereof), the Purchaser and Parent shall amend the Offer to reflect
the transactions contemplated by this Agreement and certain other matters
which are not inconsistent with the terms of this Agreement. The Purchaser may
designate another direct or indirect subsidiary of Parent as the bidder
(within the meaning of Rule 14d-1(c) under the Exchange Act) in the Offer, may
assign all or any part of its rights under this Agreement (including the right
to be a constituent corporation in the Merger) to such subsidiary or may
convert to a corporation pursuant to the provisions of the Delaware General
Corporation Law (the "DGCL"), in any of which case references herein to
Purchaser shall be deemed to apply to such subsidiary or such corporation and
such subsidiary or corporation shall be made a party signatory hereto, in each
case, unless any such action would require any filing, permit, authorization,
consent or approval as may be required under, and other applicable
requirements of, the HSR Act or any similar statute or regulation. The Company
shall not tender Shares held by it or by any of its subsidiaries pursuant to
the Offer. Subject to Section 1.1(b), the Purchaser shall, and Parent shall
cause the Purchaser to, on the terms and subject only to the prior
satisfaction or waiver of the conditions set forth in Annex A hereto,
consummate the Offer and accept for payment and pay for Shares tendered as
soon as it is legally permitted to do so under applicable law.
(b) As promptly as practicable (but in no event later than two (2) Business
Days after the public announcement of the execution hereof), Parent and the
Purchaser shall amend the Offer to Purchase (as so amended, the "Amended Offer
to Purchase") to contain the terms set forth in this Agreement and the
conditions set forth in Annex A hereto, and the Amended Offer to Purchase
shall reflect an increase in the per Share price to paid in the Offer to $9.50
per Share and provide for an expiration date (as such date may be extended in
accordance with the provisions of this Section 1.1(b), the "Expiration Date"),
of ten (10) Business Days from the date the Amended Offer to Purchase is first
disseminated to security holders of the Company. The Purchaser and Parent
shall cause the Amended Offer to Purchase to be disseminated to the security
holders of the Company within two (2) Business Days after the date of this
Agreement. The Purchaser shall not, and Parent shall cause the Purchaser not
to, decrease the Offer Price or change the form of consideration to be paid in
the Offer or decrease the number of Shares sought to be purchased in the
Offer, amend the conditions to the Offer set forth in Annex A or impose
conditions to the Offer other than those set forth in Annex A, in each case,
without the prior written consent of the Special Committee, which the Special
Committee may withhold in its sole discretion. Notwithstanding the foregoing,
(i) the Purchaser shall extend the Offer (A) for any period required by any
rule, regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable law, and (B) in
ten (10) Business Day increments, up to the thirtieth (30th) Business Day
after the date the Amended Offer to Purchase is first disseminated to security
holders, if on the then current Expiration Date, any condition to the Offer
shall not have been satisfied or waived; provided, however, that the Purchaser
shall not so extend such then current Expiration Date if so directed by the
Special Committee, and (ii) notwithstanding the foregoing, the Purchaser may
from time to time, without the consent of the Special Committee, extend the
Offer (A) if, on the then current Expiration Date, any condition to the Offer
shall not have been satisfied or waived, for the shortest period of time that
Purchaser reasonably believes is necessary to satisfy such condition, such
period not to exceed ten (10) Business Days, provided, that neither the
Purchaser nor Parent shall be in material breach of any of their respective
obligations under this Agreement, (B) providing for a "subsequent offering
period" not to exceed twenty (20) Business Days to the extent permitted under,
and
III-2
in compliance with, Rule 14d-11 promulgated under the Exchange Act, or (C) for
an aggregate period not to exceed five (5) Business Days, if all of the
conditions to the Offer are satisfied or waived but the number of Shares
validly tendered and not withdrawn (when added to (x) all shares of Class A
Common Stock owned by Parent, Purchaser and any other director or indirect
subsidiary of Parent, and (y) all shares of Class A Common Stock that are
issuable upon conversion of the shares of Class B common stock, par value $.01
per share, of the Company owned by Parent, Purchaser and any other direct or
indirect subsidiary of Parent (the "Class B Common Stock," and, together with
the Class A Common Stock, the "Company Common Stock")) is less than 90% of the
number of shares of Class A Common Stock that would be then outstanding
assuming the conversion of such Class B Common Stock.
(c) On the date the Offer to Purchase is amended, Parent and the Purchaser
shall file with the SEC (i) an amended Schedule TO (together with all
amendments and supplements thereto and including the exhibits thereto, the
"Schedule TO/A") with respect to the amended Offer, and (ii) an amended Rule
13e-3 Transaction Statement on Schedule 13E-3 promulgated under the Exchange
Act with respect to the Offer (together with all amendments and supplements
thereto and including the exhibits thereto, the "Schedule 13E-3/A") which
shall be filed as a part of the Schedule TO/A. The Schedule TO/A shall contain
or shall incorporate by reference, among other things, the Amended Offer to
Purchase and an amended form of letter of transmittal (the Schedule TO/A, the
Amended Offer to Purchase, the related letter of transmittal and the Schedule
13E-3/A, together with any amendments and supplements thereto, collectively,
the "Offer Documents"). The Offer Documents shall comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Purchaser with respect to the Company's
projections set forth in the Offer to Purchase or information regarding the
Company in the Offer Documents which was previously included in any SEC
Document (as defined herein) filed by the Company and not superseded by a
later SEC Document filed by the Company as of the date of inclusion. Each of
Parent and the Purchaser shall further take all steps necessary to cause the
Offer Documents to be filed with the SEC and shall cause the Offer Documents
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Each of Parent and the
Purchaser shall promptly correct, and the Company agrees to notify the
Purchaser promptly as to, any information regarding any of them respectively
in the Offer Documents if and to the extent that it shall have become false
and misleading in any material respect and the Purchaser further shall take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and
to the extent required by applicable federal securities laws. The Company and
its counsel, and the Special Committee and its counsel, shall be given a
reasonable opportunity to review and comment upon the Schedule TO/A (and shall
provide any comments thereon as soon as practicable) prior to the filing
thereof with the SEC. In addition, Parent shall, and shall cause the Purchaser
to, provide the Company and its counsel, and the Special Committee and its
counsel, in writing with any comments or other communications that Parent,
Purchaser or their counsel may receive from time to time from the SEC or its
staff with respect to the Offer Documents promptly after receipt of such
comments or other communications, and with copies of any written responses and
telephonic notification of any verbal responses by Parent, Purchaser or their
counsel.
(d) Parent shall provide or cause to be provided to Purchaser on a timely
basis all of the funds necessary to purchase any Shares that Purchaser becomes
obligated to purchase pursuant to the Offer.
Section 1.2. Company Actions.
(a) The Company represents that (i) its Board of Directors, at a meeting
duly called and held, by a unanimous vote of the directors present at the
meeting (with the exception of directors abstaining due to any actual or
potential conflict of interest) (A) approved this Agreement (including all
terms and conditions set forth herein) and the Transactions, (B) subject to
the terms and conditions set forth herein, declared that this Agreement is
III-3
advisable and that the terms of the Offer and the Merger are fair to, and in
the best interests of, the Company's stockholders (other than Parent and its
affiliates) and (C) subject to the terms and conditions set forth herein,
recommended that the Company's stockholders (other than Parent and its
affiliates) accept the Offer, tender their Shares thereunder to the Purchaser
and, if applicable, vote to adopt this Agreement; and (ii) the Special
Committee, at a meeting duly called and held, has unanimously (A) determined
that the terms of the Offer and the Merger are fair to, and in the best
interests of, the stockholders of the Company (other than Parent and its
affiliates), (B) subject to the terms and conditions set forth herein,
recommended that the Company's Board of Directors approve this Agreement and
declare its advisability, and (C) subject to the terms and conditions set
forth herein, recommended that the stockholders of the Company (other than
Parent and its affiliates) accept the Offer and tender their Shares pursuant
to the Offer. The Company represents that it has elected not to be governed by
Section 203 of the DGCL in accordance with the provisions thereof. The Company
hereby consents to the inclusion in the Offer Documents of the recommendations
of its Board of Directors and the Special Committee described in this Section
1.2(a) of the immediately preceding sentence.
(b) Substantially concurrently with the filing of the Schedule TO/A, the
Company shall file with the SEC an amended Schedule 14D-9 (the "Schedule 14D-
9/A") which shall contain, among other things, the recommendations referred to
in Section 1.2(a) hereof; provided, however, that such recommendations may be
withdrawn, modified or amended, in each case in accordance with the provisions
of Section 5.2 of this Agreement. The Schedule 14D-9/A shall comply in all
material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information regarding
Parent or the Purchaser in the Schedule 14D-9/A which was previously included
in any SEC Document filed by Parent or the Purchaser and not superseded by a
later SEC Document filed by Parent or the Purchaser as of the date of
inclusion. The Company further shall take all steps necessary to cause the
Schedule 14D-9/A to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Company shall promptly correct, and Parent and Purchaser
agree to notify the Company promptly as to, any information regarding any of
them respectively in the Schedule 14D-9/A if and to the extent that it shall
have become false and misleading in any material respect and the Company
further shall take all steps necessary to cause the Schedule 14D-9/A as so
corrected to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, the Purchaser and their counsel shall be given a
reasonable opportunity to review and comment upon the Schedule 14D-9/A (and
shall provide any comments thereon as soon as practicable) prior to the filing
thereof with the SEC. In addition, the Company shall provide Parent, the
Purchaser and their counsel in writing with any comments or other
communications the Company or its counsel may receive from time to time from
the SEC or its staff with respect to the Schedule 14D-9/A promptly after
receipt of such comments or other communications and with copies of any
written responses and telephonic notification of any verbal responses by the
Company or its counsel.
(c) In connection with the Offer, the Company has elected and agrees to
promptly communicate the Offer to the stockholders of the Company and promptly
furnish or cause to be furnished to the stockholders of the Company the Offer
Documents, to the full extent and in the manner required by federal securities
laws.
(d) Notwithstanding anything in this Agreement to the contrary, during the
period from and after the date hereof but prior to the Effective Time (as
defined herein), the Board of Directors of the Company shall delegate to the
Special Committee, the sole responsibility for (i) any termination and, to the
fullest extent permitted by law, any amendment or modification of this
Agreement on behalf of the Company, (ii) any waiver of any of the Company's
rights or remedies hereunder, (iii) any extension of the time for performance
of Parent's or Purchaser's obligations hereunder, (iv) any agreement or
understanding with Parent or Purchaser providing for the termination of the
Offer and (v) any enforcement of the Company's rights or remedies under this
III-4
Agreement. No amendment to this Agreement shall be effective without being
approved by the Special Committee.
Section 1.3. Directors. Promptly upon the purchase by Purchaser of Shares
pursuant to the Offer, (i) Parent shall be entitled to designate one (1)
additional director to the Board of Directors of the Company, and (ii) the
Company shall promptly increase the size of the Board of Directors of the
Company as is necessary to enable Purchaser's designee to be elected to the
Board of Directors of the Company in accordance with the terms of this Section
1.3 and shall cause Purchaser's designee to be so elected; provided, however,
that, if Purchaser's designee is elected to the Board of Directors of the
Company, until the Effective Time, the Board of Directors of the Company shall
delegate the responsibility set forth in Section 1.2(d) hereof to the Special
Committee, and the Board of Directors shall have, and the Special Committee
shall be comprised of, at least two (2) directors who are directors on the
date hereof and who are neither officers of the Company nor designees,
stockholders, affiliates or associates (within the meaning of the federal
securities laws) of Parent (each, an "Independent Director"); provided,
further, that if less than two (2) Independent Directors remain, the remaining
Independent Director (if any) or, if no Independent Director remains, the
other directors shall designate persons to fill the vacancies who shall not be
either officers of the Company or designees, shareholders, affiliates or
associates (within the meaning of the federal securities laws) of Parent, and
Parent and the Company shall cause such persons to be elected to the Board of
Directors of the Company, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. The members of the Special Committee
on the date hereof shall serve as the initial Independent Directors and shall
continue to serve as members of the Special Committee until the earlier of the
Effective Time or their resignation. Subject to applicable law, the Company
shall promptly take all action necessary pursuant to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its
obligations under this Section 1.3 and shall include in the Schedule 14D-9/A
mailed to stockholders promptly after the amendment of the Offer (or any
subsequent amendment thereof or an information statement pursuant to Rule 14f-
1 if Purchaser has not theretofore designated directors) such information with
respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this
Section 1.3. Parent and Purchaser shall supply the Company, and shall be
solely responsible for, any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and
Rule 14f-1.
Section 1.4. The Merger. Subject to the terms and conditions of this
Agreement and the provisions of the DGCL and, if applicable, the Delaware
Limited Liability Company Act ("DLLCA"), at the Effective Time, the Company
and the Purchaser shall consummate a merger (the "Merger") pursuant to which
(a) the Purchaser shall be merged with and into the Company and the separate
existence of the Purchaser shall thereupon cease, (b) the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") under the
name Delco Remy International, Inc. and shall continue to be governed by the
laws of the State of Delaware, and (c) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Merger. At the Effective Time, (x) the
Certificate of Incorporation of the Company and (y) the By-laws of the
Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation and By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation and
such By-laws. The Merger shall have the effects set forth in the DGCL and, if
applicable, the DLLCA.
Section 1.5. Effective Time. The Purchaser and the Company shall cause an
appropriate Certificate of Merger (the "Certificate of Merger") to be executed
and filed on the date of the Closing (as defined herein) (or on such other
date as Parent and the Company may agree) with the Secretary of State of the
State of Delaware (the "Secretary of State") as provided in the DGCL and, if
applicable, the DLLCA. The Merger shall become effective at the time the
Certificate of Merger has been duly filed with the Secretary of State or such
later time as is agreed upon by the parties and specified in the Certificate
of Merger, and such time is hereinafter referred to as the "Effective Time."
Section 1.6. Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m., on a date to be specified by the parties, which shall be
as soon as practicable, but in no event later than the second Business
III-5
Day after satisfaction or waiver of all of the conditions set forth in Article
VI hereof (other than those conditions that by their nature must be satisfied
on the Closing Date), at the offices of Dechert, 4000 ▇▇▇▇ Atlantic Tower,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another date or
place is agreed to in writing by the parties hereto (the "Closing Date").
Section 1.7. Directors and Officers of the Surviving Corporation. Subject to
Section 1.3, the directors and officers of the Company immediately prior to
the Effective Time shall, from and after the Effective Time, be the directors
and officers, respectively, of the Surviving Corporation until their
successors shall have been duly elected or appointed or qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws.
Section 1.8. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, as soon as practicable
following the earliest of (i) the acceptance for payment and purchase of
Shares by the Purchaser pursuant to the Offer, (ii) termination or expiration
of the Offer, and (iii) a written request from Parent, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Special Meeting") for the purpose of considering and
taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement (such proxy or information statement, as amended or supplemented,
the "Proxy Statement") relating to the Merger and this Agreement and use
its reasonable best efforts (x) to obtain and furnish the information
required to be included by the federal securities laws (and the rules and
regulations thereunder) in the Proxy Statement and, after consultation with
Parent, to respond promptly to any comments made by the SEC with respect to
the preliminary Proxy Statement and cause a definitive Proxy Statement to
be mailed to its stockholders and (y) to obtain the necessary adoption of
this Agreement by its stockholders; and
(iii) subject to the terms and conditions of this Agreement, include in
the Proxy Statement the recommendations of the Board of Directors of the
Company and the Special Committee that stockholders of the Company (other
than Parent and its affiliates) vote in favor of the adoption of this
Agreement.
(b) The Company, Parent and Purchaser shall cooperate with each other in the
preparation of the Proxy Statement. Parent, Purchaser and their counsel shall
be given a reasonable opportunity to review and comment upon the Proxy
Statement (and shall provide any comments thereon as soon as practicable)
prior to the filing thereof with the SEC. The Company shall notify Parent,
Purchaser and their counsel promptly of the receipt of any comments and other
communications from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information. The Company shall supply Parent, Purchaser and their counsel with
copies of all correspondence and other communications between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to the Proxy Statement and telephonic notification of
any verbal responses by the Company or its counsel. If at any time prior to
adoption of this Agreement by the Company's stockholders there shall occur any
event that is required to be set forth in an amendment or supplement to the
Proxy Statement, the Company shall promptly prepare and mail to its
stockholders such an amendment or supplement. The Company shall not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects. The Company shall use its reasonable best efforts to cause
the Proxy Statement to be mailed to the Company's stockholders as promptly as
practicable after filing with the SEC.
(c) Parent shall provide the Company with the information concerning Parent
and Purchaser required to be included in the Proxy Statement. Parent shall
vote, or cause to be voted, all of the shares of Class of Class A Common Stock
then owned by it, Citicorp Venture Capital Ltd., the Purchaser or any of
Parent's other direct or indirect subsidiaries in favor of the adoption of
this Agreement.
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Section 1.9. Merger Without Meeting of Stockholders. In the event that
Parent, Purchaser and the other direct and indirect subsidiaries of Parent,
shall collectively own at least ninety percent (90%) of the then-outstanding
shares of Class A Common Stock pursuant to the Offer or otherwise (excluding
any shares issuable pursuant to the Option Agreement), each of the parties
hereto shall take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after the satisfaction or waiver of
the conditions to the Merger set forth in Article VI hereof, without a meeting
of stockholders of the Company, in accordance with Section 253 of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1. Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or of the holders of membership interests of
the Purchaser, if Purchaser is a limited liability company (the "Purchaser
Interests"):
(a) Purchaser Interests. Each Purchaser Interest issued and outstanding
immediately prior to the Effective Time shall be converted into and become
one validly issued, fully paid and nonassessable share of Class A common
stock, $.01 par value per share, of the Surviving Corporation. If pursuant
to the terms of this Agreement the Purchaser converts to a corporation or
assigns its rights to enter into the Merger to a corporation, then the
foregoing sentence will have no application and each share of capital stock
of such corporation issued and outstanding immediately prior to the
Effective Time shall be converted into and become one validly issued, fully
paid and nonassessable share of Class A common stock, $.01 par value per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Any shares of
Company Common Stock that are issued and outstanding immediately prior to
the Effective Time and owned by the Company as treasury stock, any shares
of Company Common Stock issued and outstanding immediately prior to the
Effective Time and owned by any subsidiary of the Company and any shares of
Company Common Stock issued and outstanding immediately prior to the
Effective Time and owned by Parent, the Purchaser or any other direct or
indirect subsidiary of Parent shall be canceled and retired and shall cease
to exist and no consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares to
be canceled in accordance with Section 2.1(b) hereof and any Dissenting
Shares (as defined herein)), shall be converted into the right to receive
the Offer Price payable to the holder thereof, without interest (the
"Merger Consideration"), upon surrender of the certificate which
immediately prior to the Effective Time represented such share of Company
Common Stock in the manner provided in Section 2.2 hereof. All such shares
of Company Common Stock, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist,
and each holder of a certificate which immediately prior to the Effective
Time represented any such shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration
therefor upon the surrender of such certificate in accordance with Section
2.2 hereof, without interest.
Section 2.2. Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company (the
"Paying Agent") reasonably acceptable to the Company to act as paying agent
for the holders of Company Common Stock in connection with the Merger,
pursuant to an agreement providing for the matters set forth in this Section
2.2 and such other matters as may be appropriate and the terms of which shall
be reasonably satisfactory to the Company and the Purchaser. When and as
needed, Parent shall make available to the Paying Agent such funds for timely
payment hereunder. Such funds shall not be used for any purpose other than as
set forth in this Article II, and shall be invested by the Paying Agent as
directed by Parent or the Surviving Corporation in (i) direct obligations of
the
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United States of America, (ii) obligations for which the full faith and credit
of the United States of America is pledged to provide for the payment of
principal and interest, (iii) commercial paper rated the highest quality by
either ▇▇▇▇▇'▇ Investors Service, Inc. or Standard and Poor's Ratings
Services, or (iv) investments in any money market funds investing in any of
the foregoing. Any net profit resulting from, or interest or income produced
by, such investments will be payable to Purchaser or Parent, as Parent
directs.
(b) Exchange Procedures. Promptly after the Effective Time but in no event
more than three (3) Business Days thereafter, Parent shall cause the Paying
Agent to mail to each holder of record of a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates"), which shares were converted
pursuant to Section 2.1 hereof into the right to receive the Merger
Consideration, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in
such form and have such other provisions as Parent and the Surviving
Corporation may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent, together with such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration (subject to subsection (e), below) for each share of Company
Common Stock formerly represented by such Certificate , to be mailed within
ten (10) Business Days of receipt of such Certificate and letter of
transmittal, and the Certificate so surrendered shall forthwith be canceled.
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 of the Merger Consideration 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 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 satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate (other than
those representing Dissenting Shares (as defined below)) shall be deemed at
any time after the Effective Time to represent only the right to receive the
Merger Consideration in cash as contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in Company Common Stock. At
the Effective Time, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers of shares
of Company Common Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following 180 calendar
days after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
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
Corporation, which shall thereafter act as the Paying Agent, (subject to
abandoned property, escheat or other similar laws) as general creditors
thereof with respect to the payment of any Merger Consideration that may be
payable upon surrender of any Certificates, as determined pursuant to this
Agreement, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation 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.
(e) Withholding Taxes. If so specified in the Offer Documents, Parent, the
Purchaser, the Surviving Corporation and the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to a holder of
Company Common Stock pursuant to the Offer or Certificates pursuant to the
Merger such amounts as Parent, the Purchaser, the Surviving Corporation or the
Paying Agent is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the
III-8
"Code") or any provision of state, local or foreign tax law. To the extent
amounts are so withheld by Parent, the Purchaser, the Surviving Corporation or
the Paying Agent, (i) such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the Company Common
Stock or Certificates, as applicable, in respect of which the deduction and
withholding was made, and (ii) the Parent shall, or shall cause the Purchaser,
the Surviving Corporation or the Paying Agent, as the case may be, to,
promptly pay over such withheld amounts to the appropriate Governmental Entity
(as defined herein).
(f) Lost, Stolen or Destroyed Certificates. 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 and, if requested by Parent or the Surviving Corporation, the
delivery of a bond (in such amount as Parent or the Surviving Corporation may
reasonably direct) as indemnity against any claim that may be made against the
Paying Agent, Parent or the Surviving Corporation on account of the alleged
loss, theft or destruction of such Certificate, 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.
Section 2.3. Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, shares of Company Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Company Common Stock who have properly exercised
appraisal rights with respect thereto in accordance with Section 262 of the
DGCL (the "Dissenting Shares") , shall not be converted into or exchangeable
for the right to receive the Merger Consideration, and holders of such
Dissenting Shares shall be entitled to receive payment of the fair value of
such Dissenting Shares in accordance with the provisions of Section 262 of the
DGCL, unless and until the applicable holder fails to perfect or effectively
withdraws or otherwise loses such holder's rights to appraisal under the DGCL.
If, after the Effective Time, any such holder fails to perfect or effectively
withdraws or loses such right, such Dissenting Shares shall thereupon be
treated as if they had been converted at the Effective Time into the right to
receive the Merger Consideration, without any interest thereon. The Company
shall give Parent prompt notice of any written demands received by the Company
for appraisals of Dissenting Shares, and Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent, make
any payment with respect to any demands for appraisals or offer to settle or
settle any such demands.
Section 2.4. Company Option Plans. The Company and Purchasers shall consult
in good faith with each other to determine the treatment of outstanding stock
options to purchase Shares (the "Options") granted under the Company's 1997
Stock-Based Incentive Compensation Plan, as amended, or the Company's 1997
Non-Qualified Stock Option Plan for Non-Employee Directors, as amended
(collectively, the "Stock Plans").
Section 2.5. Change in Control Provisions. The Company has obtained from its
officers and other affected employees a written waiver of the application to
the transactions contemplated by this Agreement of any "change in control"
provisions in any employee benefit plan (as defined in Section 3(3) of ERISA
without regard to any exemption from any provision of Title I of ERISA) or any
agreement including, without limitation, any bonus or incentive compensation
plan and any retirement or supplemental retirement plan, and specifically
including the Delco Remy International, Inc. Supplemental Executive Retirement
Plan and any employment or split-dollar life insurance agreements. "Change in
control provisions" shall include, without limitation, (1) any provisions
requiring either accelerated vesting or accelerated payment of any
compensation or benefits accrued under any such plan or agreement and (2) any
provision of any such plan or agreement requiring advance funding of, or
contributions to, any trust, insurance policy or other funding vehicle
included as part of, or related to, any such plan or agreement; provided,
however, that the Company may enter into certain agreements (the "Change of
Control Agreements") with certain executive officers of the Company providing
for the payment of benefits upon a change of control; provided, further,
however, that the terms of the Change of Control Agreements and the names of
such executive officers shall be provided in writing to Parent and Purchaser
prior to or on the date hereof.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser as follows:
Section 3.1. Corporate Organization. Each of the Company and its
subsidiaries is a corporation, partnership or other legal entity duly
incorporated or organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has the requisite corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, except for the failure to
be so organized, existing and in good standing or to have such corporate power
and authority which would not reasonably be expected to have, when aggregated
with all such other failures, a Material Adverse Effect (as defined herein) on
the Company and its subsidiaries, taken as a whole (a "Company Material
Adverse Effect"). Each of the Company and its Significant Subsidiaries (as
defined below) is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character of the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so
licensed or qualified would not reasonably be expected to have, when
aggregated with all other such failures, a Company Material Adverse Effect. As
used in this Agreement, the term "Material Adverse Effect" means a material
adverse effect (i) on the business, operations or financial condition of
Parent or the Company, as the case may be, and its subsidiaries, taken as a
whole, or (ii) on the party's ability to consummate the transactions
contemplated hereby. As used in this Agreement, (i) the word "subsidiary" when
used with respect to any party means any corporation, partnership or other
organization, whether incorporated or unincorporated, of which at least a
majority of the securities or other interests having by their terms 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 beneficially owned or controlled by such party or by
any one or more of its subsidiaries, or by such party and one or more of its
subsidiaries, and (ii) "Significant Subsidiary" has the meaning given such
term in Rule 405 of the Securities Act of 1933, as amended (the "Securities
Act"). The copies of the Certificate of Incorporation and Bylaws of the
Company, most recently filed with the Company's SEC Documents (as defined
herein), are true, complete and correct copies of such documents as in effect
as of the date of this Agreement.
Section 3.2. Capitalization. (a) The authorized capital stock of the Company
consists of 49,400,000 shares of Class A Common Stock and 17,600,000 shares of
Class B Common Stock. At the close of business on February 6, 2001 there were
18,118,058 shares of Class A Common Stock issued and outstanding and 6,278,055
shares of Class B Common Stock issued and outstanding. As of February 6, 2001,
there were 909,561 shares of Class A Common Stock issuable upon the exercise
of outstanding Options pursuant to the Stock Plans and 1,680,038 shares of
Class A Common Stock issuable upon the exercise of warrants to purchase Class
A Common Stock (the "Warrants"). Except as set forth in Section 3.2(a) of the
disclosure schedule of the Company delivered to Parent concurrently herewith
(the "Company Disclosure Schedule"), all of the issued and outstanding shares
of Company Common Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. The exercise prices
of each Option and the Warrants are set forth in Section 3.2(a) of the Company
Disclosure Schedule. Except as set forth in Section 3.2(a) of the Company
Disclosure Schedule, since February 1, 2001 until the date hereof, the Company
has not issued any shares of its capital stock or any securities convertible
into or exercisable for any shares of its capital stock. Except as set forth
above or in Section 3.2(a) of the Company Disclosure Schedule, as of the date
of this Agreement there are not any Shares issued and outstanding or any
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any securities of the
Company, including any securities representing the right to purchase or
otherwise receive any Shares (other than as a result of the exercise of the
Options or Warrants and other than the conversion rights of the Class A Common
Stock and Class B Common Stock set forth in the Company's Certificate of
Incorporation).
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, the Company owns, directly or indirectly, all of the issued and
outstanding shares of capital stock of each of its Significant Subsidiaries,
free
III-10
and clear of any liens, charges, encumbrances, adverse rights or claims and
security interests whatsoever ("Liens") which would reasonably be expected to
have, in the aggregate, a Company Material Adverse Effect, and all of such
shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Except as set forth in Section
3.2(b) of the Company Disclosure Schedule, none of the Company's Significant
Subsidiaries has, or is bound by, any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any security of such Significant Subsidiary, including
any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such Significant
Subsidiary.
Section 3.3. Authority. The Company has all necessary corporate power and
authority to execute and deliver this Agreement and the Option Agreement and
to consummate the transactions contemplated hereby, subject to obtaining the
vote of holders of a majority of the issued and outstanding shares of Class A
Common Stock in favor of the adoption of this Agreement prior to the
consummation of the Merger in accordance with the DGCL, if so required. The
execution, delivery and performance by the Company of this Agreement and the
Option Agreement, and the consummation by it of the transactions contemplated
hereby, have been duly approved, authorized and declared advisable by its
Board of Directors and, except, if required by the DGCL, for obtaining the
vote of its stockholders in favor of the adoption of this Agreement as
contemplated by Section 1.8 hereof, no other corporate action on the part of
the Company is necessary to authorize the execution and delivery by the
Company of this Agreement and the Option Agreement and the consummation by it
of the transactions contemplated hereby. Each of this Agreement and the Option
Agreement has been duly executed and delivered by the Company and, assuming
due and valid authorization, execution and delivery hereof by the other
parties thereto, constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to the enforcement of creditors'
rights generally and (ii) is subject to general principles of equity.
Section 3.4. Consents and Approvals; No Violations. (a) Except for (i) the
consents and approvals set forth in Section 3.4(a) of the Company Disclosure
Schedule, (ii) the filing with the SEC of the Offer Documents, the Schedule
13E-3/A, the Schedule 14D-9/A and, if necessary, of the Proxy Statement, (iii)
the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware pursuant to the DGCL, (iv) if necessary, the adoption of
this Agreement by the requisite votes of the stockholders of the Company and
(v) filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements, of the Exchange Act and the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), no consents or approvals of, or filings, declarations or registrations
with, any federal, state or local court, administrative or regulatory agency
or commission or other any governmental authority or instrumentality, domestic
or foreign (each a "Governmental Entity"), are necessary for the consummation
by the Company of the transactions contemplated hereby, other than such
consents, approvals, filings, declarations or registrations that, if not
obtained, made or given, would not reasonably be expected to have, in the
aggregate, a Company Material Adverse Effect.
(b) Except as set forth in Section 3.4(b) of the Company Disclosure
Schedule, none of the execution and delivery of this Agreement or the Option
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, or compliance by the Company with any of the
terms or provisions hereof or thereof, will (i) conflict with or violate any
provision of the Certificate of Incorporation or Bylaws of the Company or any
of the similar organizational documents of any of its Significant Subsidiaries
or (ii) assuming that the authorizations, consents and approvals referred to
in Section 3.4(a) and, if required by the DGCL, the vote of holders of a
majority of the issued and outstanding shares of Class A Common Stock in favor
of adoption of this Agreement are obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with, result in the
loss of any material benefit under, constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation
III-11
of any Lien upon any of the respective properties or assets of the Company or
any of its subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, permit, lease,
contract, agreement or other instrument or obligation to which the Company or
any of its subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, except, in the case
of clause (ii) above, for such violations, conflicts, losses of benefits,
breaches, defaults, terminations, rights of termination or cancellation,
accelerations or Lien creations which, in the aggregate, would not have a
Company Material Adverse Effect.
(c) Except as set forth on Schedule 3.4(c) of the Company Disclosure
Schedule, no event has occurred (which has not been cured or satisfied) which
violates, conflicts with, has resulted or is reasonably likely to result in
the loss of any material benefit under, constitutes a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, results in the termination of or a right of termination or cancellation
under, accelerates the performance required by, results in an obligation
becoming due before its stated due date (whether due to a mandatory "offer to
purchase" or otherwise) under, or results in the creation of any Lien upon any
of the respective properties or assets of the Company or any of its
subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, permit, lease, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party, or by which they or any of their respective
properties or assets may be bound or affected, including agreements listed in
Section 6.2 of the Company Disclosure Schedule, except for such violations,
conflicts, losses of benefits, breaches, defaults, terminations, rights of
termination or cancellation, accelerations or Lien creations which, in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect; provided, however, that in the case of specified provisions (as listed
in Section 6.2 of the Company Disclosure Schedule) (the "Specified
Provisions") to the agreements listed in Section 6.2 of the Company Disclosure
Schedule, this Section 3.4(c) shall be deemed not to have been breached on
account of any event occurring prior to the date of this Agreement unless a
notice (which has not directly or indirectly been induced by Parent or any of
its affiliates) from any counterparty to, or any holder of debt under, any
such agreement shall have been received by the Company or any of its directors
or officers which notice specifically alleges that an event described in the
Specified Provisions has occurred.
(d) Section 3.4(d) of the Company Disclosure Schedule sets forth a true,
correct and complete list as of the date hereof of (i) any note, bond,
mortgage, indenture and deed of trust, (ii) any contract, agreement,
obligation, and benefit plan with or relating to the Company's directors,
officers and consultants, and (iii) any material license, permit, lease,
contract, agreement, benefit plan or other instrument or obligation, in any
case to which the Company or any of its subsidiaries is a party, or by which
they or any of their respective properties or assets may be bound or affected,
which contain any acceleration, vesting, "change in control," increase in
payment or obligation, anti-assignment, restriction on transfer, termination
or other similar provision which will be triggered as a result of the
Transactions.
Section 3.5. SEC Documents; Undisclosed Liabilities. The Company has filed
all reports, schedules, forms and registration statements with the SEC
required to be filed pursuant to the Securities Act or the Exchange Act and
the rules and regulations of the SEC promulgated thereunder since January 1,
1999 (collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, the "SEC Documents").
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents
(including any and all financial statements included therein) as of such dates
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of the Company included
in the SEC Documents (the "SEC Financial Statements") complied as to form in
all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted accounting
principles (except as may be indicated therein or in the notes thereto and
except, in the case of unaudited
III-12
consolidated quarterly statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved and fairly present
in all material respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments and the absence of footnotes). Except as set
forth on Section 3.5 of the Company Disclosure Schedule, to the best knowledge
of the Company, since July 31, 2000 until the date hereof, neither the Company
nor any of its subsidiaries has incurred any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required, if
known, to be reflected or reserved against on a consolidated balance sheet of
the Company prepared in accordance with GAAP except (i) as and to the extent
set forth on the audited balance sheet of the Company and its subsidiaries as
of July 31, 2000 (including the notes thereto), (ii) as incurred in connection
with the transactions contemplated by this Agreement, (iii) as incurred after
July 31, 2000 in the ordinary course of business and consistent with past
practice, (iv) to the extent specifically described in the SEC Documents filed
since July 31, 2000 but on or prior to the date hereof (the "Recent SEC
Documents"), or (v) as would not, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 3.6. Broker's Fees. Except as set forth in Section 3.6 of the
Company Disclosure Schedule, neither the Company nor any subsidiary of the
Company nor any of their respective officers or directors on behalf of the
Company or such subsidiaries has employed any financial advisor, broker or
finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions contemplated hereby.
Section 3.7. Absence of Certain Changes or Events. Except as disclosed in
the SEC Documents filed or press releases of the Company (the "Company
Releases") issued prior to the date hereof or as set forth in Section 3.7 of
the Company Disclosure Schedule, since July 31, 2000, (a) no events have
occurred which would reasonably be expected to have, in the aggregate, a
Company Material Adverse Effect, (b) the Company and its subsidiaries have
carried on and operated their respective businesses in all material respects
in the ordinary course of business consistent with past practice, except for
such deviations of the Company's business from the ordinary course of business
which would not reasonably be expected to have, in the aggregate, a Company
Material Adverse Effect and (c) there has been no (i) declaration, setting
aside or payment of any dividend, or other distribution in respect of the
capital stock of the Company or any redemption or other acquisition by the
Company of any of its capital stock; (ii) increase in the rate or terms of
compensation payable or to become payable by the Company or any Significant
Subsidiary to its directors, officers or key employees of the Company or its
Significant Subsidiaries, except for the Change of Control Agreements and
increases occurring in the ordinary course of business in accordance with its
customary past practices; (iii) grant or increase in the rate or terms of any
bonus, insurance, pension, severance or other employee benefit plan, payment
or arrangement made to, for or with any directors, officers or key employees,
except for the Change of Control Agreements and increases occurring in the
ordinary course of business in accordance with its customary past practices;
(iv) change by the Company in accounting methods, principles or practices
except as required by generally accepted accounting principles; (v) entry into
any agreement, commitment or transaction by the Company or any subsidiary
which is material to the Company and its subsidiaries taken as a whole, except
agreements, commitments or transactions in the ordinary course of business;
(vi) stock split, reverse stock split, combination or reclassification of the
Company Common Stock; (vii) change in the terms and conditions of the Stock
Plans except as contemplated hereby; or (viii) any agreement or commitment,
whether in writing or otherwise, to take any action described in (i) through
(vii) above.
Section 3.8. Company Information. The information relating to the Company
and its subsidiaries contained in the Proxy Statement, if any, the Schedule
14D-9/A or the Offer Documents (to the extent such information was provided by
the Company for inclusion in the Offer Documents or was previously included in
any SEC Document filed by the Company not superseded by a later SEC Document
filed by the Company as of the date of inclusion) or in any other document
filed with any other Governmental Entity in connection herewith, at the
respective times that the applicable document is filed with the SEC or such
other Governmental Entity and first published, sent or given to stockholders
of the Company and, in addition, in the case of the Proxy Statement,
III-13
at the date it or any amendment or supplement is mailed to holders of the
Shares, at the time of the Special Meeting and at the Effective Time, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
in which they are made, not misleading.
Section 3.9. Opinion of Financial Advisor. The Special Committee has
received the opinion (the "Fairness Opinion") of Deutsche Banc Alex. ▇▇▇▇▇,
Inc., financial advisor to the Special Committee (the "Financial Advisor") for
the use of the Special Committee and the Company's Board of Directors, to the
effect that, as of the date of such Fairness Opinion, the consideration to be
received in the Offer and the Merger by the holders of Shares (other than
Parent, Purchaser and their affiliates) is fair to the holders of Shares
(other than Parent, Purchaser and their affiliates), from a financial point of
view. A complete and correct copy of the executed Fairness Opinion will be
delivered by the Company to Parent, and the Company has been authorized by the
Financial Advisor to permit the inclusion of the Fairness Opinion (and,
subject to prior review and consent, which shall not be unreasonably withheld,
a reference thereto) in the Offer Documents and in the Schedule 14D-9/A, in
each case, subject to the terms and conditions of the engagement letter
executed by the Financial Advisor, the Special Committee and the Company.
Section 3.10. Takeover Statutes. The Company has taken all actions necessary
such that no restrictive provision of any "fair price," "moratorium," "control
share acquisition," "interested shareholder" or other similar anti-takeover
statute or regulation (including, without limitation, Section 203 of the DGCL)
or restrictive provision of any applicable anti-takeover provision in the
Certificate of Incorporation or the By-Laws of the Company is, or at the
Effective Time will be, applicable to the Company, Parent, the Purchaser, the
Shares, the Offer, the Merger, the Option Agreement or any other transaction
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and the Purchaser jointly and severally represent and warrant to the
Company as follows:
Section 4.1. Corporate Organization. Each of Parent and the Purchaser is a
corporation or limited liability company duly incorporated or organized, as
applicable, validly existing and in good standing under the laws of the state
of Delaware and has the requisite corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is
now being conducted. Each of Parent and the Purchaser is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not reasonably
be expected to have, when aggregated with all other such failures, a Material
Adverse Effect on the Parent (a "Parent Material Adverse Effect"). The copies
of the Certificate of Incorporation and Bylaws (or similar organizational
documents) of Parent and Purchaser, which have previously been made available
to the Company, are true, complete and correct copies of such documents as in
effect as of the date of this Agreement.
Section 4.2. Authority. Each of Parent and the Purchaser has all necessary
corporate or limited liability company power and authority, as applicable, to
execute and deliver this Agreement and the Option Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and performance
by Parent and the Purchaser of this Agreement and the Option Agreement and the
consummation of the transactions contemplated hereby, have been duly
authorized and approved by Parent, on behalf of itself and as the sole holder
of membership interests of Purchaser, and by Purchaser's Board of Directors
and no other corporate action on the part of Parent and the Purchaser is
necessary to authorize the execution and delivery by Parent and the Purchaser
of this Agreement and the Option Agreement and the consummation by them of the
transactions contemplated hereby. Each of this Agreement and the Option
Agreement has been duly executed and delivered by Parent and the Purchaser,
and, assuming due and valid authorization, execution and delivery hereof by
the Company, constitutes a valid and binding obligation of each of Parent and
the Purchaser, enforceable against
III-14
each of them in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and
(ii) is subject to general principles of equity.
Section 4.3. Consents and Approvals; No Violation. (a) Except for (i) the
filing with the SEC of the Offer Documents, and the Schedule 13E-3/A, (ii) the
filing of the Certificate of Merger with the Secretary of State of the State
of Delaware pursuant to the DGCL, and (iii) filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Exchange Act and the HSR Act, no consents or approvals
of, or filings, declarations or registrations with, any Governmental Entity
are necessary for the consummation by Parent and the Purchaser of the
transactions contemplated hereby, other than such other consents, approvals,
filings, declarations or registrations that, if not obtained, made or given,
would not reasonably be expected to have, in the aggregate, a Parent Material
Adverse Effect.
(b) None of the execution and delivery of this Agreement or the Option
Agreement by Parent or the Purchaser, or the consummation by Parent or the
Purchaser of the transactions contemplated hereby, or compliance by Parent or
the Purchaser with any of the terms or provisions hereof or thereof, will (i)
conflict with or violate any provision of the Certificate of Incorporation or
Bylaws of Parent or any of the similar organizational documents of the
Purchaser or (ii) assuming that the authorizations, consents and approvals
referred to in Section 4.3(a) are obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Parent or the Purchaser or any of their respective properties or
assets, or (y) violate, conflict with, result in the loss of any material
benefit under, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any Lien upon any of the respective
properties or assets of Parent or Purchaser under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, permit, lease, contract, agreement or other instrument or
obligation to which Parent or the Purchaser is a party, or by which they or
any of their respective properties or assets may be bound or affected, except,
in the case of clause (ii) above, for such violations, conflicts, breaches,
defaults, losses, terminations of rights thereof, accelerations or Lien
creations which, in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
Section 4.4. Broker's Fees. Neither Parent nor the Purchaser nor any of
their respective officers or directors on behalf of Parent or Purchaser has
employed any financial advisor, broker or finder in a manner that would result
in any liability of the Company for any broker's fees, commissions or finder's
fees in connection with any of the transactions contemplated hereby.
Section 4.5. Purchaser's Operation. The Purchaser was formed solely for the
purpose of engaging in the Offer and the transactions contemplated hereby and
has not engaged in any business activities or conducted any operations other
than in connection with the Offer and the transactions contemplated hereby.
Section 4.6. Parent or Purchaser Information. The information relating to
Parent and the Purchaser (and their respective affiliates other than the
Company, its directors and officers) contained in the Offer Documents, the
Schedule 14D-9/A (to the extent such information was provided by Parent and
the Purchaser for inclusion in the Schedule 14D-9/A or was previously included
in any SEC Document filed by Parent or the Purchaser not superseded by a later
SEC Document filed by Parent or the Purchaser as of the date of inclusion) or
the Proxy Statement, if any, or in any other document filed with any other
Governmental Entity in connection herewith, at the respective times that the
applicable document is filed with the SEC or such other Governmental Entity
and first published, sent or given to stockholders of the Company and, in
addition, in the case of the Proxy Statement, at the date it or any amendment
or supplement is mailed to holders of the Shares, at the time of the Special
Meeting and at the Effective Time, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
misleading.
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Section 4.7. Sufficient Funds. Parent and the Purchaser collectively have
and will have at the Expiration Date of the Offer and at the Effective Time,
and Parent will make available to the Purchaser, sufficient funds to enable
the Purchaser to pay for all outstanding Shares purchased pursuant to the
Offer or converted into cash pursuant to the Merger, to perform Parent's and
the Purchaser's obligations under this Agreement and to pay all fees and
expenses related to the transactions contemplated by this Agreement payable by
them.
Section 4.8. Purchaser Capitalization. The authorized capital stock of the
Purchaser consists of 1,000 membership interests, of which 600 membership
interests have been validly issued, are fully paid and nonassessable, all of
which issued membership interests are owned by Parent, free and clear of any
Liens.
Section 4.9. Ownership of Company Common Stock. The Parent is the holder of
record and the beneficial owner of 6,632,734 shares of Class A Common Stock
and 6,278,055 shares of Class B Common Stock.
ARTICLE V
COVENANTS
Section 5.1. Conduct of Businesses Prior to the Effective Time. Except as
set forth in Section 5.1 of the Company Disclosure Schedule, as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Effective Time, unless Parent otherwise agrees in writing, which agreement
shall not be unreasonably withheld or delayed, the Company shall, and shall
cause its subsidiaries to, (i) conduct its business in the usual, regular and
ordinary course consistent with past practice and (ii) use all reasonable
efforts to maintain and preserve intact its business organization and the
goodwill of those having business relationships with it and retain the
services of its present officers and key employees. Without limiting the
generality of the foregoing, and except as set forth in Section 5.1 of the
Company Disclosure Schedule, as expressly contemplated or permitted by this
Agreement, or as required by applicable law, rule or regulation, during the
period from the date of this Agreement to the Effective Time, the Company
shall not, and shall not permit any of its subsidiaries to, without the prior
written consent of Parent, which consent shall not be unreasonably withheld or
delayed:
(a) (i) issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (A) any additional shares of its capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for any shares of its capital stock, or any rights,
warrants, option, calls, commitments or any other agreements of any
character to purchase or acquire any shares of its capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of its capital stock other than pursuant
to the exercise of stock options or warrants or conversion rights
outstanding as of the date hereof; or (B) any other securities in respect
of, in lieu of, or in substitution for, any shares of its capital stock
outstanding on the date hereof other than pursuant to the exercise of stock
options or warrants or conversion rights outstanding as of the date hereof;
(ii) except pursuant to put and call provisions in place as of the date of
this Agreement and listed on Section 5.1 of the Company Disclosure
Schedule, redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding shares of capital
stock; or (iii) split, combine, subdivide or reclassify any shares of its
capital stock or declare, set aside for payment or pay any dividend, or
make any other actual, constructive or deemed distribution in respect of
any shares of its capital stock or otherwise make any payments to its
stockholders in their capacity as such;
(b) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
investments in, any other person other than the Company or its
subsidiaries;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its
properties or assets with a value in excess of $1 million to any
individual, corporation or other entity other than a direct or indirect
wholly-owned subsidiary, or cancel, release or assign any indebtedness in
excess of $1 million to any such person or any claims held by any such
person, in each case that is material to the Company and its
III-16
subsidiaries, taken as a whole, except (i) in the ordinary course of
business consistent with past practice, (ii) pursuant to contracts or
agreements in force at the date of this Agreement or (iii) pursuant to
plans disclosed in writing prior to the execution of this Agreement to
Parent or Purchaser;
(d) make any material acquisition or investment either by purchase of
stock or securities, merger or consolidation, contributions to capital,
property transfers, or purchases of any property or assets of any
individual, corporation or other entity other than a wholly-owned
subsidiary thereof;
(e) increase in any manner the compensation of any of its directors,
officers or employees or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing, health
or other welfare, stock option or other equity, pension, retirement,
vacation, severance, deferred compensation or other compensation or benefit
plan, policy, agreement, trust, fund or arrangement with, for or in respect
of, any stockholder, officer, director, other employee, agent, consultant
or affiliate other than (i) as required pursuant to the terms of agreements
in effect on the date of this Agreement, and (ii) increases in salaries,
wages and benefits of employees who are not directors or officers of the
Company made in the ordinary course of business and in a manner consistent
with past practice;
(f) amend its certificate of incorporation, bylaws or similar governing
documents;
(g) enter into any agreement of the type that would be required to be
disclosed in Section 3.4(d) of the Company Disclosure Schedule if such
agreement had been in effect on the date of this Agreement; or
(h) make any commitment to take any of the actions prohibited by this
Section 5.1.
Section 5.2. No Solicitation.
(a) The Company shall immediately cease any discussions or negotiations with
any parties that may be ongoing with respect to a Takeover Proposal (as
defined herein). Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any of its subsidiaries or any affiliate
(other than Parent, Purchaser or Citigroup Holdings Group and its
subsidiaries), director or investment banker, attorney or other advisor or
representative of the Special Committee, the Company or any of its
subsidiaries, shall be deemed to be a breach of this Section 5.2(a) by the
Company. From the date hereof until the Effective Time or the termination of
this Agreement in accordance with Section 7.1, the Company and the Special
Committee shall not, nor shall the Company permit any of its subsidiaries to,
nor shall the Company authorize or permit any of the Company's officers,
directors and employees and any affiliate (other than Parent or Purchaser),
investment banker, financial advisor, attorney, accountant or other
representative retained by the Special Committee, the Company or any of its
subsidiaries to, directly or indirectly, (i) solicit, initiate or facilitate
(including by way of furnishing information which has not been previously
publicly disseminated) any inquiries or the making of any proposal which
constitutes, or is reasonably expected to lead to, any Takeover Proposal or
(ii) participate in any discussions or negotiations regarding any Takeover
Proposal; provided, however, that if, prior to the earlier of the Effective
Time or the adoption of this Agreement by the requisite vote of the Company
stockholders, and following the receipt of a Takeover Proposal which was not
solicited or facilitated after the date of this Agreement in violation of this
Section 5.2(a), the Special Committee determines in good faith by a unanimous
vote (a) after consultation with outside counsel, that a failure to do so is
reasonably likely to constitute a breach by it of its fiduciary duties to its
stockholders under applicable law and (b) after consultation with the
Financial Advisor (or another nationally recognized investment banking firm),
that such proposal is reasonably expected to lead to a Superior Proposal (as
defined herein), then the Company may, in response to such Superior Proposal
and subject to compliance with Section 5.2(c), (x) furnish information with
respect to the Company to the party making such Takeover Proposal pursuant to
a customary confidentiality agreement, provided that (i) such confidentiality
agreement must include a provision prohibiting such party from soliciting key
employees of the Company or its subsidiaries, such provision lasting at least
one year and (ii) the Company delivers to Parent all such nonpublic
information delivered to the requesting party concurrently with its delivery
to such requesting party, and (y) participate in discussions and negotiations
with such party regarding such Takeover Proposal.
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(b) Except as expressly permitted in this Section 5.2, neither the Board of
Directors of the Company nor the Special Committee or any other committee
thereof shall (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent or Purchaser, the approval,
determination of advisability, or recommendation by such Board of Directors or
such committee of the Transactions, (ii) approve, determine to be advisable,
or recommend, or propose publicly to approve, determine to be advisable, or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other
similar agreement (each, an "Acquisition Agreement") related to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the
earlier of the Effective Time or the adoption of this Agreement by the
requisite vote of the Company stockholders, the Special Committee determines
in good faith by a unanimous vote, after consultation with outside counsel,
that a failure to do so is reasonably likely to constitute a breach by it of
its fiduciary duties to its stockholders under applicable law, each of the
Board of Directors of the Company and the Special Committee may (subject to
this and the following sentences and to compliance with Section 5.2(a))
withdraw or modify its approval, determination or recommendation of the
Transactions, provided that it uses reasonable best efforts to give Parent two
days prior written notice of its intention to do so.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 5.2, the Company shall promptly advise Parent
orally and in writing of any request for information or of any Takeover
Proposal, the material terms and conditions of such request or the Takeover
Proposal and the identity of the person making such request or Takeover
Proposal and shall keep Parent reasonably informed of the status and any
material changes in details of any such request or Takeover Proposal.
(d) Nothing contained in this Section 5.2 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule 14e-
2(a) promulgated under the Securities Exchange Act or from making any
disclosure to the Company's stockholders required by applicable law; provided,
however, neither the Company nor its Board of Directors nor any committee
thereof shall, except as in accordance with Section 5.2(b), withdraw or
modify, or propose publicly to withdraw or modify, its approval, determination
or recommendation with respect to the Transactions.
(e) For purposes of this Agreement:
(i) "Takeover Proposal" means any inquiry, proposal or offer from any
person (other than Parent and its subsidiaries, affiliates and
representatives) relating to any direct or indirect acquisition or purchase
of 20% or more of the assets of the Company and its subsidiaries or 20% or
more of any class of equity securities of the Company or any of its
Significant Subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of
any class of equity securities of the Company or any of its Significant
Subsidiaries, or any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Significant Subsidiaries,
other than the transactions contemplated by this Agreement.
(ii) "Superior Proposal" means a bona fide written offer from any person
(other than Parent and its subsidiaries, affiliates and representatives)
for a direct or indirect acquisition or purchase of 50% or more of the
assets of the Company or any of its Significant Subsidiaries or 50% or more
of any class of equity securities of the Company or any of its Significant
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 50% or more of any class of equity
securities of the Company or any of its Significant Subsidiaries, or any
merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any of its Significant Subsidiaries, other than the
transactions contemplated by this Agreement, (A) which, considering all
relevant factors, is more favorable to the Company and its stockholders
than the Offer and the Merger, (B) for which the third party has
demonstrated that financing is reasonably likely to be obtained and (C)
that is otherwise reasonably likely to be consummated, taking into account
all factors including, but not limited to, antitrust and regulatory
approvals, in each case as determined by the Special
III-18
Committee in its good faith judgment (after consultation with the Financial
Advisor or another nationally recognized investment banking firm). Any
Superior Proposal is a Takeover Proposal.
Section 5.3. Sufficient Funds. At the consummation of the Offer, Parent and
the Purchaser shall have sufficient funds available (through cash on hand and
existing credit arrangements or otherwise) to purchase all of the Shares
outstanding on a fully diluted basis that are not owned by Parent, Purchaser
or any other direct or indirect subsidiary of Parent and to pay all fees and
expenses related to the transactions contemplated by this Agreement payable by
Parent or the Purchaser.
Section 5.4. Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release reasonably
acceptable to Parent and the Company. Thereafter, so long as this Agreement is
in effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other
announcement with respect to the Merger, this Agreement or the other
transactions contemplated hereby without the prior approval of the other
party, except as may be required by law or by any listing agreement with a
national securities exchange as determined in the good faith judgment of the
party wanting to make such release.
Section 5.5. Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i)
the occurrence, or non-occurrence of any event, the occurrence or non-
occurrence of which (A) it has actual knowledge of and (B) would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time and (ii)
any material failure of the Company or Parent (or Purchaser), as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.5 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 5.6. Access to Information. (a) Upon reasonable notice and subject
to applicable laws relating to the exchange of information, the Company shall,
and shall cause each of its subsidiaries to, afford to the officers,
employees, accountants, counsel and other representatives of the Parent,
during normal business hours during the period prior to the Effective Time,
reasonable access to all its properties, books, contracts, commitments and
records, and to its officers, employees, accountants, counsel and other
representatives and, during such period, the Company shall, and shall cause
its subsidiaries to, make available to the Parent (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of Federal securities laws
(other than reports or documents which the Company is not permitted to
disclose under applicable law) and (ii) all other information concerning its
business, properties and personnel as such other party may reasonably request.
Neither the Company nor any of its subsidiaries shall be required to provide
access to or to disclose information where such access or disclosure would
violate or prejudice the rights of its customers, jeopardize the work product
privilege of the institution in possession or control of such information or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement provided
that the Company gives notice to Parent of same. The parties hereto will make
appropriate substitute disclosure arrangements under circumstances in which
the restrictions of the preceding sentence apply.
(b) No investigation by any of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other parties set forth herein.
(c) The information provided pursuant to Section 5.6(a) will be used solely
for the purpose of the transactions contemplated hereby, and unless and until
the Merger is consummated, such information will be kept secret and
confidential by Parent and the Purchaser, except that the information provided
pursuant to Section 5.6(a) or portions thereof may be disclosed to those of
Parent and the Purchaser's or their affiliates' directors, officers,
employees, agents and advisors (collectively, the "Representatives") who (a)
need to know such information for the purpose of the transactions contemplated
hereby, (b) shall be advised by Parent or the Purchaser, as the case may be,
of this provision, (c) agree to hold the information provided pursuant to
III-19
Section 5.6(a) as secret and confidential and (d) agree with Parent and the
Purchaser to be bound by the provisions hereof. Parent and the Purchaser
jointly agree to be responsible for any breach of this section by any of their
Representatives.
Section 5.7. Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each of Parent
and the Company shall, and shall cause its subsidiaries to, use all reasonable
best efforts (i) to take, or cause to be taken, all actions necessary, proper
or advisable to comply promptly with all legal requirements which may be
imposed on such party or its subsidiaries with respect to the Merger and,
subject to the conditions set forth in Article VI hereof, to consummate the
transactions contemplated by this Agreement as promptly as practicable and
(ii) to obtain (and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity and any other third party which is required to be obtained by the
Company or Parent or any of their respective subsidiaries in connection with
the Merger and the other transactions contemplated by this Agreement, and to
comply with the terms and conditions of any such consent, authorization, order
or approval.
(b) Subject to the terms and conditions of this Agreement, each of Parent
and the Company shall use all reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective, as soon as practicable
after the date of this Agreement, the transactions contemplated hereby,
including, without limitation, using all reasonable efforts to lift or rescind
any injunction or restraining order or other order adversely affecting the
ability of the parties to consummate the transactions contemplated hereby and
using all reasonable efforts to defend any litigation seeking to enjoin,
prevent or delay the consummation of the transactions contemplated hereby or
seeking material damages.
Section 5.8. Employee Benefit Plans. Except as otherwise provided herein,
Parent shall, and shall cause the Surviving Corporation to, honor in
accordance with their terms all employee benefit plans (as defined in Section
3(3) of ERISA) and other employment, consulting, benefit, compensation or
severance agreements, arrangements and policies of the Company (collectively,
the "Company Plans"); provided, however, that Parent or the Surviving
Corporation may amend, modify or terminate any individual Company Plans in
accordance with the terms of such Company Plans and applicable law (including
obtaining the consent of the other parties to and beneficiaries of such
Company Plans to the extent required thereunder).
Section 5.9. Indemnification and Insurance.
(a) From and after the Effective Time, in addition to any obligations it may
have under certain endorsements existing on the date hereof for the benefit of
Messrs. ▇. ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Surviving Corporation shall
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date of this Agreement or who becomes such prior to the
Effective Time, an officer, director, agent, fiduciary or employee of the
Company or any of its subsidiaries (the "Indemnified Parties") against (i) any
and all losses, claims, damages, costs, expenses, fines, liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of or
in connection with any claim, action, suit, proceeding or investigation based
in whole or in part on or arising in whole or in part out of the fact that
such person is or was a director, officer, agent, fiduciary or employee of the
Company or any of its subsidiaries pertaining to any action or omission
existing or occurring at or prior to the Effective Time and whether asserted
or claimed prior to, or at or after, the Effective Time ("Indemnified
Liabilities"), and (ii) all Indemnified Liabilities based in whole or in part
on, or arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby; provided, however, that, such
indemnification shall only be to the fullest extent a corporation is permitted
under the DGCL to indemnify its own directors and officers and, with respect
to its agents, fiduciaries and employees, such indemnification shall only be
to the extent such obligations of the Company exist on the date hereof to
indemnify such agents, fiduciaries and employees, and provided, further such
indemnification shall not be applicable to any claims made against the
Indemnified Parties if a judgment or other final adjudication established that
(A) their acts or omissions were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
deliberated or (B) arising out of, or are based upon or attributable to the
gaining in fact
III-20
of any financial profit or other advantage to which they were not legally
entitled. In the event any claim for Indemnified Liabilities is asserted or
made by an Indemnified Party, any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under the DGCL shall be made by independent legal counsel selected
by such Indemnified Party and the Surviving Corporation. The Surviving
Corporation will promptly advance all reasonable out-of-pocket expenses of
each Indemnified Party in connection with any such action or proceeding as
such expenses are incurred, but only to the fullest extent permitted by law
and subject to receipt of any undertaking contemplated by Section 145(e) of
the DGCL (including in the case of any agent, fiduciary or employee, a similar
undertaking). Without limiting the foregoing, in the event any such claim,
action, suit, proceeding or investigation is brought against any Indemnified
Party (whether arising before or after the Effective Time), (i) the
Indemnified Parties may retain counsel satisfactory to them and the Surviving
Corporation, (ii) the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received, and (iii) the Surviving Corporation shall use all
reasonable efforts to assist in the vigorous defense of any such matter,
provided that the Surviving Corporation shall not be liable for any settlement
of any claim effected without its written consent, which consent, however,
shall not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification or advancement of expenses under this Section 5.9, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under this
Section 5.9 except to the extent such failure materially prejudices such
party), and shall deliver to the Surviving Corporation the undertaking
contemplated by Section 145(e) of the DGCL (including in the case of any
agent, fiduciary or employee, a similar undertaking). The Indemnified Parties
as a group may retain only one law firm as well as one law firm to serve as
local counsel where required to represent them with respect to each such
matter unless there is, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of any two or more
Indemnified Parties.
(b) The Surviving Corporation shall use its reasonable best efforts to
maintain in effect for six (6) years from the Effective Time, the current
directors' and officers' liability insurance policies maintained by the
Company including certain endorsements existing as of the date hereof for the
benefit of Messrs. Billig and ▇▇▇▇▇▇▇ (provided that the Surviving Corporation
may substitute therefor policies of at least the same coverage containing
terms and conditions which are not materially less favorable) with respect to
matters occurring prior to the Effective Time; provided, that (1) if the
existing policies expire, are terminated or canceled during such period the
Surviving Corporation will use its reasonable best efforts to obtain
substantially similar policies, (2) the Surviving Corporation shall not be
required to spend as an annual premium therefor an amount in excess of 175% of
the annual premium therefor as of the date of this Agreement and (3) if,
during such six-year period, such insurance coverage cannot be obtained at all
or can only be obtained for an amount in excess of 175% of the current annual
premium therefor, Parent shall use all reasonable efforts to cause to be
obtained as much directors' and officers' liability insurance coverage as can
be obtained for an amount equal to 175% of the current annual premium
therefor, on terms and conditions substantially similar to the existing
directors' and officers' liability insurance.
(c) The provisions of this Section 5.9 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party, his or her heirs and
his or her personal representatives and shall be binding on the Surviving
Corporation and its successors and assigns.
Section 5.10. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective subsidiaries shall take all such necessary
action as may be reasonably requested by, and at the sole expense of, Parent.
Section 5.11. Stockholder Litigation. The Company shall keep Parent informed
of, and give Parent the opportunity to participate in the defense or
settlement of, any stockholder litigation against the Company or its directors
relating to the Transactions contemplated by this Agreement. The Company shall
not enter into any
III-21
settlement of such stockholder litigation against the Company or its directors
which provides for injunctive relief against the Company, Parent or Purchaser
or monetary payment by the Company, in either case without the consent of
Parent; provided, however, that with respect to any such settlement of
stockholder litigation against the Company or its directors providing solely
for a monetary payment, Parent shall not unreasonably withhold or delay such
consent.
Section 5.12. Transfer of Company Common Stock. Parent shall not transfer
any shares of Company Common Stock owned by it on the date of this Agreement
or acquired thereafter, and Purchaser shall not transfer any shares of Company
Common Stock acquired by it pursuant to the Offer or otherwise, in each case,
unless the transferee of such shares agrees on behalf of itself and any future
transferees to vote such shares in favor of the adoption of this Agreement.
ARTICLE VI
CONDITIONS
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions (which may be waived in whole or in part by such party):
(a) Stockholder Approval. This Agreement shall have been duly adopted by
the requisite vote of the holders of Company Common Stock, if required by
applicable law or the Company's Certificate of Incorporation, to consummate
the Merger;
(b) Statutes; Consents. No statute, rule, order, decree or regulation
shall have been enacted or promulgated by any Governmental Entity or
authority of competent jurisdiction which prohibits the consummation of the
Merger and all material foreign or domestic governmental consents, orders
and approvals required for the consummation of the Merger and the
transactions contemplated hereby shall have been obtained and shall be in
effect at the Effective Time and specifically including those consents,
orders and approvals listed in Section 6.1(b) of the Company Disclosure
Schedule;
(c) Injunctions. There shall be no order or injunction of any
Governmental Entity of competent jurisdiction in effect precluding,
restraining, enjoining or prohibiting consummation of the Merger; provided,
however, that each of the parties hereto shall have used its reasonable
best efforts to prevent the entry of any such injunction or other order and
to appeal as promptly as possible any injunction or other order that may be
entered; and
(d) Purchase of Shares in Offer. Parent, the Purchaser or their
affiliates shall have purchased Shares pursuant to the Offer, provided that
this condition shall be deemed satisfied with respect to (a) Parent and the
Purchaser if the Offer has expired and at the time the Offer expired, the
Company was not in material breach of any material covenant to be performed
by it in this Agreement or (b) the Company if the Offer has expired and at
the time the Offer expired, neither Parent nor the Purchaser was in
material breach of any material covenant to be performed by either of them
in this Agreement.
Section 6.2. Conditions to Obligations of Parent and Purchaser to Effect the
Merger. The obligations of Parent and Purchaser to effect the Merger are
subject to the satisfaction of the further conditions (which may be waived in
whole or in part by Parent) that (i) the Company shall have performed all
material obligations required to be performed by it under this Agreement on or
before the Closing Date (ii) no event has occurred (which has not been cured
or satisfied), or will occur by reason of the consummation of the Merger,
which violates, conflicts with, has resulted or may result in the loss of any
benefit under, constitutes a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, results in the
termination of or a right of termination or cancellation under, accelerates
the performance required by, results in an obligation becoming due before its
stated due date (whether due to a mandatory "offer to purchase" or otherwise)
under, or results in the creation of any Lien upon any of the respective
properties or assets of the Company or any of its subsidiaries under, any of
the terms, conditions or provisions of the agreements, listed in Section 6.2
of the Company
III-22
Disclosure Schedule; except for violations, conflicts, losses of benefit,
defaults, termination or cancellation rights, accelerations or Liens which
would not, individually or in the aggregate, have a Company Material Adverse
Effect; provided, however, that in the case of the Specified Provisions to the
agreements listed in Section 6.2 of the Company Disclosure Schedule, this
Section 6.2 shall be deemed to have been satisfied on account of any event
occurring prior to the date of this Agreement unless a notice (which has not
directly or indirectly been induced by Parent or any of its affiliates) from
any counterparty to, or any holder of debt under, any such agreement shall
have been received by the Company or any of its directors or officers which
notice specifically alleges that an event described in the Specified
Provisions has occurred and (iii) if none of Parent, Purchaser or their
affiliates have purchased shares in the Offer, the Offer has expired and at
the time the Offer expired neither Parent nor Purchaser was in material breach
of any material covenant to be performed by either of them in this Agreement,
none of the events described in paragraphs (a) through (j) of Annex A shall
have occurred and be continuing.
Section 6.3. Conditions to Obligations of the Company to Effect the
Merger. The obligations of the Company to effect the Merger are subject to the
satisfaction of the further condition (which may be waived in whole or in part
by the Company) that each of the Purchaser and Parent shall have performed all
material obligations required to be performed by it under this Agreement on or
before the Closing Date.
ARTICLE VII
TERMINATION
Section 7.1. Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether
before or after the adoption of this Agreement by the stockholders of the
Company:
(a) By the mutual written consent of the Parent, Purchaser (by action of
its Board of Directors) and the Company (by action of the Board of
Directors after approval by the Special Committee).
(b) By either of the Company, at the direction of the Special Committee,
or Parent:
(i) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall
have become final and non-appealable; provided, that the party seeking
to terminate this Agreement shall have used its reasonable best efforts
to challenge such order, decree, ruling or other action;
(ii) [intentionally omitted];
(iii) [intentionally omitted];
(iv) if the Merger has not been consummated by June 30, 2001 (the
"Merger Date"); provided, however, that if (A) all of the conditions to
the Merger are satisfied or waived as of June 30, 2001, other than the
condition provided in Section 6.2(ii), and (B) no event or events have
occurred after the date of this Agreement and prior to or on June 30,
2001 which would reasonably be expected to have, in the aggregate, a
Company Material Adverse Effect during the period from May 14, 2001
until August 31, 2001, the Merger Date shall be extended until
August 31, 2001; or
(v) if upon a vote thereon taken at the Special Meeting (including
any adjournment or postponement thereof) the requisite vote of the
stockholders of the Company to adopt this Agreement shall not have been
obtained (if such vote is required by applicable law).
(c) By the Company, at the direction of the Special Committee:
(i) [intentionally omitted]
III-23
(ii) if Parent or the Purchaser shall have breached or failed in any
material respect to perform or comply with any material obligation,
agreement or covenant required by this Agreement to be performed or
complied with by it, which breach cannot be cured or has not been cured
within one Business Day prior to the Effective Time; or
(iii) if, in compliance with the provisions of Section 5.2(a), the
Special Committee determines a Takeover Proposal is a Superior Proposal
and thereafter, and as a consequence of making such determination,
withdraws or modifies its approval, determination or recommendation of
the Transactions in a manner adverse to Parent, and the Company gives
Parent at least three (3) Business Days prior notice of its intent to
terminate this Agreement pursuant to this Section 7.1(c)(iii),
attaching to such notice the material terms and conditions of the
Superior Proposal and permits Parent during such three (3) Business Day
period to make a new offer which shall be considered in good faith by
the Special Committee; provided, however, that any right to terminate
this Agreement pursuant to this Section 7.1(c)(iii) shall expire if (A)
the Purchaser or its permitted assigns accepts Shares for payment
pursuant to the Offer or (B) the Company breaches in any material
respect any provision of Section 5.2.
(d) By Parent:
(i) [intentionally omitted]
(ii) if (A) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified, or proposed publicly to
withdraw or modify, in a manner adverse to Parent its approval or
recommendation of the Transactions, or failed to reconfirm its
recommendation within four (4) Business Days after a written request to
do so, or approved or recommended, or proposed publicly to approve or
recommend, any Takeover Proposal, or (B) the Board of Directors of the
Company or any committee thereof shall have resolved to take any of the
foregoing actions; or
(iii) if the Company shall have breached or failed in any material
respect to perform or comply with any material obligation, agreement or
covenant required by this Agreement to be performed or complied with by
it, which breach cannot be cured or has not been cured within one
Business Day prior to the Effective Time.
Section 7.2. Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement (other than
Sections 7.2, 7.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9 and 8.12 hereof, which shall
survive any termination of this Agreement) shall forthwith become null and
void, and there shall be no liability on the part of the Parent or the
Company, except as provided in this Section 7.2.
Section 7.3. Expenses. Except as provided in this Section 7.3, all fees and
expenses incurred by the parties hereto shall be borne solely and entirely by
the party which has incurred such fees and expenses. Except in the case where
Parent is in material breach of this Agreement, Parent and the Purchaser shall
be entitled to reimbursement by the Company, promptly as statements therefor
are received, for their out-of-pocket expenses incurred in connection with the
Offer as initially commenced or as amended or with the negotiation, execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, all fees and expenses of counsel,
accountants, experts and consultants to Parent, the Purchaser and their
affiliates and including printing and mailing expenses, fees payable under the
HSR Act, SEC filing fees and depositary and information agent fees and
expenses in connection with the Offer and the Merger, provided, however, that
such reimbursement for fees and expenses shall not exceed $1,750,000. If
Parent or Purchaser materially breaches any of its covenants hereunder, Parent
shall reimburse to the Company any amounts paid by the Company pursuant to
this Section 7.3. The expense arrangement contemplated hereby is the sole
remedy hereunder and shall be paid by the Company pursuant to this Section 7.3
regardless of any alleged breach, other than a willful or intentional breach,
by Parent or Purchaser of its obligations hereunder, provided that no payment
III-24
made by the Company pursuant to this Section 7.3 shall operate or be construed
as a waiver by the Company of any breach of this Agreement by Parent or
Purchaser or of any rights of the Company in respect thereof.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. 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 of
their respective Boards of Directors (subject, in the case of the Company, to
the approval of the Special Committee) at any time prior to the Effective Time
with respect to any of the terms contained herein; provided, however, that no
amendment, modification or supplement to this Agreement shall be effective
without being approved by the Special Committee.
Section 8.2. Extension; Waiver. At any time prior to the Effective Time and
subject to Section 1.2(d) hereof with respect to the Company, 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 contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) subject to the proviso of Section 8.1, waive
compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver
of such rights.
Section 8.3. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall
survive the Effective Time.
Section 8.4. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by an overnight courier service, such as Federal
Express, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
Court Square Capital Limited
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
III-25
(b) if to the Company, to:
Delco Remy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ice ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Special Committee, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.5. Counterparts. This Agreement may be executed in two or more
counterparts, all 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 parties, it being understood that
all parties need not sign the same counterpart.
Section 8.6. Entire Agreement; Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein, including the
Option Agreement): (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, and (b) except as provided in
Sections 1.3 and 5.9, is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
Section 8.7. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.8. Governing Law; Waiver of Trial by Jury. This Agreement shall be
governed and construed in accordance with the laws of the State of Delaware
without giving effect to the principles of conflicts of law thereof or of any
other jurisdiction. All parties hereto hereby irrevocably waive a trial by
jury in any proceedings arising out of this Agreement or matters related
hereto.
Section 8.9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that the Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any direct or indirect subsidiary or affiliate of Parent but
no such assignment shall relieve Parent or Purchaser of its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
III-26
Section 8.10. Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement. "Include," "includes,"
and "including" shall be deemed to be followed by "without limitation" whether
or not they are in fact followed by such words or words of like import.
Section 8.11. 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
State of Delaware or of the United States located in the State of Delaware in
the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, and each party will not attempt to deny or
defeat personal jurisdiction or venue in any such court by motion or other
request for leave from any such court.
Section 8.12. Submission to Jurisdiction; Waivers. Each of the Company,
Parent and the Purchaser irrevocably agrees that any legal action or
proceeding with respect to this Agreement or for recognition and enforcement
of any judgment in respect hereof brought by any other party hereto or its
successors or assigns shall be brought and determined in the Chancery or other
Courts of the State of Delaware or of the United States located in the State
of Delaware, and each of the Company, Parent and the Purchaser hereby
irrevocably submits with regard to any such action or proceeding for itself
and in respect to its property, generally and unconditionally, to the
exclusive jurisdiction of the aforesaid courts. Each of the Company, Parent
and the Purchaser hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), and (c) to the fullest extent permitted
by applicable law, that (i) the suit, action, or proceeding in any such court
is brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts.
III-27
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the date first written above.
COURT SQUARE CAPITAL LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and
Managing Director
DRI ACQUISITION LLC
By: Court Square Capital Limited,
its sole member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and
Managing Director
DELCO REMY INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
III-28
ANNEX A TO THE AGREEMENT AND PLAN OF MERGER
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer or this Agreement, and in
addition to (and not in limitation of) the Purchaser's rights to extend and
amend the Offer at any time in accordance with the terms of the Agreement, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay
for, and may delay the acceptance for payment (subject to the restriction
referred to above) of and accordingly the payment for, any tendered Shares,
and may terminate the Offer, if (1) at or prior to the Expiration Date, any
applicable waiting period under the HSR Act has not expired or terminated or
(2) at any time on or after the date of this Agreement and before the time of
payment for any such Shares (whether or not any Shares have theretofore been
accepted for payment pursuant to the Offer), any of the following events shall
have occurred and be continuing:
(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, (1)(A) challenging or seeking to make illegal, to delay or
otherwise directly or indirectly to restrain or prohibit or make materially
more costly the making of the Offer, the acceptance for payment of, or
payment for, some or all the Shares by the Purchaser, Parent or any other
affiliate of Parent or the consummation by the Purchaser, Parent or any
other affiliate of Parent of the Merger, (B) seeking to obtain damages that
are material to the Company in connection therewith or (C) otherwise
directly or indirectly relating to the transactions contemplated by the
Offer or the Merger, (2) seeking to prohibit the ownership or operation by
the Purchaser, Parent or any other affiliate of Parent of all or any
portion of the business or assets of the Company and its subsidiaries, or
to compel the Purchaser, Parent or any other affiliate of Parent to dispose
of or hold separately all or any portion of the business or assets of the
Purchaser or the Company or any of its subsidiaries or seeking to impose
any limitation on the ability the Purchaser, Parent or any other affiliate
of Parent to conduct their respective businesses or own such assets, (3)
seeking to impose or confirm limitations on the ability of the Purchaser,
Parent or any other affiliate of Parent effectively to exercise full rights
of ownership of the shares of Company Common Stock, including, without
limitation, the right to vote any shares of Company Common Stock acquired
by any such person on all matters properly presented to the Company's
stockholders, or (4) seeking to require divestiture by the Purchaser,
Parent or any other affiliate of Parent of any shares of Company Common
Stock;
(b) except as described in Section 3.7 of the Company Disclosure
Schedule, there shall have occurred any change, event or development that
has had or would be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect;
(c) there shall be any action taken or any statute, rule, regulation,
judgment, order or injunction enacted, enforced, promulgated, amended,
issued or deemed applicable (1) to the Purchaser, Parent or any other
affiliate of Parent or (2) to the Offer or Merger, by any court, government
or governmental, administrative or regulatory authority or agency, domestic
or foreign (other than the application of the waiting period provisions
under the HSR Act), which is reasonably likely to result in any of the
consequences referred to in clauses (1) through (4) of paragraph (a) above;
(d) there shall have occurred (1) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, for a period in
excess of twenty-four hours (excluding suspensions or limitations resulting
solely from physical damage or interference with any such exchange or
market not related to market conditions), (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks by federal or
state authorities in the United States, (3) commencement of a war, armed
hostilities or other national or international calamity directly or
indirectly involving the United States that would be reasonably expected to
materially
III-29
adversely effect the functioning of the financial markets in the United
States, (4) a decrease in the average closing prices of the Dow ▇▇▇▇▇
Industrial Average or the Standard & Poor's Index of 500 Industrial
Companies by an amount in excess of 20% measured from the close of business
on the date of this Agreement or (5) in the case of any of the foregoing
existing on the date of this Agreement, a material acceleration or material
worsening thereof;
(e) the Purchaser shall have reached an agreement or understanding with
the Company providing for termination of the Offer;
(f) any event shall have occurred (which has not been cured or satisfied)
which violates, conflicts with, has resulted or may result in the loss of
any benefit under, constitutes a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, results in the
termination of or a right of termination or cancellation under, accelerates
the performance required by, results in an obligation becoming due before
its stated due date (whether due to a mandatory "offer to purchase" or
otherwise) under, or results in the creation of any Lien upon any of the
respective properties or assets of the Company or any of its subsidiaries
under, any of the terms, conditions or provisions of the agreements listed
in Section 6.2 of the Company Disclosure Schedule, except for violations,
conflicts, losses of benefit, defaults, termination or cancellation rights,
accelerations or Liens which would not, individually or in the aggregate,
have a Company Material Adverse Effect; provided, however, that in the case
of the Specified Provisions to the agreements listed in Section 6.2 of the
Company Disclosure Schedule, this condition shall be deemed to have been
satisfied on account of any event occurring prior to the date of this
Agreement unless a notice (which has not directly or indirectly been
induced by Parent or any of its affiliates) from any counterparty to, or
any holder of debt under, any such agreement shall have been received by
the Company or any of its directors or officers which notice specifically
alleges that an event described in the Specified Provisions has occurred.
(g) any other material approval, permit, authorization, consent or other
action or non-action of any domestic, foreign or supranational
governmental, administrative or regulatory agency, authority, tribunal or
third party which is necessary to consummate the Offer shall not have been
obtained specifically including any approval, permit, authorization or
consent listed in Section 6.1(b) of the Company Disclosure Schedule;
(h) the representations and warranties of the Company set forth in the
Agreement shall not be true and correct in any respect, disregarding for
this purpose any standard of materiality contained in any such
representation or warranty, as of the date of consummation of the Offer as
though made on or as of such date or the Company shall have breached or
failed to perform or comply with any obligation, agreement or covenant
required by the Agreement to be performed or complied with by it, except
(1) in the case of the failure of any representation or warranty, (A) for
changes specifically permitted by the Agreement, and (B)(i) those
representations and warranties that address matters only as of a particular
date which are true and correct as of such date or (ii) where the failure
of the representations and warranties set forth in the Agreement to be true
and correct, does not, and is not reasonably likely to, individually or in
the aggregate, have a Company Material Adverse Effect, or (2) in the case
of the failure to perform or comply with any obligation, agreement or
covenant, where the failure to so perform or comply does not, and is not
reasonably likely to, individually or in the aggregate, have a Company
Material Adverse Effect;
(i) the Board of Directors of the Company or any other committee thereof
shall have (1) withdrawn, or modified, amended or changed (including by
amendment of the Schedule 14D-9/A) in a manner adverse to Parent or the
Purchaser, its approval or recommendation of this Offer, the Merger, the
Agreement or any of the other transactions contemplated by the Agreement,
(2) approved or recommended to the Company's stockholders a proposal or
offer from any person (other than Parent and its subsidiaries, affiliates
and representatives) relating to any direct or indirect acquisition or
purchase of 20% or more of the assets of the Company and its subsidiaries
or of any shares of any class of equity securities of the Company or any of
its subsidiaries, any tender offer or exchange offer for shares of any
class of equity securities of the Company, any merger, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution
III-30
or similar transaction involving the Company or its subsidiaries, or any
other acquisition of Shares other than this Offer and the Merger or (3)
adopted any resolution to effect any of the foregoing; or
(j) the Agreement shall have been terminated in accordance with its
terms; which, in the sole and reasonable judgment of the Purchaser in any
such case, and regardless of the circumstances (including any action or
inaction by the Purchaser or any of its affiliates) giving rise to any such
condition, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to
any such conditions or may be waived by the Purchaser, in its sole discretion,
in whole or in part, at any time and from time to time. The failure by the
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time. Any
determination by the Purchaser concerning any condition or event described in
this section shall be final and binding upon all parties.
III-31