1
EXHIBIT 6
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
Hotel Reservations Network, Inc. ("PARENT"),
Wonsub, Inc. ("SUB"),
AND
▇▇▇▇▇▇▇▇▇.▇▇▇ Inc. ("COMPANY")
DATED AS OF JANUARY 3, 2001
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
ARTICLE 1 THE OFFER; APPROVALS OF THE BOARD OF DIRECTORS AND STOCKHOLDERS...................2
1.1. The Offer........................................................................2
1.2. Offer Documents..................................................................4
1.3. Company Actions..................................................................4
1.4. Directors........................................................................6
1.5. Sub Stockholder Approval.........................................................7
1.6. Funding..........................................................................7
ARTICLE 2 THE MERGER........................................................................7
2.1. The Merger.......................................................................7
2.2. Closing..........................................................................7
2.3. Effective Time of the Merger.....................................................8
2.4. Effects of the Merger............................................................8
ARTICLE 3 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF THE CERTIFICATES......................................8
3.1. Effect on Capital Stock..........................................................8
3.2. Conversion of Shares.............................................................9
3.3. Payment for Shares...............................................................9
3.4. Stock Transfer Books............................................................11
3.5. Stock Option Plans..............................................................11
3.6. Dissenting Shares...............................................................12
3.7. Stockholder Agreements..........................................................12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES...................................................12
4.1. Representations and Warranties of the Company...................................12
4.2. Representations and Warranties of Parent and Sub................................26
ARTICLE 5 COVENANTS RELATING TO CONDUCT OF BUSINESS........................................28
5.1. Affirmative Covenants of the Company............................................28
5.2. Negative Covenants of the Company...............................................28
ARTICLE 6 ADDITIONAL AGREEMENTS............................................................30
6.1. Access to Information...........................................................30
6.2. No Solicitation.................................................................31
6.3. Fees and Expenses...............................................................33
6.4. Brokers or Finders..............................................................33
i
3
6.5. Indemnification; Directors' and Officers' Insurance.............................33
6.6. Reasonable Efforts..............................................................35
6.7. Publicity.......................................................................35
6.8. Withholding Rights..............................................................35
6.9. HSR and Other Governmental Approvals............................................35
6.10. Notification of Certain Matters.................................................36
6.11. Preparation of the Proxy Statement; Company Stockholders Meeting; Merger
without a Company Stockholders Meeting..........................................36
6.12. Stock Option....................................................................37
6.13. Other Actions...................................................................38
6.14. Appraisal Rights................................................................38
ARTICLE 7 CONDITIONS PRECEDENT.............................................................38
7.1. Conditions to Each Party's Obligation to Effect the Merger......................38
ARTICLE 8 TERMINATION AND AMENDMENT........................................................39
8.1. Termination.....................................................................39
8.2. Effect of Termination...........................................................42
8.3. Amendment.......................................................................42
8.4. Extension; Waiver...............................................................42
ARTICLE 9 GENERAL PROVISIONS...............................................................42
9.1. Nonsurvival of Covenants and Agreements.........................................42
9.2. Confidentiality Agreement.......................................................42
9.3. Notices.........................................................................42
9.4. Interpretation..................................................................44
9.5. Counterparts....................................................................44
9.6. Entire Agreement; No Third Party Beneficiaries..................................44
9.7. Governing Law...................................................................44
9.8. Assignment......................................................................44
9.9. Director and Officer Liability..................................................44
9.10. Specific Performance............................................................45
9.11. Effectiveness...................................................................45
SCHEDULES
---------
Schedule 4.1(b) -- Capital Structure
Schedule 4.1(c) -- Authority; No Violations; Consents and Approvals
Schedule 4.1(d) -- Disclosure Documents
Schedule 4.1(f) -- No Default
Schedule 4.1(h) -- Litigation
Schedule 4.1(i) -- Taxes
Schedule 4.1(j) -- Employment Agreements
ii
4
Schedule 4.1(k)(i) -- Employee Benefit Plans
Schedule 4.1(k)(ii) -- Welfare Benefit Plans
Schedule 4.1(k)(viii) -- Additional Rights Under Employee Benefit Plans
Schedule 4.1(k)(ix) -- 280G Payments
Schedule 4.1(l) -- Absence of Certain Changes or Events
Schedule 4.1(m) -- Undisclosed Material Liabilities
Schedule 4.1(p) -- Labor Matters
Schedule 4.1(q) -- Intellectual Property
Schedule 4.1(t) -- Related Party Transactions
Schedule 4.1(u) -- Certain Business Practices and Regulations, Potential Conflicts of Interest
Schedule 5.2 -- Negative Covenants of the Company
Schedule 5.2(k) -- Capital Expenditures
EXHIBITS
--------
Exhibit A -- Form of Stockholder Agreement
Exhibit B -- Conditions to the Offer
Exhibit C -- Promissory Note
iii
5
INDEX OF DEFINED TERMS
Term Section
---- -------
Acquisition Proposal....................................................6.2
Agreement..........................................................Preamble
Antitrust Division...................................................6.9(a)
Applicable Common Share Amount......................................6.12(a)
Board Percentage.....................................................1.4(a)
By-laws..............................................................2.4(d)
Certificate of Incorporation.........................................2.4(c)
Certificate of Merger...................................................2.3
Certificates.........................................................3.3(b)
Claim................................................................6.5(b)
Closing.................................................................2.2
Closing Date............................................................2.2
Code.............................................................4.1(i)(xi)
Company............................................................Preamble
Company Common Stock...............................................Recitals
Company Debt......................................................4.1(b)(i)
Company Intellectual Property.....................................4.1(q)(i)
Company Litigation...................................................4.1(h)
Company Order........................................................4.1(h)
Company Permits......................................................4.1(g)
Company SEC Documents................................................4.1(d)
Common Share Option.................................................6.12(a)
Company Stockholder Approval....................................4.1(c)(iii)
Confidential IP Information......................................4.1(q)(vi)
Confidentiality Agreement............................................6.1(c)
Constituent Corporations................................................2.1
Continuing Director..................................................1.4(a)
D&O Insurance........................................................6.5(c)
DGCL....................................................................1.3
Dissenting Shares.......................................................3.6
Effective Time..........................................................2.3
Employee Benefit Plans............................................4.1(k)(i)
Environmental Laws................................................4.1(r)(i)
ERISA.............................................................4.1(k)(i)
ERISA Affiliate...................................................4.1(k)(i)
Exchange Act.........................................................1.1(a)
Financial Advisor.......................................................1.3
FTC..................................................................6.9(a)
Funding Date........................................................6.11(a)
Gains and Transfer Taxes........................................4.1(c)(iii)
GAAP.................................................................4.1(d)
Governmental Entity.............................................4.1(c)(iii)
HSR Act.........................................................4.1(c)(iii)
Indemnified Parties..................................................6.5(b)
iv
6
Term Section
---- -------
Injunction...........................................................7.1(c)
Intangible Rights.................................................4.1(q)(i)
IRS..............................................................4.1(i)(ix)
Laws.............................................................4.1(c)(ii)
Licensed Software...............................................4.1(q)(iii)
Liens............................................................4.1(c)(ii)
Material Adverse Effect..............................................4.1(a)
Maximum Premium......................................................6.5(c)
Meeting Date.........................................................4.1(e)
Merger.............................................................Recitals
Merger Consideration.................................................3.2(a)
Minimum Condition................................................1.1(b)(ii)
Notice Date.........................................................6.12(b)
Offer..............................................................Recitals
Offer Consideration..................................................1.1(a)
Offer Documents.........................................................1.2
Offer Termination Date.......................................1.1(b)(iii)(B)
on a fully-diluted basis.........................................1.1(b)(ii)
Option Consideration.................................................3.5(a)
Optioned Common Shares..............................................6.12(a)
Options..............................................................3.5(a)
Owned Software...................................................4.1(q)(ii)
Parent.............................................................Preamble
Paying Agent.........................................................3.3(a)
Payment Fund.........................................................3.3(a)
Per Common Share Price..............................................6.12(a)
Permitted Encumbrances............................................4.1(q)(i)
Promissory Note......................................................6.3(b)
Proxy Statement.................................................4.1(c)(iii)
Representative..........................................................6.2
Violation........................................................4.1(c)(ii)
Schedule 14D-9..........................................................1.3
Schedule TO.............................................................1.2
SEC..........................................................1.1(b)(iii)(A)
Securities Act.......................................................4.1(d)
Shares.............................................................Recitals
Stock Option Plan....................................................3.5(a)
Stockholder Agreements.............................................Recitals
Sub................................................................Preamble
Subsidiary...........................................................3.1(b)
Surviving Corporation...................................................2.1
Tax..............................................................4.1(i)(xi)
Tax Return.......................................................4.1(i)(xi)
Taxes............................................................4.1(i)(xi)
Transaction Documents...................................................1.3
Vested Option........................................................3.5(a)
Violation........................................................4.1(c)(ii)
v
7
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of January 3, 2001 (this
"Agreement"), is made and entered into by and among Hotel Reservations Network,
Inc., a Delaware corporation ("Parent"), Wonsub, Inc., a Delaware corporation
and a wholly owned Subsidiary (as defined in Section 3.1(b)) of Parent ("Sub"),
and ▇▇▇▇▇▇▇▇▇.▇▇▇ Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Sub and the Company have
unanimously approved this Agreement pursuant to which Parent will acquire the
Company by means of the Offer (as defined below) and the merger (the "Merger")
of Sub with and into the Company, upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, to effectuate the Merger, Parent and the Company each desire
that Sub commence a cash tender offer to purchase (the "Offer") all of the
outstanding shares of common stock, par value $0.01 per share, of the Company
("Company Common Stock") upon the terms and subject to the conditions set forth
in this Agreement and the Offer Documents (as defined in Section 1.2), and the
Board of Directors of the Company has approved the Offer and agreed, subject to
the terms and conditions hereof, to recommend to the stockholders of the Company
that they accept the Offer and tender their Shares pursuant thereto (shares of
Company Common Stock are herein sometimes referred to as the "Shares");
WHEREAS, Parent and Sub are unwilling to enter into this Agreement (and
effect the transactions contemplated hereby) unless, contemporaneously with the
execution and delivery hereof, the Company and each of [INSERT NAMES OF
INDIVIDUAL STOCKHOLDERS] enter into Stockholder Agreements substantially in the
form of Exhibit A hereto (the "Stockholder Agreements") and, in order to induce
Parent and Sub to enter into this Agreement, such persons are executing and
delivering concurrently herewith the Stockholder Agreements; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the
consummation thereof;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
8
ARTICLE 1
THE OFFER; APPROVALS OF THE BOARD OF DIRECTORS
AND STOCKHOLDERS
1.1. THE OFFER
(a) Provided that this Agreement shall not have been
terminated in accordance with Article 8 and that none of the events set forth in
Exhibit B hereto shall have occurred and be continuing, as promptly as
practicable (but in any event not later than ten business days after the public
announcement of the execution and delivery of this Agreement), Sub shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) the Offer for all outstanding Shares at a
cash price of $4.16 per Share, net to the holder in cash (the "Offer
Consideration"). The obligation of Parent and Sub to commence the Offer,
consummate the Offer, accept for payment and pay for Shares tendered in the
Offer and not withdrawn shall be subject only to those conditions set forth in
Exhibit B hereto.
(b) Parent and Sub expressly reserve the right to amend or
modify the terms of the Offer at any time prior to acceptance of Shares for
payment pursuant to the Offer, except that, without the prior written consent of
the Company (which consent may be withheld in the Company's sole discretion),
Sub shall not (and Parent shall cause Sub not to):
(i) decrease the Offer Consideration, change the form
of the Offer Consideration or decrease the number of Shares sought
pursuant to the Offer,
(ii) amend or waive the condition that there shall be
validly tendered and not withdrawn prior to the time the Offer expires
a number of Shares which, together with the shares of Company Common
Stock then owned by Parent and Sub, constitutes a majority of the
Shares outstanding on a fully-diluted basis on the date of purchase
(the "Minimum Condition") ("on a fully-diluted basis" meaning, as of
any date, the number of Shares outstanding, together with the shares of
Company Common Stock, if any, which the Company may be required to
issue, now or in the future, including, without limitation, shares of
Company Common Stock issuable pursuant to options (including, without
limitation, the Options (as defined in Section 3.5)), warrants or other
rights), or
(iii) extend the expiration date of the Offer, which
shall initially be not less than 20 business days (as defined in Rule
14d-1 under the Exchange Act) after the date the Offer is commenced;
provided, however, that Sub may extend the expiration date of the
Offer:
(A) as required by any rule, regulation or
interpretation of the United States Securities and Exchange
Commission (the "SEC");
(B) in the event that any condition to the
Offer is not satisfied as of the scheduled expiration date
thereof, for such periods for up to five (5) business days at
a time (or such longer period as shall be approved by the
Company) as Sub may reasonably deem necessary, but, except as
provided in clause (C) below, in no event may the Offer be
extended to a date later than the
2
9
date (the "Offer Termination Date") that is 90 days from the
date of this Agreement (provided that, in the event that any
condition to the Offer is not satisfied as of the scheduled
expiration date thereof, Sub shall extend the expiration date
of the Offer at the request of the Company for up to five (5)
business days at a time (or such longer period as shall be
mutually agreed) until the earlier of the acceptance for
payment of any Shares pursuant to the Offer or 60 calendar
days after the commencement of the Offer; provided that such
extension shall not be required if in the reasonable judgment
of Sub, any such condition is incapable of being satisfied
prior to the expiration of such 60 calendar day period);
(C) notwithstanding the foregoing, beyond
the Offer Termination Date (1) in connection with an increase
in the consideration to be paid pursuant to the Offer so as to
comply with the applicable rules and regulations of the SEC,
and (2) for up to a period not to exceed the period which ends
on the 15th business day after the date that either (w) the
Company shall have publicly announced the receipt of an
Acquisition Proposal (as defined in Section 6.2) in the event
such announcement is made less than ten business days prior to
the Offer Termination Date, (x) the Company publicly announces
its reaffirmation of its approval or recommendation of the
Offer following the public announcement of the receipt of any
Acquisition Proposal in the event that such reaffirmation or
announcement is made less than ten business days prior to the
Offer Termination Date, (y) the Board of Directors of the
Company shall have withdrawn or adversely modified, or taken a
public position materially inconsistent with, its approval or
recommendation of the Offer, the Merger or this Agreement at
any time within ten business days prior to the Offer
Termination Date or (z) any notice is given by the Company in
accordance with clause (ii) of Section 8.1(h) if such notice
is made less than 15 business days prior to the Offer
Termination Date;
(iv) amend the terms of the Offer in any manner that
is adverse to the holders of Shares; or
(v) impose any condition to the Offer in addition to
those set forth in Exhibit B.
(c) Notwithstanding the foregoing, without the consent of the
Company, Sub may (and Parent may cause Sub to) make available a subsequent
offering period (within the meaning of Rule 14d-11 under the Exchange Act) by
extending the Offer on one occasion for up to 20 business days if on the
expiration date, the Shares validly tendered and not withdrawn pursuant to the
Offer equal less than ninety percent (90%) of the outstanding shares on a fully
diluted basis notwithstanding that all the conditions to the Offer have been
satisfied. If Sub makes available (or Parent causes Sub to make available) such
a subsequent offering period, Sub shall irrevocably waive satisfaction of any of
the conditions to the Offer (other than in the case of paragraph 3 of Exhibit B
hereto (i) the occurrence of any injunction, proceeding, action, suit or
litigation by any Governmental Entity seeking to make illegal or prohibit the
consummation of the Offer or (ii) the promulgation, enactment or enforcement of
any Law that makes illegal or
3
10
prohibits the consummation of the Offer) that subsequently may not be satisfied
during any such subsequent offering period.
Except as set forth above, Sub may waive any other condition
to the Offer in its sole discretion. Assuming the prior satisfaction or waiver
of the conditions to the Offer, Sub shall accept for payment, and pay for, in
accordance with the terms of the Offer, all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the expiration date
thereof. The Company will not tender into the Offer any Shares beneficially
owned by it.
1.2. OFFER DOCUMENTS. On the date of commencement of the Offer, Parent
and Sub shall file or cause to be filed with the SEC a Tender Offer Statement on
Schedule TO (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule TO") with respect to the Offer. The Schedule
TO shall contain or shall incorporate by reference the offer to purchase,
related letter of transmittal and other ancillary Offer documents and
instruments pursuant to which the Offer will be made (such Schedule TO and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). The Offer
Documents (a) shall contain (or shall be amended in a timely manner to contain)
all information which is required to be included therein in accordance with the
Exchange Act and the rules and regulations thereunder and any other applicable
law and (b) shall conform in all material respects with the requirements of the
Exchange Act and any other applicable law. Notwithstanding the foregoing, no
agreement or representation hereby is made or shall be made by Parent or Sub
with respect to information supplied by the Company expressly for inclusion in,
or with respect to Company information derived from the Company's public SEC
filings that is included or incorporated by reference in, the Offer Documents.
Each of Parent, Sub and the Company shall promptly correct any information
provided by it for use in the Offer Documents if and to the extent that it shall
have become false or misleading in any material respect, and Parent and Sub
shall take all lawful action necessary to cause the Offer Documents as so
corrected to be filed promptly with the SEC and to be disseminated to holders of
Company Common Stock, in each case as and to the extent required by applicable
law. In conducting the Offer, Parent and Sub shall comply in all material
respects with the Exchange Act and any other applicable law. The Company and its
counsel shall be given reasonable opportunity to review and comment on the Offer
Documents and any amendments or supplements thereto (and shall provide any
comments thereon as soon as practicable) prior to either the filing thereof with
the SEC or dissemination to the stockholders of the Company, as the case may be.
Parent and Sub shall provide the Company and its counsel any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after receipt of such comments. To the extent
practicable, the Company and its counsel shall also be given reasonable
opportunity to review and comment on correspondence with the SEC concerning the
Offer Documents prior to the delivery thereof to the SEC.
1.3. COMPANY ACTIONS. The Company hereby represents that (a) its Board
of Directors (at a meeting duly called and held) has unanimously (i) determined
that this Agreement and the Stockholder Agreements (collectively, the
"Transaction Documents") and the transactions contemplated hereby or thereby,
including the Offer and the Merger provided for by this Agreement, are fair to
and in the best interests of the Company and the holders of Company
4
11
Common Stock, (ii) approved the execution, delivery and performance of the
Transaction Documents by the Company and the consummation of the transactions
contemplated thereby, including the Offer and the Merger provided for by this
Agreement, such approval constituting approval of the foregoing for purposes of
Section 203 of the Delaware General Corporation Law, as amended (the "DGCL"),
thereby making the proscription contained in Section 203(a) of the DGCL
inapplicable to such transactions, and (iii) resolved, subject to Section 6.2
hereof, to recommend (A) acceptance of the Offer and (B) adoption of this
Agreement by the holders of Company Common Stock, if such adoption is required
by law; and (b) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated (the "Financial Advisor"),
has delivered to the Board of Directors of the Company its opinion that, as of
the date of such opinion and based upon and subject to the matters set forth
therein, the Offer Consideration to be received by the holders of Company Common
Stock in the Offer and the Merger Consideration (as defined in Section 3.2) to
be received by the holders of the Company Common Stock in the Merger are fair,
from a financial point of view, to such holders. The Company hereby consents to
the inclusion in the Offer Documents of the recommendation referred to in this
Section 1.3. Subject to Section 6.2 hereof, the Company hereby agrees to file
with the SEC, concurrently with the commencement of the Offer or as promptly
thereafter as practicable, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, the "Schedule
14D-9") containing such recommendations of the Board of Directors of the Company
in favor of the Offer and the Merger and otherwise complying with Rule 14d-9
under the Exchange Act and to cause the Schedule 14D-9 to be mailed to the
stockholders of the Company promptly after commencement of the Offer and at the
same time the Offer Documents are first mailed to the stockholders of the
Company. The Schedule 14D-9 shall comply in all material respects with the
Exchange Act and any other applicable law and shall contain (or shall be amended
in a timely manner to contain) all information that is required to be included
therein in accordance with the Exchange Act and the rules and regulations
promulgated thereunder and any other applicable law. Notwithstanding the
foregoing, no agreement or representation hereby is made or shall be made by the
Company with respect to information provided by Parent, Sub or their affiliates.
Each of the Company, Parent and Sub shall promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect and the Company shall
take all lawful action necessary to cause the Schedule 14D-9 as so corrected to
be promptly filed with the SEC and disseminated to the holders of Company Common
Stock, in each case as and to the extent required by applicable law. Parent, Sub
and their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 and any amendments thereto (and shall provide any comments
thereon as soon as practicable) prior to the filing thereof with the SEC. The
Company will provide Parent and Sub and their counsel any comments the Company
or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt of such comments. To the extent
practicable, Parent, Sub and their counsel shall also be given reasonable
opportunity to review and comment on correspondence with the SEC concerning the
Schedule 14D-9 prior to the delivery thereof to the SEC. In connection with the
Offer, the Company shall promptly furnish, or cause its transfer agent to
furnish, Sub with mailing labels, security position listings and all available
listings or computer files containing the names and addresses of the record
holders of the Company Common Stock as of the latest practicable date and shall
furnish, or cause its transfer agent to furnish, Sub with such information and
assistance (including updated lists of stockholders, mailing labels and lists of
security positions) as Sub or its agents may
5
12
reasonably request in communicating the Offer to the record and beneficial
holders of Company Common Stock. Subject to the requirements of applicable law
and stock exchange rules, and except for such actions as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer and the Merger, Parent, Sub and their affiliates shall hold in
confidence the information contained in such labels and lists, shall use such
information only in connection with the Offer and the Merger provided for by
this Agreement, and, if this Agreement is terminated for any reason, shall
deliver promptly to the Company all copies of such information then in their
possession or control. In connection with the Offer, the Company will furnish
Parent with such information (which will be treated and held in confidence by
Parent) and assistance as Parent or its officers, employees, accountants,
counsel and other representatives may reasonably request in connection with the
preparation of the Offer and communicating the Offer to the record and
beneficial holders of shares of Company Common Stock.
1.4. DIRECTORS.
(a) Upon the purchase by Sub pursuant to the Offer of such
number of Shares which represents a majority of the outstanding shares of
Company Common Stock (on a fully diluted basis), and from time to time
thereafter, the parties hereto agree to cause to be elected to the Board of
Directors of the Company such number of directors designated by Sub, rounded up
to the next whole number (but in no event more than two less than the total
number of directors on the Board of Directors of the Company, as such number may
be increased as provided herein), as will give Sub, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Board of Directors of
the Company equal to the product of (i) the number of directors on the Board of
Directors of the Company (giving effect to any increase in the number of
directors pursuant to this Section 1.4) and (ii) the percentage (the "Board
Percentage") that such number of Shares so purchased bears to the aggregate
number of Shares outstanding and the Company shall, upon request by Sub and
subject to applicable law, promptly satisfy the Board Percentage by (A)
increasing the size of the Board of Directors of the Company or (B) using its
reasonable efforts to secure the resignations of such number of directors as is
necessary to enable Sub's designees to be elected to the Board of Directors of
the Company and shall cause Sub's designees promptly to be so elected, provided
that no such action shall be taken which would result in there being, prior to
the consummation of the Merger, less than two directors of the Company who are
Continuing Directors (as defined below), except to the extent that all
Continuing Directors have resigned. At such times, if requested by Sub, the
Company will use its best efforts to cause each committee of the Board of
Directors of the Company to include persons designated by Sub constituting the
Board Percentage of such committee. The Company shall promptly amend, or cause
to be amended, its by-laws, if necessary, to increase the size of the Board of
Directors of the Company if such increase is required to satisfy the Board
Percentage pursuant to this Section l.4. At the request of Sub, the Company
shall take, at the Company's expense, any lawful action necessary to effect any
such election, including, without limitation, mailing to its stockholders the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder (provided that Sub has provided the information described
in the following sentence), unless such information has previously been provided
to the Company's stockholders in the Schedule 14D-9. Sub will supply to the
Company in writing and be solely responsible for any information with respect to
itself and its nominees, directors and affiliates required by Section 14(f) of
the Exchange Act and Rule 14f-1 thereunder. The
6
13
term "Continuing Director" shall mean (1) each member of the Board of Directors
immediately prior to the acceptance for payment of Shares tendered pursuant to
the Offer or (2) any director elected or appointed to fill any vacancy or newly
created directorship after the date hereof who is (x) recommended or elected, as
the case may be, by a majority of the Continuing Directors then on the Board of
Directors and (y) not affiliated with, and not a designee or nominee of, Parent
or Sub.
(b) Following the election or appointment of Sub's designees
pursuant to this Section 1.4 and prior to the Effective Time (as defined in
Section 2.3) of the Merger, the approval of a majority of the Continuing
Directors shall be required to authorize any termination of this Agreement by
the Company, any consent or agreement by the Company to such termination, any
amendment of this Agreement requiring action of the Board of Directors of the
Company, any extension of time for the performance of any of the obligations or
other acts of Parent or Sub under this Agreement, any waiver of compliance with
any of the agreements or conditions under this Agreement for the benefit of the
Company or the holders of Company Common Stock, and any action to seek to
enforce any obligation of Parent or Sub under this Agreement. In connection
therewith, the Continuing Directors shall be authorized, on behalf of and at the
expense of the Company, to retain financial and legal advisors.
1.5. SUB STOCKHOLDER APPROVAL. Parent, in its capacity as the sole
stockholder of Sub, by its execution hereof, approves and adopts this Agreement
and the transactions contemplated hereby.
1.6. FUNDING. Parent shall provide or cause to be provided to Sub on a
timely basis the funds necessary to purchase any Shares that Sub becomes
obligated to purchase pursuant to the Offer.
ARTICLE 2
THE MERGER
2.1. THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL, Sub shall be merged with and
into the Company at the Effective Time (as defined in Section 2.3). At the
Effective Time, the separate corporate existence of Sub shall cease, and the
Company shall continue as the surviving corporation and a direct wholly owned
Subsidiary of Parent (Sub and the Company are sometimes hereinafter referred to
as the "Constituent Corporations" and, as the context requires, the Company is
sometimes hereinafter referred to as the "Surviving Corporation") and shall
continue under the name "_________________."
2.2. CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1, and subject to the satisfaction or waiver of the conditions set forth in
Article 7, the closing of the Merger (the "Closing") shall take place at 9:00
a.m., Central Standard Time, as promptly as practical (but in no event later
than the second business day) after satisfaction and/or waiver of all of the
conditions set forth in Section 7.1 (the "Closing Date"), at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, unless another
date, time or place is agreed to in writing by the parties hereto.
7
14
2.3. EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, as provided in the DGCL, as soon as practicable
after the Closing. The Merger shall become effective upon such filing or at such
time thereafter as is provided in the Certificate of Merger as the Company and
Sub shall agree (the "Effective Time").
2.4. EFFECTS OF THE MERGER.
(a) The Merger shall have the effects as set forth in the
applicable provisions of the DGCL.
(b) The directors and officers of Sub immediately prior to the
Effective Time shall, from and after the Effective Time, be the initial
directors and officers of the Surviving Corporation until their successors have
been duly elected or appointed and qualified, or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws.
(c) The certificate of incorporation of Sub shall be the
certificate of incorporation (the "Certificate of Incorporation") of the
Surviving Corporation until thereafter amended as provided by applicable law.
(d) The by-laws of Sub shall be the by-laws (the "By-laws") of
the Surviving Corporation until thereafter amended as provided by applicable
law, the Certificate of Incorporation or the By-laws.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF THE CERTIFICATES
3.1. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of shares of Company
Common Stock or any holder of shares of capital stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock of
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of common stock, par value $0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of Company
Common Stock and all other shares of capital stock of the Company that are
owned, directly or indirectly, by the Company, or by Parent or Sub or any other
wholly owned Subsidiary of Parent shall be canceled and retired and shall cease
to exist, and no consideration shall be delivered or deliverable in exchange
therefor. As used in this Agreement, the word "Subsidiary," with respect to any
party,
8
15
means any corporation, partnership, joint venture or other organization,
whether incorporated or unincorporated, of which: (i) such party or any other
Subsidiary of such party is a general partner; (ii) voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation, partnership, joint venture or other organization is
held by such party or by any one or more of its Subsidiaries, or by such party
and any one or more of its Subsidiaries; or (iii) at least 50% of the equity,
other securities or other interests is, directly or indirectly, owned or
controlled by such party or by any one or more of its Subsidiaries, or by such
party and any one or more of its Subsidiaries.
3.2. CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of Sub, the Company or the holders of
the Company Common Stock:
(a) Subject to the other provisions of this Section 3.2, each
share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (excluding shares of Company Common Stock canceled pursuant to
Section 3.1(b) and Dissenting Shares (as defined in Section 3.6)) shall be
converted into the right to receive an amount in cash equal to the Offer
Consideration, or such higher price, if any, as is paid in the Offer (the
"Merger Consideration"), payable to the holder thereof in cash, without any
interest thereon, less any required withholding taxes, upon surrender and
exchange of the Certificate (as defined in Section 3.3) representing such share
of Company Common Stock pursuant to the terms hereof.
(b) All such shares of Company Common Stock, when converted as
provided in Section 3.2(a), no longer shall be outstanding and shall
automatically be canceled and shall cease to exist, and each Certificate (as
defined below) previously evidencing such shares of Company Common Stock shall
thereafter represent only the right to receive the Merger Consideration. The
holders of Certificates previously evidencing 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 herein or by law
and, upon the surrender of Certificates in accordance with the provisions of
Section 3.3, shall only have the right to receive for such shares the Merger
Consideration, less any required withholding taxes, without any interest
thereon. Notwithstanding the foregoing, if between the date of this Agreement
and the Effective Time the outstanding shares of Company Common Stock shall have
been changed into a different number of shares or a different class by reason of
any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Merger Consideration shall be
correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
with the aggregate Merger Consideration payable to each stockholder in such case
being rounded to the nearest ▇▇▇▇▇.
3.3. PAYMENT FOR SHARES.
(a) Paying Agent. Prior to the Effective Time, Parent shall
appoint a United States bank or trust company reasonably acceptable to the
Company to act as paying agent (the "Paying Agent") for the payment of funds in
amounts and at times necessary for the payment of the Merger Consideration, and
immediately following the Effective Time Parent shall contribute the funds in
amounts and at times necessary for the payment of the Merger Consideration to
the
9
16
Surviving Corporation and shall cause the Surviving Corporation to deposit
funds in amounts and at times necessary for the payment of the Merger
Consideration so contributed with the Paying Agent in a separate fund (the
"Payment Fund") established for the benefit of the holders of Certificates, for
payment in accordance with this Article 3, through the Paying Agent, and such
contribution by Parent and payment by the Surviving Corporation shall be in
immediately available funds in amounts necessary to make the payments pursuant
to Section 3.2 and this Section 3.3. The Paying Agent shall, pursuant to
irrevocable instructions, pay the Merger Consideration out of the Payment Fund.
If for any reason the Payment Fund is inadequate to pay the
amounts to which holders of shares of Company Common Stock shall be entitled
under this Section 3.3, Parent shall take all steps necessary to enable or cause
the Surviving Corporation promptly to deposit in trust additional cash with the
Paying Agent sufficient to make all payments required under this Agreement, and
Parent and the Surviving Corporation shall in any event be liable for payment
thereof. The Payment Fund shall not be used for any purpose except as expressly
provided in this Agreement.
(b) Payment Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall instruct the Paying
Agent to mail to each holder of record of a certificate or certificates which,
immediately prior to the Effective Time, evidenced outstanding shares of Company
Common Stock (the "Certificates") (i) a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent, and shall be in such form and have such other provisions as the
Surviving Corporation reasonably may 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, or an
"agent's message" in the case of a book entry transfer, and such other customary
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in respect thereof cash in an amount
equal to the product of (A) the number of shares of Company Common Stock
formerly represented by such Certificate and (B) the Merger Consideration, less
any required withholding taxes, and the Certificate so surrendered shall
forthwith be canceled. No interest shall be paid or accrued on the Merger
Consideration payable upon the surrender of any Certificate. If any holder of a
Certificate shall be unable to surrender such holder's Certificates because such
Certificates have been lost, mutilated or destroyed, such holder may deliver in
lieu thereof an affidavit and indemnity bond in form and substance and with
surety reasonably satisfactory to the Surviving Corporation. If payment is to be
made to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section 3.3(b), each
Certificate converted into the right to receive cash pursuant to Section 3.2(a)
hereof shall be deemed at any time after the Effective Time to represent for all
purposes only the right to receive the Merger Consideration.
10
17
(c) Termination of Payment Fund; Interest. Any portion of the
Payment Fund which remains undistributed to the holders of Company Common Stock
for 180 days after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Company Common Stock who have not
theretofore complied with this Article 3 and the instructions set forth in the
letter of transmittal mailed to such holder after the Effective Time shall
thereafter look only to the Surviving Corporation for payment of the Merger
Consideration to which they are entitled. All interest accrued in respect of the
Payment Fund shall inure to the benefit of and be paid to the Surviving
Corporation.
(d) No Liability. None of Parent, the Company or the Surviving
Corporation shall be liable to any holder of shares of Company Common Stock for
any cash from the Payment Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
3.4. STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Common Stock thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Paying Agent or Parent for any reason, except notation thereon that a
stockholder has elected to exercise his rights to appraisal pursuant to the
DGCL, shall be converted into the right to receive cash pursuant to Section
3.2(a) hereof.
3.5. STOCK OPTION PLANS.
(a) Cancellation of Options. At the Effective Time, each then
outstanding option (the "Options") to purchase or acquire shares of Company
Common Stock, whether or not issued under the Company's 2000 Omnibus Stock
Incentive Plan (the "Stock Option Plan"), and whether or not then exercisable or
vested, shall be canceled and as to any such Options which are according to
their terms vested and exercisable as of the Effective Time ("Vested Option"),
the cancellation of such Vested Options shall represent the right to receive the
following consideration in settlement thereof: for each share of Company Common
Stock subject to such Vested Option an amount (subject to any applicable
withholding tax) in cash equal to the difference between the Merger
Consideration and the per share exercise price of such Vested Option to the
extent such difference is a positive number (such amount in cash as described
above being hereinafter referred to as the "Option Consideration"); provided,
however, that with respect to any person subject to Section 16(a) of the
Exchange Act, any such Option Consideration shall not be payable until the first
date payment can be made without liability to such person under Section 16(b) of
the Exchange Act, but shall be paid as soon as practicable thereafter.
(b) Termination of Rights. The surrender of a Vested Option to
the Company in exchange for the Option Consideration shall be deemed a release
of any and all rights the holder had or may have had in respect of such Vested
Option. Prior to the expiration of the Offer, the Company shall use its best
efforts to take all action necessary (including causing the Board of Directors
of the Company (or any committees thereof) to take such actions as are allowed
by the Stock Option Plan or any option agreements) to ensure that, following the
Effective Time, no Option holder shall have any right thereunder to acquire
equity securities of the Company, the Surviving Corporation or any Subsidiary
thereof. All Options other than Vested Options expire at the Effective Time
according to the terms of such option agreements or the Stock Option Plan.
11
18
3.6. DISSENTING SHARES. Notwithstanding any other provisions of this
Agreement to the contrary, shares of Company Common Stock that are outstanding
immediately prior to the Effective Time and which are held by stockholders who
shall have not voted in favor of the Merger or consented thereto in writing and
who properly shall have demanded appraisal for such shares in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Merger Consideration. Such
stockholders instead shall be entitled to receive payment of the appraised value
of such shares of Company Common Stock held by them in accordance with the
provisions of such Section 262 of the DGCL, except that all Dissenting Shares
held by stockholders who shall have failed to perfect or who effectively shall
have withdrawn or otherwise lost their rights to appraisal of such shares of
Company Common Stock under such Section 262 of the DGCL shall thereupon be
deemed to have been converted into and to have become exchangeable, as of the
Effective Time, for the right to receive, without any interest thereon, less any
required withholding taxes, the Merger Consideration upon surrender in the
manner provided in Section 3.3 of the Certificate or Certificates that,
immediately prior to the Effective Time, evidenced such shares of Company Common
Stock.
3.7. STOCKHOLDER AGREEMENTS. Notwithstanding any provision contained
herein to the contrary, the provisions of Sections 1.1, 3.2 and 3.5 (including,
without limitation, provisions related to the Offer Consideration, the Merger
Consideration and Option Consideration payable to holders of Shares and Options,
respectively) insofar as they relate to amounts payable to the holder that is
party to the Stockholder Agreements, shall be subject to Section 4 of the
Stockholder Agreements in the form attached as Exhibit A.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Sub as follows (such representations and
warranties being deemed to be made on a continuous basis until the Effective
Time):
(a) Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted,
and is duly qualified to do business as a foreign corporation and in good
standing to conduct business in each jurisdiction in which the business it is
conducting, or the operation, ownership or leasing of its properties, makes such
qualification necessary, other than in such jurisdictions where the failure so
to qualify would not have a Material Adverse Effect (as defined below). The
Company has heretofore made available to Parent complete and correct copies of
the certificate of incorporation and by-laws of the Company. As used in this
Agreement, a "Material Adverse Effect" shall mean any result, occurrence, fact,
change, event or effect, whether or not foreseeable or known as of the date of
this Agreement or covered by insurance (other than a change or effect arising as
a result of this Agreement, the transactions
12
19
contemplated hereby, or the identity of Parent or Sub), that, individually or in
the aggregate with any such other results, occurrences, facts, changes, events
or effects, is or, in Parent's reasonable judgment, could be expected to (a) be
(whether or not such result, occurrence, fact, change, event or effect has,
during the period or at the time in question, manifested itself in the Company's
historical financial statements) materially adverse to the historical or
near-term or long-term projected (i) business, (ii) operations, licenses,
permits, rights or privileges, (iii) assets, (iv) liabilities, (v) financial
condition, (vi) results of operations or (vii) capitalization, in each case, of
the Company, (b) materially impair the ability of the Company to perform its
obligations under any of the Transaction Documents or (c) prevent the
consummation of any of the transactions contemplated thereby. The Company has no
Subsidiaries, and has never had any Subsidiaries that were material to its
business.
(b) Capital Structure.
(i) The Company. The authorized capital stock of the
Company consists of 50,000,000 shares of common stock, par value $0.01
per share, and 25,000,000 shares of preferred stock, par value $.01 per
share. As of the date of this Agreement, 10,873,159 shares of Company
Common Stock are issued, all of which are outstanding. There are no
shares of preferred stock outstanding. Except as set forth on Schedule
4.1(b), no bonds, debentures, notes or other instruments or evidence of
indebtedness of the Company ("Company Debt") are issued or outstanding.
Except as set forth on Schedule 4.1(b), (A) there are no outstanding
securities convertible into, or exchangeable or exercisable for, shares
of capital stock or other securities of the Company and (B) there are
no calls, rights (including, without limitation, preemptive rights),
commitments or agreements (including, without limitation, employment,
termination and similar agreements) to which the Company is a party or
by which it is bound, in any case obligating the Company to issue,
deliver, sell, purchase, redeem or acquire, or cause to be issued,
delivered, sold, purchased, redeemed or acquired, any securities of the
Company, including, without limitation, shares of capital stock, or
obligating the Company to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. Set forth on Schedule
4.1(b) is a list of all of the Options outstanding on the date hereof
and the number of shares of Company Common Stock and exercise prices
relating thereto. No Shares are held by the Company. All outstanding
Shares are validly issued, fully paid and nonassessable and are not
subject to, and have not been issued in violation of, preemptive or
other similar rights.
(ii) Voting of Shares. Except as set forth in the
Transaction Documents or as set forth on Schedule 4.1(b), there are not
as of the date hereof and there will not be at the Effective Time any
stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or by which it is bound
relating to the voting of any shares of the capital stock of the
Company which will limit in any way the solicitation of proxies by or
on behalf of the Company from, or the casting of votes by, the
stockholders of the Company with respect to this Agreement.
13
20
(c) Authority; No Violations; Consents and Approvals.
(i) The Company has all requisite corporate power and
authority to enter into the Transaction Documents and, subject to, if
required by applicable law with respect to the consummation of the
Merger, the Company Stockholder Approval (as defined in Section
4.1(c)(iii)), to consummate the transactions contemplated by the
Transaction Documents. The execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the part
of the Company, subject, if required by applicable law with respect to
the consummation of the Merger, to the Company Stockholder Approval.
The Transaction Documents have been duly executed and delivered by the
Company and, subject, if required by applicable law with respect to the
consummation of the Merger, to the Company Stockholder Approval, and
assuming that each of the Transaction Documents to which Parent or Sub
is a party constitutes the valid and binding agreement of Parent or
Sub, constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms and conditions
except that the enforcement thereof may be limited by (A) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(ii) Except as set forth on Schedule 4.1(c), the
execution and delivery of the Transaction Documents and the
consummation of the transactions contemplated thereby by the Company
will not (A) conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration (including
pursuant to any put right) of any material obligation or the loss of a
material benefit under, or the creation of a mortgage, pledge, lien,
claim, charge, security interest, restriction, tenancy, other
possessory interest, conditional sales obligation or other encumbrance
of any kind (collectively, "Liens"), or right of first refusal with
respect to any asset or property (any such conflict, violation,
default, right of termination, cancellation or acceleration, loss,
creation or right of first refusal, a "Violation"), pursuant to any
provision of the certificate of incorporation or by-laws of the Company
or (B) except as to which requisite waivers or consents have been
obtained, assuming the consents, approvals, authorizations or permits
and filings or notifications referred to in paragraph (iii) of this
Section 4.1(c) are duly and timely obtained or made, and assuming, if
required by applicable law with respect to the consummation of the
Merger, the Company Stockholder Approval has been obtained, result in
any Violation of (1) any loan or credit agreement, note, mortgage, deed
of trust, indenture, lease, employee benefit plan, Company Permit (as
defined in Section 4.1(g)), or any other agreement, obligation,
instrument, concession, franchise or license or (2) any judgment,
order, decree, statute, law, ordinance, rule, regulation, writ or
injunction (collectively, "Laws") applicable to the Company or its
properties or assets, except in the case of clauses (1) and (2) for any
Violations that, individually or in the aggregate, would not have a
Material Adverse Effect. The Board of Directors of the Company has
taken all actions necessary under the DGCL, including approving the
transactions contemplated by the Transaction Documents, to ensure that
the restrictions on Business Combinations
14
21
(as defined in Section 203 of the DGCL) do not, and will not, apply to
the transactions contemplated hereby if consummated in accordance with
the terms hereof.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, notice to, or permit
from any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the Company
in connection with the execution and delivery of any of the Transaction
Documents by the Company or the consummation by the Company of the
transactions contemplated thereby, except for (A) the filing of a
pre-merger notification and report form by the Company under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the expiration or termination of the applicable waiting
period thereunder; (B) the filing with the SEC of (1) if required by
applicable law with respect to consummation of the Merger, a proxy
statement or information statement in definitive form for distribution
to the stockholders of the Company in advance of the meeting, if any,
of the holders of Company Common Stock to adopt this Agreement in
accordance with Regulation 14A or Regulation l4C promulgated under the
Exchange Act (such proxy statement or information statement as amended
or supplemented from time to time being hereinafter referred to as the
"Proxy Statement"), (2) the Schedule 14D-9 in connection with the
Offer, and (3) such reports under and such other compliance with the
Exchange Act and the rules and regulations thereunder as may be
required in connection with this Agreement and the transactions
contemplated hereby; (C) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the
Company does business; (D) such filings and approvals as may be
required by any applicable state takeover, securities or "blue sky"
laws; (E) such filings in connection with any state or local tax which
is attributable to the beneficial ownership of the Company's real
property, if any (collectively, the "Gains and Transfer Taxes"); (F)
such other filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the
Merger or the transactions contemplated by this Agreement; (G) if
required by applicable law with respect to consummation of the Merger,
the adoption of this Agreement by the holders of a majority of the
outstanding Shares ("Company Stockholder Approval"); and (H) such other
consents, approvals, orders, authorizations, registrations,
declarations, filings, notices or permits the failure of which to be
obtained or made would not have a Material Adverse Effect.
(d) Disclosure Documents. Set forth on Schedule 4.1(d) is a
list of each report, schedule, registration statement and definitive proxy
statement filed by the Company with the SEC since January 1, 1998, and prior to
the date of this Agreement (the "Company SEC Documents"), which are all the
documents (other than preliminary material) that the Company was required to
file with the SEC since such date, true and complete copies of which the Company
has made available to Parent. As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933 (the "Securities Act"), the Exchange Act and the rules
and regulations of the SEC promulgated thereunder, and none of the Company SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
15
22
the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
Company SEC Documents complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present, in
accordance with applicable requirements of GAAP (subject, in the case of the
unaudited statements, to year-end audit adjustments, as permitted by Rule 10-01,
and any other adjustments described therein), the financial position of the
Company as of their respective dates and the results of operations and the cash
flows of the Company for the periods presented therein. The unaudited financial
statements of the Company for the two-month period ended November 30, 2000
(copies of which have been provided to Parent) were prepared in accordance with
GAAP (except that there is no comparable period data included) applied on a
consistent basis during the period involved (except as may be indicated in the
notes thereto) and fairly present, in accordance with applicable requirements of
GAAP (subject to year-end audit adjustments, as would be permitted by Rule
10-01, and any other adjustments described therein), the financial position of
the Company as of November 30, 2000, and the results of operations of the
Company for the period presented therein.
(e) Information Supplied. None of the information supplied or
to be supplied by the Company in writing specifically for inclusion or
incorporation by reference in (i) any of the Offer Documents will, at the time
the Offer Documents are first published, sent or given to holders of Company
Common Stock, and at any time they are amended or supplemented, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading, and (ii) the Proxy
Statement, if any, will contain, on the date it is first mailed to the holders
of the Company Common Stock or at the date of the related stockholders' meeting
(the "Meeting Date"), any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. If at any time prior to the expiration or termination of the
Offer, the acceptance for payment of Shares pursuant to the Offer or the Meeting
Date (if applicable), any event with respect to the Company, or with respect to
information supplied by the Company specifically for inclusion in the Offer
Documents or the Proxy Statement, as applicable, shall occur which is required
to be described in an amendment of, or supplement to, such document, such event
shall be so described by the Company and furnished to Parent. All documents that
the Company is responsible for filing with the SEC in connection with the
transactions contemplated herein, insofar as it relates to the Company or other
information supplied by the Company specifically for inclusion therein, will
comply as to form, in all material respects, with the provisions of the
Securities Act, the Exchange Act and the rules and regulations thereunder, and
each such document required to be filed with any Governmental Entity other than
the SEC will comply in all material respects with the provisions of applicable
law as to the information required to be contained therein. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to the
information supplied or to be supplied by Parent or Sub for inclusion in the
Offer Documents or the Proxy Statement.
16
23
(f) No Default. Except (i) as may result from the execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby (which is subject to Section 4.1(c)(ii)) or
(ii) as set forth on Schedule 4.1(f), no Violation exists (and no event has
occurred which, with notice or the lapse of time or both, would constitute a
Violation) of any term, condition or provision of (A) the certificate of
incorporation or by-laws of the Company, (B) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license to which the Company is now a party or by which
the Company or any of its properties or assets is bound or (C) any Law
applicable to the Company, except in the case of (B) and (C) for Violations
which, in the aggregate, would not have a Material Adverse Effect.
(g) Compliance with Applicable Laws. The Company holds all
permits, licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Entities necessary for the lawful conduct of its business (the
"Company Permits") and is in compliance with the terms thereof, except where the
failure to hold any such Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect. As of the date of this Agreement, no
investigation or review by any Governmental Entity with respect to the Company
is pending or, to the knowledge of the Company, has been threatened which would
have a Material Adverse Effect.
(h) Litigation. Except as set forth on Schedule 4.1(h), there
is no suit, action or proceeding pending or, to the knowledge of the Company,
threatened against the Company ("Company Litigation") the loss of which would
have a Material Adverse Effect, nor is there any material judgment, decree,
unfunded settlement, conciliation agreement, letter of deficiency, award,
temporary restraining order, injunction, rule or order of any Governmental
Entity or arbitrator outstanding or, to the knowledge of the Company, pending or
threatened, against the Company ("Company Order") that would have a Material
Adverse Effect. In addition, except as expressly set forth on Schedule 4.1(h) as
having such effect, none of the claims and judgments pending or, to the
knowledge of the Company, threatened pursuant to all Company Litigation and
Company Orders, would, individually or in the aggregate, have a Material Adverse
Effect.
(i) Taxes. Except as set forth on Schedule 4.1(i) hereto:
(i) All material Tax Returns required to be filed by
or with respect to the Company, and any affiliated, consolidated,
combined, unitary or similar group of which the Company is or was a
member, have been duly and timely filed (taking into account all valid
extensions of filing dates), and all such Tax Returns are true, correct
and complete in all material respects. The Company, and any affiliated,
consolidated, combined, unitary or similar group of which the Company
is or was a member, has duly and timely paid (or there has been paid on
its behalf) all material Taxes that are due, except for Taxes being
contested in good faith by appropriate proceedings and for which
adequate reserves have been established in the Company's unaudited
financial statements for the quarter ended September 30, 2000, in
accordance with GAAP. With respect to any period for which Taxes are
not yet due with respect to the Company, and any affiliated,
consolidated, combined, unitary or similar group of which the Company
is or was a member, the Company has made due and sufficient current
accruals for such Taxes in accordance with GAAP in the most recent
financial statements contained in the
17
24
Company SEC Documents. The Company has withheld and paid all material
Taxes required by all applicable laws to be withheld or paid in
connection with any amounts paid or owing to any employee, creditor,
independent contractor, stockholder or other third party.
(ii) Correct and complete copies of all federal,
state, local and foreign income Tax Returns filed by the Company since
December 31, 1998, have been delivered to Parent.
(iii) There are no outstanding agreements, waivers,
or arrangements extending the statutory period of limitation applicable
to any claim for, or the period for the collection or assessment of,
material Taxes due from or with respect to the Company or any
affiliated, consolidated, combined, unitary or similar group of which
the Company is or was a member, for any taxable period. No audit or
other proceeding by any court, governmental or regulatory authority, or
similar person is pending in regard to any material Taxes due from or
with respect to the Company or any material Tax Return filed by or with
respect to the Company, or any affiliated, consolidated, combined,
unitary or similar group of which the Company is or was a member, other
than normal and routine audits by nonfederal governmental authorities.
All material deficiencies of Taxes assessed by any applicable taxing
authority have been paid, fully settled or adequately provided for in
the financial statements contained in the Company SEC Documents. No
taxing authority has asserted or threatened to assert any deficiency or
assessment, or proposed (formally or informally) any adjustment, for
any Taxes against the Company, and the officers and directors (and
employees responsible for Tax matters) of the Company do not know of
any audit or investigation by any taxing authority with respect to any
Tax liability of the Company.
(iv) No consent to the application of Section
341(f)(2) of the Code (or any predecessor provision) has been made or
filed by or with respect to the Company or any of its assets. The
Company has not agreed to make any material adjustment pursuant to
Section 481(a) of the Code (or any predecessor provision) by reason of
any change in any accounting method, and there is no application
pending with any taxing authority requesting permission for any changes
in any accounting method of the Company which will or would reasonably
cause the Company to include any material adjustment in taxable income
for any taxable period (or portion thereof) ending after the date of
consummation of the Offer.
(v) The Company is not a party to, is not bound by,
nor has it any obligation under, any Tax sharing agreement, Tax
allocation agreement or similar contract, agreement or arrangement. The
Company is not subject to any joint venture, partnership or other
arrangement or contract which is treated as a partnership for federal
income Tax purposes.
(vi) Except as set forth on Schedule 4.1(i), the
Company has made no payments, is not obligated to make any payments nor
is it a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under
Section 280G or Section 162(m) of the Code.
18
25
(vii) The Company is not, nor has it has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii).
(viii) There are no requests for rulings from any
taxing authority for information with respect to Taxes of the Company
and, to the knowledge of the Company, no material reassessments (for
property or ad valorem Tax purposes) of any assets or any property
owned or leased by the Company have been proposed.
(ix) The Company has not executed or entered into
with the Internal Revenue Service ("IRS"), or any taxing authority, a
closing agreement pursuant to Section 7121 of the Code or any similar
provision of state, local, foreign or other income tax law, which will
require any increase in taxable income or alternative minimum taxable
income, or any reduction in tax credits for, the Company for any
taxable period ending after the Closing Date.
(x) None of the property of the Company is subject to
a safe-harbor lease (pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954 as in effect after the Economic Recovery Tax Act
of 1981 and before the Tax Reform Act of 1986) or is "tax-exempt use
property" (within the meaning of Section 168(h) of the Code) or
"tax-exempt bond financed property" (within the meaning of Section
168(g)(5) of the Code).
(xi) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended. The term "Tax" (and, with correlative
meaning, "Taxes") shall mean (A) any net income, alternative or add-on
minimum, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, license, withholding on amounts
paid by the Company, payroll, employment, excise, production,
severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with
any interest and/or any penalty, addition to tax or additional amount
imposed by any taxing authority, (B) any liability of the Company for
the payment of any amounts of the type described in (A) as a result of
being a member of an affiliated or consolidated group or arrangement
whereby liability of the Company for the payment of such amounts was
determined or taken into account with reference to the liability of any
other person for any period, and (C) any liability of the Company with
respect to the payment of any amounts of the type described in (A) or
(B) as a result of any express or implied obligation to indemnify any
other Person. The term "Tax Return" shall mean all returns,
declarations, reports, estimates, information returns and statements
required to be filed by or with respect to the Company in respect of
any Taxes, including, without limitation, (x) any consolidated federal
income Tax return in which the Company is included and (y) any state,
local or foreign income Tax returns filed on a consolidated, combined
or unitary basis (for purposes of determining tax liability) in which
the Company is included.
19
26
(xii) There are no excess loss accounts or deferred
intercompany transactions between the Company within the meaning of
Treas. Reg. Sections 1.1502-19 or 1.1502-13, respectively.
(j) Employment Agreements. Schedule 4.1(j) contains a complete
list of each management, employment, consulting or other agreement, contract or
commitment, whether oral or in writing, to which the Company is a party that
provides for (i) the employment of any person or providing for retention of
management, executive or consulting services, or (ii) the payment or accrual of
any compensation or severance upon (A) a change in control of the Company or (B)
any termination of such management, employment, consulting or other
relationship. All compensation earned pursuant to the foregoing, including
deferred compensation, has been fully and accurately accrued for and reflected
in the financial statements included in the Company's quarterly report on Form
10-Q for the quarter ended September 30, 2000.
(k) Pension and Benefit Plans; ERISA.
(i) Except as disclosed on Schedule 4.1(k)(i),
neither the Company nor any corporation, trade, business or entity
under common control with the Company within the meaning of section
414(b), (c) or (m) of the Code or section 4001 of ERISA ("ERISA
Affiliate") maintains or contributes to, nor have they maintained or
contributed to, any "employee pension benefit plans" as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), "welfare benefit plans" as defined in Section 3(l)
of ERISA, or stock bonus, stock option, restricted stock, stock
appreciation right, stock purchase, bonus, incentive, deferred
compensation, severance, or vacation plans, or any other employee
benefit plan, program, policy or arrangement for the benefit of any
current or former directors, officers, current or former employees or
independent contractors of the Company or any of its ERISA Affiliates
pursuant to which it or they may be obligated to make payments or
otherwise have any liability (collectively, the "Employee Benefit
Plans").
(ii) Except as disclosed on Schedule 4.1(k)(ii), none
of the "welfare benefit plans" as defined in Section 3(1) of ERISA
maintained by the Company provide for continuing benefits or coverage
for any participant or any beneficiary of a participant following
termination of employment, except as may be required under sections 601
through 608 of ERISA and section 4980B of the Code, and any such
welfare benefit plan may be unilaterally amended or terminated in its
entirety without liability except as to benefits accrued thereunder
prior to such amendment or termination.
(iii) Neither the Company nor any of its ERISA
Affiliates maintain or contribute to, nor have they ever maintained or
contributed to, (i) any pension plan subject to Title IV of ERISA or
Section 412 of the Code or 302 of ERISA, (ii) any "multiemployer plan"
as defined in Section 3.(37) of ERISA, or (iii) any trust intended to
be exempt from federal income taxes within the meaning of section
501(c)(9) of the Code.
(iv) With respect to all Employee Benefit Plans
disclosed on Schedule 4.1(k)(i), Parent has been furnished true,
correct and complete copies of related
20
27
documents, including plan documents, trust agreements, insurance or
group annuity contracts and each other funding or financing arrangement
relating to any Employee Benefit Plan, as well as all amendments
thereto. In addition, Parent has been furnished the most recent report
on Form 5500 and the summary plan description for each Employee Benefit
Plan which is required to file or distribute those items. For each
Employee Benefit Plan that is a "top hat" plan exempt from Form 5500
filings, a copy of the requisite "top hat filing" described in Labor
Regulation section 2520.104-23 has been furnished to Parent. With
respect to any Employee Benefit Plan that is intended to be qualified
under section 401(a) of the Code, a copy of the most recent favorable
determination letter has been furnished to Parent, along with a copy of
any outstanding determination letter applications for such Employee
Benefit Plans. A schedule of employer expenses with respect to each
Employee Benefit Plan has been furnished to Parent along with any
administration agreement associated with any Employee Benefit Plan.
(v) To the knowledge of the Company, each Employee
Benefit Plan has been administered in all material respects in
accordance with its terms and the terms of any contracts relating to
the Employee Benefit Plan and the Company, its ERISA Affiliates and all
the Employee Benefit Plans are in compliance in all material respects
with the applicable provisions of ERISA, the Code and all other
applicable laws. To the knowledge of the Company, there are no suits,
proceedings or claims pending or threatened involving any Employee
Benefit Plan (other than routine claims for benefits) that would
reasonably be expected to have a Material Adverse Effect on the
Company. All contributions required to be made to the Employee Benefit
Plans pursuant to their terms and provisions and the requirements of
ERISA and the Code have been made in accordance with those terms and
requirements, and in a timely manner.
(vi) As to any Employee Benefit Plan intended to be
qualified under section 401 of the Code, there has been no termination
or partial termination of the Employee Benefit Plan within the meaning
of Section 411(d)(3) of the Code.
(vii) To the knowledge of the Company, there is no
matter pending (other than routine qualification determination filings)
with respect to any of the Employee Benefit Plans before the Internal
Revenue Service, the Department of Labor, or any other administrative
agency or governmental entity.
(viii) Except as disclosed on Schedule 4.1(k)(viii),
the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not (A) require the Company
to make a larger contribution to, or pay greater benefits under, any
Employee Benefit Plan than it otherwise would or (B) create or give
rise to any additional vested rights or service credits under any
Employee Benefit Plan.
(ix) Neither the Company nor any ERISA Affiliate is
party to any agreement, nor has it established any policy or practice,
requiring it to make a payment or provide any other form of
compensation or benefit to any person performing services for the
Company or any ERISA Affiliate upon termination of such services that
would not be payable or provided in the absence of the consummation of
the transactions contemplated
21
28
by the Transaction Documents. In addition, except as disclosed on
Schedule 4.1(k)(ix), in connection with the consummation of the
transactions contemplated by the Transaction Documents, no payments
have or will be made which, in the aggregate, would result in
imposition of the sanctions imposed upon golden parachute payments
under sections 280G and 4999 of the Code.
(l) Absence of Certain Changes or Events. Since September 30,
2000, except as disclosed in Schedule 4.1(l), (i) the Company has conducted its
business, in all material respects, only in the ordinary course and in a manner
consistent with past practice (except in connection with the negotiation and
execution and delivery of this Agreement and the other Transaction Documents),
and (ii) no event has occurred that would have been prohibited by the terms of
Section 5.2 had the terms of such Section been in effect as of and at all times
since September 30, 2000, and there has not been any event or events (whether or
not covered by insurance), individually or in the aggregate, having, or that
would be reasonably expected to have, a Material Adverse Effect.
(m) No Undisclosed Material Liabilities. Except as set forth
on Schedule 4.1(m), there are no liabilities of the Company of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, that are material to the Company, other than (i) liabilities
reflected on the Company's financial statements (together with the related notes
thereto) filed with the Company's quarterly report on Form 10-Q for the quarter
ended September 30, 2000 (as filed with the SEC), (ii) liabilities under this
Agreement or for professional fees and expenses in connection with the
transactions contemplated hereby and (iii) liabilities that have occurred in the
ordinary course of business since September 30, 2000.
(n) Opinion of Financial Advisor. The Company has received the
opinion of the Financial Advisor to the effect that, as of the date thereof, the
Offer Consideration to be received by the holders of Company Common Stock in the
Offer and the Merger Consideration to be received by the holders of Company
Common Stock in the Merger are fair from a financial point of view to such
holders, and such opinion has not been withdrawn or modified. True and complete
copies of all agreements and understandings between the Company or any of its
affiliates and the Financial Advisor relating to the transactions contemplated
by this Agreement have been provided by the Company to Parent.
(o) Vote Required. Subject to the applicability of Section 253
of the DGCL, the affirmative vote or written consent of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote or
consent of the holders of any class or series of the Company's capital stock
necessary (under applicable law or otherwise) to adopt this Agreement.
(p) Labor Matters.
(i) Neither the Company nor any ERISA Affiliate is,
or has ever been, subject to the terms of or bound by any collective
bargaining or other labor union agreement. The Company has never had an
employee strike, work stoppage, slowdown, lockout or labor union
organizing activity nor, to the best of Company's knowledge, has it
been subject to any threatened employee strikes, work stoppages,
slowdowns or lockouts, or labor union organizing activity. Within the
preceding three years, there have
22
29
been no organizing activities involving the Company, representation or
certification proceedings, or petitions seeking a representation
proceeding or unfair labor practice charges, pending or, to the
knowledge of the Company, threatened to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or
authority.
(ii) To the best knowledge of the Company, the
Company is in compliance in all material respects with all laws,
regulations and orders relating to employment and labor, including but
not limited to all such laws, regulations and orders relating to wages
and hours, collective bargaining, equal employment opportunity,
affirmative action, discrimination, civil rights, employee benefits,
plant closing and mass layoff, immigration, medical and family leave,
safety and health, workers' compensation and the collection and payment
of withholding and/or social security taxes and any similar tax.
(iii) As of the date hereof, there is no proceeding,
claim, suit, action or governmental investigation pending or, to the
best knowledge of the Company, threatened, with respect to which any
current or former director, officer, employee or agent of the Company
is entitled, or has asserted he is entitled, to claim indemnification
from the Company pursuant to the certificate of incorporation or
by-laws of the Company, as provided in any indemnification agreement to
which the Company is a party or pursuant to applicable law, that has a
Material Adverse Effect.
(q) Intellectual Property.
(i) Except as set forth on Schedule 4.1(q), the
Company owns or has a right to use all intellectual property currently
used by the Company, including, without limitation, each trademark,
trade name, domain name, patent, service ▇▇▇▇, brand ▇▇▇▇, brand name,
database, industrial design, trade secret, technology, software,
customer lists and copyright required, owned or used in connection with
the operation of its businesses, including any registrations thereof
and pending applications therefor, and each license or other contract
relating thereto that is material to the conduct of its business
(collectively, the "Company Intellectual Property"), free and clear of
any and all Liens, other than Permitted Encumbrances (as defined
below), except where the failure to own or have a right to use such
property or such Lien, claim or encumbrance would not have a Material
Adverse Effect. All material Company Intellectual Property and a
listing of all names under which the Company has operated are set forth
on Schedule 4.1(q). Except as set forth on Schedule 4.1(q), the use of
the Company Intellectual Property by the Company does not conflict
with, infringe upon, violate or interfere with or constitute an
appropriation of any right, title, interest or goodwill, including,
without limitation, any intellectual property right, trademark, trade
name, domain name, patent, service ▇▇▇▇, brand ▇▇▇▇, brand name,
database, industrial design, trade secrets, technology, software,
customer lists, copyright or any pending application therefor of any
other person (collectively, "Intangible Rights"), and the Company does
not have knowledge of any claims thereof. Except as set forth on
Schedule 4.1(q), the use of all Company Intellectual Property will not
be adversely affected by the transactions contemplated in this
Agreement. As used herein the term "Permitted Encumbrances" includes,
only to the extent that they do not impair in any material respect the
business activities of the
23
30
Company as currently conducted, (i) Liens for Taxes, assessments or
governmental charges or levies not yet due or delinquent and being
diligently contested in good faith, (ii) statutory Liens of carriers,
warehousemen, mechanics, materialmen and the like arising in the
ordinary course of business and for obligations not yet due and
payable, (iii) easements, restrictive covenants, rights of way and
other similar imperfections of title, and (iv) zoning, building and
other similar restrictions.
(ii) Schedule 4.1(q) also lists all software owned by
the Company that is currently licensed to third parties by the Company
(the "Owned Software"). Except as disclosed on Schedule 4.1(q), (i) the
Company has sole title to the Owned Software, free of all claims
including claims or rights of employees, independent contractors,
agents, consultants or other parties involved in the development,
creation, marketing, maintenance, enhancement or licensing of such
software; (ii) the Owned Software does not contain any Licensed
Software (as hereinafter defined) or any other software (other than
third party operating systems), or derivatives of any of the foregoing;
and (iii) the Company has the right to use, market, distribute,
sublicense, modify and copy the Owned Software, free and clear of any
limitations or encumbrances (including any obligations to pay
royalties). Schedule 4.1(q) also lists all the licensees of the Owned
Software. The Company is not infringing any Intangible Rights of any
other person with respect to the Owned Software, and, to the best
knowledge of the Company, no other person is infringing any Intangible
Rights of the Company with respect to the Owned Software.
(iii) Schedule 4.1(q) lists all material software for
which the Company is a licensee, lessee or otherwise has obtained from
a third party the right to use, market, distribute, sublicense or
otherwise transfer the right to use such software (the "Licensed
Software"). The Company has made use of all copies of the Licensed
Software in its possession as permitted by the respective license
agreements in all material respects. Except as disclosed on Schedule
4.1(q), the Company has complied with all material provisions of the
license, lease or other similar agreement pursuant to which they have
rights to use the Licensed Software, except where non-compliance would
not have a Material Adverse Effect.
(iv) The transactions contemplated hereby will not
cause a breach of, default under or otherwise trigger a right to
terminate the license agreement by which the Company licenses any
Licensed Software or Owned Software or impair the Company's ability to
use the Licensed Software or license the Owned Software in the same
manner as such software is currently used or licensed in the business
of the Company, except where such breach, default or right would not
have a Material Adverse Effect.
(v) The Company and, to the best knowledge of the
Company, the other parties to any contract under which the Company is
the licensor, lessor or has otherwise granted the rights to use any
Owned Software are in compliance therewith and are not in breach of
their obligations with respect thereto, except where non-compliance or
breach would not have a Material Adverse Effect.
(vi) The Company has taken all reasonable and
practicable steps to protect and preserve the confidentiality of all
Company Intellectual Property not subject
24
31
to copyright or patent rights ("Confidential IP Information"). Use by
the Company of Confidential IP Information not owned by the Company has
been and is pursuant to the terms of a written agreement between the
Company and the owner of such Confidential IP Information, or is
otherwise lawful.
(vii) To the best knowledge of the Company, there are
no viruses in the Owned Software and there are no defects in the Owned
Software that would prevent such software from performing in all
material respects the tasks and functions that it was intended to
perform except those that can be cured or otherwise corrected without a
Material Adverse Effect.
(r) Environmental Matters.
(i) The operations of the Company have at all times,
to the Company's knowledge, been conducted, and as of the Closing Date
will be, in compliance with all federal, state, and local laws, rules,
regulations, ordinances, and orders of any governmental entity relating
to pollution or the protection of human health, the environment, or
natural resources ("Environmental Laws").
(ii) The Company does not, to its knowledge, have any
contingent liability in connection with, and is not, to its knowledge,
subject to any outstanding contracts with any other person respecting,
the release, spill, discharge, emission, migration, or disposal into
the indoor or outdoor environment of any hazardous substance, hazardous
waste, pollutant or contaminant, petroleum or petroleum product, or any
other material regulated, prohibited, or limited under any
Environmental Law.
(s) Board Recommendation. As of the date hereof, the Board of
Directors of the Company, at a meeting duly called and held, has by the
unanimous vote of those directors present (i) determined that the Transaction
Documents and the transactions contemplated thereby, including the Offer and the
Merger provided for by this Agreement, taken together, are fair to and in the
best interests of the stockholders of the Company and has approved the same and
(ii) resolved to recommend, subject to Section 6.2 hereof, the Offer and that
the holders of the shares of Company Common Stock adopt this Agreement, if such
adoption is required by applicable law, and tender their shares of Company
Common Stock pursuant to the Offer.
(t) Related Party Transactions. Except as set forth on
Schedule 4.1(t) and except for the Transaction Documents, or any Employee
Benefit Plans or as otherwise disclosed hereunder, no director, officer,
"affiliate" or "associate" (as such terms are defined in Rule 12b-2 under the
Exchange Act) of the Company (i) has borrowed any monies from or has outstanding
any indebtedness or other similar obligations to the Company or (ii) is
otherwise a party to any contract, arrangement or understanding with the
Company.
(u) Certain Business Practices and Regulations; Potential
Conflicts of Interest.
(i) Neither the Company nor any directors, officers,
agents or employees of either, in their capacity as directors,
officers, agents or employees of or on behalf of the Company, has (A)
used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity
or (B) made
25
32
any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended.
(ii) Except as set forth on Schedule 4.1(u), none of
the officers or directors of the Company, or any entity controlled by
any of the foregoing, (A) owns, directly or indirectly, any significant
interest in, or is a director, officer, employee, consultant or agent
of, any person which is a competitor, lessor, lessee or customer of, or
supplier of goods or services to, the Company, (B) owns, directly or
indirectly, in whole or in part, any real property, leasehold interests
or other property with a fair market value of at least $25,000 in the
aggregate the use of which is necessary for the activities of the
Company, (C) has any cause of action or other suit, action or claim
whatsoever against, or owes any amount to the Company, other than
claims in the ordinary course of business, or (D) has sold to, or
purchased from, the Company any assets or property for aggregate
consideration in excess of $60,000 since July 23, 1999, or, to the
Company's knowledge, has sold to, or purchased from, the Company any
assets or property for aggregate consideration in excess of $60,000
during the period from January 1, 1996 through July 22, 1999.
4.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent and Sub
each represent and warrant to the Company (such representations and warranties
being deemed to be made on a continuous basis until the Effective Time) as
follows:
(a) Organization, Standing and Power. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified to do business as a
foreign corporation and in good standing to conduct business in each
jurisdiction in which the business it is conducting, or the operation, ownership
or leasing of its properties, makes such qualification necessary, other than in
such jurisdictions where the failure so to qualify would not materially impair
the ability of Parent or Sub to consummate the transactions contemplated by this
Agreement. All of the issued and outstanding capital stock of Sub is owned
directly by Parent free and clear of any Lien, other than Permitted
Encumbrances. Parent and Sub have heretofore made available to the Company
complete and correct copies of their respective certificates of incorporation
and by-laws.
(b) Authority; No Violations; Consents and Approvals.
(i) Each of Parent and Sub has all requisite
corporate power and authority to enter into each of the Transaction
Documents to which it is a party and to consummate the transactions
contemplated thereby. The execution and delivery of each of the
Transaction Documents to which Parent or Sub is a party and the
consummation of the transactions contemplated thereby have been
respectively duly authorized by all necessary corporate action on the
part of Parent and Sub. Each of the Transaction Documents to which
Parent or Sub is a party have been respectively duly executed and
delivered by each of Parent and Sub and, assuming that such constitute
the valid and binding agreements of the other parties thereto,
respectively constitute valid and binding
26
33
obligations of Parent and Sub enforceable in accordance with their
terms and conditions except that the enforcement hereof or thereof may
be limited by (A) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(ii) The execution and delivery of each of the
Transaction Documents to which Parent or Sub is a party and the
consummation of the transactions contemplated thereby by each of Parent
and Sub will not (A) result in any Violation pursuant to any provision
of the respective certificates of incorporation or by-laws of Parent or
Sub or (B) except as to which requisite waivers or consents have been
obtained and assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in paragraph (iii) of
this Section 4.2(b) are duly and timely obtained or made and, if
required, the Company Stockholder Approval has been obtained, result in
any Violation of (1) any loan or credit agreement, note, mortgage,
indenture, lease, or other agreement, obligation, instrument,
concession, franchise or license or (2) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or Sub
or their respective properties or assets, except in the case of clauses
(1) and (2), for any Violations that, individually or in the aggregate,
would not prevent the consummation of any of the transactions
contemplated hereby or thereby.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, notice to, or permit
from any Governmental Entity is required by or with respect to either
of Parent or Sub in connection with their respective execution and
delivery of each of the Transaction Documents to which it is a party or
the consummation by each of Parent and Sub of the transactions
contemplated thereby, except for: (A) filings under the HSR Act; (B)
the filing with the SEC of (1) the Schedule TO in connection with the
commencement and consummation of the Offer and (2) such reports under
and such other compliance with the Exchange Act and the rules and
regulations thereunder as may be required in connection with this
Agreement and the transactions contemplated hereby; (C) the filing of
the Certificate of Merger with the Secretary of State of the State of
Delaware; (D) such filings and approvals as may be required by any
applicable state securities, "blue sky" or takeover laws; (E) such
filings in connection with any Gains and Transfer Taxes; and (F) such
filings and consents as may be required under any environmental, health
or safety law or regulation pertaining to any notification, disclosure
or required approval necessitated by the Merger or the transactions
contemplated by this Agreement.
(c) Information Supplied. None of the information supplied or
to be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Schedule 14D-9 will, at the time the Schedule 14D-9 is
filed with the SEC, and at any time it is amended or supplemented, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading, and (ii) the Proxy
Statement, if any, will contain, on the date it is first mailed to the holders
of Company Common Stock or at the Meeting Date, any untrue statement of a
material fact or omit to state any material fact required
27
34
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. If at any
time prior to the expiration or termination of the Offer, the acceptance for
payment of Shares pursuant to the Offer or the Meeting Date (if applicable), any
event with respect to Parent or Sub, or with respect to information supplied by
Parent or Sub specifically for inclusion in the Offer Documents or the Proxy
Statement, as applicable, shall occur which is required to be described in an
amendment of, or supplement to, such document, such event shall be so described
by Parent and Sub and provided to the Company. All documents that Parent or Sub
is responsible for filing with the SEC in connection with the transactions
contemplated herein will comply as to form, in all material respects, with the
provisions of the Securities Act, the Exchange Act and the rules and regulations
thereunder, and each such document required to be filed with any Governmental
Entity other than the SEC will comply in all material respects with the
provisions of applicable law as to the information required to be contained
therein. Notwithstanding the foregoing, Parent and Sub make no representation or
warranty with respect to the information supplied or to be supplied by the
Company for inclusion in the Offer Documents or the Proxy Statement.
(d) Financing. As of the date hereof and at the expiration of
the Offer and at the Effective Time, Parent and Sub will have available all of
the funds necessary to purchase all of the Shares pursuant to the Offer and the
Merger and to pay all fees and expenses payable by Parent or Sub related to the
transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1. AFFIRMATIVE COVENANTS OF THE COMPANY. During the period from the
date of this Agreement and continuing until the designees of Sub have been
appointed to the Board of Directors of the Company pursuant to Section 1.4,
except as expressly contemplated or permitted by the Transaction Documents or to
the extent that Parent shall otherwise consent in writing, (i) the Company shall
carry on its business in the usual, regular and ordinary course consistent with
past practice, and (ii) the Company shall, to the extent consistent therewith,
use all reasonable efforts to preserve intact its present business organization
and goodwill and retain the services of its current officers and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it. Parent acknowledges that the announcement of this Agreement
may impair the Company's business or employee relationships, and these effects
shall not constitute a breach of this covenant.
5.2. NEGATIVE COVENANTS OF THE COMPANY. During the period from the date
of this Agreement and continuing until the earlier of the designees of Sub
having been appointed to the Board of Directors of the Company pursuant to
Section 1.4 and termination of this Agreement pursuant to Section 8.1 hereof,
except as set forth in Schedule 5.2, as expressly contemplated by the
Transaction Documents or to the extent that Parent shall otherwise consent in
writing:
(a) the Company shall not (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, or set aside
funds therefor, (ii) split, combine or reclassify any of its capital stock, or
issue, authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for, shares of its capital stock; or
28
35
(iii) repurchase or otherwise acquire any shares of its capital stock, except as
required by the terms of its securities outstanding or any Employee Benefit Plan
in effect on the date hereof, or set aside funds therefor;
(b) the Company shall not (i) grant any options, warrants or
other rights to purchase shares of capital stock, (ii) amend the terms of or
reprice any Option outstanding on the date of this Agreement or amend the terms
of the Stock Option Plan, or (iii) except for Shares issuable pursuant to
Options outstanding on the date of this Agreement, issue, deliver or sell, or
authorize or propose to issue, deliver or sell, any shares of its capital stock,
any Company Debt, or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, or Company Debt;
(c) the Company shall not amend or propose to amend its
certificate of incorporation or by-laws;
(d) the Company shall not (i) merge or consolidate with, or
acquire any equity interest in (including, without limitation, through the
creation of any Subsidiary of the Company), any corporation, partnership,
association or other business organization, or enter into an agreement with
respect thereto, (ii) acquire or agree to acquire any material assets, except
for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make
any loan or advance to, or otherwise make any investment in, any person;
(e) the Company shall not sell, lease, encumber or otherwise
dispose of, or agree to sell, lease (whether such lease is an operating or
capital lease), encumber or otherwise dispose of, any of its material assets;
(f) the Company shall not authorize, recommend, propose or
announce an intention to adopt a plan of complete or partial liquidation or
dissolution;
(g) the Company shall not, except as may be required by Law or
pursuant to any of the its Employee Benefit Plans existing on the date of this
Agreement, (i) grant any increases in the compensation (including, without
limitation, salary, bonus and other benefits) of any of its directors, officers,
management employees or key employees; (ii) pay or agree to pay any pension,
retirement allowance or other employee benefit to any director, officer,
management employee or key employee, whether past or present; (iii) enter into
any new, or materially amend any existing, employment or severance or
termination agreement with any person; (iv) except as may be required to comply
with applicable Law, become obligated under any new Employee Benefit Plan, which
was not in existence on the date hereof, or amend any such plan or agreement in
existence on the date hereof if such amendment would have the effect of
materially enhancing any benefits thereunder; (v) grant any general increase in
compensation (including, without limitation, salary, bonus and other benefits)
to employees, except for increases occurring in the ordinary course of business
consistent with past practice, or (vi) extend any loans or advances to any of
its directors, officers, management employees or key employees, except for
ordinary course of business advances for business related expenses;
(h) the Company shall not (i) assume or incur any indebtedness
for borrowed money, (ii) guarantee any such indebtedness, (iii) issue or sell
any debt securities or warrants or
29
36
rights to acquire any debt securities, (iv) guarantee any debt obligations of
any other person, (v) enter into any lease (whether such lease is an operating
or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on
the property of the Company, or (vii) enter into any "keep well" or other
agreement or arrangement to maintain the financial condition of any other
person;
(i) the Company shall not (A) enter into any contracts
involving aggregate annual payments in excess of $50,000 or (B) modify, rescind,
terminate, waive, release or otherwise amend in any material respect any of the
terms or provisions of any material contract;
(j) the Company shall not, other than as required by the SEC,
Law or GAAP, make any changes with respect to accounting policies, procedures or
practices;
(k) the Company shall not, other than as set forth on Schedule
5.2(k), incur capital expenditures in excess of (i) $25,000 individually and
(ii) $100,000 in the aggregate;
(l) the Company shall not engage in or permit any transaction
or act which, if it had been engaged in or permitted prior to the date of this
Agreement, would have rendered untrue in any material respect any of the
representations and warranties of the Company contained in this Agreement;
(m) the Company shall not deposit or otherwise invest any cash
on hand into accounts, securities or other instruments having a maturity of more
than 30 days or that will impose payment or penalty upon liquidation within 30
days of such deposit or investment;
(n) the Company shall not transfer or license to any person or
entity or otherwise extend, amend or modify in any material respect any rights
to any material Company Intellectual Property, other than non-exclusive licenses
in the ordinary course of business and consistent with past practice; and
(o) the Company shall not agree to or make any commitment to,
whether orally or in writing, take any actions prohibited by this Agreement.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1. ACCESS TO INFORMATION.
(a) Upon reasonable notice, the Company shall afford access to
the officers, employees, accountants, counsel and other representatives of
Parent and Sub (including financing sources and their employees, accountants,
counsel and other representatives), during normal business hours during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments and records. If Parent and Sub require environmental site
assessments of any parcels of real property owned or leased by the Company, the
Company shall allow such assessments to be performed.
30
37
(b) During the period prior to the Effective Time, the Company
shall promptly furnish to Parent and Sub (i) a copy of each report, schedule,
registration statement and other document in advance of filing it with the SEC,
and shall provide Parent and Sub a reasonable opportunity to review and comment
upon such document, during such period, (ii) a copy of each document received by
it from the SEC, during such period, and (iii) all other information concerning
its business, properties and personnel as Parent and Sub may reasonably request.
(c) Subject to Section 9.2, that certain Confidentiality
Agreement dated December 20, 2000, by and between the Company and Parent (the
"Confidentiality Agreement") shall apply with respect to information furnished
pursuant to this Section 6.1.
6.2. NO SOLICITATION. From and after the date hereof until the
termination of this Agreement, the Company will not, and will cause its
Representatives (as defined below) not to, directly or indirectly, (i) initiate,
solicit or encourage (including by way of furnishing information or assistance),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), (ii) enter into any agreement
contemplating or participate in any discussions or negotiations regarding any
Acquisition Proposal, or furnish to any third party any information with respect
to its business, properties or assets in connection with any Acquisition
Proposal, (iii) maintain or continue discussions or negotiations with any person
or entity in furtherance of such inquiries or for the purpose of obtaining an
Acquisition Proposal, (iv) agree to or endorse any Acquisition Proposal, (v)
withdraw, modify or not make the recommendations of the Company's Board of
Directors referred to in Section 1.3, or (vi) release any third party from any
standstill, confidentiality or similar agreement, or waive or amend any
provision thereof, to which it is a party. It is agreed that any violation of
the restrictions set forth in the preceding sentence by any Representative of
the Company or any of its Subsidiaries shall be deemed to be a breach of this
Section 6.2 by the Company. The Company shall notify Parent orally (within one
business day) and in writing (as promptly as practicable) of all of the relevant
details relating to, and all material aspects of (including the identity of the
person or entity making such inquiry or proposal), all inquiries and proposals
which it or any of its Subsidiaries or any of their respective Representatives
may receive relating to any of such matters and, if such inquiry or proposal is
in writing, the Company shall deliver to Parent a copy of such inquiry or
proposal as promptly as practicable. Notwithstanding the foregoing, prior to the
acceptance of Shares for payment pursuant to the Offer and provided that the
Company has complied with the terms of this Section 6.2, nothing contained in
this Section 6.2 shall prohibit the Board of Directors of the Company from:
(i) following the receipt of an unsolicited written bona fide
Acquisition Proposal from any person or entity,
(A) furnishing information to, or entering into
discussions or negotiations with, the person or entity that makes such
Acquisition Proposal, or
(B) withdrawing, modifying or not making its
recommendations referred to in Section 1.3
31
38
if, and only to the extent that, (1) in the case of either clause (A)
or (B) above, the Board of Directors of the Company, after consultation
with its legal counsel (who may be the Company's regularly engaged
legal counsel), determines in good faith that the failure to take such
action would result in a breach by the Company's Board of Directors of
its fiduciary obligations under applicable law and (2) the Company (w)
in the case of either clause (A) or (B) above, provides reasonable
prior notice to Parent to the effect that it is taking such action,
which notice shall (to the extent consistent with the fiduciary duties
of the Board of Directors to stockholders under applicable law) include
the identity of the person or entity engaging in such discussions or
negotiations, requesting such information or making such Acquisition
Proposal, and the material terms and conditions of any Acquisition
Proposal, (x) in the case of clause (A) above, receives from such
person or entity making such Acquisition Proposal an executed
confidentiality agreement having terms no more favorable to such person
or entity than those terms included in the Confidentiality Agreement in
existence between the Company and Parent and its affiliates, (y) in the
case of clause (A) above, the Company furnishes to Parent all such
nonpublic information delivered to such person or entity concurrently
with the delivery of such information to such person or entity, and (z)
in the case of clause (A) above, the Company shall, to the extent
consistent with the fiduciary duties of the Board of Directors to
stockholders under applicable law, promptly and continuously advise
Parent as to all of the relevant details relating to, and all material
aspects of, any such discussions or negotiations; or
(ii) taking and disclosing to the stockholders of the
Company a position contemplated by Rule 14e-2 under the Exchange Act
if, after the receipt of an unsolicited written bona fide Acquisition
Proposal, the Board of Directors of the Company, after consultation
with its legal counsel (who may be the Company's regularly engaged
legal counsel), determines in good faith that the failure to take such
action would result in a breach by the Company's Board of Directors of
its fiduciary obligations under applicable law.
Except for the confidentiality agreement referred to in clause (i)
above and the agreement relating to an Acquisition Proposal entered into
contemporaneously with terminating this Agreement as contemplated in Section
8.1(h), nothing in this Section 6.2 shall permit the Company to enter into any
agreement with respect to any Acquisition Proposal during the term of this
Agreement. The Company shall immediately cease and cause to be terminated any
existing solicitation, initiation, encouragement, activity, discussion or
negotiation with any parties conducted heretofore by the Company or any
Representatives with respect to any Acquisition Proposal existing on the date
hereof and shall seek to have returned to the Company any confidential
information that has been provided in any such solicitation, initiation,
encouragement, activity, discussion or negotiation.
For purposes of this Agreement, "Acquisition Proposal" shall mean any
agreement, offer or proposal (other than the transactions among the Company,
Parent and Sub contemplated hereunder) involving the Company for: (A) any
merger, consolidation, share exchange, recapitalization, reorganization,
business combination, or other similar transaction; (B) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of 10% or more of the
assets of the Company in a single transaction or series of transactions; or (C)
any tender offer or exchange
32
39
offer for all or any portion of the outstanding shares of capital stock of the
Company or the filing of a registration statement under the Securities Act in
connection therewith.
For purposes of this Agreement, "Representative" of a person shall mean
that person's employees, officers, directors, representatives (including,
without limitation, any investment banker, attorney or accountant), agents or
affiliates.
6.3. FEES AND EXPENSES.
(a) Except as otherwise provided in this Section 6.3 and
except with respect to claims for damages incurred as a result of a material
breach of this Agreement, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense.
(b) In the event of the termination of this Agreement under
Section 8.1(g) or Section 8.1(h), then the Company shall deliver to Parent or
Parent's designee, contemporaneously with the termination of this Agreement, a
promissory note in the form of Exhibit C attached hereto (the "Promissory Note")
in the principal amount of $2,750,000.
(c) Any amounts due under this Section 6.3 that are not paid
when due shall bear interest at the prime rate of interest as announced from
time to time by Chase Manhattan Bank, N.A. plus 1% from the date due through and
including the date paid.
(d) The fee and other amounts payable pursuant to this Section
6.3 shall be paid by the Company without reservation of rights or protests and
the Company, upon making such payment, shall be deemed to have released and
waived any and all rights that it may have to recover such amounts.
6.4. BROKERS OR FINDERS.
(a) The Company represents that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except the
Financial Advisor, whose fees and expenses will be paid by the Company in
accordance with the Company's agreements with such firm (copies of which have
been delivered by the Company to Parent prior to the date of this Agreement).
(b) Each of Parent and Sub represents, as to itself that no
agent, broker, investment banker, financial advisor or other firm or person
engaged by any of them is or will be entitled to receive from the Company any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
6.5. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) Until six years from the Effective Time, unless otherwise
required by Law, the Certificate of Incorporation and By-laws of the Surviving
Corporation shall contain provisions no less favorable with respect to the
elimination of liability of directors and the indemnification of (and
advancement of expenses to) directors, officers, employees and agents than as
are set forth in the certificate of incorporation and by-laws of the Company, as
in effect on the date hereof.
33
40
(b) As of the Effective Time and for a period of not less than
six years thereafter, Parent and the Surviving Corporation shall, jointly and
severally, 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 prior to the
Effective Time, an officer, director, employee or agent of the Company
(collectively, the "Indemnified Parties") against all losses, reasonable
expenses (including reasonable attorneys' fees), claims, damages, liabilities or
amounts that are paid in settlement of, or otherwise in connection with, any
threatened or actual claim, action, suit, proceeding or investigation (a
"Claim"), based in whole or in part on or arising in whole or in part out of the
fact that the Indemnified Party is or was a director, officer, employee or agent
of the Company and pertaining to any matter existing or arising out of actions
or omissions occurring at or prior to the Effective Time (including, without
limitation, any Claim arising out of this Agreement or any of the transactions
contemplated hereby), whether asserted or claimed prior to, at or after the
Effective Time, in each case to the fullest extent permitted under Delaware law,
and shall pay any expenses, as incurred, in advance of the final disposition of
any such action or proceeding to each Indemnified Party to the fullest extent
permitted under Delaware law. Without limiting the foregoing, in the event any
such Claim is brought against any of the Indemnified Parties, (i) such
Indemnified Parties may retain counsel (including local counsel) satisfactory to
them and which shall be reasonably satisfactory to Parent and the Surviving
Corporation and the Surviving Corporation shall pay, jointly and severally, all
reasonable fees and expenses of such counsel for such Indemnified Parties; and
(ii) the Surviving Corporation shall use all reasonable efforts to assist in the
defense of any such Claim, provided that the Surviving Corporation shall not be
liable for any settlement effected without its written consent, which consent,
however, shall not be unreasonably withheld. Notwithstanding the foregoing,
nothing contained in this Section 6.5 shall be deemed to grant any right to any
Indemnified Party which is not permitted to be granted to an officer, director,
employee or agent of the Company under Delaware law, assuming for such purposes
that the Company's certificate of incorporation and by-laws provide for the
maximum indemnification permitted by law.
(c) Parent will cause to be maintained for a period of not
less than six years from the Effective Time the Company's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all persons who are directors and officers of the Company on the date of this
Agreement and for all former directors and officers of the Company, so long as
the annual premium therefor would not be in excess of 125% of the last annual
premium therefor paid prior to the date of this Agreement (the "Maximum
Premium"); provided, however, that Parent may, in lieu of maintaining such
existing D&O Insurance as provided above, cause coverage to be provided under
any policy maintained for the benefit of Parent or any of its affiliates, so
long as the terms thereof are no less advantageous to the intended beneficiaries
thereof than the existing D&O Insurance. If the existing D&O Insurance expires,
is terminated or canceled during such six-year period, Parent will use all
reasonable efforts to cause to be obtained as much D&O Insurance as can be
obtained for the remainder of such period for an annualized premium not in
excess of the Maximum Premium, on terms and conditions no less advantageous to
the covered persons than the existing D&O Insurance. The Company represents to
Parent that the Maximum Premium is $78,489.
34
41
6.6. REASONABLE EFFORTS.
(a) Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable, under applicable Laws or otherwise, to
consummate and make effective the transactions contemplated by the Transaction
Documents, subject, if applicable, to the Company Stockholder Approval,
including cooperating fully with the other party. The Company will use all
reasonable efforts to obtain any consent from third parties necessary to allow
the Company to continue operating its business as presently conducted as a
result of the consummation of the transactions contemplated hereby (including,
without limitation, those consents set forth on Schedule 4.1(c)).
(b) 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 either of the Constituent
Corporations, the parties to this Agreement shall direct their respective
officers and directors to take all such necessary action.
6.7. PUBLICITY. The parties will consult with each other and will
mutually agree upon any press release or public announcement pertaining to the
Offer or the Merger and shall not issue any such press release or make any such
public announcement prior to such consultation and agreement, except as may be
required by applicable Law (or stock exchange rules), in which case the party
proposing to issue such press release or make such public announcement shall use
reasonable efforts to consult in good faith with the other party before issuing
any such press release or making any such public announcement.
6.8. WITHHOLDING RIGHTS. Parent and Sub, as applicable, shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement or the Offer to any holder of shares of Company
Common Stock or Options such amounts as Parent or Sub, as applicable, is
required to deduct and withhold with respect to the making of such payment under
the Code or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent or Sub, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock or Options in respect of which such deduction and
withholding was made by Parent or Sub.
6.9. HSR AND OTHER GOVERNMENTAL APPROVALS.
(a) Each party hereto shall file or cause to be filed with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") any notification required to be
filed by their respective "ultimate parent" companies under the HSR Act and the
rules and regulations promulgated thereunder with respect to the transactions
contemplated in the Transaction Documents. Such parties will use all reasonable
efforts to make such filings promptly and to respond on a timely basis to any
requests for additional information made by either of such agencies. Each of
Parent and the Company shall pay one-half of the filing fees in connection with
any such required filings. Each of the parties hereto agrees to furnish the
others with copies of all correspondence, filings and communications (and
memoranda setting forth the substance thereof) between it and its affiliates and
their
35
42
respective representatives, on the one hand, and the FTC, the Antitrust Division
or any other Governmental Entity or members of their respective staffs, on the
other hand, with respect to the Offer, the Merger or any of the Transaction
Documents or the transactions contemplated thereby, other than personal
financial information filed therewith.
(b) Each party hereto shall cooperate and use its reasonable
efforts to promptly prepare and file all necessary documentation to effect all
necessary applications, notices, petitions, filings and other documents, and use
all reasonable efforts to obtain (and will cooperate with each other in
obtaining) any consent, acquiescence, authorization, order or approval of, or
any exemption or nonopposition by, any Governmental Entity required to be
obtained or made by Parent or the Company or any of their respective affiliates
in connection with the Offer and the Merger or the taking of any other action
contemplated by the Transaction Documents; provided, however, that Parent, Sub
and their respective affiliates shall not be required to divest of any assets in
connection therewith.
(c) Each party hereto agrees to furnish the others with such
necessary information and reasonable assistance as such other parties and their
respective affiliates may reasonably request in connection with their
preparation of necessary filings, registrations or submissions of information to
any Governmental Entities, including without limitation any filings necessary
under the provisions of the HSR Act.
(d) Without limiting the foregoing, the Company and its Board
of Directors shall (i) take all action necessary or otherwise reasonably
requested by Parent to exempt the Offer and the Merger from the provisions of
any applicable takeover, business combination, control share acquisition or
similar statute and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Offer, the Merger or any of the Transaction
Documents or the transactions contemplated thereby, take all action necessary to
ensure that the Offer, the Merger and the other transactions contemplated by any
of the Transaction Documents may be consummated as promptly as practicable on
the terms contemplated by the Transaction Documents and otherwise to minimize
the effect of such statute or regulation on the Offer, the Merger and the other
transactions contemplated by any of the Transaction Documents.
6.10. NOTIFICATION OF CERTAIN MATTERS. Each party shall give prompt
written notice to the other of (a) the occurrence, or failure to occur, of any
event of which it becomes aware that has caused or that would be likely to cause
any representation or warranty of such party contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing Date and
(b) the failure of such party to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it
hereunder.
6.11. PREPARATION OF THE PROXY STATEMENT; COMPANY STOCKHOLDERS MEETING;
MERGER WITHOUT A COMPANY STOCKHOLDERS MEETING.
(a) The Company and Parent will, as soon as practicable
following the acceptance for payment of and payment for shares of the Company
Common Stock by Sub in the Offer (the date on which such acceptance and payment
shall occur shall be referred to herein as the "Funding Date"), prepare and file
the Proxy Statement in preliminary form with the SEC. The Company will use all
reasonable efforts to respond to all SEC comments with respect to the Proxy
Statement and to cause the Proxy Statement to be mailed to the Company's
stockholders at the earliest practicable date.
36
43
(b) If adoption of this Agreement is required by applicable
law, the Company will, as soon as practicable following the acceptance for
payment of and payment for shares of the Company Common Stock by Sub in the
Offer, duly call, give notice of, convene and hold a meeting of the Company's
stockholders for the purpose of adopting this Agreement or, in lieu of such
meeting, Parent and Sub, as soon as practicable following the Funding Date,
shall cause this Agreement to be adopted by written consent of stockholders. At
such stockholders meeting (or in connection with any consent in lieu thereof),
Parent shall cause all of the shares of Company Common Stock then owned by
Parent or Sub to be voted in favor, or consented to, the adoption of this
Agreement.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Parent and Sub shall acquire in the aggregate at least 90% of the
outstanding shares of Company Common Stock in the Offer, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective, as soon as practicable after the expiration of the Offer, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.
6.12. STOCK OPTION.
(a) Grant of Common Share Option. The Company hereby grants to
Sub an irrevocable option (the "Common Share Option") to purchase for a per
share price equal to the per share Merger Consideration (the "Per Common Share
Price") in cash a number of shares of Company Common Stock (the "Optioned Common
Shares") equal to the Applicable Common Share Amount. The "Applicable Common
Share Amount" shall be the lesser of (i) the number of shares of Company Common
Stock which, when added to the number of shares of Company Common Stock owned by
Sub immediately prior to the exercise of the Common Share Option, would result
in Sub owning immediately after the exercise of the Common Share Option 90% of
the then outstanding shares of Company Common Stock and (ii) the number of
shares of Company Common Stock represented by (x) the total authorized number of
shares of Company Common Stock under the Company's certificate of incorporation
less (y) the sum of the number of shares of Company Common Stock outstanding
plus the number of shares of Company Common Stock reserved for issuance,
subscribed for or otherwise committed for issuance. Sub may exercise the Common
Share Option only if (a) the Funding Date shall have occurred, (b) upon such
exercise, it (together with Parent) shall own at least 90% of the then
outstanding shares of Company Common Stock and (c) such exercise would not
violate applicable law. The Common Share Option shall expire if not exercised
prior to the earlier of the Effective Time and 12:00 midnight, Eastern time, on
the date 15 business days after the Funding Date.
(b) Exercise of Common Share Option. Provided that the
conditions to exercise of the Common Share Option set forth in Section 6.12(a)
are satisfied, Sub may exercise the Common Share Option only in whole at any
time prior to the expiration of such option. In the event that Sub wishes to
exercise the Common Share Option, Sub shall give written notice (the date of
such notice being herein called the "Notice Date") to the Company specifying the
37
44
number of Optioned Common Shares it will purchase pursuant to such exercise and
a place and date (not later than ten business days from the Notice Date) for the
closing of such purchase.
(c) Payment of Purchase Price and Delivery of Certificates for
Optioned Shares. At any closing of the Common Share Option, (i) Sub will make
payment to the Company of the full purchase price for the Optioned Common Shares
in New York Clearing House funds by certified or official bank check payable to
the order of the Company, in an amount equal to the product of the Per Common
Share Price multiplied by the number of Optioned Common Shares being purchased
at such closing and (ii) the Company will deliver to Sub a duly executed
certificate or certificates representing the number of Optioned Common Shares so
purchased, registered in the name of Sub or its nominee in the denomination
designated by Sub in its notice of exercise.
(d) Securities Act. Sub represents that any Optioned Common
Shares purchased by Sub will be acquired for investment only and not with a view
to any public distribution thereof and Sub will not offer to sell or otherwise
dispose of any Optioned Common Shares so acquired by it in violation of the
registration requirements of the Securities Act.
(e) Adjustment upon Changes in Capitalization. In the event of
any change in the number of outstanding Company Common Shares by reason of any
stock dividend, stock split, recapitalization, combination, exchange of shares,
merger, consolidation, reorganization or the like or any other change in the
corporate or capital structure of the Company that would have the effect of
diluting Sub's rights under the Common Share Option, the number of Optioned
Common Shares and the Per Common Shares Price shall be adjusted appropriately so
as to restore Sub to its rights hereunder with respect to the Common Share
Option; provided, however, that nothing in this Section 6.12 shall be construed
as permitting the Company to take any action or enter into any transaction
otherwise prohibited by this Agreement.
6.13. OTHER ACTIONS. Except as expressly permitted by the terms of this
Agreement, the Company will not knowingly or intentionally take or agree or
commit to take any action that is reasonably likely to result in any of the
Company's representations or warranties hereunder being untrue in any material
respect.
6.14. APPRAISAL RIGHTS. The Company shall not settle or compromise any
claim for appraisal rights in respect of the Merger without the prior consent of
Parent, which consent shall not be unreasonably withheld.
ARTICLE 7
CONDITIONS PRECEDENT
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:
(a) Stockholder Approval. This Agreement shall have been
adopted by the affirmative vote of the holders of a majority of the outstanding
Shares entitled to vote thereon if such vote is required by applicable law;
provided that the Parent and Sub shall vote all shares of Company Common Stock
purchased pursuant to the Offer or the Stockholder Agreements in favor of the
adoption of this Agreement.
38
45
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired, and no restrictive order or other requirements shall have been
placed on the Company, Parent, Sub or the Surviving Corporation in connection
therewith.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger shall be in effect; provided, however,
that prior to invoking this condition, each party shall use all reasonable
efforts to have any such Injunction vacated.
(d) Statutes. No Law shall have been enacted, promulgated or
otherwise issued by any Governmental Entity which prohibits the consummation of
the Merger.
(e) Payment for Shares. Sub shall have accepted for payment
and paid for the Shares tendered in the Offer; provided that this condition
shall be deemed to have been satisfied if Sub, in violation of the terms and
conditions of the Offer, fails to accept for payment and pay for Shares tendered
pursuant to the Offer.
ARTICLE 8
TERMINATION AND AMENDMENT
8.1. TERMINATION. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, whether before or after
adoption of this Agreement by the stockholders of the Company or by Parent:
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent if any permanent
injunction or other order of a court or other competent authority preventing the
consummation of the Offer or Merger shall have become final and non-appealable;
(c) by Parent prior to the acceptance of Shares for payment
pursuant to the Offer, so long as neither Parent nor Sub is then in material
breach of its obligations hereunder, if (i) there has been a breach of any
representation or warranty (when made on or at the time of termination as if
made on such date of termination, except to the extent it relates to a
particular date) on the part of the Company (provided that any representation or
warranty of the Company contained herein that is subject to a "materiality,"
"Material Adverse Effect" or similar qualification shall not be so qualified for
purposes of determining the existence of any breach thereof on the part of the
Company), and which breach has not been cured within ten business days following
receipt by the Company written of notice of such breach and is existing at the
time of the termination of this Agreement, except for such breaches that could
not, individually or in the aggregate with any other breaches on the part of the
Company, have a Material Adverse Effect or (ii) there has been a breach of any
representation or warranty (when made on or at the
39
46
time of termination as if made on such date of termination, except to the extent
it relates to a particular date) contained in Section 4.1(b) on the part of the
Company;
(d) by Parent prior to the acceptance of Shares for payment
pursuant to the Offer, so long as neither Parent nor Sub is then in material
breach of its obligations hereunder, if there has been a breach of Section
5.2(b) or Section 6.2 or a material breach of any other covenant or agreement on
the part of the Company set forth in this Agreement (provided that any covenant
or agreement of the Company contained herein the performance of which is subject
to a "materiality," "Material Adverse Effect" or similar qualification shall not
be so qualified for purposes of determining the existence of any nonperformance
thereof on the part of the Company), and which breach (other than a breach of
any covenant or agreement set forth in Section 5.2(b) or Section 6.2) has not
been cured within ten business days following receipt by the Company of written
notice of such breach and is existing at the time of the termination of this
Agreement;
(e) by the Company prior to the acceptance of Shares for
payment pursuant to the Offer, so long as the Company is not then in material
breach of its obligations hereunder, if there has been a breach of any
representation or warranty (when made on or at the time of termination as if
made on such date of termination, except to the extent it relates to a
particular date) on the part of Parent or Sub (provided that any representation
or warranty of Parent or Sub contained herein that is subject to a "materiality"
or similar qualification shall not be so qualified for purposes of determining
the existence of any breach thereof on the part of Parent or Sub), and which
breach has not been cured within ten business days following receipt by Parent
or Sub of written notice of such breach and is existing at the time of the
termination of this Agreement, except for such breaches that, individually or in
the aggregate with any other breaches on the part of Parent or Sub, would not
materially and adversely affect the ability of the parties hereto to consummate
the transactions contemplated hereby;
(f) by the Company prior to the acceptance of Shares for
payment pursuant to the Offer, so long as the Company is not then in material
breach of its obligations hereunder, if there has been a material breach of any
covenant or agreement on the part of Parent or Sub set forth in this Agreement
(provided that any covenant or agreement of Parent or Sub contained herein the
performance of which is subject to a "materiality" or similar qualification
shall not be so qualified for purposes of determining the existence of any
nonperformance thereof on the part of Parent or Sub), and which breach has not
been cured within ten business days following receipt by Parent or Sub of
written notice of such breach and is existing at the time of the termination of
this Agreement;
(g) by Parent prior to the acceptance of Shares for payment
pursuant to the Offer if (i) the Board of Directors of the Company (whether or
not under circumstances permitted by this Agreement) shall have failed to make
the recommendation contemplated by Section 1.3 in the Offer Documents and the
Proxy Statement or shall have withdrawn or modified, in any manner which is
adverse to Parent, its recommendation or approval of the Offer, the Merger or
this Agreement and the transactions contemplated hereby, or shall have resolved
to do so, (ii) the Board of Directors of the Company shall have recommended to
the stockholders of the Company any Acquisition Proposal, or shall have resolved
to do so, (iii) a tender offer or exchange offer for 50% or more of the
outstanding shares of capital stock of the
40
47
Company is commenced (other than by the Sub or its affiliates) and the Board of
Directors of the Company fails to recommend, within the time period required by
Rule 14e-2 of the Exchange Act, against the stockholders of the Company
tendering their shares into such tender offer or exchange offer, or (iv) an
Acquisition Proposal has been publicly announced by the Company and the Company
shall fail to publicly reaffirm its approval or recommendation of the Offer, the
Merger and this Agreement on or before the tenth business day following the date
on which such Acquisition Proposal shall have been announced; provided that
Parent may condition the effectiveness of such termination pursuant to this
Section 8.1(g) upon receipt by Parent or its designee of the Promissory Note
pursuant to Section 6.3;
(h) by the Company prior to the acceptance of Shares for
payment pursuant to the Offer, following the receipt of an unsolicited written
bona fide Acquisition Proposal from any person or entity and contemporaneously
with entering into a definitive agreement relating to such Acquisition Proposal,
provided that the Company may not effect such termination pursuant to this
Section 8.1(h) unless and until (i) the Board of Directors of the Company has in
good faith determined that (y) such person or entity has, or is reasonably
likely to have, the necessary funds or shall have obtained, or is reasonably
likely to obtain, customary commitments to provide the funds to consummate such
Acquisition Proposal and (z) such Acquisition Proposal is more favorable to the
Company and its stockholders than the transactions contemplated by this
Agreement, (ii) Parent receives at least five days prior written notice (which
notice shall include the identity of the person or entity making the relevant
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal and the material terms and conditions of any agreements or arrangements
to be entered into in connection with such Acquisition Proposal with any party
to any of the Stockholder Agreements with respect to his then existing
agreements and arrangements with the Company, to the extent known to the
Company) from the Company of its intention to effect such termination pursuant
to this Section 8.1(h), and (iii) if during such five-day period Parent shall
have revised the terms and conditions of the Offer or the Merger, the Board of
Directors of the Company, after receiving advice from the Company's financial
and legal advisors, shall have determined in good faith that the terms and
conditions of the Acquisition Proposal giving rise to this termination right are
superior to those of the Offer and the Merger as so revised; and provided
further that the Company may not effect such termination pursuant to this
Section 8.1(h) unless the Company has contemporaneously with such termination
tendered payment to Parent or Parent's designee of the amounts that are due
Parent or Parent's designee under Section 6.3;
(i) by Parent, if the Offer terminates, is withdrawn,
abandoned or expires by reason of the failure to satisfy any condition set forth
in Exhibit B hereto; provided, however, that Parent may not so terminate if the
termination, withdrawal, abandonment or expiration of the Offer arises from a
breach of this Agreement by Parent or Sub;
(j) by the Company, if the Offer shall have expired (without
having been extended in accordance herewith) or shall have been withdrawn,
abandoned or terminated by Sub without any shares of Company Common Stock being
purchased by Sub thereunder; or
(k) by the Company, if the Funding Date does not occur when
required under the Exchange Act (but which in no event shall be more than four
business days following the acceptance by Sub of Shares tendered pursuant to the
Offer).
41
48
8.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation hereunder on the part of Parent, Sub or the Company or their
respective affiliates, officers, directors or stockholders, except (a) Section
6.1(c), Section 6.3, Section 8.2 and Article 9 shall survive such termination,
and (b) no such termination shall relieve any party from liability for a breach
of any term or provision hereof.
8.3. AMENDMENT. Subject to the provisions of Section 1.4(b), this
Agreement may be amended, modified or supplemented, before or after the Company
Stockholder Approval, only by written agreement of Parent, Sub and the Company
at any time prior to the Effective Time with respect to any of the terms
contained herein; provided, however, that, after the Company Stockholder
Approval, no term or condition contained in this Agreement shall be amended or
modified in any manner that by law requires further approval by the stockholders
of the Company without so obtaining such further stockholder approval.
8.4. EXTENSION; WAIVER. Subject to Section 1.4(b), at any time prior to
the Effective Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally allowed (a) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements or conditions contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in a written instrument signed on behalf of
such party. The failure of any party hereto to assert any of its rights
hereunder shall not constitute a waiver of such rights.
ARTICLE 9
GENERAL PROVISIONS
9.1. NONSURVIVAL OF COVENANTS AND AGREEMENTS. None of the
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the covenants and agreements contained in Article 3, Section
6.3, Section 6.5, Section 6.8 and any other covenant or agreement that
contemplates performance after the Effective Time.
9.2. CONFIDENTIALITY AGREEMENT. The Confidentiality Agreement shall
survive the execution and delivery of this Agreement or any termination of this
Agreement, and the provisions of the Confidentiality Agreement shall apply to
all information and material delivered by any party hereunder; provided,
however, that the terms and provisions of the Confidentiality Agreement are
hereby waived, amended or modified to the extent necessary to permit the
consummation of the transactions contemplated by the Transaction Documents. Upon
the Funding Date, the terms and provisions of the Confidentiality Agreement
shall terminate in full.
9.3. NOTICES. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or registered mail, postage prepaid, and shall
be deemed to be given, dated and received when so delivered personally,
telegraphed or telecopied or, if mailed, five business days after the date of
42
49
mailing to the following address or telecopy number, or to such other address or
addresses as such person may subsequently designate by notice given hereunder:
(a) if to Parent or Sub, to:
----------------------------
----------------------------
----------------------------
Attn:
-----------------------
Telecopy:
-------------------
with copies to:
▇▇▇▇▇▇, Lidji & Werbner
Renaissance Tower, Suite 4400
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
3700 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
----------------------------
----------------------------
----------------------------
Attn:
-----------------------
Telecopy:
-------------------
with a copy to:
Shook, Hardy & Bacon, LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
43
50
9.4. INTERPRETATION. When a reference is made in this Agreement to
Articles or Sections, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. The table of contents, list of defined
terms and headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the word "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
9.5. 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.
9.6. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
(together with the Confidentiality Agreement (as amended by Section 9.2), the
other Transaction Documents, and any other documents and instruments referred to
herein) 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. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any other right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
other than Section 6.5, which is intended to be for the benefit of the persons
covered thereby and may be enforced by such persons; it being understood and
agreed that if any such person shall institute and prevail in any proceeding
against Parent, Sub or the Surviving Corporation in respect of a breach by
Parent, Sub or the Surviving Corporation of its covenants and agreement
contained in Section 6.5, Parent, Sub and the Surviving Corporation shall,
jointly and severally, pay the reasonable expenses of such person (including
reasonable attorney's fees) incurred in connection with such proceedings to the
fullest extent authorized by applicable law.
9.7. GOVERNING LAW. 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.
9.8. 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 Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder (a) to
any newly-formed direct wholly-owned Subsidiary of Parent or Sub or (b) in the
form of a collateral assignment to any institutional lender who provides funds
to Parent or its affiliates for the consummation of the transactions
contemplated hereby. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
9.9. DIRECTOR AND OFFICER LIABILITY. The directors, officers, and
stockholders of Parent and its affiliates shall not have any personal liability
or obligation arising under the Transaction Documents (including any claims that
the Company may assert) other than as an assignee of a Transaction Document.
Except to the extent that a person is a party signatory thereto, the directors,
officers, and stockholders of the Company and its affiliates shall not have
44
51
any personal liability or obligation arising under the Transaction Documents
(including any claims that Parent or Sub may assert) other than as an assignee
of a Transaction Document.
9.10. SPECIFIC PERFORMANCE. The parties recognize that in the event the
Company should refuse to perform under the provisions of this Agreement,
monetary damages alone will not be adequate. Parent and Sub shall therefore be
entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement. In
the event of any action to enforce this Agreement specifically, the Company
hereby waives the defense that there is an adequate remedy at law.
9.11. EFFECTIVENESS. This Agreement shall not become effective until
such time as this Agreement and all other Transaction Documents (or counterparts
thereof) have been executed and delivered by each of the parties thereto;
provided, however, that Parent, in its sole discretion, may waive the condition
that it receive executed Stockholder Agreements from individual Stockholders.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
45
52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be signed by their respective officers thereunto duly
authorized on the date first written above.
PARENT
By: /s/:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SUB
By: /s/:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
COMPANY
By: /s/:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
53
EXHIBIT A
FORM OF STOCKHOLDER AGREEMENT
[TO BE PROVIDED]
A-1
54
EXHIBIT B
CONDITIONS TO THE OFFER
The capitalized terms used in this Exhibit B shall have the respective
meanings ascribed thereto in the Agreement and Plan of Merger, to which this
Exhibit B is attached, by and among ____________________, ____________________
and _____________________.
Conditions
Notwithstanding any other provision of the Offer, Sub 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 Sub's obligation to pay for or return tendered Shares promptly after
expiration or termination of the Offer), to pay for any Shares tendered, and may
postpone the acceptance for payment or, subject to the restriction referred to
above, the payment for any Shares tendered, and, to the extent permitted by the
Agreement, may amend or terminate the Offer, if:
1. the Minimum Condition has not been satisfied;
2. any applicable waiting periods under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer; or
3. at any time on or after the date of the Agreement and before
acceptance for payment of, or payment for, such Shares pursuant to the Offer any
of the following events shall have occurred and be continuing:
(a) there shall be pending as of the expiration of the Offer
or at any time thereafter, any Injunction, proceeding, action, suit or
litigation by any Governmental Entity that seeks to (i) challenge the
acquisition by Parent, Sub or any of their respective affiliates of Shares
pursuant to the Offer, (ii) restrain, prohibit or delay the making or
consummation of the Offer or the Merger, (iii) make the purchase of or payment
for some or all of the Shares pursuant to the Offer or the Merger illegal, (iv)
impose material limitations on the ability of Parent, Sub, the Company or any of
their respective affiliates to acquire or hold, or to require Parent, Sub, the
Company or any of their respective affiliates to dispose of or hold separate,
any material portion of their assets or business, (v) impose material
limitations on the ability of Parent, Sub, the Company or any of their
respective affiliates to continue to conduct, own or operate, as heretofore
conducted, owned or operated, all or any material portion of their businesses or
assets, (vi) impose or result in material limitations on the ability of Parent,
Sub or any of their respective affiliates to exercise full rights of ownership
of the Shares purchased by them, including, without limitation, the right to
vote the Shares purchased by them on any or all matters properly presented to
the stockholders of the Company, or (vii) prohibit or restrict in a material
manner the financing of any of the transactions contemplated by the Transaction
Documents;
(b) there shall have been promulgated, enacted, entered,
enforced or deemed applicable, any Law (other than the application of the
waiting period provision of the HSR Act),
B-1
55
or there shall have been issued any Injunction that results in any of the
consequences referred to in subsection (a) above;
(c) there shall have occurred any event or events (whether or
not covered by insurance) that, individually or in the aggregate, have had, or
would be reasonably expected to have, a Material Adverse Effect;
(d) there shall have occurred and be continuing (i) any
general suspension of trading in, or general 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 48 hours, (ii) the declaration of
a banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national calamity involving the United States having a
significant adverse effect on the functioning of the financial markets in the
United States, (iv) any material limitations (whether or not mandatory) imposed
by any Governmental Entity on the nature or extension of credit or further
extension of credit by banks or other lending institutions, or (v) in the case
of clauses (iii) and (iv) of this paragraph (d), if existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(e) any of the representations and warranties of the Company
contained in the Agreement shall not be true and correct in all respects
(provided that any representation or warranty of the Company contained in the
Agreement that is subject to a "materiality," "Material Adverse Effect" or
similar qualification shall not be so qualified for purposes of determining the
existence of any breach thereof on the part of the Company) as of the date of
the Agreement and (except to the extent that such representations and warranties
speak as of an earlier date) as of the date of the acceptance of Shares for
payment pursuant to the Offer as though made on and as of such date, except for
such breaches that, individually or in the aggregate with any other breaches on
the part of the Company, could not (A) have a Material Adverse Effect or (B)
materially and adversely affect the ability of the parties to the Agreement to
consummate the transactions contemplated thereby;
(f) the Company shall have not performed in all material
respects (provided that any obligation the performance of which is subject to
materiality, Material Adverse Effect or similar qualification shall not be so
qualified for purposes of determining the existence of any nonperformance
thereof) all obligations required to be performed by it under the Agreement at
or prior to the acceptance of Shares for payment pursuant to the Offer;
(g) the Agreement shall have been terminated in accordance
with its terms;
(h) (i) the Board of Directors of the Company shall have
failed to make or shall have withdrawn or modified or changed (including by
amendment of the Schedule 14D-9) in a manner adverse to Sub its recommendation
of the Offer, the Agreement or the Merger, or shall have approved or recommended
any Acquisition Proposal or any other acquisition of the shares of Company
Common Stock other than the Offer and the Merger, or (ii) any person or other
entity or group shall have entered into a definitive agreement or an agreement
in principle with the Company with respect to any Acquisition Proposal;
B-2
56
(i) the Company shall have failed to comply with its
obligations under Section 1.4(a) of the Agreement;
(j) each of the representations and warranties contained in
the Stockholder Agreements of the stockholders who are parties thereto shall not
be true and correct in all material respects as of the date of the acceptance of
Shares for payment pursuant to the Offer as though made on and as of such date;
or
(k) any of the stockholders who are parties to the Stockholder
Agreements shall have not performed in all material respects, or shall have
otherwise materially breached or given notice of any intention to materially
breach, any obligations required to be performed by such stockholders under the
Stockholder Agreements at or prior to the acceptance of Shares for payment
pursuant to the Offer.
The foregoing conditions are for the sole benefit of Sub and its
affiliates and may be asserted by Sub regardless of the circumstances
(including, without limitation, any action or inaction by Sub or any of its
affiliates, but except for a breach by Sub or any of its affiliates of the
Agreement) giving rise to any such condition or may be waived by Sub, in whole
or in part, from time to time in its sole discretion, except as otherwise
provided in the Agreement. The failure by Sub 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 and may be asserted at any time and from
time to time.
B-3