AGREEMENT AND PLAN OF MERGER
by and among
FRAMATOME CONNECTORS INTERNATIONAL ▇.▇.
▇▇▇▇▇ ACQUISITION CO.
and
▇▇▇▇ ELECTRONICS CORP.
August 27, 1998
TABLE OF CONTENTS
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Page
ARTICLE 1
The Offer and Merger
Section 1.1. The Offer...................................................5
Section 1.2. Company Actions.............................................7
Section 1.3. Directors...................................................7
Section 1.4. The Merger..................................................8
Section 1.5. Effective Time..............................................8
Section 1.6. Closing.....................................................8
Section 1.7. Directors and Officers of the Surviving Corporation.........9
Section 1.8. Stockholders' Meeting.......................................9
Section 1.9. Merger Without Meeting of Stockholders......................9
ARTICLE 2
Conversion of Securities
Section 2.1. Conversion of Capital Stock................................10
Section 2.2. Exchange of Certificates...................................10
Section 2.3. Dissenting Shares..........................................11
Section 2.4. Company Option Plans.......................................11
ARTICLE 3
Representations and Warranties of the Company
Section 3.1. Organization; Subsidiaries.................................12
Section 3.2. Capitalization.............................................12
Section 3.3. Authorization; Validity of Agreement; Company Action.......13
Section 3.4. Consents and Approvals; No Violations......................14
Section 3.5. SEC Reports and Financial Statements ......................14
Section 3.6. No Undisclosed Liabilities.................................14
Section 3.7. Absence of Certain Changes.................................15
Section 3.8. Contracts..................................................16
Section 3.9. Employee Benefit Plans; ERISA..............................16
Section 3.10. Litigation.................................................17
Section 3.11. Permits; No Default; Compliance with Applicable Laws.......17
Section 3.12. Taxes......................................................18
Section 3.13. Real and Personal Property.................................18
Section 3.14. Intellectual Property......................................19
Section 3.15. Environmental Matters......................................19
Section 3.16. Employee and Labor Matters.................................20
Section 3.17. Information in Offer Documents.............................20
Section 3.18. Brokers or Finders.........................................20
Section 3.19. Insurance..................................................20
Section 3.20. Opinion of Financial Advisor...............................20
Section 3.21. Rights Plan; Takeover Laws.................................20
Section 3.22. Termination Agreement......................................21
Section 3.23. Exon-▇▇▇▇▇▇................................................21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE Purchaser
Section 4.1. Organization...............................................21
Section 4.2. Authorization; Validity of Agreement; Necessary Action.....22
Section 4.3. Consents and Approvals; No Violations......................22
Section 4.4. Information in Offer Documents; Proxy Statement............22
Section 4.5. Sufficient Funds...........................................22
Section 4.6. Share Ownership............................................23
Section 4.7. Purchaser's Operations.....................................23
ARTICLE 5
Covenants
Section 5.1. Interim Operations of the Company..........................23
Section 5.2. Access to Information......................................24
Section 5.3. Employee Benefits..........................................25
Section 5.4. No Solicitation............................................25
Section 5.5. Publicity..................................................26
Section 5.6. Indemnification; D&O Insurance.............................27
Section 5.7. Approvals and Consents; Cooperation; Notification..........27
Section 5.8. Reasonable Best Efforts; Further Assurances................28
Section 5.9. Shareholder Litigation.....................................28
Section 5.10. Fair Price Statute.........................................28
Section 5.11. Non-solicitation and Non-Competition Agreements............28
Section 5.12. Transition Services........................................28
ARTICLE 6
Conditions
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger.28
Section 6.2. Conditions to the Obligations of the Company to Effect the
Merger.....................................................29
Section 6.3. Conditions to the Obligations of Parent and the Purchaser
to Effect the Merger.......................................29
Section 6.4. Exception..................................................29
ARTICLE 7
Termination
Section 7.1. Termination................................................29
Section 7.2. Effect of Termination......................................30
ARTICLE 8
Miscellaneous
Section 8.1. Amendment and Modification.................................31
Section 8.2. Nonsurvival of Representations and Warranties..............31
Section 8.3. Notices....................................................31
Section 8.4. Interpretation.............................................32
Section 8.5. Counterparts...............................................32
Section 8.6. Entire Agreement; Third Party Beneficiaries................32
Section 8.7. Severability...............................................32
Section 8.8. Governing Law..............................................32
Section 8.9. Specific Performance.......................................33
Section 8.10. Assignment.................................................33
Section 8.11. Expenses...................................................33
Section 8.12. Headings...................................................33
Section 8.13. Waivers....................................................33
Section 8.14. Disclosure.................................................33
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 27, 1998 (this
"Agreement"), by and among FRAMATOME CONNECTORS INTERNATIONAL S.A., a
corporation organized under the laws of the Republic of France ("Parent"),
BRAVO ACQUISITION CO., a Delaware corporation and an indirect wholly-owned
subsidiary of Parent (the "Purchaser"), and ▇▇▇▇ ELECTRONICS CORP., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, the Purchaser and
the Company have approved, and deem it advisable and in the best interests of
their respective stockholders to consummate, the acquisition of the Company
by Parent and the Purchaser upon the terms and subject to the conditions set
forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make
certain representations, warranties, covenants and agreements in connection
with this Agreement and to prescribe certain conditions to the transactions
contemplated hereby;
WHEREAS, to satisfy a condition to Parent and Purchaser
entering into this Agreement and incurring the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, certain
stockholders of the Company have entered into a Stockholders Agreement (the
"Stockholders Agreement") with Purchaser pursuant to which such stockholders
have agreed, on the terms and subject to the conditions thereof, to tender
their Shares in the Offer (as defined below); and
WHEREAS, to satisfy a condition to Parent and Purchaser
entering into this Agreement and incurring the obligations set forth herein,
as soon as practicable following the execution and delivery of this Agreement,
▇▇▇▇▇ & Partners and certain employees of the Company will enter into
Non-Competition and Non-Solicitation Agreements (the "Non-Competition and
Non-Solicitation Agreements") with the Company pursuant to which such employees
and ▇▇▇▇▇ & Partners will agree, on the terms and subject to the conditions
thereof, to certain non-competition and non-solicitation arrangements with the
Company.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
The Offer and Merger
Section 1.1. The Offer. (a) Provided that nothing shall have
occurred that, had the Offer referred to below been commenced, would give rise
to a right to terminate the Offer pursuant to any of the conditions set forth
in Annex A hereto, as promptly as practicable after the date hereof (but in no
event later than five business days from the public announcement of the
execution hereof), the Purchaser shall, and Parent shall cause the Purchaser
to, commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), an offer (the "Offer") to
purchase for cash any and all of the issued and outstanding shares of (i)
Common Stock, par value $0.01 per share, of the Company (referred to herein as
either the "Common Shares" or "Company Common Stock") at a price of $35.00 per
Common Share, net to the seller in cash (such price, or such higher price per
Common Share as may be paid in the Offer, being referred to herein as the
"Common Offer Price," provided that Purchaser shall not be required to
increase the Common Offer Price) and (ii) Class A Common Stock, par value
$0.01 per share, of the Company (referred to herein as either the "Class A
Shares" or "Company Class A Common Stock" and, together with the Common
Shares, as the "Shares" or "Company Stock," which references include for all
purposes the related Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement between the Company and ▇▇▇▇▇▇ Trust and
Savings Bank, dated as of December 22, 1997) at a price of $32.965 per Class A
Share, net to the seller in cash (such price, or such higher price per Class A
Share as may be paid in the Offer, being referred to herein as the "Class A
Offer Price," provided that Purchaser shall not be required to increase the
Class A Offer Price, and, together with the Common Offer Price, as the "Offer
Price"). The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
pay for Shares tendered as soon as it is legally permitted to do so under
applicable law; provided that, if the number of Shares that have been
physically tendered and not withdrawn are more than 50% of the Shares
outstanding on a fully diluted basis but less than 90% of the outstanding
shares of each class of capital stock of the Company, the Purchaser may extend
the Offer for up to 20 business days from the date that all conditions to the
Offer shall first have been satisfied or waived. The obligations of the
Purchaser to accept for payment and to pay for any and all Shares validly
tendered on or prior to the expiration of the Offer and not withdrawn shall be
subject only to there being validly tendered in accordance with the terms of
the Offer and not withdrawn prior to the expiration date of the Offer, that
number of Shares which, together with any Shares beneficially owned by Parent
or the Purchaser, represent at least a majority of the Shares outstanding on a
fully diluted basis (the "Minimum Condition") and the other conditions set
forth in Annex A hereto. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase") containing the terms set forth in this
Agreement, the Minimum Condition and the other conditions set forth in Annex A
hereto. The Purchaser shall not amend or waive the Minimum Condition,
decrease the Offer Price or decrease the number of Shares sought, or impose
any additional conditions to the Offer, or amend any term of the Offer in any
manner adverse to the holders of the Shares or extend the expiration date of
the Offer (except for such extensions as are contemplated below), in each case
without the prior written consent of the Company (such consent to be
authorized by the Board of Directors of the Company or a duly authorized
committee thereof). Notwithstanding the foregoing, the Purchaser shall, and
Parent agrees to cause the Purchaser to, extend the Offer from time to time
until the date that all conditions to the Offer have been satisfied, subject
to the provisions of Section 7.01(b)(i) hereof if, and to the extent that, at
the initial expiration date of the Offer, or any extension thereof, all
conditions to the Offer have not been satisfied or waived. In addition, the
Offer Price may be increased and the Offer may be extended to the extent
required by law in connection with such increase, in each case without the
consent of the Company. In the event of any increase in the Common Offer
Price, the Class A Offer Price will be increased by an equal amount, and in
the event of any increase in the Class A Offer Price, the Common Offer Price
will be increased by an equal amount.
(b) As soon as practicable on the date the Offer is commenced, Parent
and the Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-1
will include, as exhibits, the Offer to Purchase and a form of letter of
transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Offer
Documents when filed will comply as to form in all material respects with the
provisions of applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation is made by
Parent or the Purchaser with respect to omissions or information supplied in
writing for inclusion in the Offer Documents, in each case by the Company.
Each of Parent and the Purchaser further agrees to take all steps necessary to
cause the Offer Documents to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and the Purchaser, on the one hand,
and the Company, on the other hand, agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect and
each of Parent and the Purchaser further agrees to take all steps necessary to
cause the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review the initial Schedule 14D-1 before it
is filed with the SEC. In addition, Parent and the Purchaser agree to provide
the Company and its counsel in writing with any comments or other
communications that Parent, the Purchaser or their counsel may receive from
time to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications.
Section 1.2. Company Actions. (a) The Company hereby approves
of and consents to the Offer and represents that the Board of Directors, at a
meeting duly called and held, has with the affirmative vote of at least a
majority of the members of the Board of Directors (i) determined that this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger (as defined in Section 1.04), are fair and in the best interests of
the holders of the Shares and approved the Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approvals
constitute approval of this Agreement, the Offer and the Merger for purposes
of Section 203 of the General Corporation Law of the State of Delaware (the
"DGCL"), and (ii) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares thereunder to the Purchaser and approve
and adopt this Agreement and the Merger, which recommendation shall not be
withdrawn, modified or amended except as permitted by Section 5.04(b) hereof.
(b) As soon as practicable after the time the Offer is commenced, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the provisions of Section 5.04(b) of this Agreement, contain the
recommendation referred to in clause (ii) of Section 1.02(a) hereof. The
Company will use its reasonable best efforts to cause the Schedule 14D-9 to be
filed on the same date that the Schedule 14D-1 is filed; provided, however,
that in any event the Schedule 14D-9 will be filed no later than ten business
days following the commencement of the Offer. The Schedule 14D-9 when filed
will comply as to form in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to omissions or information supplied in writing for inclusion in the
Schedule 14D-9, in each case by Parent or the Purchaser. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and
to the extent required by applicable federal securities laws. Each of the
Company, on the one hand, and Parent and the Purchaser, on the other hand,
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of the Shares, in each
case as and to the extent required by applicable federal securities laws.
Each of Parent, the Purchaser and its counsel shall be given a reasonable
opportunity to review the initial Schedule 14D-9 before it is filed with the
SEC. In addition, the Company agrees to provide Parent, the Purchaser and
their counsel in writing with any comments or other communications that the
Company or its counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
or other communications.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date (which shall
in no event be more than ten days prior to the date hereof), and shall furnish
the Purchaser with such additional information (including updated lists of
holders of Shares and their addresses, mailing labels and lists of security
positions) and such other assistance as the Purchaser or its agents may
reasonably request in communicating the Offer to the record and beneficial
stockholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser and each of their
affiliates, associates, partners, employees, agents and advisors shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be delivered
to the Company all copies of such information then in its possession or the
possession of its agents or representatives.
Section 1.3. Directors. (a) Promptly upon the purchase of and
payment for Shares by Parent or any of its subsidiaries which represent at
least a majority of the outstanding shares of Company Stock (on a fully diluted
basis), Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company
as is equal to the product of the total number of directors on such Board
(giving effect to any additional directors designated by Parent pursuant to
this Section) multiplied by the percentage that the aggregate number of Shares
beneficially owned by the Purchaser, Parent and any of their affiliates
(including Shares accepted for payment) bears to the total number of shares of
Company Stock then outstanding. The Company shall, upon request of and as
specified by the Purchaser or Parent, on the date of such request, either
increase the size of its Board of Directors or secure the resignations of such
number of its incumbent directors as is necessary, consistent with the request
of Purchaser or Parent, to enable Parent's designees to be so elected to the
Company's Board of Directors, and shall take all actions necessary to cause
Parent's designees to be so elected or appointed. At such times, the Company
will use its reasonable best efforts to cause individuals designated by Parent
to constitute the same percentage as such individuals represent on the
Company's Board of Directors of each committee of the Board (other than any
committee of the Board established to take action under this Agreement), each
board of directors of each Subsidiary (as defined in Section 3.01) and each
committee of each such board. Notwithstanding the foregoing, until the
Effective Time, the Company shall retain as members of its Board of Directors
at least two directors who are directors of the Company on the date hereof;
provided, that subsequent to the purchase of and payment for Shares pursuant
to the Offer, Parent shall always have its designees represent at least a
majority of the entire Board of Directors. The Company's obligations under
this Section 1.03(a) shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this Section 1.03(a), including without
limitation mailing to stockholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be
elected to the Company's Board of Directors. Parent or the Purchaser will
supply the Company any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f)
and Rule 14f-1.
(b) From and after the time, if any, that Parent's designees constitute
a majority of the Company's Board of Directors, any amendment of this
Agreement or the Certificate of Incorporation or By-Laws of the Company, any
termination of this Agreement by the Company, any extension of time for
performance of any of the obligations of Parent or the Purchaser hereunder,
any waiver of any condition or any of the Company's rights hereunder or other
action by the Company in connection with the rights of the Company hereunder
may be effected only with the concurrence of a majority of the directors of
the Company then in office who were directors of the Company on the date
hereof.
Section 1.4. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time (as defined in Section 1.05 hereof)
the Company and the Purchaser shall consummate a merger (the "Merger")
pursuant to which (a) the Purchaser shall be merged with and into the Company
and the separate corporate existence of the Purchaser shall thereupon cease,
(b) the Company shall be the successor or surviving corporation in the Merger
(the "Surviving Corporation") and shall continue to be organized under the
laws of the State of Delaware, and (c) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Merger. Should the merger of the Purchaser
with and into the Company give rise to any material tax liability, at the
election of Parent and subject to the consent of the Company, such consent not
to be unreasonably withheld, the Merger may be structured so that the Company
shall be merged with and into Purchaser with the result that Purchaser shall
be the Surviving Corporation. Pursuant to the Merger, (x) the Certificate of
Incorporation of the Purchaser, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate
of Incorporation, and (y) the By-laws of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation and such By-laws. The Merger shall have the effects set forth
in the DGCL.
Section 1.5. Effective Time. On the date of the Closing (as
defined in Section 1.06 hereof) (or on such other date as the parties may
agree), the Company and Purchaser shall file with the Delaware Secretary of
State a certificate of merger or other appropriate document (in any such case,
the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL, and shall make all other filings, recordings and
publications required by the DGCL with respect to the Merger. The Merger
shall become effective at such time as the certificate of merger is duly filed
with the Delaware Secretary of State or such later time as is specified in the
Certificate of Merger (the time the Merger becomes effective is hereinafter
referred to as the "Effective Time").
Section 1.6. Closing. The closing of the Merger (the
"Closing") will take place at 11:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article 6 hereof
(the "Closing Date"), at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, unless another date or place
is agreed to in writing by the parties hereto.
Section 1.7. Directors and Officers of the Surviving
Corporation. The directors of the Purchaser immediately prior to the
Effective Time shall, from and after the Effective Time, be the directors of
the Surviving Corporation until their successors shall 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 By-laws. The officers of the Company immediately prior to
the Effective Time shall, from and after the Effective Time, be the officers
of the Surviving Corporation until their successors shall 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 By-laws.
Section 1.8. Stockholders' Meeting. (a) If the Purchaser owns
less than 90% of the Shares following the purchase of Shares by the Purchaser
pursuant to the Offer, the Company, acting through its Board of Directors,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as soon as practicable
following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer for the purpose of voting, considering
and taking action upon this Agreement and the Merger;
(ii) promptly prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement,
obtain and furnish the information required by the SEC to be included
in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, respond promptly to any comments made by the
SEC with respect to the preliminary proxy or information statement,
use its reasonable best efforts to have cleared by the SEC and cause a
definitive proxy or information statement and all other proxy
materials for such meeting (the "Proxy Statement") to be mailed to its
stockholders and use its reasonable best efforts to obtain the
necessary adoption of this Agreement and the transactions contemplated
hereby by its stockholders and will otherwise comply with all legal
requirements applicable to such meeting; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by the Company's outside counsel and subject
to Section 5.04(b) hereof, include in the Proxy Statement the
recommendation of the Board that stockholders of the Company approve
and vote in favor of the adoption of this Agreement and the Merger.
(b) Parent agrees that it will provide the Company with the information
concerning Parent and the Purchaser required to be included in the Proxy
Statement and will vote, or cause to be voted, all of the Shares then owned by
Parent, the Purchaser or any of its other subsidiaries and affiliates in favor
of the approval of the Merger and the adoption of this Agreement.
Section 1.9. Merger Without Meeting of Stockholders.
Notwithstanding Section 1.08 hereof, in the event that the Purchaser shall
acquire at least 90% of the outstanding shares of each class of capital stock
of the Company, pursuant to the Offer or otherwise, the parties hereto agree
to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting of
stockholders of the Company.
ARTICLE 2
Conversion of Securities
Section 2.1. Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the
holders of any shares of Company Common Stock or common stock of the Purchaser
(the "Purchaser Common Stock"):
(a) Each share of the Purchaser Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation.
(b) Any shares of Company Stock held by the Company as treasury stock
and any shares of Company Stock owned by Parent, the Purchaser or any other
wholly owned Subsidiary (as defined in Section 3.01 hereof) of Parent
immediately prior to the Effective Time shall be cancelled and retired and
shall cease to exist and no consideration shall be delivered in exchange
therefor.
(c) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than Common Shares to be
cancelled in accordance with Section 2.01(b) hereof and any Dissenting Shares
(if applicable and as defined in Section 2.03 hereof)) shall be converted into
the right to receive the Common Offer Price, payable to the holder thereof,
without interest (the "Common Stock Merger Consideration"), upon surrender of
the certificate formerly representing such share of Company Common Stock in
the manner provided in Section 2.02 hereof.
(d) Each share of Company Class A Common Stock issued and outstanding
immediately prior to the Effective Time (other than Class A Shares to be
cancelled in accordance with Section 2.01(b) hereof and any Dissenting Shares
(if applicable and as defined in Section 2.03 hereof)) shall be converted into
the right to receive the Class A Offer Price, payable to the holder thereof,
without interest (the "Class A Common Stock Merger Consideration" and,
together with the Common Stock Merger Consideration, the "Merger
Consideration"), upon surrender of the certificate formerly representing such
share of Company Class A Common Stock in the manner provided in Section 2.02
hereof.
(e) All such shares of Company Stock, when so converted in accordance
with Sections 2.01(c) and 2.1(d) hereof, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance
with Section 2.02 hereof, without interest, or to perfect any rights of
appraisal as a holder of Dissenting Shares (as hereinafter defined) that such
holder may have pursuant to Section 262 of the DGCL.
Section 2.2. Exchange of Certificates. (a) Parent shall
designate a bank or trust company, or an affiliate thereof, of nationally
recognized standing to act as agent for the holders of shares of Company Stock
in connection with the Merger (the "Paying Agent") for the purpose of
exchanging certificates representing Shares and to receive the funds to which
holders of shares of Company Stock shall become entitled pursuant to Sections
2.01(c) and 2.1(d) hereof. Prior to the Effective Time, Parent shall take all
steps necessary to deposit or cause to be deposited with the Paying Agent such
funds for timely payment hereunder. Such funds shall be invested by the
Paying Agent as directed by Parent or the Surviving Corporation.
(b) As soon as reasonably practicable after the Effective Time but in no
event more than three business days thereafter, the Paying Agent shall mail to
each holder of record of a certificate or certificates, which immediately
prior to the Effective Time represented outstanding shares of Company Stock
(the "Certificates"), whose shares were converted pursuant to Section 2.01
hereof into the right to receive the Merger Consideration (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of
transmittal, duly executed and properly completed, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Company Stock formerly represented by such
Certificate and the Certificate so surrendered shall forthwith be cancelled.
If payment of any portion of the Merger Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.02.
(c) At the Effective Time, the stock transfer books of the Company shall
be closed and thereafter there shall be no further registration of transfers
of shares of Company Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of shares of
Company Stock outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to such Shares, except as otherwise provided
for herein or by applicable law. If, after the Effective Time, Certificates
are presented to the Surviving Corporation for any reason, they shall be
cancelled and exchanged as provided in this Article 11.
(d) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest received with respect thereto) which
had been made available to the Paying Agent and which have not been disbursed
to holders of Certificates, and thereafter such holders shall be entitled to
look to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) only as general creditors thereof with respect to the
Merger Consideration payable upon due surrender of their Certificates, without
any interest thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law. Any amounts
remaining unclaimed by holders of Shares two years after the Effective Time
(or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any governmental entity) shall, to
the extent permitted by applicable law, become the property of Parent free and
clear of any claims or interest of any person previously entitled thereto.
(e) Any portion of the Merger Consideration made available to the Paying
Agent pursuant to Section 2.02(a) hereof to pay for Shares for which appraisal
rights have been perfected shall be returned to Parent upon demand.
Section 2.3. Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such Shares
in accordance with the DGCL ("Dissenting Shares") shall not be converted into
a right to receive the Merger Consideration, unless and until such holder
fails to perfect or withdraws or otherwise loses his or her right to
appraisal. If after the Effective Time such holder fails to perfect or
withdraws or loses his right to appraisal, such Shares shall be treated as if
they had been converted as of the Effective Time into a right to receive the
Merger Consideration, without interest thereon. The Company shall give Parent
prompt notice of any demands received by the Company for appraisal of Shares,
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 2.4. Company Option Plans. At the Effective Time,
each then outstanding option (collectively, the "Options") to purchase or
acquire shares of Company Common Stock under the Company's 1993 Stock Option
Plan, as amended, the Company's 1998 Incentive Compensation Plan and the
director option to purchase 48,660 shares of Company Common Stock
(collectively, the "Option Plans"), whether or not then exercisable or vested,
shall be cancelled and shall represent the right to receive in cash an amount
equal to the product of (i) the number of shares of Company Common Stock
subject to each such Option and (ii) the excess of (A) the Common Stock Merger
Consideration over (B) the per share exercise price of such Option. Prior to
the Effective Time, the Company shall take all actions (including, if
appropriate, obtaining any consents from holders of Options or making any
amendments to the terms of the Option Plans) that are necessary to give effect
to the transactions contemplated by this Section. Notwithstanding any other
provision of this Section, payment may be withheld in respect of any stock
option until necessary consents are obtained.
ARTICLE 3
Representations and Warranties of the Company
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1. Organization; Subsidiaries. (a) Each of the
Company and its Subsidiaries is a corporation or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be in good
standing would not reasonably be expected to have a Company Material Adverse
Effect (as hereinafter defined). Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the property owned or leased by
it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so duly qualified and in good
standing would not reasonably be expected to have a Company Material Adverse
Effect. As used in this Agreement, the word "Subsidiary" means, with respect
to any party, any corporation, partnership or other entity or organization,
whether incorporated or unincorporated, of which (i) such party or any other
Subsidiary of such party is a general partner (excluding such partnerships
where such party or any Subsidiary of such party does not have a majority of
the voting interest in such partnership) or (ii) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly
or indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. As used
in this Agreement, "Company Material Adverse Effect" means any change in or
effect on the business of the Company and its Subsidiaries that is materially
adverse to the business, financial condition, assets or results of operations
of the Company and its Subsidiaries taken as a whole, but excluding (i) any
change resulting from general economic or industry conditions and (ii) any
circumstance arising from any act or omission on the part of the Parent or the
Purchaser not otherwise contemplated by this Agreement. Section 3.1 of the
disclosure schedules delivered to Parent by the Company on or prior to
entering into this Agreement (the "Company Disclosure Schedule") sets forth a
complete and correct list of all of the Company's Subsidiaries and their
respective jurisdictions of incorporation or organization. Except as set
forth in Section 3.1 of the Company Disclosure Schedule, neither the Company
nor any Company Subsidiary holds any interest in a partnership or joint
venture of any kind.
(b) Except as set forth in Section 3.1(b) of the Company Disclosure
Schedule, the Company has heretofore delivered to Parent a complete and
correct copy of each of its Certificate of Incorporation and By-laws, as
currently in effect, and has heretofore made available to Parent a complete
and correct copy of the charter and by-laws of each of its Subsidiaries, as
currently in effect. In all material respects, the minute books of the Company
and the Company Subsidiaries contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, the boards of
directors and all committees of the boards of directors of the Company and the
Company Subsidiaries. Complete and accurate copies of all such minute books
and of the stock register of the Company and each Company Subsidiary have been
made available by the Company to Parent.
(c) To the knowledge of the Company, Substrate Technologies Inc. and TVS
▇▇▇▇ Ltd. are currently operating with all necessary permits and licenses and
are in compliance with all applicable laws and regulations, except where the
failure to be in compliance with such laws and regulations would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 3.2. Capitalization. (a) As of the date hereof, the
authorized capital stock of the Company consists of 120,000,000 shares of
Company Common Stock, 7,000,000 shares of Company Class A Common Stock, and
28,500,000 shares of preferred stock, par value $.01 per share (the "Company
Preferred Stock"), of which 670,000 shares are designated as Series A Junior
Preferred Stock. As of August 24, 1998, (i) 39,398,204 shares of Company
Common Stock were issued and outstanding, (ii) 2,348,497 shares of Company
Common Stock were reserved for issuance upon exercise of Options granted
pursuant to the Option Plans, (iii) 1,440,784 Options were granted and
remained unexercised pursuant to the Option Plans, (iv) 1,908,554 shares of
Company Common Stock were reserved for issuance upon conversion of outstanding
shares of Company Class A Common Stock, (v) 255,500 shares of Company Common
Stock were issued and held in the treasury of the Company, (vi) 1,908,554
shares of Company Class A Common Stock were issued and outstanding, (vii)
there were no shares of Company Preferred Stock issued and outstanding and
(viii) 670,000 shares of Series A Junior Preferred Stock were reserved for
issuance upon exercise of the Rights. All the outstanding shares of the
Company's capital stock are duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights. Since August 24, 1998, no
additional shares of capital stock or securities convertible into or
exchangeable for such capital stock, have been issued other than any shares of
Company Common Stock issued upon exercise of the Options granted under the
Option Plans or upon conversion of outstanding shares of Company Class A
Common Stock, and no shares of Company Preferred Stock have been issued.
Section 3.2(a) of the Company Disclosure Schedule identifies (i) the holders
of each of the Options, (ii) the number of Options vested for each holder,
(iii) the Option Plan under which each Option was issued, (iv) the number of
Options held by such holder and (v) the exercise price of each of the Options.
All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance prior to the Effective Time on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
Except for shares of Company Common Stock issuable upon exercise of the
Options described in Section 3.2(a) of the Company Disclosure Schedule or upon
conversion of outstanding shares of Company Class A Common Stock, or as
otherwise set forth in Section 3.2(a) of the Company Disclosure Schedule,
there are no (i) options, warrants, calls, subscriptions or other rights,
convertible securities, agreements or commitments of any character obligating
the Company or any Company Subsidiary to issue, transfer or sell any shares of
capital stock or other equity interest in, the Company or any Company
Subsidiary or securities convertible into or exchangeable for such shares or
equity interests, (ii) outstanding contractual obligations or commitments of
any character of the Company or any Company Subsidiary to repurchase, redeem
or otherwise acquire any capital stock of the Company or any Company
Subsidiary, (iii) outstanding contractual obligations or commitments of any
character restricting the transfer of, or requiring the registration for sale
of, any capital stock of the Company or any Company Subsidiary, (iv)
outstanding contractual obligations or commitments of any character granting
any preemptive or antidilutive right with respect to, any capital stock of the
Company or any Company Subsidiary or (v) voting trusts or similar agreements
to which the Company or any Company Subsidiary is a party with respect to the
voting of the capital stock of the Company or any Company Subsidiary. Except
as set forth in Section 3.2(a) of the Company Disclosure Schedule, there are
no outstanding contractual obligations of the Company or any Company
Subsidiary to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any Company Subsidiary or any other
person, other than guarantees by the Company of any indebtedness of any
Company Subsidiary.
(b) Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights. Except as disclosed in Section 3.2(b) of the
Company Disclosure Schedule, all of the outstanding shares of capital stock of
each Company Subsidiary are owned of record and beneficially, directly or
indirectly, by the Company, free and clear of all mortgages, security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, charges and other material encumbrances of any nature
whatsoever.
Section 3.3. Authorization; Validity of Agreement; Company
Action. The Company has full corporate power and authority to execute and
deliver, and to perform its obligations under, this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and performance
by the Company of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by its Board of
Directors and no other corporate action on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the transactions contemplated hereby,
except, in the case of the Merger, for the requisite approval of stockholders
contemplated by Section 1.08 hereof, if applicable. This Agreement has been
duly executed and delivered by the Company and (assuming due and valid
authorization, execution and delivery hereof by Parent and Purchaser) is a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 3.4. Consents and Approvals; No Violations. Except as
disclosed in Section 3.4 of the Company Disclosure Schedule and except, with
respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) matters specifically described in this Agreement,
neither the execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby will (i) violate or conflict with any provision of the Certificate of
Incorporation or By-laws of the Company or the charter or by-laws of any of its
Subsidiaries, (ii) result in a violation or breach of, or result in any loss
of benefit or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation,
acceleration or modification) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, permit,
contract, agreement or other instrument or obligation to which the Company or
any of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, (iii) violate or conflict with any order,
writ, judgment, injunction or decree binding upon or applicable to the
Company, any of its Subsidiaries or any of their properties or assets, (iv)
violate or conflict with any law, statute, rule or regulation binding upon or
applicable to the Company, any of its Subsidiaries or any of their properties
or assets, (v) require on the part of the Company or any of its Subsidiaries
any action by or in respect of any filing or registration with, notification
to, or authorization, consent or approval of, any court, legislative,
executive or regulatory authority or agency (a "Governmental Entity") or (vi)
result in the creation or imposition of any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind on any asset of the Company or
any of its Subsidiaries, except in the case of clauses (ii), (iv), (v) or
(vi) for such violations, breaches or defaults which, or filings,
registrations, notifications, authorizations, consents or approvals the
failure of which to obtain, would not reasonably be expected to have a Company
Material Adverse Effect or would not materially adversely affect the ability
of the Company to consummate the transactions contemplated by this Agreement.
Section 3.5. SEC Reports and Financial Statements. The
Company has filed all reports required to be filed by it with the SEC pursuant
to the Exchange Act and the Securities Act of 1933, as amended (the "Securities
Act"), since January 1, 1997 (as such documents have been amended since the
date of their filing, collectively, the "Company SEC Documents"). The Company
SEC Documents (a) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (b) as of their
respective filing dates, or if amended, as of the date of the last such
amendment, did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Each of the historical consolidated balance sheets
(including the related notes) included in the Company SEC Documents fairly
presents in all material respects the financial position of the Company and
its consolidated Subsidiaries as of the date thereof, and the other related
historical statements (including the related notes) included in the Company
SEC Documents fairly present in all material respects the results of
operations and cash flows of the Company and its consolidated Subsidiaries for
the respective periods or as of the respective dates set forth therein. Each
of the historical consolidated balance sheets and historical statements of
operations and cash flow (including the related notes) included in the Company
SEC Documents has been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during
the periods involved, except as otherwise noted therein and, in the case of
unaudited interim financial statements, subject to normal year-end adjustments
and except as permitted by Form 10-Q of the SEC. The books and records of the
Company and its Subsidiaries have been, and are being, maintained, in all
material respects, in accordance with GAAP and any other applicable legal and
accounting requirements.
Section 3.6. No Undisclosed Liabilities. Except (a) for
liabilities and obligations incurred in the ordinary course of business
consistent with past practices since December 31, 1997, (b) for liabilities
and obligations disclosed in the Company SEC Documents filed prior to the date
hereof, (c) for liabilities and obligations incurred in connection with the
Offer and the Merger or otherwise as contemplated by this Agreement and (d) as
disclosed in Section 3.6 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries has incurred any liabilities or
obligations of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, except for such liabilities or
obligations which would not have a Company Material Adverse Effect.
Section 3.7. Absence of Certain Changes. Changes. Except as
(a) disclosed in the Company SEC Documents filed prior to the date hereof, (b)
disclosed in Section 3.7 of the Company Disclosure Schedule, or (c)
contemplated by this Agreement, since December 31, 1997, the Company has
conducted its business in the ordinary and usual course, consistent with past
practices, and there has not been:
(i) any transaction, commitment, dispute or other event,
occurrence, development of a state of circumstances or facts or
condition (financial or otherwise) of any character (whether or not in
the ordinary course of business consistent with past practices) which,
alone or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in,
the Company or such Subsidiary;
(iii) any amendment of any material term of any outstanding security
of the Company or any of its Subsidiaries;
(iv) any incurrence, assumption or guarantee by the Company or any
of its Subsidiaries of any indebtedness for borrowed money other than
in the ordinary course of business consistent with past practices and
in amounts and on terms consistent with past practices;
(v) any acquisition, sale or transfer of any material assets of
the Company or any of its Subsidiaries;
(vi) any creation or assumption by the Company or any of its
Subsidiaries of any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind on any material asset other than in the
ordinary course of business consistent with past practices;
(vii) any transaction or commitment made or any contract or
agreement entered into by the Company or any of its Subsidiaries or
any relinquishment by the Company or any of its Subsidiaries of any
contract or other right or any amendment or termination of, or default
under, any Material Agreement (as defined in Section 3.08), in each
case, material to the Company and its Subsidiaries, taken as a whole,
other than transactions and commitments in the ordinary course of
business consistent with past practices;
(viii) any making of any loan, advance or capital contribution to or
investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries of the
Company made in the ordinary course of business consistent with past
practices and payroll, travel and similar advances made in the
ordinary course of business consistent with past practices;
(ix) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company
or any of its Subsidiaries which, individually or in the aggregate,
has had or would reasonably be expected to have a Company Material
Adverse Effect;
(x) any transaction, agreement or understanding between the
Company or its Subsidiaries on the one hand and any current director
or officer of the Company or any Subsidiary or any transaction which
would be subject to proxy statement disclosure under the Exchange Act
pursuant to the requirements of Item 404 of Regulation S-K (an
"Affiliate Transaction");
(xi) any material change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries, except as required
by reason of a concurrent change in GAAP; or
(xii) any (x) increase in compensation, bonus or other benefits
payable (including any retention or stay bonus) to directors, officers
or employees of the Company or any of its Subsidiaries, other than in
the ordinary course of business consistent with past practices, (y)
grant of, or increase in benefits payable under, any severance or
termination pay to any director, officer or employee of the Company or
any of its Subsidiaries or (z) entering into of any employment,
deferred compensation or other similar agreement (or any amendment to
any such existing agreement) with any director, officer or employee of
the Company or any of its Subsidiaries.
Section 3.8. Contracts. Except as disclosed in or attached as
exhibits to the Company SEC Documents or as disclosed in Section 3.8(a) of the
Company Disclosure Schedule, neither the Company nor any of the Company
Subsidiaries is a party to or bound by any contract required to be described
in or filed as an exhibit to the Company's SEC filings (collectively with the
documents disclosed in Section 3.8(b) of the Company Disclosure Schedule, the
"Material Agreements"). The Company has previously made available to Parent
true and correct copies of the Material Agreements. Neither the Company nor
any Company Subsidiary knows of, or has received notice of, any violation or
default under (nor does there exist any condition which with the passage of
time or the giving of notice would cause such a violation of or default under)
any Material Agreement except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a
Company Material Adverse Effect.
Section 3.9. Employee Benefit Plans; ERISA.
(a) Pension and Multiemployer Plans. The Company and its Subsidiaries
have not during the preceding six years made or had an obligation to make
contributions to any pension plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or described in
Section 3(37), 4063 or 4064 of ERISA with respect to their employees. With
respect to any Benefit Plan that is a defined benefit plan, as of the date
hereof, all funding requirements have been met in accordance with the law of
the relevant jurisdiction, and the Company has accounted for such plans in
accordance with GAAP, except as would not have a Company Material Adverse
Effect.
(b) Tax Qualification. The Benefit Plans (as defined below) and their
related trusts intended to qualify under Sections 401 and 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), respectively, have
been determined by the Internal Revenue Service (the "IRS") to qualify under
such sections, as amended by the Tax Reform Act of 1986, and to the knowledge
of the Company nothing has occurred since the date of such determination
letters which could not be corrected or otherwise remedied without having a
Company Material Adverse Effect.
(c) Compliance with Laws. The Benefit Plans have been maintained in
accordance with their terms and applicable laws, except for any noncompliance
as would not reasonably be expected to result in a Company Material Adverse
Effect
(d) Claims. Except as disclosed in Section 3.9(d) of the Company
Disclosure Schedule, there are no pending or to the knowledge of the Company
threatened actions, claims or proceedings against any Benefit Plan or its
assets, plan sponsor, plan administrator or fiduciaries with respect to the
operation of such plan (other than routine benefit claims) which would
reasonably be expected to have a Company Material Adverse Effect.
(e) Change in Control. Except as disclosed in Section 3.9(e) of the
Company Disclosure Schedule or in connection with the Options, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due
to any employee (current, former or retired) of the Company and its
Subsidiaries, (ii) increase any benefits under any Benefit Plan or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
(f) Benefit Plans. For purposes hereof, "Benefit Plans" means all
"employee benefit plans," as defined in Section 3(3) of ERISA, and all bonus
or other incentive compensation, deferred compensation, disability, severance,
stock award, stock option, stock purchase, tuition assistance plans or
policies and each employment or other similar contract, each plan or
arrangement providing for insurance coverage (including any self-insured
arrangements), supplemental unemployment benefits, vacation benefits,
retirement benefits, profit-sharing, stock appreciation or post-retirement
insurance or benefits, in each case which the Company or any of its affiliates
maintains or to which the Company or any of its affiliates makes or has an
obligation to make contributions with respect to current or former employees
or directors of the Company or any of its affiliates. For purposes of this
Section 3.09, "affiliate" of any Person means any other Person which, together
with such Person, would be treated as a single employer under Section 414 of
the Code.
(g) Disclosure. Section 3.9(g) of the Company Disclosure Schedule
contains a list of all of the Benefit Plans. Other than Benefit Plans for
foreign Subsidiaries, copies of the Benefit Plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations
thereof have been made available to Purchaser together with, if applicable,
(A) the most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan and (B) the most
recent actuarial valuation report prepared in connection with any such plan.
The Company has made available to the Purchaser copies of the most recent
Internal Revenue Service determination letters with respect to each Benefit
Plan which is intended to be qualified under Section 401(a) of the Code.
(h) Unions. Except as set forth in Section 3.9(h) of the Company
Disclosure Schedule, neither the Company nor any Subsidiary is a party to or
subject to any union contract or collective bargaining agreement for U.S.
employees.
Section 3.10. Litigation. Except as disclosed in Section 3.10
of the Company Disclosure Schedule or as disclosed in the Company SEC
Documents filed prior to the date hereof or for shareholder suits against the
Company related to, arising out of or resulting from the transactions
contemplated by this Agreement, there is no action, suit, proceeding, audit or
investigation pending or, to the knowledge of the Company, threatened against
or involving the Company or any of its Subsidiaries or any of their respective
properties, by or before any court, governmental or regulatory authority,
arbitrator or by any third party that could prevent, enjoin, or materially
alter or delay any of the transactions contemplated by this Agreement or that,
if adversely determined, would reasonably be expected to have a Company
Material Adverse Effect. Except as disclosed in Section 3.10 of the Company
Disclosure Schedule or as disclosed in the Company SEC Documents filed prior
to the date hereof, neither the Company nor any of its Subsidiaries is subject
to any outstanding order, writ, injunction or decree which has had or,
individually or in the aggregate, would reasonably be expected to have a
Company Material Adverse Effect.
Section 3.11. Permits; No Default; Compliance with Applicable
Laws. Each of the Company and the Company Subsidiaries is in possession of
all material franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals, clearances and
orders of any Governmental Entity necessary for the Company or any Company
Subsidiary to own, lease and operate its properties or to carry on their
respective businesses substantially in the manner described in the Company SEC
Documents and as it is now being conducted (the "Company Permits"), and all
such Company Permits are valid, and in full force and effect, and no suspension
or cancellation of any of the Company Permits is pending or, to the knowledge
of the Company, threatened and no condition exists that with notice or lapse
of time or both would constitute a material default under the Company Permits,
and none of the Company Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated
hereby. The business of the Company and each of its Subsidiaries is not in
default or violation of, and has not since January 1, 1998 defaulted on or
violated, and to the knowledge of the Company none is under investigation with
respect to or has been threatened to be charged with or given notice of any
default or violation of, any term, condition or provision of any statute, law,
rule, regulation, judgment, decree, order, permit, license or other
governmental authorization or approval (including any Company Permit)
applicable to the Company or any of its Subsidiaries or by which any property,
asset or operation of the Company or any of its Subsidiaries is bound or
affected, including, laws, rules and regulations relating to occupational
health and safety, employee benefits, wages, workplace safety, equal
employment opportunity and race, religious or sex discrimination, excluding
defaults or violations which are disclosed in the Company SEC Documents or
which would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.12. Taxes. (a) Except as disclosed in Section 3.12
of the Company Disclosure Schedule: (i) all material Tax Returns required to
be filed by or with respect to the Company and each of its Subsidiaries have
been filed and such Tax Returns were true and correct in all material
respects; (ii) the Company and each of its Subsidiaries has paid (or there has
been paid on its behalf) all material Taxes that are due whether or not shown
on any Tax Return, except for Taxes being contested in good faith by
appropriate proceedings and for which adequate reserves have been established
in the Company's financial statements (as of the date thereof); and (iii) none
of the material Tax Returns filed by the Company and its Subsidiaries is
currently the subject of an audit.
(b) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries, (i) currently is
the beneficiary of any extension of time within which to file any material Tax
Return; (ii) has filed a consent under Section 341(f) of the Code concerning
collapsible corporations; (iii) has made any payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under
Section 280G of the Code; (iv) has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
five-year period ending on the date the Offer commences; (v) neither the
Company nor any of its Subsidiaries is a party to any material tax allocation
or sharing agreement; (vi) has any liability for the taxes of any person (other
than any of the Company and its Subsidiaries) under Treasury Regulation
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise; or (vii) has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a tax assessment or deficiency.
(c) Section 3.12 of the Company Disclosure Schedule lists all material
federal, state, local, and foreign Tax Returns filed with respect to any of
the Company and its Subsidiaries for taxable periods ending after December 31,
1992, indicates those Tax Returns that have been audited, and indicates those
Tax Returns that currently are the subject of audit. The Company has delivered
to Purchaser correct and complete copies of all Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by any
of the Company and its Subsidiaries for taxable periods ending after December
31, 1992.
(d) Prior to the Closing Date, the Company shall provide Purchaser with
a U.S. tax balance sheet for the Company for the taxable periods ending
December 31, 1997, such U.S. tax balance sheet having been prepared in a
manner consistent with the U.S. tax balance sheet for the Company for the
taxable period ending December 31, 1996 that was previously provided to
Purchaser by the Company.
(e) As soon as practicable after the execution of this Agreement, the
Company shall provide to Purchaser the taxable income and net operating
loss carryovers to 1998 that the Company expects to report on its Tax
Returns for the taxable periods ending December 31, 1997 and such reported
amounts will not differ materially from those amounts actually reported on
the Company's Tax Returns for the taxable periods ending December 31, 1997.
(f) The term "Taxes" shall mean all taxes, charges, fees, levies, or
other similar assessments or liabilities imposed by the United States of
America, or by any state, local, or foreign government, or any subdivision,
agency, or other similar person of the United States or any such government,
including without limitation (i) income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, and estimated taxes
and (ii) any interest, penalties or additions thereto, whether disputed or
not.
(g) The term "Tax Returns" shall mean any report, return, declaration,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
Section 3.13. Real and Personal Property. The Company and its
Subsidiaries, as the case may be, have good and marketable title to all of
their respective real property and good title to all of their respective
leasehold interests and other properties, as reflected in the most recent
balance sheet included in the Company SEC Documents, except for properties and
assets that have been disposed of in the ordinary course of business consistent
with past practices since the date of such balance sheet, free and clear of
all mortgages, liens, pledges, charges or encumbrances of any nature
whatsoever, except (i) any lien for current Taxes, payments of which are not
yet delinquent, (ii) such imperfections in title and easements and
encumbrances, if any, as are not substantial in character, amount or extent
and do not materially detract from the value, or interfere with the present
use of the property subject thereto or affected thereby, or otherwise
materially impair the Company's business operations (in the manner presently
carried on by the Company) or (iii) as disclosed in the Company SEC Documents.
All leases under which the Company leases any real or personal property are in
good standing, valid and effective in accordance with their respective terms,
and there is not, under any of such leases, any existing default, breach or
event which with notice or lapse of time or both would become a default or
breach which could reasonably be expected to have a Company Material Adverse
Effect.
Section 3.14. Intellectual Property. The Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
Intellectual Property Rights necessary to conduct the business now operated by
them, except where the failure to own or possess such licenses or rights has
not had and would not reasonably be expected to have a Company Material
Adverse Effect. To the knowledge of the Company, the Intellectual Property
Rights of the Company and the Subsidiaries do not conflict with or infringe
upon any Intellectual Property Rights of others to the extent that, if
sustained, such conflict or infringement has had and would reasonably be
expected to have a Company Material Adverse Effect. For purposes of this
Agreement, "Intellectual Property Right" means any trademark, service ▇▇▇▇,
trade name, copyright, patent, software license, invention, trade secret,
know-how or other similar proprietary intellectual property right (including
any registrations or applications for registration of any of the foregoing).
Section 3.15. Environmental Matters. Except as disclosed in
Section 3.15 of the Company Disclosure Schedule or as disclosed in the Company
SEC Documents:
(i) the Company and its Subsidiaries are in compliance with
applicable laws, regulations, judicial decisions, ordinances,
judgments, orders, permits, rules or governmental requirements
relating to the environment, the effect of the environment on human
health and safety, or pollutants, contaminants or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials (collectively, "Environmental Laws"),
except for any noncompliance that individually or in the aggregate
would not reasonably be expected to have a Company Material Adverse
Effect;
(ii) there are no outstanding notices of violation, notices,
requests for information, orders, complaints, or penalties against the
Company or any of its Subsidiaries under or pursuant to Environmental
Laws which individually or in the aggregate would reasonably be
expected to have a Company Material Adverse Effect;
(iii) there are no judicial or administrative proceedings,
investigations or actions pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened, which allege the violation of
or liability under any Environmental Law which individually or in the
aggregate would have reasonably be expected to have a Company Material
Adverse Effect;
(iv) there are no liabilities of or relating to the Company or any
of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, arising
under or relating to any Environmental Law which individually or in
the aggregate would reasonably be expected to have a Company Material
Adverse Effect, and there are no known facts, conditions, situations
or sets of circumstances which could reasonably be expected to result
in or be the basis for any such liability which would have a Company
Material Adverse Effect;
(v) any operations conducted in, and each facility or real
property owned, leased or operated by the Company or any of its
Subsidiaries in the State of New Jersey satisfy the requirements of
the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.
("ISRA"), and the regulations implemented thereunder, including but
not limited to N.J.A.C. 7:26B-2.3, except where the failure to satisfy
such requirements would not reasonably be expected to have a Company
Material Adverse Effect; and
(vi) consummation of the Offer, the Merger and the transactions
contemplated by this Agreement will not require compliance with the
Connecticut Hazardous Waste Establishment Transfer Act (General
Statutes Section 22a-134, et seq.), as amended, and any rules or
regulations promulgated thereunder ("CTA"), except for any non-
compliance that would not reasonably be expected to have a Company
Material Adverse Effect.
Section 3.16. Employee and Labor Matters. (a) Except as set
forth in Section 3.16 of the Company Disclosure Schedule: (i) since January
1, 1997 there has been no labor strike or work stoppage against, or lockout
by, the Company or any of its Subsidiaries or, to the Company's knowledge, any
activity or proceeding by a labor union or representative thereof to organize
any employees of the Company or any of its Subsidiaries, which employees were
not subject to collective bargaining agreement at December 31, 1997, (ii)
there is no unfair labor practice charge or complaint against the Company or
any of its Subsidiaries pending before, or, to the knowledge of the Company,
threatened by, the National Labor Relations Board, and (iii) there is no
pending or, to the knowledge of the Company, threatened union grievance
against the Company or any of its Subsidiaries that would reasonably be
expected to have a Company Material Adverse Effect.
Section 3.17. Information in Offer Documents. None of the
information supplied or to be supplied by the Company or any of its
Subsidiaries, or any of their officers, directors, employees, representatives
or agents for inclusion or incorporation by reference in the Offer Documents
or the Schedule 14D-9, including any amendments or supplements thereto,
contains or, with respect to the information included or incorporated by
reference into the Offer Documents or the Schedule 14D-9, will contain at the
respective times the Offer Documents and the Schedule 14D-9 are filed with the
SEC or first published, sent or given to the Company's stockholders, any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, the Company does not make
any representation or warranty with respect to the information that has been
or will be supplied by Parent or the Purchaser or their officers, directors,
employees, representatives or agents for inclusion or incorporation by
reference in any of the foregoing documents. The Schedule 14D-9 and any
amendments or supplements thereto will comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder.
Section 3.18. Brokers or Finders. The Company represents, as
to itself, its Subsidiaries and its affiliates, 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 fees and expenses
of which will be paid by the Company in accordance with the Company's
agreement with such firm, a true and complete copy of which has heretofore
been furnished to Parent. The Company has no obligations or commitments to
any investment banker or financial advisor in connection with any future
transactions that may be considered or entered into by the Company after the
Effective Time.
Section 3.19. Insurance. The Company maintains insurance
coverage with reputable insurers in such amounts and covering such risks as
are in accordance with normal industry practice for companies engaged in
businesses similar to that of the Company (taking into account the cost and
availability of such insurance).
Section 3.20. Opinion of Financial Advisor. The Company has
received the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to the effect that, as of the
date hereof, the consideration to be received by the holders of the Common
Shares in the Offer and the Merger is fair from a financial point of view to
such holders. A copy of such opinion has been provided to the Purchaser.
Section 3.21. Rights Plan; Takeover Laws. (a) The Company and
its Board of Directors have amended the Rights Agreement between the Company
and ▇▇▇▇▇▇ Trust and Savings Bank dated December 22, 1997 (the "Rights
Agreement") (without redeeming the Rights issued thereunder), which amendment
has been provided to Parent, so that neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (i) cause any Rights issued pursuant to the Rights Agreement to become
exercisable, to be triggered or to separate from the Shares to which they are
attached, (ii) cause the Parent or the Purchaser or any of their affiliates to
be an Acquiring Person (as defined in the Rights Agreement) in connection with
the transactions contemplated hereby or (iii) trigger other provisions of the
Rights Agreement, including giving rise to a Distribution Date (as defined in
the Rights Agreement) in connection with the transactions contemplated hereby,
and such amendment shall remain in full force and effect from and after the
date hereof.
(b) The Company has taken all action required by it in order to exempt
this Agreement and the Stockholders Agreement and the transactions
contemplated hereby and thereby from, and this Agreement and the Stockholders
Agreement and the transactions contemplated hereby and thereby are exempt
from, the requirements of any "moratorium", "control share", "fair price" or
other anti-takeover laws and regulations (collectively, "Takeover Laws") of
the State of Delaware and any other state.
Section 3.22. Termination Agreement. The Company has entered
into a Termination Agreement (the "Termination Agreement") with ▇▇▇▇▇, Muse &
Co. Partners, L.P. Incorporated ("HM&Co") providing for the termination of
that certain Amended and Restated Monitoring and Oversight Agreement dated as
of March 6, 1996 among the Company, ▇▇▇▇ Electronics Group, Inc. and HM&Co
(the "Oversight Agreement"). A copy of the Termination Agreement has been
provided to Parent.
Section 3.23. Exon-▇▇▇▇▇▇. Except as disclosed in Section
3.23 of the Company Disclosure Schedule, to the knowledge of the Company,
neither the Company nor any of its Subsidiaries:
(i) has, or has had within the past three yeas, any contract with
an agency of the Government of the United States with national defense
responsibilities, including any component of the Department of
Defense;
(ii) has, or has had within the past five years, any contract with
any agency of the Government of the United States involving any
information, technology or data which is classified under Executive
Order 12356 of April 2, 1982 or Executive Order 12958 of April 17,
1995;
(iii) is a supplier to any of the military services of the United
States or the Department of Defense of any products or services
(including research and development) as a prime contractor or a first
tier subcontractor or, if known, a subcontractor at any level or a
seller to any such prime contractor or subcontractor;
(iv) has technology which has military applications;
(v) produces products or technical data subject to validated
licenses or under general license GTDR pursuant to the U.S. Export
Administration Regulations (15 C.F.R. Part 730 et seq.); or
(vi) produces defense articles or technical data or defense
services subject to the International Traffic in Arms Regulations (22
C.F.R. Subchapter M).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE Purchaser
Parent and the Purchaser jointly and severally represent and
warrant to the Company as follows:
Section 4.1. Organization. Each of Parent and the Purchaser
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
Section 4.2. Authorization; Validity of Agreement; Necessary
Action. Each of Parent and the Purchaser has full corporate power and
authority to execute and deliver, and to perform its obligations under, this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance by Parent and the Purchaser of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by their respective Boards of Directors and no other
corporate action on the part of Parent and the Purchaser is necessary to
authorize the execution and delivery by Parent and the Purchaser of this
Agreement and the consummation by them of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Parent and the
Purchaser and (assuming due and valid authorization, execution and delivery
hereof by the Company) is a valid and binding obligation of each of Parent and
the Purchaser, enforceable against them in accordance with its terms, except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 4.3. Consents and Approvals; No Violations. Except,
with respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to
the HSR Act and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) as described in this Agreement, neither the execution,
delivery or performance of this Agreement by Parent and the Purchaser nor the
consummation by Parent and the Purchaser of the transactions contemplated
hereby will (i) violate or conflict with any provision of the charter or
by-laws or other comparable constituent documents of Parent or the Purchaser,
(ii) result in a violation or breach of, or result in any loss of benefit or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, acceleration or
modification) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or the Purchaser is a party or by
which any of them or any of their properties or assets may be bound, (iii)
violate or conflict with any order, writ, judgment, injunction or decree
applicable to or binding upon Parent or the Purchaser or any of their
properties or assets, (iv) violate or conflict with any law, statute, rule or
regulation applicable to or binding upon Parent or the Purchaser or any of
their properties or assets, (v) require on the part of Parent or the Purchaser
any action by or in respect of filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity or (vi) result
in the creation or imposition of any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind on any asset of the Parent or the
Purchaser, except in the case of clauses (ii), (iv), (v) or (vi) for such
violations, breaches or defaults which, or filings, registrations,
notifications, authorizations, consents or approvals the failure of which to
obtain, would not materially adversely affect the ability of Parent and the
Purchaser to consummate the transactions contemplated by this Agreement.
Section 4.4. Information in Offer Documents; Proxy Statement.
None of the information supplied or to be supplied by Parent or the Purchaser,
or any of their officers, directors, employees, representatives or agents for
inclusion or incorporation by reference in the Offer Documents, the Schedule
14D-9 or the Proxy Statement, including any amendments or supplements thereto,
will, in the case of the Offer Documents and the Schedule 14D-9, at the
respective times the Offer Documents and the Schedule 14D-9 are filed with the
SEC or first published, sent or given to the Company's stockholders, or, in
the case of the Proxy Statement, at the date the Proxy Statement is first
mailed to the Company's stockholders or at the time of the Special Meeting,
contain any statement which, at such time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading. Notwithstanding the foregoing,
Parent and the Purchaser do not make any representation or warranty with
respect to the information that has been supplied by the Company or any of its
Subsidiaries or their officers, directors, employees, representatives or
agents for inclusion or incorporation by reference in any of the foregoing
documents. The Offer Documents and the Proxy Statement, in each case, when
filed, and any amendments or supplements thereto, in each case, when filed,
will comply in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder.
Section 4.5. Sufficient Funds. Either Parent or the Purchaser
has sufficient funds available to purchase all of the Shares outstanding on a
fully diluted basis, to repay all outstanding indebtedness of the Company and
the Company Subsidiaries that may become due in connection with the
transaction contemplated hereby and to pay all fees and expenses related to
the transactions contemplated by this Agreement.
Section 4.6. Share Ownership. None of Parent, the Purchaser
or any of their respective affiliates beneficially owns any Shares.
Section 4.7. Purchaser's Operations. The Purchaser is a
wholly owned Subsidiary of Parent which was formed solely for the purpose of
engaging in the transactions contemplated hereby and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated hereby.
ARTICLE 5
Covenants
Section 5.1. Interim Operations of the Company. The Company
covenants and agrees that, except (i) as contemplated by this Agreement, (ii)
as disclosed in Section 5.1 of the Company Disclosure Schedule or (iii) as
agreed in writing by Parent, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to, and shall constitute a
majority of, the Board of Directors of the Company pursuant to Section 1.03
(the "Election Date"):
(a) the business of the Company and its Subsidiaries shall be conducted
only in the ordinary course of business, consistent with past practices and,
to the extent consistent therewith, each of the Company and its Subsidiaries
shall use its reasonable best efforts to preserve its business organization
intact and maintain its existing relations with customers, suppliers and other
third parties, and to keep available the services of their present officers,
employees and business associates;
(b) each of the Company and its Subsidiaries will not, directly or
indirectly, (i) amend or propose any change to its Certificate of
Incorporation or By-laws or similar organizational documents or (ii) split,
combine or reclassify its outstanding capital stock;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare,
set aside or pay any dividend or other distribution (whether payable in cash,
stock or property or any combination thereof) with respect to its capital
stock (other than cash dividends from any wholly-owned Subsidiary of the
Company to the Company or any other Subsidiary of the Company all of the
capital stock of which is owned directly or indirectly by the Company); (ii)
issue or sell any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than issuances pursuant to the exercise of Options
outstanding on the date hereof and disclosed on Schedule 3.02(a) hereto or
conversion of Class A Shares into Common Shares in accordance with the terms
thereof; (iii) sell, lease, license (subject to the further restrictions of
paragraph (vi) hereof) or dispose of any assets or properties other than in
the ordinary course of business consistent with past practices which
individually or in the aggregate are in an amount in excess of $500,000; (iv)
incur, assume, prepay or modify any debt, other than in the ordinary course of
business consistent with past practices; (v) license or sublicense (in each
case subject to the further restrictions of paragraph (vi) hereof) any asset
or property of the Company or any Subsidiary of the Company except in the
ordinary course of business consistent with past practice on a basis that
results in a positive current royalty net of any royalties due by the Company
or any Subsidiary on account of sales by the licensee or sublicensee; (vi)
license or sublicense any Intellectual Property of the Company or any
Subsidiary; or (vii) redeem, purchase or otherwise acquire, directly or
indirectly, any of its or its Subsidiaries' capital stock (except as
contemplated by any employee benefit or stock plans or any employment or
severance agreement as in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall acquire (by
merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof;
(e) neither the Company nor any of its Subsidiaries shall make any
investment other than in readily marketable securities in an amount in excess
of $500,000 in the aggregate whether by purchase of stock or securities,
contributions to capital or any property transfer;
(f) neither the Company nor any of its Subsidiaries shall waive,
release, grant, or transfer any rights of value material to the Company and
its Subsidiaries taken as a whole;
(g) neither the Company nor any of its Subsidiaries shall, except as may
be required or contemplated by this Agreement or by applicable law, (i) enter
into, adopt, materially amend or terminate any Benefit Plans, (ii) enter into
or amend any retention plan or stay bonus arrangement, employment or severance
agreement, (iii) increase in any manner the compensation or other benefits of
its officers or directors or (iv) increase in any manner the compensation or
other benefits of any other employees (except, in the case of this clause
(iv), for normal increases in the ordinary course of business, consistent with
past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
(other than Subsidiaries of the Company), except pursuant to contractual
indemnification agreements entered into in the ordinary course of business,
consistent with past practices; (ii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
Subsidiaries of the Company and payroll, travel and similar advances made in
the ordinary course of business consistent with past practices); (iii) revalue
in any material respect any of its assets, including, without limitation,
writing down the value of inventory in any material manner or write-off of
notes or accounts receivable in any material manner; or (iv) authorize or make
capital expenditures which exceed $2,500,000 individually or $20,000,000 in
the aggregate;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge
or satisfy any material claims, liabilities or obligations (whether absolute,
accrued, asserted or unasserted, contingent or otherwise) other than the
payment, discharge or satisfaction in the ordinary course of business,
consistent with past practices, of liabilities reflected or reserved against
in the consolidated financial statements of the Company or incurred since the
most recent date thereof pursuant to an agreement or transaction described in
this Agreement (including the schedules hereto) or incurred in the ordinary
course of business, consistent with past practices;
(j) neither the Company nor any of its Subsidiaries shall change in any
material respect any of the accounting methods, principles, policies or
procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material
Agreement or enter into any new agreement material to the business of the
Company, other than in the ordinary course of business consistent with past
practices or with the prior written consent of Parent, which consent shall not
be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify any
existing Affiliate Transaction or enter into any new Affiliate Transaction
other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take or commit
to take any action that would make any representation or warranty of the
Company hereunder inaccurate in any respect at, or as of any time prior to,
the Election Date; and
(n) neither the Company nor any of its Subsidiaries will authorize or
enter into an agreement to do any of the foregoing.
Section 5.2. Access to Information. (a) Upon reasonable
notice, the Company shall (and shall cause each of its Subsidiaries to) afford
to the officers, employees, accountants, counsel, financing sources and other
representatives of Parent, reasonable access, during the period prior to the
Closing Date, to all its offices, properties, books, contracts, commitments
and records and, during such period, the Company shall (and shall cause each of
its Subsidiaries to) furnish promptly to Parent, its officers, employees,
accountants, counsel, financing sources and other representatives (i) a copy
of each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws or regulatory boards or agencies and (ii) all other
information concerning its business, properties and personnel as Parent may
reasonably request. Unless otherwise required by law and until the Closing
Date, Parent will hold any such information which is nonpublic in confidence
in accordance with the provisions of the Confidentiality Agreement between the
Company and Parent, dated as of July 21, 1998 (the "Confidentiality
Agreement").
(b) The Company (i) shall confer on a regular and frequent basis with
one or more designated representatives of Parent to report operational matters
of materiality, the general status of ongoing operations and such other
matters as Purchaser may reasonably request and (ii) shall provide Parent
access to customers and suppliers of the Company and its Subsidiaries.
Section 5.3. Employee Benefits. Parent and the Purchaser
agree that during the period commencing on the Effective Date and ending on
the date that is one year from the Effective Date, the Surviving Corporation
and its Subsidiaries and successors shall provide those persons who,
immediately prior to the Effective Time, were employees of the Company or its
Subsidiaries ("Retained Employees") with employee plans and programs that
provide benefits substantially comparable in the aggregate to those provided
to such Retained Employees immediately prior to the Effective Time
(disregarding for this purpose any stock options or other equity based
compensation provided to such employees prior to the Effective Time). With
respect to such employee plans and programs provided by the Surviving
Corporation and its Subsidiaries and successors, service accrued by such
Retained Employees during employment with the Company and its Subsidiaries
prior to the Effective Time shall be recognized for all purposes, except to
the extent necessary to prevent duplication of benefits and except for benefit
accrual under any defined benefit pension plan maintained by Purchaser.
Amounts paid before the Effective Time by employees of the Company and its
Subsidiaries under any medical plans of the Company shall after the Effective
Time be taken into account in applying deductible and out-of-pocket limits
applicable under any medical plan provided by Parent in substitution therefor
to the same extent as if such amounts had been paid under such Parent medical
plan.
Section 5.4. No Solicitation. (a) From and after the date
hereof, neither the Company nor any of its Subsidiaries shall (whether
directly or indirectly through advisors, agents or other intermediaries), nor
shall the Company or any of its Subsidiaries authorize or permit any of its or
their directors, officers, advisors, agents or representatives, to (i)
initiate, solicit, encourage or facilitate, directly or indirectly, any
Acquisition Proposal (as defined in Section 5.04(c) hereof), (ii) engage in
negotiations or discussions (other than, upon contact initiated by a third
party, to advise such third party of the existence of the restrictions set
forth in this Section 5.04) with, or furnish any information or data to, any
third party relating to an Acquisition Proposal, or (iii) grant any waiver or
release under any standstill or similar agreement with respect to any class of
equity securities of the Company or any of its Subsidiaries. Notwithstanding
anything to the contrary contained in this Section 5.04 or in any other
provision of this Agreement, the Company and its Board of Directors may
participate in discussions or negotiations with or furnish information to any
third party making an Acquisition Proposal not solicited in violation of this
Section 5.04 (a "Potential Acquiror") or approve such an Acquisition Proposal
if the Company's Board of Directors is advised by its financial advisor that
such Potential Acquiror has the financial wherewithal to be reasonably capable
of consummating such an Acquisition Proposal, and the Board determines in good
faith (A) after receiving advice from its financial advisor, that such third
party has submitted to the Company an Acquisition Proposal which is a Superior
Proposal (as defined in Section 5.04(d) hereof), and (B) based upon advice of
outside legal counsel, that the failure to participate in such discussions or
negotiations or to furnish such information or approve an Acquisition Proposal
would violate the Board's fiduciary duties under applicable law. The Company
agrees that any non-public information furnished to a Potential Acquiror will
be pursuant to a confidentiality agreement containing confidentiality and
standstill provisions substantially similar to the confidentiality and
standstill provisions of the Confidentiality Agreement, but in no event less
favorable to the Company, in a material respect. A copy of the
confidentiality agreement entered into with the Potential Acquiror shall be
provided to Parent for informational purposes only. In the event that the
Company shall determine to provide any information as described above, or
shall receive any Acquisition Proposal, it first shall promptly inform Parent
in writing as to the fact that information is to be provided and shall furnish
to Parent the identity of the recipient of such information and/or the
Potential Acquiror and the terms of any such Acquisition Proposal and shall
continue to advise Parent after providing such information. The Company will
immediately cease and cause its advisors, agents and other intermediaries to
terminate any existing activities, discussions and negotiations conducted
heretofore with respect to any Acquisition Proposal and shall use its
reasonable best efforts to cause any parties in possession of confidential
information about the Company that was furnished by or on behalf of the
Company to return or destroy all such information in the possession of any
such party or in the possession of any agent or advisor of such party.
(b) The Board of Directors of the Company shall not (i) withdraw or
modify or propose to withdraw or modify, in any manner adverse to Parent, the
approval or recommendation of such Board of Directors of this Agreement, the
Offer or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal or (iii) cause or agree to cause the
Company to enter into any letter of intent, agreement in principle or
agreement related to any Acquisition Proposal unless, in each case, the Board
determines in good faith (A) after receiving advice from its financial advisor
that such Acquisition Proposal is a Superior Proposal and (B) based upon
advice of outside legal counsel that the failure to take such action would
violate the Board's fiduciary duties under applicable law.
(c) For purposes of this Agreement, "Acquisition Proposal" shall mean
any inquiry, proposal or offer, whether in writing or otherwise, made by a
third party (other than Parent) relating to (i) any acquisition or purchase
of 20% or more of the consolidated assets of the Company and its Subsidiaries
or of 20% or more of any class of equity securities of the Company or any of
its Subsidiaries, (ii) any tender offer (including a self tender offer) or
exchange offer that if consummated would result in any third party
beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries, (iii) any merger, consolidation, business
combination, sale of assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of the Company and its Subsidiaries or (iv) any other
transaction the consummation of which would reasonably be expected to
interfere with in a material way, prevent or materially delay the Merger or
which would reasonably be expected to materially dilute the benefits to Parent
of the transactions contemplated hereby (but excluding, in each case, the
transactions contemplated hereby).
(d) For purposes of the Agreement, the term "Superior Proposal" means
any bona fide Acquisition Proposal, which proposal was not solicited by the
Company after the date of this Agreement, made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or
securities, more than a majority of the Shares then outstanding or all or
substantially all the assets of the Company, and otherwise on terms which the
Board of Directors of the Company determines in good faith to be more
favorable to the Company and its stockholders than the Offer and the Merger
(based on advice of the Company's financial advisor that the value of the
consideration provided for in such proposal is superior to the value of the
consideration provided for in the Offer and the Merger).
(e) For purposes of the Agreement, the term "third party" means any
person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act and the rules of the Commission promulgated thereunder, other
than Parent or any of its affiliates.
(f) Notwithstanding the foregoing, nothing contained in this Section
5.04 shall prohibit the Company from taking and disclosing to its stockholders
a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to the Company's stockholders which the Board of
Directors of the Company determines in good faith, on the basis of advice from
outside legal counsel (who may be the Company's regularly engaged outside
legal counsel), that such action is required in order to comply with the
fiduciary duties of the Board of Directors to the stockholders of the Company
under applicable law. Notwithstanding anything contained in this Agreement to
the contrary, (i) any action by the Board of Directors permitted to be taken
by this Section 5.04 shall not constitute a breach of this Agreement by the
Company and (ii) any "stop-look-and-listen" communication with respect to the
Offer, the Merger or this Agreement solely of the nature contemplated by Rule
14d-9 under the Exchange Act made by the Company as a result of an Acquisition
Proposal shall in no event be deemed a withdrawal or modification by the Board
of Directors of its approval or recommendation of the Offer, the Merger or
this Agreement.
Section 5.5. Publicity. The initial press releases with
respect to the execution of this Agreement shall be approved in advance by
both Parent and the Company. Thereafter, so long as this Agreement is in
effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or statement with
respect to the Merger, this Agreement or the other transactions contemplated
hereby without prior consultation with the other party, except as may be
required by law or by any listing agreement with a national securities
exchange or national securities quotation system.
Section 5.6. Indemnification; D&O Insurance. (a) The Company
shall, and from and after the consummation of the Offer, Parent shall or shall
cause the Surviving Corporation or an affiliate of Parent to indemnify, defend
and hold harmless the present and former directors and officers of the Company
and its Subsidiaries (the "Indemnified Parties") from and against all losses,
expenses, claims, damages or liabilities arising out of the transactions
contemplated by this Agreement to the fullest extent provided under the
Company's certificate of incorporation and bylaws in effect on the date
hereof; provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable law. All rights to indemnification
and exculpation existing in favor of the directors and officers of the Company
as provided in the Company's Certificate of Incorporation or By-laws, as in
effect as of the date hereof, with respect to matters occurring through the
Effective Time (including the right to advancement of expenses), shall survive
the Merger and shall not be amended, repealed or otherwise modified for a
period of six years after the consummation of the Offer in any manner that
would adversely affect the rights of the individuals who at or prior to the
consummation of the Offer were directors or officers of the Company with
respect to occurrences at or prior to the consummation of the Offer and Parent
shall cause the Surviving Corporation to honor all such rights to
indemnification.
(b) For a period of three years after the Effective Time, Parent will
cause the Surviving Corporation to use its reasonable best efforts to provide
directors and officers liability insurance issued by a reputable insurer in
respect of acts and omissions occurring prior to the Effective Time covering
each of the Indemnified Parties currently covered by the Company's officers'
and directors' liability insurance on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date
hereof; provided that in satisfying its obligation under this Section 5.06,
Parent shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of 200% of the amount per annum the Company paid in its
last full fiscal year, which amount has been disclosed to Parent.
Section 5.7. Approvals and Consents; Cooperation;
Notification. (a) The parties hereto shall use their respective reasonable
best efforts, and cooperate with each other, to (i) determine as promptly as
practicable all governmental and third party authorizations, approvals,
consents or waivers, including, pursuant to the HSR Act and other applicable
antitrust or competition laws, advisable (in Parent's and Purchaser's
discretion) or required in order to consummate the transactions contemplated
by this Agreement, including, the Offer and the Merger, (ii) obtain such
authorizations, approvals, consents or waivers as promptly as practicable and
(iii) prepare the Proxy Statement and the Offer Documents.
(b) The Company, Parent and the Purchaser shall take all actions
necessary to file as soon as practicable all notifications, filings and other
documents required to obtain all governmental authorizations, approvals,
consents or waivers, including, under the HSR Act and other applicable
antitrust or competition laws, and to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission, the Antitrust
Division of the Department of Justice and any other Governmental Entity for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any Governmental
Entity in connection therewith.
(c) The Company shall give prompt notice to Parent of (i) the occurrence
of any event, condition or development material to the Company and its
Subsidiaries, taken as a whole, (ii) any notice or other communication from
any Person claiming its consent is or may be required in connection with the
transactions contemplated by this Agreement, (iii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement and (iv) any
actions, suits, claims, investigations or proceedings commenced or, to the
best of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its Subsidiaries which, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to
Section 3.10 or which relate to the consummation of the transactions
contemplated by this Agreement. Each of the Company and Parent shall give
prompt notice to the other of the occurrence or failure to occur of an event
that would, or, with the lapse of time would cause any condition to the
consummation of the Offer or the Merger not to be satisfied.
Section 5.8. Reasonable Best Efforts; Further Assurances. (a)
Each of the parties hereto agrees to use its respective reasonable best
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 and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including the Offer and the Merger.
(b) At and after the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and deliver, in the name
and on behalf of the Company or Purchaser, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Purchaser, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title
and interest in, to and under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
Section 5.9. Shareholder Litigation. The Company and Parent
agree that in connection with any litigation which may be brought against the
Company or its directors relating to the transactions contemplated hereby, the
Company will keep Parent, and any counsel which Parent may retain at its own
expense, informed of the course of such litigation, to the extent Parent is
not otherwise a party thereto, and the Company agrees that it will consult with
Parent prior to entering into any settlement or compromise of any such
shareholder litigation; provided, that, no such settlement or compromise will
be entered into without Parent's prior written consent, which consent shall
not be unreasonably withheld.
Section 5.10. Fair Price Statute. (a) If any "fair price" or
"control share acquisition" or "anti-takeover" statute, or similar statute or
regulations shall become applicable to the transactions contemplated by this
Agreement or by the Stockholders Agreement, the Company and the Board of
Directors of the Company shall grant such approvals and take such actions as
are necessary so that the transactions contemplated hereby and thereby may be
consummated as promptly as practicable on the terms contemplated hereby and
thereby, and otherwise to minimize the effects of such statute or regulation
on the transactions contemplated hereby or thereby.
Section 5.11. Non-solicitation and Non-Competition Agreements.
As soon as practicable following the execution of this Agreement, the Company
will enter into Non-Solicitation and Non-Competition Agreements substantially
in the form of the agreements or as otherwise set forth in Section 5.11 of the
Company Disclosure Schedule with the individuals and the entities listed in
such Section of the Company Disclosure Schedule.
Section 5.12. Transition Services. The Company shall enter
into an agreement with ▇▇▇▇▇ & Partners pursuant to which, at the election of
the Company, ▇▇▇▇▇ & Partners will provide transition services to the Surviving
Corporation for a period of up to six months (as determined by the Company)
following the Effective Time at a cost that is equal to the cost to ▇▇▇▇▇ &
Partners of providing those services. For the purposes of this Section,
"transition services" means financial, treasury, accounting, tax, audit,
benefit administration, management information services and other related
services, and other similar administrative services currently provided to the
Company or its Subsidiaries by ▇▇▇▇▇ & Partners.
ARTICLE 6
Conditions
Section 6.1. Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been adopted by the requisite vote of the
holders of Company Stock, if required by applicable law and the Certificate of
Incorporation (provided that Parent shall comply with its obligations in
respect of the voting of Shares set forth in Section 1.08(b));
(b) any waiting period applicable to the Merger under the HSR Act and
other applicable antitrust or competition laws shall have expired or been
terminated, as applicable;
(c) no judgment, statute, rule, regulation, order, decree or injunction
shall have been enacted, promulgated or issued by any Governmental Entity or
court which prohibits or restrains the consummation of the Merger; and
(d) Parent, the Purchaser or their affiliates shall have purchased
shares of Company Stock pursuant to the Offer; provided that neither Parent
nor the Purchaser may invoke this condition if Purchaser shall have failed to
purchase shares of Company Stock so tendered and not withdrawn in violation of
the terms of this Agreement or the Offer.
Section 6.2. Conditions to the Obligations of the Company to
Effect the Merger. The obligation of the Company to effect the Merger shall
be further subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) the representations and warranties of Parent and the Purchaser shall
be true and accurate in all material respects as of the Effective Time as if
made at and as of such time (except for those representations and warranties
that address matters only as of a particular date or only with respect to a
specific period of time which need only be true and accurate as of such date
or with respect to such period); and
(b) each of Parent and the Purchaser shall have performed in all
material respects all of the respective obligations hereunder required to be
performed by Parent or the Purchaser, as the case may be, at or prior to the
Effective Time.
Section 6.3. Conditions to the Obligations of Parent and the
Purchaser to Effect the Merger. The obligations of Parent and the Purchaser
to effect the Merger shall be further subject to the satisfaction at or prior
to the Effective Time of the following conditions:
(a) the representations and warranties of the Company shall be true and
accurate in all material respects as of the Effective Time as if made at and
as of such time (except for those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and accurate as of such date or with respect
to such period); and
(b) the Company shall have performed in all material respects all of the
respective obligations hereunder required to be performed by the Company, at
or prior to the Effective Time.
Section 6.4. Exception. The conditions set forth in Section
6.02 and 6.03 hereof shall cease to be conditions to the obligations of the
parties if the Purchaser shall have accepted for payment and paid for Shares
validly tendered pursuant to the Offer.
ARTICLE 7
Termination
Section 7.1. Termination. This Agreement may be terminated
and the Merger contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of Parent, the Purchaser and the Company.
(b) By either of the Company, on the one hand, or Parent and the
Purchaser, on the other hand:
(i) if shares of Company Stock shall not have been purchased
pursuant to the Offer on or prior to December 31, 1998; provided
further, however, that the right to terminate this Agreement under
this Section 7.01(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of Parent or the Purchaser, as
the case may be, to purchase shares of Company Stock pursuant to the
Offer on or prior to such date; or
(ii) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or if any
Governmental Entity shall have issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other action
the parties hereto shall use their respective reasonable best efforts
to lift), in each case restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement or prohibiting Parent
to acquire or hold or exercise rights of ownership of the Shares, and
such order, decree, ruling or other action shall have become final and
non-appealable.
(c) By the Company:
(i) if, subject to the provisions of Section 5.04(b) hereof
and prior to the purchase of shares of Company Stock pursuant to the
Offer, a third party shall have made an Acquisition Proposal that the
Board of Directors of the Company determines in good faith, after
consultation with its financial advisor, is a Superior Proposal and
the Company shall have executed a definitive agreement with such third
party in respect of such Superior Proposal; or
(ii) if Parent or the Purchaser shall have terminated the
Offer, or the Offer shall have expired, without Parent or the
Purchaser, as the case may be, purchasing any shares of Company Stock
pursuant thereto; provided that the Company may not terminate this
Agreement pursuant to this Section 7.01(c)(ii) if the Company is in
material breach of this Agreement.
(d) By Parent and the Purchaser if, prior to the purchase of shares of
Company Stock pursuant to the Offer, (i) the Board of Directors of the Company
shall have withdrawn, modified or changed in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, this Agreement or the
Merger; (ii) the Board of Directors of the Company shall have approved or
recommended an Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal or
similar business combination with a person or entity other than Parent, the
Purchaser or their affiliates (or the Board of Directors of the Company
resolves to do any of the foregoing); or (iii) any person or group (as defined
in Section 13(d)(3) of the Exchange Act) (other than Parent or any of its
affiliates) shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of at least 50% of the outstanding Shares
or shall have acquired, directly or indirectly, at least 50% of the assets of
the Company.
Section 7.2. Effect of Termination. (a) In the event of the
termination of this Agreement as provided in Section 7.01, written notice
thereof shall forthwith be given to the other party or parties specifying the
provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void, and there shall be no
liability on the part of Parent, the Purchaser or the Company or their
respective directors, officers, employees, stockholders, representatives,
agents or advisors other than, with respect to Parent, the Purchaser and the
Company, the obligations pursuant to this Section 7.02, Sections 5.12, 8.01,
8.02, 8.03, 8.04, 8.05, 8.06, 8.07, 8.08, 8.10, 8.11, 8.12, 8.13 and the last
sentence of Section 5.02(a). Nothing contained in this Section 7.02 shall
relieve Parent, the Purchaser or the Company from liability for willful breach
of this Agreement.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 7.01(c)(i) hereof or by Parent and the Purchaser pursuant
to Section 7.01(d) hereof, the Company shall pay to Parent by wire transfer
of immediately available funds to an account designated by Parent on the next
business day following such termination, an amount equal to $65,000,000 (the
"Termination Fee").
(c) The Company acknowledges that the agreements contained in this
Section 7.02 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount
due pursuant to this Section 7.02, and, in order to obtain such payment, the
other party commences a suit which results in a judgment against the Company
for the fee or fees and expenses set forth in this Section 7.02, the Company
shall also pay to Parent its costs and expenses incurred in connection with
such litigation.
ARTICLE 8
Miscellaneous
Section 8.1. Amendment and Modification. Subject to
applicable law, this Agreement may be amended, modified and supplemented in
any and all respects, whether before or after any vote of the stockholders of
the Company contemplated hereby, by written agreement of the parties hereto,
by action taken by their respective Boards of Directors (which in the case of
the Company shall include approvals as contemplated in Section 1.03(b)), at any
time prior to the Closing Date with respect to any of the terms contained
herein; provided, however, that after the approval of this Agreement by the
stockholders of the Company, no such amendment, modification or supplement
shall reduce or change the Merger Consideration or adversely affect the rights
of the Company's stockholders hereunder without the further approval of such
stockholders.
Section 8.2. Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
schedule, instrument or other document delivered pursuant to this Agreement
shall survive the Effective Time. This Section 8.02 shall not limit any
covenant or agreement contained in this Agreement which by its terms
contemplates performance after the Effective Time.
Section 8.3. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or sent by an overnight courier
service, such as Federal Express, with delivery by such service confirmed, to
the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
Tour Framatome
▇, ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ La Defense
France
Telephone: ▇▇ (▇)▇ ▇▇ ▇▇ ▇▇ 43
Telecopy: ▇▇ (▇)▇ ▇▇ ▇▇ ▇▇ 88
Attention: Philippe Anglaret
with copies to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
(b) if to the Company, to:
▇▇▇▇ Electronics Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: R. ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Any notice which is not sent to the party's counsel in the
manner and at the address or telecopy number set forth above within 24 hours
following the time such notice is given to such party shall be deemed not to be
validly delivered to such party.
Section 8.4. Interpretation. The words "hereof", "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation". The words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa. The phrase "to the
knowledge of" or any similar phrase shall mean such facts and other
information which as of the date of determination are actually known to any
senior or executive vice president, chief financial officer, general counsel,
chief compliance officer, controller, and any officer superior to any of the
foregoing. The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be
deemed to refer to August 27, 1998. As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act. The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement. As used in this Agreement, "Person" means an individual or
corporation, partnership, limited liability company, association, trust,
unincorporated organization, joint venture, estate, governmental entity or
other legal entity.
Section 8.5. Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
Section 8.6. Entire Agreement; Third Party Beneficiaries.
This Agreement and the Confidentiality Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, and (b)
except as provided in Section 5.06, are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
Section 8.7. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 8.8. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof or of any other
jurisdiction.
Section 8.9. Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach of this Agreement,
each non-breaching party would be irreparably and immediately harmed and could
not be made whole by monetary damages. It is accordingly agreed that the
parties hereto (a) will waive, in any action for specific performance, the
defense of adequacy of a remedy at law and the posting of any bond in
connection therewith and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in a court of competent
jurisdiction.
Section 8.10. 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 hereto, except that Parent and Purchaser
may transfer or assign, in whole or from time to time in part, to one or more
of its affiliates, the right to purchase Shares pursuant to the Offer, but any
such transfer or assignment will not relieve Parent or Purchaser, as the case
may be, of its obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective permitted successors
and assigns.
Section 8.11. Expenses. Except as set forth in Section 7.02
hereof, all costs and expenses incurred in connection with the Offer, the
Merger, this Agreement and the consummation of the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
Section 8.12. Headings. Headings of the Articles and Sections
of this Agreement are for convenience of the parties only, and shall be given
no substantive or interpretative effect whatsoever.
Section 8.13. Waivers. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 8.14. Disclosure. The Company Disclosure Schedule
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
FRAMATOME CONNECTORS INTERNATIONAL S.A.
By: /s/ Philippe Anglaret
------------------------------------------
Name: Philippe Anglaret
Title: Chairman and President
BRAVO ACQUISITION CO.
By: /s/ Philippe Anglaret
------------------------------------------
Name: Philippe Anglaret
Title: Chairman of the Board of Directors
and President
▇▇▇▇ ELECTRONICS CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
ANNEX A
Notwithstanding any other provision of the Offer, subject to
the provisions of the Merger Agreement, Parent and the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to
above, the payment for, any tendered Shares, and may terminate the Offer and
not accept for payment any tendered Shares if (i) any applicable waiting
period under the HSR Act or other applicable antitrust or competition laws has
not expired or been terminated prior to the expiration of the Offer, (ii) the
Minimum Condition has not been satisfied, or (iii) at any time on or after
August 27, 1998, and before the time of acceptance of Shares for payment
pursuant to the Offer, any of the following shall exist:
(a) there shall be instituted or pending any action or proceeding by any
government or governmental authority or agency, domestic or foreign, before
any court or governmental authority or agency, domestic or foreign, that has
reasonable likelihood of success (i) challenging or seeking to make illegal,
to delay materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer, the acceptance for payment of or payment for
some of or all the Shares by Parent or the consummation by Parent of the
Merger, or seeking to obtain material damages in connection with the
transactions contemplated by the Offer or the Merger, (ii) seeking to restrain
or prohibit Parent's ownership or operation (or that of its respective
subsidiaries or affiliates) of all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, or of Parent and
its subsidiaries, taken as a whole, or to compel Parent or any of its
subsidiaries or affiliates to dispose of or hold separate all or any material
portion of the business or assets of the Company and its Subsidiaries, taken
as a whole, or of Parent and its subsidiaries, taken as a whole, (iii) seeking
to impose or confirm material limitations on the ability of Parent or any of
its subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote any
Shares acquired or owned by Parent or any of its subsidiaries or affiliates on
all matters properly presented to the Company's stockholders, or (iv) seeking
to require divestiture by Parent or any of its subsidiaries or affiliates of
all or any material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole; or
(b) there shall be any statute, rule, regulation, order, decree or
injunction enacted, promulgated or issued by any court, government or
governmental authority or agency that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and accurate in all material respects as of
the date of consummation of the Offer as though made on or as of such date
(except for those representations and warranties that address matters only as
of a particular date or only with respect to a specific period of time which
need only be true and accurate as of such date or with respect to such
period);
(d) the Company shall have breached or failed to perform or comply with,
in any material respects, any obligation, agreement or covenant under the
Merger Agreement;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Board of Directors of the Company shall have withdrawn or
modified or changed in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger Agreement or the Merger or
shall have recommended an Acquisition Proposal or shall have executed an
agreement in principle or definitive agreement relating to an Acquisition
Proposal or similar business combination with a person or entity other than
Parent, the Purchaser or their affiliates or the Board of Directors of the
Company shall have adopted a resolution to do any of the foregoing.
The foregoing conditions are for the sole benefit of the
Purchaser and Parent (subject to any assignment in accordance with Section
8.10 hereof) and, subject to the Merger Agreement, may be asserted by either of
them or may be waived by Parent or the Purchaser, in whole or in part at any
time and from time to time in the sole discretion of Parent or the Purchaser.
The failure by Parent or the Purchaser at any time to exercise any such rights
shall not be deemed a waiver of any right and each right shall be deemed an
ongoing right which may be asserted at any time and from time to time.